Monday, March 27, 2006
McHenry County Board Minutes of Contempo Industries' Loan Write-Off
AGENDA # 14.2.B (07)
R E S O L U T I O N
AUTHORIZING AN EMERGENCY APPROPRIATION AND BUDGET LINE ITEM TRANSFERS IN THE REVOLVING LOAN FUND FISCAL YEAR 2004-2005 BUDGET
WHEREAS, the County Board of the County of McHenry, Illinois established a revolving loan fund for the purpose of encouraging economic growth and increasing the size of its commercial and industrial base; and
WHEREAS, in December, 2004 a loan was approved and awarded to Contempo Industries, Inc. in the amount of $200,000.00 for the start-up of a new business, which was collateralized by its inventory on hand; and
WHEREAS, on December 1, 2005 Contempo Industries, Inc. filed a voluntary petition for relief in bankruptcy and was working to restructure its working capital to continue operations in bankruptcy; and
WHEREAS, upon review of the collateral agreement and bankruptcy documents filed, the State’s Attorney’s office advised the County that collection of the outstanding principal owed ($177,470.37) was uncertain. Because the collection of the remaining balance is uncertain, an increase to the reserve for doubtful accounts, as required by generally accepted accounting principles, is necessary as of November 30, 2005.
WHEREAS, in order to properly record this reserve in fiscal year 2004-2005, budget line item transfers and an emergency appropriation to the Revolving Loan Fund budget is now required.
NOW, THEREFORE BE IT RESOLVED, by this County Board of McHenry County, Illinois that an emergency appropriation of $146,033.00 to OCA 100050-6550 (Revolving Loan Fund – Bad Debt Expense) is hereby authorized in the fiscal year 2004-2005 budget with an offsetting entry to OCA 100050-9990 (Revolving Loan Fund – Utilization of Fund Balance) for the purpose of increasing the reserve for doubtful accounts.
BE IT FURTHER RESOLVED, that the following budget line item transfers are also hereby authorized in the fiscal year 2004-2005 budget for the purpose of increasing the reserve for doubtful accounts.
FROM:
OCA 100050-4001 Contractual Services $ 5,920
OCA 100050-4010 Audit & Management Services 1,500
OCA 100050-6810 Fund Balance Enhancement 24,018
TO:
OCA 100050-6550 Bad Debt Expense $31,438
BE IT FURTHER RESOLVED, that the County Clerk is hereby requested to distribute a certified copy of this Resolution to the County Auditor; the Deputy County Administrator; the Associate County Administrator-Finance; and the County Administrator.
DATED at Woodstock, Illinois, this twenty-third day of March, A.D., 2006.
_______________________________
KENNETH D. KOEHLER, Chairman
McHenry County Board
ATTEST:
_______________________________
KATHERINE C. SCHULTZ, County Clerk
RevolvingLoanFundEmergApprop3.23.06
http://www.co.mchenry.il.us/Common/CountyBrd/MtgDocs/2006032306ctybd/032306bd14.2b(07).pdf
R E S O L U T I O N
AUTHORIZING AN EMERGENCY APPROPRIATION AND BUDGET LINE ITEM TRANSFERS IN THE REVOLVING LOAN FUND FISCAL YEAR 2004-2005 BUDGET
WHEREAS, the County Board of the County of McHenry, Illinois established a revolving loan fund for the purpose of encouraging economic growth and increasing the size of its commercial and industrial base; and
WHEREAS, in December, 2004 a loan was approved and awarded to Contempo Industries, Inc. in the amount of $200,000.00 for the start-up of a new business, which was collateralized by its inventory on hand; and
WHEREAS, on December 1, 2005 Contempo Industries, Inc. filed a voluntary petition for relief in bankruptcy and was working to restructure its working capital to continue operations in bankruptcy; and
WHEREAS, upon review of the collateral agreement and bankruptcy documents filed, the State’s Attorney’s office advised the County that collection of the outstanding principal owed ($177,470.37) was uncertain. Because the collection of the remaining balance is uncertain, an increase to the reserve for doubtful accounts, as required by generally accepted accounting principles, is necessary as of November 30, 2005.
WHEREAS, in order to properly record this reserve in fiscal year 2004-2005, budget line item transfers and an emergency appropriation to the Revolving Loan Fund budget is now required.
NOW, THEREFORE BE IT RESOLVED, by this County Board of McHenry County, Illinois that an emergency appropriation of $146,033.00 to OCA 100050-6550 (Revolving Loan Fund – Bad Debt Expense) is hereby authorized in the fiscal year 2004-2005 budget with an offsetting entry to OCA 100050-9990 (Revolving Loan Fund – Utilization of Fund Balance) for the purpose of increasing the reserve for doubtful accounts.
BE IT FURTHER RESOLVED, that the following budget line item transfers are also hereby authorized in the fiscal year 2004-2005 budget for the purpose of increasing the reserve for doubtful accounts.
FROM:
OCA 100050-4001 Contractual Services $ 5,920
OCA 100050-4010 Audit & Management Services 1,500
OCA 100050-6810 Fund Balance Enhancement 24,018
TO:
OCA 100050-6550 Bad Debt Expense $31,438
BE IT FURTHER RESOLVED, that the County Clerk is hereby requested to distribute a certified copy of this Resolution to the County Auditor; the Deputy County Administrator; the Associate County Administrator-Finance; and the County Administrator.
DATED at Woodstock, Illinois, this twenty-third day of March, A.D., 2006.
_______________________________
KENNETH D. KOEHLER, Chairman
McHenry County Board
ATTEST:
_______________________________
KATHERINE C. SCHULTZ, County Clerk
RevolvingLoanFundEmergApprop3.23.06
http://www.co.mchenry.il.us/Common/CountyBrd/MtgDocs/2006032306ctybd/032306bd14.2b(07).pdf
# posted by Cal Skinner : 5:00 AM
