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4.7. SR 12-04-2017 EOty1� ,.,�� Request for Action River To Item Number Mayor and City Council 4.7 Agenda Section Meeting Date Prepared by Consent December 4, 2017 Lori Ziemer, Finance Director Item Description Reviewed by Authorize Cancellation of Interfund Loan of the Cal Portner, City Administrator Park Dedication Fund to the GRE Reserve Fund Reviewed by Action Requested Adopt,by resolution, the cancellation of the interfund loan of the Park Dedication Fund to the GRE Reserve Fund for its share of the final Pinewood Golf Course payment. Background/Discussion In 2006, the city purchased Pinewood Golf Course for $1,800,000 plus interest and lease payments of $180,000. The council consensus was to use $390,000 for the down payment and first lease payment from the GRE Reserve Fund. The remaining payment balance would be split 50% each from the Park Dedication Fund and the GRE Reserve Fund. However,with the decline in the development activity and the lack of sufficient Park Dedication Revenue, the Park Dedication Fund did not have the funds available for its share of the final payment of $1,140,446 (net of the $410,000 legal settlement) in 2016. Therefore, the GRE Reserve Fund provided the financing for the final Pinewood payment with the intent the Park Dedication Fund repay its share with an interfund loan as Park Dedication Revenue became available. Due to the inadequate generation of Park Dedication Revenue,it is recommended to cancel the $570,223 interfund loan of the Park Dedication Fund to the GRE Reserve Fund as it could be years before the loan would be paid off. If the city were to sell the golf course each fund would be reimbursed their pro- rated share for any money put into Pinewood towards the purchase price and interest. Financial Impact Cancel the $570,223 interfund loan of the Park Dedication Fund to the GRE Reserve Fund for its share of the final Pinewood payment. Attachments ■ Resolution authorizing the cancellation of the interfund loan of the Park Dedication Fund to the GRE Reserve Fund ■ April 10, 2006, City Council minutes The Elk River Vision A PehoMing community 2a itb revolutionary and spirited resourcefulness, exceptional POWERED By service, and community engagement that encourages and inspires prosperity INAWRE1 City of Elk City of Elk River Wver City Council Resolution 17- A Resolution of the City Council of the City of Elk River Authorizing the Cancellation of the Interfund Loan of the Park Dedication Fund to the GRE Reserve Fund WHEREAS, the city purchased Pinewood Golf Course in 2006 with funding sources to come from the Park Dedication and GRE Reserve Funds. WHEREAS, the Park Dedication Fund lacked sufficient funds available for its fifty percent share of the final Pinewood payment of$1,140,446, net of the $410,000 legal settlement,in 2016. WHEREAS, the GRE Reserve Fund financed the final Pinewood payment with the intent the Park Dedication Fund repay its share as park dedication revenue became available. WHEREAS, due to the inadequate generation of park dedication revenue it is deemed in the best interest of the Park Dedication Fund to cancel the interfund loan to the GRE Reserve Fund. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,Minnesota, as follows: authorize the cancellation of the $570,223 interfund loan of the Park Dedication Fund to the GRE Reserve Fund. Passed and adopted this 41h day of December 2017. John J. Dietz,Mayor ATTEST: Tina Allard, City NATUREJ City Council Minutes April 10, 2006 Page 5 • Councilmember Morin stated that it was his view that if you paid anything towards it and if the property was sold you would get your money back. Councilmember Farber stated that he agrees that one-half should come from Park Dedication funds. Ms. Johnson stated that if the council wished a plan could be developed to determine an amount to be reserved each year in the Park Dedication fund to fund the principal payment due at the end of the contract. Commissioner Peterson indicated that they were concerned of the full balloon payment coming out Park Dedication funds. Commissioner Polston-Hock stated that she felt we needed to be very cautious in using Park Dedication funds. Mayor Klinzing stated that this is a park that was purchased by the council and also a recreational program. She stated that we all need to come together in support. Commissioner Niziolek stated that he sees this as a recreational opportunity but he wants to make sure that we have sufficient funds to make critical steps in the future and that we don't make decisions too quickly. He wants to make sure that when other property becomes available for parks that we have money available to acquire. Councilmember Morin agreed that the council also doesn't want the commission to run out • of money. He stated that part of having reserves is to be able to take advantage of opportunities as they come up. He stated that the council decided that as a recreational opportunity it was important to plan for this now. Comatissioner Peterson stated that it is a one shot deal and that they are trying to save parcels. He stated that we have to develop and acquire all at the same time making it very difficult with funding. He stated that no one is against acquiring but the council never came back to the commission asking their opinion on acquiring and funding. He expressed concerns of communication and concern that all of the money would be coming from the Park Dedication funds. The council stated that time didn't allow coming back to the Commission and that they had to make a decision fast MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER MOTIN TO USE $390,000 FROM RDF RESERVE FUNDS; AND FIFTY PERCENT OF THE REMAINING BALANCE TO COME FROM PARK DEDICATION FUNDS AND FIFTY PERCENT FROM RDF RESERVE FUNDS OR THE HOST FEES (WHICHEVER HAS FUNDS AVAILABLE); AND IF THE CITY EVER SELLS THE GOLF COURSE THAT THE PARK DEDICATION FUND IS REIMBURSED FOR ANY MONEY THAT THIS FUND PUT INTO PINEWOOD TOWARDS THE PURCHASE PRICE AND TOWARDS INTEREST. MOTION CARRIED 5-0. • Ms. Johnson stated that staff would bring this back annually for Council action on using either the RDF Reserve or landfill host fees. The Council concurred.