The projected operating deficit for the South Okanagan Events Centre and other facilities operated by Global Spectrum should drop to $1.38 million next year.
Budget figures for the SOEC, Penticton Trade and Convention Centre, Memorial Arena and the OHS Training Centre were outlined during Penticton council's 2013 budget deliberations which continue later this week.
Dean Clarke, Global Spectrum's general manager in Penticton, told council that the combined net operating loss for the "SOEC complex" is about $145,000 less than the $1.52 million shortfall for 2012. It compared to a net loss of $2.1 million in 2009.
Broken down by location, the SOEC has a projected shortfall of $1,084,000 next year, with the Convention Centre running a deficit of $204,000, and Memorial Arena at $150,000. The OHS rink is budgeting for a $56,000 profit.
Clarke said although the SOEC has a "fierce competitor" in Kelowna's Prospera Place, Penticton is becoming a preferred Interior destination for concerts. He pointed to the strong relationship with its concert and event partners, which has seen more co-promotion and rental shows being booked.
"Rentals create absolute stability with our income," he said. "This enables us to project our income much more efficiently."
However, Clarke noted rental income from the Penticton Vees will take a hit this year with the reduced number of games in the BCHL season. Only 27 home dates are booked, down from 30 in previous seasons.
Sally Pierce, Global Spectrum's assistant general manager, said gross revenues for the Trade and Convention Centre in 2013 are expected to be up 25 per cent from this year.
"This will reflect in a positive impact of about $100,000 to the bottom line," she said. "It also reflects an increase in non-resident delegate days of 17 per cent."
The economic impact to the community should rise to $13.2 million next year from $11.3 million. Further details from a recent economic impact study are expected to available within the next few months.
When combined with events at Memorial Arena and the OHS rink, total economic benefits from the complex amount to $19.7 million.
Pierce did acknowledge that the lack of an attached or nearby hotel continues to limit the number of corporate conventions that come to Penticton.
"If we did have (more) hotel rooms of a similar quality that would certainly enable us to go after a different type of business that would certainly be very beneficial," she said.
Council members seemed generally pleased with the improved fiscal performance at the SOEC.
"The more stuff that you bring in, the better it is for the Events Centre and the community because of the economic impact it has on our businesses," said Coun. John Vassilaki.
Chuck Loewen, the city's general manager of recreation and facilities, said some noticeable improvements have occurred at the SOEC over the past 18 months.
"We've seen some real good synergies working between Global Spectrum and the new SOEC advisory committee," Loewen said. "We've working very closely with the team and Global in developing events that are good for the community and good for the bottom line."
Although council holds a regular meeting this evening starting at 6 p.m., budget deliberations are now on hold until Friday.
The 2013 budget proposes a zero per cent tax increase, as recommended by the city's fiscal review advisory committee. However, council must address a $1.1-million revenue shortfall by either using reserve funds, reducing expenses and/or increasing taxes.
If only taxation revenue is utilized to eliminate the deficit, property taxes would climb by an average of 4.6 per cent.