The Funny Money Crisis at Fine Arts Museums SF
• • • • • • • • May 2025 • • • • • • • •
The Fine Arts Museums FY 25-26 budget proposal includes cutting approximately 20% of its security staff and closing the Museums on Tuesdays. FAMSF Trustees claim the cuts are necessary to meet the projected $3,300,000 reduction in General Fund revenues. Still, FAMSF Trustees did not approve the FY 25-26 Budget as required by Charter Section 4.102. The FY 25-26 Budget presentations were listed as discussion, not as an action item, at the January and February Board meetings..
CFO Jason Seifer gave the Board the FY 25-26 Budget presentations. Mr. Seifer acts as a FAMSF officer but is not a City and County employee. He is a private Corporation Of the Fine Arts Museums (COFAM) employee. For FY 2023, COFAM paid Jason Seifer over $400,000 for his services. To provide some perspective, imagine if the Recreation and Parks Department CFO were a San Francisco Parks Alliance employee, not a City and County employee. It is an arrangement drenched in conflict of interest. Acting as FAMSF CFOs, COFAM employees have submitted the last ten FY budgets to the Mayor’s Office without the approval of the charter-mandated Board. These CFOs have also repeatedly failed to include the annual multi-million-dollar giveaways to their employer, COFAM, in the budget submissions.
The Fine Arts Museums’ Audited Financial Statements (AFS) reveal millions of dollars in annual non-General Admission fee revenues, including special exhibition fees, membership fees, special event rentals, and museum and café store sales. Yet FAMSF Trustees never propose using non-General Admission fee revenues as an alternative to cutting operating hours or security staff. FAMSF Trustees have not publicly discussed the Fine Arts Museums’ annual AFS since 2013. Audit Committee Chair Carl Pascarella presented the FY 11-12 AFS to the Board of Trustees on March 27, 2013.
It is unclear why the San Francisco Board of Supervisors never approved the lease, but the FAMSF Board of Trustees, the City Attorney, and FAMSF Director Harry Parker knew that without that approval, the lease would be null and void. Yet, they all stood by and said nothing as FAMF and COFAM used the “Lease” to enhance the bonds’ creditworthiness of the $143,000,000 needed to finance the construction of the new DeYoung Museum. ”
Unlike non-revenue-generating Departments, which have little choice but to cut services when faced with General Fund reductions, FAMSF is a revenue-generating department. The Fine Arts Museums charge all kinds of fees: general admission fees, special exhibition fees, membership fees, and special event rental fees, to name just a few. The revenue from these fees can be upwards of $20,000,000 per year. Still, FAMSF officials only list the General Admission Fee on the Master Fee Schedule as part of the Department’s annual FY budget submissions.
Asked to explain why the non-General Admission Fee revenue is routinely missing from the annual FY budget submissions, FAMSF Senior Government Affairs Manager and COFAM employee Paria Dea replied, “Special exhibitions are an activity and cost of the Corporation of the Fine Arts Museums (COFAM), a 501(c)(3) non-profit and a separate financial entity. COFAM’s budget is presented to and approved by the non-profit Board.” This comment only references the special exhibition admission fees. It does not address the fact that there appears to be no written agreement or contract identifying special exhibitions as an “activity and cost” of COFAM or authorizing COFAM to retain any of the Museums’ revenues.
Ever since the DeYoung reopened in October 2005, FAMSF Trustees, many of whom concurrently serve as COFAM Trustees during their tenure on the FAMSF Board, have allowed COFAM, the non-profit organization that operates the DeYoung and Legion of Honor Museums, to retain 100% of all non-General Admission Fee revenues, over $250,000,000 over the past twenty years. For FY 2023-2024, the most recent year for which COFAM tax filings are available, COFAM reports $6,972,999 in admissions and event revenue and $842,195 in special event rental income on its 2023 Form 990. If you include membership fees, museum gift store, and café sales, COFAM collected approximately $20,000,000 from the DeYoung and Legion of Honor Museums operations in FY 2023-2024.
In response to repeated public records requests for any revenue sharing agreement or other written document authorizing COFAM to collect and retain the Museums’ non-General Admission Fee revenue, FAMSF and City officials have provided just one document, a one-page, unsigned MOU approved by FAMSF Trustees at the January 25, 2018, Board meeting. This MOU is largely just a copy and paste of language from the City Charter. It does not include one word regarding COFAM’s right to collect and retain any of the Museums’ non-General Admission fee revenue.
City officials also never executed a Lease authorizing COFAM to operate the Legion of Honor or DeYoung Museums. In January 2002, the FAMSF Board of Trustees approved a Facilities Lease with FAMF (the non-profit that handles the Museums’ investment portfolio). However, the Lease was never approved by the Board of Supervisors. After two years and multiple public records requests, the City Attorney’s Office finally produced a copy of the “Facilities Lease for the Fine Arts Museums” in April 2013. The seventy-six-page Lease reads in BOLD CAPITALIZED language just above the signature area:
It is unclear why the San Francisco Board of Supervisors never approved the lease, but the FAMSF Board of Trustees, the City Attorney, and FAMSF Director Harry Parker knew that without that approval, the lease would be null and void. Yet, they all stood by and said nothing as FAMF and COFAM used the “Lease” to enhance the bonds’ creditworthiness to finance the construction of the new DeYoung Museum. They continued to stand by and say nothing as COFAM, an entity that was not even a party to the Lease, proceeded to occupy and operate the new DeYoung Museum and collect and retain millions of dollars each year in public revenues from special exhibition fees, special event rentals, membership fees, and museum and café store sales. In response to multiple public record requests for the current Leases for the DeYoung and the Legion of Honor Museums, city officials have only provided the one-page MOU dated January 25, 2018.
If the January 25, 2018, MOU authorizes COFAM to operate the Museums and collect $20,000,000+ in annual Museum revenues, then COFAM’s budget should be available to the public per Administrative Code Section 12L.5. It requires non-profit organizations receiving more than $250,000 in “City-provided or City-administered funds” to provide access to their most recent FY budget and to hold at least two meetings open to the public each year. Yet, FAMSF officials insist that COFAM does not receive any “City-provided or City-administered funds” and that the requirements of Section 12L do not apply. On May 9, 2025, in response to a request for copies of all COFAM FY Budgets since FY 18-19, FAMSF Senior Government Affairs Manager Paria Dea replied, “The Corporation of the Fine Arts Museums (COFAM) is not subject to 12L.”
By excusing COFAM from the disclosure requirements of Section 12L, FAMSF officials have denied the public and the Board of Supervisors an opportunity to comment on how tens of millions of dollars in Museum revenues are being spent. Consider the FAMSF membership fees. In FY 23-24, COFAM collected $10,745,214 in FAMSF Membership fees. FAMSF did not receive one cent of those fees, and neither the public nor the Board had any input on how that money was spent. Under a self-perpetuating Board of Trustees, the membership of which overlaps significantly with the Board of the non-profit organization operating the Museums, FAMSF has become the only Department in the City and County of San Francisco for which 80% of its total operating budget is approved in private and unavailable for public review or comment. COFAM’s private budget is fueled by millions of dollars in annual non-General Admission fee revenue, but the public largesse doesn’t stop there.
Over the past twenty years, FAMSF Trustees have given away more than $12,000,000 in excess General Admission fee revenues as annual expense reimbursements to COFAM. The actual amounts are never publicly discussed at the Board of Trustees meetings. Instead, the FAMSF Secretary, a COFAM employee, quietly inserts the amount of the COFAM expense reimbursements into back-dated copies of the FAMSF Resolutions approving the annual FY giveaways.
Prior to the pandemic, the annual transfer of General Admission Fee revenues for COFAM expense reimbursements totaled in the millions, $2,800,000+ in FY 16-17, $3,500,000+ in FY 17-18, and $3,200,000+ in FY 18-19. More recently, the reported reimbursements are greatly reduced, $332,532.39 for FY 22-23 and $374,418.01 for FY 23-24. Even so, the amounts remain well above the threshold for triggering the financial disclosure and open meeting requirements of Section 12L and represent funds that could instead be used to help balance the FAMSF FY budgets.
At the May 21, 2025, Board of Trustees meeting, FAMSF Trustees, for the 21st year in a row, effectively wrote a blank check to COFAM for the Fine Arts Museums’ excess General Admission fee revenue for the upcoming FY. Despite a projected $3,000,000+ reduction in General Fund revenues for FY 25-26, FAMSF Trustees, without any comment or questions, voted to turn over the excess General Admission Fee revenue, which is clearly public funds, to COFAM rather than use them to help shore up FAMSF’s FY 25-26 Budget. FAMSF representatives and the City Attorney’s Office have not responded to requests for comment, but the Board of Supervisors should have plenty of questions during the FY 25-26 FAMSF Budget deliberations.
Anmarie Mabbutt is a California attorney and longtime SF resident.
May 2025
