Est. Revenue:  $7 million

 

Source:

1. Banquet - $3.6 million

2. C&G Rev. - $1.7 million

3. Food & Beverage - $1.2 million

 

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June 5,2011

By Rhonda Reed-Slaughter

rhonda@thenumbercrunchers-bolingbrook.com

The one and only budget workshop was held on Saturday, April 2, 2011.  The Village board originally scheduled 3 workshops, but cancelled the last 2 because of the "lack of community participation."

Kemper Sports Management, (company the Village board approved to manage the golf course) was in attendance, and briefly discussed the golf course 2011/12 budget.

According to Kemper, the golf course generated a net profit of $121k in fiscal year 2010/11, and estimate a $195k net profit for fiscal year 2011/12. 

A net profit?  Really?

How can they declare a net profit if the golf course has been performing at an operating loss since the doors opened in 2002? 

How did they manage to turn around chronic, systemic losses?

Easy, if you play with the numbers.  

Creative reporting of GC financials

Is it possible Kemper is excluding depreciation and interest expense from net profit calculation?

We will not be able to verify Kemper's claim of "net profit" in fiscal year 2011 until the independent auditor has completed the audit.

But we have reviewed the GC audited financials for fiscal year 2002 - 2010, and discovered chronic losses since the beginning. (view graph on the far right of page)

 

What type of business is the GC?

The Bolingbrook Golf Course should be ran like a business.  As a proprietary fund, the revenue generated thru user fees, etc. should cover it's expenses.  With chronic, systemic losses, Kemper and the Village Board should re-examine GC operations.

 

Now consider the primary purpose of depreciation.  Depreciation matches the cost of assets (like the golf club, furniture, carts, etc.) against the revenue earned from using the asset.  Simply put, it is the gradual and permanent decrease in the "value" of a property. 

 

Therefore, businesses will report the asset and accumulated depreciation in it's balance sheet.   Depreciation expense is netted against revenue to calculate income.

 

 

Why would the GC & Village exclude depreciation?

The Golf Course Fund (as part of the Village financials) were audited by an independent auditor, and very reliable.

 

But anytime government officials make public claims of a financial nature, it's important to do your own fact check.

 

The primary reason the Village Board and Kemper Sports Management may exclude depreciation and interest expense is to overstate net income.  It gives the appearance of profitability.

 

At the end of the day, who will question them?  After all, very few people in the community even attend the budget workshops.

 

 

 

Special assignment

We have included a copy of the GC income statement for fiscal year 2010. (click on link at the end of the article)

 

Ask Mayor Claar, one of the Village Trustees or Kemper Management one question - "Did the GC generate a net profit or loss in fiscal year 2010?"

 

If they claim an $88k net profit, depreciation expense was excluded. 

 

If they own up to the $527k net loss?  Then it's correct.

 

Just look at the copy provided as proof.

 

 

 

Final check

We discussed this issue with a representative from the Governmental Accounting Standards Board (GASB), and feel very comfortable in our belief that whenever Kemper and Village officials make public statements regarding  GC net income, they should report  "net income AFTER depreciation and interest".

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UPDATE!!

The primary source of the Civil Union article has given me permission to share her name with the Bolingbrook community.

Her name is Cheryl Hooten, Owner of Dream Gay Weddings.  Feel free to contact her at info@dreamgayweddings.com.

"There are two sides to every story.  Rhonda accurately expressed my side.  Thanks for listening."

 

'Instead of spreading negative remarks, where was all the attention to promote this once in a lifetime event.  This was a dream deal."  -

Cheryl Hooten, Owner of Dream Gay Weddings

 

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June 1, 2011

By Rhonda Reed-Slaughter

rhonda@thenumbercrunchers-bolingbrook.com

Tonight, a huge celebration was planned at the Bolingbrook Golf Course.  A civil union celebration for same-sex couples ready to take that major step, by making their union legal.  

The event was expected to attract approximately 60 couples, and 600 guest, including family and friends.

A beautiful ceremony for the couples, and plenty of tax revenue for the Village.

Seem like a sure deal, right?

Well it all depends on who's telling the story.

If you read what's published in the "soft press", the Village claims the event failed to attract enough participants.  They had to pull the plug because of "lack of participation".

However, we spoke with individuals that were actively involved in planning this event.  They are telling a completely different story.

 

 

According to reliable sources -

 

• Bolingbrook Golf Course management were the ones that originally contacted Dream Gay Weddings pitching the idea.

 

• The Golf Course management praised the diversity of Bolingbrook, and presented Bolingbrook as the perfect community to embrace same-sex unions.

 

• DuPage Township Supervisor, Bill Mayer agreed to attend the event with multiple staff members.  They would assist the couples in filling out the marriage license.  At midnight,  Mayer and staff would take the paperwork back to the Township Office and work overnight processing them. 
  

 

• According to one source, the management company claimed to have a personal approval from Mayor Claar allowing DuPage Township to keep their doors open at midnight (to process marriage licenses).
  
• The original, 1 page contract was for $56k.  Apparently, no immediate down payment was required.

 

• 3 months into planning the event, they became very concern when the golf course, and Village was slow in advertising the event.  After all, it was the golf course that pitched the "diverse community" angle which sweetened the deal.  Otherwise, they would have held the event in Chicago where Governor Quinn's attending.

 

•  3 months into the planning.   After several ignored phone calls, and mixed messages, sources claim the golf course increased pressure to get money up front.  A new contract was drafted for $18k, and an immediate down payment was demanded.  Basically, the event planners would be required to pay the $18k even if the event was cancelled.  This was 6 weeks before the event.  Why the drastic change in terms?

 

• The planners refused to pay the $18k up front, and cancelled the event.   Not really understanding why the Village and golf course squashed a sweet deal like this. 

 

• The personalized ceremony was $1500 - $2000 per couple.  The golf course would have collected $300 per couple.  The estimated 600 guest could stay at Bolingbrook hotels, eat at our restaurants, and shop at the Promenade.  There's tax revenue for the community across the board. 

 

• Sources claim the golf course and Village caved to "perceived" pressure because of the nature of the event - same-sex unions.  And unfairly demanded the $18k down payment 6wks before the event to encourage a cancellation.  [the golf course has released the planner from it's $18k down payment obligation]

 

After reading both sides of the story, do you believe there's something to the claim that the Village caved to the fundamental social conservatives of our community?  If so, what about the social liberals in Bolingbrook that don't mind same-sex civil unions?  And feel that it's not our business.

 

Or do you believe the Village was right in not holding a same-sex union celebration? 

 

Did  the Village miss a golden opportunity to make money?

 

 

 

 

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FOLLOW THE MONEY SERIES

 

This gorgeous club has never made a net profit since it opened in 2002.  So why did the board increase labor cost?

 

Lets take a peek at the 2010/11 budget

 

 

 

December 4, 2010

By Rhonda Reed-Slaughter

 

The Bolingbrook Golf Club, a village-owned property is an 18-hole golf course, designed by Architect, Arthur Hill.  The club opened with lots of publicity in 2002.

 

According to the audited financial statements, the Village issued $64 million in bonds to help fund the construction of the golf course, and several other projects.  In addition, there were contributions from the Village, and proceeds from the sale of reclassed land.  

The Club House was funded by the issuance of bonds totaling $18.5 million.

 

Kemper Management was contracted to oversee the golf course operations.  Suprisingly,  their contract increased this fiscal year, they are now paid $276k annually.

The decision to invest in a luxury golf course, and fund it with taxpayer dollars was approved by the Village board, unanimously. 

 

FACT: The Bolingbrook Golf Club's been performing at a net loss since the doors open in 2002.  As of FYE 2009, the club generated a combined net loss of $10 million.  The public is still waiting for the Village to publish FYE 2010 financials, which will probably add to the net loss. 

QUESTION:  When the Village board publicly announced the new rounds of budget talks (for 2010/11), and decided to slash public safety worker jobs to close the budget deficit in the General Fund, why did they completely ignore the annual budget deficits in the Golf Course Fund?

Instead of addressing the deficit issue, the board relied on the use of reserves to cover the losses.  But what happens when the reserves run out?  With over 7 years of continued losses, $10 million and counting, what's their plan B?

 

 

Golf Course Fund Budget 2010/11

The budget for 2010/11 is $6.8 million.  It's important to understand how the GC generates revenue, and identify where the majority of the money's being spent.

Here's what we discovered -

 

REVENUE

Revenue is broken down as follows:

• Food & Beverage       $ 4,726,154
• Course & Grounds        1,610,365
• Pro Shop                        263,789
• Practice Center               238,250
• Carts                                2,500

 

EXPENSES

From what we analyzed, it appears the Village board approved increases in various areas, not decreases. 

In addition, we were shocked to learn that LABOR COST is 45% of the total budget.  This is one prime area to cut cost and balance the budget. 

 

 

Top 3 Expense Categories

(as a % of total budget)

Payroll/HR      $3 million          45%

Other Exp.      $1.3 million       20%

Cost of Goods Sold  $1.4          20%   

 

 

FINAL WORDS

The Bolingbrook Golf Club is a gorgeous property that should serve as a gem for any community.  But was the investment worth the millions of dollars in losses?  When did our local government get into the luxury golf course industry?  Bolingbrook has a golf course - Boughton Ridge.  Did we really need another one?

Why did the board choose to increase cost, and failed to do any massive cuts to balance the budget?  There's $10 million in net losses(from 2002 - 2009), and counting. 

 

The board is left with two choices -

 

(Either)

Make the massive cuts today to maintain a real balanced budget.

 

(or)

Consider selling the property to an investment company that specialize in luxury golf courses.  Just cut our losses.

 

 

As a resident and taxpayer, what would you recommend the Village board do?

 

Bolingbrook Golf Course

Financial Results

 

 

Click image below to enlarge