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8) Does the city have the money to make the final balloon payment? <br /> The city has money available for the purchase and the further ability to raise all of the revenue needs <br /> through general taxes. <br /> 9) What were the city's alternative plans for the golf course if it did not meet these <br /> financial expectations? <br /> The City Council's direction was to request to amend the Contract for Deed to reflect a property <br /> value more consistent with the market following the recession,loss of development,and the <br /> anticipated Park Dedication Fees to fund the purchase. The City Council has not discussed any <br /> alternative plans for the golf course property. <br /> 10)Does the forfeit of the balloon payment have anything to do with saving for future <br /> projects? <br /> The request to amend the Contract for Deed and any potential savings from the original contract <br /> price has no impact on future projects. The original plan was to pay for the golf course with the <br /> proceeds from future Park Dedication Fees and revenue in the GRE Fund. Using other capital <br /> funds until repaid with Park Dedication will require the Council to either postpone or cancel other <br /> planned capital improvements or utilize other fund sources,including the general tax levy. <br /> 1 1)if the city forfeits the golf course, will the purchase money need to be repaid to the <br /> Park Dedication Fund? <br /> Only the seller can cancel the Contract for Deed. In that event,Park Dedication Funds,which have <br /> been minimally used for the purchase would be repaid to Park Dedication. Costs have thus far been <br /> primarily paid by the GRE Fund,Equipment Replacement Fund, and General Fund. There has been <br /> no discussion about paying back any funds, except to the extent they were treated as loans. <br /> B 2)What effect will this have on the city's bond/credit rating? <br /> Bond Ratings are completed by a committee at the rating agency using several criteria and factors. <br /> Our financial advisor has indicated that the request to amend the Contract for Deed does not <br /> support the inability to pay. The city can demonstrate its minimal impact on finances,and its <br /> willingness to repay GO bonds or other rated securities. <br /> Future Intentions <br /> 13)Why did the city council enter into the purchase of the golf course? What were <br /> their intentions? <br /> The decision was made by a different City Council body under different economic conditions. The <br /> discussions of late 2005 and early 2006 are recorded in the respective meeting minutes. <br /> 14)Did the current city council have any intention of continuing Pinewood Golf Course <br /> after the Contract for Deed expired? <br /> The Contract for Deed did not expire. Only the seller can cancel a Contract for Deed,which has not <br /> happened. The only direction by the City Council was to renegotiate and amend the Contract for <br /> Deed. Instead of negotiating,the Krauses sued the city. The city's legal counsel recommended <br /> ceasing operations until conclusion of the litigation. The Council will discuss course operations <br /> 176706v2 <br />