Loading...
Minutes - 10/06/2020 - Sports Core Advisory CommitteeCall to Order Meeting called to order by John Anos at 6:00 PRESENT: In Person - John Anos, Lara Barber, Mike Stevens, Frank Scarpiniti, Kathy Miller, Jim DePhillips, Melissa Martin; via Zoom – Mike Jerich IN ATTENDANCE: In Person – Village Manager, Rick Ginex, Executive Assistant, Connie Reid, Trustee John Baar, Trustee Asif Yusuf, Golf Superintendent, Sean Creed, Trustee Mike Manzo, and Dan O’Leary. Via Zoom- Trustee Moin Saiyed, Village President, Gopal Lalmalani, Head Golf Professional, Jeff Kawucha. Approval of Minutes Motion to approve minutes from the September 10, 2020 meeting made by Frank Scarpiniti, seconded by Lara Barber Public Comments There are no public comments Active Business Sports Core Involvement with Polo: The polo conversation starts with Frank Scarpiniti asking if the meeting between polo the Village and Butler National has happened. Rick Ginex explains that Butler would like to enter into a 20 year agreement with Village to lease the upper driving range, which is the range they are currently using. Dan O’Leary shares that in order for polo in Oak Brook to grow they would need to transition to the upper field. He goes on to say that the lower driving range floods and becomes unsafe for the players. John Baar shares his opinion that the upper range doesn’t get used by Butler on Sundays and he feels like a deal can be made that would be mutually accepted. He also mentions that Butler is a gender segregated club, and hints that we should not let them call the shots. John Baar states that polo is something that brings people to Oak Brook and thinks the Village should work with them on growing the program. He goes on to say that polo is a major branding aspect of Oak Brook. It’s asked how much of the $80,000 Butler rental payment would be held back if polo were allowed to play on the upper field. Rick Ginex states that the rental fee would be cut to $50,000 per Butler’s representatives. The question is asked of Dan O’Leary if they would be able to make up the lost rental fee, he does not directly answer. Frank Scarpiniti states that Gopal told him that the Sports Core is supposed to run “cost neutral”. He asks the Trustees that are present if that is the case. Melissa Martin asks for clarification on what neutrality means, operating expenses or including capital expenses. Conversation continues regarding MINUTES OF THE OCTOBER 6, 2020 MEETING OF THE SPORTS CORE ADVISORY COMMITTEE OF THE VILLAGE OF OAK BROOK APPROVED AS WRITTEN ON JANUARY 19, 2021 neutrality. Trustee Manzo says that his understanding is that it would include capital expenses. Trustee Baar speaks of a time when the Golf Course needed to do some irrigation work and the Village sold lots on York and 31st to pay for it. He goes on to say that ever since its inception the Village has paid for capital projects for the Sports Core, the reason that the Village is spending more now is because it has been neglected for so long. Frank Scarpiniti asks the question again as to whether the Sports Core should run cost neutral. Asif states that it should run, going forward, on a cash basis. Melissa Martin asks Jason if the Club is at the break-even point when taking into account just operating expenses. Jason confirms that the Bath & Tennis side without golf does run at close break-even point. Frank Scarpiniti asks Trustee Saiyed what his understanding is. Trustee Saiyed says that the Sports Core Committee should make recommendations and he wants to hear from them before he commits to anything. Frank Scarpiniti asks for direction, he wants the Board to tell the committee how to proceed. The committee can’t make recommendations without knowing what is expected. Trustee Saiyed states that he wants the committee to tell him what they should do. Jason explains that the Sports Core may not break even every year but could be budget neutral over a multiple year period. The committee talks about Sports Core financially supporting polo. Jason explains that the money the Sports Core pays to polo is in the form of Golf Maintenance time and resources and the loss of revenue from the driving range on polo match days. Rick explains that the Hotel/Motel fund has very little in it due to COVID, and unless it is voted to combine the 1% - 2% funds there will be no money to give to polo. Rick goes on further to say that the Hotel Committee has already stated that they no longer want to financially support polo. The committee appreciates the historical significance of polo but doesn’t believe that it serves the community. Dan O’Leary states that only10% of the polo attendees are Oak Brook residents. Jason shares with the committee that the Sports Core spends approximately 20,000 to $25,000 plus almost $10,000 in lost driving range revenue. Conversation continues regarding how the money goes in and out and who pays for what. Lara asks about the money that polo makes, and if anyone has seen their financials and why isn’t polo paying rent on the driving range? Trustee Saiyed states that polo should be self-sustaining. Questions and answers go back and forth and conversation continues. Jason explains the intricacies of what is paid to polo, what is paid back to the Village and which expenses to the Sports Core are not reimbursed. After which it is decided by the committee that the Sports Core should not be subsidizing polo. The committee makes a formal recommendation to the Board that the Sports Core is not to subsidize polo. The conversation shifts to the B&T Clubhouse, Frank Scarpiniti states that the Clubhouse does not make money and that every time an event was held, the Sports Core subsided someone’s event. Even without capital outlays, the revenue is less than the operating expenses. Shift back to polo, Trustee Manzo makes a point that if polo is going to move to the upper field and Butler is paying the Village less because of it, polo needs to make up the difference. Frank Scarpiniti reiterates that the committee’s formal recommendation to the Board is that Sports Core is not going to subsidies Polo in any way. Trustee Manzo says that the Sports Core can’t continue to use money from the general fund, because when it does, it takes money from another department, such as Police or Public Works. Trustee Saiyed also states that Village revenues have been substantially reduced and the Village has to cut expenses. Melissa Martin makes a point to say that the Sports Core is exactly where the Village needs to spend money because this is what the residents need at this point, as they are spending time outside, in swimming pools and at the golf course. Trustee Baar talks about the Sports Core being an amenity and that the Board needs to carefully spend money on it and realizes that it takes money to make money. He further states if you want to be able to charge more you need to have a better product. The committee votes amongst themselves and unanimously decides that the Sports Core should be an amenity. Dan O’Leary leaves the meeting since the polo discussion is over. Sports Fields – Frank Scarpiniti starts the discussion by asking how much money is made on the soccer fields. Jason answers that it’s between $80,000 and $100,000, net. It is established that the Sports Core has given that to the Park District. It is also brought up that the Village paid the Park District $230,000 in 2019 membership revenue at that time was kept by the Village). Jim DePhillips asks why the field revenue has gone down and it is explained that it was due to weather and tournaments. Trustee Baar shares that the new Park District fields will be exclusively used by the Wizzard’s Soccer Club and Lakeshore Lacrosse Clubs, and is not taking away any rentals from Sports Core fields. He goes on to say that the Park District is looking for more clubs to rent our Sports Core fields. It is asked if the PD has signed a non-poaching agreement, and confirmed they have not, but it’s in their best interest to book the Sports Core fields. Trustee Manzo states that he was opposed to the agreement with the Park District but for the sake of unity he voted for it. His main concern involved giving the soccer field revenue to the Park District. He believes that the agreement guarantees the Sports Core a $100,000 loss. Melissa Martin states that in 2019 the $230,000 management payment to the Park District was offset by the $230,000 revenue brought in by memberships. She goes on to say that the capital costs will always be there so the B&T will not show that they make a profit. The operating revenue vs. expenses is at a break-even point. Rick speaks of the issue with parking and the influx of money that it will take to rectify that it. He goes on to say that no matter who is managing the fields the parking would have to be upgraded. Parking wasn’t an issue this year because of less spectators and the lack of B&T events. Frank Scarpiniti states that every time there’s an event at the Clubhouse it loses money. A discussion follows regarding whether the Clubhouse should stay open. Melissa Martin voices that pool and tennis are not the cause of the parking problems, it’s only an issue when there is an event at the Clubhouse. It’s a combination of the soccer field rentals and the Clubhouse. Trustee Baar brings up the view that if more parking is built they will be able to rent out three additional soccer fields which would help offset the costs of parking. It’s stated that the Salt Barn has nothing to do with the parking issue, it was built on an old dump. Drainage is an issue and always has been. Rick goes through the different scenarios for parking. He then states that pulling out of the agreement with the Park District will be the worst decision that can be made; the pool will not open in 2021. The consensus is that if the pool doesn’t open next year, it will never open. The discussion shifts back to soccer revenue and why it’s being given to the Park District. It is understood that the Park District wouldn’t sign the deal without it, and that 25% of any profit that the Park District makes would go back into the Sports Core. A lively discussion continues regarding the Park District intergovernmental agreement on whether the Sports Core makes money and how to proceed with the Park District. It is stated that if the Sports Core doesn’t continue the agreement with the Park District as it is, the Park District will pull out of any dealings with the Sports Core and most likely the Sports Core will close. Rick goes over some of the highlights of the agreement, stating that the Park District really hasn’t had a chance to prove themselves, it’s a 3 year agreement that gets renewed every October. Melissa Martin says that the flaw with the agreement is that all operating revenues were given to the Park District and all capital projects, like the parking lot, were kept with the Sports Core. Lara Barber speaks of the problem of the Village not wanting to run the Sports Core. They don’t have the expertise, desire or the resources to make it successful, so it is a must for it to be contracted out, and now the only entity that can make that happen is the Park District. So even though the contract may not be the best, the only other option is to close. Everyone agrees that the Park District does a fantastic job, it’s just that the agreement isn’t fair. Jim DePhillips states that the Park District should run the Sports Core for next year. Rick states, very clearly, that the Park District is not interested in amending the agreement, if it is not renewed as is, they will walk away and the pool probably will not open next year. Frank Scarpiniti says that this agreement was negotiated and signed without the recommendation or knowledge of the committee, so that any losses are something that the Village Board needs to address. Conversation shifts to the Clubhouse operations. The committee discusses closing it, because it loses money every time there is an event. Trustee Baar defends the event business saying that it has grown every year for the past 5 years. They discuss the effects of COVID on the event industry, most believe it will not be profitable next year and perhaps will never come back. Swimming, Tennis and Golf can be considered an amenity, but events that don’t service the community are not, and Golf having to subsidies the Clubhouse for every event is like sponsoring someone’s wedding. Frank Scarpiniti proposes to close down the Clubhouse and not have any weddings, which would solve the parking problem. Trustee Manzo’s proposal is to rent the facility to one of the hotels for $1 and even if they don’t use it, the Hotel/Motel Fund can be used for capital projects. If it can’t be closed then it should be taken out of the Sports Core and possibly the Clubhouse can be repurposed and used by the Park District. The actual cost of the parking lot is over $1 million dollars, which some of the cost will be offset by grants. The drainage has to get done. Frank Scarpiniti shares his thoughts on closing the events portion of the Sports Core. He states that Sean is an expert at golf, there was no one in the Village that was an expert at swimming and tennis so the Park District is taking over, and there is no expert at events. Trustee Baar states that the goal is to break-even, and that it’s too soon to shut down the operation, and even if it is shut down there will still be expenses and no revenue coming in. Melissa Martin makes the point that all of the sections of the Sports Core have the capability of making money, even the events, we just need to find the right formula. She goes on to say that it needs to be decided how to make that happen, say that it’s an amenity or close it. Mike Jerich adds that this is the same argument that has gone on for years, if the Sports Core is expected to make money, run it like a business, if it is deemed acceptable to run as a loss then it’s an amenity for the residents. But a decision needs to be made in order for this committee to move forward. Trustee Saiyed states that however the Sports Core is run, amenity or profit center, the Village can’t keep giving it money, unless the residents want to pay a property tax. He says that since 1996 the Sports Core has lost millions of dollars. Melissa Martin explains that you can’t call it a loss if it’s an amenity – you are paying to have the facility for the residents to enjoy, like parks. She goes on to say that it’s the Board’s responsibility to decide. Trustee Baar makes a point to say that the Village has 11 months worth of reserve money in a bank account and the money should be used to invest in the Village. He goes on to say that no one is being short changed, the golf course is being taken care of, the library, police and fire are all being taken care of. They are looking to the future and see the Sports Core as this jewel of the community that should attract new families to Oak Brook. The goal is to monetize all aspects of the Sports Core. Trustee Manzo says that he has no problem taking money out of reserves, he is worried about how they are going to replenish it. Lara Barber says it’s key to have a cohesive brand and marketing plan. She thinks that renting the pool to swim teams is a way to make some money but, Sports Core vs. Park District receiving the money may be problematic. She also thinks that longer hours is important. Melissa Martin made a point to say that younger families will abandon the Sports Core if it does not open this year. Adjournment Motion to adjourn made by Melissa Martin seconded by Lara Barber. Meeting adjourned at 8:30. ATTEST: Connie Reid Date Executive Assistant Village of Oak Brook