In the wake of the Overture Center’s announcement of its budget shortfall and dissolved trust fund, a local citizens group is looking into Overture’s operations to make recommendations on what should be done to ensure extra funding.

“The recommendations are intended to give broad parameters to the staff at Overture and give them direction on how to help improve the operations there,” said Mark Bugher, director of the Overture study group.

The semi-public arts facility first opened in September 2004, and the trust fund was established to pay off construction debt and create a revenue stream.

The fund was liquidated on Sept. 19 after its principal fell below $97 million and could no longer sustain the center’s loan payments, according to Paul Reilly, one of the members of the Overture study group and former finance director and comptroller of the city of Madison.

“Since it was liquidated, there is nothing left now to earn interest in order to provide Overture with subsidy money, and expected revenue went away,” Reilly said.

According to Reilly, the fund had been functioning well enough to fulfill its purposes throughout this year.

Although he added some problems remain.

“One is that most performing arts centers don’t usually make that much money,” Reilly said. “And so, to keep it properly maintained, W. Jerome Frautschi (the center’s primary benefactor) had an endowment fund designed to earn enough money to pay off the Overture construction debt as well as provide subsidy money.”

In an attempt to cut costs and increase revenue, the group recommended several changes.

“Our group laid out a whole series of recommendations that relate to the budget at being much more disciplined with revenues and expenses,” Bugher said, which included “a complete reorganization of the operating entity of Overture, applying for tax exempt financing on the balance of the overture debt, aggressively marketing Overture, which include mixing the performance types up a little bit.”

Since the fund’s liquidation, there is concern taxpayers will have to fill the gap in funding.

Jonathan Zarov, vice president of marketing and communications at the Overture Center, said the liquidation will help pay off $87 million in construction debt.

Additional short term funding source includes $5 million from Frautschi and $5 million from the Madison Cultural Arts District, the group that governs the Overture Center.

Zarov said the temporary replacement funding should sustain Overture through 2011.

Bugher said the group recommended aggressive fundraising in the community while exploring the creation of an entertainment district, which will have authority to operate Overture and other cultural facilities in the greater Madison area.

Further discussions are expected until final measures are taken as to the future of the Overture Center.