Just like the Grand Rapids City Commission did last week, the Convention and Arena Authority is likely to make some mid-year adjustments to its operating budget this week — and for the same reason.
The CAA operates Van Andel Arena and DeVos Place.
Total operating revenues to the CAA are on track to drop by $568,670 from what was expected last summer and lead to a 64 percent reduction in the projected operating surplus when the fiscal year ends on June 30.
The adjusted budget has a year-end surplus of $287,786, a freefall of almost two-thirds from the forecasted number of $808,662. (See related chart.)
Revenue estimates from the arena and convention center have been lowered by $416,254 and from parking receipts by $152,416 — the two sources of operating income. Those changes are expected to reduce the total operating revenue from $11.63 million to $11.06 million. Operating expenses have also been cut in the amended budget, but only by $47,794. So the overall adjustment between operating revenues and expenses results in a loss of $520,876.
As for non-operational items, the CAA expects investment income to fall by $147,000 to $675,000, instead of the $822,000 that was projected.
The board is also being advised to cut spending on capital improvements to the buildings this year by $953,260, and to consider moving at least three arena projects into next year. At the start of this year, the CAA adopted a budget of $1.84 million for those upgrades. Now the board is likely to stop capital-improvement spending this year at $890,840.
The CAA will review the budget adjustments Wednesday morning.