Changes abound for Phila. Orchestra

Many years, the Philadelphia Orchestra's annual meeting is a routine recital of committee reports and crowing about artistic achievements. But this year's gathering, held Thursday, was an exposition of an organization in transition.

The orchestra is welcoming one artistic leader, Charles Dutoit, while looking for the next. Harold A. Sorgenti will remain chairman of the board for another year while the next chairman, as yet unnamed, transitions into the job in a few months. In just the past few days was it learned that a new president must be found to replace James Undercofler, who on Tuesday announced his departure next summer.

And new blood on the board includes four African American members (Debra Sandler, James Nevels, Marcia "Tina" Wells and Osagie O. Imasogie), the most ever, bringing the orchestra leadership a bit closer to reflecting the city's population.

There's no change on one front, however. Conductor Peter Nero has agreed to a five-year contract extention promising to keep him at the Philly Pops through 2014, his 35th year at the helm.

These developments and others were presented Thursday at the Kimmel Center to board, staff and members of the Philadelphia Orchestra Association, which includes the orchestra, Philly Pops and the Academy of Music.

Most significant, in a reversal of the recent trend of balancing its books, the association ran up a $2.1 million deficit on a $50.2 million operating budget for the year that ended Aug. 31.

Mentioned briefly was the recent announcement by president and chief executive officer Undercofler that he would step down July 31 after only three years on the job. Undercofler on Thursday would not elaborate on the reasons behind his departure, saying only, "It's complicated."

A search committee charged with finding a new president will be formed shortly. "We need strong, decisive leadership," Sorgenti said before the meeting, adding that orchestral music needed someone with the kind of vision Peter Gelb has brought to opera as general manager of the Metropolitan Opera.

After the annual meeting, the orchestra board passed a resolution to defray the deficit partially with $1.65 million taken from unrestricted endowment, bringing the shortfall to $500,000. The action, which leaves $22 million in that part of the orchestra's endowment, was approved by major foundations whose grants to the orchestra carry a no-deficit stipulation, Undercofler said.

Preferring to characterize the orchestra's first deficit in four years as "understandable" rather than "significant," he said it was the result of too-aggressive fund-raising goals and lower-than-projected earned income.

About $250,000 of the deficit came from the orchestra's Global Concert Series - performances carried live last season via Internet2 to theaters and classrooms as close as Villanova and as far away as Greece. Those broadcast concerts have been suspended for the coming season, a spokeswoman said. "We're stepping back this year to absorb," said media committee chair Michael D. Zisman.

The deficit came despite higher contributions from donors as well as increased income generated by the orchestra's endowment, said finance committee chair Joseph Jacovini.

"Expenses went up," he said. The operating budget of the orchestra rose to $50.2 million from $46.1 million, an orchestra spokeswoman said.

Citing the tough economy and the possibility of a $1 million gap between funding and expenses, Undercofler recently made the decision to cancel the orchestra's prestigious 2009 European festivals tour, which would have been its first with Dutoit in his new role as chief conductor and artistic adviser.

The endowment took a beating in the last fiscal year. "Don't shoot the messenger," investment committee chair Roland K. Bullard 2d said before reporting that the orchestra's endowment stood at $156 million as of Aug. 31, down $20.3 million from one year ago. The market value of the Academy of Music's endowment declined $2 million to $21.8 million.

The results of the orchestra's long-running endowment campaign would be announced in October, said development committee chair Carole Haas Gravagno.

The volunteers of the orchestra were responsible for bringing in an impressive sum of just over $2 million, reported volunteer committees president Elizabeth M. Mahoney.

After the meeting, Undercofler said the orchestra's 2005 10-CD deal with the Finnish label Ondine would yield two or three more releases. Slated for distribution are a Tchaikovsky compilation and Mahler's

Symphony No. 2

. Still under review is a recording of the Mahler

Symphony No. 8

.

Of the orchestra's run with Ondine, he said, "That's likely to be the end of the relationship."