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Mounds View City Council March 27, 2000 Regular Meeting Page 10 Council Member Marty advised that the golf course would probably require a loan, however, if the billboards proceed as planned, it might not only be unnecessary for the City to loan the golf course the pre-approved amount, but also to not make any more fund transfers or loans at all. Mayor Coughlin stated this discussion could probably be answered with Item 10D, pertaining to the lease agreement with Eller Media, as some of the dollar amounts would come forward during that discussion. He stated no actions have been taken with regard to any loans for the golf course, in lieu of the billboard discussions. City Administrator Whiting stated the cash flow projections over the life of the bonds, which are set to expire in 2015, indicate that there would be two years during that time where the cash flow at the golf course would not be sufficient to pay off that year’s bond payment. He stated there has been discussion of two loans from other City funds, to be paid back with full interest so as not to affect any General Fund position the City encounters. He stated the first one of these loans was to occur at some point this year, and the second, in 2004. He stated pursuant to the discussion, given the life of the bonds, and given that they would expire at some point, those loans would be paid back in full to the City funds in due course, as a normal component of the golf course operation. He pointed out that if an extension was required a year or two beyond the term of the bonds, that would be relatively easy to do. City Administrator Whiting stated the billboard agreement will likely make both of those loans immaterial, in that the cash flow should improve significantly. He explained there should come a point in time when not only would the bonds be paid off in full, but the operations at the golf course would also continue to be profitable. He advised that at that time, the revenues from the billboards would create other questions for the City, in terms of what to do with the additional funds. He stated he was not certain when this would occur, however, Finance Director Kessel could report back to the Council in this regard at the next Work Session. Council Member Stigney clarified that this proposal would be utilized in lieu of paying off the loans, however, the billboards themselves would not pay off the bonds, but rather, would position the golf course to pay off the bonds. Mayor Coughlin stated in his understanding, the outstanding bonds on the golf course total approximately 3.1 million dollars, and the billboards represent and amount in excess of 5 million dollars over the course of the next 15 years. He indicated this would more than adequately pay for any bonds and any interest, after which, the question would be in terms of what to do with the overage. Golf Course Superintendent John Hammerschmidt explained that the bonds, over the term of 15 years, would almost exactly equal the payments, which would be 4.5 million, with interest, however, this does not take into account the possibility that with profit sharing, they could come above that. He explained that the 4.5 million is a guaranteed amount, and the golf course is guaranteed to pay off their bonds with the money they will receive from the billboards. Council Member Quick advised that the Council should be aware of the fact that there are some problems at the golf course as a result of the original construction, which must be rectified. He