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HomeMy WebLinkAbout07-30 • Resolution No. 07-30 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH THE ELGIN RECREATION CENTER BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Olufemi Folarin,City Manager,and Dolonna Mecum,City Clerk,be and are hereby authorized and directed to execute a Purchase of Service Agreement on behalf of the City of Elgin with the Elgin Recreation Center for youth gang intervention programs, a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: February 14, 2007 Adopted: February 14, 2007 Omnibus Vote: Yeas: 7 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk s/Jennifer Quinton Jennifer Quinton, Deputy City Clerk PURCHASE OF SERVICE AGREEMENT THIS AGREEMENT is made and entered into thisIl day of February, 2007, by and between the CITY OF ELGIN, nois, a municipal corporation (hereinafter referred to as the "City" ) , and ELGIN RECREATION CENTER, a not-for-profit corporation organized and existing under the laws of the State of Illinois (hereinafter referred to as the "Service Provider" ) . WHEREAS, the City has determined that it would serve a beneficial public purpose to enter into an agreement with the Service Provider for the Service Provider to provide certain contract services as described in this agreement ; and WHEREAS, the Service Provider represents that it has the necessary expertise and experience to furnish the Subject Services upon the terms and conditions set forth in this agreement . NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows : 1 . The Service Provider shall provide all of the services pursuant to the terms and conditions and on the dates and times as described in the document entitled Elgin Recreation Center - Scope of Services for 2007 Purchase of Service Agreement, attached hereto as Exhibit A and made a part hereof (such services including the terms, conditions, dates and times are hereinafter referred to as the "Subject Services" ) . In the event of any conflict between the provisions of this agreement and the provisions in Exhibit A, the provisions of this agreement shall control . The Service Provider represents and warrants that the Service Provider has the skills and knowledge necessary to conduct the Subject Services provided for in Exhibit A and that the Subject Services set forth in Exhibit A are integral parts of this agreement and may not be modified, amended or altered except by a written amendment to this agreement agreed to and executed by both parties hereto . 2 . The Service Provider shall address all inquiries and requests made pursuant to this agreement to the Assistant City Manager of the City or his designee . 3 . In connection with the Subject Services to be performed on other than City properties, the Service Provider warrants and agrees to maintain all facilities and equipment used in the performing of the Subject Services in a clean, sanitary and safe condition and free from defects of every kind whatsoever. Service Provider agrees and warrants that the Service Provider will periodically inspect all of such facilities and equipment for such purposes . Service Provider also warrants that the Service Provider and the Service Provider' s facilities and equipment used in the performing of the Subject Services are not now, nor shall be during the term of this agreement in violation of any health, building, fire or zoning code or regulation or other applicable requirements of law. In connection with the Subject Services on properties owned or controlled by the City, Service Provider agrees and warrants to use, and to cause persons participating in the Subject Services to use, through proper supervision and control , all facilities with due care, and to report all defects in or damage to any such facilities, and the cause thereof, if known, immediately to the Assistant City Manager of the City. 4 . The City shall make payments to the Service Provider for the Subject Services under this agreement in the total amount of $152 , 000 . Such payments shall be made in two parts . The first part of such payment shall be made in the form of rental payments totaling $125, 004 and shall be paid directly by the City to the facility owner in accordance with the Elgin Recreation Center Lease Agreement . The second part of such payment shall be in the total amount $26, 996 and should be paid by the City to the Service Provider in two installments of $13 , 498 in February and in August 2007 . However, the second installment payment shall not be made prior to fifteen (15) days after the Service Provider' s submission of the budget document and audited financial statement documents referred to in Paragraph 6 of this agreement . " 5 . The Service Provider shall apply the monies to be paid by the City to the Service Provider pursuant to the proceeding paragraph hereof solely to operating expenses such as staff salary and benefits, meeting expenses, and expenses associated with the Subject Services to be provided by the Service Provider pursuant to this agreement . 6 . The Service Provider shall complete, maintain and submit to the Assistant City Manager of the City, or his designee, any and all records, reports and forms relating to the Subject Services in this agreement as requested by the City. Without limiting the foregoing, the parties further agree as follows : A. The Service Provider shall provide a budget to the City which shall reflect the projected distribution of funds received from the City pursuant to this agreement during the term of -2- this agreement . The budget shall be submitted to the Assistant City Manager of the City prior to any payment by the City. B. The Service Provider shall provide written performance reports detailing the disbursements of the monies to be paid by the City to the Service Provider pursuant to this agreement . The reports shall be provided to the City quarterly on March 31, 2007 ; June 30 , 2007 ; September 30, 2007; and December 31, 2007 . C. The City has the right to review all accounting records of the Service Provider related to the use of the monies to be paid by the City to the Service Provider pursuant to this agreement upon 72 hours advance notice from the City to the Service Provider. D. The Service Provider shall have an audit performed on its financial statements for the year ending December 31, 2006 . The audit must be performed by an independent certified public accountant recognized in good standing by the American Institute of Certified Public Accountants and licensed in the State of Illinois . The Service Provider shall provide the City with two copies of the said audited financial statement along with the management letter and any other correspondence related to internal control matters on or before July 15, 2007 . These statements shall be submitted to the Assistant City Manager at City Hall , 150 Dexter Court, Elgin, Illinois 60120-5555 . 7 . In the event this agreement is terminated, or in the event the Subject Services for which the City funds provided herein are to be applied are discontinued, or the Service Provider ceases its operations prior to December 31, 2007, the Service Provider shall refund to the City on a prorated per diem basis the funds paid hereunder for the portion of the year remaining after any such termination or for the portion of the year the Subject Services were not conducted. 8 . Service Provider agrees and warrants that the Service Provider has procured all licenses, permits or like permission required by law to conduct or engage in the Subject Services provided for in this agreement, and that the Service Provider will -3- procure all additional licenses, permits or like permission hereinafter required by law during the term of this agreement, and that the Service Provider will keep same in full force and effect during the term of this agreement . Service Provider shall perform the Subject Services with due care and in compliance with all applicable legal requirements . 9 . The City of Elgin shall be recognized as a sponsor of the Service Provider and shall receive the benefits of sponsorship consistent with the level of support provided in this agreement . At a minimum, the City' s support shall be acknowledged on all print materials promoting the Service Provider ' s organization, press releases, radio advertising, web page information and event program(s) through the following mandatory funding identification statement : "Funding for the organization is provided in part through the City of Elgin" . Three samples of this acknowledgement shall be provided to the City. A logo provided by the City to the Service Provider shall be used for this purpose . 10 . In all printed materials in which a City seal or logo is deemed appropriate, approval by the Public Information Officer of the City is required prior to printing. 11 . The term of this agreement shall commence from the date of the execution hereof and continue through December 31 , 2007 . 12 . This agreement shall not be construed so as to create a partnership, joint venture, employment or other agency relationship between the parties hereto. Service Provider understands and agrees that the relationship of the Service Provider to the City arising out of this agreement shall be that of an independent contractor. It is expressly agreed and understood that the Service Provider and the Service Provider' s officers, employees and agents are not employees of the City and are not entitled to any benefits or insurance provided to employees of the City. 13 . If either party violates or breaches any term of this agreement, such violation or breach shall be deemed to constitute a default, and the other party has the right to seek administrative contractual or legal remedies as may be suitable to the violation or breach; and, in addition, if either party by reason of any default, fails to within fifteen (15) days after notice thereof by the other party to comply with the conditions of the agreement, the other party may terminate this agreement . Notwithstanding the foregoing, or anything else to the contrary in this agreement, no action shall be commenced by the Service Provider against the City for monetary damages . In the event any legal action is brought by the City for the enforcement of any of the obligations of the -4- Service Provider in this agreement and the City is the prevailing party in such action, the City shall also be entitled to recover from the Service Provider reasonable interest and reasonable attorney' s fees . 14 . Notwithstanding any other provision hereof, the City may terminate this agreement at any time upon thirty (30) days prior written notice to the Service Provider. In the event this agreement is so terminated, the Service Provider shall be paid for services actually performed, and reimbursable expenses actually incurred prior to termination, except that reimbursement shall not in any event exceed the total amount set forth under paragraph 4 above . Additionally, in the event this agreement is so terminated, the Service Provider shall immediately cease the expenditure of any funds paid to the Service Provider by the City and shall refund to the City any unearned or unexpended funds . 15 . To the fullest extent permitted by law, Service Provider agrees to indemnify, defend and hold harmless the City, its officers, employees, agents, boards and commissions from and against any and all claims, suits, judgments, costs, attorney' s fees, damages or other relief, including but not limited to worker' s compensation claims, in any way resulting from or arising out of negligent actions or omissions of the Service Provider in connection herewith, including negligence or omissions or agents of the Service Provider arising out of the performance of this agreement and/or the Subject Services . In the event of any action against the City, its officers, employees, agents, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless, such action shall be defended by legal counsel of the City' s choosing. The provisions of this paragraph shall survive any expiration and/or termination of this agreement . 16 . The Service Provider shall provide, pay for and maintain in effect, during the term of this agreement, comprehensive automobile liability insurance covering all owned, non-owned and hired motor vehicles used in connection with the Subject Services with limits of not less than $500, 000 per occurrence for damages to persons or property. The Service Provider shall also provide, pay for and maintain in effect, during the term of this agreement, worker ' s compensation insurance in amounts required under the laws of the State of Illinois . At the request of the City the Service Provider shall provide to the City certificates of insurance regarding the insurance required in this paragraph. 17 . No official, director, officer, agent or employee of the City shall be charged personally or held contractually liable under -5- any term or provision of this Agreement or because of their execution, approval or attempted execution of this Agreement . 18 . In all hiring or employment made possible or resulting from this Agreement, there shall be no discrimination against any employee or applicant for employment because of sex, age, race, color, creed, national origin, marital status, of the presence of any sensory, mental or physical handicap, unless based upon a bona fide occupational qualification, and this requirement shall apply to, but not be limited to, the following: employment advertising, layoff or termination, rates of pay or other forms of compensation and selection for training, including apprenticeship. 19 . No person shall be denied or subjected to discrimination in receipt of the benefit of any services or activities made possible by or resulting from this Agreement on the grounds of sex, race, color, creed, national origin, age except minimum age and retirement provisions, marital status or the presence of any sensory, mental or physical handicap. Any violation of this provision shall be considered a violation of a material provision of this Agreement and shall be grounds for cancellation, termination or suspension, in whole or in part, of the Agreement by the City. 20 . The parties intend and agreed that, if any paragraph, sub-paragraph, phrase, clause or other provision of this Agreement, or any portion thereof, shall be held to be void or otherwise unenforceable, all other portions of this Agreement shall remain in full force and effect . 21 . This Agreement and its exhibits constitutes the entire Agreement of the parties on the subject matter hereof and may not be changed, modified, discharged or extended except by written amendment duly executed by the parties . Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof . 22 . This Agreement shall be deemed to have been made in, and shall be construed in accordance with the laws of the State of Illinois . Venue for the resolution of any disputes or the enforcement of any rights pursuant to this agreement shall be in the Circuit Court of Kane County, Illinois . 23 . The Service Provider certifies hereby that it is not barred from bidding on a public contact as a result of a violation of 720 ILLS 5/33E et seq. or any similar state or federal statute regarding bid rigging. 24 . As a condition of this contract, the Service Provider shall have written sexual harassment policies that include, at a -6- minimum, the following information: A. the illegality of sexual harassment ; B. the definition of sexual harassment under state law; C. a description of sexual harassment, utilizing examples; D. the vendor' s internal complaint process including penalties; E . the legal recourse, investigative and complaint process available through the Illinois Department of Human Rights, and the Illinois Human Rights Commission; F. directions on how to contact the department and commission; G. protection against retaliation as provided by Section 6-101 of the Human Rights Act . A copy of the policies must be provided to the Department of Human Rights upon request (775 ILCS 5/2-105) . 25 . All notices, reports and documents required under this Agreement shall be in writing and shall be mailed by First Class Mail , postage prepaid, addressed as follows : As to the City: As to Service Provider: City of Elgin Elgin Recreation Center 150 Dexter Court 1080 East Chicago St . Elgin, IL 60120-5555 Elgin, IL 60120 Attention: Sean Stegall Attn: Jarrig Visser Assistant City Manager Chairman With a copy to: William A. Cogley, Corporation Counsel City of Elgin 150 Dexter Court Elgin, IL 60120-5555 26 . This agreement is and shall be deemed to construe to be a joint and collective work product of the City and the Service Provider and, as such, this agreement shall not be construed against the other party, as the otherwise purported drafter of same, by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity, vagueness or conflict, if any, of the terms and provisions contained herein. 27 . This agreement shall be binding on the parties hereto -7- and their respective successors and permitted assigns . This agreement and the obligations herein may not be assigned by the Service Provider without the express written consent of the City which consent may be withheld at the sole discretion of the City. IN WITNESS WHEREOF, the undersigned have entered into executed this agreement on the date and year first written above . CITY OF ELGIN, a municipal Elgin Recreation Center corporation Bysw. c/1 i y anage • Chairm Attest : 4Lø City Clerk -8- EXHIBIT A Elgin Recreation Center - Scope of Services 2007 Purchase of Service Agreement Payment: Payment provided per this agreement is $152 , 000 . Payment shall be made in two parts : Rent of $125, 004 shall be made directly to the facility owner in accordance with the Elgin Recreation Center Lease Agreement . $26, 996 shall be paid directly to ERC in two installments of $13 , 498 each in February and August . Programming: Elgin Recreation Center shall provide gang intervention programming including, but not limited to, a bi-lingual summer school program, an after school program, maintaining an 8 station computer lab, sports and recreation programs, Restorative Opportunities Program for youth, and a Suspended Student Program for youth suspended from school for gang or violent related offenses . In addition, Elgin Recreation Center will work cooperatively with the City' s Gang Intervention Staff to provide intervention and prevention programming city-wide . F:\Recreation\PSA Agreements\ERC\ERC PSA Agreement 2007.doc -9- l ' • 1 ELGIN RECREATION CENTER, INC. Audited Financial Statements Years Ended December 31, 2005 and 2004 I 1 I� l f _ 1 • 1 CONTENTS Page 1 Independent Auditor's Report l Statement of Assets, Liabilities and Net Assets-Cash Basis 2 Statement of Revenues, Expenses and Other Changes in Net Assets-Cash Basis 3 Statement of Functional Expenses-Cash Basis 4 Statement of Cash Flows-Cash Basis 5 Notes to Financial Statements 6-9 1 l MICHAEL C. WALSH & ASSOCIATES, P.C. CERTIFIED PUBLIC ACCOUNTANTS Michael C. Walsh, C.P.A. 1595 We1d Road Brenda L. Reynolds, C.P.A. Elgin, 11 60123 (847) 695-2700 200 Hillcrest Avenue Yorkville, IL 60560 (630)553-6566 INDEPENDENT AUDITORS' REPORT 1 The Board of Directors Elgin Recreation Center, Inc. Elgin, Illinois 60120 We have audited the accompanying statement of assets, liabilities, and net assets-cash basis of Elgin Recreation Center, Inc. as of December 31, 2005 and 2004 and the related statements of revenue, expenses and other changes in net assets-cash basis, functional expenses-cash basis and cash flows-cash basis for the years then ended. These financial statements are the responsibility of the Organi7ation's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, these financial statements were prepared on the cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted 1 accounting principles. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities and net assets of Elgin Recreation Center, Inc. as of December 31, 2005 and 2004, and the revenue received and expenditures disbursed for the year then ended on the basis of accounting described in Note 1. Elgin, Illinois June 8, 2006 1- I • ELG1N RECREATION CENTER, INC. 1 Statement of Assets, Liabilities and Net Assets-Cash Basis December 31, 2005 and 2004 ASSETS 2005 2004 Total Total 1 Current Assets: Cash and cash equivalents $ 32,936 50,665 I Unconditional Promise to give(Note 4) 53,920 46,300 Total current assets 86,856 96,965 IEquipment and Leasehold Improvements,at cost (Note 1) Leasehold improvements 54,732 54,732 Equipment 381,404 254,033 i1 Less accumulated depreciation (253,581) (212,128) 182,555 96,637 i1 Other assets: Security deposit 6,000 6,000 I $ 275,411 199,602 LIABILITIES AND NET ASSETS 7i Current Liabilities: Sales tax payable $ 254 187 Total current liabilities 254 187 1 Net Assets: Investment in Property and Equipment 182,555 96,637 Unrestricted 68,402 85,871 1 Temporarily restricted (Note 3) 24,200 16,907 Permanently restricted - Total net assets 275,157 199,415 1 $ 275,411 199,602 1 1 1 The accompanying notes are an integral part of the financial statements. 1 -2- . ELGIN RECREATION CENTER, INC. 1 Statement of Revenues and Expenses, and Other Changes in Net Assets-Cash Basis For The Year Ended December 3 I, 2005 and 2004 - ) Investment Temporarily in Property 2005 2004 Unrestricted Restricted &Equipment Total % Total 9 Revenue Collected:Game and Concession Income $ 38,503 - 38,503 5.9 44,271 8.3 Donations 11,173 - - 11,173 1.7 26,662 5.0 1 Fees 142,590 142,590 21.9 130,727 24.6 Fees-teen education 17,455 17,455 2.7 18,763 3.5 Other Income 13,157 - - 13,157 2.0 6,699 1.3 r I Grant-City of Elgin 152,009 - 127,371 279,380 42.9 163,284 30.7 Grants-other 110,693 19,200 129,893 20.0 140,890 26.5 Fundraising net of expenses 18,508 - - 18,508 2.8 - - I totalling$15,647 Net Assets released from restrictions 11,907 (11,907) - - - - 1 Total Income 515,995 7,293 127,371 650,659 100.0 531,296 100.0 Cost of Sales: Purchases of Concessions 16,418 - - 16,418 2.5 17,817 3.4 Gross Margin 499,577_ 7,293 127,371 634,241 97.5 513,479 96.6 Administrative Costs: Program Supplies&expense 62,560 - - 62,560 9.6 52,134 9.8 1 Direct Labor 234,814 - - 234,814 36.1 220,498 41.5 Administrative Expenses 8,466 - - 8,466 1.3 9,092 1.7 Insurance 28,994 - - 28,994 4.5 21,205 4.0 Office Expense and Postage 10,429 - - 10,429 1.6 11,135 2.1 Professional Fees 8,386 - - 8,386 1.3 10,980 2.1 Rent 105,909 - - 105,909 16.3 105,809 19.9 Repairs and Maintenance 5,639 - - 5,639 0.9 9,413 1.8 Payroll Taxes 24,105 - - 24,105 3.7 21,656 4.1 Telephone 6,159 - - 6,159 0.9 4,869 0.9 Utilities 22,059 22,059 3.4 16,190 3.0 Total Administrative Costs 517,520 - - 517,520 79.5 482,981 90.9 Income(Loss)from Operations (17,943) 7,293 127,371 116,721 17.9 30,498 5.7 Interest income 474 474 0.i 545 0.1 Depreciation Expense - - (41,453) (41,453) (6.4) (38,449) (7.2) Change in Net Assets (17,469) 7,293 85,918 75,742 11.6 (7,406) (1.4) Net Assets,January 1 85,871 16,907 96,637 199,415 206,821 Fixed Asset Additions - - - - - Net Assets,December 31 $ 68,402 24,200 182,555 275,157 199,415 The accompanying notes are an integral part of the financial statements. -3- i1 . ELGIN RECREATION CENTER, INC. 1 Statement of Functional Expenses-Cash Basis For The Year Ended December 31, 2005 and 2004 .I 2005 2004 Program General and Total Total Services Administrative Expenses Expenses Expenses: Program Supplies and Expenses $ 62,560 - 62,560 52,134 IDirect Labor 212,412 22,402 234,814 220,498 General Administrative Expenses 6,773 1,693 8,466 9,092 1 Insurance 14,497 14,497 28,994 21,205 Office Expense and Postage 7,822 2,607 10,429 11,135 Professional Fees 6,289 2,097 8,386 10,980 1 Rent 95,328 10,581 105,909 105,809 Repairs and Maintenance 5,075 564 5,639 9,413 Payroll Taxes 22,391 1,714 24,105 21,656 1 Telephone 5,543 616 6,159 4,869 Utilities19,853 2,206 22,059 16,190 Total Expenses Before Interest 1 and Depreciation 458,543 58,977 517,520 482,981 Depreciation Expense 41,453 - 41,453 38,449 1 Total Expenses $ 499,996 58,977 558,973_ 521,430 1 I I 1 1 1 f The accompanying notes are an integral part of the financial statements. i -4- , I i i . ELGIN RECREATION CENTER, INC. 1 Statement of Cash Flows-Cash Basis For The Year Ended December 31, 2005 and 2004 2005 2004 1 Cash provided by operations: Change in net assets $ 75,742 (7,406) Add: Expenditures not requiring an outlay of cash: IDepreciation 41,453 38,449 Subtract: Noncash Revenue (127,371) - IIncrease (Decrease)in non-cash components of working capital: (Increase)Decrease in Unconditional Promise to give (7,620) (46,300) I Increase(Decrease) in Sales taxes payable 67 (19) Cash provided by (used in) operations (17,724) (15,276) iCapital investment activities: Purchase of equipment and leasehold improvements - - lTotal capital investment - - Financing activities: 1 Loan proceeds - - Payment of debt - Total financing - - 1 Increase (Decrease) in cash (I7,729) (15,276) ICash and cash equivalents, January 1 50,665 65,941 1 Cash and cash equivalents, December 31 $ 32,936 50,665 ISupplemental information: Interest paid - $0 3 1 The accompanying notes are an integral part of the financial statements. -5- 1 • lELGIN RECREATION CENTER, INC. Notes to Financial Statements _l For The Year Ended December 31, 2005 1 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Background Elgin Recreation Center, Inc.is a not-for-profit Corporation which provides youth service to inner city youth and young adults. A summary of the significant accounting policies of the agency is presented below to assist the reader in evaluating the accompanying financial statements. Basis ofAccounting } The financial statements of the agency have been prepared on the modified cash basis of } accounting, which is a comprehensive basis of accounting other than generally accepted account principles. Modifications to the pure cash basis of accounting include recording depreciation, unconditional promise to give and sales tax payable. basis of Presentation Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) Bo. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Agency is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Tax Status The Agency was granted exempt status by the Internal Revenue Service under code section 501(c)(3) and accordingly, no provision for income taxes is reflected in the accompanying financial statements. j Financial Statement Estimates 1 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. -6- i r] ELGIN RECREATION CENTER, INC. Notes to Financial Statements(Cont'd) For The Year Ended December 31, 2005 NOTE l —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-continued Equipment and Leasehold Improvements Equipment and Leasehold Improvements are recorded at cost. Purchase of equipment with a useful life exceeding one year and an acquisition cost exceeding$1,000 is capitalized. Depreciation is provided using the straight line method of accounting over a useful life of three, five or seven years. For the year ended December 31, 2005 and 2004 depreciation of$41,453 and $38,449 respectively was reflected as an expenditure in the accompanying Statement of Revenues, Expenses and Other Changes in Net Assets-Cash Basis. Fixed Asset Balance Balance Summary 1/1/2005 Additions Deletions 12/31/2005 Leasehold Impr. 54,732 - - 54,732 Equipment 254,033 127,371 381,404 308,765 127,371 - 436,136 1 Accum. Depn. (212,128) (41,453) - (253,581) Book Value 96,637 85,918 - 182,555 Functional Allocation of Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Risk Management Significant losses are covered by commercial insurance. There have been no significant reductions in insurance coverage. Settlement amounts, if any, have not exceeded insurance coverage for the current year or three prior years. Cashind Cash Equivalents The Agency considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents for purposes of the statement of cash flows exclude permanently restricted cash and cash equivalents. The Agency does not have permanently restricted cash. -7- • ELGIN RECREATION CENTER, INC. Notes to Financial Statements(Cont'd) For The Year Ended December 31, 2005 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-continued Support and Revenue Elgin Recreation Center, Inc.'s primary funding source is a grant from the City of Elgin totaling $279,380 for 2005 and $163,284 for 2004. This finding source pays the rent direct to the owner which was $105,809 for both 2005 and 2004. The balance of the funds were paid direct to vendors for new equipment. IFair Value of Financial Instruments 1 At December 31, 2005 and 2004, the carrying value of financial instruments such as cash, j certificate of deposit and savings, approximated their fair value. JRestricted and Unrestricted Revnne Contributions received are recorded as increases in unrestricted, temporarily restricted, or permanently restricted net assets, depending on the existence and/or nature of any donor restictions. NOT — P RATIN EASE 1 Elgin Recreation Center, Inc. occupies premises located in the upper level of the building 1 at 1080 E. Chicago Street, Elgin, IL. The Center occupies 20,000 square feet. The building has new owners as of May 31, 2005. There has been ongoing negotiations to 1 form a lease between the Center and it's landlord. As of the date of this report no signed l lease is in effect. There has been a month to month agreement on rent and the security deposit of $6,000.00 paid by the Center was transferred from the previous owners to the new landlord. JFor the calendar years 2005 and 2004, Elgin Recreation Center, Inc. acquired a grant from the City of Elgin to pay for occupancy. The City pays the Landlord directly for rent up to a maximun of$108,000. For the year 2005 and 2004 the rent expense of$105,809 was fully paid by the City of Elgin. 1 -8- 1 .1 ELGIN RECREATION CENTER, INC. Notes to Financial Statements (Coned) For The Year Ended December 31, 2005 1 NOTE 3 —TEMPORARILY RESTRICTED NET ASSETS The Agency received a donation of $5,000 during the year of 2003 specifically to purchase a new van or bus. During the years ended December 31, 2005 and 2004 there 1 was not any vehicle purchased, therefore the restriction is still in effect. The funds have been physically segregated from operating funds in a separate bank account. The Agency received money totalling $19,200 from three different grants in late December 2005 for programs to be run in the year of 2006. These funds have also been physically separated from the operating checkbook. MOTE 4—UNCONDITIONAL PROMISE TO GIVE The Agency received a commitment from the local United Way Organization for donations of $65,000 remitted in 12 monthly payments and $35,700 remitted in 10 1 monthly payments both ending June 30, 2006 The Agency received $46,780 during the year ended December 31, 2005 and have recorded the balance of $53,920 on the Statement of Assets, Liabilities and Net Assets-Cash Basis as a current asset. 1 1 I' 1 -9- `�- z Agenda Item No. City of Elgin r 7 ,- January 19, 2007 �'`(t k r• TO: Mayor and Members of the City Council nd FROM: Olufemi Folarin, City Manager Opportunities 4n I s t e 1I Ci�itrn�-( ,rruniNu tw:�il Chum Randy Reopelle, Parks and Rec eation Director SUBJECT: 2007 Purchase of Service Agreement with the Elgin Recreation Center PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to consider the 2007 Purchase of Service Agreement with the Elgin Recreation Center. RECOMMENDATION It is recommended that the City Council approve the 2007 Purchase of Service Agreement with the Elgin Recreation Center to provide $152,000 of funding toward youth gang intervention programs. BACKGROUND The Elgin Recreation Center provides recreational and educational programs to at-risk Elgin youth. The Center is located at 1080 East Chicago Street. The Center is drop-in based and also offers programs such as a bilingual summer school program, weight training, tutoring, computer classes, GED classes, art programs and more. On average over 150 participants ranging from ages 5 to 35 are served daily in the Center. Under the Service Agreement, the City's $152,000 will be utilized in the following manner: $125,004 will be used for rent of the facility at 1080 East Chicago Street, and $26,996 will be used for gang intervention programming including, but not limited to, a bi-lingual summer school program, an after school program, maintaining an eight station computer lab, sports and recreation programs, Restorative Opportunities Program and a Suspended Student Program. In exchange for this funding, the Elgin Recreation Center will provide ongoing activities to at-risk youth and work cooperatively with the City's Parks and Recreation Department and the City's Gang Intervention Program Supervisor. In 2006 the following were among the many programs offered at the Elgin Recreation Center: arts and craft classes, GED program, computer training, bilingual summer school program, 2007 Purchase of Service Agreement with the Elgin Recreation Center January 19, 2007 Page 2 indoor and outdoor soccer, basketball, boxing, pre-employment skills training, after school tutoring, summer pool trips, U-46 Fresh Start Program, and programming for the Gifford Street High School. Annually, Elgin's low income, at-risk youth collectively spend approximately 110,000 hours at the Elgin Recreation Center. In 2005, the City's PSA represented 29.52% of the Elgin Recreation Center's unrestricted revenue (income) based upon total revenue of$515,995. The agency's audit report is attached. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None FINANCIAL IMPACT The cost of the Purchase of Service Agreement with the Elgin Recreation Center is $152,000. There are sufficient funds budgeted ($152,000) and available ($152,000) in the Riverboat Fund, account number 275-0000-791.80-23, to enter into the agreement. LEGAL IMPACT 1 _ None V ALTERNATIVES 1. The Council may choose to approve the 2007 Purchase of Service Agreement with the Elgin Recreation Center to provide $152,000 of funding towards youth gang intervention programs. 2. The Council may choose not to approve the 2007 Purchase of Service Agreement with the Elgin Recreation Center to provide $152,000 of funding towards youth gang intervention programs. Respectfully submitted for Council consideration. me attachment