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Rochester Art Center continues making adjustments to fix budget shortfalls

The organization is seeing budget reductions amid increasing visitor numbers.

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The Rochester Art Center Thursday, Oct. 14, 2021, in Rochester.
Joe Ahlquist / Post Bulletin
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ROCHESTER — The Rochester Art Center is striving to do more with less amid COVID recovery.

“We have been really filling our building,” Art Center Director Pam Hugdahl told members of the Rochester City Council on Wednesday.

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She said the center currently has seven installations, where two or three were seen at a time in the past.

Meanwhile, she said annual support from at least one donor – The McKnight Foundation – is shifting to other causes, specifically environmental and social justice concerns.

Additionally, the center has seen a 12% decrease in city funding since 2018. The city’s 2022 budget calls for a $170,000 city contribution to support activities linked to key community priorities.

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The center had benefited from federal COVID payroll protection and employee retention funding, but Hugdahl, who joined the art center staff in 2020, said that has been spent at this point.

“It’s been a challenge to try to reduce our budget, which we knew we had to do,” she told council members Mark Bransford, Molly Dennis and Shaun Palmer, who serve as the council’s Outside Agency Oversight Committee.

The art center’s annual budget has dropped to approximately $800,000 after it saw a $279,099 loss on a $1.1 million budget in 2015.

The center began making changes in 2016 and 2017, but change continues, and the changes are being made as attendance numbers grow.

In 2019, the center logged 13,000 visitors, a number that more than doubled last year.

“We’re really excited to see that trend,” she said of the 29,000 visitors seen last year.

The increase is primarily attributed to community partnerships that have brought new events in the wake of the COVID pandemic, such as the Night Market, the Iraqi American Reconciliation Project, Rochester Symphony and Southeastern Minnesota Youth Orchestra.

“We have seen quite a bit of increasing interest,” Hugdahl said of art center activities.

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However, she said the art center also continues to adjust to the new model that has organizations connected to the Mayo Civic Center operating in a shared capacity.

The result is a potential decrease in rental revenue, since the Art Center will only receive a percentage of income from events booked in the space.

Where rental revenue has topped $200,000 in the past, the organization’s current budget anticipates $63,400 to be received in the next 12 months. So far, Hugdahl said $19,000 in confirmed revenue has been booked.

“I’m hoping they get a lot more booked,” she said.

While the new city-led agreement has the organization splitting some revenue, it also provides the art center with shared security and maintenance benefits, Hugdahl said.

Rochester City Administrator Alison Zelms said the agreement connected to the Mayo Civic Center, known as the one-roof model, might have opportunities for adjustment but provides efficiencies that are intended to benefit all groups involved, which includes the Rochester Civic Theatre.

“I think there is a lot of opportunity,” she said.

Dale Martinson, the city’s director of finance and information technology, said the financial benefits might not be evident until future expenses and revenues can be compared.

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“I think it will take some time to shake that all out,” he said.

In addition to reviewing the Art Center finances and operational goals, the council members reviewed the Rochester Downtown Alliance report. They will be reviewing every outside agency that receives more than $100,000 or operates out of a city-owned building.

Once the agencies are reviewed, the committee will make a recommendation to the full City Council in regard to potential funding in the 2023 city budget.


What happened: Rochester's Outside Agency Oversight Committee reviewed financial reports of the Rochester Art Center.

Why does this matter: The city provides more than $100,000 in funding to the organization based on its work toward specific city priorities. The center is also housed in a city-owned building.

What's next: The committee will continue to review other agencies that receive more than $100,000 in city funding or occupy a city-owned building. The committee will make a recommendation for funding allocations in the city's 2023 budget.


Randy Petersen joined the Post Bulletin in 2014 and became the local government reporter in 2017. An Elkton native, he's worked for a variety of Midwest papers as reporter, photographer and editor since graduating from Winona State University in 1996. Readers can reach Randy at 507-285-7709 or rpetersen@postbulletin.com.
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