R-2034 - 08/09/2022 - BOARD OF TRUSTEES - Resolutions Supporting Documents ITEM 8.A.7
BOARD OF TRUSTEES MEETING
v"-L"G-' Of SAMUEL E. DEAN BOARD ROOM
OAK B R , K o BUTLER GOVERNMENT CENTER
1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
August 9, 2022
SUBJECT: Resolution Initiating the Submission of a Public Question Regarding
Financial Investment in the Oak Brook Sports Core Banquet Facility
FROM: Greg Summers, Village Manager G.s,
BUDGET SOURCE/BUDGET IMPACT: TBD
RECOMMENDED MOTION: Staff recommends that the Village Board approve
Resolution 2022-EL-REF-B&T-BANQ-R-2034 Initiating the Submission of a Public
Question Regarding Financial Investment in the Oak Brook Sports Core Banquet Facility
Backeround/History:
As the Village continues to strive for financially sustainable and lower cost operations
across the board, attention has focused on each independent component of the Sports Core
operation. This includes the Bath and Tennis Club("OBBT")banquet operation,Golf Cafe
(inclusive of the golf `Drink Cart') and Poolside Cafe. In recent years, the Village has
operated the banquet facility food service operations via an offsite catering vendor and
under the direction of the Golf Professional managing the Golf Cafe and Poolside Cafe.
The last five years of financials for these there operations are as detailed at the top of the
next page.
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6-S.
B&T 2017 2018 2019 2020 2021
Revenues $ 195,514 $ 200,480 $ 342,989 $ 20,402 $ 197,112
Expenses 477,605 371,981 502,358 321,198 294,699
Gain/(Loss) $ (282,091) $ (171,501) $ (159,369) $ (300,796) $ (97,587)
Pool Cafe 2017 2018 2019 2020 2021
Revenues $ 61,268 $ 53,158 $ 54,909 $ - $ -
Expenses 91,297 50,032 70,293 8,099 5,158
Gain/(Loss) $ (30,029) $ 3,126 $ (15,384) $ (8,099) $ (5,158)
Golf Cafe 2017 2018 2019 2020 2021
Revenues $ 384,925 $ 333,355 $ 400,677 $ 526,623 $ 776,626
Expenses 287,416 275,738 301,827 410,445 525,029
Gain/(Loss) $ 97,509 $ 57,617 $ 98,849 $ 116,179 $ 251,597
Total $ (214,611) $ (110,757) $ (75,904) $ (192,716) $ 148,852
As a result of this analysis,on January 6,2022 the Village released an RFP for private food
service vendors to operate the OBBT banquet facility, Golf Cafe and Poolside Cafe.
Responses to the RFP were received January 20th, 2022. Initial runs of the financials
proposed in response to the RFP proved inferior to the current financials with the Village
operating all three of these operations under the current structure. As a result, staff
negotiated with a vendor to identify a mutually agreeable financial structure. After much
debate, the terms were outlined still required the golf food operation to subsidize banquet
losses; as further evidenced by no vendor willing to take on banquets as a standalone
outsourcing opportunity absent the Golf Cafe and Poolside Cafe operations.
Further opportunities were explored with the current Golf Professional, who has been
running the Golf Cafd and Poolside Cafd operations. After diligent review, Jeff Kawucha
did agree to accept the same terms as the proposed vendor but,as noted above,that proposal
did not resolve the banquet operation negative cash flow.
Sports Core Advisory Committee Discussion:
On Wednesday July 6, 2022, the Sports Core Advisory Committee met to review this
information and make a recommendation to the Village Board on future food service
operations for the OBBT banquet operation, Golf Cafd, and Poolside Cafd. During the
course of that discussion, the Committee focused on the fact that the Golf Cafd has been
profitable for each of the last five years and the Poolside Cafd has been close to cost-neutral
each year, even with challenges related to delayed pool openings, etc. Conversely, the
noted that the OBBT banquet operation has proven not to be financially successful, losing
between$100,000 and $300,000 annually, as detailed above.
Inevitably, this resulted in a discussion surrounding what to do with this loss. The Sports
Core Advisory Committee noted that while the aforementioned outsourcing proposal
packaged it with the profitable food service operations, each operation should stand alone
and that it would be more profitable to cease banquet operations and retain the existing
Golf Cafd food service operation as a stand-alone function. Naturally,this evolved into a
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discussion of what to do with the OBBT Banquet facility itself. As a part of this discussion,
significant items of deferred maintenance and upcoming capital investment needs for the
facility were discussed; as was the idea of placing the question to the public in the form of
a non-binding referendum question,to be worded:
The Village of Oak Brook owns and manages the Oak Brook Sports Core, inclusive
of golf, soccer, pool, tennis, banquets and food service operations. Each of the
aforementioned functions financially operates at an average of break-even or cash
flow positive, with the exception of the banquet operation which functions at an
average annual operating loss of approximately $202,000. Shortfalls in the
operational costs are subsidized by income from other Sports Core operations and
transfers out of the Village's general fund.A recent study has demonstrated a need
for significant building capital investment at the facility over the next ten years.
Given these facts, should the Village of Oak Brook invest $2,8 72,980 for capital
improvements over the next ten years to continue operating the Sports Core
banquet facility even though records reflect that the banquet facility is used
predominantly by non-residents, which requires continuing to use the general fund
to cover the facility's operating losses?
Accordingly, after internal review, staff has worked with the Village Attorney,to draft the
attached Resolution entitled "A Resolution Initiating the Submission of a Public Question
Regarding Financial Investment in the Oak Brook Sports Core Banquet Facility."
Recommendation:
Staff recommends that the Village Board approve Resolution 2022-EL-REF-B&T-BANQ-
R-2034 Initiating the Submission of a Public Question Regarding Financial Investment in
the Oak Brook Sports Core Banquet Facility
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