SR 05:255 - Laserfiche WebLink

Irrigation Water Water represents one of the single largest expenses of operating golf courses, after labor costs, The budget initially includes approximately ~2)0,000 per year (10% of the operating budget) to irrigate the course, which assumes the City will pay the same rate as all other ratepayers, The City's potable water supply is currently being used for all domestic and irrigation uses on the golf course, During the preliminary design of the project, staff did analyze options for alternative supplies of water; however, the capital and operational costs for the alternatives reviewed were considered cost prohibitive. The golf course has been designed and built with the infrastructure to irrigate with other water supplies in the future should it become more cost effective, Staff is in preliminary discussions with consultants and other agencies for an alternate supply of irrigation water for the golf course. If these efforts are successful, staff will bring these alternatives to the City Council for review, Management Fee CourseCo is in the first year of a five. year contract to operate Callippe Preserve for the City, All revenues and expenses pass through CourseCo, to and from the City's golf course bank account. CourseCo is compensated through an annual management fee that is jO% fixed and jO% incentive.based (revenue criteria must be met), In the first year the fixed fee is ~75,000, and CourseCo can earn up to an additional $7j,000 if revenue benchmarks are attained, In the second year these amounts increase to ~78,000, !1Qposed Operatin2 Bud2et for FY 2005.06 and FY 2006.07 Working with City staff, CourseCo has developed a 19.month operating budget for Callippe Preserve for the seven (7) remaining months in FY 200,.06, and all of FY 2006.07, These budgets are included as Attachment B.l and B.2. The budgets reflect the reduced revenue expectations resulting from the revised estimate of annual golf rounds discussed above, The golf course projects positive net operating income (NO!) for each of the two (2) budget periods (~'7,000 in 200,.06, and ~4,3,000 in 2006.07); however, as anticipated, the golf course is not projected to generate sufficient income to pay the full bond debt service (about $1.6 million annually) in the initial years of operation, due primarily to the decrease in projected golf rounds. Revenues are anticipated to increase over time as Callippe Preserve matures, and operations are expected to generate sufficient cash flow to eventually pay all costs, including debt service, These longer.term projections are shown in a 20.year pro forma (Attachment C) and discussed below, 20. Year Pro Forma and Fundine the Bond Debt Service Attachment C is the projected 20-year pro forma for Callippe Preserve Golf Course, Using FY 2006.07 as the base year, CourseCo has applied percentage increases to annual golf rounds, golf fees, and operating expenses to estimate NO! for the next 20 years, The assumptions are based SR 0,:2" Page 7