Labor Council chief asks Board of Supervisors investigate San Francisco Symphony accounting practices

January 26, 2006

SAN FRANCISCO -- Today Tim Paulson, Executive Director of the San Francisco Labor Council, AFL-CIO, asked the San Francisco Board of Supervisors to investigate the San Francisco Symphony's accounting practices.

The Symphony's Musicians have been working without a contract since November 26, 2005.

In a letter sent today to the Supervisors, Paulson said: "Because the Symphony relies on taxpayer dollars, I am writing to ask the Board of Supervisors to investigate the Symphony Management's refusal to use its endowment for the Musicians and its creation of illusory deficits."

Text of letter follows.

Dear Supervisors:

The Musicians of the San Francisco Symphony, members of the American Federation of Musicians Local 6, have been negotiating in good faith with the Symphony's management for ten months, and have been working without a contract since November 26, 2005. The San Francisco Labor Council stands in solidarity with the Musicians.

The San Francisco Symphony is one of the most financially healthy orchestras in the country, with an endowment of over $174 million. Its conductor, Michael Tilson Thomas, is paid over $1.5 million annually for his part-time work.

Despite the Symphony's steady financial growth, the Symphony'smanagement is proposing a contract that would place San Francisco's Musicians below their colleagues in other leading orchestras such as Los Angeles, Philadelphia, Boston, Chicago, and New York, and on par with what the financially troubled Cleveland Orchestra pays its musicians.

I am concerned about the Symphony management's accounting practices, which it is using to bolster its contention that it cannot support the Musicians at the level of other top-tier orchestras:

(1) Management Won't Use Endowment For Musicians. Management is directing contributed funds into the endowment and is claiming that this money is somehow walled off. A significant portion of this money is "Board designated," meaning the donor did not specify that the money go to the endowment. In total, over $113 million of endowment money is categorized as "unrestricted." As such, there are no legal prohibitions against management doing what the Chicago Symphony has done and using a very small portion of a very large endowment to support the Musicians.

(2) Management Creates Illusory Deficits. The Symphony's management reported surpluses from fiscal year ending August, 2001, until fiscal year ending August, 2004. Six months into the labor negotiations, in August of 2005, management suddenly reported its first deficit ($2.4 million) to the operating budget in five years while concurrently adding $15 million to the endowment. In short, management created an illusory deficit during 2005 -- which happened to be a contract-negotiation year.

Because the Symphony relies on taxpayer dollars, I am writing to ask the Board of Supervisors to investigate (1) the Symphony Management's refusal to use its endowment for the Musicians and (2) its creation of illusory deficits.

Tim Paulson
Executive Director

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