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Mounds View City Council April 9, 2001 <br />Regular Meeting Page 6 <br />expand. He further stated that, if the time comes to move on a Resolution, the Resolution should <br />clearly state what the costs involved are. <br />Council Member Stigney stated that the Mayor's comments were well spoken but he still feels <br />the need to look at the whole picture when spending his money as a taxpayer. He then noted the <br />study mentioned the uncertainty of revenue in the bonds discussion and he stated he feels the <br />City needs to be very cautious the second time around. <br />Mr. Hammerschmidt explained the master plan presented almost two years ago was to come up <br />with revenue producing items and a list of what items would be needed if the changes were <br />made. He stated it was clearly stated there was at least a two year interval between each step and <br />the decision was supposed to be made as to whether it was feasible to proceed with the next step. <br />He then stated he felt the course did not need to compete with bars and restaurants but merely <br />needed to provide minimal service for the golfers. He further stated he felt the key is to put <br />money into the golf course and then worry about the amenities. <br />Council Member Thomas asked if there would be a dedicated revenue stream for the bonds or if <br />there was a need to use general obligation bonds. <br />The Springsted Representative stated that based on the numbers they looked at the City could <br />issue gross revenue bonds for the second course and show positive cash flow. He stated the City <br />does not have the authority for general obligation bonds and would need a public vote to issue <br />. that type of bond. He stated they used gross revenue bonds because it is the most cost effective <br />way to do it. He further stated that to do a pure revenue bond would cost considerably more than <br />a gross revenue bond and due to the nature of the market that would be hard to sell. <br />Council Member Thomas asked what gross percentage the City is plus or minus on the revenue <br />percentage in terms of interest rate. <br />The Springsted Representative stated he believed the City to be +.5% or possibly closer to <br />+.25%. <br />Council Member Thomas questioned whether there is the option to gain a little more interest rate <br />if the City went with a straight general obligation bond. <br />Council Member Stigney stated that one of the options they were looking at doing if the <br />community supports it was to do an annual subsidy of residents and expansion of the course. He <br />noted if the billboards come in that should resolve the debt service issue and the City would not <br />need anything further. He stated that the study mentioned several options but he has seen only <br />two options. The first is to loan the course money and the second is to reach the point to <br />refinance. He then questioned what the other options are. <br />The Springsted Representative stated he was not sure on the language usage but stated they have <br />looked at the option of refinancing the existing debt but it has an attractive interest rate noting it <br />would be something that should be refinanced at the call date but it is not worth struggle right <br />