Hey there, time traveller!
This article was published 15/11/2012 (1680 days ago), so information in it may no longer be current.
For the first time in 15 years, the Keystone Centre has turned a profit on its operations, making $38,120 when capital needs and infrastructure deficits were not considered.
That’s an improvement from one year ago, when the facility’s operations ran $239,530 in the red, and the reasons were made clear to those attending the Keystone Centre’s annual general meeting Thursday at CKLQ Hall by the facility’s auditor.
“Your gross margin for food and beverage sales, revenue went up by $250,000,” said Todd Birkhan, a partner at BDO who has audited the Keystone Centre’s books for 15 years. “That generated another $100,000 in margin for the facility. The room rentals and the (Westoba Agricultural Centre of Excellence), revenue was $314,000 this year compared to $162,000 last year. A $150,000 change. … That’s a $250,000 change (in increased revenue) from last year.”
Birkhan said other budget line items generated small surpluses and the facility did a good job with holding the line on expenses.
Neil Thomson, the facility’s general manager, said the food and beverage revenue increases were a nine per cent improvement from the previous year, but that a whopping 25 per cent increase in Ag Centre and room rental revenue and a 26 per cent increase in box office revenue, thanks in part to hosting more concerts were major factors in the facility’s success.
“The Arabian show, the national Belgian show, the national Holstein show, and the Ag Centre was busy for us, those were significant factors for us this year,” Thomson said.
The cautionary tale of the financial picture for Brandon’s convention centre is that the facility is now 40 years old, with an infrastructure deficit of $10 million. There are also long-term debts, caused when not all the funds pledged from a previous fundraising drive were collected, but the money was spent as though it was, and debt from the construction of the Westoba Agriculture Centre of Excellence.
“What do we own, what do we owe and what’s left over?” Birkhan said.
Birkhan noted that last year, the facility carried $3.59 million in long-term debts, but paid off approximately $500,000 in 2012 to leave just over $3 million left owing. While at current funding rates from the leadership group, that could be paid off in full in seven to 10 years, Birkhan said it’s imperative for the facility that the government funding partners keep the facility in mind as the longer needed renovations and upgrades take to start and complete, the greater the financial risks are for the facility.
“Still, we need to remember, we have $4.4 million, between operating and capital, in liabilities,” Birkhan said. “Outside of the capital assets, we have $1 million in assets, so we have $3.4 million left to deal with going forward and you do have enough in your current year to be able to project another surplus in 2013. Those are modest surpluses though when you look at $3.4 million carry forward deficits.”
To help deal with pressing capital needs, the Keystone Centre board will set aside 75 per cent of its operating profits to put it in a reserve fund for infrastructure needs. This year, $28,590 will be put in that reserve fund.
Brandon Coun. Garth Rice (South Centre), a city representative on the Keystone Centre board, said the they needs to keep pressing governments for cash to fund capital upgrades.
“We can’t let the (recently announced) $3.3 million in capital funding be a one-off and then go away for a while,” Rice said.
“We really have to press and get more money out of our leadership group.”
A Brandon University study, where Keystone Centre board member Doug Ramsey is a research partner, is underway to identify what the true economic impact of the Keystone Centre is.
Ramsey said the improving financial picture is a key indicator that the centre is a key economic driver for Westman.
“I’ve seen an improvement in how the Keystone is moving forward with the ag events and the concerts,” Ramsey said. “If you can balance sports with entertainment and the ag shows, that’s where you will see real value in this facility. That means a wider segment of the community will use it. Not everyone is interested in agriculture. Not everyone is interested in rock music and not everyone is interested in hockey. But if we really become a facility that builds itself around all of these different events, that’s going to be our success.”