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<br />Further, there are approximately $175,000 of capital costs that need to be incurred within the fIrst <br />two years of ownership. Part of this cost is to bring the clubhouse into compliance with the <br />American with Disabilities Act. These improvements would need to be completed prior to the city <br />operating the golf course. The same reserve funds used for the purchase could fund these capital <br />costs; the mowing equipment could be fmanced through equipment certifIcates that would be paid <br />through property taxes. <br /> <br />In addition, if annual revenues do not meet all operating costs, funds would need to be available to <br />offset the shortfalls. Mr. McMurchie's projections show that there is a slight income each year; <br />however, this may be optimistic given that the personnel expenses for the city are likely higher than <br />those included in the projections. If the city were to fund these defIcits similar to the way it funds <br />the Ice Arena defIcits, it would be part of the general fund tax levy. <br /> <br />In conclusion, if the Council proceeds with this purchase, funding sources for the purchase, capital <br />costs, and possible operating shortfalls need to be identifIed.d <br />s: \ Council\Lori\2005 \Pinewood Appraisal Presentation. doc <br />