You know..........

The one with the big story on the Railroaders Memorial Museum's finances, scandal or no?

Inquiring minds want to know! (oops, wrong "newspaper" motto....)

lner4472@bcpl.net

Before the speculation becomes too intense and the rumor mill gets out of control, I would like to share whatever information I have concerning the situation in Altoona. For a long time I have been not only puzzled by the museums inability to communicate not only with the general public but its unwillingness to communicate with the railfan community which is the major focus of the museum's potential support expecially on matters related to the K4 project. The speculation over the K4's progess almost universally carries a negative tone and the problems at the museum and the lack of public communications only reinforces that perception.

As I understand the issues, here is my read on the situation.

1. There is no intent at this time to consider bankruptcy.

2. Interim stop-gap funds have been committed with several major managemewnt provisos imposed. These funds will not allow the status-quo to continue but will allow operation to continue on a more limited basis until such time as the mission and the economics of the museum can be rationally redefined.

3. The Board has resigned and has been replaced by a management committee of community leaders with specific skills and committed interests.

4. The top management of the museum has also be realigned and strict financial controls have been imposed.

5. Railfest will go on as intended. The museumn will remain open as will the HSC site.

6. A new Board will be reconstituted sometime in the future to include the current management committe.

MY OPINION! This a a perfect example of champane tastes and a beer pocketbook. When the new museum was conceived in the Master Mechanmic's Building the movers and shakers had their own agendas and no one would recognize that the museum was not really a museum but rather a local interperative tourist attraction and that the "farebox" would never cover the cost of the significant overhead and saleries that the new building, it publically addressed mission, and its exhibits as well as the HSC site would impose on the "farebox". The lack of management skills and the lack of rigid cost containment created the typical "cash flow crunch" that symbolizes the current situation.

There is much more to the story; however, from my perspective the management plan now being put into place together with a realistic assessment of the museum's potential as an economic engine for the local community should produce a viable instiution that serves the local community and the railfan community.

The same can be said for the K4 project. At this time there is no real operating plan and as we all know the Steam Engine has an isatiable thurst for money, For either better or worse, the Commonwealth of Pennsylvania has many "Steam" railroad tourist sites and the folks in Altoona must comne to grips with an operating plan that is unique and does not either compete with other nearby RR venues or tries to replicate them. The K4 experience must be unique in order not the be a furter drain on the limited resources available.

The track record todate is not very good. Better public communications would be the first step to a new direection. They should not rely on the local newpaper to get their story to the public.

Stay tuned.



v-scarpitti@worldnet.att.net

> Although the magnitude of this situation maybe larger or more public than others-these conditions exist at a great many non-profits, rail preservation oriented or otherwise. We've certainly seen similar stories here in the past.

Unfortunately, the bigger the organization, the more the problems listed by Mr. Levin tend to appear-just as it does in all of the business world.

Ironically, non-profits in some cases require more adept management than a similar-sized for-profit, because by their very nature a non-profit can't measure their success soley by objective measures like profit, growth, etc. Obviously, this leads to second-guessing and back seat driving.

You have to deal with donors who want their money used a certain way. Their may be the involvement of well-connected but difficult individuals.

When there's well meaning but inexperienced boardmembers/management, its a tough haul dealing with strong passions and dreams untempered by the limits and disciplines required to stay focused, solvent and compliant. Unrestricted donations tend to make for "champagne appetitites/beer budgets (what a great analogy)" and donor-restrictions tend to create competing and contradicting objectives.

I'm actually inclined to congratulate the prior board for recognizing their own limitations and allowing the organization to reconstitute- no matter how vigorous the persuasion.

Just to show how complicated the financial management and reporting can be, I've included a link to a site which discusses Financial Accounting Standards Board (FASB) 117. Although written in the language of CPA's, you can see from the distinctions in the various financial statement classifications that its quite a juggling act to just PRESENT and account for these items, let alone to please the constituencies that donate and rely upon them.



FASB 117 Discussion

Bennett- I have always found your comments to be insightful and worth considering. Two days ago I was at the museum briefly and liked the progress I saw. I was unaware of the financial issues going on. Your posting caught my eye and I was wondering what you mean by "no one would recognize that the museum was not really a museum but rather a local interperative tourist attraction" Why do you classify it a tourist attraction as opposed to a museum?

kandsmarkloff@aol.com