Agenda Packets - 2004/05/03 - Laserfiche WebLink

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Item No: 1B(1) Meeting Date: 05/03/04 Type of Business: WS City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mary Burg, Golf Course Manager Item Title/Subject: Review Golf Course Study Options Introduction: At the March 22, 2004 regular meeting, the City council directed the City Administrator to prepare a business plan review of the Golf Course operation. The plan was presented to the City Council at the April 5, 2004 work session. The City Council requested staff to provide additional information on some of the alternatives and asked to discuss this item further at this work session. This report is to outline possible alternatives for further study. As noted previously, due to the fact that some of the alternatives may be expensive and will require the work of outside consultants, it is recommended that the City Council review the possible alternatives and eliminate any in which there is no interest in pursuing. Background: The City has recognized as a priority the need to explore solutions to the problem of Golf Course financing. The most promising near-term revenue enhancement appears to be the authorization of billboard leases along the Golf Course freeway frontage. It is anticipated that this will bring in $250,000 in revenue each year, starting in 2005. To date positive action on the billboard issue has yet to come forth. Analysis (from 04/05/04 WS 07) : The City Finance Director has prepared several financial scenarios to give the City Council a picture of current and possible situations, which are attached. The first scenario assumes that the operations continue with no major changes. Under this scenario, overall debt continues to climb for the foreseeable future. Over time, internal loan debt (Due to Other Funds) simply supplants bonded debt. The second scenario assumes billboard revenue of $250,000 per year starting in 2005. Under this scenario, bonded debt is fully paid in 2012 and internal loan debt is fully paid by 2018. The third scenario depicts what would happen if the City decided to forgive all of the current internal loan debt. While this scenario is unlikely and not recommended at this time, it does demonstrate the additional impact of the internal loan debt on top of the bonded debt. Under this scenario, bonded