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It’s been a long road for the Milwaukee Public Museum, but the natural and human history museum, threatened with bankruptcy in 2005, is now growing its endowment and paying off debts, according to new financial statements submitted to Milwaukee County. The county board’s Parks Committee will consider them when it meets today.

According to the statements, the museum’s long-term debt shrank to just $4.7 million earlier this year after refinancing. Jay Williams, former president of U.S. Bank-Wisconsin and chairman of the Private Bank-Milwaukee, is the Public Museum’s newest president and CEO, chosen by its board last year. He’s the second official lacking a museum background (following former Waukesha County Executive Dan Finley) chosen to help lead the museum out of the financial morass it sank into in 2005.

Public Museum (photos by Adrian Palomo)

There were multiple causes of the near-bankruptcy in 2005. Foremost among them were costly new projects taken on by the museum: A county audit later noted there was “dramatic growth in physical assets, such as building improvements and special exhibits.”

The office of former Milwaukee County Executive Scott Walker said in 2011 county budget documents the past woes were brought on by “overly aggressive expansion, financial mismanagement and lax Museum Board oversight.”

Leading up to the 2005 debacle, the museum’s one-time endowment of about $4.4 million was sapped, dropping to just $95,282 in 2005, and its long-term debt mounted, rising from $10.5 million in 1999 to almost $30 million in 2005, according to the county audit.

But before the museum could begin to recover from this fiscal hangover, the museum’s immediate solvency had to be guaranteed with a $6 million loan underwritten by Milwaukee County, meaning a default by the museum would have left taxpayers on the hook. But with the help of grant funding, the museum paid off the loan in 2008, years ahead of schedule.

The museum also made deep cuts to staff and began fundraising heavily to recover from 2005’s crisis. The endowment had risen to about $1.9 million by 2008, the first year since 2004 in which the museum’s assets exceeded its liabilities, according to annual reports.

From there, the endowment swelled to almost $4 million in 2009, $6.1 million in 2010 and to $7.6 million by the beginning of March 2011. Meanwhile, according to statements submitted to the county board, long term debt has fallen to about $4.7 million.

Is the public museum finally out of the woods? “We feel confident in our strong position and are now more than ready to take our museum to even greater places,” says the 2010 annual report.

Ironically, much of the museum’s success in recent years has come from special touring exhibitions such as the Dead Sea Scrolls exhibit, the ongoing Mummies of the World and the tremendously popular Body Worlds show of 2008, which drew 338,500 visitors in a county of about 600,000 people, still a record turnout for an exhibition at the museum.

But these were traveling show run by national companies, not new permanent installations, such as the Puelicher Butterfly exhibit and the IMAX theater cited by the county audit as major contributors to the 2005 meltdown.

The latter hasn’t performed particularly well for the museum: In fiscal year 2010 (ending in August 2010), the IMAX and the museum’s planetarium brought in about $920,000 instead of the $1.1 million the museum had hoped for. And in the first six months of fiscal year 2011, the story was much the same with the museum making about $133,000 less on IMAX and planetarium tickets than was projected in the museum’s budget.

Admissions and donations, however, including a $1 million grant from the Northwestern Mutual Foundation announced in December, have remained strong.

And support from the county has held steady at about $3.5 million a year. The county also funds capital projects at the museum, including $1.4 million this year for interior renovations and a new flashing system for diverting rain. The county owns the building and collections while the museum’s operations are managed by a nonprofit, Milwaukee Public Museum Inc., created by the county in 1992.

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