06/01/1992 Park Board Packet - Laserfiche WebLink

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HOW IS A GOLFCOURSE Consider Your Financing Options municipal income—logically the golf course itself. Such a bond can be useful for either Now you know how much you need to finance. And ^\ overall funding or for a significant part of you know that it's easier to have acquired the land first, the finance package. A revenue bond might and probably separately. Then you can consider a be used to finance the clubhouse once the shorter term loan for construction,including the archi- course is completed and in operation—or to tect's fees and facilities. If the land itself can be underwrite earlier cost of land acquisition so handled by grant,tradeout,cash purchase,long term- the lease operator who has contracted to lease or gift—or even a separate conventional loan, build and operate the course can get started. you will have an easier job financing or bonding for construction. Or, it might be used to refinance a project once it has been opened. Other than the specific financing plans shown below, there are often certain creative financing opportunities FOR EXAMPLE:In the Miamisburg,Ohio example available at local levels. Be sure to explore them noted earlier,the entire project,including the land thoroughly. purchase and the construction cost, was handled by a 25-year General Obligation Bond for If You Are a Municipality. $5,000,000.This resulted in a debt service charge Since municipalities have bonding power,it might be of$450,000 a year. The city anticipates converting the GOB to a Revenue Bond in three or four years in the community's best interest to cover the entire cost after the cash flow from the course has been of the project with one bond issue, including the established, the total debt is somewhat lower and clubhouse: the bond market is better,thus lowering the annual ❑ General Obligation Bond: If the course is debt service. to be part of the municipal overall long- ❑ Land Lease:Rather than leasing the facility range recreational plan or open space master to a management company for construction plan, a General Obligation Bond might be and operation,the municipality might elect the best method of funding. It may have a to lease to a company that will develop the better chance of voter approval in this larger course and then lease it back to the package than if the bond is for just a golf municipality. In this instance no debt service course alone.The necessary public meeting will appear on the municipality balance presentations in preparation for a referendum sheet, and when the lease expires, the city vote can serve as a useful springboard for will again own the land free and clear.This advance promotion of the project. In fact, is therefore,in effect,a lease purchase. once you have favorable passage of the referendum,you might well expect an early ❑ Bond Anticipation Note:In anticipation of acceptance of the course. potential bonding, a municipality might As a suggestion, when you prepare the choose a BAN, a Bond Anticipation Note.referendum "For the purpose of This would mean selling the.note on the ...," an open market.It can be rolled over each.year approximate target date should be established for an allowable five years. At the end of that will give the city the greatest flexibility that time, the loan can be covered by a in timing the bond issue. standard revenue bond or even a general ❑ Revenue Bond:Since a revenue bond usually obligation bond. On the other hand,it might does not require a public vote, it can be be possible that during those five years issued backed by the city's credit rating and enough revenue could have been generated revenues from designated sources of 28 Guidelines for Planning and Developing a Public Golf Course