Answers to Questions from the Town Hall Meeting

December 1, 2018, Conrad Sulzer Regional Library

 
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Save Old Town School had a “Town Hall” meeting on December 1, 2018. The agenda included information sharing by several SOTS members, and then open community dialogue. If you missed the meeting, or just want to refresh your memory, you can view the slide deck.

The plan was for SOTS to address some of the factual questions people might raise during the community dialogue portion. But the discussion was so fruitful that we ran out of time to answer questions and said that we would provide answers afterward.  Here they are.


Enrollment

Does anyone know why enrollment is declining?

Publicly, in recent years the administration has blamed things like the increased availability of "free" online instruction through YouTube, and decreased interest in guitar-driven music.  But we don't think that's what's going on.

We don't have the information that Old Town School of Folk Music has, or should have, about its students and enrollment, so while we can speculate about things like increased class prices, reduced morale and fewer offerings, we haven’t been able to do any kind of complete analysis to fully understand the decline.  Likely it is some combination of many things, big and small. We do know that they could be doing much a better job of marketing and of using the community to help recruit and retain students. They also eliminated things like the First Friday open house in Lincoln Square and printed course catalogs, which we think also contributed to the decline.

This is at the core of what we want to help the school with.  Let’s put all our heads together and get this figured out and reversed.


How long have children’s classes been losing enrollment? Has the removal of the discount been contributing to that? Can they think about adding back discounts for families?

We don't have good information on this, but based on the four years of annual reports available on the school’s website (2014, 2015, 2016, and 2017) enrollment for children 0-5 and 6-12 has been decreasing each of those years.  It has increased slightly for teens -- though they represent a small percentage of students overall-- and decreased for adults, but not as much as for children. In fact, adult enrollments went up slightly in 2015. See table below:

Education Enrollment by Age (from Annual Reports)
2014 2015 2016 2017
Infants and toddlers (0-5) 10,344 9,410 8,602 7,976
Children (6-12) 12,518 8,336 8,432 7,896
Teens   (13-19) 2,361 2,484 2,561 2,538
Adults (20+) 20,105 21,338 21,036 20,047
Total Enrollments 45,328 41,568 40,631 38,457

Marketing/Demographics

Can the school be rebranded? Change the name? How do we call more attention to it?

We think that more information is needed before we think about rebranding or changing the name of the school, and we would not recommend taking this step blindly.  On a broad scale, we would like to see the school making smart decisions based on accurate market research. That being said, we love how the name of the school and how it ties into the history and culture of our community.  Also, "Old Town School of Folk Music" has a lot of name recognition and goodwill associated with it.

A related question might be, can the school's image be updated and refined so that potential students and concert-goers will better understand the wide variety of offerings?  We think that it can.

What is the board doing in regards to marketing? What is their vision? Do they have plans to rethink and provide more outreach?

We do not have details about the school’s marketing efforts.  We have heard radio ads for classes, but have seen little evidence of targeted digital marketing, which we think is more likely to be successful in reaching new students.  We believe the school could leverage its database of class enrollments and concert attendance to product targeted emails along the lines of, “We see you took a class with teacher A focusing on genre B in the past; did you know that Teacher A will offer a class with a similar focus next session?”  

Who are we marketing to? Where are the younger people? Where are the people of color? What is being done to engage people with diverse backgrounds? What about senior citizens who could come during the day when the building is empty?

We recognize that the profile of students at the school is not as diverse as any of us would like to see.  The current administration has made efforts to reach out to other neighborhoods and communities, which we appreciate.  We suspect that diversifying the student body will require a combination of new kinds of classes and targeted marketing initiatives.

What is the representation of the kids in the pre-teen and teen years? How can we get them to be a part of the movement?

See info above under “enrollment” for children and teens.  Combined, they currently represent about 27% of all students; there are about twice as many adults as there are children and teens.  We are forming committee to try to think of ways to reach these younger people, and welcome volunteers.


Fundraising

What are the efforts in getting the major donors of the Old Town Board involved in these efforts?

One SOTS member has already reached out directly to 5 major donors (friends from ensemble classes taken together) to share information about what has been happening with the Old Town School Board’s recent decisions and SOTS’ responses, and to solicit letters from them to the Board. The SOTS member will be meeting with several of these donors in a few weeks to learn more about the donors’ perspectives. A SOTS donor outreach committee or subcommittee is being formed; volunteers for this committee will be welcomed.   


The Board/Governance

How are bylaws written or amended in non-profit orgs? What kind of pressure needs to be applied to amend the bylaws?

The initial bylaws of an nonprofit corporation are adopted by the corporation’s board of directors as part of the organization of the nonprofit.  Thereafter the board of directors has the sole power to alter, amend, or repeal the bylaws or adopt new bylaws. Old Town School of Folk Music is a non-member organization, and accordingly, only directors have the role and obligation to review and approve amendments to the bylaws.

The current bylaws have been amended at least 12 times.  We don’t currently have access to previous versions of the bylaws, but we are exploring avenues to obtain them. Nonprofits are required to report each year on IRS 990s as to whether the governing documents have been substantially changed in that year, and the school has consistently answered “no” to this question.

As part of our efforts, SOTS would like to hear what amendments to the bylaws the community would like to see.  The school is structurally an insular body, but we hope with under the pressure and scrutiny of the community, the Board of Directors would create mechanisms for broader participation and input in policy and decision making. These changes could include amendments to the bylaws.

Can we have a report of the by-laws? What do they say about how people become members of the board?

A copy of the Old Town School of Folk Music bylaws and articles of incorporation have been posted on the SOTS website at https://saveoldtownschool.org/reference-info.

The bylaws specify that candidates for open Director positions are identified, evaluated and recommended by a Nominating and Governance Committee, which consists of at least five Directors, including the Chairperson of the Board. All the members of that Committee must be current Board members.

We have been told that Directors are expected to donate -- or raise -- a minimum of $8,000 per year.  While Directors do much more, fundraising appears to be a key obligation of a director to the School and the “give or get” requirement is a key obligation for one to remain as a director.

Only Directors can vote to add (or remove) Directors. The Bylaws provide that the Board shall comprised of at least 32 directors.  Directors can only be removed by a majority of current Directors “then in office” voting at a meeting of the Board of Directors at which a quorum is present.  For example, with a Board of 32, removal would require the vote of at least 17 directors.

The Bylaws are somewhat confusing on the voting requirements to remove a director.  A majority of current Directors “then in office” would always be greater than the number of directors needed to to establish a meeting quorum.  A quorum is one-third of the “whole” Board of Directors. As a general rule, the bylaws provide that “[t]he act of a majority of the Directors present at a meeting at which quorum is present shall be the act of the Board of Directors.” Accordingly, with a Board of 32, a quorum is at least 11 directors.  With 11 directors present at a duly-called meeting, the affirmative vote of only 6 would be required to for the Board to act.

Currently only 29 Directors are listed on the school website.  The bylaws provide for a board of 32 Directors. Vacancies on the Board may be filled by the Board at any regular meeting, and accordingly, questioning any action of the Board based on these vacancies seems unlikely to be an effective method to promote change.  

The members of the board have fiduciary responsibilities and should be addressing the financial decline of the school.  Do we have copies of minutes of the Board? What has been discussed at Director meetings regarding the financial situation of the school?  

We have not seen or been provided with minutes of the Board.  We have had access to public filings of financial information which paints part of the picture regarding the school’s current situation.  To see these disclosures through 2017 visit: https://saveoldtownschool.org/reference-info/

Who are the voting members of the corporation?   

There are no voting members or voter shares in the organization; according to the bylaws, there are no members at all (from a legal perspective). Since the Old Town School of Folk Music is organized as a nonmember nonprofit, only the Directors (board members) vote on decisions. This is a legal form of nonprofit organization.  


The “voluntary severance”

In addition to taking 909 off the market, did you speak to the Board about protection for the teaching staff? Any word from them on the buyouts?

We are disappointed that the school is planning to close its music store on Armitage and is continuing with its plans for a "voluntary buyout package" for administrative staff.  We continue to believe that the decline in student enrollment that is driving these expense reductions can be turned around with sufficient attention to marketing and pricing strategies.  We hope any other cost-cutting initiatives will be limited and temporary, and will not include staff layoffs.

In our remarks to the board on November 29th we said the following: “[We] hope you understand the anguish we feel -- for ourselves and for our friends on the faculty and staff -- when they fear for their livelihoods and, in the case of staff, have been threatened with layoffs.

The full SOTS statement to the board can be found here: https://saveoldtownschool.org/nov-statement-to-board.

The school is projecting a significant loss for the year and say they are trying to find ways to narrow the loss.  Our message to them is that a rising tide lifts all boats. If we can work together to boost enrollment and otherwise restore the health of the school, we can reduce or eliminate the need for any cuts.

Why are they issuing voluntary severance?

There's been no official statement, but we understand that the letter that was sent out to the staff said that it was due to "budget challenges."   We are told that the recipients of the letter were given until November 30th to decide whether to apply for the severance package.

What is happening with the teaching staff? Is SOTS stepping on the toes of people who work?

The teaching staff is not being offered voluntary severance.  We understand that nearly all are paid an hourly rate based on the classes/lessons they teach, and if they teach a certain minimum number of hours they are eligible for health insurance benefits. However, as enrollment goes down, or if students don't follow them to a new location, then they don't have classes to teach and their income goes down. Some may lose classes/lessons to the point that they not only lose income, but they lose insurance.  Again, a rising tide lifts all boats. The key is to rebuild enrollment.

We want to provide advice and, where needed, boots on the ground to help with things like recruiting new students, mentoring beginners to increase retention, etc.  We are not here to replace existing employees, and we can only be effective if management is effective in utilizing us to complement the paid staff.


909 W. Armitage

Does the 909 W. Armitage building have historic landmark status?

It is not a landmark building but it is in a historic district.  The building is rated orange by the Commission of Chicago Landmarks.  The orange rating means that if a demolition permit is applied for, the permit will briefly be put on hold to allow time for interested parties to study the property's historic significance.  During that time interested parties could pursue getting the building landmarked.

The property's B3-2 zoning allows for a maximum floor area ratio of 2.2:1 meaning that a building containing 2.2 times the land area or 10,868 SF (4,940 SF of land x 2.2 = 10,868 SF) could be built on the property.  This does not include lower level area which is generally not counted in the max floor area. The building currently contains around 8,800 SF of above grade area, meaning someone could add some building area.

Given the property's potential historic nature, current zoning and its relatively small site size, it probably is not a teardown and is more likely an adaptive reuse, meaning someone would buy it to reuse the existing building.  The most likely uses would be conversion to mixed-use, retail on 1st floor and residential above or exclusive retail use. In both cases, significant capital is going to be spent in renovating the building.

Why doesn’t 909 W. Armitage have a liquor license or a license to hold ticketed performances?

At the town hall meeting, a former administrator of the school recalled that once the Hild building (Lincoln Square west building) was up and running, those licenses were given up because at the time it was thought that 909 W. Armitage would be used only for Wiggleworms and teen programming. The administrator explained that it wasn't anticipated that there would be a need for those licenses in the future. Presumably this was a cost-saving measure. A liquor license currently is $4,400, and also requires special insurance. Unfortunately, once given up these licenses aren't easy to reinstate, with the liquor license possibly being more difficult.  A liquor license likely would also require upgrades to the bar area to comply with current health department regulations.

However, existing licensing does permit donation-optional concerts to be held at 909 W. Armitage similar to the way the World Music Wednesday concerts work at Lincoln Square.

If the Armitage school skews younger in age, why are they closing it if they want to reach out to the younger people?

That is one of many things about the decision that we would like to have explained.