S-1373 - 07/09/2013 - BUDGET-SPORTS CORE - Ordinances Supporting DocumentsITEM I I.B. 1)
Of OAt
.
`l
AGENDA ITEM
Regular Board of Trustees Meeting
of
July 9, 2013
SUBJECT: Sports Core Consolidated Loan
FROM: Sharon Dangles, Finance Director
BUDGET SOURCE/BUDGET IMPACT: N/A
RECOMMENDED MOTION: I move the Village Board approve ORDINANCE 2013 -
BU -SC -S -1373, an Ordinance deeming the consolidated loan to the Sports Core Fund an
equity contribution.
Backaround/Historv:
At the most recent Village Board meeting on June 25, 2013 there was discussion amongst the
board to recognize the consolidated loan between the General Corporate Fund and the Sports
Core Fund as an equity contribution as opposed to recognize this as an outstanding loan with no
future plans of it being paid back. The Village Board has determined that it is likely the
revenues will continue to be insufficient to allow the Sports Core Fund to repay the Loans and
believes the Sports Core provides a valuable service to the residents similar to Public Safety,
Public Works and the Library and that it's appropriate for the Village General Fund to provide
subsidies to the Sports Core to enhance its service levels.
The ordinance authorizing loans from the General Corporate Fund to the Sports Core Fund will
expire on January 31, 2014, though in the past it has been renewed every year. From 2004 —
2008 the Sports Core received an annual subsidy from the General Fund. The General Fund
ceased the annual Sports Core subsidy in 2008, which at that time was $157,800. During that
time there were no additional dollars added to the debt due to the subsidy. Prior to 2004, the
board 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. From 2009 through 2012, the consolidated
loan had increased to $2,362,000 to fund capital and operating needs of the Sports Core.
AP
After consultation with our independent audit firm they stated it was common practice with park
districts they have audited that a subsidy is done to help fund the operations. Trustee Adler and
myself concurred with the audit firm and therefore would like to recognize the consolidated loan
as an "equity transfer ". An accounting entry will be done to take this off the books as an
interfund loan and record it as an equity contribution. This will reduce the General Corporate
Fund balance and increase the Sports Core Fund Balance by $2,362,000 in 2013.
In addition, I believe it's worth mentioning that last year Golf operations purchased golf carts
and borrowed money from the General Fund to be paid back with interest. The Sports Core
Fund is paying this back to the General Fund over 4 years and is not included in the $2,362,000.
The amount owed to the General Fund for the purchase of golf carts as of 12/31/12 is
$183.897.75 with a transfer scheduled this year from the Sports Core Fund to the General
Corporate Fund.
Recommendation:: Approve ORDINANCE 2013- BU -SC -S -1373, an Ordinance deeming
the consolidated loan to the Sports Core Fund an equity contribution.
ORDINANCE 2013- BU -SC -S -1373
AN ORDINANCE DEEMING THE CONSOLIDATED LOAN TO
THE SPORTS CORE FUND A TRANSFER
WHEREAS, in previous years, the revenues generated by the Sports Core have been insufficient
to offset the Village's expenditures from the Sports Core Fund; and
WHEREAS, in order to provide the residents of the Village quality sports facilities, the Village
Board previously determined it was in the best interests of the Village and its residents to provide the
Sports Core Fund money from the Village's General Fund; and
WHEREAS, Ordinance 2012 -BU -S -1358 authorized a consolidated loan consistent with Section
10 of Ordinance 2011- FI- TX -BU -S -1318 of not more than $2,362,000 from the General Corporate Fund to
the Sports Core Fund ( "Loans'l in order to fund capital projects and operations of the Sports Core, and
said amount was loaned from the General Corporate Fund to the Sports Core Fund; and
WHEREAS, the Loans did not contain provisions that required the Loans to be repaid with
interest; and
WHEREAS, similar to the benefits received by the Village residents from the provision of police,
fire, public works, and library services, the Village Board, after consultation with the Village's independent
auditor, believes the residents receive significant benefits from the Sports Core that are appropriate to
subsidize from the Village's General Corporate Fund; and
WHEREAS, the Village Board believes that it is now more appropriate to recognize the Loans to
the Sports Core Fund to be "transfers."
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 the Village Board hereby deems the Loans to be transfers and not outstanding
loans.
Section 3: That the Village Finance Director is hereby authorized and directed to make the
appropriate and necessary adjustments to the Village's books and accounts so that the Loans are
recognized in the books and accounts as transfers instead of as loans.
Section 4: Section 10 of Ordinance 2011- FI- TX -BU -S -1318 is hereby amended and shall read as
follows:
It is the policy of the Board that enterprise and utility funds shall be financially self -
supporting. Rates or other charges for services shall be established and maintained at
levels which produce revenues sufficient to defray expenditures within each fund,
including reasonable reimbursements to other funds for services or benefits received
therefrom. Enterprise and utility funds shall not receive transfers from other funds except
in the form of loans made pursuant to Section 15 hereof, or as grants or transfers
authorized by the Board.
Section 5: That all ordinances or resolutions, or parts thereof, in conflict with the provisions of
this ordinance be and are hereby repealed.
ORDINANCE 2013- BU -SC -S -1373
An Ordinance Deeming The Consolidated Loan To
The Sports Core Fund An Equity Contribution
Page 2 of 2
Section 6: That this ordinance shall be in full force and effect from and after passage and
approval pursuant to law.
APPROVED THIS g`h of July, 2013.
PASSED THIS gth day of July, 2013.
Ayes:
Nays:
Absent:
Gopal G. Lalmalani
Village President
ATTEST:
Charlotte K. Pruss
Village Clerk