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3) How does the city justify collecting revenue in 2013 if, in April before the golf <br /> season there was never any intention to pay the bill? <br /> In April of 2013,the city proposed an amendment to the balloon payment. The city continued <br /> operating the course expecting a counter offer from the Krauses. The Krauses did not provide a <br /> counter offer. <br /> For the 2013 golf season,golf revenue collected at Pinewood Golf course was short of operational <br /> expenditures by$47,027,requiring a taxpayer subsidy. The subsidy does not include capital <br /> expenditures of$27,764 for a replacement mower that was needed to continue operations. The City <br /> Council budgeted for 2013 and 2014 golf course operations knowing the course would require a <br /> subsidy in order to operate. <br /> As stated above,the intention was to renegotiate the final payment with Mr. Krause to reflect <br /> economic changes and to continue operations and maintenance of the course. The Krauses notified <br /> the city that they were amending their lawsuit to claim further rental fees for the property while in <br /> litigation. In response to their amended complaint,and the Krauses'claim for damages,the Council <br /> agreed with city legal counsel's recommendation to close the course in 2014 while the lawsuit is <br /> pending. <br /> Budget Questions: <br /> 4) In the past five years, which tits parks/recreation facilities have consistently lost <br /> money? <br /> City parks have ongoing maintenance and operational costs. They are provided for public good and <br /> have no revenue expectation. <br /> Most parks are provided to the community as required park dedication by a developer and cannot be <br /> utilized for any other purpose. Some parks and park land were purchased with state, federal or other <br /> grant monies or with funding from the implementation of a conservation easement. Most have some <br /> restrictions on their use and maintenance. <br /> The city owns the following recreation facilities: <br /> a) Pinewood Golf Course/Clubhouse—Does not earn enough revenue to support operations, <br /> capital equipment/improvement needs or purchase price. <br /> b) Elk River Ice Arena—Ice rental,building rental, and concessions pay for full operational costs, <br /> capital equipment replacement,and some building expenses. The Barn Rink was gifted to the <br /> city after construction and operation by the Elk River Youth Hockey Association. <br /> c) Elk River Activity Center—Operations,maintenance,and capital repair/replacement are funded <br /> by taxpayers. Senior programming is subsidized,approximately$193,000,by general taxes. <br /> d) Lions Park Building—Rentals offset only a small portion of the operations and maintenance,but <br /> not capital repair expenses. The building and park were gifted to the city by the Lions Club. <br /> e) Trott Brook Barn-Rentals offset only a portion of the operations,maintenance,but not capital <br /> repair expenses. The building and park were provided to the city as Park Dedication. <br /> 176706v2 <br />