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interoffice M E M O.R A N D U M to: Matthew Fulton -= from: Mary Burg subject: Clubhouse Project date: July 24, 1998 Brightwood Hills Golf Course paid its last $37,000.00 lease payment installment to Ramsey County in December of 1997. As you know, our plan has always been to use this flow of revenue to finance a new or upgraded clubhouse facility. Now that our financial commitment to Ramsey County has been completed, it is timely to consider moving toward constructing the new clubhouse. As directed by the City Council, staff has spent a considerable amount of time during the past several months evaluating the options of remodeling the existing structure versus constructing a new facility at Brightwood Hills Golf Course. Efficient Golf Course Systems was chosen as our consultant to assist us in considering operational issues. Their recommendation was to replace rather than remodel the clubhouse building. Our evaluation was discussed with the City Council at a work session. The Council concurred with this recomendation. Williams O'Brien Architects has worked with us on evaluating design alternatives. The conclusion to replace the clubhouse allows for needed improvements that remodeling does not ie: additional parking space, more efficient storage space, a building that would better meet the needs for the long term operations of the golf course. After additional design and site work, the new clubhouse design and site plan was brought before the New Brighton Park, Recreation, and Environmental Commission and the New Brighton Planning Commission. Both Commissions have recommended approval for the design and placement of the new facility. As a result, this project is ready to move forward, subject only to ensuring that we have .a sound financial package in place and getting Council approval to proceed. The expected cost of the project is $540,000. The Finance Director has recommended that financing for the facility be accomplished through a revenue debt issue that utilizes revenues derived solely from revenues generated at the golf course. This type of project should not utilize any property taxes and we would like to ensure that the capital debt doesn't cause any undue burden on the golf course's normal operation causing increases in our green fee structure. That is why utilizing the existing flow of revenue we have historically paid to Ramsey County makes sense to maintain for serving any new debt for the facility. Currently, the cost of the proposed project would require an annual debt service that exceeds our desired level of less than $40,000. The currently proposed project costs would require annual debt service of approximately $48,000 for a 20 year term. We are also very concerned that the bids we