General Fund Isn't the Golf Course Overdraft Account
One of the unanswered questions I asked at Tuesday's Board Meeting was:
What is the plan to repay the Village’s General Fund for the money borrowed over the past three years of losses? How much are you planning to tuck away for when this pandemic finally calms down and we see the rounds decline or if we get a rainy summer like last year?
Phil didn't answer this in the meeting, but he's been out campaigning and has reportedly told people that I'm incorrect because there is no interfund loan, RedTail doesn't owe the General Fund money.
Here's what I've seen in my review of the financials and why the General Fund is owed money before any of the profits from the boom in RedTail can be used for any other expense.
From the balance sheet at the end of every month since May 2017. Because I believe facts and sources are important, these numbers are taken directly from the "Cash & Investments Balance" sheets on the month end board approved financials. Note: The line is the reserves that we should always have on hand -- it is set yearly at 30% of operating expenses.
The first question I asked was since this account keeps dipping into the negative why don't we have overdraft fees in our bills. Well, this is where I found out that RedTail and the General Fund share a bank account. So, one of the keys to good accounting is that you must keep track of separate money separately. Currently, our general fund is acting as overdraft protection for our golf course. Anyone else think that's a problem?
But breaking down this chart, I've added some key information about the timeline:
From this overview, it is clear that since CAO Smith was hired, our golf course has been overspending. In the 30 months that have closed since the CAO began, RedTail's fund has been above the reserve 5 months or 1/6th of the time. Far worse, in the first 12 months of Phil's presidency, we've had positive months merely 4 months (all in the summer season when almost all of the money is made in this seasonal business). At the worst, RedTail has been $168,000 in the red --- for reference, the repaving project of Hampshire Rd was $170,000.
What is seriously worrying is that there is a swing of about $438,000 since Phil's service on the board in the RedTail cash balances. What has this $438,000 bought us? We've remodeled/redeocrated essentially a quintuple-wide industrial trailer. We've added a deck. We've painted a silo and added a cap after 10 years of being without one.
Do not misunderstand me, I like our golf course. I believe it's an asset to our community. I firmly believe that if we run it right; it has the potential to be profitable or at the very least pay for itself. Looking at this graph tells me that there is potential for RedTail to be a community benefit --- but not if we continue to allow the out of control spending.
Finally, we have to ask what village services have suffered while the general fund has propped up RedTail for the past 2.5 years? I know I'll be watching the profits over the summer months of 2020, which should be the best year for golf in the history of the course. But I also will be watching and listening to how Phil and his team will want to spend the cash instead of planning ahead.