06/01/1992 Park Board Packet - Laserfiche WebLink

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4. Construction of the Project it is anticipated by the City that construction of the project will commence by October 1, 1990. At the current time it is anticipated that the project will be completed by August 1, 1992. The City believes that the proceeds of the Bonds will be sufficient to complete the project, although various circumstances may result in cost overruns. In the event that the proceeds of the Bonds and certain investment income are insufficient for completion of the project,the City has agreed that it will exercise its best efforts to cause Completion Bonds to be issued in an amount not to exceed $200,000 to pay the remaining costs of completing the project. The City is not obligated, however, to cause Completion Bonds to be issued to complete the project, and no assurance can be given that the City will be able to cause the issuance of such Completion Bonds, or that the Completion Bonds will be sufficient to complete the course. Completion Bonds may be issued for the purpose of completing the project without notice to or the approval of the registered owners of the Bonds. If issued, Completion Bonds will be equally and proportionately secured under the Resolution with the Bonds previously issued. To the extent Completion Bonds may be issued under the Resolution, such issuance may result in a dilution of revenues available to pay debt service on the Bonds. 5. General Factors that May Affect Sufficiency of Revenues Payment of debt service on the Bonds and operation and maintenance costs from golf course revenues is dependent upon the continued successful operation of the course. A number of factors may affect the sufficiency of revenues including but not necessarily limited to the ability of the City to efficiently and cost-effectively operate the course, the construction of additional public golf courses in Dakota County and the metropolitan area which may compete with the City's course, 'economic recessions which may reduce discretionary income of potential golfers, and a leveling off of the number of persons who currently are playing golf or starting to play golf. While the City has pledged to continue operating the course for as long as Bonds are outstanding, significant revenue shortfalls below projected levels could cause the City to reduce operation of the course. 6. Unforeseen Problems With the Golf Course Payment of principal of and interest on the Bonds is dependent upon the continued operation of the golf course. While the City believes that the golf course has been designed and will be constructed in such a manner as to permit its continued operation without requiring unreasonable costs for maintenance or repairs and has provided under the terms of the Resolution for the creation and maintenance of funds in amounts which it believes to be sufficient to provide for the necessary repairs and maintenance of the golf course, there can be no assurance that such amounts will, in fact, be sufficient. Although the golf course will be covered by policies of insurance as otherwise described herein, casualties and other occurrences may result in damage to the golf course which may not be covered by the net proceeds of any insurance award. Any material interruption of the operation of the golf course may have an adverse effect on the ability of the City to collect fees from users of the golf course and could, in turn, have a materially adverse effect on the ability of the City to make timely payment of debt service on the Bonds. Page 13