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HomeMy WebLinkAbout1997-03-17; Parks & Recreation Commission; 397-4; Municipal Golf Course DevelopmentPARKS & RECREATION COMMISSION - AGENDA BILL AB# 397-4 MTG 03-17-97 " )EPT CSD TITLE: MUNICIPAL GOLF COURSE DEVELOPMENT UPDATE (INFO) RECOMMENDED ACTION: Accept and file staff report. ITEM EXPLANATION: Staff will update the Commission on the most recent Council action and status of the Municipal Golf Course Development. EXHIBITS: 1. City Council Agenda Bill #14,075 11 CITY OF CARLSBAD - AGENDA BILL zog oz3 Oo AB# /#f 07S*X MTG. 4%^7 DEPT. CD TITLE: APPROVAL OF DESIGN CONTRACTS FOR THE CARLSBAD MUNICIPAL GOLF COURSE PROJECT DEPT. HD. (~f^ £^i~> CITYATTY. (A2*-^- CITYMGR -^Y APPROVING RECOMMENDED ACTION: It is recommended the City Council ADOPT Resolution No. three (3) agreements and APPROPRIATING FUNDS for the Carlsbad Municipal Golf Course project and ADOPT Resolution No. 97-f? declaring the intention to reimburse certain project expenses from the proceeds of obligations to be issued by the City, or a Joint Powers Authority to be created by the City, for this project. ITEM EXPLANATION: A Selection Committee composed of City staff and representatives of the City Council appointed Golf Course Steering Committee has concluded its review and analysis of several proposals, undertaken site visits, completed interviews, and finalized its evaluation of the finalists for both golf course architect and golf course development services. The Selection Committee recommends the following architect and development firms for the proposed Carlsbad Municipal Golf Course project: Golf Course Architecture Services: Golf Course Development Services: Casper-Nash and Associates of Scottdale, Arizona Raven Golf Management of Pheonix, Arizona At this City Council meeting, staff will review the status and schedule for the proposed Carlsbad Municipal Golf Course project. Staff will also discuss the opportunity for the City to form a Joint Powers Authority to undertake the administration, financing, and operation of the municipal golf course project. Attached for the City Council's review and approval are 3 consulting agreements required to initiate design activities for the project. These agreements include golf course architectural design and construction phase services with Casper - Nash and Associates, golf course development and construction phase consulting services with the Raven Golf Group, and environmental field surveys and resource agency permit processing with Tetra Tech, Incorporated. A brief summary of their respective work activities include: Casper - Nash and Associates: All golf course design services including course layout, grading plans, all on-course landscape design, irrigation plans, water features, bunkers, greens, tees, on-course signage, driving range, and all construction phase architectural services. Raven Golf Management: All golf course development consulting services including clubhouse and maintenance facility design, all off-course landscape design, drainage and utility 12- PAGE 2 OF AGENDA BILL NO. design, all off-course signage and lighting, and consulting services during the design phase with emphasis on maintenance, operations, and marketing both prior to and after the course is open to the public. This scope of work also includes JiJI construction phase services including construction management. Tetra Tech. Incorporated: All required environmental field surveys including update of the existing environmental constraints data and mapping, field reconnaissance for sensitive species, resource agency permit processing, and environmental constraints consulting during the design process. Staff recommends approval of the 3 consulting agreements. GOLF COURSE FINANCING PROGRAM The total cost of developing the Carlsbad Municipal Golf Course will not be clearly defined until the architect has completed the course design and the required project entitlements have been secured . However, the City Council has received reports in the past showing that the total cost may be as much as $12 to $14 million. In the past, the staff has reported to the City Council on financing alternatives that generally focused on the issuance of revenue bonds that may or may not be backed by the City's General Fund. Although staff is recommending that the City Council fund these contracts from funds that are already in the Golf Course Enterprise Fund, or from advances from the General Fund to the Golf Course Enterprise Fund, it is important to understand that the ultimate financing vehicle will be a debt issue. Staff expects to ask the City Council to issue bonds in the late winter or early spring f 1998. At the same time, the City Council will be asked to decide on the structure of the bond issue, the security for the bonds, and other issues related to the bonds. The security question will be an important one in that the bond market will be looking for some assurance that if the golf course is not successful, the bonds will still be paid. Generally, this assurance comes in the form of a pledge of revenue from the City's General Fund to fill any gap between the revenue from the golf course operation and the amount needed to pay debt service. In the past, the City Council has been hesitant to offer this surety. The City Council will want to carefully review the budget issues and fiscal tradeoffs that such a pledge might raise. One benefit that the City Council has is that in 1988 the voters of Carlsbad gave the City Council the authorization to use General Fund money to pay for a portion of the golf course, if necessary. This vote meets the requirements of section 1 .24 of the Carlsbad Municipal Code (Proposition H) which requires voters approve the expenditure of more than $1 million of General Fund Monies on any Capital Project. FORMATION OF A JOINT POWERS AUTHORITY Staff will also be proposing the formation of a Joint Powers Authority (JPA) to actually construct and operate the golf course. The JPA structure has some flexibility in its contracting rules that provides some relief from the strict bidding system applied to all municipal public works projects. In addition, the JPA may provide the City Council with an administrative alternative for dealing with issues such as rate setting, future project related improvements, or golf course policies. These opportunities will be discussed with Coun "Nn detail at a future meeting. The JPA will be formed shortly before the City Council goeo to bid on the golf course construction in early to mid -1998. -- 13 One of the attached resolutions allows the City Council to recover preliminary engineering and design costs from a later bond issue, if the City Council so desires. The ability to recover these costs will depend upon the ultimate economics of the golf course project. However, staff is asking the City Council to take this action now to preserve the City's options in the future. The staff will be recommending the City pursue a tax exempt bond issue. In a previous discussion with the City Council, staff outlined the pros and cons of taxable versus tax exempt bond issues. The lower interest rates, and therefore, lower total cost to the City is the preferred option. All of the technical issues related to the golf course financing will be presented to the City Council as we get closer to actually putting the financing package together. FISCAL IMPACT: The 3 agreements have been negotiated to include complete design and construction phase services for the following costs: Casper - Nash and Associates: $ 363,000 Raven Golf Group: $ 1,393,200 Tetra Tech, Incorporated: S 24.000 Total Design and Construction Phase $ 1,780,200 (a) Consulting Services: It should be noted that additional project development, entitlement, and processing costs will be required and include the following estimates: Environmental Impact Report: $ 125,000 Supplemental Environmental Surveys: $ 25,000 Geotechnical Report: $ 10,000 Miscellaneous Permit Fees and Utility Fees: $ 25,000 Off-site Environmental Mitigation (if required): $ 175,000 Continuing Financial Advisors, Bond Counsel, $ 25,000 and Economic Research Consulting Services: Design and Pre-Opening Contingency: $ 100.000 Total Estimated Pre-Opening Costs: $ 485,000 (b) Total Appropriation Needed (a+b above) $ 2,265,200 Amount Available in Golf Course Fund: $ 5QQ.OQQ Additional Appropriation Needed: $ 1,765,200 There is currently $500,000 budgeted for the project in the Golf Course Fund. An additional appropriation of $1,765,200 is needed. Staff recommends that an advance be made to the •*- 14 PAGE 4 OF AGENDA BILL NO. /^ £>7f \ Golf Course Fund from the General Fund balance to finance these costs. It is anticipated \ that the advance will be repaid either from the issuance of debt by the Golf Course Fund, discussed below, or from operating income over time after the golf course is operational. EXHIBITS: 1 Resolution Number 97-?f approving 3 consulting agreements and aDDrooriating funds for the Carlsbad Municipal Golf Course project. 2 Resolution Number 97-f 9 declaring the intention to reimburse certain project related costs from the future bond sale proceeds. 3. Consulting agreement with Casper - Nash and Associates. 4 Consulting agreement with Raven Golf Group. 5. Consulting agreement with Tetra Tech, Incorporated. 15