HOSCHEIT; Allan, Kojzarek, Laesch, Starrett

RIVERBOAT COMMITTEE County Board Room

Monday, August 4, 2014 2:30 p.m.

AGENDA

1. Call to Order

2. Approval of Minutes (Riverboat Committee, July 23, 2013)

3. Financial Reports

4. Consideration of 2015 Internal Grant Requests

5. External Grant Funding

6. Adjournment

RIVERBOAT COMMITTEE

July 23, 2013

The Riverboat Committee met on Tuesday, July 23, 2013, at 10:00 a.m. in Building A, County Board Room, Kane County Government Center, Geneva, Illinois. PRESENT: Hoscheit, Allan, Kojzarek, Starrett. Absent: Laesch. Also Present: OCR Dir. Berger and staff Grobe; Co. Bd. Chairman Lauzen & Co. Bd. members Taylor, Davoust, Barreiro; Public Health Dir. Jeffers & staff Isaacson; Facilities, Development & Environmental Mgmt. Exec. Dir. Harbaugh & staff VanKerkhoff, Wollnik, Hill; HR Mgmt. Exec. Dir. McCraven; State’s Atty. McMahon; Treasurer Rickert; Auditor Hunt; Finance Dir. Onzick; ITD Exec. Dir. Fahnestock; and members of the press and public. Chairman Hoscheit called the meeting to order at 10:10 a.m. with a quorum present. Minutes of June 4, 2013 – Committee member Kojzarek asked that the minutes be amended to reflect he had abstained from voting on the United Way of Elgin grant request and that Jennifer Laesch had abstained from voting on the Friends of the Aurora After-School Program request. Motion was made by Starrett, seconded by Kojzarek to approve as amended. Motion carried by voice vote.

Resolution: FY2013 Budget Adjustment for Environmental Management (Blighted Structure Demolitions) – moved to the Finance Committee on motion by Kojzarek, seconded by Allan. This is to transfer $90,000 from the Riverboat Fund to the Enterprise Surcharge Fund to pay costs associated with the demolition, repair or enclosure of dangerous and unsafe buildings following the issuance of a court order. Dev. Dir. VanKerkhoff confirmed that the Development Department will oversee the work, track expenses, and lien properties to recover costs. This fund will be replenished as the liens are paid off. Motion carried unanimously by Voice Vote. REVIEW OF DRAFT BUDGET FOR FY2014 – Chairman Hoscheit reminded the committee that this process was moved up prior to the FY2014 budget being approved to avoid the need for after-the-fact adjustments. It is anticipated that going forward, internal approvals will occur and that the external grant process will continue on in the spring. OCR Dir. Berger reviewed the draft budget noting that it is only partially complete. He noted that the Grand Victoria is projecting a $3.94 million contribution to the Riverboat Fund for 2014, which is less than in past years. Interest income is anticipated to be approximately $30,000 for the year. Chairman Hoscheit noted that there has been a significant reduction in revenue in the last few years due in part to a significant increase in the gaming taxes, which affects the net income of the riverboat and therefore reduces the portion of the funds that the county receives. Additional licenses that have been granted have softened the market for visitors to the riverboats located in Kane County, and the economy has also had an impact on the amount of gaming revenue. Hoscheit commented that there is a fairly significant fund balance; however, funding these programs will eat into the balance. He expressed a long-term concern about relying on funding of internal programs with a declining revenue stream that ultimately will result in cutting some of the programs or shifting the burden to the county budget, which would have an impact on tax revenue. REVIEW/APPROVE INTERNAL GRANT APPLICATIONS – Committee members reviewed a spreadsheet showing Riverboat Fund 2014 internal applications and funding history. Chairman Hoscheit noted that a number of the requests were carryover items for the program that have been funded through this process in the past, but there were some new requests as well. Co. Bd. Chairman Lauzen discussed the Community Outreach Coordinators request noting the amount shown on the spreadsheet was incorrect and should be $80,000-$81,000. The number on the spreadsheet included two full time salaries plus fringe benefits. Fringe benefits for any position that is not a contract is 60% on top of whatever the salary is. While he had no objection to the calculation of the maximum effect of the two positions, that was not his intent for this grant application. He noted that in the past web communication has been in the area of $100,000 so this request actually represents a 19% reduction from what it’s been historically. As this is an open budgeting process being done ahead of time, some estimate needed to me made. Lauzen said he hoped the program would be successful/productive, but that data isn’t available at this point. Some discussion followed. Lauzen agreed to provide the committee with more information on the Coordinator positions; i.e., job description, list of goals & accomplishments, etc. Hoscheit asked that the committee keep in mind that if these positions are to be solely funded through this grant process in future years, some cuts would need to be made elsewhere to sustain them. Hoscheit reviewed the other requests with staff from requesting departments/offices providing additional information and responding to questions on specific funding requests. Chairman Hoscheit summarized the discussion noting that

RIVERBOAT GRANT SUBCOMMITTEE - 2 - July 23, 2013 the County Board’s request for Community Outreach Coordinators would be reduced to $81,000, and the Development Department’s request for Demolition would be reduced to $50,000. Motion was made by Starrett, seconded by Allen to approve internal grant requests as outlined below (including reduction in the amounts for the Community Outreach Coordinators to $81,000 and Demolition to $50,000). Motion carried unanimously by voice vote.

COMPLETE DRAFT BUDGET FOR FY2014 – OCR Dir. Berger noted that the draft budget provided had some missing pieces, but decisions made by the committee today allows them to fill in some of the blanks. He noted that internal projects including the Fit for Kids Program as an internal project, leaves a balance of $4,234,404, which does not include Tuition Reimbursement as it has its own line item in the budget. To be consistent with what was done in the past, $1 million will be budgeted for external grants. That being said, Berger indicated that the amount of cash-on-hand (funds taken from the fund balance) would be $1,491,483, which would produce a balanced budget for 2014. Motion was made by Allen, second by Starrett to approve the budget as discussed. Motion carried unanimously by voice vote. REVIEW TIMELINE FOR FY2014 EXTERNAL GRANT CYCLE – Chairman Hoscheit noted that external applications will be released February 10, 2014 and are due April 7, 2014. Receipt of Riverboat revenue is expected in late April. It is anticipated that applications will be reviewed/approved by the County Board at their June 2014 meeting. Next year there will be a more detailed outreach program to make sure the public is aware of grant opportunities. The meeting was adjourned at 11:28 a.m. on motion by Kojzarek, seconded by Starrett. Motion carried unanimously by voice vote. Ellyn M. McGrath Recording Secretary

Fund Office/Dept. Project/Program 2014 Request Recommendation

001 County Board Community Outreach Coordinators $163,932.00 $81,000.00

001/405 Water Resources Cost Share Drainage Program $304,000.00 $304,000.00

120 Human Resources Tuition Reimbursement $150,000.00 $150,000.00

120 Information Tech. Website Maintenance $100,000.00 $100,000.00

220 State's Attorney Title IV-D $19,798.00 $19,798.00

221 State's Attorney Drug Prosecution $188,075.00 $188,075.00

222 State's Attorney Victim Coordinator Services $38,602.00 $38,602.00

223 State's Attorney Domestic Violence $477,664.00 $477,664.00

230 State's Attorney Child Advocacy Center $493,256.00 $493,256.00

272/273 Court Services Drug Court $566,800.00 $566,800.00

275 Court Services Juvenile Drug Court $21,531.00 $21,531.00

351 Health Kane Kares $261,952.00 $261,952.00

420 Environ. Mgmt. Stormwater Mgmt. - NPDES & Gages $60,000.00 $60,000.00

430 Development Farmland Preservation Program $600,000.00 $600,000.00

600 Finance JJC Bond Payment $792,726.00 $792,726.00

650 Development Demolition Program $100,000.00 $50,000.00

650 Environ. Mgmt. Recycling Program $79,000.00 $79,000.00

350 Health Fit for Kids (External project in prior years) $100,000.00 $100,000.00

Totals $4,517,336.00 $4,384,404.00

Actual

Revenue

Approved Expenses

2010 $6,512,255.45 $6,681,222.00

2011 $6,589,017.13 $5,761,661.00

2012 $5,802,312.79 $5,165,104.00

2013 $4,441,449.11 $4,917,388.91

2014 $3,292,226.49 $5,462,749.00

Totals $26,637,260.97 $27,988,124.91

Sources Actual Revenue: New World Systems Financial Records Approved Expenses: Approved Budgets and Resolutions

$0.00

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

$7,000,000.00

2010 2011 2012 2013 2014

Riverboat Fund History Actual Revenue and Approved Expenses

(2010-2014)

Revenue

Expenses

Internal

Grants

External Grants

2010 $4,939,761.00 $1,665,000.00

2011 $4,417,803.00 $1,266,798.00

2012 $3,979,608.00 $1,107,500.00

2013 $3,720,943.91 $1,118,728.00

2014 $4,384,404.00 $1,000,000.00*

Totals $21,442,519.91 $6,158,026.00

*Amount budgeted. Individual awards not yet approved. Sources Internal and External Grants: County Board Resolutions

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

$4,000,000.00

$4,500,000.00

2010 2011 2012 2013 2014

Riverboat Fund History Internal and External Grants

(2010-2014)

Internal Grants

External Grants

Beginning Fund Balance Assumption

The unobligated fund balance on 12/1/2014 is projected to be $7,526,141. This figure assumes all current obligations of $2,427,462 are maintained and an additional $1,000,000 is obligated under the 2014 external grant program. The board may wish to de-obligate prior-year awards that are not likely to be utilized and/or award less than $1,000,000 to external agencies, which would increase the unobligated fund balance.

Revenue Assumptions The annual revenue from Elgin’s Grand Victoria Casino holds level at $3,051,310 through FY2018. (This

is the amount projected by casino officials for FY2015.)

Interest income on the fund balance over the next four years is $30,000 in FY2015, $25,000 in FY2016, $20,000 in FY2017, and $15,000 in FY2018.

Expense Assumptions FY2014 funding levels are maintained for all internal county projects in future years. In FY2015 and

FY2016 this figure would be $4,384,404. Beginning in FY2017 the amount would drop to $3,334,404 because the Juvenile Justice Center bonds will have been retired in FY2016.

$1,000,000 is approved for external projects each year.

Payroll/fringe benefit expenses for program staff remain level.

Business as Usual Outcome Under the above assumptions, the Riverboat Fund will have an unobligated fund balance of $0 in

December 2016, at which time there will not be adequate unobligated funds on hand to satisfy all FY2017 internal awards.

$(4,000,000.00)

$(2,000,000.00)

$-

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

Unobligated Fund Balance Projection (Business As Usual Assumptions)

Unobligated Fund Balance