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Home My WebLink AboutReg 2011-11-21 Item 5K - Resolution - Golf Course Fund Financial ProtocolsCOUNCIL AGENDA SYNOPSIS CAS NUNIBI :It: A(;1;.Nl),\ I rl ;n -I "T1TI.i Initial r ITEM NO. Meeting Date Prepared by Maior's review CoullCil re7 46 11/14/11 PMc 11/21/11 PMc i 5.K. ITEM INFORMATION STAFF SPONSOR: PEGGY MCCARTHY OItIGINAI.A(,I',NDA DA'17?: 11/14/11 Consider for approval certain financial changes in Golf Course Fund. CvTHGORY Discussion Motion Resolution Ordinance E:1 Bid An "a7d Public.Hearino Other Altg Date 11/14/11 Mtg Dale Mtg Date 11 21 11 lbltg Date Mtg Date MIS Date Altg Date SPONSOR Council Mayor HR DCD Finance .Fire IT P &R Police P1h SPC )NSOR'S The City Council is being asked to consider for approval certain financial changes to the SLININIARY Golf Course fund to enable a balanced budget without the need for significant General Fund subsidy. RrviiANIFID BY COW Mtg. CA &P Cmte F &S Cmte Utilities Cmte Arts Comm. Parks Comm. DATE: COMMITTEE CHAIR: RECOMMENDATIONS: SPONSOR/ADMIN. Finance CO ;�I NIl "I "1' I x;13 COST IMPACT FUND SOURCE E \PI"N1)I'll)Rl ?RI UItz D AMOUNT BUDGETED 1' LInd SOLII Ce: ('0177177(-'171,5: Transportation Cmte Planning Comm. APPROPRIATION REQUIRED $0 I MTG.DATEI RECORD OF COUNCIL ACTION 11/14/11 1 Forward to next Regular Meeting with Resolution I MTG.DATEI ATTACHMENTS 11/14/11 I Informational memorandum dated 11/8/11, with attachments 11/21/11 lInformational memorandum dated 11/16/11 RPSnlution in draft form Schedule of accumulated sales tax revenue 301 fund 29 30 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Councilmembers FROM: Peggy McCarthy, Interim Finance Director DATE: November 16, 2011 SUBJECT: Draft Resolution Golf Course Fund Financial Protocols ISSUE The Council is being asked to approve a resolution authorizing the Golf Course Fund financial protocols discussed at the November 14, 2011 Council of the Whole meeting. The financial protocols are established to foster, and ideally achieve, a self- sustaining Golf Course Fund. BACKGROUND The recommendations made by the administration and staff and presented at the November 14, 2011 meeting are interrelated and dependent. To remain balanced, a change in one recommendation may require an offsetting change in another recommendation if all other financial circumstances remain the same. For instance, if the indirect cost allocation charge is increased in 2013, discretionary subsidy may need to be used or admissions tax decreased or operational practices adjusted, to achieve break -even status, unless financial circumstances improve making these changes unnecessary. Attachment G, revised with the proposed financial changes, portrays a very tight budget for the golf course and shows a small deficit for most of the six years presented. DISCUSSION The ability of the golf course to achieve a self- sustaining, balanced budget in 2012 and beyond depends on meeting revenue and expenditure projections, achieving the more than $180,000 cost savings built into the Attachment G model, and by finding additional cost savings or revenue to offset the small deficits existing in the model. The draft resolution has been written to document Council decisions and reflect the economic circumstances modeled in Attachment G. RECOMMENDATION The Council is being asked to consider and approve the draft resolution on the Golf Course Fund financial policy changes. ATTACHMENTS Draft resolution. Schedule of Accumulated Sales Tax Revenue Land Parks Acquisition Fund 301 31 32 City of Tukwila Washington Resolution No. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ADOPTING FINANCIAL PROTOCOLS FOR THE GOLF COURSE FUND. WHEREAS, the golf course serves the community by providing environmental benefits and a park -like, visually appealing experience; by providing recreational services to youth, seniors and others; and by providing a meeting place for Tukwila residents and others; and WHEREAS, these amenities strengthen our community, making Tukwila a more attractive place to live and adding to the vision of Tukwila as an entertainment center; and WHEREAS, the citizens of Tukwila made their desires known by voting to acquire the golf course in 1975; and WHEREAS, the golf course operating revenue has historically been insufficient to cover the cost of servicing the bond debt, issued in 2003 to fund construction of the clubhouse, and to cover certain General Fund charges to the fund; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The City Council hereby agrees for 2012 and beyond that no portion of the Parks and Recreation Director's salary and benefits will be charged to the Golf Course Fund. Section 2. The City Council hereby agrees that for 2012 and beyond the operating costs of the maintenance building shall be born proportionally by the General Fund Parks Division and the Golf Course Fund based on usage of the facility. Section 3. The City Council hereby agrees to characterize the $650,000 transfer to the Golf Course Fund by the General Fund in 2004 as reimbursement to the Golf Course Fund for the Parks Division portion of the maintenance building construction costs. W: \Word Processing \Resolutions \Financial Protocols for Golf Course Fund 11 -16 -11 Page 1 of 2 PM:bjs 33 Section 4. The City Council hereby agrees to consider the outstanding bond debt, issued in 2003 to finance the construction of the clubhouse, as a governmental obligation and authorizes the transfer of the balance of this debt from the Golf Course Fund to a governmental debt service fund after the December 1, 2011 debt service payment. 34 Section 5. The City Council hereby authorizes the transfer of $3,302,960 of accumulated sales tax revenues from the Land Parks Acquisition Fund 301 to the debt service fund established in Section 4 of this resolution for the purpose of paying the scheduled 2012 and 2013 debt service costs and for early redemption in December 2013 of the outstanding bond balance. Section 6. The City Council hereby establishes for 2012 an indirect cost allocation charge of $15,000 for the Foster Golf Course Fund by the General Fund and agrees to review this charge in connection with the 2013 -2014 biennial budget. Section 7. The City Council hereby agrees for 2012 to continue assessing the admissions tax on golf course operations. Section 8. The City Council hereby agrees for 2012 and beyond to discontinue the automatic transfers into the Golf Course Fund by the General Fund and to provide transfers only on a discretionary basis if needed to allow the Golf Course Fund to operate at a break -even level. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 1 2011. ATTEST /AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Shelley M. Kerslake, City Attorney Allan Ekberg, Council President Filed with the City Clerk: Passed by the City Council: Resolution Number: W: \Word Processing \Resolutions \Financial Protocols for Golf Course Fund 11 -16 -11 PM:bjs Page 2 of 2 CITY OF TUKWILA LAND AND PARK ACQUISITION FUND 301 ACCUMULATED SALES TAX LOCAL RETAIL SALES AND USE TAX 301.313.100.00.00 Account History Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 Total Budget 210,000.00 202, 000.00 200,000.00 200,000.00 200,000.00 585,000.00 200,000.00 300,000.00 1,200,000.00 100,000.00 200, 000.00 Revenues 151,640.71 150, 814.82 200,000.00 200,000.00 214,012.51 609,032.80 207,485.60 278, 364.00 1,168,239.00 110,541.46 197,168.00 3.597.000.00 3.487.298.90 Source: EDEN Account Information Report 35 36