S-1325 - 12/13/2011 - BUDGET - Ordinances Supporting DocumentsITEM 7.17.6)
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AGENDA ITEM
Regular Board of Trustees of
December 13, 2011
SUBJECT: Interfund Loan to the Sports Core Fund
FROM: Sharon Dangles
Finance Director
BUDGET SOURCE/BUDGET IMPACT: N/A
RECOMMENDED MOTION: I move that the Village Board approve Ordinance 2011 -
BU -S -1325, an Ordinance Authorizing a Loan to the Sports Core Fund.
Backeround/Mstorv:
The ordinance authorizing loans from the General Corporate Fund to the Sports Core Fund will
expire on January 31, 2012. The prior ordinance authorized a consolidated loan of up to
$1,290,000 in order to fund capital and operating needs of the Sports Core dating from 1996-
2003. In 2009, an interfund loan of $205,000 was required in order to finance Sports Core
operations due to the decline in the economy, bad weather, severance and benefit payouts
relating to the reduction in work force. In 2010, an interfund loan of $422,000 was required in
order to finance Sports Core operations due to the bad weather and overall economic factors.
This brought the consolidated loan balance to $1,917,000 which will remain unpaid in 2011 due
to the weather related issues, and reduction in revenues from the clubhouse we had this year.
The cash balance in the Sports Core Fund as of January 1, 2011 was $3,621, which is low
compared to prior years. In the first quarter of 2011, the General Fund provided the Sports Core
with a working cash loan of $250,000 to help cover the expenses until the season starts. This
working cash loan occurs every year and is typically paid back to the General Fund by August of
the same year. The financial statement review is monitored on a monthly basis by the Sports
Core Director and Finance Director. The Village Manager was notified in July that it was
unlikely that the Sports Core would be unable to pay back some of the $250,000 working cash
loan. After a recent review of the Sports Core Operations through November, it's estimated that
they will need a total of $170,000 for the 2011 season, which would bring the consolidated loan
balance to $2,087,000.
WWI
The restoration of Field #1 on the Oak Brook Sports Core for the purpose of playing polo
matches in 2012 was completed in 2011. Due to this expenditure, the Polo program needed
$15,000 from the General Fund to pay for this.
Overall, the Golf Operations is expected to make a profit and helps support other Sports Core
programs. For 2011, Golf Operations is expected to be below revenue projections by
approximately $50,000. The floods in 2008 and 2010 have convinced many traditional golf
members to pay as they go instead of buying the season membership. Also, due to poor weather
(the 4`h wettest summer in 141 years of recording) leading to less golf green fees, less golf cart
revenues, less golf food and beverage revenues, and less soccer rentals.
The remaining $105,000 needed from the General Corporate Fund is needed because banquet
revenues at the Bath & Tennis Club were significantly less than expected.
As of December 7, 2011 the Sports Core has a negative cash balance of $75,000. The loan is
necessary in order to pay help pay for the expenses as noted above for its operations as well as
the December expenses. Every January 31" the attached ordinance expires and requires board
approval to extend it for another year. Seeing that the loan is not expected to be paid back in
2011 we would authorize a consolidated loan of up to $2,087,000 that will expire on January 31,
2013. The board would then need to reauthorize in January 2013. If funds become available
next year in 2012, we would start to pay down the loan.
Recommendation:
I recommend approval of the attached ordinance which extends the loan authorization to the
Sports Core Fund for an extension of January 31, 2013.
ORDINANCE 2011 -BU -S -1325
AN ORDINANCE AUTHORIZING A LOAN
TO THE SPORTS CORE FUND
WHEREAS, Ordinance 2010 -BU -S -1291 authorized a consolidated loan of $1,895,000 from the
General Corporate Fund to the Sports Core Fund in order to fund capital projects and operating needs of
the Sports Core; and
WHEREAS, the amount of $22,000 be loaned from the General Fund to the Sports Core Fund to
fund the operating needs of the Sports Core for 2010 expenses, which brings the loan to $1,917,000 as of
December 31, 2010; and
WHEREAS, an amount up to $170,000 be loaned from the General Fund to the Sports Core
Fund to fund the operating needs of the Sports Core for the calendar year 2011. The consolidated loan of
$2,087,000 authorized would remain outstanding requiring an extension to January 31, 2013.
NOW, THEREFORE BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows:
Section 1: That the preamble hereinabove set forth is hereby adopted as though fully set forth
herein.
Section 2: That a consolidated loan of not more than $2,087,000 from the General Corporate
Fund to the Sports Core Fund is hereby authorized in order to fund capital projects and operating needs of
the Sports Core.
Section 3: That the loan authorized in Section 2 hereof shall be treated as revolving loans. The
Finance Director is hereby authorized to draw on the principal amounts on an as- needed basis and to
repay the outstanding balances as funds are made available.
Section 4: That any unpaid balance on these loans will be due and payable on January 31, 2013.
Section 5: That all ordinances or resolutions, or parts thereof, in conflict with the provisions of this
ordinance be and are hereby repealed.
Section 6: That this ordinance shall be in full force and effect from and after passage and
approval pursuant to law.
APPROVED THIS 13M of December, 2011.
Gopal G. Lalmalani
Village President
PASSED THIS 1:'h day of December, 2011.
Ayes:
Nays:
Absent:
Ordinance 2011 -BU -S -1325
Authorizing Loan to
Sports Core Fund, Page 2 of 2
ATTEST:
Charlotte K. Pruss
Village Clerk