06/01/1992 Park Board Packet - Laserfiche WebLink

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APPENDIX III ' RISK FACTORS GOLF COURSE GROSS REVENUE BONDS PROSPECTIVE PURCHASERS OF THE BONDS SHOULD BE AWARE THAT INVESTMENT IN THE BONDS MAY ENTAIL SOME DEGREE OF RISK. EACH PROSPECTIVE INVESTOR IN THE BONDS IS ENCOURAGED TO READ THIS OFFICIAL STATEMENT IN ITS ENTIRETY. PARTICULAR ATTENTION SHOULD BE GIVEN TO THE FACTORS DESCRIBED BELOW WHICH, AMONG OTHERS, COULD AFFECT THE PAYMENT OF DEBT SERVICE ON THE BONDS AND WHICH COULD ALSO AFFECT THE MARKET PRICE OF THE BONDS TO AN EXTENT THAT CANNOT BE DETERMINED. THIS DISCUSSION OF RISK FACTORS IS NOT, AND IS NOT INTENDED TO BE, EXHAUSTIVE. 1. Umited Obligation The obligation of the City to pay debt service on the Bonds is a limited obligation of the City. The full faith and credit and taxing power of the City is not pledged to pay debt service on the Bonds, and the City does not have the authority to levy any ad valorem property taxes in order to pay debt service on the Bonds. As further described elsewhere herein, debt service on the Bonds is payable solely from gross revenues derived by the City from the operation of the golf course described herein. While it is believed that revenues of the golf course will be sufficient to pay debt service on the Bonds when due, a number of factors described below may affect the receipt of sufficient revenues from the golf course for such purposes, which might impair ^ the ability of the.City to make timely debt service payments on the Bonds. 2. Operation and Maintenance of the Golf Course The City has pledged the gross revenues of the golf course first for the payment of debt service, and intends to pay operation and maintenance expenses from the balance of gross revenues available after payment of debt service costs. In the event such revenues are insufficient to pay all operation and maintenance expenses, the City would have to use other City moneys or general revenues for that purpose. General revenues include property tax levies which are limited by Minnesota law. In the event general revenues are insufficient to pay all City requirements for providing general City services, some service levels would have to be reduced. If golf course operating costs were reduced it could have an adverse effect on the golf course and reduce golf course revenues. 3. Competition The Inver Grove Heights municipal golf course will have to compete with other available golf course facilities both within Dakota County and the balance of the metropolitan area. There are currently eight golf courses available to the public already operating within Dakota County, with a total of 126 holes of golf. While the City has designed a championship 1 8-hole course and a 9-hole executive course which is intended to attract golfers of all ranges of abilities, these other public courses may serve to dilute the demand to play the City's courses and will serve to keep fees and charges at competitive levels. In addition to the courses available to the public in Dakota County, another privately owned 18- '� hole course which will be available for public play on a fee basis has been planned for construction within Inver Grove Heights on a site 2Y2 miles from the City's course. If constructed, this course will compete for golfers with the City's municipal course. Page 12