Regarding “Tampa art museum seeking $850,000 in U.S. tax credits” (April 30):
Although the article accurately reflected the nature of the New Markets Tax Credit that the Tampa Museum of Art is pursuing, it ended with a very misleading view of the museum’s financial position.
Excerpted from the article: “By reducing the museum’s debt, the tax credit income could help it to bring its books more into balance. The museum’s latest publicly available tax filing in 2012 showed it operating with a deficit of more than $405,000.”
Museum’s response: This figure is drawn from the museum’s 2012 990 form. It is given on Page 1, Part 1, Line 19 and includes cash and non-cash expenses. A breakdown of expenses is provided on Page 10, Part IX of the 990 reference in the article.
We would like to draw attention to the significant non-cash items, as they factor in the $405,000 amount. Page 10, Part IX, Line 22 accounts for depreciation, depletion and amoritization. These non-cash expenses are $460,418 for 2012. These expenses include the standard depreciation on museum assets and the amortization of the leasehold interest in the building itself.
In other words, the museum actually operated in a cash-positive position for the year.
“The same document shows the museum owed about $2.5 million in debt payments, which made up the bulk of its $3 million in expenses.”
Museum’s response: The $2.4 million in debt is a long-term (30-year) note with the city of Tampa for the construction of the chiller plant (a necessity for an art museum to ensure proper HVAC conditions). Page 11, Part X Balance Sheet, Line 23 lists the secured mortgages and notes payable to unrelated third parties at $2,495,715. The museum has been, and remains, current on its repayment of this loan.
The $3 million in expenses reference above reflects the museum’s 2012 operations.
In this case, the balance sheet is being confused with the operating activity for the year. The conflation between debt on the balance sheet and operating expenses results in an unclear and potentially misleading understanding of our financial health.
“Grants from the government and other sources accounted for about half the museum’s $2.6 million in revenue that year.”
Museum’s response: Government support of the museum in 2012 accounted for $746,919 in revenue. This represents 28 percent of our overall revenue.
Todd D. Smith is executive director of the Tampa Museum of Art.