For 11 days of the year, the Colorado State Fairgrounds is filled with music, livestock, thrill rides and fried things on a stick.

But most other days, there’s little fun happening at the fair site in Pueblo, the city that has served as host to the event since 1872.

And it’s the off-fair time that has become a financial back-breaker for management over the last several years. Year after year, the fair loses money because fairgrounds facilities fail to attract enough events during non-fair days to keep up with costs.

Combine that reality with a lack of funding and continued borrowing from the State Treasurer’s Office, and it becomes increasingly evident to some that the fair cannot continue to function much longer under its current model.

“They have dug themselves into such a hole,” said State Auditor Dianne Ray. “They’re running deficits and they’re having to borrow money to continue operating every year. And it’s not sustainable.”

The fair’s financial difficulties have led some to ponder something that was once unthinkable — moving the fair out of Pueblo, chatter that has stoked passionate response from Pueblo supporters.

Fair officials contend the situation is not as bleak as some say. They believe they are starting to right the ship and that anticipated new local funding and an upcoming shift in management will allow organizers to focus on providing year-round attractions that will ease financial hemorrhaging.

But they acknowledge there have been difficulties and that, in order to fully turn things around, the state must provide more resources.

“Those fairs that stay out of the newspapers and are successful receive tremendous amounts of subsidies on the local level and on the state level,” said state fair General Manager Chris Wiseman.

“There are more things we can do here to improve the business of the fair, but there’s also things that need to be done at the state level to help out as well.”

Audit details financial woes

A 2014-2015 fiscal year financial audit details key money problems.

The fair, which operates under the state Department of Agriculture, has been losing money for at least the last 13 years. That includes a $3.3 million operating loss during the ’14-’15 fiscal year. And that loss was a half million dollars greater than the one examined in a previous audit.

Ray said the fair’s losses have little to do with cotton candy sales or petting zoo visits.

“During fair-time operations, they are break-even or they usually make a little money,” she said. “It’s that off-fair time that they don’t have enough activities bringing in revenue to offset expenses and depreciation (of state-owned fair facility assets). And they’re running about $800,000 to $900,000 deficits total for the year.”

Another issue has been a decreasing contribution from Pueblo governments. Although the fair generates $29 million in annual economic impact to Pueblo and the state’s economy, the city and county of Pueblo contribute just a combined $300,000 annually.

Financial support from the City of Pueblo has dropped off over the last few years. Pueblo Council President Steve Nawrocki said economic realities there have made it difficult for the city to contribute more.

The city’s budget has seen deficits in the millions over the last six years he’s been on the council. Because of that, the city has had to make cuts all around, including having to reduce the number of city employees by more than 100 over the last few years, Nawrocki said.

“It certainly can be higher,” Nawrocki said of the city’s financial contribution to the fair. “And if we had the ability, that wouldn’t be an issue. But our city has seen a long, hard road to recovery from the Great Recession.”

Then there’s the dearth of events taking place at the fairgrounds when the fair isn’t going on. Wiseman said fairgrounds facilities are used just 48 percent of the time throughout the year. He would like to bring that number up to 75 percent by attracting events that include car shows, boxing matches and concerts.

“We haven’t focused on it the way we should,” Wiseman acknowledged.

Fair on the upswing?

But Wiseman said it’s unfair to lay the entire blame on fair management and insists the financial numbers aren’t as bad as what has been reported from the 2014 audit.

Wiseman said it’s important to note that the recent audit studied the previous fiscal year and that the fair is not expected to suffer a loss this year and might even make enough money to make up for previous losses.

Wiseman also said the audit findings do not accurately detail the fair’s “real cash loss.”

The $3.3 million operating loss doesn’t factor taxpayer contributions that total $2 million, he said, nor does it take into account $750,000 in facility depreciation losses.

“When you take those into account, the actual loss is $500,000 (annually),” he said. “Accumulated over the last five years, it’s $1.4 million.

And the 2015-1016 fiscal year marked the first time “in a long, long time” that the fair had received general fund money from the Legislature.

Wiseman also expects Pueblo’s funding role to increase going forward. Nawrocki said city tax revenue is up over last year. That’s thanks in part to Pueblo’s efforts to bring a more diverse economy to the longtime blue-collar, manufacturing community.

“You’re going to see Pueblo step up to do more for the fair,” Wiseman predicts. “The city is looking at what options they have in order to do something now. Before the end of the year, we’ll be making an announcement of additional funding for the fair. I’d be very surprised if that didn’t happen.”

Wiseman also sees an upcoming change in management structure as being beneficial to fair sustainability.

Wiseman was recently appointed deputy commissioner for the Colorado Department of Agriculture and will be stepping down as fair general manager after this summer’s fair.

He feels he will be able to work in his new capacity with a new manager, who he hopes will bring a heightened focus on bringing more events to the fairgrounds.

“I think we do have momentum,” he said.

But Ray said she’s heard it all before.

“They come in and tell me and the legislative Audit Committee that every single year,” she said. “They’ve got some new angle and sometimes it’s a little more money — $100,000 here, $100,000 there.”

“They need a million-dollar influx. I need to hear something from them that they’ve figured out how to increase revenues by a million dollars or find donors or donations, corporate donations, whatever.”

Wiseman agrees that the fair needs more funding from the state. A management study authorized by the Legislature is expected to be completed in March. That will give lawmakers a better understanding how to proceed with future fair funding.

But Wiseman said it’s important to note that a state fair really isn’t designed to make money in the first place.

“The size of the infrastructure you need to do an annual fair doesn’t sustain itself for the rest of the year,” he said. “Fairs themselves aren’t built to be profit centers. They never will be.”

Wiseman points to a $6 million deficit that was racked up during a brief period in the 1990s when the fair was privatized.

“If fairs were good business, there would be businesses doing fairs,” he said.

Talk of leaving Pueblo

The fair’s struggles have led some to suggest that it might be time for the operation to move out of Pueblo.

During a July Audit Committee hearing, state Sen. Tim Neville, R-Littleton, said it’s worth having a conversation about a venue move and that the Pueblo site should not be considered a “Holy Grail.”

The possibility of a move to the National Western Complex in Denver was also discussed at the hearing.

But Gov. John Hickenlooper has supported keeping the fair in Pueblo. And Audit Committee Chairwoman Lucia Guzman, D-Denver, the Senate minority leader, called the state fair “a southern Colorado treasure” that should stay in Pueblo.

Wiseman said the fair’s average daily attendance is higher than the stock show’s. He doesn’t think changing venues would do any good.

“Everyone says, ‘Let’s move this thing to Denver because in Denver there’s all the people and they will come,’” he said. “We’ve got the attendance here. Yes, we need to improve some of our operations. But the bottom line is, moving it probably won’t solve the problem. It may actually make it worse if we have to duplicate this facility in another location.”

Nawroki said it just wouldn’t seem right to move the fair out of Pueblo.

“It’s been here since the very beginning,” he said. “I feel strongly that when you think of Pueblo, you think of the state fair. It’s the market center for all of southeastern and southwestern Colorado and northern New Mexico, primarily all agriculture and ranching.”

“That’s what the importance of our fair is to us, to be able to celebrate and perpetuate that culture.”

— Twitter: @VicVela1