Agenda Packets - 1999/08/16 - Laserfiche WebLink

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MEMO TO: Chuck Whiting FROM : John Hammerschmidt TOPIC: Golf Course Funding Options DATE: August 5, 1999 Since the golf course has been built, it has been evident that either additional funding or expansion of the business to increase profits was going to be necessary to meet increasing debt payments and capital expenditures. Since no expansion has been seriously considered and since the lawsuit legal costs and course repair have taken place, there must be some infusion of cash to bring financing in line with bond covenants. The golf course committee has discussed several funding options, which I will summarize below. I need to point out that the overall financial picture of the golf course is not a five minute explanation and that any option that is used should also have with it a long term plan to expand the golf course business. This is so that a reserve of some type can be established to make up for fluctuations in business and pay back any loans that may be made directly by user fees. Option one: (spreadsheets attached) This is based on a series of loans from special projects. The bond is refinanced at the most favorable period in the next five years and repayment is extended two years to pay back the city loans. The $500,000.00 difference will be made up by interest savings when the bond is refinanced. Option two: (spreadsheets attached) The suggestion here is to take the entire cost of the lawsuit to date and repairs out of special projects. This amount would then be put back into the golf course fund. Along with refinancing the bond and extending the years for repayment we are back in line with the bond covenants. Option three: The third option has several parts to it. TIF money could possibly be used to pay for the lawsuit expenses and repairs. This obviously would need a legal opinion and is only possible until December 31, 1999. The other part of using TIF money, would be to pay for either range expansion, course lights, or course expansion. Revenue produced from any of these three projects would fund both increases in bond principal and any capital expenses in the future. TIF funds could possibly be used to pay the principal and interest for the course in years 1995-1999. For expansion with TIF funds even to be a possibility, the decision needs to made immediately due to the amount of time to do pro-formas, get bids, cost estimates, etc.