New budgets for key venues in place

June 11, 2010
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The 2011 fiscal year operating forecasts for Van Andel Arena and DeVos Place are nearly carbon copies of the buildings’ respective budgets for the past six years. But the manner in which the Convention and Arena Authority adopted the operating plans was a first for the board in its 10-year history.

Board members adopted both budgets, along with the CAA’s fiscal plan, without a quorum present for the votes.

The CAA board consists of seven members, so four have to be present for the panel to have a quorum. Four members were present at the beginning of the board’s June meeting, which is a key gathering because the fiscal year budgets go into effect on July 1 and the spending plans have to be in place to continue operations at the buildings.

The meeting, though, started about 20 minutes later than the 8:30 a.m. posted time because the CAA Operations Committee meeting, which began at 7:30 a.m., ran long. One of the four board members present, Grand Rapids Mayor George Heartwell, told CAA Vice Chairman Joseph Tomaselli that he had another commitment to keep and likely wouldn’t be able to stay for the entire board meeting, which usually lasts about an hour.

So the meeting was opened with a quorum present and the minutes from the previous meeting were accepted by a quorum. Then a short recess was called and Heartwell left. The board reconvened a few minutes later and the budgets were adopted by the three remaining members; Tomaselli, Floyd Wilson Jr. and Lew Chamberlin. Chairman Steven Heacock, Birgit Klohs and Gary McInerney were absent for the entire meeting.

When the Business Journal asked CAA legal counsel Dick Wendt if the board could adopt the budgets without a vote from a quorum, he said the panel could do so because the meeting began with a quorum present and a quorum took action on the previous month’s minutes.

One option the board had was to suspend the meeting prior to the votes and pick up at another time when a quorum would be present. But the CAA board only meets monthly and the panel doesn’t hold meetings in July.

A lack of attendance at board and committee meetings has been an ongoing thorny issue for the CAA for the past few years. So much so that Heacock suggested changing the meeting routine in November and members approved a new schedule for the board and the Operations and Finance committees in January in hopes of increasing turnout for all three panels.

The February meetings were cancelled because the new schedule made its debut in early March. But the board’s April meeting also was cancelled, and just five of the seven members were present for the May meeting. So far the board has met four times through the first six months of this year.

The CAA was formed in April 2000 to oversee daily operations for the arena, the convention center and DeVos Performance Hall.

As for the fiscal forecasts for the coming year, the arena has been projected to have a surplus of $1.2 million and DeVos Place is expected to lose almost $711,000.

But of the $4.4 million in event income the convention center has been projected to receive in 2011, more than $860,000 of that total is expected to be generated by the performance hall rather than the exhibit space or meeting rooms that make up DeVos Place. Revenue and expenses for the performance hall have always been included in the DeVos Place financial statements.

For the current fiscal year, which ends on June 30, the arena is on target to record a surplus of $1.22 million and the convention center is on track to lose about $600,000.

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