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<br />on anticipated golf trends and estimated CPI increases each year, The data provided needs to be
<br />viewed as long.term planning, which will be continually reviewed and updated to ensure it is a
<br />useful budgeting tool.
<br />
<br />The pro forma does, however, provide a starting point for current financial issues, As discussed
<br />above, the first full year of operations (2006.07) anticipates an NO! of M)3,000, Starting in
<br />October 200" approximately ~1.6 million in annual debt service begins to accrue. The
<br />payments will occur in two (2) installments: principal and interest each October (~1,062,000);
<br />and an interest.only payment each April (~'30,000). The 20.year pro forma projects that in year
<br />14 of operations, Callippe Preserve will generate sufficient NO! to pay all operational costs and
<br />the full annual debt service, Prior to year 14, it will be necessary for the City to subsidize the
<br />debt service with annual contributions that will decrease over time (e,g., ~l.l million in the first
<br />full year of operations; ~772,000 by year 4; ~474,000 in year 8; and ~)8,000 in year 13),
<br />
<br />During its review of the proposed green fee rates in July, Golf Committee members pointed out
<br />that the original feasibility studies projected 7',000 total rounds annually for a municipal golf
<br />course in Pleasanton, Given economic conditions and a depressed golf industry nationwide,
<br />particularly in the Bay Area, the current estimate is '),000 annual rounds, Those 20,000 rounds,
<br />coupled with green fees approved by the Parks and Recreation Commission, would have
<br />allowed Callippe Preserve to be financially independent in its first full year of operations, Even
<br />ERA's revised financial analysis in 2001 estimated that the course would likely be able to cover
<br />operating costs and debt service by year 4, It is a reflection of the volatile nature of the golf
<br />industry that the current pro forma projects financial independence will not occur until year 14,
<br />
<br />It should be pointed out that the goal has always been to have the golf course be self.sustaining,
<br />This is in contrast to several other City recreational facilities that typically try to recover
<br />program costs, but not capital costs, Attachment D details the prior year revenues and expenses
<br />for five ()) City recreational facilities, including the Amador Theater, Dolores Ben~son
<br />Aquatics Center, Senior Center, Sports and Recreation Community Park, and the Tennis
<br />Complex, The appendix illustrates ongoing annual General Fund subsidies of a low of~2l9,000
<br />at the Tennis Complex, to a high of ~1,06,,00 at Sports and Recreation Community Park. In
<br />addition, the General Fund pays most of the debt service for the Senior Center, with developer
<br />fees (not user fees) paying the remainder. While the golf course is projected to require subsidies
<br />for debt service from the General Fund for a period of time, ultimately it is projected to pay for
<br />its own capital costs,
<br />
<br />As a result of the projected shortfall in NO! to pay debt service in the early years of operation,
<br />staff is recommending the adoption of interim financial goals, along with long.term financial
<br />policies, that are consistent with the City's other Enterprise (self.supporting) Funds.
<br />
<br />SR 0,:2"
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