CAA Board Turns Surplus

November 21, 2007
Text Size:

GRAND RAPIDS — When members of the Convention and Arena Authority meet next week for the final time this calendar year, they will hear that net operating income topped $390,000 for the last fiscal year.

“In general, it was a better-than-expected year,” said Cheryl McConomy, a financial consultant to the CAA.

McConomy recently presented the audited findings to the board’s Finance Committee and those findings included revenues and expenditures to the CAA, DeVos Place and Van Andel Arena. For FY07, which ended on June 30, operating revenues totaled $11.2 million, while expenditures were nearly $10.9 million.

Those figures gave the board a surplus of $391,149 for the year, quite an improvement from FY06 when the CAA recorded an operating loss of nearly $287,000.

Audits for the buildings showed a $1.55 million surplus for the arena and a $650,000 deficit for the convention center in FY07.

The audit, performed by BDO Seidman LLP, also pegged the CAA’s net assets at $22.1 million, up from $21.5 million the previous fiscal year.

“Generally, operations have functioned as expected,” said McConomy.

Members of the Finance Committee continued their discussion and review of the board’s five-year-old investment policy. A comparison of the return the CAA received in September with the interest paid by one-year U.S. Treasury notes revealed the board received a higher overall rate that month.

Kent County Fiscal Services Director Robert White said the investments were drawing a large enough return to cover about $1 million of capital improvements for the arena and convention center, but not nearly enough to meet those needs in coming years when that tab is expected to reach $3 million annually.

“We should really review the investment policy and decide what indices we should follow,” said committee chairwoman Birgit Klohs.

The board’s pooled investment account tops $20 million and received a yield of 5.09 percent at the end of September. Committee members are expected to review a number of potential short-, middle- and long-term benchmarks with which to compare return rates when they meet next in January.

“We do have some good balances, so we could take a slightly higher risk to get a higher interest rate,” said White.

As for the current fiscal year, DeVos Place had an operating deficit of $255,000 at the end of October, while Van Andel Arena had an operating surplus of $201,000.

SMG Director of Finance Chris Machuta said the convention center was performing according to expectations and would likely make up the shortfall in the second half of the fiscal year. He also said the rest of the calendar year will be a strong financial period for the arena.

Turning It Around

GRAND RAPIDS—The Convention and Arena Authority had a swing of $678,128 in operating revenues and expenses over the last two fiscal years, as it went from an operating deficit of $286,979 in 2006 to an operating surplus of $391,149 last year.



Operating Revenues, Facilities



Operating Expenses:

Personnel Services






Supplies & Expenses



Contractual Services  






Repairs & Maintenance   



Professional Services    



Total Operating Expenses   



Operating Income (Loss)    



Note: Contractual Services include expenses for SMG, Parking Services, Public Safety and the Downtown Improvement District.

Recent Articles by David Czurak

Editor's Picks

Comments powered by Disqus