City staff toss lifeline to TheMuseum
Kitchener’s core cultural institution on verge of closing for good
The future of the TheMuseum in downtown Kitchener hangs on a vote at city council Monday.
City staff propose interim funding of $300,000 for TheMuseum over the next four months. In exchange, the city wants negotiations to begin June 1 on changing TheMuseum’s business model in ways that secure its future. If the talks fail, TheMuseum will close and use the $1.5 million it has in reserve to pay severance for its staff of 20.
Financial difficulties hit cultural organizations across the country following the COVID-19 pandemic, says the report.
Prior to the pandemic, TheMuseum was attracting about 100,000 visitors a year to 10 King St. W. in downtown Kitchener. Last year, attendance was about 80,000 and it was expected to fully recover in 2024. But regional council’s unexpected vote to slash TheMuseum’s annual grant earlier this year put the institution’s board of directors in the position of having to find a new way of funding or close it down in an orderly fashion.
Regional councillors later restored the funding in a separate vote, but the experienced rattled TheMuseum’s board.
Memories are still fresh of the KW Symphony’s sudden closure last fall that left musicians and staff with no jobs and no severance payments. The KWS board walked away from its obligations without even filing for bankruptcy.
“We are not going to do that,” said TheMuseum’s CEO David Marskell in an interview Friday.
City staff want to avoid that as well.
“As observed during the sudden closure of the KW Symphony, the sudden closure of any cultural institution prevents the community
funders, supporters, etc.) from rallying behind the organization,” says the staff report.
Launched in 2003 as the Waterloo Regional Children’s Museum in a renovated department store, it rebranded as TheMuseum in 2010. It has run deficits most years, but was always able to raise enough money to pay down debts and keep going.
TheMuseum currently reing. ceives about $745,000 (cash and in kind) from Kitchener, Waterloo and the Region of Waterloo.
TheMuseum’s annual operating budget is about $2.5 million. Every year the board raises the difference, or dips into reserves, or taps a line-of-credit to pay off deficits.
The report says city staff and TheMuseum agree that approach is not sustainable.
In return for interim financing, the city wants to TheMuseum to honour all bookings for summer camps, weddings and other events and reduce spend(donors, It also wants museum staff to put forward their “best efforts” in exploring major fundamental/structural changes to their operating model.
Without immediate help, TheMuseum will be in a negative cash flow position this month, and now has very limited unrestricted balances in its reserves, says the city report.
Marskell, who did not want to give a detailed interview in advance of Monday night’s vote at city council, warned last December the region’s cuts put TheMuseum’s future in jeopardy.
The staff report says the city will begin looking at alternative uses for the building at 10 King St. E., which it owns, in case TheMuseum has to close.
“Undertake an orderly shutdown if needed,” says the staff report.
“Should TheMuseum board determine that no viable, sustainable model can be found, they would ensure an orderly shutdown including covering all outstanding liabilities.”