CITY COUNCIL 2014/10/20 Agenda
THE CITY OF LAKE FOREST
CITY COUNCIL AGENDA
Monday, October 20, 2014
Immediately following the Finance Committee Meeting at 6:30
City Hall Council Chambers
Honorable Mayor, Donald Schoenheider
Catherine Waldeck, Alderman First Ward Stanford Tack, Alderman Third Ward
Prudence R. Beidler, Alderman First Ward Jack Reisenberg, Alderman Third Ward
David Moore, Alderman Second Ward Michael Adelman, Alderman Fourth Ward
George Pandaleon, Alderman Second Ward Michelle Moreno, Alderman Fourth Ward
CALL TO ORDER AND ROLL CALL Immediately following Finance Committee Meeting
PLEDGE OF ALLEGIANCE
REPORTS OF CITY OFFICERS
1. COMMENTS BY MAYOR
A. Swear in Firefighter Paramedic- Chuck Kriens
Mayor Schoenheider and Fire Chief Jeff Howell
2. COMMENTS BY CITY MANAGER
A. Community Spot Light
CROYA Manager, Todd Nahigian
3. COMMENTS BY COUNCIL MEMBERS
A. Finance Committee
1. Acknowledge Receipt of the FY2014 Treasurer’s Report
PRESENTED BY: George Pandaleon, Finance Committee Chairman
PURPOSE AND ACTION REQUESTED: Staff requests that the City Council acknowledge
receipt of the Fiscal Year 2014 Treasurer’s Report.
BACKGROUND/DISCUSSION: Pursuant to Illinois Statute, a Treasurer’s Report must be filed
with the City Clerk, the County Clerk, and published in a Lake Forest newspaper within six
months after the end of each fiscal year. The report will be published in the October 30,
2014, edition of the Lake Forester. The report may be found beginning on page 12.
BUDGET/FISCAL IMPACT: N/A
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COUNCIL ACTION: Acknowledge receipt of the FY2014 Treasurer’s Report.
B. Property and Public Land Committee
1. Consideration of Three Recommendations from the Property and
Public Land Committee Related to the Process for Considering the
Establishment of a Tax Increment Finance District. (Waive first
reading and grant final approval of two Ordinances and approve a
Resolution.)
PRESENTED BY: Alderman Reisenberg, Chairman of the
Property and Public Land Committee
CITY’S TIF CONSULTANT: Lee Brown, Teska Associates, Inc.
STAFF CONTACT: Catherine Czerniak, Director of Community Development (810-3504)
PURPOSE AND ACTION REQUESTED: The Property and Public Land Committee (PPL)
recommends that the City Council take three actions, consistent with State law, to set the
framework for consideration of the establishment of a Tax Increment Financing (TIF)
District for the Laurel and Western Avenues Redevelopment site.
BACKGROUND AND DISCUSSION: On September 2, 2014, the City Council approved a
Resolution authorizing and directing the Property and Public Land Committee, the City’s
TIF Consultant and City staff to proceed with preparations and actions concerning the
possible establishment of a TIF District for the Western and Laurel Avenues redevelopment
site. The three actions now recommended by the PPL are in accordance with that
Resolution and are necessary next steps in the process of consideration of a TIF District.
The Property and Public Land Committee recommends the following actions:
1. Approval of an Ordinance setting the public hearing date for consideration of a
TIF District for the Western and Laurel Avenues Redevelopment Project.
State law requires that the public hearing date for consideration of a TIF District Plan be
set by Ordinance. The Ordinance, included in the Council packet beginning on page 19,
sets the public hearing date for the December 10, 2014 Plan Commission meeting.
2. Approval of the TIF Inducement Resolution by motion.
The TIF Inducement Resolution, included in the Council packet beginning on page 21,
states the City’s intention to consider reimbursing eligible expenses from the
redevelopment project from revenues generated by the TIF District.
3. Approval of an Ordinance approving the establishment of an “Interested Parties
Registry” and Adopting Registration Rules.
The purpose of this Ordinance is to inform interested parties of the opportunity to register
for information and notices pertaining to the proposed TIF District. State Statutes require
an Interested Parties Registry and registration rules to be established for any prospective
TIF District. The Ordinance is included in the Council packet beginning on page 24.
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BUDGET/FISCAL IMPACT:
None, importantly, the three actions recommended by the PPL do not approve or
authorize the establishment of a TIF District, but instead, these actions allow the public
review process for considering the proposed TIF District to get underway. After
conducting a public hearing on this matter, the Plan Commission will forward a
recommendation to the City Council for consideration and action on the TIF District.
COUNCIL ACTION:
If determined to be appropriate by the City Council:
1. Waive first reading and grant final approval of an Ordinance setting the public
hearing date for consideration of a TIF District for the Proposed Laurel and Western
Avenues Redevelopment Project.
2. Approve the TIF Inducement Resolution by motion.
3. Waive first reading and grant final approval of an Ordinance establishing an
Interested Parties Registry and adopting associated rules.
4. OPPORTUNITY FOR CITIZENS TO ADDRESS THE CITY COUNCIL ON NON-AGENDA
ITEMS
5. ITEMS FOR OMNIBUS VOTE CONSIDERATION
1. Approval of the October 6, 2014 City Council meeting Minutes
A copy of the minutes can be found beginning on page 34.
2. Recommendation from Parks and Recreation Board and Golf Advisory
Committee to enter into a contract with KemperSports, Inc. for the
management of Deerpath Golf Course
PRESENTED BY: Michael Adelman, City Council Liaison to the Golf Advisory Committee
and Mary Van Arsdale, Director of Parks and Recreation, 810-3918
PURPOSE AND ACTION REQUESTED: Per recommendation from the Parks and Recreation
Board and the Golf Advisory Committee, staff is seeking approval of a contract with
KemperSports, Inc. for the management of Deerpath Golf Course beginning in 2015.
Background Attachments A-F may be found beginning on page 40 and the Agreement,
Attachment G, is on page 49.
FACILITY COMMUNICATION/RECOMMENDATIONS: The following chart outlines the
significant public meetings held to communicate golf course challenges and/or
consulting analysis related to Deerpath Golf Course. In addition to these documents and
events, periodic seasonal updates were shared at the monthly Parks and Recreation
Board meetings.
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Meeting/Activity Date Focus
Pellucid Corporation/Edgehill Golf
Advisors Report
October
2008
Business Operational Review
Community Forum October
2010
State of the Industry and ‘What’s On the
Horizon for Deerpath Golf Course’
National Golf Foundation
Consulting Services
February
2011
Review and Analysis of Deerpath Golf
Course Business Operations
Community Forum August
2011
Deerpath Performance and Management
Options being investigated
Request for Qualifications &
Request for Information Process
Fall 2011 KemperSports, Inc. selected to provide
hybrid management assistance
Community Forum January
2013
Deerpath Performance and Changes to
Permanent Tee Time Lottery
City Council/Park Board October
2013
State of Industry Update and Deerpath 2012-
2013 Performance
Park Board August
2014
First Quarter FY15 Operations Report
Park Board and Golf Advisory
Committee Workshop
August
2014
Review of historical performance data,
management structure discussion
Park Board September
2014
Recommend a KemperSports Managed
Structure beginning FY16
BACKGROUND/DISCUSSION: Deerpath Golf Course was established in 1927 when a
private entity transferred title of multiple parcels to the City of Lake Forest. The property,
which is designated primarily as flood plain, is located in the heart of the community
adjacent to Deerpath Road and the Skokie River. Reviewing the cache of title
documents, various deed restrictions exist affecting the properties that comprise
Deerpath. The restriction that appears in numerous documents states: “Deerpath is to be
used for public park and recreational purposes, except for trap shooting….and that in
the event the Property, at any time, ceases to be used by the City of Lake Forest or its
duly constituted Park Board as a public park or for recreational purposes, or shall be used
for trap shooting, then said property shall immediately revert to and become property of
said grantor, his heirs, executors or assigns.” Thus for eighty-seven years, Deerpath Golf
Course, with its 145 acres of woods, ponds, natural areas, and lawn, has played a critical
and vital role in delivering year-round recreational services and providing critical flood
control and environmental benefits to residents. As a recreational amenity of the City of
Lake Forest, it has been financially sufficient until recent years when the golf industry
became saturated with courses, the 2011 recession occurred and the volume of core
golfers declined.
Beginning in early 2010, The City hosted several community forums in an effort to inform
residents about future challenges facing the golf industry and Deerpath Golf Course in
particular. Discussions focused on how to increase revenues, reduce expenses and
maintain a quality golfing experience for our valued golfing patrons in light of the fact
that Deerpath Golf Course was projected to begin operating at a financial deficit.
As a result, in 2011, The City took a proactive approach and investigated third party
management of the Golf Course by conducting an extensive Request for Qualifications
(RFQ) and Request for Proposal (RFP) process. Multiple companies were interviewed, and
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as you are aware, KemperSports Management was determined to be best suited for
Deerpath Golf Course. A three-year contract was signed in December 2011 for
KemperSports to provide a “hybrid management option” by providing the General
Manager and assisting with marketing and revenue generation, while The City continued
to retain all other staff as City employees and managed the maintenance of the Course.
This arrangement over the past three years resulted in helping Deerpath remain
competitive in a challenging industry.
However, City expenses continue to outpace revenue under the current structure. As we
approach the final months of the hybrid management agreement, KemperSports and
The City identified the importance of conducting due diligence in determining the next
course of action to gain better efficiencies and financial outcomes. Both groups
identified that the hybrid management option, while a good fit initially, is not the optimal
solution going forward, and KemperSports indicated they are not interested in extending
the hybrid arrangement. Challenges identified with a hybrid management structure
include:
• Bifurcated management system creates a challenging communication process,
especially in addressing significant customer or employee issues
• Difficult to build team dynamics with multiple employers
• Programming challenges with multiple vendors and stakeholders
• Different financial and accounting models for timely reporting
• Capital planning and prioritization conflicts with cohesive planning
Recently, the Golf Advisory Committee and the Parks and Recreation Board reviewed
financial materials, including recent performance and industry trends compared to the
Illinois/Chicago market, while evaluating a City-managed course with a KemperSports-
managed course. The Deerpath Golf Course Flash Report (Attachment A) and Financial
History FY07-FY14 (Attachment B) provide a summary of this data with the following
highlights:
Rounds Trend:
a) Deerpath total rounds have outpaced Chicago/Illinois daily fee, semi-private,
municipal and other public courses.
b) Deerpath’s 3-year average is 31,089 rounds.
Total Revenue/Rounds:
a) Deerpath’s revenue per round was the higher than the average daily fee/semi-
private or municipal course in 2013.
b) Deerpath’s revenue per round was higher than other municipal courses in years
2011 and 2012.
Deerpath Regional Competition:
a) 81 golf courses are located within 30 minutes. Neighboring communities all offer a
public option for their residents.
b) Around Lake Forest, the highest concentration is private courses.
Financial History:
a) Deerpath’s net before capital and debt was positive until FY14, but is expected to
be a deficit for FY15.
b) Deerpath’s net after capital and debt became a negative balance beginning in
FY08.
c) Due to the debt service coverage requirement (this means that the operating
income of the golf course must exceed the annual debt service requirements by
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125%), Deerpath received a subsidy from the Recreation Fund beginning in FY11.
The subsidy from the Recreation Fund has increased annually each year.
Regarding the future management structure, The City deemed it appropriate to continue
to investigate a full management option with KemperSports. Per clarification with The
City’s legal counsel, The City is not required to issue another RFP before executing a
proposed contract with KemperSports. Under the City’s Purchasing Directive, professional
services, like the ones provided by KemperSports, are initially to be selected through an
RFP process, and those professional relationships can continue and be extended until The
City determines a change is warranted or until it again wants to test the waters. Since
The City selected KemperSports following an RFP process in 2011, the City’s renegotiation
of the services agreement with KemperSports is consistent with the Directive and a new
RFP is not required. As a result, staff prepared various financial proformas comparing a
City managed option versus a KemperSports managed option.
BUDGET/FISCAL IMPACT:
The budget proforma process began with The City and KemperSports each creating a
detailed FY16 line item proforma budget (Attachment C) using various revenue and
expense assumptions based upon performance history, anticipated increases and
industry expectations. Where feasible, alignment was sought on both revenues and
expenses. Historically, The City utilizes very conservative revenue projections based upon
recent performance and current fiscal year. Expenses are typically estimated based
upon current year and expected increases for the various line items. KemperSports looks
at a 3 year course and industry average and recent weather impacts to project its
revenues and a similar approach as the City’s for expense line items. When reviewing the
FY16 line item budget it becomes apparent that the driving factors that impact the
overall fiscal performance are due to limited revenue growth potential and significant
costs differentials in wages and benefits. Capital and debt expenses were kept identical
for both scenarios.
From the FY16 Line Item Budget, four 5-year fund performance summaries were then
projected with the following significant assumptions and results.
1. City Managed Fund Forecast:
Assumptions: Revenues reflect City’s conservative revenue estimates. With
expenses, all employees are City staff, including adding salary expense for a
General Manager and the related benefit and insurance costs.
Results: Net, before and after debt and capital, operate as a deficit beginning in
FY16 and the fund balance reserve of 15% is not achieved. The Recreation Fund
transfer exceeds $225,000 annually. Potentially least favorable financial results.
2. Kemper Managed Fund Forecast (Attachment D):
Assumptions: Revenues reflect KemperSports increased revenue projections
primarily achieved through greater daily fee revenue. Revenues also reflect a
$61,378 (4% of revenue) management fee paid by The City to KemperSports. All
employees are KemperSports employees with KemperSports benefit and insurance
costs.
Results: Net before capital and debt remains with positive cash flow; after adding
debt and capital a deficit balance is generated and fund balance reserve of 15%
is not achieved. The Recreation Fund transfer is less than $50,000 annually.
Potentially best financial results.
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3. City Revenue/Kemper Expense Fund Forecast:
Assumptions: Conservative City revenues were utilized with KemperSports
expenses (all employees are KemperSports employees) and KemperSports is
managing the course.
Results: Net before capital and debt remains with positive cash flow, though less
than the Kemper Managed scenario; after adding capital and debt a deficit
balance is generated and fund balance reserve of 15% is not achieved. The
Recreation Fund transfer averages $95,000 per year. Potentially second best
financial results.
4. Kemper Revenue/City Expense Fund Forecast:
Assumptions: KemperSports projected revenue included with City estimated
expenses (all employees are City employees) and The City continues to maintain
the entire operation.
Results: Net before capital and debt operate at a deficit beginning in FY16 but
remains flat around $50,000 annually; after adding capital and debt a deficit
balance is generated in excess of $200,000 annually and fund balance reserve of
15% is not achieved. The Recreation Fund transfer averages $174,800 per year.
Potentially third best financial results.
The “Net after Capital and Debt Chart -pre-subsidy” (Attachment E) helps illustrate the
proforma results graphically for each fiscal scenario.
In addition to fiscal performance, there are differences between the two management
options related to the role The City plays and degree of control retained in key
operational areas that impact our golfing patrons. The Management Options Matrix
(Attachment F) outlines these items in such important areas as setting fees, course
conditions and staffing. As the Matrix indicates, both options allow The City a strong voice
in how the course is operated and setting expectations.
The Parks and Recreation Board discussed the various management scenarios at their
September 16, 2014 public meeting. Citing the recent success with the hybrid structure,
long term financial benefits, and enhanced professional oversight by a leading
professional golf firm, the Parks and Recreation board unanimously recommended
moving forward with a full management contract with KemperSports beginning in 2015.
As a result, and under direction of the City Manager, staff has worked with The City
Attorney and KemperSports legal counsel to prepare the agreement, which is attached
in substantive form.
COUNCIL ACTION: Recommend the City Council authorize the City Manager to execute
an agreement with KemperSports, Inc. for the management of Deerpath Golf Course
beginning in 2015, subject to City Attorney review and in substantially the form attached
hereto.
3. Consideration of a Recommendation from the Zoning Board of Appeals in
Support of an Amendment to the Special Use Permit for the Lake Forest Club
Approving a Modified Master Site Plan. (First Reading, and if Desired by the
City Council, Final Approval)
STAFF CONTACT: Catherine Czerniak,
Director of Community Development (810-3504)
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The following recommendation from the Zoning Board of Appeals is presented to the City
Council for consideration as part of the Omnibus Agenda.
The Zoning Board of Appeals recommended approval of minor modifications to the Master Site
Plan for the Lake Forest Club. The Master Site Plan is an exhibit to the Club’s Special Use Permit
which was approved by the City Council in 2003. The addition of a fifth paddle tennis court
and associated walkways is proposed. The new paddle court and the lights on the new court
will be consistent with the existing courts. No other site modifications are planned and no other
changes are proposed to the Special Use Permit. The Board recommended approval of the
requested amendment. (Board vote: 7 - 0, approved)
The Ordinance approving the amendment to the Special Use Permit to incorporate the
modified Master Site Plan as recommended by the Zoning Board of Appeals is included in the
Council’s packet beginning on page 86. The Zoning Board of Appeals’ report is also included
in the Council packet for additional background. A copy of the original SUP is available for
review in the Community Development Department.
COUNCIL ACTION: If determined to be appropriate by the City Council, waive first
reading and grant final approval of the Ordinance approving an amendment to the
Special Use Permit for the Lake Forest Club in accordance with the Zoning Board of
Appeals’ recommendation.
COUNCIL ACTION: Approve the three (3) Omnibus items as presented.
6. ORDINANCES
1. Consideration of a Recommendation from the Plan Commission in Support
of Final Plat Approval of the Spiel Planned Preservation Subdivision and
Approval of the Associated Special Use Permit. (If desired by the Council,
Waive First Reading and Grant Approval of the Final Development Plan
Ordinance.)
STAFF CONTACT: Catherine Czerniak,
Director of Community Development (810-3504)
PURPOSE AND ACTION REQUESTED: Consideration of a recommendation from the Plan
Commission to grant final approval of the Spiel Subdivision, a 6-lot Planned Preservation
Subdivision.
BACKGROUND/DISCUSSION: In May, 2012, the City Council, based on a
recommendation from the Plan Commission, granted tentative approval of the Spiel
Subdivision. Since receiving tentative approval, Mr. Spiel, the property owner, has met all
of the requirements to maintain the validity of tentative approval. As originally intended,
with tentative approval in hand, Mr. Spiel offered the 10-acre property for sale. A
contract purchaser has now been identified, the plans for the development have been
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put in final form and the project is now presented for final approval which will allow
recording of the final plat of subdivision, sale of the property to the developer,
construction of the improvements for the subdivision and construction of five new homes.
The existing Spiel home, designed by Stanley Anderson, will remain on one of the lots.
On September 10, 2014, the Plan Commission held a public hearing and considered a
request for final approval of the 6-lot Spiel Planned Preservation Subdivision. The
subdivision is consistent with the tentative approval and establishes size buildable lots
ranging in size from one acre to two acres, directs stormwater flows to existing ditches
and culverts, preserves open space and heritage trees, and provides for landscape
screening along the perimeters of the site in response to requests from neighboring
property owners.
The Plan Commission voted 4 to 0 to recommend final plat approval and approval of the
associated Special Use Permit. The approving Ordinance, including the conditions of
approval as recommended by the Plan Commission, is included in the Council packet
beginning on page 96. A copy of the Plan Commission’s report is also included in the
packet as additional background.
BUDGET/FISCAL IMPACT: The proposed subdivision will support infill development in the
community and will provide the opportunity for the construction of new residences and
will generate transfer tax revenues, impact fees, building permit fees and property tax
revenues.
COUNCIL ACTION: If determined to be appropriate by the City Council, waive first
reading of the Final Development Plan Ordinance approving the Special Use Permit and
final plat of subdivision for the Spiel Planned Preservation Subdivision.
2. Consideration of a Recommendation from the Plan Commission in Support
of Actions Related to Tentative Approval of the Oak Knoll Woodlands
Subdivision. (If desired by the Council, Grant First Reading of An Ordinance
and Grant Tentative Approval of the Plat of Subdivision by Motion)
STAFF CONTACT: Catherine Czerniak,
Director of Community Development (810-3504)
PURPOSE AND ACTION REQUESTED: Consideration of a recommendation from the Plan
Commission in support of approving 1) first reading of an Ordinance approving a zone
change and application of a zoning overlay district; and 2) approval of the tentative plat
of subdivision for the proposed Oak Knoll Woodlands Subdivision.
BACKGROUND/DISCUSSION: This petition proposes development of a 30 acre parcel
located east of the Conway Farms development, north of Conway Road, at the north
end of Oak Knoll Drive. The property is vacant and is the last parcel of significant size
available for development in this area. This property was in the ownership of a local
family for many years and was recently acquired by a developer as part of the settling of
an estate.
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A 16-lot Planned Preservation Subdivision is proposed on the 30-acre parcel. To achieve
the proposed development, a zone change from R-5 to R-4, application of the Historic
Residential Open Space Preservation Zoning District, and tentative approval of the plat of
subdivision are requested. The overlay district requires that the density of the
development is consistent with the underlying zoning district, but allows flexibility in lot
sizes and setbacks in exchange for preservation of open space, wetlands and
woodlands. This conservation subdivision approach has led to other successful
developments in the community including the Conway Farms, Middlefork Farm and
Everett Farm subdivisions.
The Plan Commission held a public hearing on this petition in May and September of this
year. At those meetings, the Commission heard presentations from the petitioner, the
petitioner’s consultants and heard several hours of public testimony. The majority of
those speaking stated opposition to the proposed development. The Commission also
received numerous letters regarding this petition. The key concerns expressed by
neighboring property owners included: density, lot size, traffic, drainage, access to the
development and neighborhood character. After closing the public hearing at the
September 10th, the Commission directed staff to provide a written response to the public
testimony. The letters received by the Commission are available for review. The staff
response to public testimony and the Plan Commission’s report and the Ordinance are all
included in the Council’s packet beginning on page 114.
At the conclusion of the Plan Commission’s third meeting on this petition, the Commission
concluded that all of the applicable requirements and criteria were satisfied for tentative
approval and voted 4 to 0 to recommend first reading of an Ordinance approving a
zone change to R-4 and application of the overlay district and tentative approval of the
plat of subdivision. Importantly, these tentative approvals indicate support for the overall
plan but do not authorize the development to proceed.
Tentative approval allows the petitioner to proceed with detailed engineering work,
preparation of detailed tree preservation and tree removal plans, a detailed landscape
plan, development of the final plat of subdivision and completion of the various
documents required for final approval. Once all of the requirements for final approval
are met, and after review by City staff, the final plans will again be considered by the
Plan Commission at a public hearing and a final recommendation will be forwarded to
the City Council for action on this project. Tentative approval is valid for 12 months from
the date of Council approval.
COUNCIL ACTION: If determined to be appropriate by the City Council:
1. Grant first reading of an Ordinance rezoning the 30 –acre parcel from R-5 to R-4
and applying the Historic Residential and Open Space Overlay District.
AND
2. Approve a motion granting tentative approval of the Oak Knoll Woodlands
Planned Preservation Subdivision subject to the conditions of approval as
recommended by the Plan Commission.
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7. NEW BUSINESS
1. Metra Commuter Rail Update
Norm Carlson, Metra Board of Director, Lake County Representative
2. Update on the East Train Station and West Train Station
8. ADDITIONAL ITEMS FOR COUNCIL DISCUSSION
9. ADJOURNMENT 8:30 pm
Office of the City Manager October 15, 2014
The City of Lake Forest is subject to the requirements of the Americans with Disabilities
Act of 1990. Individuals with disabilities who plan to attend this meeting and who require
certain accommodations in order to allow them to observe and/or participate in this
meeting, or who have questions regarding the accessibility of the meeting or the
facilities, are required to contact City Manager Robert R. Kiely, Jr., at (847) 234-2600
promptly to allow the City to make reasonable accommodations for those persons.
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ANNUAL TREASURER’S REPORT
THE CITY OF LAKE FOREST
FISCAL YEAR ENDING APRIL 30, 2014
COMPENSATION SUMMARY
Under $25,000
PATRICK ACELLO,TERESA ALBUS,HERIBERTO ALCANTAR,SARAH ALLEN,MICHAEL ALLRED,ASHLEY ANDERSEN,JESSICA
ANDERSEN,JOHN ANDERSEN,KAREN ANDERSEN,REBECCA ANDERSEN,SHELLEY AQUINO,RICHARD ASHWORTH,MILANA
ASTORINO,FRANCISCO AYALA RODRIGUEZ,DOUGLAS BAIR,PHILIP BARNHART,ANA BARTOSZEWSKI,LAURA BARTUSIAK,PEDRO
BEDOLLA,LUKE BOWMAN,JOANN BOYLE,BARRY BRAVO,DAVID BRETERNITZ,CHARLES BREUSCHER,SARAH BREW,JOSEPH
BRICKNER,TRACEY BROLLEY,MARIKO BROWN,KEVIN BRUNS,ZACHERY BULICH,JACLYN BURCH,JULIA BURKE,KIMBERLY
BUTERA,JOSE CALDERON,PATRICIO CAMARENA,AMBER CAMPBELL,JASON CANTWELL,STEPHANIE CAPPIELLO,SERENA
CARBONELL,OFELIA CARMICHAEL,ROBERTA CASSIDY,EPIFANIO CASTRO,MELQUIADES CASTRO,CONNOR
CAVALARIS,CHRISTOPHER CHOUINARD,MATTHEW CHOUINARD,COLLIN CHRISTENSEN,MARY CLEVELAND,JAMES COMBS,CORY
CONNER,JONATHON CONNOR,GIUSEPPE CONOSCENTI,KAREN CONSIDINE,KORI COTTELEER,STEVE CREIGHTON,MOLLY
CROCKER,HILARY CURTIS,JACQUELYN CUSIMANO,BARB CUTRO,AKHILA DAMERLA,ELIZABETH DAVIS,AARON
DEBAETS,CATHERINE DEMET,NICHOLAS DEMET,BLAKE DETHLEFSEN,GRANT DETHLEFSEN,SAMANTHA DEWITZ,LOUIS
DIGIOIA,COLE DIGMAN,AUDRA DONNELLY,LIA DONOVAN,LAUREN DUNKLEMAN,JAKE DURBURG,JEANNEMARIE
DUTOIT,MICHAEL EDWARDS,MARILYN EISENSTEIN,KRISTIN ELLIOTT,JOHN ELLIS,HENRY ERZINGER,JESSE EUYOQUE,ANDREW
FARVER,HEATHER FAUDEL,CRISTINA FAVIA,AMANDA FERNANDEZ,MARGARET FERRARESI,KEEGAN FILKIN,KATHERINE
FLURI,CONNOR FORD,WILLIAM FRAIN,JOHN FRAME,CODY FRANKE,DANIEL FUNCHESS,GRANT FURTON,ARTURO
GARCIA,MICHAEL GARCIA,PABLO GARCIA,REYMUNDO GARCIA,JOHN GARD,ELIZABETH GARDNER,DEBORAH GARREY,HERBERT
GARREY,PATRICK GARREY,ROSEANN GIANGIORGI,MICHAEL GIANNELLI,ANN GLYNN,CONNOR GLYNN,ISABEL
GODUCO,STEPHANIE GOEBEL,ARTURO GONZALEZ,CARLOS GONZALEZ,BRITTANY GOODRICH,HEATHER GOODRICH,JOSHUA
GORZNEY,ELMER GOTTSCHALK JR,DENITA GREGORY,MARTIN GRUM,SAMANTHA HAAS,JERRY HAMALAINEN,ARGY MAITA
HAMBURG,FREDERICK HAMBURG,PATRICK HANES,CONNOR HANRAHAN,ANTONI HANSDORFER,HANNAH HARDISON,BRENDA
HELLWIG,CATHIE HEMESATH,JANET HENDERSON,AMY HEPBURN,BRIAN HILL,STEPHANIE HILTON,ASHLEY HITCHCOCK,ALEC
HITE,CHRISTINA HOOKER,WILLIAM HORGAN,LINDSAY HOUGH,WILLIAM HOWARD,NICHOLAS HUBING,LISA JACOBS,JEFFREY
JAMROK,KATELIN JENKO,UL JERNIGAN,KRISTEN JESSEN,ROBERT JOHNSON,HUNTER JOHNSTONE,REBEKAH JONES,JONATHON
JOYCE,JENNA JOZEFOWSKI,KATELYN KASHUL,LINDSAY KEATON,DEBORAH KEEGAN,CONNOR KENEHAN,THOMAS KIENZLE,HALEY
KILLAM,DANIEL KIM,MATTHEW KLUCHKA,RUSSELL KLUCHKA,WILLIAM KNESLEY,DANIELLE KNIGHTON,KEVIN KONSLER,RYAN
KONSLER,STEPHEN KONSLER,BRANT KOTOWSKI,AARON KRISTAN,MONICA KRZEMINSKI,JACK KUYKENDALL,LYLE
KUYKENDALL,THOMAS LACHANCE,DANIEL LAINIO,DUNCAN LAMPHERE,GORDON LAMPHERE,PATRICK LANCTOT,JOHN
LANDIS,MIGUEL LARA,JOHN LARSON,MATTHEW LAVITOLA,CONNIE LAWRENCE,RACHEL LERTZMAN,REGINA
LINDSTROM,DENNIS LINEHAN,EUGENE LONERGAN,AGUSTIN LOPEZ,LUKE LOVCIK,LEANN LYDEN,MICHAEL
MACNAUGHTON,DANIEL MADURA,KATHERINE MAHONEY,BRITTNEY MANNING,THOMAS MARKS,ANDREW
MARTINI,MARGARET MASS,JAKE MATTSON,CATHLEEN MCCORMICK,AMANDA MCDONALD,KORY MCFARLAND,MICHAEL
MCGUIRE,ZARAH MCGUIRE,THOMAS MCINERNEY,CHRISTOPHER MCKENNA,MATTHEW MCKIERNAN,KRISTIN
MCKINNON,STUART MCSWEENEY,ROBERT MEERS,RICHARD MELLADO,ALEX MILLER,ALEXIS MILLER,MIRANDA MILLER,LAURA
MINNIS,BRIAN MOLLER,MAX MOORE,DAWN MORRIS,EVAN MOSIER,SHANNON MULVEY,CAROL MYERS,THOMAS
MYERS,TRAVIS MYERS,JOHN NELSON,RYLEE NERI,KARSTEN NEUMEISTER,JANINE NEWMAN,CHRISTINA OHANESIAN,JASON
OLSON,MITCHELL O'NEILL,LISA ORSINI,KATHERINE O'TRUK,ALEXIS PAULSEN,ANDREW PAXSON,COLLEEN PEDDLE,MICHAEL
PERRY,PATRICK PESCH,RALPH PETERSON,CARTER PETRAY,MARCO PIACENZA,ANDREW PILARSKI,CHRISTOPHER
POMMER,JOSHUA PONCEDELEON,SHELDON PRAIS,JANICE PRICE,DEBORAH PTAK,CHRIS PUCIN,CRISTIAN QUINONES,DIEGO
QUINONES,MICHAEL RAFFERTY,JESUS RAMIREZ,DAVID RANSDELL,LAUREN REAUMOND,STEPHEN REBARCHAK,TROY
REEVES,ANTHONY REINERT,SANDRA RHODES,COLE RICE,POLLY RICHARDSON,JOSEPH RISI,SCOTT ROBERTSON,ADELINE
ROBINSON,SARALEE RODGERS-SCHMIDT,RAUL RODRIGUEZ,ROBERTO RODRIGUEZ,CARRIE ROGERS,MARIA ROMERO,AMY
ROSE,OLIVIA RUGGLES,AMANDA RULE,HALLY RYAN,JAMES RYAN,JULIE SAKICI,JAIME SANFILIPPA,JOSEPH SANTELLO,REBECCA
SAUSER,SAMANTHA SCHALLER,IAN SCHAPPE,ANKE SCHOETTLE,CHARLES SCHRAMM,JANE SCHUMACHER,EMILY
SCHWARZ,WILLIAM SCROGGINS,JACOB SENECZKO,JOHN SENTELL,MICHAEL SHANAHAN,CHRISTOPHER SHANNON,ANDREW
SHAW,ANN SHAW,MICHAEL SHIELDS,JANET SICKLES,FORREST SIMMS,MACKLIN SIMMS,SUSAN SIMMS,MICHAEL SINCLAIR,KELLY
SINDT,FREDERICK SMITH,JOSHUA SMITH,KATHLEEN SMITH,MICHAEL SMITH,TAYLOR SOLUM,KATHERINE SORENSON,CORY
SPANN,DANIELLE SPANN,LESHON SPANN,AMY SPECTOR,STEVEN STARK,AMI STELLATOS,MATTHEW STERNBERG,KIMBERLY
STIBAL,ARIEL STOUDER,LLOYD STOUT,DEENA STOVALL,AMY STRUCK,EDWIN SUBLETT,SUSAN SUHLING,ERIC
SWANSON,ZACHARY TADEL,MARY TARPLEY,IAN TAYLOR,ROBERT TAYLOR,ERIC THOMPSON,DREW THOMPSON-TOLER,MARINA
12
TOLPIN,LESLIE TREECE,LUKE TURELLI,MARK TURELLI,EDWARD TUTEN,NICHOLAS TUTTLE,CHRISTOPHER UHLE,TRACY
ULMER,LARRY UTLEY,HILLIARY VACCARELLO,NICHOLAS VAN ANTWERP,RICHARD VILLASANA,MARISSA WADHWA,NATASHA
WADHWA,ALLEN WALKER,JOHN WALKER,CRYSTAL WALLEM,CHRISTOPHER WAY,JESSICA WEAVER,MEGAN WHALLEY,KRISTY
WHITE,SARAH WHITNEY,AUSTEN WIECZOREK,VICTORIA WIEGAND,CLAIRE WILLIAMS,DESIREE WILLIAMS,JACK
WILLIAMS,JEREMY WOERTZ,ALEX WOLOSHYN,IONA WOODS,MARK ZALKE
$25,000.00 to $49,999.99
ERNESTO ALCANTAR,EDMUNDO ALVAREZ,LINDA BRODERICK,ROBERT BROWN,MARILYNN BRUNS,CAROLYNN
CALLABY,DEBORAH CHROBAK,JOHN ELDRIDGE,ARTURO ESCOBAR,MICHAEL EVERT,CHRISTINE FAUDEL,BENITO
FUENTES,ROBERT GOEPPNER,MARIANO GOMEZ,VALERIE GONZALEZ,ESTHER GUTIERREZ-SLOAN,ANDREW HUNT,SANDRA
KOOPER,CHARLES KRIENS,CARLOS LARA,DEBRA LERMAN,JESSICA LINDERS,JOSE LOPEZ,KIMBERLY MCCANN,JASON
MITCHELL,JAMES RISI,MARK SCHUMACHER,KRISTEN SKISTON,JOSHUA WEAVER
$50,000.oo to $74,999.99
ANTHONY ANASZEWICZ,JOHN BALDWIN,DOMINICK BELLINO,BRIAN BELLITO,ANNE BOLOTIN,MARGARET BOYER,MATT
BRUGIONI,KELLY BURNS,JASON BUSDEKER,RIGOBERTO CORIA,DAVID CORONA,RAFAEL DAVILA,JOSE DIAZ,CRYSTAL
EDWARDS,BRIAN ESMON,RONALD FONTANA,JAMILA FOSTER,CHARLES FRANCO,MICHELLE FRIEDRICH,MICHAEL GOY,LARONDA
HAINES,SARA HARTNETT,ERIK HUSTON,THAI JAMIESON,CATHERINE JAPUNTICH,MICHELLE KOUSINS,MARY JO KUTYNA,TERESA
LAURILA,BARBARA LUEDER-MANETTI,DANIEL MARKUS,KEITH MASLON,DIANA MILLER,THOMAS MINARIK,KASEY
MORGAN,MEGAN NEUMAN,MADELINE PALENICA,BRIAN PANNIER,RICKEY PARHAM,TRAVIS PEDERSEN,KENNETH PIERINI,BECKY
POCASANGRE,SANDRA RAGSDALE,ISMAEL RAMIREZ,HUNTER RATLIFF,TERRY RICHARDS,PENNY ROBBINS,LISSARDA
ROGOZ,WILLIAM SCHELHAS,PATRICIA SCHWALL,JAMES SHELTON IV,DENNIS SMITH,RICO STRINGER,NADA SYDOW,CHRISTINE
TERESI,ANDREW THICKPENNY,JOSEPH TOMASELLO,MICHELLE WALKER,CARLA WARD,KIMBERLY YESSIAN,JOANNE YORRO
$75,000.00 to $99,999.99
CRISPIN ABEL,BRIAN ACELLO,DAVID ANDERSEN,SUSAN BANKS,GILDARDO BARAJAS,JAN-PIERRE BARDI,ANDREW
BARNES,WILLIAM BORZICK,MIGUEL CAMARENA,TONY CARINGELLO,ROBERT CARMICHAEL,DAVID CERER,SCOTT
CHRISTENSEN,STUART COX,BRYAN DEBAETS,TROY DEVRIES,RANDALL DIEKMANN,CHARLES DOUGLAS,DANIEL DRAEGER,BRIAN
D'SOUZA,DONNA DUNN,CHARLES FLESCH,CHRISTOPHER FREUND,YONI GARCIA,ETHEL GARY,MIKE GERNENZ,MICHAEL
GLOMSKI,MATTHEW GOODMAN,PETER GORDON,RONALD GRAMER,JOHN GULLEDGE,JAMES GUNN,KENNETH
HAGLUND,ROBERT HEELAN JR,ROBERT HENDERSON,FRIEDRICH HOEFT,BILL HOOPER,DIANE HORN,JOSHUA HUCKER,BRIAN
HUFFHINES,MICHAEL HUGHES,SCOTT IRISH,PATRICK ISSEL,MATTHEW JAKOB,ROBERT JANUARY,EDWARD JOHNSON,BRIAN
JOYCE,CORY KAZIMOUR,LAWRENCE KENAR,JAMES KOBLAS,ERIK KOSITZKI,OTIS LINDER,MARK LONG,BILLY LOYD,TIMOTHY
MAGOON,SALOMON MARTINEZ JR.,BRIAN MIKLOVIC,ADAM MILCZAREK,JOSEPH MOBILE,MICHAEL MOUNTS,TODD
NAHIGIAN,RICHARD PAULSEN,MATTHEW PENAR,PAUL PETERSEN,BRIAN POGACHNIK,BERNARD PONDEXTER,MATTHEW
RAUSCH,ROBERT RAYMOND,MISAKO RIVERA,CHRISTOPHER ROBERTS,MARK ROCKWELL,KYLE ROEDER,JAMES
SANTOSTEFANO,NICHOLAS SAVEL,MARLA SCHACHTEL,ROBERT SERKOWSKI,ANDY SHIU,MATTHEW SIGNA,RAYMOND
SPETZ,JOSEPH STANONIK,COLLEEN SYC,ANGELA TAPPA,ARTHUR TEKAMPE,MICHAEL TIEGS,DAVID TISINAI,JOHN
VARNER,RICHARD VOLPE,KENNETH WAGNER,CARINA WALTERS,MATTHEW WERT,MICHAEL WHALEN,COREY WIEREMA,JEFFREY
WIEREMA,ROBERT WILKINS,THOMAS WILSON,ROBERT WOLFF,WILLIAM WRIGHT,EDMUND YEP,GALE YOUNG
$100,000.00 to $124,999.99
PHILLIP ALDERKS,ANDREW ALLAN,RICK ANDERSON,MARTIN BLITSTEIN,ROBERT COPELAND,KEVIN CRONIN,DWIGHT
DAVIS,LOUIS DECKER JR,DAVID DEMARCO,WENDY DUMONT,ROBERT ELLS,JAMES FAHEY,ERIC FARR,JOSEPH
GABANSKI,MICHAEL GALLO,TIMOTHY GEHRING,ERIC GLOBERGER,STEPHEN GROST,BENJAMIN GRUM,DIANE HALL,JEFFREY
HAYS,STEVEN HUCK,MICHAEL LANGE,CRAIG LEPKOWSKI,BRETT MARQUETTE,DANIEL MARTIN,ROBERT MARTINELLI,ROBERT
MONAHAN,ERIC MONTELLANO,CHARLES MYERS,ERIC PODOWSKI,PAUL PUGLIESE,ANDREW RICK,MARK SENGER,PETER
SIEBERT,JEFFREY SULKIN,SALLY SWARTHOUT,JEFFREY WAIT,KARL WALLDORF,KEVIN ZELK
$125,000 and over
CATHERINE CZERNIAK,CHRISTOPHER GARRISON,JAMES HELD,ELIZABETH HOLLEB,JEFFREY HOWELL,KEVIN ISSEL,DESHA
KALMAR,ROBERT KIELY,MICHAEL THOMAS,MARY VAN ARSDALE,BRIAN VERBEKE
Total Compensation $21,425,985.38
EXPENDITURE SUMMARY:
1ST AYD CHEMICAL CORPORATION 11,419.07,3M LAR5393 5,446.00,A & A SPRINKLER COMPANY INC 16,525.00,A WISH COME
TRUE, LP 4,251.52,ABSOLUTE SERVICE INC 12,287.00,ABT ELECTRONICS &APPLIANCES CO 3,365.77,ACOM SOLUTIONS INC
2,978.20,ACRONIS INTERNATIONAL GMBH 10,000.00,ACTION FENCE CONTRACTORS, INC. 11,400.00,ADAMS GOLF, LTD.
2,502.02,ADMIRAL MECHANICAL SERVICES, INC 24,809.00,ADS ENVIRONMENTAL SERVICES 21,795.00,AIR ONE EQUIPMENT INC
17,629.04,AIR SERVICES COMPANY 3,159.00,AL WARREN OIL COMPANY, INC. 316,950.32,ALBERTSON'S INC.
17,363.20,ALEXANDER CHEMICAL CORPORATION 26,256.03,ALEXANDER EQUIPMENT CO INC 42,770.25,AMERICAN BACKFLOW
PREVENTION INC 6,794.72,AMERICAN GAS LAMP WORKS, LLC 6,913.74,AMERICAN GASES CORP 6,315.42,AMERICAN LEGAL
13
PUBLISHING CORP 3,896.25,AMERICAN LEGION POST 264 5,294.16,AMERICAN OUTFITTERS LTD 4,685.44,AMIAD USA
17,604.90,ANDRES MEDICAL BILLING LTD 26,520.35,APPAREL SEWN RIGHT 33,038.80,AQUASOURCE 144,610.00,ARAMARK
REFRESHMENT SERVICES 6,185.45,ARAMARK UNIFORM SERVICES INC 11,552.85,ARLINGTON POWER EQUIPMENT INC
17,847.43,ARTHUR CLESEN INC 38,724.19,ARTHUR WEILER INC 4,275.00,ARTRAGEOUS CUSTOM ENGRAVING, LLC
2,796.00,ASPEN VALLEY LANDSCAPE SUPPLY 12,559.02,ASSISTIVE HEARING SYSTEMS, LLC 5,996.00,AT & T 57,417.44,ATLAS
BOBCAT INC 17,478.17,AVI SYSTEMS, INC. 12,137.39,AYRES ASSOCIATES, INC. 46,717.00,BAKER TILLY VIRCHOW KRAUSE LLP
3,200.00,BANDIT INDUSTRIES, INC. 3,197.32,BARRINGTON PUBLISHING, INC 6,682.00,BARRIOS CUSTODIAL SERVICES, INC
12,672.00,BAUDVILLE INC 4,747.24,BAXTER AND WOODMAN INC 71,899.90,BEBER CAMP 16,261.00,BELL'S ULTIMATE TRUCK
OUTFITTER 3,197.00,BERKEN-KOTTER, LTD. 5,958.78,BERRY TIRE CO 11,820.26,BLECK ENGINEERING CO INC 22,455.00,BOUND
TREE MEDICAL, LLC 3,818.35,BOYER, MARGARET 2,833.37,BRICKMAN GROUP HOLDINGS, INC 5,643.00,BROADWAY IN CHICAGO
GROUP SALE 7,762.50,BRUCE BRUGIONI CONSTRUCTION 23,418.50,BSA TROOP 48 7,579.00,BUILDING PERMIT REFUNDS
456,099.75,BURRIS EQUIPMENT COMPANY 54,386.00,BUSHNELL, INCORPORATED 6,530.00,BUSINESS DISTRICTS INC 2,551.23,C
& H DISTRIBUTORS LLC 27,712.92,C & M PEST MANAGEMENT COMPANY 2,705.00,CALL ONE 76,689.89,CALLAWAY GOLF
COMPANY 3,548.73,CAREY'S HEATING & AIR CONDITIONING 9,855.00,CARMICHAEL, ROBERT L 3,529.75,CATERED
PRODUCTIONS 5,105.25,CDS OFFICE TECHNOLOGIES 95,253.05,CDW 92,682.77,CEDAR ROOFING COMPANY, LLC
3,920.00,CEMETERY LOT REFUNDS 48,025.00,CENTER OF PUBLIC SAFETY 4,275.00,CENTRAL MICHIGAN UNIVERSITY
2,540.00,CENTRAL SUBURBAN YOUTH FOOTBALL 5,200.00,CENTRAL WISCONSIN SOD & LANDSCAPING 3,943.00,CERAMIC
SUPPLY CHICAGO INC 12,760.04,CERTIFIED POWER, INC. 3,658.43,CF LAND CORPORATION, INC. 20,422.50,CFA
2,995.00,CHAMBERS EXCAVATING SERVICE 4,277.00,CHARLES J FIORE COMPANY INC 4,494.25,CHICAGO COMMUNICATIONS
LLC 35,269.50,CHICAGO DISTRICT GOLF ASSOC 4,444.00,CHICAGO INTERNATIONAL TRUCKS 6,288.31,CHICAGO NATL ASSOC OF
DANCE 6,835.00,CHICAGO OFFICE TECHNOLOGY GROUP 6,113.78,CHICAGOLAND TURF 8,920.00,CHRZANOWSKI, FRANK
32,683.74,CINTAS CORPORATION 25,293.43,CIT GROUP, INC 3,831.48,CIT GROUP/COMMERCIAL SERVICES 2,620.53,CLARK
BAIRD SMITH, LLP 14,838.75,CLARKE MOSQUITO CONTROL PRODUCT 16,926.40,CLASSIC GARDEN ORNAMENTS, LTD
4,273.00,CLAVEY'S NURSERY INC 5,695.00,CLERK BASE 8,540.00,CLIENTFIRST CONSULTING GROUP 49,316.25,CLUB
MOMENTUM ATHLETICS 2,906.25,COLE-PARMER 3,851.55,COLLEGE OF LAKE COUNTY 6,625.00,COLLEGE PARK ATHLETIC CLUB
57,214.20,COLUMBIA PIPE AND SUPPLY CO 6,890.90,COLUMBUS MCKINNON CORP 3,400.00,COMCAST OF CHICAGO, INC.
15,611.05,COMED 63,028.00,COMMUNICATION REVOLVING FUND 10,192.80,COMMUNICATIONS FINANCE, INC.
7,915.00,COMMUNITY PARTNERS AFFORD HOUSING 87,500.00,CONDELL MEDICAL CENTER 4,640.00,CONSERV FS
65,105.35,CONSERVATION DESIGN FORUM 4,630.00,CONTINENTAL WEATHER SERVICE 3,600.00,CONWAY PARK AT LAKE
FOREST 5,381.83,COPELAND, ROBERT 3,744.51,CORE MECHANICAL INC 69,695.00,CORE VISION IT SOLUTIONS LLC
8,300.00,CORUS GROUP LLC 11,549.44,COSTCO WHOLESALE CORPORATION 16,132.08,CRAFTWOOD LUMBER COMPANY
5,710.30,CREATIVE CONCRETE 9,996.90,CREDENTIALS ORDER PROCESSING SERVICES 98,358.47,CROWLEY'S YACHT YARD
LAKESIDE 17,485.00,CRUTCHFIELD-STEPHENSON, INC 3,175.00,CRYOTECH DEICING TECHNOLOGY 5,844.01,CRYSTAL
MAINTENANCE SERVICES 159,859.79,CUMMINS NPOWER LLC 4,001.69,CURRIE MOTORS FRANKFORT, INC 54,122.00,CURTAIN
CALL COSTUMES 3,710.76,CZERNIAK, CATHERINE 3,008.53,D N WELDING & FABRICATING, INC 3,181.46,D. K. ENVIRONMENTAL
SERVICES, 10,000.00,D.S.S. CHARITIBLE FUND 3,500.00,DAIOHS USA 14,390.08,DANCE MAKERS, INC. 7,800.00,DATA SYSTEMS
INTERNATIONAL, INC 9,077.93,DAVID L.F. WILSON & COMPANY INC 3,770.00,DE JONG EQUIPMENT CO. INC.
2,997.30,DEERPATH INN, LLC 3,837.48,DELF'S GARAGE & SERVICE, INC. 5,769.50,DELL MARKETING L.P 51,776.49,DEMUTH INC
52,900.00,DI TOMASSO EXCAVATING 19,995.00,DIGITAL HIGHWAY INC 3,788.73,DIRECT FITNESS SOLUTIONS, LLC
35,950.49,DISCOUNT MEDIA PRODUCTS, LLC 2,511.67,DISCOUNT SCHOOL SUPPLY 3,579.97,DIVINCI PAINTERS INC
83,251.00,DIVISION OF VITAL RECORDS 14,836.00,D'LAND CONSTRUCTION, LLC 108,985.58,DOLPHIN FIBERGLASS PRODUCTS,
INC 9,800.00,DONATI'S OF LAKE FOREST 11,871.91,DRYDON EQUIPMENT, INC. 4,455.94,DUECO INC 3,384.89,DULTMEIER SALES
INC 3,535.86,DUROWELD CO INC 4,101.50,DYNACOIL, INC 6,500.00,ECCO USA INC. 5,208.53,ECESSA CORPORATION
16,091.32,EDGE AUDIO SERVICES 5,010.00,EDUCATIONAL PERFORMANCE TOURS 30,980.00,EJ EQUIPMENT INC.
10,279.42,ELAN FINANCIAL SERVICES 209,345.04,ELAWA FARM FOUNDATION 240,566.09,ELITE GROWERS
10,575.75,EMERGENCY COMMUNICATIONS NETWO 3,700.00,EMERGENCY MEDICAL PRODUCTS INC 3,750.71,EQUESTRIAN
CONNECTION 3,530.50,ERNIE'S WRECKER SERVICE 3,574.50,ESRI 25,000.00,EXCEL DISPOSALOF WISCONSIN LLC
6,998.69,FAMILY SERVICE OF SOUTH LK COUNTY 5,700.00,FASTSIGNS 2,859.25,FAULKS BROS. CONSTRUCTION INC
3,731.62,FERENTINO'S PIZZA 9,612.32,FILTRATION CONCEPTS, INC. 6,630.95,FIRE PENSION PAYMENTS 1,810,137.58,FIRST
STUDENT INC 2,957.50,FISH PLANET 7,617.32,FITNESS EXPERIENCE, LLC 4,925.00,FLIPS GYMNASTICS NORTH SHORE
27,540.00,FLOLO CORPORATION 69,717.35,FOOTJOY 8,182.59,FOREST PARK PROJECT CORPORATION 819,995.00,FRANKLIN,
RICHARD 199,305.92,FRIENDS OF LAKE FOREST PARKS & RECREATION 22,949.93,GALLO, MIKE 3,208.27,GARVEY'S OFFICE
PRODUCTS 11,628.59,GATWOOD CRANE SERVICE INC 4,015.00,GE CAPITAL 3,299.76,GEMPLER'S, INC. 4,433.96,GENERAL
PARTS, INC 25,378.36,GENERAL SUPPLY & SERVICES, INC 3,948.98,GETZ'S INCORPORATED 2,672.57,GEWALT-HAMILTON ASSOC
INC 35,790.00,GIANT MAINTENANCE & RESTORATION 4,950.40,GIS CONSORTIUM 3,230.00,GLACIER OAKS NURSERY
4,997.00,GLOBAL EMERGENCY PRODUCTS INC 7,371.03,GOODMAN ELECTRIC SUPPLY 35,116.35,GORTON COMMUNITY CENTER
2,830.00,GRAINGER 64,626.12,GRAPHIC PARTNERS, INC. 5,432.14,GRAYBAR ELECTRIC COMPANY, INC. 25,035.62,GREAT LAKES
TURF, LLC 3,214.62,GREEN GLEN NURSERY, INC 3,250.00,GREEN WHEELS LTD 18,625.00,GREENS BY WHITE INC 4,096.08,GREG'S
14
AUTO BODY, INC. 36,527.48,GROWER EQUIPMENT & SUPPLY 7,097.41,GUY SCOPELLITI CO., INC. 67,488.05,H & E SOD NURSERY
8,009.46,H W LOCHNER, INC. 29,373.43,HAAPANEN BROTHERS, INC. 12,123.50,HACH COMPANY 2,587.43,HALLORAN & YAUCH
INC. 4,392.04,HANSELMAN, FREDERICK G. 4,528.00,HARRIS GOLF CARS 18,727.38,HAVEY COMMUNICATIONS INC
55,322.26,HBK WATER METER SERVICE INC 11,052.24,HD SUPPLY WATERWORKS, LTD. 101,575.63,HDR ENGINEERING, INC.
131,942.48,HEALTH ENDEAVORS, S. C. 21,939.00,HELLER CATERING 10,307.68,HENDERSON, JANET AUSTIN 3,571.73,HENRY
PRATT COMPANY 5,100.80,HERKY'S TRUCKING INC 18,450.00,HEYNSSENS & GRASSMAN, INC. 4,767.40,HILTI INC
3,043.92,HOBBY LOBBY CREATIVE CENTERS 2,716.05,HOERR CONSTRUCTION, INC 243,976.12,HOLIAN INSULATION COMPANY,
INC 3,610.00,HOLLAND & KNIGHT LLP 300,284.23,HOME DEPOT 38,394.24,HOMER INDUSTRIES, LLC 13,870.00,HOMESTEAD
ELECTRIC COMPANY 21,050.00,HOVING PIT STOP, INC. 3,492.17,HOWE SECURITY, INC 5,321.50,HUFCOR CHICAGO INC
13,670.00,I.P.R.A. 3,172.00,I.R.M.A. 384,710.96,ICMA 6,079.80,IDEAL HEATING COMPANY 90,191.21,IDLEWOOD ELECTRIC
SUPPLY 4,119.60,ILL DEPT OF EMPLOYMENT SECURITY 122,095.26,ILL DEPT OF REVENUE 7,473.00,ILL DEPT OF
TRANSPORTATION 135,313.35,ILLCO, INC. 4,068.25,ILLINOIS DEPT OF TRANSPORATION 26,022.40,ILLINOIS FIRE STORE
4,868.00,ILLINOIS GIRLS LACROSSE ASSOC 15,036.25,ILLINOIS MUNICIPAL RETIREMENT FUND 1,662,588.00,ILLINOIS PUMP INC
33,185.93,ILLINOIS ROOF CONSULTING ASSOC 6,060.00,IMAGES ALIVE 5,690.96,IMPACT NETWORKING LLC 5,371.10,IMS
INFRASTRUCTURE MANAGEMENT 58,356.70,INFORMATION PROFESSIONALS, INC 4,199.00,INLAND POWER GROUP, INC.
2,927.47,INTEGRITY GROUP COMPANIES INC 16,120.00,INTEGRYS ENERGY SERVICES 117,939.14,INTEGRYS ENERGY SERVICES,
INC. 370,157.74,INTERNAL REVENUE SERVICE 1,116,331.00,INTERSTATE BATTERY OF NORTHERN 9,191.60,ITASCA GREENHOUSE
INC. 2,646.37,J C PENNEY CUSTOM DECORATING 11,541.50,J W TURF 36,548.90,JAMES LA DUKE AND ASSOCIATES
4,950.00,JAMES W SMITH PRINTING COMPANY 4,966.00,JG UNIFORMS, INC. 6,630.27,JOHN DEERE LANDSCAPES, INC
7,772.72,JOHN KENO AND COMPANY, INC 4,995.00,JOHN S. SWIFT COMPANY, INC 27,952.00,JS COMMUNICATIONS
TECHNOLOGIES 2,534.85,JULIE INC 8,431.26,K & M MARKETING INC 26,545.06,K. H. KIM'S TAE KWON DO 9,233.25,KATHABAR
DEHUMIDIFICATION SYSTEMS 10,864.78,KATTEN MUCHIN ZAVIS ROSENMAN 22,000.00,KEEGAN, DEBORAH 3,800.00,KEMPER
SPORTS MANAGEMENT, INC. 133,317.12,KENOSHA NEWS 2,841.60,KIDDLES INC 10,285.48,KINNUCAN 105,099.00,KNOX CO.
3,015.00,KONICA MINOLTA BUSINESS SOLUTIONS 2,646.36,KONICA MINOLTA BUSINESS SOLUTIONS 42,159.82,LA FORCE
4,162.81,LAKE & MCHENRY COUNTY FD SRT 5,230.00,LAKE BLUFF BASEBALL ASSOCIATION 2,800.00,LAKE COUNTY COLLECTOR
29,919.54,LAKE COUNTY GOVERNMENT 10,785.00,LAKE COUNTY GRADING CO 4,925.00,LAKE COUNTY HOSE AND EQUIPMENT
17,803.88,LAKE COUNTY PRESS, INC 21,029.00,LAKE COUNTY RECORDER 3,901.00,LAKE FOREST BANK AND TRUST
228,322.00,LAKE FOREST BP 5,592.53,LAKE FOREST CLUB 6,839.31,LAKE FOREST COLLEGE 3,035.00,LAKE FOREST COMM HIGH
SCH 115 18,018.51,LAKE FOREST HIGH SCHOOL 10,692.19,LAKE FOREST LACROSSE ASSOCIATION 8,223.75,LAKE FOREST SWIM
CLUB 5,083.20,LAKE SHORE FEEDER BASEBALL LEAGUE 4,650.00,LAKEFRONT ENGINEERING, INC 6,220.00,LAKELAND BUILDING
SUPPLY, INC 2,682.00,LANDSCAPE CONCEPTS MANAGEMENT 54,791.84,LANGUAGE STARS 2,625.00,LARSEN FLORIST /
GREENHOUSE 5,956.30,LAW OFFICE OF HENRY TONIGAN 9,000.00,LAWSON PRODUCTS, INC. 14,082.25,LCSMC 2,780.00,LEACH
ENTERPRISES INC 17,280.15,LEADS ONLINE LLC 2,848.00,LENCO FLOORING 10,125.00,LESTERS MATERIAL SERVICE INC
51,972.23,LEXIPOL, LLC 5,550.00,LEY, W. MICHAEL 5,840.91,LF/LB CHAMBER OF COMMERCE 2,696.00,LIBERTY FARM LLC
3,660.00,LIBERTY PRAIRIE RESTORATIONS 5,000.00,LIBERTYVILLE CHEVROLET 6,478.01,LIFE INSURANCE CO OF NORTH AMERICA
41,054.60,LINDCO EQUIPMENT SALES, INC. 109,205.41,LION HEART ENGINEERING P.C. 7,521.50,LIQUID WASTE TECHNOLOGY
LLC 17,639.78,LIVE LINE DEMO, INC. 3,900.00,LOGO NOTIONS, INC. 3,704.50,LOWE'S CREDIT SERVICES 8,421.54,LYNCH
CONSTRUCTION CORPORATION 26,033.39,LYONS ELECTRIC COMPANY, INC. 5,533.57,M AND N SUPPLY, INC. 2,864.31,MAG
CONSTRUCTION CO 26,922.50,MANEVAL CONSTRUCTION CO INC 185,000.00,MANFREDINI LANDSCAPING CO., INC
8,275.00,MARIANI LANDSCAPE 6,204.37,MARIANI NURSERY, INC. 25,707.25,MARTELLE WATER TREATMENT, INC.
17,999.00,MARTIN IMPLEMENT SALES, INC. 2,583.64,MARTIN PETERSEN CO INC 29,105.28,MARTINELLI CORP
2,758.50,MASTERGRAPHICS 12,016.48,MATRIX CONSULTING GROUP, LTD 25,000.00,MAX-R 9,374.00,MCELWEE, CHRISTOPHER
A. 2,780.00,MCGLADREY LLP 38,750.00,MCHENRY ANALYTICAL WATER 10,167.50,MCHENRY COUNTY NURSERY INC
9,518.00,MCLAUGHLIN, MELVIN 12,639.96,MCMAHON ASSOCIATES INC 35,750.00,MCMASTER CARR 5,367.50,MCNEILUS
TRUCK & MFG CO 12,818.06,MEADE ELECTRIC COMPANY 4,699.20,MEDICAL AND DENTAL CLAIMS 4,272,355.08,MELICHAR
ARCHITECTS 9,662.95,MENDINO EXCAVATING, INC 7,869.00,MENONI & MOCOGNI INC 24,122.39,METRO CHICAGO FENCING
CENTER 3,949.31,METRO PROFESSIONAL PRODUCTS 3,059.19,MID AMERICAN WATER OF WAUCONDA 22,035.68,MIDWEST
FUEL INJECTION SERVICE 5,695.83,MIDWEST GROUNDCOVERS 12,629.26,MIKE GRECO LANDSCAPING, INC. 6,650.00,MILES
CHEVROLET 122,231.20,MILL CREEK NURSERY INC 7,104.00,MISC ONE TIME VENDORS 16,432.11,MNJ TECHNOLOGIES DIRECT,
INC. 51,528.02,MOBILE, JOSEPH 5,297.86,MONDI CONSTRUCTION INC. 39,939.20,MOODY'S INVESTORS SERVICE
12,500.00,MORRISON ASSOCIATES LTD 26,800.00,MORTON GROVE AUTO 3,582.83,MORTON SALT CO 159,778.13,MOTOROLA
SOLUTIONS, INC. 6,577.44,MUNICIPAL EMERGENCY SERVICES 6,738.85,MUNICIPAL GIS PARTNERS, INC. 182,246.00,MUNICIPAL
SYSTEMS, INC. 30,549.05,MUTUAL SERVICES OF HIGHLAND PARK 10,872.94,MUZAK LLC 52,764.11,NASAW DOUGLASS
27,000.00,NATIONAL PROPERTY CONSULTING 16,250.00,NATURESCAPE DESIGN, INC 97,825.18,NEENAH FOUNDRY
3,063.64,NELS JOHNSON TREE EXPERTS INC 23,190.00,NEOGOV 5,000.00,NEOPOST USA, INC 7,547.28,NEW WORLD SYSTEMS
CORPORATION 3,965.00,NIKE USA INC 25,825.64,NIPSTA 7,670.00,NORATEK SOLUTIONS 2,850.00,NORTH EAST MULTI-
REGIONAL TRAINING 8,370.00,NORTH SHORE GAS COMPANY 52,453.91,NORTH SHORE OFFICE MACHINES, INC 9,082.51,NORTH
SHORE SANITARY DIST 12,281.35,NORTHEASTERN IL REG CRIME LABORATORY 28,474.93,NORTHERN ILL POLICE ALARM SYSTEM
15
4,570.00,NORTHERN ILLINOIS UNIVERSITY 12,927.12,NORTHERN SAFETY CO INC 3,121.02,NORTHERN TOOL& EQUIPMENT CO
3,226.09,NORTHWEST MUNICIPAL CONFERENCE 11,069.38,NORTHWESTERN MEMORIAL PHYSICIAN 20,402.00,NORTHWOODS
WREATHS CO 5,808.00,NSSRA 224,221.08,O C TANNER 11,794.47,OFFICEMAX, INC. 22,892.07,O'HARE DANCE STUDIOS INC
3,039.75,OLMOS, JESUS 2,600.00,OLSON TRANSPORTATION, INC. 39,858.26,OM WORKSPACE - CHICAGO 9,876.80,OTIS
ELEVATOR COMPANY 12,924.30,OVERHEAD DOOR CO 13,519.45,P CLIFFORD MILLER INC 115,200.00,P F PETTIBONE & CO
3,789.20,PAL STEEL 3,219.60,PARKMOBILE USA, INC 2,600.15,PARKNPOOL CORPORATION 4,296.00,PASQUESI HOME &
GARDENS 4,531.05,PASQUESI PLUMBING CORP 10,162.00,PATAGONIA, INC 4,282.93,PATTEN POWER SYSTEMS
29,469.15,PEARSON FENCE COMPANY, INC. 36,620.00,PENDELTON TURF SUPPLY INC 7,901.00,PERSONNEL STRATEGIES LLC
11,125.00,PETE THE PAINTER INC 8,990.00,PETER BAKER & SON 1,777,399.91,PETROLIANCE LLC 36,850.82,PHN ARCHITECTS,
LTD 14,773.97,PIEPER ELECTRIC INC 19,805.00,PILATES WITH AUDREY 2,624.00,PING 6,912.90,PINNER ELECTRIC
8,900.00,PITNEY BOWES RESERVE ACCOUNT 10,400.00,PLANTE & MORAN, PLLC 23,625.00,POLICE PENSION PAYMENTS
2,109,195.75,POPE, FRANKLIN 2,889.00,POSSIBILITY PLACE NURSERY 3,600.00,PRAIRIE ACRES TREE FARM, LLC 4,475.00,PRAIRIE
MATERIAL 6,744.29,PRECISION SERVICE & PARTS. INC 6,114.01,PREMIERE SPEAKERS BUREAU, INC 2,779.60,PRINOTH, LTD.
21,908.76,PRO GRO, INC. 13,438.17,PRO-DIVE, INC. 35,694.90,PROFESSIONAL BENEFITS ADMINISTRATION 653,850.00,PUMP
SUPPLY INC 26,472.63,QUINCY COMPRESSOR LLC 3,013.68,R A ADAMS ENTERPRISES INC 5,806.00,R A MANCINI, INC.
898,765.48,R C TOPSOIL 10,052.00,R J THOMAS MFG CO INC 7,007.00,R/J FURNITURE INC 5,760.00,RAGSDALE, SANDRA
7,711.21,RAINBOW FARM ENTERPRISES, INC 9,800.00,RANDALL INDUSTRIES 2,988.50,RAY CHEVROLET INC 63,861.00,RAY
O'HERRON CO INC 8,479.67,RAY SCHRAMER & CO 4,810.70,RAYMOND CHEVROLET INC 74,156.00,REALESTATE TRANSFER TAX
REFUND 120,165.00,REALTY VALUATION SERVICES INC 3,750.00,RECREATION PROGRAM REFUNDS 19,897.46,RED WING SHOES
5,524.75,REINDERS, INC. 19,830.08,RESOURCE MANAGEMENT-CHICAGO 8,538.89,REVOLUTION DANCEWEAR 4,295.99,REX
RADIATOR 10,657.00,RJ UNDERGROUND, INC 80,030.33,RLB HYDRAULIC SERVICE INC. 9,277.23,ROCCO FIORE & SONS
59,719.00,RODENTPRO.COM, LLC 8,024.71,ROGAN'S SHOE 3,006.75,RON CLESEN'S ORNAMENTAL PLANTS 3,582.20,RONDOUT
SERVICE CENTER 9,779.50,RUPRECHT COMPANY 2,877.60,RUSH TRUCK CENTERS OF ILLINOIS 6,819.41,RUSSO HARDWARE, INC.
14,498.92,S & S WORLDWIDE, INC. 3,643.57,SAM'S WEST, INC. 17,035.59,SAWVELL TREE SERVICE, INC 3,250.00,SCHNEIDER
ELEC BUILDINGS AMERICA 5,704.89,SCHOOL DISTRICT 67 103,546.45,SCHROEDER & SCHROEDER, INC. 18,812.00,SEITZ, LEE
ANN 4,075.00,SELECTRON TECHNOLOGIES, INC 22,490.00,SEMERSKY ENTERPRISES 10,716.77,SERVICE EXPRESS, INC.
13,153.71,SEWER EQUIPMENT CO OF AMERICA 3,531.15,S-FOUR ENTERPRISES, INC. 11,820.43,SHARP BRUSH INC
21,823.37,SHERIDAN AUTO PARTS 11,254.74,SHI INTERNATIONAL CORP 20,628.86,SICALCO LTD 10,006.63,SIEMENS
ENTERPRISE COMMUNICATION 13,360.69,SIGNATURE CLEANING INC 23,677.24,SILK-SCREENING BY WILL 16,357.06,SILVER
STAR HOME SERVICES CORP 18,092.00,SMITH & LALUZERNE LTD 42,203.50,SOIL & MATERIAL CONSULTANTS
3,099.50,SOLARWINDS, INC 3,229.50,SOLID WASTE AGENCY OF LAKE COUNTY 9,702.50,SPARKS OF IMAGINATION, INC.
7,965.80,SPAULDING MFG INC 30,474.60,SPECIALTIES DIRECT 7,909.00,SPEER FINANCIAL, INC. 31,935.26,SPORTS ENDEAVORS
INC 2,726.50,SPORTS MADE PERSONAL, LLC 4,100.00,SPRING ALIGN OF PALATINE INC 6,110.76,ST AUBIN NURSERIES INC
6,121.00,STACHURA, KELLY 4,717.99,STANDARD EQUIPMENT COMPANY 13,563.88,STARK PRINTING COMPANY
16,161.07,STEIN, RONALD W. 10,837.01,STEINER ELECTRIC COMPANY 19,094.80,STEPHEN A LASER ASSOCIATES PC
3,555.00,STEPP EQUIPMENT COMPANY 6,433.64,STEVE OLSON PRINTING AND DESIGN 4,993.50,STRAND ASSOCIATES, INC
96,683.49,SUBURBAN ELEVATOR COMPANY 2,988.00,SUNGARD HTE INC 62,355.49,SUNGARD PUBLIC SECTOR
24,141.00,SUNSET FOOD MART INC 9,117.59,SUNSHADE TENT RENTAL 3,160.00,SUN-TIMES MEDIA 8,383.35,SUN-TIMES MEDIA
14,259.40,SUPERIOR INDUSTRIAL SUPPLY 12,178.54,SUPERIOR ROAD STRIPING INC 98,072.78,SUSAN L. KELSEY
53,725.39,SVANACO 8,975.00,SWAN ANALYTICAL USA 5,130.00,T. Y. LIN INTERNATIONAL, INC. 44,816.97,TAYLOR MADE GOLF
COMPANY INC 8,048.46,TDS DOOR COMPANY 14,255.34,TEAM ONE LACROSSE LLC 9,425.25,TEC ELECTRIC INC
34,179.60,TERMINAL SUPPLY COMPANY 6,795.83,TESKA ASSOCIATES INC 30,114.77,THE ACTIVE NETWORK, INC. 9,958.13,THE
ANTIGUA GROUP, INC 4,050.15,THE BEAN FARM 4,278.60,THE BUREAU OF NAT'L AFFAIRS INC 3,840.00,THE CITY OF LAKE
FOREST 8,809.21,THE DAVEY TREE EXPERT COMPANY 37,630.50,THE LAKE FOREST FOUNDATION FOR HISTORIC PRESERVATION
4,950.00,THIRD MILLENNIUM ASSOCIATES, INC 8,108.74,THOMPSON ELEVATOR INSPECTION 25,478.00,THOR GUARD INC
16,737.65,THYSSENKRUPP ELEVATOR CORP 14,443.36,TIMOTHY W SHARPE 7,600.00,TITLEIST 18,640.71,TRADITIONAL
CONCRETE PRODUCTS 13,015.00,TRAFFIC CONTROL&PROTECTION INC 44,529.93,TREDROC TIRE SERVICE 36,866.76,TRUGREEN
LP 22,192.75,ULINE, INC. 7,638.70,ULIVIERI, NICK 3,465.00,UNIFORMITY INC 10,136.04,UNIFY INC 13,360.70,UNITED
HEALTHCARE INSURANCE CO 3,414.10,UNITED STATES POSTAL SERVICE 25,000.00,UNIVAR USA, INC. 9,078.82,USA BLUEBOOK
23,043.37,VAN ZEYL, MICHAEL 10,330.87,VANS ENTERPRISES LTD 20,276.00,VERIZON WIRELESS MESSAGING SERVICE
95,475.75,VERNON HILLS ANIMAL HOSPITAL 5,601.04,VERNON HILLS COUGARS ATHLETIC 2,570.00,VILLAGE OF BUFFALO
GROVE 15,750.00,VILLAGE OF DEERFIELD 16,020.00,VILLAGE OF GLENVIEW 9,022.14,VILLAGE OF LAKE BLUFF 3,157.00,VIP
DANCE, LLC 11,915.00,VISION SOLUTIONS, INC. 7,018.06,VULCAN MATERIALS COMPANY 12,613.15,WALKER, LINDA A.
8,962.50,WALNUT CREEK NURSERY 12,287.50,WAREHOUSE DIRECT 28,679.15,WASSER, BRUCE JAY 7,435.46,WATER REFUNDS
8,665.79,WAUKEGAN SAFE & LOCK LTD 4,802.47,WEISSMAN'S DESIGNS FOR DANCE 8,055.92,WELDING BY K & K, LLC
7,522.50,WELLS FARGO 4,817,481.00,WENNINGTON, WILLIAM 5,861.80,WEST MARINE PRODUCTS, INC. 4,326.44,WEST SIDE
TRACTOR SALES CO 3,439.09,WESTSIDE MECHANICAL INC 92,409.62,WET SOLUTIONS, INC. 2,761.57,WHIPPLE CONSULTING
LLC. 36,000.00,WHOLESALE DIRECT INC 2,916.29,WILLIAM J. CASSIDY TIRE 5,546.22,WILSON NURSERIES, INC 4,547.00,WINDY
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CITY LIGHTS, INC. 13,098.24,WISS JANNEY ELSTNER ASSOC 27,642.31,WOODWAY USA INC 6,630.65,WORD SYSTEMS, INC
3,815.74,WORLD FUEL SERVICES, INC. 201,462.17,WRIGHT BENEFIT STRATEGIES INC 30,000.00,ZARNOTH BRUSH WORKS INC
3,237.90,ZEP MANUFACTURING COMPANY 2,664.25,ZION LANDFILL T1 369,424.69,ZOLL MEDICAL CORPORATION 137,472.09
Total Vendors $34,753,769.26
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SUMMARY STATEMENT OF CONDITION
Discretely
Presented
Special Capital Debt Internal Component
General Revenue Projects Service Enterprise Service Fiduciary Unit
Revenues 32,963,831$ 10,928,960$ 2,281,119$ 2,098,791$ 10,558,059$ 8,156,752$ 72,887$ 3,925,929$
Expenditures (27,777,157) (10,368,386) (5,058,015) (2,648,720) (10,848,364) (8,392,670) (39,021) (3,746,476)
Excess of
Revenues Over
(Under)
Expenditures 5,186,674 560,574 (2,776,896) (549,929) (290,305) (235,918) 33,866 179,453
Transfers In - 513,870 2,045,000 665,436 96,000 -
Transfers Out (2,325,306) (96,000) - (900,000) - -
Debt issuance -
installment contract -
Bond Proceeds - - 9,741,093 -
Other 1,869 789,169 (9,665,000)
Net Increase
(Decease) in
Fund Balance 2,861,368 980,313 57,273 (708,400) (194,305) (235,918) 33,866 179,453
Previous Year
Fund Balance 14,753,592 9,363,114 5,476,967 2,407,274 9,916,224 6,588,481 477,133 1,215,681
Other - - - - - - - -
Current Year
Ending Fund Balance 17,614,960$ 10,343,427$ 5,534,240$ 1,698,874$ 9,721,919$ 6,352,563$ 510,999$ 1,395,134$
Total Debt Outstanding
Beginning of Issued Current Retired Current Outstanding
Year Fiscal Year Fiscal Year End of Year
58,263,146$ 9,715,000 12,880,950 55,097,196$
Subscribed and sworn to this 21nd of October, 2014 /s Elizabeth A. Holleb, City Treasurer
I, Robert R. Kiely, Jr, City Clerk of The City of Lake Forest, Lake County, Illinois, do hereby certify that the above is a true copy of the Annual Treasurer's Report
for the fiscal year ending April 30, 2014 /s Robert R. Kiely, Jr., City Clerk
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The City of Lake Forest
CITY COUNCIL
Proceedings of the October 6, 2014
City Council Meeting at 7:30pm. City Council Chambers
CALL TO ORDER AND ROLL CALL: Honorable Mayor Schoenheider called the meeting to order at
7:30 pm, and Deputy City Clerk Margaret Boyer called the roll of Council members.
Present: Mayor Schoenheider, Alderman Waldeck, Alderman Beidler, Alderman Moore, Alderman
Pandaleon, Alderman Tack, Alderman Reisenberg, Alderman Adelman and Alderman Moreno.
Absent: None
Also present were: Bob Kiely, City Manager, Victor Filippini, City Attorney; Carina Walters,
Assistant City Manager; Susan Banks, Communications Manager; Catherine Czerniak, Director of
Community Development; Chuck Myers, Superintendent of Parks & Forestry; Mary Van Arsdale,
Director of Parks & recreation, Dan Martin, Superintendent of Public Works; and Michael Thomas,
Director of Public Works.
There were approximately 20 present in the audience.
PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was recited by all in attendance.
REPORTS OF CITY OFFICERS
COMMENTS BY MAYOR
A. 2014-2015 New Board and Commission Appointments/Reappointments
ELAWA FARM COMMISSION
NAME OF MEMBER APPOINT/REAPPOINT WARD
Dianne FitzSimons Appoint LB-Elawa Foundation
Alderman Reisenberg made a motion to approve the Mayor’s Appointment, seconded by
Alderman Beidler. The motion carried unanimously by voice vote.
Mayor Schoenheider Thanked the Library Board for hosting the City Council and giving a tour of
the newly installed Media Lab. The Mayor added that the Library is quiet a resource for residents,
and he encouraged residents to visit.
COMMENTS BY CITY MANAGER
City Manager Robert Kiely, stated that Item # 5 on the Omnibus agenda (Award of Bid for the
Municipal Services Epoxy Floor Project Included in the FY 2015 CIP Budget) would be tabled until
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the October 20, 2014 City Council meeting. City Staff will be meeting with a local business man
who believes that the work proposed can be done for less.
COMMENTS BY COUNCIL MEMBERS
A. Public Works Committee
1. Recognition of the 2014 Water Plant Operator of the Year Award-
Charlie Douglas, Assistant Chief Water Plant Operator
Chairman of The Public Works Committee, Catherine Waldeck, introduced Dan Martin;
Superintendent of Public Works he reported that at last month’s 83rd Annual Convention for the
Illinois Potable Water Supply Operators Association and the Illinois Environmental Protection
Agency, Charlie Douglas, the Assistant Chief Water Plant Operator, was recognized by industry
peers and awarded the 2014 Operator of the Year Award.
Mr. Martin added that there are approximately 4,000 certified drinking water operators in the
State of Illinois. "Operator of the Year" is the highest professional honor operators can receive in
recognition of service and performance in the waterworks industry that is responsible for
producing and supplying drinking water throughout Illinois. He noted that winners and finalists are
nominated by their peers, screened by a pre-selection committee, and chosen by a second
committee that interviews nominees at their facilities.
Mr. Martin stated that Charlie Douglas has work for the City of Lake Forest for 37 years and is the
first City of Lake Forest Water Plant Operator to ever be awarded the prestigious award. He
thanked Mr. Douglas for his hard work and devotion to the City of Lake Forest.
Mr. Douglas thanked The City of Lake Forest and Staff.
2. City Council Approval of the Winter 2014/2015 Salting Policy, the Salt Quantity
to be Purchased, the Waiver of Formal Bidding for a Portion of the Salt
Purchases, and the Final Selection of Salt Vendors
Mr. Thomas reviewed the bids received for the winter season and presented the staff’s
recommendations.
Staff recommendation #1 would be to modify salting procedures for the 2014-2015 winter as:
Normal Salting December 1 – January 15, Reduced Salting January 16 – February 15, and Limited
Salting February 16 – March 30. He reminded everyone that actual usage would be dictated by
conditions and although there is economic, environmental and service reasons for modifying the
salting procedures, safety is and will always continue to be the number one priority.
Staff recommendation #2: Approve the bid from North American Salt Company as procured
through the Lake County bid process; 500 tons at $69.66/ton.
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Staff recommendation #3: Reject the bid from Morton Salt as procured through the State bid
process because it varies from the bidding criteria that the City established for its participation in
the State bid process.
Staff recommendation #4: Waive the competitive bid process and purchase 1,600 tons of road salt
from Conserv FS.
Staff recommendation #5: Approve the purchase of an additional 250 tons for School Districts #67
and #115, totaling $29,750. The City is reimbursed for all salt used by the School District and any
salt that is not used will remain in the salt bays for the following winter.
Mr. Thomas added that the proposed salt bay reinforcement allows for 600 additional tons
and that currently the 2 bays hold 1,600 tons total. The Old MS site held 600 tons total. He said
reinforcement will allow for an additional 600 tons.
The City Council had discussion on how the bid process works, why other communities are paying
less per ton, and if the purchase of salt be done in the off season to reduce costs and what our
obligations are.
Mayor Schoenheider asked if there was anyone from the public who wanted to comment on the
topic, and seeing none, asked for a motion on the following items:
1. The 2014 – 2015 winter salting policy as proposed
Alderman Moreno made a motion approving the 2014 – 2015 winter salting policy as proposed,
seconded by Alderman Pandaleon. The following voted “Yea”: Aldermen Waldeck, Beidler, Moore,
Pandaleon, Tack, Reisenberg, Adelman and Moreno. The following voted “Nay”: None. 8 Yeas, 0
Nays, motion carried. Mayor Schoenheider added for clarification that the Director of Public works
has flexibility on either side of the policy
2. Approval of the Bid from North American Salt Company as procured through the
Lake County Bidding Process for the purchase of 500 tons at $69.66 / ton.
Alderman Waldeck made a motion for approval of the Bid from North American Salt Company as
procured through the Lake County Bidding Process for the purchase of 500 tons at $69.66 / ton,
seconded by Alderman Moreno. The following voted “Yea”: Aldermen Waldeck, Beidler, Moore,
Pandaleon, Tack, Reisenberg, Adelman and Moreno. The following voted “Nay”: None. 8 Yeas, 0
Nays, motion carried.
3. Rejection of the Bid from Morton Salt as procured from the State of Illinois Bidding
Process, as such bid materially varies from the bidding criteria that the City
established for its participation in the State of Illinois bidding process.
Alderman Moore made a motion for rejection of the Bid from Morton Salt as procured from the
State of Illinois Bidding Process; as such bid materially varies from the bidding criteria that the City
established for its participation in the State of Illinois bidding process, seconded by Alderman
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Pandaleon. The following voted “Yea”: Aldermen Waldeck, Beidler, Moore, Pandaleon, Tack,
Reisenberg, Adelman and Moreno. The following voted “Nay”: None. 8 Yeas, 0 Nays, motion
carried.
4. Waiver of Competitive Bids and approval of the proposal from Conserv FS for the
purchase of 1,600 tons of road salt at the price of $115.25 and $119.00/ton
respectively.
Alderman Pandaleon made a motion for Waiver of Competitive Bids and approval of the proposal
from Conserv FS for the purchase of 1,600 tons of road salt at the price of $115.25 and
$119.00/ton respectively, seconded by Alderman Reisenberg. The following voted “Yea”:
Aldermen Waldeck, Beidler, Moore, Pandaleon, Tack, Reisenberg, Adelman and Moreno. The
following voted “Nay”: None. 8 Yeas, 0 Nays, motion carried.
5. In addition, the City annually purchases, stores, and loads School District’s #67 &
#115 salt. Since the City pays for and receives the material, staff is requesting an
additional $29,750 be approved for their tonnage. The Districts’ average amount
used of 250 tons x $119/ton = $29,750. The City is reimbursed for all salt used by
the School District; what is not used remains in the salt bays for the following
winter.
Alderman Pandaleon made a motion to approve the annually purchase, storage, and loading
School District’s #67 & #115 salt. Since the City pays for and receives the material, staff is
requesting an additional $29,750 be approved for their tonnage. The Districts’ average amount
used of 250 tons x $119/ton = $29,750. The City is reimbursed for all salt used by the School
District; what is not used remains in the salt bays for the following winter, seconded by Alderman
Moreno. The following voted “Yea”: Aldermen Waldeck, Beidler, Moore, Pandaleon, Tack,
Reisenberg, Adelman and Moreno. The following voted “Nay”: None. 8 Yeas, 0 Nays, motion
carried.
Mayor Schoenheider thanked Mr. Thomas and his team for all their efforts.
OPPORTUNITY FOR CITIZENS TO ADDRESS THE CITY COUNCIL ON NON-AGENDA ITEMS
Paul Hamann addressed the City Council with his opinion on the use of City property.
ITEMS FOR OMNIBUS VOTE CONSIDERATION
1. Approval of the September 2, 2014 City Council meeting Minutes
2. Check Register for period August 23- September 26, 2014
3. Resolution of Appreciation for Randall J. Diekmann
4. Resolution of Appreciation for Dan Jasica,Parks & Recreation Board Member
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(5.) Award of Bid for the Municipal Services Epoxy Floor Project Included in the F.Y.
2015 CIP Budget – ITEM TABLED
5. Approval of Plante Moran Professional Services for Phase 5 of the Parks and
Recreation Software Replacement Project as Budgeted in FY15 Capital Plan
6. Approval of Resolution Supporting an Intergovernmental Agreement for Law
Enforcement Mutual Aid (ILEAS)
COUNCIL ACTION: Approve the six (6) Omnibus items as presented.
Mayor Schoenheider stated that Item # 5 on the Omnibus would be tabled and asked the Council
if they would like any additional item removed or be taken separately.
Alderman Moore asked that the City Council minutes of 9/2/2014 be amended to reflect the
following statement “this was the 4th time the City Council had no bids and the 2nd time this year
there were more no bids then bids on the Omnibus”, Mayor Schoenheider then asked for a
motion to approve the six (6) Omnibus items as amended.
Alderman Reisenberg made a motion approving the Omnibus items as amended per Alderman
Moore’s comment, seconded by Alderman Beidler. The following voted “Yea”: Aldermen Waldeck,
Beidler, Moore, Pandaleon, Tack, Reisenberg, Adelman and Moreno. The following voted “Nay”:
None. 8 Yeas, 0 Nays, motion carried.
Information such as Purpose and Action Requested, Background/Discussion, Budget/Fiscal Impact,
Recommended Action and a Staff Contact as it relates to the Omnibus items can be found on the agenda.
ORDINANCES
None
NEW BUSINESS
None
ADDITIONAL ITEMS FOR COUNCIL DISCUSSION
EXECUTIVE SESSION pursuant to 5ILCS 120/2 (c) (11), The City Council will be discussing
threatened or pending Litigation was not entered into.
ADJOURNMENT
There being no further business. Alderman Pandaleon made a motion to adjourn, seconded by
Alderman Adelman Motion carried unanimously by voice vote at 8:25 p.m.
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Respectfully Submitted,
Margaret Boyer
Deputy City Clerk
A video of the City Council meeting is available for viewing at the Lake Forest Library and on file in
the Clerk’s office at City Hall. You can also view it on the website by
visiting www.cityoflakeforest.com. Click on I Want To, then click on View, then choose Archived
Meetings Videos.
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Deerpath Golf Course Flash ReportAttachment A40
Actual Actual Actual Actual Actual Actual Actual Actual
Preliminary
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Fund Balance 5/1 62,569$ 318,233$ 263,011$ 208,631$ 278,787$ 298,928$ 310,906$ 279,027$
Revenue
Operating revenue 1,585,915 1,428,307 1,412,208 1,325,874 1,264,624 1,222,912 1,320,455 1,397,836
Giving Tree - 5,500 1,520 8,005 16,100 - -
Grant 125,000 - - -
Interest Income 30,618 28,262 7,004 3,959 4,400 3,920 2,686 2,138
Total Current Revenue 1,741,533$ 1,462,069$ 1,420,732$ 1,337,838$ 1,269,024$ 1,242,932$ 1,323,141$ 1,399,974$
Less:
Operations and Maintenance 436,356 489,728 427,080 459,149 426,941 481,028$ 666,209 741,425
Salaries/Benefits 773,138 795,761 791,977 688,462 725,722 652,542$ 567,571 597,885
Adm Serv to City 19,375 20,102 20,855 21,637 22,070 22,401 22,961 23,535
Total Operating Expenses 1,228,869$ 1,305,591$ 1,239,912$ 1,169,248$ 1,174,733$ 1,155,971$ 1,256,741$ 1,362,845$
Net Before Capital & Debt 512,664 156,478 180,820 168,590 94,291 86,961 66,400 37,129
Capital Expense 141,600 93,700 187,200 5,004 - - 65,491 34,670
Debt Service 115,400 118,000 48,000 93,430 96,750 112,983 110,788 105,366
Total Capital/Debt Service 257,000 211,700 235,200 98,434 96,750 112,983 176,279 140,036
Net after Capital & Debt 255,664 (55,222) (54,380) 70,156 (2,459) (26,022) (109,879) (102,907)
Recreation Fund Transfer 22,600 38,000 78,000 96,000
Fund Balance 4/30 318,233$ 263,011$ 208,631$ 278,787$ 298,928$ 310,906$ 279,027$ 272,120$
Fund Balance Target (15% Revenue)198,471$ 209,996$
Over (under) FB Target $80,556 $62,124
Debt service coverage 1.25 4.44 1.33 3.77 1.80 1.21 1.11 1.30 1.26
Series 2004A bonds were refunded as part of the 2011B refunding issue and mature 12-15-23 (FY24).
Op Revenue increase%-9.9%-1.1%-6.1%-4.6%-3.3%8.0%5.9%
Op Expense increase % 6.2%-5.0%-5.7%0.5%-1.6%8.7%8.4%
FINANCIAL HISTORY
DEERPATH GOLF COURSE FUND
Revised 9/5/14 FY2014 pending audit finalization - subject to change
Attachment B
41
Attachment CCityCityKemperFY15 Budget FY'16FY'16REVENUE Seasonal Fees‐Resident$296,040 $296,705 $298,818Seasonal Fees‐Non Resident$66,720$56,874$66,041Daily Fee‐Resident$196,577 $176,919 $189,705Daily Fee‐Non Resident$248,431 $206,642 $236,408 Seasonal & Daily Fees Sub‐Total$807,768 $737,140 $790,972Locker Fee$6,503$7,129$8,650Electric Car Rental$235,556 $205,272 $217,893Start Time$12,000$11,690$11,690Range Fees$60,000$60,000$60,861Club Rental$1,009$1,000$1,000Pullcarts$4,512$4,060$4,322Merchandise Sales$21,056$98,131$98,131Concession Sales$15,000$15,000$15,000Handicap Service$10,000$10,000$7,230Golf Classes/Lessons$303,000 $296,536 $296,536Interest on Investment$2,600$1,926$1,926Interfund Transfer from Recreation$91,000TOTAL REVENUE$1,570,004 $1,447,883 $1,514,211TOTAL OPERATING EXPENSE*$1,386,532 $1,521,272 $1,357,750 *line item detail pages 18 ‐ 19NET OPERATIONS$183,472‐$73,389$156,461DEBT/CAPITAL/OTHER EXPENSE**$216,530$224,552 $285,930 **line item detail page 20GRAND TOTAL WITH DEBT/CAP$1,603,062 $1,745,824 $1,643,680TOTAL PROFIT/LOSS‐$33,058‐$297,941‐$129,469Deerpath Golf CourseLine Item Detail Budget Proformas42
Attachment CCityCityKemperFY15 Budget FY'16FY'16Deerpath Golf Course Proforma BudgetEXPENSESADMINISTRATIONSalaries ‐ General Manager98,200$ $90,000$90,000Salaries‐Full Time Other176,091$ $181,374 $165,000Wages‐Temporary Maintenance157,935$ $159,497 $162,874Wages‐Temporary Clubhouse84,038$ $84,038$58,243Overtime20,956$ $21,709$0 Salaries Sub‐Total$537,220 $536,618 $476,117Longevity1,887$ $1,875$0Insurance Medical57,919$ $75,705$65,135Insurance Dental1,171$ $1,652$0Insurance Life243$ $324$0Unemployment Insurance44,194$ $48,470$19,772Social Security32,690$ $39,033$37,319Pension49,525$ $61,395$1,125Flexi446$ $396$0Payroll W.C.$15,000$11,891 Benefits‐Sub‐Total$188,075$243,850$135,242IRMA (Risk) Insurance & Deductible32,231$ $18,126$18,126Training and Development200$ $200$357Membership Dues1,900$ $1,900$1,935Meetings and Exp Reimbursement150$ $150$0Contractual Services ‐ Audit2,496$ $2,596$4,160IT Maintenance3,645$ $6,827$6,827Cell Phone1,069$ $1,000$1,000Clothing4,100$ $4,100$4,925Assets under $10,0009,900$ $9,900$10,001 Administration Sub‐Total $780,986 $825,266 $658,69043
Attachment CCityCityKemperFY15 Budget FY'16FY'16CLUBHOUSEMeetings and Exp Reimbursement100$ $100$0Contractual Services 264,840$ $262,040 $273,501Credit Card Charges28,020$ $28,860$28,580Water4,197$ $4,200$4,200Sewer770$ $770$770Maintenance of Equipment5,302$ $5,302$5,444Materials for Bldg. Maint17,700$ $14,902$18,050Telephone4,515$ $4,605$4,605Advertising15,000$ $15,000$15,301Office Supplies2,000$ $2,000$2,040Postage and Printing9,000$ $9,000$9,180Minor Equipment5,850$ $5,850$5,967Janitorial Supplies2,250$ $3,000$2,292Electricity19,000$ $19,602$19,602Gas 6,610$ $6,480$6,480Merchandise COG‐$ $80,870$80,870Handicap Service9,726$ $9,726$9,921Inventory Loss1,000$ $1,000$0Sales Tax8,500$ $8,670$8,670 Clubhouse Sub‐Total $404,380 $481,977 $495,473MAINTENANCEContractual Services4,978$ $4,975$5,073Water60,000$ $64,066$64,066Fleet PM Service/Fuel47,513$ $48,938$20,000Maintenance of Equipment/Parts3,725$ $9,395$8,899Minor Equipment/Tools6,950$ $7,000$7,089Material to Maintain/Repair12,700$ $14,000$7,854Agricultural Materials23,800$ $24,154$36,276Chemicals41,500$ $41,500$54,330 Maintenance Sub‐Total$201,166 $214,029 $203,587GRAND TOTAL EXPENSE w/o Capital/Debt$1,386,532 $1,521,272 $1,357,75044
Attachment CCityCityKemperFY15 Budget FY'16FY'16CAPITAL, DEBT & OTHERKemperSports Management Fee25,000$ $0$61,378Capital Equipment60,000$ $97,000$97,000Revenue Bond Interest21,910$ $20,208$20,208Bond Expense85,000$ $82,000$82,000Paying Agents/Bonds500$ $500$500Administrative Services24,120$ $24,844$24,844 Capital, Debt & Other Sub‐Total $216,530 $224,552 $285,930GRAND TOTAL with Capital/Debt$1,603,062 $1,745,824 $1,643,680TOTAL PROFIT/LOSS‐$33,058‐$297,941‐$129,46945
46
47
Management Options Matrix
CITY OPERATION MANAGEMENT CONTRACT
PAYMENT City continues to operate all services. The City pays a Management Firm, typically a
fixed fee, plus incentives.
REVENUES All revenues belong to the City. All revenues belong to the City.
FEES & CHARGES Controlled and established by the City
annually.
Recommended by Management Firm and
approved by City annually.
SERVICES & COURSE
CONDITIONS
City determines services and
responsible for conditions.
Expectations set by City. Management Firm
responsible for executing.
STAFFING City is responsible for all staffing and
related expense.
Management Firm provides all staff and is
responsible for related expense. Staff approved by
City.
EQUIPMENT City purchases, maintains, and replaces. City retains responsibility to purchase and pay
repair expense. Firm repairs with its staff.
CAPITAL & DEBT City has total responsibility. City has total responsibility.
Attachment F
48
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (“Agreement”) is made and entered into as of
______________ 2014, by and between The City of Lake Forest, Illinois, an Illinois home rule
and special charter municipal corporation (“Owner”) and KemperSports Management, Inc., an
Illinois corporation (“KSM”).
W I T N E S S E T H:
WHEREAS, Owner owns the public golf course, clubhouse, and related facilities located
in Lake Forest, Illinois known as the “Deerpath Golf Course” (the “Property”); and
WHEREAS, Owner and KSM desire for KSM to operate and manage all Property
amenities, including clubhouse operations, food and beverage concessions, sales and marketing,
golf course maintenance, membership sales, if any, payroll and benefit administrations,
insurance, financial reporting, accounting, and other related activities, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants, promises and
agreements herein contained, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1. Definitions. All capitalized terms referenced or used in this Agreement and not
specifically defined herein shall have the meanings set forth on Exhibit A attached hereto.
ARTICLE 2
APPOINTMENT AND TERM
2.1. Appointment. Owner hereby retains, engages and appoints KSM as Owner’s agent
to perform the Management Services during the Term, as more fully described herein, and KSM
hereby accepts said appointment upon and subject to the terms hereof.
(A) Term. Subject to Article 13 of this Agreement, the “Term” of this Agreement shall
be five (5) years beginning on ___________ (the “Commencement Date”) and
terminating on ____________________ (the “Termination Date”); provided,
however, that either Owner or KSM may terminate this Agreement following the
third anniversary of the Commencement Date upon notice to the other party 90 days
prior to such termination.
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ARTICLE 3
MANAGEMENT SERVICES
3.1. Management of the Property. During the Term, KSM shall perform the
management services described in this Article 3 in order to supervise, manage, direct and operate
the Property on behalf of and for the account of Owner (collectively, the “Management
Services”), subject to the terms of this Agreement and consistent with the Operating Budget
approved by Owner. Owner hereby delegates to KSM, subject to the (i) Budgets, (ii) Owner’s
approval rights specifically described in this Agreement (the “Approval Rights”), (iii) Operating
Budget, and (iv) other terms and conditions set forth herein, the discretion and authority to
determine operating procedures, standards of operation, house rules, standards of service and
maintenance, pricing, and other policies, rules, and regulations affecting the Property or the
operation thereof, to implement all of the foregoing, and to perform any act on behalf of Owner
deemed by KSM to be necessary or desirable for the operation and maintenance of the Property.
3.2. Use of the Property. Owner hereby grants to KSM the right to use and occupy the
Property during the Term for the purposes set forth herein. KSM shall, upon the expiration or
termination of the Term, vacate and surrender the Property to Owner.
3.3. Scope of Services. KSM will manage all activities of the Property that are included
in the annual Operating Budget and approved by Owner. KSM will operate the Property
consistent with high quality standards for comparable golf properties in the vicinity as provided
for in, and consistent with, the approved Operating Budget. Subject to the terms of this
Agreement and the approved Operating Budget, KSM shall have the authority and responsibility
to:
3.3.1. Manage the Property and use commercially reasonable efforts to conform
to the approved Operating Budget;
3.3.2. Implement the policies and standards of the Property, as approved by
Owner;
3.3.3. Establish high quality golf course maintenance standards approved by
Owner and in accordance with the Operating Budget;
3.3.4. Manage and supervise all day-to-day operations of the Property, including
tee time reservations, collecting green and cart fees, membership or annual pass sales and
services, clubhouse operations, outside services, course maintenance, managing outings,
tournaments and events, payroll and benefits administration, accounting, and financial
reporting, etc.;
3.3.5. Hire, train, and supervise all employees required to carry out KSM’s
responsibilities;
3.3.6. Manage payment of all Property Operating Expenses as identified in the
Operating Budget;
Comment [RP1]: KSM will provide a definition
of this term.
50
3.3.7. Determine hours of operations, dress code requirements, establish starter,
marshal and other outside services, establish handicap services, and golf instruction
programs;
3.3.8. Acquire all goods and services necessary to carry out KSM’s
responsibilities. With the exception of capital improvements, KSM shall be exempt from
Owner’s purchasing policy when acquiring such goods and services;
3.3.9. Market the Property to achieve targeted objectives;
3.3.10. Obtain licenses and other operating permits;
3.3.11. Negotiate contracts for maintenance equipment and carts to be executed
by Owner; and
3.3.12. Consistent with high quality maintenance standards, make repairs and
other improvements to the Property, including repairs related to fleet equipment,
irrigation equipment, and other such repairs necessary to satisfy Owner’s legal
requirements related to flood plain and storm water management.
3.4. Budgets. All budgets, as hereinafter set forth (collectively, the “Budgets”), shall be
prepared with the advice and counsel of Owner, based on what KSM believes to be reasonable
assumptions and projections, and delivered to Owner for Owner’s review and written approval.
All Budgets shall be presented in reasonable detail. KSM shall not be deemed to have made any
guarantee or warranty in connection with the results of operations or performance set forth in the
Budgets and the Parties acknowledge that the Budgets are based solely upon KSM’s judgment and
the facts and circumstances known by KSM at the time of preparation. KSM shall submit
monthly financial reports to Owner that provide year to date performance versus projections based
on the Budgets. If year to date performance of operational fiscal results are less than the
projections (that is, revenue is less than projected under the Budgets or expenses exceed
projections in the Budgets), KSM must provide owner with corrective measures that will be made
to achieve fiscal annual goals within an acceptable margin as defined by Owner. KSM shall
prepare and maintain all accounting and financial reports on the Owner’s fiscal year, not a
calendar year.
3.4.1 Operating Budget. By October 1 of the prior fiscal year during the Term,
KSM shall submit to Owner, for Owner’s review and written approval, an Operating
Budget of the Property for each upcoming fiscal year, or part thereof, within the Term.
Owner shall retain final authority regarding operating expenditures and the Operating
Budget. The Operating Budget for the first year of the Term is attached hereto as Exhibit
D.
3.4.2 Capital Expenditures Budget. By October 1 of the prior fiscal year
during the Term, KSM shall submit to Owner, for Owner’s review and written approval,
a Capital Expenditures Budget for the upcoming fiscal year or part thereof within the
Term, including a five-year schedule of capital improvements. Owner shall retain final
authority regarding capital improvements and the Capital Expenditures Budget. The
Capital Expenditures Budget for the first year of the Term is attached hereto as Exhibit E.
51
3.4.3 Owner’s Review and Approval of Budgets. The Budgets shall be for
Owner’s review and written approval, subject to the terms of this Agreement, which
approval shall not be unreasonably withheld. Owner shall provide KSM with a budget
schedule for each year of the Term by September 1st of the preceding year and KSM shall
provide Owner with all required Budgets pursuant to that budget schedule. Owner shall
give its written comments and/or approval pursuant to the Owner’s established budget
schedule. If Owner fails to provide any comments or approval with respect to a Budget
within the time period provided in that budget schedule (as such schedule may be
mutually extended), then the Owner shall be deemed to have disapproved the Budget. In
the event of disapproval of any Budgets, KSM shall continue operating the Property
pursuant to the Budgets last approved by the Owner, subject to increases in Operating
Expenses required due to (i) increases in Gross Revenues or (ii) weather or other matters
beyond the control of KSM, until such time as Owner and KSM agree upon the
appropriate replacement Budgets.
3.4.4 Unanticipated Expenditures and Reallocation of Funds. Owner and KSM
agree that the Budgets are intended to be reasonable estimates, and, accordingly, the
Parties agree that such Budgets may contain reasonable line items for contingencies as
approved by the Owner. In addition, KSM shall be entitled from time to time to propose
revisions to the Budgets to cover any expenditures that were unanticipated at the time of
preparation of the Budgets but are reasonable and necessary to carry out the provisions of
this Agreement; provided, however, that no such revision to the Budgets shall be
effective unless approved in writing by the Owner. Except as otherwise set forth in this
Agreement, KSM shall be required to obtain Owner’s prior written approval of any
expenditures that would result in any line item within the Budgets being exceeded by five
percent (5%) or total budgeted expenditures within the Budget (including contingencies)
being exceeded. Owner shall also be required from time to time to revise the Budgets
upon request of the Owner in the event that Annual Gross Revenues are more than five
percent (5%) lower than expected. KSM is authorized to take all action reasonably
deemed necessary by KSM to implement, perform, or cause the performance of the items
set forth in the Budgets in accordance with the Budgets. Owner acknowledges that KSM
has not made any guarantee, warranty, or representation of any nature whatsoever
concerning or relating to (i) the Budgets, or (ii) the amounts of Gross Revenues or
Operating Expenses to be generated or incurred from the operation of the Property.
3.4.5. Easements. KSM accepts the Property subject to rights of any party,
including Owner, in and to any existing easements, permits or licenses.
3.4.6. Relocation of Utilities or Facilities. KSM accepts the Property subject to
rights of any party, including Owner, in and to any existing conduits, sewers, water lines,
gas lines, power lines, drainage facilities, telephone, telegraph or other wires, and policies
and utilities or facility of any kind whatsoever, whether or not of record. Should it at any
time become necessary to relocate any of same by reason of this Agreement, KSM shall
bear and pay the cost of doing so.
3.4.7. Liens. KSM agrees not to suffer or permit any lien of mechanics or
materials to be placed upon the Property or any part thereof and, in case of any such lien
52
attaching to, immediately pay off and remove the same. It is further agreed by the parties
hereto that KSM has no authority or power to cause or permit any lien or encumbrance of
any kind whatsoever, whether created by act of KSM, operation of law, or otherwise, to
be attached to or be placed on Owner or Owner's title or interest, if any, in the Property,
and any and all liens and encumbrances created or suffered by KSM shall attach to
KSM's interest only.
3.4.8. Taxes. The Property is currently exempt from payment of real estate taxes.
KSM acknowledges and agrees that if at any time during the Term of this Agreement, the
Owner is assessed for any real estate taxes or assessments, the parties shall work in good
faith to renegotiate the terms of this Agreement to address payment of the real estate
taxes and its implications, if any, on the fees paid pursuant to this Agreement. In
addition, either Owner or KSM, working singularly or together, shall have the right to
contest any assessment of real estate taxes against the Property. Either party may pursue
a contest in the name of Owner or KSM, or both parties. In the event the parties shall fail
to agree on a mutually agreeable revised agreement or shall fail to successfully contest
the tax assessment, either party shall have the right to terminate this Agreement upon
providing at least thirty (30) days written notice to the other party of the intention to
terminate; provided, however, that the right to terminate shall exist only from and after
the disposition of any tax assessment contest by a final order not subject to any further
appeal or review, or, if neither party initiates a contest, from and after the expiration of
the time for such a contest under applicable law. Any real estate taxes that cannot be
successfully contested and which are owed for the period from assessment until
termination of this Agreement shall be paid by KSM.
3.5 Property Operations. KSM shall use commercially reasonable efforts to
perform all acts that are necessary in the opinion of KSM to operate and manage
the Property, subject to the Budgets, the Approval Rights and terms and conditions set
forth herein, on behalf of and for the account, and at the sole cost and expense of, Owner,
in accordance with the standards of quality expected at high quality golf courses in the
vicinity of the Property. KSM shall have the authority and responsibility for the
administration, operation and management of the Property. At a minimum, KSM shall
perform the following acts and services:
3.5.1 Financial Management, Accounting Records and Reporting. The day-to-day
accounting and financial affairs of the Property shall be handled generally by
KSM’s home office. Additionally, KSM may employ at such time it is deemed
appropriate a part-time on-site bookkeeper for the Property to assist Home Office
in connection with such day-to-day accounting and financial affairs, the cost of
which shall be the sole responsibility of KSM and not Owner. KSM’s duties shall
include (i) maintaining all books, records and other data associated with the
financial activities of the Property, (ii) preparing all operating budgets, cash flow
budgets, and other financial projections and forecasts, and (iii) controlling and
being responsible for the day-to-day financial affairs of the Property. All
accounting records shall be maintained in a format consistent (in all material
respects) with generally accepted accounting practices and Owner’s reasonable
requirements. In order to reimburse KSM for the use of its internal resources in
53
connection with such handling by its home office, Owner shall pay KSM an
Accounting Reimbursement as described in Section 5.1.3. KSM shall cooperate
fully with Owner’s annual audit, including but not limited to preparation of
supporting schedules, response to audit inquiries, and adherence to the established
schedule. KSM shall provide monthly financial reports to Owner within fifteen
(15) calendar days of month-end in a format consistent with the City’s chart of
accounts for posting to the City’s general ledger, as well as detailed check
registers for all checks processed for that month.
3.5.2 Bank Accounts. KSM shall assist Owner in establishing, in Owner’s name,
utilizing the federal tax identification number of Owner, an Operating Account.
Owner agrees that individuals designated by KSM, and approved in writing by
Owner, shall be signatories on the account in addition to authorized signatories
designated by the Owner, and that Owner will not change the signatories of such
account or close such account without the prior written consent of KSM.
Additionally, KSM shall establish a payroll account (the “Payroll Account”) in
KSM’s name. The records and bank statements shall be subject to inspection by
Owner pursuant to the terms recited herein. KSM shall provide to the Owner
copies of bank statements and bank account reconciliations for both the Operating
and Payroll Accounts by the 15th day following month end. All Gross Revenues
of the Property shall be collected, received, and deposited by KSM exclusively
through the Operating Account in accordance with the terms of this Agreement.
All Operating Expenses shall be handled and expended exclusively through the
Operating Account. All Gross Payroll for the Property shall be handled and
expended exclusively through the Payroll Account and will be funded via
transfers from the Operating Account by KSM.
3.5.3 Employees. As part of the Operating Budget, KSM shall (i) determine personnel
requirements, recruitment schedules, and compensation levels, (ii) furnish job
descriptions, performance appraisal procedures, employee benefit programs, and
operational and procedural manuals for all personnel, and (iii) establish forms and
procedures for employee compensation and Property incentive programs. KSM
shall hire, promote, discharge, and supervise all employees performing services in
and about the Property. All of the employees of the Property shall be employees
of KSM and the employees’ compensation shall be an Operating Expense.
3.5.3.1 General Manager. KSM shall present to Owner the
qualifications of the individual that it proposes to be general manager of
the Property. If the proposed general manager is unsatisfactory to Owner,
then KSM shall present to Owner the qualifications of another individual
that it proposes to be general manager of the Property, repeating this
process until the proposed general manager is satisfactory to Owner.
Consistent with Section 15.5, this reservation of rights with regard to the
general manager shall not be construed as Owner employing the general
manager in any way; it merely provides Owner the opportunity to more
precisely determine the quality of KSM’s service to Owner pursuant to
this Agreement.
54
3.5.4 Marketing. KSM shall make recommendations to Owner as to green fees and
other fees and rates. KSM shall develop the ongoing marketing plan for
the Property and define a schedule of marketing and advertising activities, which
shall be submitted to Owner by October 1st of the preceding fiscal year for each
year of the Term. The marketing plan for the first year of the Term is attached
hereto as Exhibit F. Upon Owner’s approval, KSM shall indicate on the premises
that the Property is being operated by KSM. KSM shall seek advisory input on
marketing and fees from the Golf Advisory Committee and Parks and Recreation
Board as directed by Owner.
3.5.5 Housekeeping. KSM shall at all times keep the Property clean, properly
maintained and in good condition and repair. KSM has the right to use certain
fixtures and equipment located on the Property, which fixtures and equipment
shall be and remain the property of the Owner. This includes the dining and
kitchen areas and all equipment in the Clubhouse. KSM shall not post, paint or
place, or permit others to post, paint, or place on the Property any advertisement
or sign not related directly to KSM's business on the Property, except as approved
by the Owner.
3.5.6 Hours/Presence on Property: KSM must maintain personnel on premises 12
months of the year. KSM may use discretion on hours of coverage.
3.5.7 Fleet Maintenance: KSM will provide a qualified mechanic responsible for the
prompt and complete repair of all maintenance equipment, ordering of parts and
completing fuel ordering, preventative maintenance work, and record keeping as
stipulated by Owner. Should KSM personnel be unable to perform any such
repair or preventative maintenance work, KSM may submit a request to Owner
for assistance via Owner’s Fleet Section. Owner will provide KSM with cost
quote and timetable for requested work. KSM utilize the Owner’s Fleet Section
for the requested work and pay for the costs thereof pursuant to such quote, or
KSM may elect to contract out repairs if a better price or schedule may be
obtained.
3.6 Food and Beverage Concessions. In addition to the activities set forth in Section
3.3, KSM shall also operate and manage a golf food and beverage concession in the Property’s
clubhouse (the “Clubhouse”) that prepares and sells items that are usual and customary for such
concession facilities. KSM agrees to handle only such articles as are appropriate for this type of
business occupancy or use. Unless otherwise set forth in this Agreement, KSM shall be
responsible for the day-to-day management, responsibility, operations, employees, collecting
revenues, and paying expenses of the Deerpath Golf Course food and beverage concessions
during the Term of this Agreement.
3.6.1 Previous Agreement. This Agreement supersedes all prior agreements, leases,
and understandings (whether written or oral) between the Owner and KSM with
respect to the subject matter of Section 3.6.
55
3.6.2 Concession Cart. Owner will make available to KSM a concession cart no later
than March 25 of each year. With the exception of the Owner’s responsibility to
perform ordinary daily maintenance of the cart, KSM shall be responsible for all
repairs and damage to the concession cart, the cost of which shall be an Operating
Expense. KSM shall be responsible for all liability arising from the use of the
concession cart.
3.6.3 Small Wares. KSM will furnish all small wares (e.g., flatware, kitchen prep and
service items, etc.) for the operation as part of Operating Expenses, and the
Owner shall be responsible for any long term capital improvements and other
equipment that Owner has approved as part of the Budgets. Any equipment
(besides small wares, which shall remain the property of KSM) purchased
pursuant to this Section 3.6.4 shall be property of Owner.
3.6.4 Placement of Coolers. The Owner will allow two coolers on the south wall of the
dining area and two soft drink vending machines, one near the cart barn and one
near the pump house.
3.6.5 Signage. No interior or exterior signage will be permitted without the prior
approval of the Owner.
3.7 Environmental Remediation. Throughout the Term, if KSM becomes aware of
the presence of any Hazardous Material in a quantity sufficient to require remediation or
reporting under any Environmental Law in, on or under the Property or if KSM, Owner, or the
Property becomes subject to any order of any federal, state or local agency to investigate,
remove, remediate, repair, close, detoxify, decontaminate or otherwise clean up the Property,
KSM shall, at Owner’s request and sole expense within the limits of the approved Budgets, use
all commercially reasonable efforts to carry out and complete any required investigation,
removal, remediation, repair, closure, detoxification, decontamination or other cleanup of the
Property; provided that such remediation activities shall be at KSM’s expense if such activities
are required as a direct consequence of Hazardous Material being present in, on or under the
Property solely as a result of grossly negligent actions undertaken (or grossly negligent failure to
act) by KSM. Owner acknowledges and agrees that Owner shall be solely responsible for any
legal or other liability arising out of the presence of any Hazardous Material in, on or under the
Property, except to the extent such Hazardous Material is present in, on or under the Property
solely as a result of grossly negligent actions undertaken (or grossly negligent failure to act) by
KSM.
3.7.1 Pollutants and Contaminants. KSM further agrees to comply with all ordinances,
laws, rules or regulations enacted by any governmental body or agency relating to the
control, abatement, or emission of air and water contaminants and/or the disposal of
refuse, solid wastes or liquid wastes or any other ordinances, laws, rules or regulations
that may be applicable to KSM’s activities on the Property. To the extent caused by
KSM’s negligence or willful misconduct, KSM shall bear all costs and expenses arising
from compliance with said ordinances, laws, rules or regulations, and shall indemnify and
save harmless Owner from all liability, including without limitation, fines, forfeitures and
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penalties arising in connection with failure by KSM to comply with this subsection as it
relates to such ordinances, laws, rules or regulations.
3.8 Contracts. KSM shall negotiate, consummate, enter into, and perform, in the
name of Owner, such agreements as KSM may deem necessary or advisable for the furnishing of
all food, beverages, utilities, concessions, entertainment, operating supplies, equipment, repairs
and other materials and services as KSM determines are needed from time to time for the
management and operation of the Property, subject to the limitations of the approved Budgets.
Notwithstanding the above, any contract that exceeds Twenty Thousand Dollars ($20,000) in
total payments over one (1) year shall require the prior written consent of Owner.
3.9 Licenses, Permits and Accreditations. KSM shall apply for and use its
commercially reasonable efforts to obtain and maintain, in Owner’s name (or, if otherwise
required by applicable law, in KSM’s name), all licenses, permits, and accreditations required in
connection with the management and operation of the Property, the cost of which shall be an
Operating Expense. Owner will cooperate with KSM in applying for, obtaining, and maintaining
such licenses (including liquor licenses), permits, and accreditations. Notwithstanding the
foregoing, KSM shall apply for and obtain a liquor license in its own name.
3.10 Legal Action. KSM may not institute any legal action by or on behalf of Owner
or the Property without the prior written consent of Owner and Owner may not institute any legal
action by or on behalf of KSM without the prior written consent of KSM.
3.11 Emergency Expenditures. In the event, at any time during the Term, a condition
should exist in, on, or about the Property of an emergency nature which, in KSM’s sole and
absolute discretion, requires immediate action to preserve and protect the Property, to better
assure the Property’s continued operation, or to protect the Property’s customers, guests, or
employees, KSM is authorized to take all steps and to make all reasonable expenditures
necessary to repair and correct any such condition, whether or not provisions have been made in
the applicable Budgets for any such expenditures. KSM shall notify Owner of the need for, and
estimated amount of, any such emergency expenditures within 24 hours of KSM becoming
aware of any such emergency condition. Unless otherwise approved by the Owner, any such
emergency expenditures shall be deemed expenditures of available contingency funds in the
Budgets.
3.12 Compliance with Laws. KSM shall comply with all federal, state and local laws,
ordinances, rules, or governmental regulations now or hereafter in force, or by order of any
governmental or municipal power, department, agency, authority, or officer (collectively
“Laws”) applicable to the use, operation, maintenance, repair and restoration of the Property,
whether or not compliance therewith shall interfere with the use and enjoyment of the Property.
KSM shall procure, maintain, and comply with all licenses and other authorizations required in
connection with the Management Services, the costs of which shall be Operating Expenses. The
Owner acknowledges and agrees that the Owner or its construction contractors shall be
responsible for procuring, maintaining and complying with all licenses and other authorizations
relating to any construction or maintenance on the Property. If at any time during the Term
KSM is notified or determines that repairs, additions, changes, or corrections in the Property
(other than normal maintenance) of any nature shall be required by reason of any Laws, KSM
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shall notify the Owner, and the Owner will be responsible to take reasonable steps to repair and
correct any such repairs, additions, changes, or corrections. In the event that compliance with
Laws cannot be accomplished within the funds allocated in the Budgets, Owner shall have the
right to suspend operations on the Property and KSM’s services under this Agreement,
notwithstanding any other provision of this Agreement.
3.13 Other Duties and Prerogatives. KSM shall use commercially reasonable efforts to
perform any act that KSM determines is necessary to operate and manage the Property during the
Term, subject to the terms and conditions hereof and approved Budgets. In fulfilling its
operational and managerial responsibilities hereunder, KSM shall have all rights ordinarily
accorded to a manager in the ordinary course of business, including, without limitation, the
collection of proceeds from the operation of the Property, the incurring of trade debts in Owner’s
name (subject to the approved Budgets), the approval and payment of obligations, and the
negotiating and signing of leases and contracts. KSM shall not be obligated to advance any of its
own funds to or for the account of Owner nor to incur any liability, unless Owner shall have
furnished KSM with funds necessary for the full discharge thereof. Further, KSM shall not be
obligated to sign any leases, contracts or other agreements in KSM’s name. However, if for any
reason KSM shall have advanced funds in payment of any reasonable expense within the scope
of its authority under this Agreement, within the limits of the approved Budgets, and in
connection with the maintenance and operation of the Property, Owner shall reimburse KSM
within ten (10) days after invoice for the full amount of such payments.
ARTICLE 4
RESPONSIBILITIES OF OWNER
4.1 Expenditures. Owner acknowledges that it is solely responsible for all Operating
Expenses and capital expenditures required for or on behalf of the Property, provided that such
Operating Expenses and capital expenditures are made in accordance with the terms of this
Agreement.
4.2 Owner’s Advances. Owner shall make an initial deposit of funds into the
Operating and Payroll Accounts to maintain and conduct the affairs of the Property. Following
the initial deposit, KSM shall fund operating expenses and payroll expenses from the Operating
Account. Should KSM deem the balance in the Operating Account to be insufficient to cover
operating and payroll expenses, KSM shall provide written notice to the Owner of the need for
additional advances a minimum of ten (10) business days prior to the anticipated need to draw on
the requested advance.
ARTICLE 5
FEES, EXPENSES AND RECEIPTS.
5.1 Management Fee. Owner shall pay KSM management fees as follows
(collectively, the “Management Fee”):
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5.1.1 Base Management Fee. During the Term, Owner shall pay KSM an annual fee of
Four and One-Half Percent (4.5%) of the annual Gross Revenues of the Property,
or Seventy-Five Thousand Nine Hundred Eighty-Four and 84/100 Dollars
($75,984.84), whichever is greater (“Base Management Fee”). The Base
Management Fee shall be paid in equal monthly installments in advance based on
$75,984.84 (as adjusted below), no later than the first day of each calendar month.
(Such Base Management Fee shall be prorated for any partial calendar month
occurring during the Term.) To the extent that 4.5% of the Gross Revenues of the
Property exceeds $75,984.84 (as adjusted below), the difference between the
monthly installments and the Base Management Fee due to KSM shall be paid
within sixty (60) days after the close of the Owner’s fiscal year to which such
Base Management Fee applies. KSM shall submit monthly invoices to Owner for
the Base Management Fee. The Base Management Fee shall be adjusted on the
anniversary of the Commencement Date for any year as follows:
(i) If the prior year gross revenues meet or exceed the approved Budgets by at
least three percent (3%), the Base Management Fee shall be increased by
three percent (3%);
(ii) If the prior year gross revenues falls short of the approved Budgets by
three percent (3%) or more, the Base Management Fee shall be reduced by
three percent (3%).
5.1.2 Incentive Management Fee. In addition to the Base Management Fee described
above, and provided that KSM materially complies with the terms of this
Agreement, Owner shall pay KSM an annual incentive management fee (the
“Incentive Management Fee”) calculated as follows:
• Ten Percent (10%) of Gross Revenues of the Property exceeding
$__________ (“Minimum Revenue Threshold”). The Minimum
Revenue Threshold shall increase each year on the anniversary of the
Commencement Date by three percent (3%).
The Incentive Management Fee shall be paid to KSM within sixty (60) days after
the end of the fiscal year to which the Incentive Management Fee relates.
5.1.3 Accounting Reimbursement. As of the Commencement Date, Owner shall also
pay KSM an annual fee of $20,000 (the "Accounting Reimbursement") in order to
reimburse KSM for the use of its internal resources in connection with the provision of
the accounting services and handling the financial affairs of the Property from KSM’s
home office. The Accounting Reimbursement shall be paid upon monthly invoices from
KSM to Owner. The Accounting Reimbursement shall be increased each year on the
anniversary of the Commencement Date by three percent (3%).
5.2 Late Fees. Owner shall pay to KSM all of the fees described above, and any other
sums due KSM, at the times, at the places, and in the manner herein provided. If any payment or
any part thereof to be made by Owner to KSM pursuant to the terms hereof shall become
overdue, KSM may charge interest pursuant to the Illinois Local Government Prompt Payment
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Act, 50 ILCS 505/1 et seq. In the event any portion of this Section violates any state or federal
law or regulation, this Section shall be deemed void and shall have no other effect or make
invalid any other provision of this Agreement. Further, nothing herein shall be construed as
waiving any rights of KSM arising out of any Events of Default of Owner by reason of KSM
assessing or accepting any such late payment or interest; the right to collect the interest is
separate and apart from any rights relating to remedies of KSM after default by Owner in the
performance or observance of the terms of this Agreement. Owner shall bear the costs of any
legal or collection fees and expenses incurred by KSM in attempting to enforce Owner’s
payment obligations hereunder. Notwithstanding anything in this Agreement to the contrary, to
the extent that the Owner disputes any charges or expenses claimed by KSM in writing and
within the time frame for payment thereof, the non-payment of any disputed charge or expense
shall not be deemed an Event of Default.
5.3 Owner’s Receipts. During the Term, Owner shall receive transfers from the
Operating Account as required to cover costs paid by the Owner, including but not limited to
KSM management fees, debt service costs and capital improvements; provided, however, that a
minimum balance of at least three months’ operating expenses is maintained in the Operating
Account and the Payroll Account at all times.
5.4 Deposit. In the reasonable discretion of KSM, upon the occurrence of an
Insecurity Event, KSM shall notify the Owner. If Owner fails to cure such Insecurity Event
within 30 days after such notice, Owner shall be required to deliver to KSM a security deposit
which will not be applied against amounts owing by Owner to KSM and will be retained by
KSM as security for the payment of fees and expenses and returned to Owner at the end of the
engagement. The terms and conditions applicable to the retainer are set forth in this Section.
5.4.1 Amount of Deposit. The initial deposit (“Deposit”) shall be set at an amount
equal to the aggregate the Management Fee plus the Incentive Management Fee plus the
expected out-of-pocket expenses of KSM, each to be estimated by KSM in its reasonable
discretion based on expected amounts due and owing from Owner to KSM pursuant to
the approved Budgets during a one (1) month period. KSM shall have the right to request
that Owner add to the Deposit in the event that, at any time, KSM’s monthly
Management Fee plus the monthly Incentive Management Fee plus the monthly expected
out of pocket expenses exceeds the amount of the Deposit.
5.4.2 Security Interest in Deposit. The Deposit is a separate obligation of Owner and
Owner understands and agrees that KSM will be under no obligation perform any
services under the Agreement until payment in full of the Deposit. The Deposit shall not
be applied or credited to amounts due from Owner as they come due, but will be returned
to Owner once all amounts due hereunder are paid in full. Owner hereby grants a
security interest in the Deposit to KSM to secure payment of all amounts due hereunder.
Owner acknowledges and agrees that this security interest is perfected by virtue of
KSM’s possession of the Deposit.
5.4.3. Interest on Deposit. Interest earned on the Deposit is the property of Owner and
shall be returned to Owner, along with the Deposit itself, once all amounts due under the
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Agreement are paid in full. The Deposit is not intended to be an estimate for the total
cost of the work to be performed.
5.4.4. Suspension of Agreement. Notwithstanding anything to the contrary in this
Section 5.6, in the event the Owner experiences an Insecurity Event, Owner may elect
upon notice to KSM to suspend all operations at the Property and may further suspend all
obligations under this Agreement. Any such suspension of this Agreement shall not
relieve the Owner of moneys due and owing to KSM prior to the notice of suspension.
5.5 Payment Prior to Insolvency Proceeding. Prior to the initiation of an Insolvency
Proceeding (as defined below) by Owner, if applicable, Owner shall pay all amounts then
outstanding and owing to KSM in immediately available funds by wire transfer.
ARTICLE 6
COVENANTS AND REPRESENTATIONS
6.1 Owner’s Covenants and Representations. Owner makes the following covenants
and representations to KSM, which covenants and representations shall, unless otherwise stated
herein, survive the execution and delivery of this Agreement:
6.1.1 Corporate Status. Owner is an Illinois municipal corporation duly organized,
validly existing, and in good standing under the laws of Illinois, and authorized to
transact business in Illinois, with full corporate power and authority to enter into
this Agreement.
6.1.2 Authorization. The making, execution, delivery, and performance of this
Agreement by Owner has been duly authorized and approved by all requisite
action, and this Agreement has been duly executed and delivered by Owner and
constitutes a valid and binding obligation of Owner, enforceable in accordance
with its terms.
6.1.3 Effect of Agreement. Neither the execution and delivery of this Agreement by
Owner nor Owner’s performance of any obligation hereunder (a) shall constitute a
violation of any law, ruling, regulation, or order to which Owner is subject, or (b)
shall constitute a default of any term or provision or shall cause an acceleration of
the performance required under any other agreement or document (i) to which
Owner is a party or is otherwise bound, or (ii) to which the Property or any part
thereof is subject.
6.1.4 Ownership Rights. The Owner shall obtain and retain property interests in the
Property necessary to enable KSM to perform its duties pursuant to this
Agreement peaceably and quietly. Owner represents and warrants that KSM’s
performance of the services required by this Agreement shall not violate the
property rights or interests of any other Person.
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6.1.5 No Litigation. There are no actions, suits or proceedings pending, or to the best
of Owner’s knowledge, threatened against Owner that may adversely affect the
Property or the Owner in connection with the operations of the Property.
6.1.6 No Violation. There is no existing violation or breach of any ordinance, code,
law, rule, requirement or regulation applicable to the Property, and Owner is not
aware of the basis for any such violation or breach.
6.1.7 Hazardous Material. Owner is not aware of the presence of any Hazardous
Material in, on or under the Property in a quantity sufficient to require
remediation or reporting under any Environmental Law, and Owner has not
received notice of any violation or alleged violation of any Environmental Law
with respect to the Property.
6.1.8 Documentation. If necessary to carry out the intent of this Agreement, Owner
agrees to execute and provide to KSM, on or after the Commencement Date, any
and all other instruments, documents, conveyances, assignments, and agreements
which KSM may reasonably request in connection with the operation of the
Property.
6.1.9 Title. Owner makes no covenant for quiet enjoyment of the Property. KSM
assumes any damages KSM may sustain as a result of, or in connection with, any
want or failure at any time of Owner's title, if any, to the Property.
6.2 KSM’s Covenants and Representations. KSM makes the following covenants and
representations to Owner, which covenants and representations shall, unless otherwise stated
herein, survive the execution and delivery of this Agreement:
6.2.1 Corporate Status. KSM is a corporation duly organized, validly existing, and in
good standing under the laws of Illinois, and authorized to transact business in
Illinois, with full corporate power to enter into this Agreement and execute all
documents required hereunder.
6.2.2 Authorization. The making, execution, delivery, and performance of this
Agreement by KSM has been duly authorized and approved by all requisite action
of the board of directors of KSM, and this Agreement has been duly executed and
delivered by KSM and constitutes a valid and binding obligation of KSM,
enforceable in accordance with its terms.
6.2.3 Effect of Agreement. Neither the execution and delivery of this Agreement by
KSM nor KSM’s performance of any obligation hereunder (i) will constitute a
violation of any law, ruling, regulation, or order to which KSM is subject, or (ii)
shall constitute a default of any term or provision or shall cause an acceleration of
the performance required under any other agreement or document to which KSM
is a party or is otherwise bound.
ARTICLE 7
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INSURANCE
7.1 Property Insurance. During the Term, Owner shall secure, at its own cost,
property insurance covering loss or damage to the buildings, structures or other Improvements,
contents, equipment and supplies. KSM understands that coverage for flood, earthquake or wind
damage shall be excluded from coverage and damages connected with such events shall be an
Operating Expense. KSM shall secure, at its own cost, such insurance coverages as it determines
in its reasonable discretion regarding the activities on the Property. Further, KSM agrees to
secure and maintain:
(A) Commercial General Liability and/or Umbrella/Excess Liability Insurance providing
coverage for bodily injury and property damage arising in connection with the operation
of the Property and including coverage for contractual liability providing limits of not
less than:
Bodily Injury and Property Damage Liability - $5,000,000 each occurrence
Personal Injury and Advertising Liability - $5,000,000 per person or per
organization
General Policy Aggregate - $5,000,000
Products Liability/Completed Operations Aggregate - $5,000,000
(B) Commercial Business Automobile Liability Insurance including coverage for all
owned, non-owned, and hired vehicles providing coverage for bodily injury and property
damage liability with combined single limits of not less than $1,000,000.
(C) Commercial Liquor Liability including coverage for damages arising out of the
selling, serving or furnishing of any alcoholic beverage with a limit of $5,000,000 per
occurrence/$5,000,000 aggregate limit or the minimum limits required by statute if
higher.
Special Note: the limits of liability specified in A, B, and C above can be satisfied
through a combination of primary, umbrella or excess liability policies, provided that the
coverage under such umbrella or excess liability policies is at least as broad as the
primary coverage.
(D) Business Interruption, Loss of Income and Extra Expense Insurance that will
reimburse Owner and KSM for direct and indirect loss of earnings attributable to six
months of business interruption and for the actual loss sustained until the structures are
substantially rebuilt after an insured property loss.
(E) Employment Practices (“EPLI”), Directors and Officers, Fiduciary and Crime
Liability Insurance of not less than $5,000,000 each occurrence.
(F) Workers’ Compensation Insurance in such amounts that comply with applicable
statutory requirements, and Employer’s Liability limits, including Umbrella Liability
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Insurance, if necessary, of not less than $1,000,000 per accident, $1,000,000 disease-
policy limit, and $1,000,000 disease each employee.
(G) Fidelity Bond or Fidelity Insurance covering all employees who have access to or
responsibility for or who handle Owner funds.
All such insurance coverage maintained by KSM (except as set forth in (E), (F) and (G)) shall
name Owner as additional insured to the extent of the indemnification by KSM under Section 9.2
and shall be maintained with insurance companies rated at least A- by Best Key Rating Guide
and shall be licensed to do business in Illinois. KSM shall deliver to Owner certificates of such
insurance evidencing the required policies. Property insurance shall include a waiver of all
recovery by way of subrogation against KSM and Owner in relation to any damage covered by
such policy. KSM shall not use or permit upon the Property anything that will invalidate any
policy of insurance now or hereafter carried on the Property or any building or structure thereon.
Owner acknowledges that KSM has made no representations or warranties that the above
coverages are sufficient to fully protect Owner.
The expenses for all the coverages outlined in (A) through (G) above shall be Operating
Expenses.
7.2 Owner’s Option to Provide Insurance. Upon Owner’s prior written notification to
KSM, Owner may procure and maintain, at Owner’s sole cost and expense, with insurance
companies rated at least A- by Best’s Key Rating Guide, and licensed to do business in Illinois,
sufficient insurance fully covering the Property and operation of the Property, in at least the
amounts specified in Section 7.1 (A) through (E) above. All such insurance shall name KSM
and its shareholders, officers, directors, employees, agents and representatives as additional
insureds. Owner shall deliver to KSM certificates of insurance evidencing the above-required
policies. Property insurance shall include a waiver of all recovery by way of subrogation against
KSM in relation to any damage covered by such policy.
Within fifteen (15) days after receipt of such written notification from Owner, along with
appropriate certificates of insurance, KSM shall no longer secure the coverage specified in
Section 7.1 (A) through (D) above; provided, however, that KSM shall continue to secure the
coverage specified in Section 7.1 (E), (F) and (G) above. The expenses for the coverages
provided by KSM shall be Operating Expenses.
7.3 Waiver of Subrogation. Notwithstanding anything else contained in this
Agreement, Owner and KSM each hereby waive all rights of recovery against the other and their
Affiliates, and against each of their officers, employees, agents and representatives, on account
of loss by or damage to the waiving party’s property or the property of others under its control.
The Parties shall, upon obtaining any policies of insurance required under this Agreement, give
notice to its insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Agreement. This waiver of subrogation shall survive the expiration or
termination of this Agreement. Each Party shall deliver to the other certificates and/or policies
of insurance to prove that the obligations of this Agreement are satisfied within 10 days upon a
request of the other Party.
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ARTICLE 8
DAMAGE AND CONDEMNATION
8.1 Substantial Destruction. In the event the Real Property, Tangible Personal
Property, and/or Improvements are damaged or destroyed by fire or other casualty to the extent
that the damage is not reasonably anticipated to be materially restored with due diligence within
two hundred seventy (270) days following such event, either Party hereto may terminate this
Agreement upon written notice to the other party given within ninety (90) days following the
date of such destruction. In the event of termination of this Agreement pursuant to this Section,
the Term shall cease and come to an end as of the effective date of termination specified in the
termination notice (which shall in no event be prior to the date of receipt of the termination
notice) as though such date were the date originally fixed for the expiration of the Term. Both
Parties shall pay all amounts due to the other Party up to such effective date of termination (or,
with respect to amounts due to KSM, after such date if it is reasonably necessary to incur
additional expenses in the wind-down of operations of the Property, which wind-down period
shall in no event be more than 30 days).
8.2 Partial Destruction. In the event the Real Property, Tangible Personal Property,
and/or Improvements, or any portion thereof, is damaged or destroyed by fire or other casualty
and such damage can be materially restored with due diligence within two hundred seventy (270)
days following such event, Owner shall have the obligation to repair the damaged Real Property,
Tangible Personal Property, and/or Improvements as nearly as practicable to the condition the
same were in prior to such damage. Owner shall cause such repair to be made with all
reasonable dispatch so as to complete the same at the earliest possible date. Notwithstanding
anything to the contrary in this Section 8.2, in the event that the Owner determines that making
repairs after partial destruction is not in the best interests of the Owner, then the Owner shall so
notify KSM within ninety (90) days following the date of such destruction, and either party may
terminate this Agreement and proceed to wind-down in the manner set forth in Section 8.1.
8.3 Substantial Condemnation. In the event (i) all or substantially all of the Real
Property is taken in any eminent domain, condemnation, compulsory acquisition, or similar
proceeding by any competent authority for any public or quasi-public use or purpose, or (ii) a
substantial portion of the Real Property is so taken, but the result is that it is unreasonable to
continue to operate the Property for the purposes contemplated by this Agreement, then either
Party hereto may terminate this Agreement upon written notice to the other Party given within
ninety (90) days following the conclusion of the condemnation proceedings. In the event of
termination of this Agreement pursuant to this Section, the Term shall cease and come to an end
as of the effective date of termination specified in the termination notice (which shall in no event
be prior to the date of receipt of the termination notice) as though such date were the date
originally fixed for the expiration of the Term. Both Parties shall pay all amounts due to the
other Party up to the date of termination.
8.4 Partial Condemnation. In the event a portion of the Real Property shall be taken
by any of the events described in Section 8.3 above, or is affected but on a temporary basis, and
the result is not to make it unreasonable to continue to operate the Property for the purposes
contemplated by this Agreement, this Agreement shall not terminate. It is further agreed that any
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portion of any award, damages or other compensation paid to Owner on account of such partial
taking, condemnation, or sale as is necessary to render the Property equivalent to its condition
prior to such event shall be used for such purpose. Notwithstanding anything to the contrary in
this Section 8.4, in the event that the Owner determines that continuing operations of the
Property for the purposes contemplated in this Agreement following partial condemnation is not
in the best interests of the Owner, then the Owner shall notify KSM within ninety (90) days
following the conclusions of the condemnation proceedings, and either party may terminate this
Agreement and proceed to wind-down in the manner set forth in Section 8.3.
ARTICLE 9
INDEMNIFICATION
9.1 Owner’s Indemnification Obligations. Except as provided in Section 7.3, Owner
shall defend, indemnify and hold KSM and each of its shareholders, members, officers, directors,
managers, employees, agents, and representatives (the “KSM Related Parties”) harmless of and
from all liability, loss, damage, cost, or expense (including, without limitation, reasonable
attorneys’ fees and expenses) arising from or relating to (i) the ownership or construction of the
Property; (ii) Hazardous Materials or other conditions existing at the Property prior to be
Commencement Date; (iii) the authorized use by KSM of Property trade names, trademarks,
logos or other intellectual property used in connection with the Property; (iv) any grossly
negligent acts or omissions of Owner (or its officers, directors, agents, employees,
representatives, contractors and others for whom Owner is responsible); (v) the Owner’s
operation or management of the Property prior to the Term; (vi) the relationship between Owner
or any of Owner’s Affiliates and the prior management company of the Property or any acts or
omissions of the prior management company; and (vii) any breach by Owner of any of Owner’s
covenants, representations, and warranties herein; to the fullest extent permitted by law, except
to the extent such liabilities were caused by KSM’s negligent acts or omissions, willful or
criminal misconduct, or fraud. Owner’s duty to defend and indemnify KSM and KSM Related
Parties shall extend to all liability, loss, damage, cost, or expenses hereunder arising from or
relating to any event or occurrence taking place prior to, during, or after the Term.
9.2 KSM’s Indemnification Obligations. Except as provided in Section 7.3, KSM
shall indemnify Owner and Owner’s shareholders, officers, directors, employees, agents, and
representatives (“Owner Related Parties”) from all liability, loss, damage, cost, or expense
(including, without limitation, reasonable attorneys’ fees and expenses) caused in whole or in
part by the acts or omissions of KSM (or its officers, directors, agents, employees,
representatives, contractors and others for whom KSM is responsible), the material breach of any
covenant contained in this Agreement, or any other damages caused by the occupancy of,
presence on, or use of the Property or any structures thereon, including any labor or employment
condition or situation related to employees hired by KSM , to the fullest extent permitted by law,
except to the extent such acts or omissions were explicitly directed or approved by Owner, or
such liabilities were caused by Owner’s willful or criminal misconduct, gross negligence or
fraud. KSM’s duty to indemnify Owner and the Owner Related Parties shall extend to all
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liability, loss, damage, cost, or expenses hereunder arising from or relating to any event or
occurrence taking place prior to, during, or after the Term.
9.3 Survival. The defense and indemnification obligations contained in this Article 9
shall survive the expiration or termination of this Agreement for any reason.
ARTICLE 10
RIGHT TO CURE
10.1 Performance. If, after the expiration of any permitted grace period or notice and
cure period, a Party hereto shall have failed to cure any default in the performance of any
representation, covenant, or obligation on its part to be performed, then the other Party may, at
any time thereafter, without further notice, perform the same for the account and at the expense
of the other Party; provided, however, that any performance on behalf of the Owner shall
comport with the approved Budgets. Notwithstanding the above, in the case of an emergency,
either Party may, after notice to the other Party, so reasonably perform in the other Party’s stead
prior to the expiration of any applicable grace period; provided, however, the other Party shall
not be deemed in default under this Agreement; and provided further that any performance on
behalf of the Owner shall comport with the approved Budgets.
10.2 Reimbursement. If, pursuant to this Article, either Party at any time is compelled
or elects (as permitted by the immediately preceding Section) (i) to pay any sum of money, (ii) to
do any act which will require the payment of any sum of money, or (iii) to incur any expense
(including reasonable attorneys’ fees) in instituting, prosecuting, and/or defending any action or
proceeding instituted by reason of the other Party’s failure to perform, as described in the
immediately preceding Section, the sum or sums paid or payable by such party, with all interest,
cost, and damages, shall be immediately due from the other upon receipt of a statement and
reasonable documentation therefor. Notwithstanding anything in this Agreement to the contrary,
to the extent that a party disputes any charges or expenses claimed pursuant to this Section 10.2
in writing within 15 days after the receipt of documentation for such reimbursement, the non-
payment of any disputed charge or expense shall not be deemed an Event of Default except in
accordance with Section 11.1 of this Agreement.
ARTICLE 11
EVENTS OF DEFAULT
The occurrence of any one or more of the following events which is not cured within the
specified cure period, if any, shall constitute a default under this Agreement (hereinafter referred
to as an “Event of Default”):
11.1 Failure to Pay Sums Due. Either Party’s failure to pay any sums payable under
this Agreement when and as the same shall become due and payable and such failure shall
continue for a period of five (5) days after written notice (specifying the item not paid) thereof
from the other Party to the defaulting Party. Notwithstanding the foregoing sentence, with
respect to any amount claimed by one party that is disputed in writing (the “Notice of Dispute”)
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by the other party within the time prescribed for payment, the Parties shall meet within 30 days
after the Notice of Dispute to confer regarding the disputed amount; if no resolution is reached
within 75 days after the Notice of Dispute, then either Party may claim an Event of Default.
11.2 Failure to Comply. Either Party’s material failure to comply with any of the
covenants, agreements, terms, or conditions contained in this Agreement and such failure shall
continue for a period of thirty (30) days after written notice thereof from the other Party to the
defaulting Party specifying in detail the nature of such failure. Notwithstanding the foregoing, in
the event any such failure cannot with due diligence be cured within such 30-day period, if the
defaulting Party proceeds promptly and diligently to cure the same and thereafter diligently
prosecutes the curing of such failure, the time within which the failure may be cured shall be
extended for such period as may be necessary for the defaulting Party to cure the failure.
11.3 Bankruptcy. If either Party (i) applies for or consents to the appointment of a
receiver, trustee, or liquidator of itself or any of its property, (ii) is unable to pay its debts as they
mature or admits in writing its inability to pay its debts as they mature, (iii) makes a general
assignment for the benefit of creditors, (iv) is adjudicated as bankrupt or insolvent, or (v) files a
voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an
arrangement with creditors, or taking advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute, or admits the material allegations
of a petition filed against it in any proceedings under any such law, or if any action shall be taken
by said party for the purpose of effecting any of the foregoing (collectively, an “Insolvency
Proceeding”).
11.4 Reorganization; Receiver. An order, judgment, or decree is entered without the
application, approval, or consent of either Party by any court of competent jurisdiction approving
a petition seeking reorganization of said Party or appointing a receiver, trustee, or liquidator of
said Party, or of all or a substantial part of any of the assets of said Party, and such order,
judgment, or decree remains unstayed and in effect for a period of ninety (90) days from the date
of entry thereof.
ARTICLE 12
REMEDIES
12.1 Owner’s Remedies. Upon the occurrence of an Event of Default by KSM, Owner
may:
12.1.1 Seek specific performance of KSM’s obligations, declaratory relief, or injunctive
relief, as applicable;
12.1.2 Demand and receive payment of all amounts due Owner under the terms of this
Agreement and the payment of all costs, damages, expenses, and reasonable
attorneys’ fees of Owner arising due to KSM’s Event of Default;
12.1.3 Proceed to remedy the Event of Default, and in connection with such remedy,
Owner may pay all expenses and employ counsel. All sums so expended or
obligations incurred by Owner in connection therewith shall be paid by KSM to
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Owner, upon demand by Owner, and on failure of such reimbursement, Owner
may, at Owner’s option, deduct all costs and expenses incurred in connection with
remedying the Event of Default from the next sums becoming due to KSM from
Owner under the terms of this Agreement; and
12.1.4 Terminate this Agreement by written notice of termination to KSM. Upon proper
termination of this Agreement, KSM shall surrender occupancy of the Property to
Owner.
No remedy granted to Owner is intended to be exclusive of any other remedy
herein or by law provided, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law, in equity,
or by statute. No delay or omission by Owner to exercise any right accruing upon
an Event of Default shall impair Owner’s exercise of any right or shall be
construed to be a waiver of any Event of Default or acquiescence thereto. No
express waiver shall affect any default other than the default specified in the
express waiver and that only for the time and to the extent therein stated. No
receipt of money by the Owner from KSM (1) after any default by KSM, (2) after
the termination of this Agreement, (3) after the service of any notice or demand or
after the commencement of suit, or (4) after final judgment for possession of the
Property, shall waive such default or reinstate, continue or extend the term of this
Agreement or effect in any way any such notice or suit as the case may be. The
erection of building or other improvements on the Property shall not constitute a
waiver or affect in any way the right of either party to terminate this Agreement.
IN NO EVENT SHALL KSM BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR
PERFORMANCE OR NON-PERFORMANCE HEREUNDER (INCLUDING BUT NOT
LIMITED TO LOST PROFITS, LOST BUSINESS AND LOSS OF GOODWILL) EVEN IF
ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES.
12.2 KSM’s Remedies. Upon the occurrence of an Event of Default by Owner, KSM
may:
12.2.1 Seek specific performance of Owner’s obligations, declaratory relief, or
injunctive relief, as applicable;
12.2.2 Demand and receive payment of all amounts due KSM under the terms of this
Agreement and the payment of all costs, damages, expenses, and reasonable
attorneys’ fees of KSM due to Owner’s Event of Default;
12.2.3 Proceed to remedy the Event of Default as provided in this Agreement, and in
connection with such remedy, KSM may pay all expenses and employ counsel.
All sums so expended or obligations incurred by KSM in connection therewith
shall be paid by Owner to KSM, upon demand by KSM, and on failure of such
reimbursement, KSM may, at KSM’s option, deduct all costs and expenses
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incurred in connection with remedying the Event of Default from the next sums
becoming due to Owner from KSM under the terms of this Agreement; and
12.2.4 Terminate this Agreement by KSM’s written notice of termination to Owner. In
such event, Owner shall pay to KSM within ten (10) days of termination an
amount equal to the total unpaid Management Fees that KSM would have earned
had the Agreement remained in effect until the Termination Date.
No remedy granted to KSM is intended to be exclusive of any other remedy herein or by law
provided, but each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity, or by statute. No delay or omission by
KSM to exercise any right accruing upon an Event of Default shall impair KSM’s exercise of
any right or shall be construed to be a waiver of any Event of Default or acquiescence thereto.
No express waiver shall affect any default other than the default specified in the express waiver
and that only for the time and to the extent therein stated. No receipt of money by KSM from the
Owner (1) after any default by the Owner, (2) after the termination of this Agreement, (3) after
the service of any notice or demand or after the commencement of suit, or (4) after final
judgment for possession of the Property, shall waive such default or reinstate, continue or extend
the term of this Agreement or effect in any way any such notice or suit as the case may be. The
erection of building or other improvements on the Property shall not constitute a waiver or affect
in any way the right of either party to terminate this Agreement.
IN NO EVENT SHALL OWNER BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS
AGREEMENT OR PERFORMANCE OR NON-PERFORMANCE HEREUNDER
(INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOST BUSINESS AND LOSS OF
GOODWILL) EVEN IF ADVISED OR AWARE OF THE POSSIBILITY OF SUCH
DAMAGES.
12.3 Litigation. In the event of any litigation under or respecting this Agreement, the
prevailing Party shall be entitled to reasonable attorneys’ fees and court costs through all pretrial,
trial, appellate, administrative, and post-judgment proceedings. Nothing in this Agreement shall
be deemed to waive any defenses or affirmative defenses available under applicable Laws.
ARTICLE 13
TERMINATION
13.1 Events of Termination. This Agreement shall terminate upon the occurrence of
any of the events set forth below:
13.1.1 Upon Owner electing not to renew the Agreement pursuant to Section 2.2;
13.1.2 An Event of Default by KSM, and Owner sends to KSM a notice of
termination for cause (after the expiration of any applicable cure period);
13.1.3 An Event of Default by Owner, and KSM sends to Owner a notice of
termination for cause (after the expiration of any applicable cure period);
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13.1.4 Both Parties agree in writing to terminate this Agreement;
13.1.5 Upon the expiration or termination of this Agreement according to its
terms.
13.2 Employee and Other Obligations Upon Termination. Upon a termination of this
Agreement for any reason, Owner shall remain responsible for payment of obligations connected
with the Management Services rendered through the effective date of termination (including all
Operating Expenses, all Gross Payroll obligations, as well as the Management Fee and all out of
pocket expenses).
13.3 Payments Upon Termination. Upon expiration or termination of this Agreement,
all sums owed by either Party to the other shall be paid within ten (10) days of the effective date
of such termination.
13.4 Surrender of Property. Upon termination of this Agreement by any manner,
means, or contingency whatsoever, KSM shall without further notice or demand deliver
possession of the Property to Owner in as good condition as when entered upon. KSM hereby
agrees to remove all materials, signs, debris, or any other articles, structures or facilities owned
by KSM or permitted to be placed on the Property by KSM within thirty (30) days after
termination of this Agreement. Notwithstanding that this paragraph shall not apply to major
structural or utility improvements to the area. Such improvements shall remain in the area
managed.
13.5 Clearance of Property. If KSM shall fail to remove such property under Section
13.4, such failure shall constitute an abandonment of such property and title hereto shall pass to
Owner immediately, without any costs either by set-off, credit allowance, or otherwise. Owner
may retain, tear down, remove, or sell such property, or any part thereof, without any liability for
damage therefor in any respect whatsoever and KSM shall promptly pay Owner for any and all
expenses incurred by Owner in tearing down, removing or selling such property.
ARTICLE 14
NOTICES
14.1 Notices. Any notices or other communications required or permitted hereunder
shall be sufficiently given if in writing and (i) delivered personally, (ii) sent by certified mail,
return receipt requested, postage prepaid (“Mail”), or sent by nationally-recognized overnight
mail or courier service (“Overnight Courier”), addressed as shown below, or to such other
address as the Party concerned may substitute by written notice to the other. Any notice will be
deemed received (A) upon the date personal delivery is made, (B) three (3) business days after
the date it is deposited in the Mail, (C) one (1) business day after it is deposited with an
Overnight Courier, or (D) the date upon which attempted delivery of such notice, whether by
Mail, Overnight Courier or personal delivery, is refused or rejected.
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If to Owner: The City of Lake Forest
Attn: Robert R. Kiely, Jr., City Manager
220 E. Deerpath
Lake Forest IL 60045
If to KSM: KemperSports Management, Inc.
500 Skokie Boulevard, Suite 444
Northbrook, Illinois 60062
Attention: Steven K. Skinner, Chief Executive Officer
with a copy
to:
KemperSports Management, Inc.
500 Skokie Boulevard, Suite 444
Northbrook, Illinois 60062
Attention: Corporate Counsel
The addresses and addressees may be changed by giving notice of such change in the
manner provided herein for giving notice. Unless and until such written notice is received, the
last address and addressee given shall be deemed to continue in effect for all purposes.
ARTICLE 15
MISCELLANEOUS
15.1 Exhibits. All Exhibits attached hereto are incorporated herein by this reference as
if fully set forth herein. If any Exhibits are subsequently changed by the mutual written
agreement of the Parties, the Exhibits shall be modified to reflect such change or changes and
dated and initialed by the Parties.
15.2 Entire Agreement. This Agreement and the Exhibits hereto embody the entire
agreement and understanding of the Parties relating to the subject matter hereof and supersede all
prior representations, agreements, and understandings, oral or written, relating to such subject
matter.
15.3 Amendment and Waiver. This Agreement may not be amended or modified in
any way except by an instrument in writing executed by all Parties hereto; provided, however,
either Party may, in writing, (i) extend the time for performance of any of the obligations of the
other, (ii) waive any inaccuracies and representations by the other contained in this Agreement,
(iii) waive compliance by the other with any of the covenants contained in this Agreement, and
(iv) waive the satisfaction of any condition that is precedent to the performance by the Party so
waiving of any of its obligations under this Agreement.
15.4 Proprietary Information. KSM shall be permitted to use the trade names,
trademarks and logos of Owner (collectively, “Owner Marks”) in connection with the
performance of the services provided under this Agreement and as otherwise provided in this
Agreement or as agreed upon by Owner; provided, however, that Owner agrees that KSM may
72
use the Owner Marks in its marketing and promotional materials as a Property managed by
KSM. All specifically identifiable information developed by KSM for Owner at the expense of
Owner shall be the property of both KSM and Owner and such information may continue to be
used by Owner at the Property beyond any expiration or termination of this Agreement;
provided, however, that Owner may not use or grant others the right to use such information at
any other location nor disclose or grant any rights to such information to any third party. All of
KSM’s proprietary information, including (i) trade names, trademarks and logos as well as
programs that have been or may be developed by KSM, and (ii) software and technology, shall
remain the exclusive property of KSM and neither Owner nor any of its affiliates or successors
may use or disclose such proprietary information without the advance written consent of KSM.
The obligations and restrictions contained in this Section shall survive the expiration or
termination of this Agreement for any reason.
15.5 No Partnership or Joint Venture. Nothing contained herein shall be deemed or
construed by the Parties hereto or by any third party as creating the relationship of (i) a
partnership, or (ii) a joint venture between the Parties hereto; it being understood and agreed that
neither any provisions contained herein nor any acts of the Parties hereto shall be deemed to
create any relationship between the Parties hereto other than the relationship of independent
contractor.
15.6 Restrictions as to Employees. During the Term and for a period of two (2) years
after the end of the Term, it is agreed that Owner and/or its agents and contractors shall not,
directly or indirectly, seek to contact, entice, or discuss employment or contracting opportunities
with any Key Employee of KSM nor shall Owner, its agents and/or contractors employ or
otherwise engage or seek to employ or otherwise engage, directly or indirectly, any such Key
Employee, without first obtaining the written consent of KSM. For purposes hereof, a “Key
Employee” of KSM shall mean any individual holding any of the following positions at any time
during the Term: the general manager, superintendent, accountant/bookkeeper, director of golf,
head professional or assistant superintendent of the Property, or any employee of KSM’s
corporate office; provided further that, to the extent that any of the individuals holding such
positions had been employed by the Owner immediately prior to the commencement of this
Agreement shall not be deemed Key Employees.
15.7 Assignment; Successors and Assigns.
15.7.1 This Agreement may not be assigned by either Party hereto without the express
written consent of the other Party, except that KSM may assign this Agreement to
any of its Affiliates upon notice to the Owner.
15.7.2 This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors, legal representatives, and permitted
assigns.
15.8 Severability. Except as expressly provided to the contrary herein, each section,
part, term, or provision of this Agreement shall be considered severable, and if for any reason
any section, part, term, or provision herein is determined to be invalid and contrary to or in
conflict with any existing or future law or regulation by a court or governmental agency having
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valid jurisdiction, such determination shall not impair the operation of or have any other effect
on other sections, parts, terms, or provisions of this Agreement as may remain otherwise
intelligible, and the latter shall continue to be given full force and effect and bind the Parties
hereto, and said invalid sections, parts, terms, or provisions shall not be deemed to be a part of
this Agreement.
15.9 Survival. All covenants, agreements, representations, and warranties made herein
shall survive the execution and delivery of (i) this Agreement, and (ii) all other documents and
instruments to be executed and delivered in accordance herewith, and shall continue in full force
and effect.
15.10 Accord and Satisfaction; Allocation of Payments. No payment by Owner or
receipt by KSM of a lesser amount than that which is owed to KSM shall be deemed to be other
than on account of such amounts owed to KSM, nor shall any endorsement or statement on any
check or letter accompanying any check or payment to KSM be deemed an accord and
satisfaction, and KSM may accept such check or payment without prejudice to KSM’s right to
recover the balance of the amounts owed to KSM or pursue any other remedy provided for in
this Agreement or as otherwise provided at law or in equity. In connection with the foregoing,
and subject to the terms of this Agreement, KSM shall have the absolute right in its sole
discretion to apply any payment received from Owner, regardless of Owner's designation of such
payments, to any outstanding amount of Owner then not current and due or delinquent, in such
order and amounts as KSM, in its sole discretion, may elect.
15.11 Construction and Interpretation of Agreement. This Agreement shall be governed
by and construed under the laws of the State of Illinois. Should any provision of this Agreement
require judicial interpretation, it is agreed that the court interpreting or considering same shall
not apply the presumption that the terms hereof shall be more strictly construed against a party
by reason of the rule or conclusion that a document should be construed more strictly against the
party who itself or through its agent prepared the same. It is agreed and stipulated that all Parties
hereto have equally participated in the preparation of this Agreement and that legal counsel was
consulted by each Party before the execution of this Agreement.
15.12 Captions. Captions, titles to sections, and paragraph headings used herein are for
convenience of reference and shall not be deemed to limit or alter any provision hereof.
15.13 Governing Document. This Agreement shall govern in the event of any
inconsistency between this Agreement and any of the Exhibits attached hereto or any other
document or instrument executed or delivered pursuant hereto or in connection herewith.
15.14 Outside Businesses. Nothing contained in this Agreement shall be construed to
restrict or prevent, in any manner, any Party or any Party’s affiliates, parent corporations, or
representatives or principals from engaging in any other businesses or investments, nor shall
Owner or KSM have any right to share or participate in any such other businesses or investments
of the other Party.
15.15 Counterparts; Facsimile Signatures. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which together shall be
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deemed one and the same Agreement. Facsimile signature or scanned and e-mailed signature
shall be as effective as an original signature.
15.16 Unavoidable Delays. The provisions of this Section shall be applicable if there
shall occur during the Term any (i) strikes, lockouts, or labor disputes, (ii) inability to obtain
labor or materials, or reasonable substitutes therefor, (iii) acts of God, governmental restrictions,
regulations or controls, enemy or hostile governmental action, civil commotion, fire, or other
casualty, or (iv) other conditions beyond the reasonable control of the Party obligated to perform.
If either Party shall, as the result of any of the above-described events, fail punctually to perform
any obligation on its part to be performed under this Agreement, then such failure shall be
excused and not be a breach of this Agreement by the Party claiming an unavoidable delay (an
“Unavoidable Delay”), but only to the extent the delay is occasioned by such event. If any right
or option of either Party to take any action under or with respect to the Term is conditioned upon
the same being exercised within any prescribed period of time or at or before a named date, then
such prescribed period of time or such named date shall be deemed to be extended or delayed, as
the case may be, upon written notice, as provided above, for a time equal to the period of the
Unavoidable Delay. Notwithstanding anything contained herein to the contrary, the provisions
of this Section shall not be applicable to either Party’s obligation to pay any sums, monies, costs,
charges, or expenses required to be paid pursuant to the terms of this Agreement.
15.17 No Third-Party Beneficiaries. Nothing herein contained shall be deemed to
establish any rights of third parties against the Parties hereto; it being the intent that the rights
and obligations set forth herein are those of the Parties hereto alone, with no third party
beneficiary rights intended.
15.18 Certain Services Excluded. Notwithstanding anything else contained in this
Agreement to the contrary, KSM’s services are limited to those specifically noted in the
Agreement and do not include, among others and without limitation, architectural, engineering,
design or general contracting services, facility planning services, accounting or tax-related
assistance or advice, legal advice or services, expert witness services, cost report preparation,
data processing or information services, or feasibility studies. KSM’s services will not constitute
an audit, review or compilation or any other type of financial statement reporting or consulting
engagement subject to the rules of the AICPA or other similar bodies. KSM will not be
expressing any professional opinions and makes no representations or warranties in conjunction
with this engagement.
15.19 Bankruptcy Obligations. KSM shall have no obligation to provide any services
under the Agreement in the event that Owner becomes a debtor under the Bankruptcy Code, and,
in accordance with Section 12 hereof, may terminate this Agreement in such event. In the event
that Owner is or becomes a debtor under Chapter 11 of the Bankruptcy Code and KSM agrees to
provide services to Owner post-petition, the Parties shall enter into a revised written agreement
or an amendment to this Agreement to govern their respective rights and obligations as part of
Owner’s bankruptcy case. Notwithstanding the foregoing, Owner expressly agrees that KSM
shall be compensated by Owner for any and all efforts that KSM performs at the request of
Owner or in furtherance of any compulsory requirements to provide information in an
Insolvency Proceeding by Owner, any receiver, trustee or liquidator for Owner or any property
of Owner, any assignee for the benefit of creditors, or any trustee in any case under chapter 7 of
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the Bankruptcy Code, at an hourly rate set by KSM in its reasonable discretion, in addition to the
out-of-pocket expenses incurred by KSM in connection with the Insolvency Proceeding (the
“Insolvency Administration Fees”).
15.20 Dispute Resolution. Unless the Parties otherwise agree in writing, to promote and
aid the economical resolution of any disputes that may arise, any and all disputes or claims
related to or arising from this Agreement shall be resolved by final, binding and confidential
arbitration conducted in Chicago, Illinois by JAMS Inc. (formerly Judicial Arbitration and
Mediation Services) (“JAMS”) under the then-applicable JAMS rules, including its optional
appellate procedure if the Parties so elect. The Parties hereby waive their right to have any such
disputes or claims litigated in a court or by a jury. Judgment upon the arbitration award rendered
may be entered in the courts of Illinois.
15.21 Confidentiality. The terms and provisions of this Agreement shall be confidential
between Owner and KSM and shall be released to third parties only in connection with carrying
out their respective duties and obligations described herein, in connection with any order of court
or in order to comply with governmental rules and regulations (including the Freedom of
Information Act), and as required by any proposed purchaser or mortgagee of all or any portion
of Owner’s interest in the Property, and then only to the extent as may be reasonably necessary.
The foregoing shall not be construed to limit KSM’s ability to announce both privately and
publicly that it manages the Property. If KSM requests that any documents requested under the
Freedom of Information Act be withheld for any reason, KSM shall indemnify and hold the
Owner Related Parties harmless of and from all liability, loss, damage, cost, or expense
(including, without limitation, reasonable attorneys’ fees and expenses) arising from withholding
such documents.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
written above.
KEMPERSPORTS MANAGEMENT, INC.
By:
Steven K. Skinner
Chief Executive Officer
CITY OF LAKE FOREST, ILLINOIS
By:
Name:
Title:
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EXHIBIT A
DEFINITIONS
All capitalized terms referenced or used in the Management Agreement (the
“Agreement”) and not specifically defined therein shall have the meaning set forth below in
this Exhibit A, which is attached to and made a part of the Agreement for all purposes.
• Affiliate(s). The term “Affiliate(s)” shall mean a Person that directly or indirectly, or
through one or more intermediaries, controls, is controlled by, or is under common control
with the Person in question and any officer, director, or trustee, and any stockholder or
partner of any Person referred to in the preceding clause owning fifty percent (50%) or more
of such Person. For purposes of this definition, the term “control” means the ownership of
fifty percent (50%) or more of the beneficial interest of the voting power of the appropriate
entity.
• Approval Rights. The term “Approval Rights” shall have the meaning described in Section
3.1 of the Agreement.
• Budgets. The term “Budgets” shall have the meaning described in Section 3.4 of the
Agreement.
• Capital Expenditures Budget. The term “Capital Expenditures Budget” shall have the
meaning described in Section 3.4.2 of the Agreement
• Commencement Date. The term “Commencement Date” shall have the meaning described in
Section 2.2 of the Agreement.
• Environmental Laws. The term “Environmental Laws” shall mean all current and future
federal, state, and local statutes, regulations, ordinances, and rules relating to (i) the emission,
discharge, release, or threatened release of a Hazardous Material into the air, surface water,
groundwater, or land; (ii) the manufacturing, processing, use, generation, treatment, storage,
disposal, transportation, handling, removal, remediation, or investigation of a Hazardous
Material; or (iii) the protection of human health, safety, or the indoor or outdoor
environment, including, without limitation, the Clean Air Act, the Federal Water Pollution
Control Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Occupational Safety and
Health Act, all amendments thereto, all regulations promulgated thereunder, and their state or
local statutory and regulatory counterparts.
• Event of Default. The term “Event of Default” shall have the meaning described in
Article 11 of the Agreement.
• Gross Revenues. The term “Gross Revenues” shall mean all monthly receipts related to
or derived from the operation of the Property from cash or credit transactions recognized
during the Term, computed on an accrual basis, including, but not limited to, greens fees,
cart rental fees, guest fees, membership initiation fees and/or membership dues, income
78
derived from the investment of Gross Revenues, the amount of all sales (wholesale or
retail) of goods, wares, or merchandise on, at, or from the Property, or for services of any
nature performed on, at, or from the Property, determined in accordance with generally
accepted accounting principles applied on a consistent basis. Gross Revenues shall be
reduced by any refunds, rebates, discounts, and credits of a similar nature given, paid, or
returned by KSM or Owner in the course of obtaining such Gross Revenues.
Gross Revenues shall not include:
o Applicable gross receipts taxes, admission, cabaret, excise, sales, and use
taxes, or similar governmental charges collected directly from customers or
their guests or as a part of the sales price of any goods or services;
o Service charges that are percentage gratuities added to billings, to the extent
paid to employees of the Property;
o Proceeds of borrowings by Owner;
o Income derived from the investment of Gross Revenues;
o Subsidies from other funds owned or controlled by Owner; ;
o Grants or donations from third parties;
o Proceeds paid as a result of an insurable loss, unless paid for the loss or
interruption of business, to the extent such sums are used to remedy said loss;
or
o Owner’s Advances.
Any of the above provisions resulting in a double exclusion from Gross Revenues shall
be allowed as an exclusion only once.
• Hazardous Material. The term “Hazardous Material” shall mean any solid, liquid, or
gaseous substance, chemical, compound, product, byproduct, waste, or material that is or
becomes regulated, defined, or designated by any applicable federal, state, or local
governmental authority or by any Environmental Law as hazardous, extremely
hazardous, imminently hazardous, dangerous, or toxic, or as a pollutant or contaminant,
and shall include, without limitation, asbestos, polychlorinated biphenyls, and oil,
petroleum, petroleum products and petroleum byproducts.
• Improvements. The term “Improvements” shall mean the improvements, structures, and
fixtures placed, constructed, or installed on the Real Property for the Property, and any
additions or subsequent modifications thereto.
• Insecurity Event. The term “Insecurity Event” shall mean the occurrence of any one or
more of the following events: (a) there shall occur a default under any agreement,
document or instrument, other than this Agreement, to which Owner is a party, the
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consequences of which could reasonably be expected to have a Material Adverse Effect;
(b) any statement, report, financial statement or certificate made or delivered by Owner,
or any of its officers, employees or agents, to KSM is untrue, incomplete or incorrect in
any material respect; (c) any of Owner’s assets are attached, seized, levied upon or
subjected to a writ or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the same is not cured within
thirty (30) days thereafter; (d) an application is made by any person, other than Owner,
for the appointment of a receiver, trustee, or custodian for any of Owner’s assets and the
same is not dismissed within thirty (30) days after the application therefor; (e) any
material change in Owner’s capital structure or in any of its business objectives, purposes
and operations which might in any way adversely affect the repayment of its obligations
to KSM pursuant to this Agreement; or (f) any other event or occurrence, which, in the
reasonable discretion of KSM, could materially and adversely affects Owner’s ability to
repay its obligations to KSM pursuant to this Agreement.
• Intangible Personal Property. The term “Intangible Personal Property” shall mean all
intangible property or rights owned or held by Owner in connection with the Property,
including, but not limited to, security deposits, prepaid rents, liquor and operating
licenses, and all trademarks related to the Property.
• Key Employee. The term “Key Employee” shall have the meaning described in Section
15.6 of the Agreement.
• KSM. The term “KSM” means KemperSports Management, Inc., an Illinois corporation,
and its successors, legal representatives, and permitted assigns.
• Laws. The term “Laws” shall have the meaning described in Section 3.12 of the
Agreement.
• Management Fee. The term “Management Fee” shall have the meaning described in
Section 5.1 of the Agreement.
• Management Services. The term “Management Services” shall mean the services
provided by KSM pursuant to Article 3 of the Agreement.
• Material Adverse Effect. The term “Material Adverse Effect” shall mean any event that
has a material adverse effect on (i) the business, assets, operations or financial or other
condition of Owner, and (ii) Owner’s ability to pay the amounts owed to KSM in
accordance with the terms hereof.
• Net Operating Income. The term “Net Operating Income” or “NOI” shall be computed
as the sum of Gross Revenues less cost of goods sold, payroll, other Operating Expenses
and the Base Management Fees. Such calculation shall not include payments associated
with maintenance equipment leases treated as capital leases, capital expenditures, interest
expense, income taxes, depreciation and amortization.
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• Operating Budget. The term “Operating Budget” shall have the meaning described in
Section 3.4.1 of the Agreement.
Operating Account. The term “Operating Account” shall have the meaning described in Section
3.5.2 of the Agreement
• Operating Expenses. The term “Operating Expenses” shall mean all operating expenses
of the Property incurred or paid on behalf of Owner during the Term, computed on an
accrual basis, including, but not limited to, the following items:
o Salaries, wages, employee benefits, and payroll expenses, including without
limitation, payroll service bureau fees, payroll taxes, Property profit sharing
programs, and insurance for KSM employees as provided for in this
Agreement, excluding, however, service charges, which are defined as
percentage gratuities added to billings and paid to employees (collectively, the
“Gross Payroll”);
o Marketing, advertising, and promotional expenses;
o Purchase and replacement, as necessary, of inventories of Property operations
and maintenance equipment, parts and supplies;
o Purchase and replacement, as necessary, of silver, chinaware, glassware,
furniture, cooking utensils, and other similar items of equipment;
o Purchase and replacement, as necessary, of office supplies, computers,
printers, facsimile machines, photocopiers, postage, printing, routine office
expenses, and lease payments on any item of furniture, fixtures or equipment
to the extent not excluded below from Operating Expenses, and accounting
services incurred in the on-site operation of the Property;
o The costs of IT consultants and other consultants utilized for the Property;
o Reasonable travel expenses of on-site employees incurred exclusively in
connection with the business of the Property;
o Accrual of a reserve for insurance (including workers’ compensation) and
property taxes each month in an amount or at a rate that is sufficient to pay
such insurance premiums or property taxes when they become due and
payable;
o Insurance premiums and property taxes, to the extent not provided for in the
reserve established therefore and any deductible amounts required to be paid
pursuant to Property insurance coverage;
o Accounts receivable previously included within Gross Revenues, to the extent
they remain unpaid ninety (90) days after the first billing;
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o Auditing, accounting costs, computer fees (including costs to license and
maintain accounting software), and legal fees incurred in respect of the
operation of the Property, including any reasonable financial management and
reasonable accounting fees paid to third party accounting firms, if included in
the Budgets;
o Costs incurred for utilities, including, but not limited to, all electric, gas, and
water costs, and any other private utility charges incurred in connection with
the operation of the Property;
o Ordinary maintenance and repairs, exclusive of any capital improvements or
capital replacements, which are hereby excluded;
o The amount to be retained for purposes of maintaining Working Capital at an
appropriate level;
o All out-of-pocket expenses incurred by KSM in providing the services under
the terms of the Agreement, including without limitation, reasonable travel for
KSM employees employed on-site at the Property and KSM’s other
employees while engaged in performing the obligations of KSM hereunder,
air express, costs of recruitment (including applicable agent’s fee), and other
incidental expenses included in the Budget to the extent payable by the Owner
under this Agreement;
o Expenses, including legal fees, damages or other costs, involved in defending
any employment -related lawsuits, charges or claims involving personnel of
the Property;
o All expenses set forth in the approved Budgets; and
o All other customary and reasonable expenses incurred in the operation of the
Property and the Improvements.
Any of the above provisions resulting in a double inclusion as an Operating Expense shall be
allowed as an inclusion only once.
Operating Expenses shall not include (i) depreciation or amortization, (ii) principal or interest
payments on indebtedness, (iii) rental or lease payments for major items of furniture, fixtures, or
equipment which, in accordance with generally accepted accounting principles, are purchased
and capitalized as fixed assets, and (iv) federal, state and local income taxes of any nature or
kind incurred by Owner or KSM.
• Owner. The term “Owner” means The City of Lake Forest, Illinois and its successors,
legal representatives, and permitted assigns.
• Owner’s Receipts. The term “Owner’s Receipts” shall have the meaning described in
Section 5.4 of the Agreement.
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• Person. The term “Person” shall mean any individual, partnership, corporation,
association, or other entity, and the heirs, executors, administrators, legal representatives,
successors, and assigns of such Person where the context so permits; and, unless the
context otherwise requires, the singular shall include the plural, the masculine shall
include the feminine and the neuter, and vice versa.
• Personal Property. The term “Personal Property” shall mean the Intangible Personal
Property and the Tangible Personal Property.
• Positive Net Cash Flow. The term “Positive Net Cash Flow” shall mean the amount, if
any, by which Gross Revenues exceed Operating Expenses for the particular period being
measured.
• Property. The term “Property” shall mean the Deerpath Golf Course, Clubhouse, and
related facilities located in Lake Forest, Illinois and commonly known as the “Deerpath
Golf Course,” including any improvements, structures, personal property, and real
property located upon the same.
• Real Property. The term “Real Property” shall mean that certain parcel of land upon
which the Property is located, the legal description of which is attached hereto as Exhibit
B.
• Tangible Personal Property. The term “Tangible Personal Property” shall mean all
equipment, machinery, fixtures, furnishings, accessories, and other tangible personal
property placed or installed, or to be placed or installed, on or about the Real Property
and used as a part of or in connection with the operation of the Property.
• Term. The term “Term” shall have the meaning described in Section 2.2 of the
Agreement.
• Termination Date. The term “Termination Date” shall have the meaning described in
Section 2.2 of the Agreement.
• Unavoidable Delay. The term “Unavoidable Delay” shall have the meaning described in
Section 15.16 of the Agreement.
• Working Capital. The term “Working Capital” shall mean an amount sufficient to pay
Operating Expenses for any given month.
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EXHIBIT B
LEGAL DESCRIPTION OF REAL PROPERTY
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EXHIBIT C
ACH FORM
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