RUIDOSO DOWNS - Nearly $200,000 in Hubbard Museum of the American West budget cuts, almost exclusively in payroll expenses, are projected to move the city of Ruidoso Downs owned museum into the black.
The city council Tuesday approved an 11th hour plan offered by Hubbard Museum Director Jim Kofakis that will eliminate two full-time positions, end one part-time position, slash the director's salary by 25 percent, lower other senior staff salaries by 12.5 percent, and end a clothing allowance for museum employees.
"The problem with the museum as I see it, and with the finances, I've always said payroll is the issue," Kofakis told city councilors.
Warning signs years ago
Ruidoso Downs Race Track owner R.D. Hubbard gifted the museum to the city in 2005. Kofakis said under the city's first year of ownership the facility had an end of year surplus of $258,000.
"The second year is probably the year that the first yellow flag should have been thrown because the museum ended the year with a deficit of $25,000, including a transfer from the (city's) general fund of $100,000. The third year we ended up with a surplus again of $118,000 which included a $100,000 transfer from the general fund. The real red flag alarm and whistles should have occurred in year four. With a deficit of almost $94,000 everybody should have been saying what happened? What do we do here? And then it got worse every year after that.
Noting the museum has had almost $600,000 in red ink over the past two years, Williams said the situation turned extreme.
"You talk about fluffing numbers. We need to change that mentality and do realistic numbers," Williams told Kofakis. "Why didn't you start beginning the process of what we may have to do with employees? What we may have to do with salaries? What we may have to do with hours? Working with staff and not waiting until now when the council is looking at these numbers saying, 'Whoa.' This could have maybe been addressed earlier."
Kofakis said when he became the museum's director he immediately looked at revenues and expenditures.
"I can honestly tell you that I suspected that the Hubbard money was being drawn down but didn't get actual proof of it until Jan. 12, 2012, when that spreadsheet was emailed to me."
When R.D. Hubbard gave the museum to the city he also provided $1.5 million for the operation of the facility.
Kofakis said he has cut earlier budgets in half and made further cuts.
"And then finally when it really got bad, I said we have to cut payroll. There's no way out of this unless we cut payroll."
Payroll trimming options
While the city council Tuesday had seven options on paper for reducing staff and salaries at the museum, Kofakis asked the seven be removed from consideration as he tendered another proposal.
"This one, the director's salary is cut 25 percent. That takes me back to about where I was before I took the director's position. The senior staff (salary) will be reduced 12.5 (percent). A zero reduction is salary for part-time and the one hourly employee, the lowest paid employees. It also includes the total elimination of the clothing allowance."
The museum will see its staff of 11 employees trimmed to 8. The curator of education, the gift shop manager and a part-time visitor service representative will be let go.
Mayor Gary Williams asked Kofakis about the reaction of those whose jobs would be eliminated.
"They're not happy. Nobody's happy about losing their job or taking a cut in pay."
Kofakis said at the time the city was given the museum, it had 30 employees. He said there was a consensus among his current staff on the new reductions.
"I can appreciate the fact that you want to take that much of a salary (cut)," Williams told Kofakis. "I think 25 percent is really a generous salary reduction on your part, a little bit extreme."
Williams suggested a 15 percent reduction would work, but the 25 percent trimming remained in the final language.
Initial solutions process
Meetings between museum staff, City Attorney H. John Underwood, City Clerk Carol Virden and City Finance Director Terri Mosley began in late September.
"It was proposed to us as a group that we should come up with approximately $200,000 in budget cuts," said David Mandel, the museum's curator of exhibits. "None of us had had experience in cutting budgets and we asked for a little more time. A number of things were said that confused us."
Mandel said just trying to get information from the city was difficult and misleading things were stated.
""It's my belief that Mr. Underwood and Terri Mosley and Carol Virden were not lying to us but they were misleading us," Mandel said. "I think what they said to us created dissention among staff. Tensions between us and Jim Kofakis. When I pressed the issue of the museum's financial problems, Mr. Underwood stated repeatedly that what did or didn't happen in our financial past was just water under the bridge. Many of us have been left with the sense that there's absolutely nothing that we can do."
Declaring he had no solution, Mandel called the new option "barely a stop gap."
"I don't like to do this to anybody at anytime, not even holidays," City Councilor Judy Miller said of the plan that was approved by the three council members at Tuesday's meeting. "But I think Jim (Kofakis) has shown us the way that we can cut almost $200,000 from the expenses. And that's a big chunk. Looking at all the other plans, I'm thinking the plan that Jim's come up with now is probably the best one."
Asked by Councilor Dale Perry, Ruidoso Downs Finance Director Terri Mosley said the new option was worthy of consideration.
"It would work," Mosley said. "If the revenues come in as expected and expenditures stay low, it's in budget."
Councilor Dean Holman said he was frustrated over what to do.
"Five and six years ago I was saying the things that have been said the last month and there were people that did not listen at all."
Holman added he challenged former Museum Director Jay Smith in the past.
"My concern five years ago was not to get to this point. Now we're dealing with people's livelihoods."
Agreeing with the mayor, Holman said a 25 percent slice of the director's salary was not fair. But he noted without adequate reductions the financial issues at the museum could come back.
"Are we ready?" Holman asked.
"Jim (Kofakis) said let's get it done," replied Perry.
"I guarantee you, I'm not going through it twice and be a very active participant," Holman said. "It's too hard. The staff at the museum has to be stressed out. I would not want to come back later and say, 'You know, we just didn't go far enough with it and here we are again."
Kofakis said indeed there has been much stress at the museum.
"Our staff is a very dedicated group of people," the director said. "The last two months have been extremely difficult for me personally. I have been pulled in 12 different directions."
Kofakis added that action was needed now to assure the museum continues to operate.
Virden said even staff at city hall has been stressed over the situation.
How will museum operate?
"All the employees are going to be cross-trained to do everything," Kofakis said. "Run the gift shop, greet people at the door. This is the proposal from our staff, a very dedicated group of people. "
Williams questioned the plan to cross-train the remaining employees.
"What specifically and who are you talking about?" Williams asked. "What are the duties or added duties?"
Kofakis said the most important jobs that will be cross-trained are in the gift shop, taking admissions and selling merchandise as well as the museum's greeter. He said curator positions will not however be cross-trained.
Williams called the jobs of the curator of exhibits and curator of collections intense positions and wondered if using them to cover the gift shop might take them away from their necessary duties. Kofakis said they each might be doing the double duty for perhaps 8 hours a week, not for days.