0.8 Chapter six: attempting a turnaround, 1988-1992  (Page 19/19)

Given the board leadership's emphasis on finding a creative solution to the Society's troubles, the failure to reach an agreement with the MCNY closed yet another of the few remaining doors open to the Society. With the near-term prospects for a merger gone, the Society set its sights back on the tough job of gov­erning. The board of trustees reinitiated its recruiting process for new trustees, which had been put on hold during the MCNY talks. Debs negotiated a con­tract with the labor union, giving the Society's workers a 4 percent pay raise, retroactive to the beginning of the year. Having been without a chief financial of­ficer since September 1991, Debs received authorization from the board to retain KPMG/Peat Marwick to assist her in developing financial plans for the 1993 fiscal year. Finally, of greatest importance, the Society's loan from the Golden Foundation came due in March. The foundation was willing to extend the loan for a month but not to roll the loan over. The Society tried, without success, to retire the loan with contributions from the trustees. Only part of the money was raised when three trustees stepped forward to assume the remainder of the loan, approximately $840,000.

In June 1992, Debs announced her intention to resign her post as president effective September 30, 1992. Debs reminded the board that her contract had expired the previous December. She had stayed on beyond that date to try to convince New York State legislators and the governor that the Society was wor­thy of major support. Unfortunately, the Society had been unsuccessful in its attempt to win appropriations in the 1993 budgets of either the city or the state of New York. With prospects for city and state help deferred for another year, Debs decided it was time to step down as chief executive officer.

Debs congratulated her staff on the successful attainment of the first two objectives and pointed out that while they had not been successful in reaching the third objective, there had been significant accomplishments. She alluded to the fact that the Society had raised nearly $20 million and that the deficit had been reduced from 54 percent to 20 percent of the operating budget. She listed the major institutional alternative options that had been pursued, the attempts to gain CIG status, the failed effort to merge with the MCNY, discussions with educa­tional institutions regarding possible affiliations, and efforts to receive major as­sistance from the state of New York. She asserted that "the Society is dependent on either affiliation or merger with another institution or on the infusion of pub­lic money on a large scale."

But the Society had been unable to secure such a relationship, so at her final meeting as president, Debs presented a drastically reduced fiscal 1993 budget that she had prepared with the help of KPMG/Peat Marwick. It called for the Soci­ety's galleries to close at the end of the term of the Jewish Museum agreement on December 31, 1992. Instead of exhibitions, the museum staff was to concentrate on developing traveling exhibits and publications and to work on identifying works for possible deaccessioning. The library was to remain open to the public twenty-three hours per week, and the duplicate deaccessioning program was to be con­tinued. Through cuts in staffing, principally in security and maintenance, the Society was able to reduce payroll by $600,000. In addition, every nonessential expenditure was eliminated, resulting in a total budget of approximately $5.7 million (approximately $1 million less than for fiscal 1992). Revenues were pro­jected to increase by almost $1 million, to $5.65 million.

As Debs stepped down, the Society was once again careening toward institu­tional crisis. The 1992 fiscal year ended with a significant deficit, this time $2.5 million. Not only were cash reserves depleted, but the Society had added nearly $1 million of debt to its balance sheet. Though the Debs administration had accomplished a great deal, it had been unable to complete a year of operations without running a deficit. Responsibility for leading the Society along its rocky path passed to Norman Pearlstine, who assumed the role of acting president.