Wheeler budget deserves more scrutiny
July 26, 2011
Hats off to Aspen City Council for taking a closer look at the Wheeler Opera House. The Wheeler and the Real Estate Transfer Tax are extraordinary assets of the citizens of Aspen and for me, there is no place I would rather see a concert or live performance than the Wheeler.
Unfortunately, while I love the Wheeler and the fact that the taxpayers of the city of Aspen have an income source to subsidize operations and bring extraordinary shows to our small town, the level of annual taxpayer subsidy has gotten way out of hand.
In my opinion, part of the problem is neither the Wheeler executive director, city management nor City Council appear to focus on the Wheeler as an operating entity with a focus on and evaluation of attendance, operating revenue and operating expenses.
A review of the Wheeler Opera House operations and its executive director should be based on the things the director controls – attendance, ticket sales, rentals, food and beverage and corresponding operating costs, and venue enhancements/improvements – not items outside his purview or control such as RETT, interest income on RETT balances and loans to other city departments, real estate rentals (Bentley’s/Fiercely Local/gallery) and grants to arts organizations.
Just as Aspen Skiing Co., Winter X Games, Jazz Aspen Snowmass, etc., closely monitor skier days and attendance, the success of the Wheeler should be measured, at least in significant part, by attendance. A great show is not a great show if nobody comes to see it.
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The executive director (and sadly the press), refer to a “$200,000 to $300,000” annual subsidy for the Wheeler. This is simply not true. A review of “operating results” based on audited financial information provided by city staff indicates the annual average taxpayer operations subsidy from 2005-2009 was $1.4 million per year (as calculated by city staff), or $1.6 million per year if real estate rental income is excluded. Significantly, revenues are falling and expenses are increasing.
Projections indicate annual taxpayer operating subsidies will grow to $2.5 million per year in a few years and escalate from there. If non-expansion capital type venue improvements (sound and lighting systems, seating, etc.) are included, these losses undoubtedly widen further.
In 2008, the last year for which I have obtained attendance results, the Wheeler operated with an annual taxpayer operating subsidy of $1.8 million or about $87 per person attending a live entertainment event and $36 for every person taking a seat in the theater for live entertainment, a movie, a lecture, training and private use. With falling revenue and the likelihood of corresponding falling attendance against increasing expenses, the per-seat subsidies have no doubt increased in recent years.
I encourage City Council to carefully review the extraordinary assets of the Wheeler and the RETT to develop ways to increase utilization, attendance and operating revenue while reducing annual taxpayer subsidies. The performance of the Wheeler and its executive director should look at utilization (butts in seats), operating revenues and operating expenses.
Thank you for your consideration.