Coliseum management incentivised to cheat-not do well

by:  Diane Benjamin

The City of Bloomington WANTED an arena, so they built it.  Not knowing anything about how to run one, they handed management to a private company.  Common sense would say that at least one City employee should be working at the Coliseum to keep an eye on the taxpayers investment.  There isn’t one.  The City is assuming audits conducted by outside accountants will catch malfeasance, but they won’t.

This statement from the Auditor accompanies the Financial Statements for the Coliseum:

Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of the fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design,  implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Management is referring to CIAM, not the City of Bloomington.

Below is part of the management agreement Sioux Falls SD has with the management company for their arena and theater:


Notice they receive a flat fee, incentives for good management and penalties if they don’t break even.  CIAM is not subject to any of these constraints.

Here is a link to the entire agreement:

The current CIAM contract will expire in the next couple of years.  Hopefully the City will negotiate in the best interests of the citizens instead of the management.

Here’s more from the management agreement:

revsioux2The City of Bloomington has no authority to see the Coliseum bank account kept by CIAM.  They only have the Auditor’s report and CIAM’s word for the accuracy.  Since the City OWNS the Coliseum, not having access to actual data doesn’t make any sense.  Concessions are not run by a separate company has they are at the Coliseum.  All receipts from the Sioux Falls arena and theater go through the same bank account.

The City of Bloomington needs to reviews this entire contract.  Obviously the writers had both the interests of the management and the taxpayers in mind.  The contract Bloomington has with CIAM was written more for CIAM than taxpayers.  Penalties need to exist for under performance.  Safe-guards need instituted to insure all receipts are run through a bank account the City can review.





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