SR 05:255 - Laserfiche WebLink

RECOMMENDED FINANCIAL POLICIES Consistent with the City's other Enterprise Funds (Water and Sewer), staff is recommending that the City Council adopt financial policies that set forth the financial goals of the Golf Enterprise, including financial self. sufficiency, regular fee reviews, and maintenance of adequate reserves. Because it is projected that the Golf Fund will not fully pay debt service in the initial startup years of operation, the Fund will be unable to initially meet the goal of financial self.sufficiency during that period. It is projected that subsidies will be required to partially pay debt service, Therefore, in keeping with the City's past conservative financial policies, staff is recommending that an interim set of goals be established to span this initial start up period, Recommended Interim Financial Goals The proposed interim financial goals are intended to: o Keep the golf course fully operational and well maintained o Ensure operating costs are paid in a timely manner o Ensure debt service is fully funded o Insulate General Fund services and CIP projects from unexpected or fluctuating golf enterprise impacts, In order to achieve these goals, staff is recommending that any surplus funds identified as part of each yearend, midyear, or midterm budget review be given a high priority to fund the Golf Enterprise reserves to an adequate level. The following steps are recommended to achieve that goal: 1. Build initial operating reserves as follows: o Set aside ~1.6 million of the existing ~1.7 million Golf (General Fund) reserve for Fiscal Year 2006.07 (FY07) debt service payments, leaving a ~l 00,000 balance in the existing reserve, o Give priority to using yearend 6/30/0) (FYO)) surplus funds, in combination with the ~100,000 balance in the existing reserve, towards building the following estimated minimum reserve requirements: I 10% Reserve for Uncertainties (Contingency) ~ 300,000 I Cash Flow for Operating Expenses 200,000 2. Once the initial recommended reserve levels are achieved, staff recommends establishing the practice of pre funding debt service as follows: o Before early spring 2007, accumulate surplus funds: I from the midyear/midterm update of the two. year FY06IFY07 budget (spring 2006); I from the yearend review of FY06 (fall 2006); and SR 0,:2), Page 9