Agenda Packets - 2000/04/10 - Laserfiche WebLink

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Mounds View City Council March 27, 2000 Regular Meeting Page 10 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, and 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 pointed out that one of the problems with the finances stems from the fact that the City spent a significant amount of money on unsuccessful litigation which made the financial situation more acute, and this is another reason they have had to resort to this measure. Superintendent Hammerschmidt stated this was correct. He indicated the golf course would not accumulate any cash reserves as a result of the billboards. Council Member Quick explained that if the golf course is to be a good operating business, they should invest the money and keep it viable, so that they can maintain optimum usage, and keep the cash flow going, so that everything dovetails together. He added that they should also consider other means of improving the cash flow. He advised that the billboards are not a fix-all, but rather, one step in the process. Council Member Stigney indicated that two or three weeks ago, the Golf Course Committee was to meet and be broadcast, and this discussion might shed some light on these issues. He stated there were many questions in the community pertaining to how this revenue would be utilized and other related issues. He inquired when this meeting would take place. Mayor Coughlin stated he thought this meeting would be held some time during the month of April. He indicated at the previous meeting, there were only two members present, therefore, there was no point in broadcasting the meeting at that time. Superintendent Hammerschmidt explained that they were considering setting the meeting date 30 days from the date of this item’s publication, which would be the following Thursday, and 30 days before Eller Media could go before the State to request the permits. He indicated it would be approximately 65 days before they learn the results of the request for the State permits, and they