CAAs Fiscal Outlook Has Improved
SMG General Manager Rich MacKeigan and SMG Finance Director Chris Machuta found another $188,000 worth of revenue for the new convention center, which dropped the building’s projected deficit for FY05 from $1.57 million to $1.38 million.
“We’re still going to operate at a deficit, but it’s a lower one,” said CAA Chairman John Logie.
The additional revenue is expected to come from concession sales, catering, electrical charges and equipment rental.
After the building was open for a few months, MacKeigan and Machuta noticed that income was higher in those categories than they had projected for the current fiscal year. Two weeks ago, they adjusted the initial FY05 forecast they submitted in May to include the new income.
“The budget that we presented last month was too conservative,” said Machuta.
The additional revenue for DeVos Place changed the CAA FY05 forecast by turning a projected deficit into an expected surplus.
Prior to uncovering the extra income, the CAA was facing a deficit of $60,864 from the net operations of the arena and convention center. Now, however, the board is looking at a surplus of $126,232 from the combined operations.
The CAA FY05 operating budget also projects a surplus. The board expects revenues of $3.2 million and expenditures of $3 million, leaving the authority with a projected surplus of $211,952.
Members first adopted a budget with a surplus of $250,052. But they then amended the budget to include an expenditure of $38,100 for the Downtown Improvement District, which lowered the surplus to $211,952.
The initial forecast that members saw in May had a shortfall of $203,144 for the fiscal year. But after removing a few capital replacement projects and adding the new revenue expected for DeVos Place, the board’s deficit turned into a surplus.
The arena budget was the one that didn’t undergo any changes from the May forecast and is still projected to have a surplus of $1.51 million for FY05.
The fiscal year begins Thursday.