0.6 Chapter four: the turning tide, 1960-1982  (Page 13/14)

In the 1977 annual report, Goelet lamented the fact that "despite every pos­sible care to cope with operating expenses of the Society the economic situation continued its inflationary trend." The budget gap was widening, and still Goelet was just beginning to lose the confidence he had shown in his statements of 1974. He wrote: "The N-YHS fulfills an important role in the cultural and educational life of New York City and New York State. I hope that with continued support from friends of the Society, this situation will continue." Although Goelet must have been growing more concerned with each passing year—and each deficit— these statements further highlight his tendency to understate the gravity of the Society's financial situation. He may well have restrained himself in an attempt to walk the fine line between emphasizing that the organization was needy with­out going so far that potential contributors would refuse to support the institution for fear that it was destined to fail.

As if pressures to balance the operating budget weren't enough, during the 1970s the Society was forced to undertake a series of major capital projects. First, while investigating the possibility of renovating its auditorium, the Society dis­covered that it did not have a certificate of occupancy on file with the city. It seems that the Society's building on Central Park West predated those city ordinances. It took more than three years and well over $100,000 in construction and legal fees for the Society to receive the certificate it required. In addition, the Society did not have adequate fire detection and extinguishing systems for the library stacks. In case of a fire, the Society's antiquated sprinkler system could destroy the priceless collections. This was an area that concerned Goelet greatly, and he took a leadership role in contributing funds to help finance installation of the latest available fire detection technologies and an extinguishing system that used halon gas. The total cost of the system was $300,000, a good portion of which came from Goelet, but some of which came from its unrestricted accounts. No sooner had that project been completed than the Society found it had to rebuild its main passenger elevator. These capital expenditures erased the Society's already dimin­ished margin for error.

An unfortunate result of the combination of inflationary pressures and unforeseen major capital expenditures was neglect of regular maintenance of the facility. After 1967, when the Society installed the air-conditioning system, an increasing portion of its budget was spent on utilities. Of course, the energy cri­sis of the early 1970s exacerbated the problem. By 1974, a year when only $39,000 was spent on regular maintenance, utilities comprised 81 percent of the amount spent on building and maintenance. The deferral of maintenance expenditures continued through the rest of Heslin's tenure as Society expenditures on utilities grew at an average rate of 8.7 percent per year. Between 1974 and 1981, expen­ditures on regular maintenance, like supplies and repairs, averaged just $62,000 per year, a very small amount for a 150,000-square-foot building that was close to eighty years old.