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Wall Street downturn bites into symphony endowment

Saturday, June 02, 2001

By Andrew Druckenbrod, Post-Gazette Classical Music Critic

The Pittsburgh Symphony Orchestra is facing some belt-tightening due to recent downturns on Wall Street.

The PSO's endowment was a robust $133 million going into this fiscal year. The size of the endowment put the organization in the top 10 for American orchestras. As it nears the end of its fiscal year on Aug. 31, however, the endowment fund has dropped to $113 million.

The loss is significant because the PSO annually takes about 6.5 percent from its endowment fund to supplement its annual budget of about $30 million. Based on current figures, that means the endowment fund will provide about $1.5 million less than it normally does to the operating budget, a drop of about 5 percent.

"The fact is, like the rest of the world, we had good years, and like the entire world, the good years have ended," said managing director Gideon Toeplitz. "We found ourselves with less available money than we had the last few years."

PSO officials are taking the setback in stride.

"We are not in crisis mode," said spokeswoman Jody Doherty.

Still, Toeplitz has initiated a number of cost-saving measures, including a limited reduction in nonartistic workforce.

Trying to avoid layoffs and program cuts, Toeplitz is looking to streamline staff and still seek out new income.

The PSO began the year with 82 non-musician staff members but will end it with 72. Three staff positions will be eliminated and seven left unfilled through attrition. The orchestra, which concluded its 2000-01 season last month, will remain the same size.

"Toeplitz is going to talk about [the cost-saving measures] to the orchestra in a meeting next week, but there has not been talk about the artistic product at all," said PSO principal English horn player Harold Smoliar. "I have confidence in our board and our financial committee that we will ride it out.

Toeplitz insisted there isn't a hiring freeze and is adamant that this restructuring includes no firings or layoffs.

Everything else about firings is a complete bunch of nonsense. We are losing two people, one of whom is going back to school," he said.

With positions unfilled -- and the PSO already has one of the smallest administrative staffs of any major orchestra in the United States -- it means less people will do more work."I think what triggered this round [of organizational changes] is that once again we are hit in the face by the fact that we are over-dependent on our endowment," said Toeplitz. The streamlining addresses that, as well. "I cannot tell you that if the market goes way up again that we are going to re-instate these particular positions," he said. "We found ways of reorganizing ourselves more efficiently without them. If we have more resources, we may add people again, but not necessarily in those particular positions."



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