The Bermuda National Gallery is facing “major capital investment issues”, its treasurer has revealed.

In the BNG’s 2015 annual report, James Hallett outlined the gallery’s struggle to rescale following the “broad decline of business and population in Bermuda”.

Mr Hallett pointed out the “very noticeable” 57 per cent decline in corporate support, which was $300,000 less in 2015 than in 2008, leading to fewer exhibitions and community programmes.

He said: “Since the pre-2009 era, the BNG has aggressively scaled back its operations by over 40 per cent.

“There is very little else that can be done to reduce expenses that has not already been implemented,” added Mr Hallett, citing the 2014 closure of the BNG East/St George’s gallery and the absorption of fundraising responsibilities by senior employees and trustees, rather than paid development staff.

With the majority of donors preferring short-term commitments, he said the BNG had lacked “sustainable revenue sources” for many years.

To help address the issue, the gallery on Church Street, Hamilton began to charge a $5 admission fee early last year, although members, seniors and children can still enter for free.

Although the annual report summarised 12-month results until March 31, 2015, therefore only covering the first three months of this new policy, Mr Hallett said that the move appeared to have been beneficial.

He added: “Admission fees now exceed the grants that we received previously to support the earlier free [entry] policy. The volume of visitors has not been affected.”

Despite the BNG’s financial difficulties, Mr Hallett praised the “remarkable” generosity of individuals and family foundations, who provided $440,204 in 2015 — 57 per cent of its $772,288 operating revenue.

He also acknowledged the renewed commitment of the Bermuda Government, which more than doubled its contribution between 2014 and 2015 to $100,000 as part of its bid to boost tourism.

Owing to the combined efforts of the gallery and its donors, the BNG posted a 2015 profit of $13,803, compared with a loss of $45,721 in 2014. Yet Mr Hallett said it continued to face struggles both short- and long-term, with the gallery’s air-conditioning system a cause for concern, as well as the need for partial refurbishment.

“The air-conditioning system in one area of the BNG has been stretched long past its useful life and must be replaced this year,” he said.

“Our greatest concern is that if the air-conditioning should fail, we would need to close the gallery to find alternate storage facilities for portions of our collection.”

He also underlined why the gallery should be seen as a cultural necessity in Bermuda.

“The BNG staff continue to make great efforts to highlight the important social and intellectual impact of BNG programmes, as well as the initiatives of cultural organisations island-wide, in the face of a misperception that art is only for glamour,” Mr Hallett said.