BLOOMINGTON - The U.S. Cellular Coliseum budget deficit reached $307,786 by the end of the first month of its second fiscal year in operation. The report issued to the public Thursday recorded the financial performance of the Coliseum for May, the first month of the city's fiscal year.

City Manager Tom Hamilton gave the report to aldermen Tuesday.

Most of the aldermen said they were concerned about the loss but some seemed more upset about it than others.

"We are headed in the wrong direction," said Alderman Kevin Huette.

The current budget for the Coliseum shows an estimated $1.6 million deficit for this fiscal year.

However, the $307,786 for the first month equals more than 2½ months of what was projected for an operating loss, Huette estimated.

"At this rate we are looking more at a $3.6 million deficit for the year," he added. "I really was hoping we could have started off ahead of the budget."

During the city's previous fiscal year, the first year for the Coliseum, the facility ran up a $2.5 million operating loss.

Initially the loss in February totaled $1.8 million. By March it reached $2.1 million and by the end of the fiscal year in April it grew to slightly less than $2.5 million.

Hamilton said there are additional expenses early in the fiscal year, and some income for the building, including $50,000 from the Bloomington Extreme football team that will be collected in the coming months, is not part of the May financial picture.

"One month does not make a year," Hamilton said.

Coliseum General Manager Mike Nelson, who along with John Butler owns Central Illinois Arena Management, said in a statement released Thursday that the loss is misleading because it includes the money they have to come up with every month for the building's bond payment.

The city issued about $29 million in bonds to help pay for the construction of the $35.8 million complex, which also includes the Pepsi Ice Center and adjoining parking deck. The bond and depreciation payment is estimated at $195,000 a month, and it comes due every six months.

"The 'loss' is very misleading if you do not distinguish between cash and accrual accounting," Nelson said in the statement.

In a cash accounting system, the managers would pay the whole six-month bill out of available funds when it comes due. In accrual accounting, they have to set aside a month's worth of the payment every month.

"Our contract calls for us to determine revenue and expenses on a cash basis, much like a person keeps a household checkbook and specifically excludes interest and debt service as an operating expense," Nelson said.

That argument does not wash with Huette.

"Debt service is no different than any other cost to doing business," Huette said. "That is a real operating cost that is not going away."

Mayor Steve Stockton agreed with Huette that May's report was not a step in the right direction, but he added that May is a relatively slow month for events in the entertainment industry.

"Obviously, we are going to need to have better months ahead," Stockton said. The deepening loss was not a surprise to him.

Stockton and Aldermen Karen Schmidt are members of an oversight committee created this spring after the council learned how large the first-year loss would be.

Schmidt said, "It's not a good number; nevertheless, in the coming months we are anticipating more activity that hopefully will generate more money."

Schmidt was more optimistic about the Coliseum's performance, adding that this is a slower time for the Coliseum.

Alderman Steven Purcell said the council needs to continue to work with Nelson and Butler to ensure everything is being done to keep the deficit down to the $1.6 million estimated loss and possibly make it less.

Meanwhile Alderman Judy Stearns said the council needs accountability from Hamilton and the arena managers to ensure the numbers continue to improve.

And Alderman David Sage said, "Obviously we have to continue to focus on narrowing the loss and we, as a City Council, have to make that our top priority."