Oakland Museum foundation aims to cut ties with city

For nearly 20 years, the Oakland Museum of California has operated under a public-private partnership with the City of Oakland and the nonprofit Oakland Museum of California Foundation, sharing the $15 million annual budget and control of operations. But now city officials may remove themselves from that partnership, leaving the nonprofit foundation to run the 41-year-old cultural institution.

When the museum was established, it was fully city-owned and operated. But about 20 years ago, the foundation was launched to offset the city’s inability to keep funding the museum all on its own, said Lori Fogarty, the museum’s executive director.

Support from the city has declined over the years. The city once supported 100 percent of the costs as the sole owner, but now that figure is down to only 40 percent—about $6 million annually. Currently, the city’s contributions include paying the mortgage for the building in downtown Oakland and the building’s utilities. The city also owns the collections housed at the museum. Covering the costs of the museum’s daily operations, including staff, is also the city’s responsibility. It now pays for 44 of approximately 100 employees, while the foundation employs the remainder.

In the past two years, some city employees, such as museum guards, have had their hours cut. The city also imposed a freeze on the hiring of additional staff. With the city’s precarious budget situation, foundation members fear the staff will continue to shrink unless the foundation takes over. “When we were taking reductions from the city, the only thing we could reduce, the only thing that was at our disposal, was staff,” Fogarty said. “It automatically translated into layoffs.” If the foundation had sole control of the museum, and if budget cuts were necessary, she said, cutting staff wouldn’t be the only option.

Fogarty says foundation members are confident a break in the partnership wouldn’t hinder their operating efforts, because in recent years they have done well in increasing their fundraising efforts. “At first [the foundation] was founded essentially as a fundraising support group for the museum,” Fogarty said. “But over time, as the city’s support continued to decline, the foundation started picking up more and more of the operations of the museum, including employees.” The foundation now supports about 60 percent of the museum’s annual budget.

According to Fogarty, discussions about severing the city from the partnership were spurred by the foundation’s gusto to address the city’s dwindling financial support of the museum. If Oakland relinquished its stake in the museum, it would save the city more than $6 million dollars in annual support—money that could be a resource to help the city maintain core services—and the museum would no longer have to contend with the issues that spring from having two employers operating under one roof. Part of the nearly 100-person staff is employed by the foundation and the others are employed by the city. Currently, the museum has separate computer systems and two different payrolls—even filing cabinets and folders are segregated.

The city’s required furlough days have also affected the museum staff’s efforts to streamline tasks and workload. The visitors’ center, membership services, and admissions desk are staffed by foundation employees, so these operations are not affected by furloughs. But for city-employed positions, like Fogarty’s, furloughs have posed a problem. “Many of our management staff, truthfully, go ahead and work furlough days—we just don’t get paid those days,” Fogarty said. “Or, we swap out for another day so we can keep the museum open.” The museum remains open regardless of whether it’s a furlough day for some of its employees.

If a new agreement is reached between the foundation and the city, Fogarty anticipates the city would still hold ownership of the building and collections, but the foundation would be the sole employer of all staff and also have creative and operational control. “Our goal is to operate much more as a unified, integrated, holistic institution,” said Fogarty, “rather than these kind of two sides that we have now with all of the inefficiencies.”

Lance Gyorfi, the foundation’s chairperson, said that if the foundation assumed control of the museum, it would have creative control over the programs and educational activities offered, and have flexibility in adjusting job descriptions and making departmental changes. Gyorfi said a number of grants the museum is now receiving are based on its innovative methods of showing exhibitions. Recent exhibits have included “Pixar: 25 Year of Animation,” “Vivo: Days of the Dead 2010,” and “The Marvelous Museum: A Project by Mark Dion.” With more control, he said, the museum would be more effective in implementing their ideas by eliminating the hassle of getting the city’s stamp of approval.

In addition to grants from the National Science Foundation and the National Endowment for the Humanities—both awarded earlier this year—the Oakland Museum of California Foundation has received donor support largely in reaction to the $62 million capital campaign that has funded exterior and gallery renovations.

But with the new freedom, the foundation would have to be financially self-sufficient. “We obviously have to be prepared to run the whole show,” Gyorfi said, “which I think we are. We provide most of the direction today.”

While Fogarty says there is a potential for some city employees to be laid off if the city-foundation partnership ends, she also said that some of them may simply be hired as foundation employees, since the museum’s operational positions will still be needed. Furlough days, she said, will be a thing of the past. But, she said, there has been some discussion about how to handle employees’ pensions since the non-profit’s employees don’t pay into their pensions. Because discussions are in the early stages, Fogarty can’t be sure of what will happen until negotiations produce more information in the next few months.

The city was researching how to accommodate the need for core services when the foundation approached them about breaking ties with the museum, Karen Boyd, the assistant to the City Administrator, wrote in an email. The city’s Budget Office helps the City Administrator, Mayor, and City Council, in assessing and balancing the city’s budget, and addressing the needs of city operations—which includes the museum.

“With the growth and increasing complexity of the museum’s functions and programming,” Boyd wrote, “it may no longer be viable for the city to operate the museum effectively.” She also stated that the museum’s success is “constrained by its dual city-foundation structure, with two governing entities and two distinct personnel and payroll systems.”

For now, Fogarty says the museum is having discussions with the unions that represent city employees at the museum, working with the foundation and city administrators, and will later approach the City Council with the terms of its proposal to sever the partnership. She expects negotiations to take about two to three months, and hopes the basic terms of the agreement will be settled by February. If the council approves, the terms would be effective on July 1, 2011.

Fogarty also said any changes brought on by a new agreement would not have a negative impact for visitors, but may actually improve their experiences at the museum, since there would be a more efficient staff and more flexibility in adapting to the community’s needs. “This is a huge opportunity,” Fogarty said. “The museum’s been in this process of reinvention and we’ve been completely transforming our physical facility, and now we can really reinvent our staff. This is really a chance to look at, for the first time, truly, the entire staff and the organization and see how we can operate more efficiently as a more unified organization.”

Image: The City of Oakland may soon relinquish its stake in the Oakland Museum of California, pending negotiations and agreement of terms between the city and the Oakland Museum of California Foundation–a nonprofit that currently carries about 60 percent of the museum’s expenses. Photo by Terry Carroll, Oakland Museum of California.