BLOOMINGTON - The U.S. Cellular Coliseum ended its fiscal year with a $2.5 million deficit, and a projected deficit of $1.6 million this year has city officials looking at possibly raising taxes to cover it.

The Central Illinois Arena Management's complete report on the 2006-07 fiscal year, which ended April 30, will be discussed at a special Bloomington City Council work session at 5:30 p.m. Monday at City Hall. The council also will discuss the Coliseum's budget for 2007-08, which shows another deficit and options for covering the loss.

Calls to Central Illinois Arena Management, the group owned by Mike Nelson and John Butler, were not immediately returned Friday afternoon. The group's financial report, which was due May 25, was released Friday along with the agenda for Monday's council work session.

The deficit continued to increase since a 10-month operating loss of $1.8 million was announced in early April.

City Finance Director Brian Barnes said the increase in the final report was not unexpected.

Most of the increase is due to the continued expense of paying for the roughly $29 million in bonds issued to pay for construction of the building and for equipment depreciation, Barnes said. On the report, those two items alone account for $2.1 million in costs.

"I always predicted a loss," Bloomington Mayor Steve Stockton said. "I was guessing around $2 million, so it's a little more than what I was expecting."

When the City Council approved the arena by a 5-4 vote in 2004, the intention was for the operation of the $35.8 million Coliseum to make enough of a profit to cover the cost of building it. Those voting for the Coliseum, former Mayor Judy Markowitz and four aldermen, are no longer on the City Council.

With the current fiscal year projected to operate at a loss again, city staff members offered suggestions in the council information to raise enough cash to cover most or all of the loss.

Those options include increasing:

- The city's sales tax by a quarter of a percentage point, which would raise $2.6 million. That would add 25 cents onto a $100 grocery bill.

- Property taxes by 10 cents per $100 of equalized assessed valuation, which would raise $1.5 million. That would increase the tax on a $150,000 home by $50 a year.

- The city's garbage fees by $5.

Another option is holding expenses and finding the money in the city's $74 million general fund.

Stockton said he would prefer to see the city find money already in the budget for recreational purposes to cover the loss. If that cannot be done, his second option would be to create a hotel-restaurant-amusement tax, much like what the city of Peoria uses to help fund the Peoria Civic Center.

"It will be an interesting meeting, considering no one on the council voted for it," Stockton said. "But we've been given the Coliseum, and now we have to find a way to optimize its operations and reduce its loss."

Earlier in the week, the council approved a $24,500 contract with the accounting firm McGladrey and Pullen to conduct an audit of the Coliseum's financial statements. The audit is mandatory for all municipalities and is part of an overall contract of about $70,000 with McGladrey and Pullen to audit the city's financial statements.

The audits must be completed and filed with the state within 180 days of the ending of the city's fiscal year.

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Raising the cash

Options, including tax and fee increases, will be discussed Monday by the Bloomington City Council to cover the $2.5 million operating deficit for the U.S. Cellular Coliseum. The options include:

•: Increase sale tax by 1/4 percent, raising $2.6 million;

•: Increase property tax by 10 cents per $100 of equalized assessed value, for $1.5 million;

•: Create a Hotel-Restaurant Amusement Tax, no amount specified;

•: Increase Utility Tax by 3/4 percent, for $1.7 million;

•: Hold the line on city expenses by $1.5 million;

•: Increase garbage fees by $5 per month, for $1.5 million;

•: A combination of the above, for $1.5 million.

Source: Staff report to Bloomington City Council; Compiled by M.K. Guetersloh