Bison push Fargodome deeper into blackFARGO – North Dakota State University’s green and yellow helped push the Fargodome deep into the black in 2012.
By: Dave Olson, INFORUM, Forum Staff Reports, inforum.com
FARGO – North Dakota State University’s green and yellow helped push the Fargodome deep into the black in 2012.
The NDSU Bison football team’s three-game playoff run this winter could boost the dome’s 2012 annual surplus from the $50,000-$55,000 originally anticipated to as much as $120,000-$125,000, according to Rob Sobolik, the dome’s general manager.
“With the addition of the playoff games, it allowed us to hit our budgeted numbers, plus work on maintenance items and maybe buy ahead,” Sobolik said, referring to the purchase of things the dome uses in large amounts every year, such as tape and sidewalk deicer.
“It’s like any business,” Sobolik added. “In the lean years, you might delay some things. But in the years where the events are such there is a little bit more profit, you might catch up on supplies or extra equipment.”
Since opening in late 1992, the dome has not seen a year when expenses could not be met with operating funds.
Consequently, the dome’s reserve fund has grown to about $34 million, with about $6 million contributed from annual operating surpluses.
The reserve also grew from investment income, as well as from proceeds coming from the half-cent city sales tax used to pay the
$48 million cost of building the dome.
The sales tax expired at the end of 2008 and the dome’s bond debt was paid in full in 2009.
The dome’s reserve fund also serves as a capital improvement fund, though many improvements are covered by the dome’s annual budget.
When new turf was recently purchased and major parking lot improvements made, dome officials opted to finance the work rather than pay for it in one big chunk out of reserves.
That’s because the dome’s costs for borrowing have been around 3 percent to 4 percent, while returns on investments of dome reserves managed through the North Dakota Investment Board have been in the 5 percent to 7 percent range, according to Susan Thompson, director of finance for the dome.
Thompson said 2012 was a good year for the dome on many fronts, from core annual events like Rib Fest, Monster Jam, trade shows and NDSU sports to concerts and theatrical events.
Still, she said, the line between black and red ink grows finer every year.
“The concert industry is so cyclical,” she said. “There could be a year where there’s nobody touring, and then there’s a year where there’s a bunch of people touring.
“Our strength has always been to mix it up,” Thompson said.
As in 2012, Bison playoff games made an impression on the dome’s bottom line in 2011 as well.
That year, the dome was expecting an annual operating surplus of more than $80,000, but lower revenue from concerts placed the facility in danger of running a budget deficit for the first time.
The three playoff games in 2011 turned what could have been a financial rout into a fairly lucrative year for the dome, which finished 2011 about $45,000 to the good.
Still, the day may come when dome operations dip into the red, according to Sobolik.
If that ever happens, he said reserves should protect the city’s general fund from having to prop up the dome.
“I’m never one to say never,” he said. “But it’s one of those situations where it is extremely, extremely, extremely highly unlikely that the Fargodome would ever become a burden on the general taxes of the city.”