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S-1325 - 12/13/2011 - BUDGET - Ordinances Supporting DocumentsITEM 7.17.6) OAk 49 rl� OF i . .. �i3�SN3♦ 'Ft � G ^ � � 1 �. SAC t 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