Sour Note 

How the Colorado Springs Symphony quietly fell apart

By the time most people found out that the 75-year-old Colorado Springs Symphony Orchestra was on the verge of bankruptcy in early January, it was already too late. The rift between the musicians and management, silently growing for a year, had become a deep chasm.

The symphony's management company was quick to blame the economy, lack of a sustainable donor base and low market demand; the musicians were convinced that poor management had led them to the crisis.

On Jan. 6, Alan Isaacson, spokesman for the American Federation of Musicians' Union Local # 154, made it clear that the symphony's musicians had been privately expressing their discontent with the current leadership for months.

In fact, Isaacson revealed, the musicians had -- all the way back to last Sept. 27 -- issued a vote of "no confidence" of the executive committee of the Colorado Springs Symphony board of directors.

The cause of that no confidence vote was specifically detailed as a series of questions directed to the symphony's volunteer board of directors and its paid management team:

1) Why did former Director Susan Greene suddenly leave the symphony without explanation on Dec. 6, 2001?

2) Why had an estimated $250,000 of the symphony's annual operating budget been spent on an interim management that was flown in from Michigan every week, only worked two days a week and failed to provide a single viable candidate for the executive director position in nine months of searching.

3) Why had the board been allowed to borrow $500,000 against the symphony foundation's already shrinking endowment, something that placed the symphony's long-term sustainability in jeopardy and is widely considered to be a practice that's frowned upon in the nonprofit community?

4) Why hadn't an accurate accounting of the year's finances been provided to the musicians to account for an unprecedented tripling of annual management expenses?

The musicians are still waiting for answers. Meanwhile, on Jan. 10, the CSSO filed for bankruptcy protection under Chapter 11. Now, the entire future of one of Colorado Springs' oldest and most distinguished arts institutions is in jeopardy.

Question 1: Who's afraid of Susan Greene?

For the musicians, the untold story of the symphony's unraveling began more than a years ago, on Dec. 6, 2001. That day, staff members at the symphony's offices at 619 N. Cascade Ave., watched as Executive Director Susan Greene was hastily escorted from the office to her car by board of directors President Shawn Raintree.

No explanation was given other that Greene had "resigned."

The departure came as an unexpected blow to the musicians. And something about it didn't make sense.

Greene had been a member of the symphony's board of directors since 1990 and had been running the organization since 1997. She was beloved by the musicians for her commitment and her tireless fund-raising efforts.

"[Susan's] first priority was to honor the contract with the musicians," said Ruth Wolfe, a cellist with symphony for the past 25 years. "We didn't have any grievances or problems while she was executive director. She was there at every rehearsal and every concert, she always came backstage to give us support, and she worked very hard."

"We trusted Susan Greene 100-percent," echoed violist Carla Powers.

Greene's connections in the music industry also enabled her to book all-star guest appearances by world-renowned musicians like Itzhak Perlman, flutist James Galway and cellist Yo-Yo Ma who performed with the symphony on Sept. 11, 2001.

Greene was also responsible for bringing world-famous conductor Laurence Leighton Smith to Colorado Springs. "He was so impressed that it erased any doubts he'd had about the artistic potential of the orchestra before he came," Greene recalled.

Greene was also heavily involved in fund raising. In fact, as was noted in a February 2001 report prepared by The Research Group, LLC, an independent marketing and consulting firm hired to evaluate the symphony, consultant Rick McKelvey noted that Greene appeared to be the organization's "only" fund-raiser.

"[The executive director is] probably struggling with where to spend time -- inside managing, or outside raising money, making it hard to do either one as effectively as desired," he noted.

In the report, McKelvey also chastened the CSSO's volunteer board of directors, which had been led by Shawn Raintree, executive director of the Colorado Springs branch of Kaiser-Permanente, since he was elected president of the symphony board in 1999.

"[There is a] general acknowledgement that the board's members, individually and collectively, are not actively engaged nor leading in fundraising," wrote McKelvey, also noting the "hodgepodge of ideas belies [a] lack of awareness of fundraising's fundamental importance to health of organization." Finally, he noted, "A serious lack of awareness about who major donors are implies little recognition of donors and little communication with them."

Greene, on the other hand, had secured the single largest one-time donation of $400,000 from longtime symphony fan Lois Barbee upon her death in 1999.

The symphony's former director of finance, Katherine Moore, said Greene was constantly doing the board's fund raising for them, even more so when the board signed off on the musician's current contract that included significant raises for musicians. The musicians currently earn $13,000 a year.

"Before the 2000-2003 contract was approved," said Moore, "Susan and I sat down and went through all the numbers with the board and said, 'This is the money we're going to have to bring in. You have to do the fund raising to make this work.' And they agreed to it."

In the nonprofit world, an organization's board of directors is often responsible for raising contributions. In fact, the National Charities Information Bureau's "Standards in Philanthropy" states: "The board is accountable for all authorized activities generating financial support on the organization's behalf."

When Greene was gone, just 10 months later, few could understand why someone as productive and dedicated to the musicians for so many years would suddenly be asked to resign.

Despite their pleas to the board for an explanation, musicians were told that Greene and the symphony had signed a mutual non-disclosure agreement as part of her severance package.The musicians were left with nothing but speculation and rumors.

"I still don't know why she was fired," said Powers, the violist. "She was the heart of our organization. It's been a very difficult thing for the musicians."

Isaacson, meanwhile, believes it was precisely Greene's passion and commitment to the musicians, rather than to the board, that got her fired. "It's like the commissioner of baseball siding with the players instead of the owners -- she was always pressuring the board to do more, and they got tired of hearing it."

Lingering question

Adding to the air of confusion was a lingering question about irregularities in board protocol at the time Greene left.

On the same day she "resigned," the board later convened to take a vote on her "termination," as it was described in the minutes. Just before the vote, the four musicians who sat on the board were asked to leave the room so that the board could deal with a "personnel" issue.

Bill Holst, one of the musicians who was on the board at the time, said the musicians were then invited to return to the meeting to vote on Greene's termination, even though they had been excluded from the discussion and had not been offered an explanation.

None of the four musicians protested at the time, but later, they said they realized that the board had no cause to ask them to leave and had, in fact, violated their contract.

Specifically, the by-laws of the Colorado Springs Symphony Master Agreement, 2000-2003 state that "Orchestra representatives may not be excluded from any board discussions or votes except from board discussions of or voting on collective bargaining, contract negotiations and unresolved employee grievances at the option of the association."

Because Greene was not under the collective bargaining contract and not a union member, there was no reason the musicians should have been asked to leave, said Mary Anne Lemoine, violist and longtime member of the board's finance committee.

The musicians filed a grievance, said Paul Nagem, a flutist and board member at the time, but he claims the board never responded with a satisfactory reply.

Executive Director Raintree declined comment, citing the non-disclosure agreement.

Question #2: Management piranhas?

The Resource Group (TRG) -- which had singled out Greene as the only active fund-raiser in the symphony -- was hired to fill her position just hours after her departure. In addition, the company, then based in New Jersey, was also contracted to conduct the search for a new executive director.

Headed by Rick Lester, TRG is well known for its marketing savvy. In fact, Lester had been hired by Greene in 1999 to do marketing consultations once a month. According to Greene, the board was wowed by his talents and believed his company could help save the symphony's fund-raising efforts.

But, Greene claims, the board also thought TRG was going to do all the fund-raising work for them.

Nathan Kahn, a bass player for the symphony who is also a national negotiator for union orchestras, said that in addition to its marketing prowess, TRG has been criticized by some for charging exorbitant fees and having a reputation for doing as little as possible when serving as interim management.

"In my opinion," said Kahn, "TRG acted much like piranhas surrounding a wounded animal. They charged an exorbitant fee for an executive director search that was so bungled they ended up with no one.

"They seemed to me to want to plug in their personal friends as opposed to searching for the best candidate."

TRG's Lester declined to comment for this story, citing a company policy prohibiting him from speaking to the media about clients.

For his part, Raintree believes TRG gave its best effort, but said, "When an organization is bleeding it's rather difficult to recruit people who inevitably ask themselves, 'Do I really want to bet my career on joining this organization?'"

Isaacson and the musicians don't buy this argument. The real problem, they believed, was that TRG was only working two days a week. The symphony's interim executive director Peter Smith was being flown to Colorado Springs from Grand Rapids, Mich. every week -- a huge expense, they note.

All told, as of July 2002, $133,375 had been paid to just two members of TRG for salaries, marketing, development and the executive search over a six-month period. In addition, $51,951 for travel had been accrued, totaling $185,326. (These costs do not include the salaries for 15 other full- and part-time CSSO staff members at the time.)

Additional costs through the remainder of the year pushed the amount to an estimated $250,000.

By contrast the average cost for the entire symphony staff of 18 for a six-month period the year before was just $133,000.

In addition, bass player Kahn noted that an interim management group that is also conducting a management search has an inherent conflict of interest.

"All [TRG] had to do was keep searching ad nauseam and collecting more and more paychecks," he said.

Concerns were also raised when musicians learned that Lester had moved his entire business and home from New Jersey to Woodland Park.

"He needed money," Greene said. "He built a mega-house up in Woodland Park."

Further complicating matters was the fact that Lester's daughter was still employed by the symphony as the assistant to the executive director.

TRG's long and expensive national executive search proved, ultimately, fruitless. Larry Barrett, the man who was eventually hired as executive director last Nov. 7, is the husband of former board member Eve Barrett and lives in Colorado Springs. Although Barrett has no prior experience working with a symphony, a board member, who asked not to be identified, says his salary is $92,000 -- almost $20,000 more than Greene was making.

Question #3: Cracking foundation?

On top of the costs that were funneled to TRG for providing an interim director and for the replacement search, symphony musicians were aghast when they discovered that an estimated $850,000 for operating costs had been borrowed against the already shrinking assets of the Colorado Springs Symphony Foundation.

The foundation was set up by Springs Attorney and former CSSO board member Phillip Kendall in 1988 to help ensure the long-term financial health of the CSSO.

This type of foundation or endowment is often considered the lifeblood of a nonprofit organization, and money made from investments is often the only steady income a nonprofit can count on.

Over the years, the symphony has depended on the foundation's earnings to help with its monthly operating costs. During a typical year, for example, when the foundation's assets were well above $2 million, said Susan Greene, the Symphony Foundation would normally contribute around $11,000 per month.

But by September 2002, Isaacson said, the foundation's worth had gone from a high of $2.7 million in the summer of 2000 to around $1.7 million -- not including almost $1 million that had been borrowed by the symphony against the foundation's assets.

Some of the foundation's attrition can be attributed to monies they gave to the symphony to cover operating expenses and to offset the loss of revenues post 9/11. However, Isaacson blames the losses on poor investment and mismanagement.

Raintree, meanwhile, defended the loans against the foundation's assets as a last-ditch effort to "keep faith with the musicians' contract" because the organization was "bleeding badly."

But musicians felt that their trust already had been betrayed, and that the loan was only taken to cover up for the ongoing failure of the board to raise funds.

In general, while it is not normal to borrow money against a foundation's assets, Cathy Robbins of the Colorado Springs Chamber Nonprofit Partnership said, "It's not uncommon for nonprofits to have a line of credit. But it's not considered good business practice."

When asked if borrowing money against the foundation was a sound business decision, Foundation President Mary Ellen McNally noted: "It's legal."

"Our board," she said, "is of the opinion that the Foundation should support the symphony as long as it's in existence."

McNally said that should the symphony file for bankruptcy under Chapter 7, the foundation would be required to pay off its line of credit.

Question #4: Fuzzy math?

Another troubling indication was an apparent tripling of the management budget in 2002.

Isaacson estimates that in fiscal year 2002, with a $3.6 million budget for operating costs, $720,000 was spent on management, a figure that nearly triples the 10-year average management budget of between $250,000 to $300,000.

Larry Barrett, the symphony's new executive director said because those numbers haven't been audited, it's impossible to determine their accuracy.

In a subsequent interview, however, Barrett claimed, "I haven't even looked at those records."

Raintree, meanwhile, terms Isaacson's figures "fuzzy math" even though Barrett himself stated that his management budget for 2002-2003 was at least $800,000, which is more than $500,000 over 2001 management costs.

Raintree initially offered to show the symphony's books to the Independent, but then postponed the meeting when Barrett said he didn't have time.

Adding to the confusion is that soon after former Executive Director Susan Greene left, the board hired a new finance director, Paul McClintock, a corporate accountant from Colorado Interstate Gas Coastal. When McClintock came on board, he dramatically changed the way the organization's finances were reported, "in such a way that highlighted the crisis the organization was in," said Raintree.

Raintree described McClintock as "a very strong, very knowledgeable accountant ... among the most qualified people we've ever had at the symphony."

However, Mary Anne Lemoine, a violist who is also a longtime member of the Board Finance Committee, said that Paul McClintock's accounting was "very difficult to understand."

"Before [McClintock] we were always able to get end-of-month expense sheets within a couple of weeks of the end of the month. Now it's taking two months," said Lemoine. "As an example, the end of the fiscal year was July 2002, and we got those numbers in December."

On Jan. 7, McClintock tendered his resignation to take a position with American Birding Association. He said his resignation had nothing to do with the problems at the symphony.

Last chance

In the months following the musicians' vote of no confidence last September, their questions have remained unanswered.

The board, meanwhile, had launched what some view was an overdue, major 90-day fund-raising campaign called "the Symphony Challenge" in an attempt to salvage the season.

Almost a year after Greene's departure, the symphony had more cause for cautious optimism when Barrett came on board in November. The musicians had weathered many financial storms, and no one saw any reason why they shouldn't be able to ride this one out.

One month later, the board continued to portray a rosy picture of the symphony's financial condition.

In a CSSO marketing document dated last Dec. 3, for example, season and individual ticket sales were reported to be almost $25,000 over projections.

A financial report presented to the board on the same day gave every indication that the symphony's financial situation was ahead of budget as long as the fund-raising goal of $900,000 was met by the end of December.

Short of the goal

At the end of December 2002, the CSSO's board of directors had defied all of their critics.

According to the budget prepared by McClintock, the board had managed to raise $648,877 in just 90 days. That amount represented more than a third of the $1.7 million they needed to raise for the year -- and the season wasn't even half over.

Though they were short of their $900,000 fund-raising goal set for the end of December, they were only about $40,000 short of where the budget said they should be. Isaacson calculated that if they kept raising money at that average rate of approximately $130,000 per month for the rest of the season, they would only have been $140,000 short of their goal for 2003.

"The board did a great job during that fund-raising campaign," said Isaacson. "The organization has never raised that much money in 90 days before."

And even if the symphony was still a little short of projections, said Isaacson, the board had already demonstrated its capability of raising unprecedented amounts of donations in a short period of time. Surely a creative solution could be found to cover a small $140,000 shortfall.

Out of nowhere

On New Year's Day, the musicians got a phone call that all but quashed their hopes that the symphony might pull through.

The CSSO said they needed $217,000 just to make payroll on Jan. 15 and management immediately wanted to renegotiate the musicians' contract before it was set to expire at the end of the 2002-2003 season.

Management also asked the musicians to voluntarily break their contracts and accept 25- to 40-percent pay cuts from their $8,000 to $13,000 yearly salaries. They were also asked to agree to the reduced wages through the year 2006 to help the organization operate under a "right-sized" or "sustainable" business model.

The musicians were outraged by the timing.

January, they note, is a tough month for fund raising. In addition, a high-profile concert with musician Ray Charles was scheduled for Jan. 31. Though the economy was unpredictable, it didn't seem like a time to make rash decisions.

Why, they wondered, hadn't the board simply asked for temporary relief from the musicians as they continued their fund-raising efforts to fulfill the 2000-2003 contract they themselves had approved?

"The musicians have a long history of providing relief," said Isaacson, citing the musicians' willingness to take short-term pay cuts after a similar financial crisis in 1997. "The only appropriate action would have been to talk about the short-term shortfall. ... [The board's] intention is to downsize, restructure and reshape in the long term. ... They think the symphony should be run like Wal-Mart. But we're not selling Tide. This isn't laundry detergent."

Raintree, however, insists that the musicians knew all along that the symphony couldn't sustain itself in a battered post 9/11 economy in a state that ranks 50th in funding for the arts.

"The fact is, we had an agreement that was unsustainable," said Raintree. "Everyone knew what the situation was. Everyone knew the organization was bleeding badly. But you shouldn't confuse the messenger with the message."

Still, Isaacson said the musicians believed that Raintree and the board of directors had severely mismanaged the organization in the year since Greene left, making survival a near impossibility.

"I agree that the economy is sluggish," said Isaacson, "and I agree that other organizations are suffering. But in my opinion it has no bearing on what happened here. If you have a situation of gross mismanagement, the sluggish economy just makes it harder to recover."

No checks, no music

The musicians decided that they had held their tongues long enough. On Jan. 6, they alerted the media, breaking a year of silence and internal struggle.

Four days later the symphony filed for Chapter 11 bankruptcy and relations between the CSSO and the musicians soured even further. The filing came a day before the musicians had scheduled a meeting to discuss Barrett's original proposal.

Two days after that, Barrett asked the musicians to accept payment on a "pay-for-performance basis," that would be dictated by ticket sales at each performance.

The musicians considered the offer an even greater insult than the original offer, particularly because it was well known that concerts seldom break even.

"We'd end up owing them money!" said flutist Paul Nagem.

After several failed negotiations the following week, conductor Laurence Leighton Smith officially announced his resignation on Jan. 15.

That same day, for the first time in the symphony's 75-year history, musicians were greeted at the doors of the symphony's office by Barrett with the written announcement: "No Checks. No Music." Meaning that the musicians wouldn't get paid, and they also wouldn't be given their sheet music.

Will the band play on?

No one knows how, when and if the symphony will emerge from its labor dispute and the Chapter 11 hearing expected to begin on February 10.

Since the Jan. 15 failure to issue paychecks, the CSSO has been placed on the American Federation of Musicians' "Unfair" list, prohibiting any union musicians from playing for the CSSO. (The CSSO also failed to make payroll on January 31.)

The status has forced the Symphony to cancel or postpone its scheduled concerts, including the much-anticipated appearance by Ray Charles on Jan. 31, which CSSO management says it is trying to reschedule.

Instead of the Ray Charles concert, however, the symphony musicians gave a free concert at Grace Episcopal Church led by Laurence Leighton Smith on Sunday, Feb. 2, to show their appreciation for their dedicated audience.

With every pew and aisle packed with Symphony fans, Associate Conductor Thomas Wilson stood before the crowd just before the second-half presentation of Dvorak's "From the New World" Symphony to thank the audience.

"If anyone asks who the Colorado Springs Symphony is," he said, waving his arm toward the musicians crammed onto the church stage, "tell them it's these people."


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