Council to spend General Fund money to save money long range on Lemoore golf course

Since the golf course expanded from nine to 18 holes in 1992, income from the golf course wasn’t always able to keep up with the debt service payments, requiring the city to step in with money from the General Fund.

The golf course originally cost the city $3.6 million in 1992.

In 2005 the Lemoore Redevelopment Agency bought the notes that had accrued on the General Fund and created a repayment plan which begins in the 2020-2021 fiscal year. When the state abolished redevelopment agencies, including Lemoore’s, support for the golf course debt service disappeared, requiring augmentation from the Lemoore General Fund.

The General Fund would have to augment the original golf course debt payments until the1995 Bonds are paid off in November 2020. The existing debt schedule has accelerated principal payments each year, making it difficult for the golf course to meet those required payments.

Finance Director Cheryl Silva Tuesday night (Aug. 6) presented council members with several options, but focused on a plan to use the general fund to pay off the 1995 bonds and set up a repayment plan that saves the city money, and a payment plan the golf course can likely keep up with.

The Lemoore General Fund currently has a fund balance of $6.9 million, much of which is invested in the Local Agency Investment Fund (LAIF) and averaged less than .5 percent over the last four years. Silva said the city could loan the golf course the funds at an interest rate of LAIF plus 1 percent.

If the city does nothing and continues with the existing bond repayment schedule for the remaining eight years of the loan, payments would total $2,488,000

Silva’s top alternative is to loan the golf course $1,440,000 to pay off the 1995 bonds and other expenses and save the city a few dollars. Silva estimates the annual payments will average about $191,128, well within the golf course’s ability to pay.

Silva expects the city’s general fund to be paid back by 2021, at which point the golf course will begin repaying the RDA loan of $1,665,000, which would take about eight years to repay.