SR 05:255 - Laserfiche WebLink

I from the midyear review ofFY07 (spring 2007), o Use the surplus funds to provide for golf debt service payments in the two.year FY08IFY09 budget that will be prepared in spring 2007, o The target amount for the initial two. year time period would be about ~1.8 million (sufficient to cover estimated FY08 and FY09 debt service not covered by projected Golf net operating income). 3. Thereafter, staff recommends continuing the practice of prefunding until net operating income from the golf course is sufficient to fully fund debt service, as follows: o Accumulate one. time funding, sufficient to prefund estimated debt service requirements by the spring of each odd numbered year Gust prior to adoption of the next two. year budget), o Base future reserve target amounts on projected differences between golf course net operating income and annual debt service payments. o Continue this prefunding practice until the Golf Enterprise is able to fully fund debt , sefVIce. In summary, staff recommends that: o The reserves be given high priority for any surplus funds identified in the yearend FYO) review this fall, to provide a reserve balance that is adequate for contingency and operating cash flow requirements ($)00,000); and o An estimated $1.8 million in General Fund support to pay debt service for the next two years (FY08 and FY09) be funded by early spring 2007, o In total, the initial target for these reserves should be ~2.3 million, o $1.6 million of the existing reserve of $1.7 million be used for FY07 debt service, leaving a balance of $1 00,000 to be applied to the FY08 and FY09 reserve requirements, Therefore a roximatel $2.2 million is the tar et addition to the Golf General Fund reserve by the spring of 2007 to provide for contingencies, cash flow and full debt service payments (as estimated) through FY09, The amount needed for debt service in future years is expected to decline over time and be eliminated after about 12 to 14 years of operation, While this might seem like an extremely conservative recommendation, and one that could negatively impact funding for the CIP, the intention is actually to protect the CIP from funding volatility, By accumulating two (2) years of advance funding (from yearend surpluses and midyear/midterm reviews), and establishing the practice of prefunded debt service, the ongoing allocation of CIP funding (currently $) million) will be assured. Unanticipated impacts from golf course operations should not affect CIP funding, as the City would have a full two (2) years to react to them, resulting in the ability to smooth these impacts over time. This philosophy has served the City well in its financial planning and budgeting for many years, and is at the root of the City's existing Financial Policies, SR 0):2)) Page 10