What's Happening with THEMUSEUM?

Is Kitchener about to lose another arts institution?

At the beginning of 2023, Kitchener had three Key Cultural Institutions but with the Kitchener Waterloo Symphony filing for bankruptcy last Fall, only two remain. Key Cultural Institutions “are recognized as unique and intrinsic to the cultural infrastructure of the greater region.” Now it appears one of Kitchener’s remaining two may be on the brink of closing as well. THEMUSEUM reached out to Kitchener Council requesting $300,000 in “emergency operating supports“ to help secure its future.

The interim funding would allow THEMUSEUM to continue operating until this Fall. In that time, the museum’s Board would “explore substantial changes to their operating model to achieve sustainability.” Staff recommended that funding be provided under four conditions: protect community interests (by honouring existing commitments); create a sustainable operating model; limit discretionary spending; and undertake an orderly shutdown if needed.

Staff suggest that possible steps towards a long-term solution could include a reduction in staffing costs, reducing the operating footprint, and utilizing a hybrid delivery model to reduce building occupancy expenses. Staff are also prepared to work with THEMUSEUM to “explore potential co-located uses in the building.”

THEMUSEUM’s CEO, David Marskell cautioned about the impact of potential cuts. “We can't cut our way to sustainability. The more we cut from our programming, the more attendance we will lose...it will just shrink us into a place no one wants us to be.”

During the May 13th, 2024 Kitchener Council meeting, staff outlined both the importance of THEMUSEUM as well as the impact on the community when we see the demise of arts institutions. The staff report stated, “as observed during the sudden closure of the KW Symphony, the sudden closure of any cultural institution prevents the community from rallying behind the organization.”

At that council meeting, Marskell was joined by Board member, John Durdan, and together they provided a short presentation outlining the need for the funding and responded to over an hour of questions from Kitchener Council. Council concerns included the suddenness of this threat of closure, why a more sustainable model had not been implemented earlier, and whether the $300,000 funding request would likely result in keeping THEMUSEUM open long term.

David Marskell responded to Council’s concerns about THEMUSEUM’s existing financial model, stating, THEMUSEUM (originally the Children's Museum) “was opened with a flawed financial formula, very little money. This was coming from grants and so on, and we inherited that. And we've been saddled with this underfunding ever since.”

A 2019 review of THEMUSEUM’s finances noted that it has “consistently incurred large operating deficits since 2009,” with deficits ranging from $260,000 to $550,000 in any given year. It also claimed that staffing (in numbers and cost) is nearly twice that of similar organizations, while their fundraising falls below average. During that review, THEMUSEUM’s “only plan for its long-term sustainability was to ask municipalities for an extra $400,000 a year in operating funds.”

According to the Canada Revenue Agency, for the reporting period ending on June 30, 2023, THEMUSEUM’s revenue was $3,435,011.00 and expenses were $4,483,584.00, a deficit of $1,048,573. Revenue came largely from ‘other revenue’ (58%) and government funding (29%). Donations accounted for $279,736 (8%).

The top three expenses were charitable programs (72%), management and administration (14%), and fundraising (10%). Expenses do not include rental costs since the city of Kitchener owns the building (10 King St. W.) and leases it for $1 - an in-kind grant worth just over $125,000

Kitchener Mayor Vrbanovic noted the key role THEMUSEUM plays in tourism, with 40% of THEMUSEUM’s attendees coming from outside of the region. Last year, THEMUSEUM welcomed about 80,000 visitors. Prior to the pandemic, average attendance was around 100,000 people. Making a comparison to how the City funds other arts institutions, Vrbanovic said “There’s a fundamental funding flaw within our own facilities. Our (2023) investment in the Centre in the Square was over $2.6 million.” With just under 110,000 visitors last year, that works out to approximately $24/visitor. Yet, THEMUSEUM receives less than $5/visitor. The mayor concluded that while investment in the Centre in the Square is important and needed, so too, is it for THEMUSEUM and suggests that if the city had been funding THEMUSEUM at a similar rate, perhaps we wouldn’t be in this situation at all.

While there were numerous questions and concerns from Kitchener Council about providing the requested $300,000 interim funding, it seems fear of THEMUSEUM shutting down without such funding ruled the day. Ward 1 Councillor Scott Davey put forth an amendment where, prior to June 24th 2024, THEMUSEUM would ask the Region of Waterloo Council for half of the requested funds ($150,000). That passed with everyone in support except for ward 10 Councillor Stephanie Stretch.

Davey’s amendment also asked for a deferral of one part of the motion that would essentially withhold a decision on the final $100,000 of interim funding until after the Region had been asked to provide $150,000 of the requested funds. That failed in a 6-5 vote with councillors Owodunni, Michaud, Chapman, Johnston, Stretch, and mayor Vrbanovic opposed. The main motion ‘as amended’, which sees Kitchener providing $300,000 to THEMUSEUM, passed with everyone in favour except for Councillor Davey.

Councillor Davey’s amendment was brought forth over his concern about the, “lack of support for local Arts and Culture from other orders of government.” He stated, “Kitchener, having the smallest tax base, cannot afford to bridge these gaps on our own, especially given the homelessness and housing crises, and the general unaffordability residents are facing today.”

City staff will now work with THEMUSEUM Board to create a new financial model, while still honouring its current commitments until this Fall. Marskell concluded his discussion with Council, stating “We can't lose this. There are two scenarios for downtown Kitchener, one with THEMUSEUM and one without. And I don't think anybody wants to see that scenario with one without.”

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*A slightly edited version of this post appeared in June’s edition of The Community Edition.

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