The museum received $44,500 last year, reportedly about 4 percent of its total budget, but the city's new proposal suggests cutting future monies to support new arts projects, records show.
Arts enthusiasts asked city leaders to reconsider, but some elected officials said they want to see updated financial records before agreeing to reinstate funding.
Tyler has given the museum more than $1 million throughout the past 25 years, records show.
“The door is still open for funding for the museum, should they provide the city with information that demonstrates transparency, such as recent audit results, an operating pro forma for upcoming years, as well as a plan to stabilize their leadership,” Mayor Barbara Bass said afterward by email.
Several museum board members resigned earlier this year amid disagreements over a new museum location. The current site is on the campus of Tyler Junior College.
The city's anticipated exclusion of the museum in its new budget follows failed talks with museum representatives to reach an agreement for building a new downtown facility.
The museum's board rejected the idea of a downtown site and a doubling in financial support earlier this year after it voted to continue negotiating on a deal with the city.
The perceived reversal prompted city officials to raise concerns about the museum's divided leadership and put it on notice that any future funding would be subject to change in lieu of supporting other endeavors, records show.
The museum purchased a site several years ago off Lazy Creek Drive to build a new facility but so far has been unable to raise enough money to start physical work at that location.
“I do have issues to bring up and think about before the next meeting,” Councilman Martin Heines said. “(The Museum) did not have current audits for the last two years. … And there seems to be a lot of discussion about the capital plan. I'd like to see a full accounting for that $5 (million) to $6 million. We need to make sure those funds have not been co-mingled.”
Mayor Bass said the council has a fiduciary responsibility to spend tax dollars wisely, no matter what project they support.
“The city is very interested in partnering to bring additional arts venues to our downtown,” she said. “However, this is not mutually exclusive to the funding for the Tyler Museum of Art.”
Former museum director Kim Tomio, who attended Wednesday's hearing and left afterward to report to a new job in California, said she disagreed with Heines' assessment.
Mrs. Tomio said annual audits are not a requirement for applying for hotel-motel tax funds, and the organization has not had enough cash on hand to pay for new ones.
The hotel-motel tax revenue is used to promote economic development.
“The last one (audit) that was completed was 09-10,” Mrs. Tomio said. “Almost all of the funds that have been expended for the capital campaign project have been audited and they are fine. There has been some funds expended since the last audit and they are easily trackable.”
The former director said two board members have stepped up to pay for new audits and annual reviews of the museum's books have all been positive.
Verna Hall, the museum's new board president, said afterward she was “shocked” there were concerns over the audits, and referred questions about them to Mrs. Tomio.
Ms. Hall thanked the city during the budget hearing for its careful spending practices and years of support, saying the funding level enabled the organization to become a solid arts partner.
“We believe the Tyler Museum of Art is a cultural asset to the city” that provides an economic benefit, she said, reading a letter signed by the 18-member board.
Reneta Nunn, of Palestine, said she is a longtime supporter of the museum and its mission, saying, “Art is for the people. It must have the support of the city.”
Hideaway resident John S. Gibson said he recently moved to East Texas from Atlanta, Ga., and appreciates Tyler's forward thinking.
“The Tyler Museum of Art is quite outstanding for a city the size of Tyler,” he said. “I hope you'll continue to stay in this beautiful partnership now and in the future.”
Susan Thomae-Morphew, executive director of the R. Don Cowan Fine and Performing Arts Center at The University of Texas at Tyler, said she appreciated the city's longtime support of the museum.
“It would be heartbreaking for the city to not fund this 41-year-old organization,” she said. “The arts community in Tyler is impressive. … We're part of the Tyler family.”
Heines said he appreciates the museum, its volunteers and the contributions to the community, but he wants more transparency in the use of funds, especially given the fact that millions of dollars of capital funds were spent for a new facility and no physical work has started.
Along with updated audits, Heines said he wants to see a new executive director hired and the city sit down to discuss future objectives of the organization.
Council member Sam Mezayek also wanted to see more financial transparency.
“If we are their main funding source, that's problematic,” he said.
Councilman Darryl Bowdre said he supported a review of the financials citing similar requirements placed earlier on the Tyler Metropolitan Chamber of Commerce.
“The precedent has been set,” he said. “I don't have a problem with it.”
In other budget issues, the decrease in the property tax rate by a 10th of a cent, from 20.89 cents per $100 valuation to 20.77 cents, equals the effective rate, the level at which revenues would equal the previous fiscal year.
That decrease means someone with a $100,000 home who pays $208.86 in taxes now will pay $207.71, about $1.15 less. People with a $150,000 home will pay $311.56 instead of their current $313.35, a $1.79 decrease; while those with a $200,000 residence will pay $415.42 rather than $417.72 for $2.30 in savings.
Rate hikes are suggested for water and wastewater services — 2 percent for water and another 7 percent for wastewater to ward off a looming $4.7 million funding gap associated with $7 million in state and federal mandates, officials said.
The city carries a AAA bond rating, pays cash for most capital improvements and maintains a property tax rate that's among the lowest in the state, records show.