Changes that Prompt this Proposal This proposal is rooted in the following understanding of the current situation:

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1 The Denver Scientific and Cultural Facilities District: A Proposal for a Forward-Looking Approach to Reauthorization Prepared by Anthony Radich, September 1, 2015 The world has changed a great deal since the core funding formula for the Denver Scientific and Cultural Facilities District (SCFD) was put into place in Although that formula has been tinkered with since that time, no substantive changes have been made to it. A self-appointed task force of the SCFD governing board recently recommended essentially more of the same for the next 12 years. Now is not the time to return to the 1980s; the Denver region should look forward and not back. The current reauthorization cycle provides an opportunity to address the fact that culture in the SCFD area is no longer driven by the major institutions represented in the SCFD s tier one. Rather, cultural and scientific activity in the District is increasingly provided to the populace by SCFD tier-two and tier-three entities. Changes that Prompt this Proposal This proposal is rooted in the following understanding of the current situation: The recipients of SCFD tier-one funds have been stabilized and vastly improved since the establishment of the SCFD. Now, it is time for other cultural entities of all sizes to benefit from funds that can stabilize and develop them into more effective organizations. The world is very different in 2015 from how it was in 1988, and so is the SCFD region. The population of the SCFD region is larger by approximately one million and is projected to grow by another one million by the time the proposed 12-year reauthorization period draws to a close. The makeup of that population is also changing. The District s Hispanic/Latino population will continue to grow and is projected to soon comprise more than 30% of the region s populace. In addition, entities outside of the borders of the City of Denver have expanded their cultural aspirations, and many of them desire cultural services closer to home. The SCFD s core formula funding strategy is out of step with long-time practice in the fields of both cultural funds allocation and the expenditure of public funds in general. Although a few entities across the country continue to allocate significant cultural funds to cultural organizations in formula fashion, most public funding entities are much more deliberative and evaluative in their allocation processes. As a result, the recipients of

2 the funds are more accountable for delivering programs the public desires and for doing so in an efficient manner. The SCFD s focus on the financial size of organizations as a key criterion in the allocation process is problematic. Under the current and proposed system of allocation, a cultural organization that is significantly out of touch with what the public wants in terms of programming could continue to receive funds--often millions of dollars-- from the SCFD for years. In today s climate of a public that desires transparent and responsive government, this approach is seriously out of step. The way in which people engage in culture continues to evolve. Locking the SCFD region into a pattern of involvement anchored in the 1980s that is inflexible and centered around large institutions prevents the region from best serving the public and the adapting to ways in which citizens choose to engage in culture. Participation in culture across the region is increasingly defined as participation in a broad range of cultural activities not just those offered by a select group of flagship institutions. SCFD reports of participation in the activities offered by tier-two and tier-three organizations clearly demonstrate that these two groups serve more citizens with their tax dollars than do the tier one entities. The tier-one organizations remain important to the region for a number of good reasons; however, the smaller organizations that are currently leading in the servicing of the cultural interests of the public should receive the funds to do so. A Proposal for Changes to the Reauthorization Legislation The key recommendation made here is to revise the SCFD legislation s core allocation formula to support the future and not the past. I propose the formula be reset in the following manner: over a twenty-year-period, SCFD program funds should be adjusted annually so that at the end of a twenty year transition period, SCFD program funds are allocated in equal amounts across all three funding tiers. This would result in each of the three tiers receiving 33 ⅓% of the SCFD s program funds at the conclusion of a 20-year period. Appendix A to this document illustrates how such a change could occur over time. Under this proposal, the tier-one entities would continue to receive the generous core base amount they received under the old system; however, they would not benefit from the projected growth in funds over the next 20 years. Instead of further expanding the funds allocated to the tier one organizations, each of them would be encouraged to further develop their contributed and earned-income

3 efforts to fund any growth they wish to engage in. Unlike most tier-two and tier-three organizations, the tier-one organizations have significant staff and resources available to expand their earned and contributed income-development efforts. Although change to the existing and task-force-recommended SCFD funding formulas is most important, the reauthorization legislation also needs to be revised to reflect issues of accountability and responsiveness to the public. The following suggested changes to the SCFD legislation are focused on making recipients of the funds more accountable and also on creating a more policy-flexible structure for the allocation of SCFD funds. A more flexible governance and decisionmaking process will support innovation and risk taking in the scientific and cultural arena in addition to preservation of existing cultural activities. The suggested key changes to the legislation are: Design a process into the SCFD that builds the cultural policy-making capacity of the SCFD governing board and staff. Currently, these individuals primarily serve as check writers and auditors. They neither are required to ensure the maximization of the use of the funds distributed nor are charged with evaluating the manner in which each entity is responsive to the interests of the public. The current system of oversight seeks to ensure that funds are legally expended; however, the system as it exists today does not encourage the best allocation of SCFD funds. Develop a program-evaluation system for organizations receiving funds at all three tier levels. Some of the tier-one entities are laggards when compared with their peers across the country. Several tier-two and tier-three organizations are also underperforming for the amount of public subsidy they receive. Writing checks to entities that are not performing or do not seek to perform at a high level is a waste of taxpayer dollars. Better evaluation processes need to be put into place to ensure that public money is being used to support cultural organizations that are progressing and not stagnating. Stop allowing the tier-one organizations to decide how to allocate their block of funds among themselves. Groups that are recipients of significant tax funds typically are not allowed to decide among themselves who receives what share of tens of millions of dollars. This insider, club-like decisionmaking is not available to tier-two and tier-three organizations and needs to be taken out of the hands of the tier-one entities and placed in the hands of a public deliberative body. Begin to make a space for the funding of new major events in the District. Consider allocating any funds that flow to the District in excess of what is predicted to a fund that could be used to support the development of major

4 special cultural events. Miami and Chicago are two cities that have invested in major international level events that have built cultural participation that contributes to economic development. Such events are increasingly being developed across the country; however, they are currently locked out of SCFD funding unless they are attached to an existing organization. Except for the proposed major change to the SCFD allocation formula, most of the changes to the legislation suggested here are more fixes to the existing legislation than forward-looking innovations. They are limited in scope because they represent what I consider changes that are possible in the current decision climate. Unfortunately, for its size and the amount of funds it dispenses, the SCFD has not stimulated the development of a community that is sophisticated and creative in terms of cultural policy. Rather, the District s narrow focus on the formula distribution of funds rather than on accountable and responsive deliberative allocation has resulted in a community with a very underdeveloped understanding of cultural policy, a legacy of control by large institutions, and weak cross-cultural leadership. What I propose would likely be too modest for a Seattle, Portland, San Francisco, or Los Angeles. However, it may be the best we can obtain at the moment in Denver. Making Changes in the Legislation is Nothing to Fear The current discussion of the reauthorization of the SCFD has taken place under a drumbeat of advice from community leaders and vested interests who counsel; Don't open up that legislation with proposals for too much change. If you do, you may lose everything. Any legislative measure is open to challenges in the legislative process, a redirection of policy changes in the governor's office, changed feelings among voters, and other factors. Retaining the SCFD as it largely has been may allow it to successfully overcome these potential hurdles, but it also may not. At a size of more than $50 million annually and poised to grow substantially as the area continues to grow, the funds the SCFD now allocates annually will no longer slip through the system unnoticed. In addition, the possibility that an SCFD structure presented for reauthorization that reflects the past and not the future is very much in danger of inviting changes from many quarters. Thus, incremental change in 27-year old legislation may not be the safest approach to reauthorization today, and the community leaders who are counseling such incremental change may be paving the road to a very difficult reauthorization. The approach the SCFD task force took to the reauthorization is one that looks backward not forward--and it may generate significant opposition. Some key questions the SCFD-led pre-reauthorization discussion did not consider in depth were: a) When will the tier-one organizations have so much public money they are disincented from raising more of their own? b) How should the changing demographics of the area in terms of both ethnicity and age be reflected in the

5 funds-allocation policies of the SCFD? c) As the funds distributed by the District grow, recipients of the funds are legally and financially accountable. Should they not also be programmatically accountable? d) Isn t now the time to expand the allocation of funds to the counties to give them their turn to grow local cultural opportunities and better serve their citizens? and d) When will the SCFD be allowed to mature beyond being primarily a check-writing entity into a vehicle for more sophisticated cultural policy? Those cautioning very limited change also need to remember that the SCFD is popular with the public and passed reauthorization votes by strong margins. Altering the SCFD structure and formula may actually improve these margins. Also, because the District is now so old, few recall that it was initially proposed as a way to support only the four institutions that, at that time, were losing funds from the City and County of Denver: The Zoo, the Botanic Gardens, the Denver Art Museum, and the Museum of Nature and Science (then called the Colorado Museum of Natural History ). Only after much cajoling did the leadership group proposing the initial legislation agree to first set aside 10% of the funds for other activities. Later, after considerable additional effort by activists, the three-tier funds-allocation system was developed. The melding of the tier system into an initially very limited plan was successful. It arguably helped the measure pass with voters who may well have rejected a funding mechanism that only supported four of Denver s city-based institutions. Imagine the area today without tiers two and three. Appendix A oyqn8st2ghizwriwnbm/edit#gid=0 Appendix B This position paper was prepared by Anthony Radich in the capacity of a private citizen. Radich has served as the executive director of WESTAF (Western States Arts Federation) since Prior to that, he served as the executive director of the Missouri Arts Council, where he managed a state arts budget of $6 million. In the 1980s, Radich worked for the National Conference of State Legislatures, where he managed the organization s work in the areas of art, tourism and cultural preservation policy. He also was appointed by Mayor Peña to chair the Denver Commission on Cultural Affairs. During that time, he worked with several

6 arts leaders to successfully challenge the initial funding formula of the Scientific and Cultural Facilities District to make it more broad based and inclusive. To comment on this paper or request information about this project, you can contact Anthony Radich at END