08/15/2021
Dear Mr. Moore / City of Delray Beach, Florida Government
While we would have preferred to have an actual conversation with you prior to reading your letter justifying why the city voted to evict Old School Square, please read below which serves to correct and clarify the facts.
Sincerely,
Old School Square Center for The Arts, Inc.
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"The City Commission is responsible for managing taxpayer funds, and ensuring that non-profit agencies, funded with taxpayer dollars, are effectively and efficiently managed. Over the years, Delray Beach taxpayers have provided Old School Square with over $9 million dollars in subsidies. In addition, the non-profit agency that manages Old School Square pays only $1 in rent each year. The City provides this lease as a way to promote the arts and to enrich the lives of its residents."
LET'S BREAK THIS DOWN ⬇️
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☑️The $9 million dollars in “subsidies” referenced above includes $2 million the city has spent on capital improvements to the city owned buildings.
☑️As per OSS’s lease agreement, the City is responsible for building maintenance, grounds upkeep or major system repairs or replacement (a/c, plumbing, etc.). This has been part of our agreement for the past 30 years. They are the City’s buildings and the City's grounds and upkeep of 100-year-old buildings is not cheap, but absolutely necessary for both safety and maintenance purposes.
☑️The remaining “subsidies'' referenced are not hand-outs- they are GRANTS that we apply for and are granted annually. The grants provided are investments in the community that have been made by the CRA over the last 18 years through because the programs they support further the mission of the CRA. The grant funds offset some of the costs of putting on those programs. These CRA Grants provide less than 25% of OSS’s annual operating budget. Other revenues are derived from sponsorships (up 550.677% YOY), ticket sales, private events, educational programs, food and beverage, and fundraising, and outside cultural grants (not funded through City taxpayer dollars.)
☑️In addition to OSS, the City provides similar grants to the Spady Museum, the Delray Beach Historical Society, the Delray Beach Public Library, the Arts Garage, the Delray Beach Chamber of Commerce, and the Delray Beach Community Land Trust.
☑️The City has failed to mention that OSS has raised millions of dollars in private funds to renovate the campus buildings, which will ultimately significantly save the city on maintenance and system repairs costs since, through those private funds, we are covering the cost of new, modernized and updated systems.
So yes, as per our 30 year lease agreement with the city, we do receive subsidies, as has always been the case. But that cannot be stated without understanding that Old School Square is Delray Beach’s greatest economic development driver, responsible for over $100M of economic activity in Delray Beach annually. The $1 per year rent is an original term that has been in place since we began our lease agreement on July 31st, 1989.
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"Agencies that receive funds from the City have financial reporting responsibilities. Transparency is a requirement. During the August 10, 2021 meeting, a majority of City Commissioners expressed their dissatisfaction with the reporting as provided by Old School Square’s staff." ⬇️
☑️The lease with the City contains a multitude of reporting requirements that even the City didn’t realize were required until they requested them last month (July 2021) - and some of the historical documents they requested from us never even existed. However, all of our financial reporting requirements, historically and currently, have been addressed.
The issue of the remaining audit from 2020 was completely out of our hands, as we lost our auditors when COVID hit, then had to go through two different RFP processes to find one that could take on our audit and provide it to us in a timely manner. That team also came down with COVID, which delayed the process even further. Here is a breakdown of the auditor issues we’ve experienced for the past year and a half:
☑️March 2020 - OSS’s auditing firm furloughed the majority of their staff, forcing them to cut their client roster and focus only on their largest, highest paying clients, and decided to let OSS go as a result.
☑️March - May 2020 - OSS issued an RFP for a new auditing firm. It took two months to find a firm that could accommodate OSS during the pandemic. Amongst the challenging conditions were a lack of adequate staff, inability to travel or work on-site, and other issues facing the industry at this time.
☑️May 2020 - Q1 2021 - OSS hired a new auditing firm in the height of the pandemic, but from the start they had issues. The firm requested payment up front, even though they felt it was critical to work on site/in person, they weren’t comfortable doing field work inside OSS’s offices. OSS offered to upload all financial records to an online portal so the auditors could examine the documents, but due to auditing regulations they refused that offer. OSS gave them a deadline for the audit, but they were unable to meet this deadline so OSS was forced to terminate them.
☑️Q1 2021 - OSS issued a second RFP for an auditing firm during the pandemic.
☑️June - July 2021 - OSS secured a new auditing team through this RFP process, but the majority of their staff came down with COVID in the midst of the audit, compelling them to temporarily suspend efforts, putting OSS further behind schedule.
☑️August 2021 - The audit team returned in full health and finalized their draft of the 2019 audit, which was presented to the City Commission prior to the meeting on Aug 10. However that audit was not considered in the final vote that took place that evening, which terminated OSS’s lease. The OSS board of directors has already voted to accept the audit and the final document has already been submitted to the city. The 2020 audit was due at the end of March. Since that audit could not be done until the 2019 audit was completed, it is now in process and is expected within six weeks..
Beyond this audit, every item requested of us in compliance - which were requested by the city in July 2021 for the first time - have been received by the City Commission.
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"So, what happens next? The City Commission has directed staff to perform due diligence to secure a new management company for Old School Square. I am hopeful that performances scheduled to take place during the next six months will continue. This beloved cultural center will likewise continue to serve the residents of Delray Beach." ⬇️
☑️Old School Square Center for the Arts, Inc. is a non-profit 501.c.3 cultural organization. Old School Square Center for The Arts, Inc. IS Old School Square. We are the very entity that saved the buildings from being completely demolished 30 years ago by creating an organization governed by a volunteer board of directors that has given not only their time but their money to raise funds, create programming, and offer cultural opportunities for our community to enjoy. We created Old School Square from a run-down complex of buildings on a city block surrounded by rusted chain link fences. It is the non-profit entity Old School Square Center for the Arts, Inc. that provides all of the arts, culture, education, entertainment, and community programming that exists there today. Everything OSS visitors and community members experience on its campus is because of the non-profit organization.
☑️Additionally, every asset within the OSS buildings that are required to bring the community all the programming they enjoy belongs to the Old School Square Center for the Arts, Inc., the non-profit organization and not the city. This includes lighting systems, sound systems, rigging systems, seating, appliances, equipment, software, etc. This is all very clearly defined in the lease. The city’s position of simply providing a new management company to run the complex is not at all simple. The City will need to start from the ground up with empty vacant buildings in order to even begin to attempt to rebuild what has taken Old School Square Center for the Arts, Inc. thirty years to create here, and that will come with a hefty price tag.
☑️Additionally, the city will need to complete the unfinished interior renovations and return the millions of dollars in private funds donated for renovations by those that bestowed the funds to our organization. Those funds were raised by and given to Old School Square Center for the Arts, Inc., the non-profit organization. If you were concerned about how your tax payer dollars supported OSS before, we encourage you to stay on top of how the commission’s decision will negatively impact city tax payers as the city rebuilds this campus.
