Englewood City Council agreed by consensus vote July 1 to instruct staff to go forward with a proposal to refinance about $2.5 million in golf course revenue bonds to take advantage of lower interest rates and avoid a big jump in annual premiums in 2014.
The initial ordinance setting limits for the amount of the bonds, the interest rate and annual debt payment plus the maximum term for the bonds is scheduled to be considered on first reading by the city council on July 15.
If it passes, the ordinance will be considered on second and final reading at the Aug. 5 meeting.
The bonds were sold in 1994 to provide about $4 million to provide funds to rebuild the clubhouse, construct the new indoor teaching center and to rebuild the Par 3 course, and were refinanced in 2003.
Frank Gryglewicz, finance director, presented the proposal to the Englewood City Council at the July 1 study session. He said the 2013 annual debt payment is $216,663 and, without refinancing the bonds, the 2014 debt payment will be about $290,000.
“We are looking at the market to determine the best length of time for the refinancing and right now we looking at adding 10 years to the date the bonds will be paid off,” Gryglewicz said. “The refinancing will keep the annual debt payment the same as 2013, which means the course will have reserves to meet unexpected expenses.”
The bonds are scheduled to be paid off in 2024. Refinancing will extend the date the bonds will be retired until 2034.
He said plans are to have everything completed in time to close the deal in September.
Council Member Rick Gillit asked if extending the life of the bonds will cost more in interest than is saved. Gryglewicz said the difference in annual payments will more than cover the additional interest paid over the life of the bonds.
The city-owned golf course, now called Broken Tee at Englewood Golf Course, is located at 2101 W. Oxford Ave. in Sheridan.
In 2006-08, play on the course was limited because of construction to complete a total remake of the course, which included the renaming.
The driving range, par 3 course and six holes of the regular course were shifted to the west but still remain east of the South Platte River, and the design moved the seventh, eighth and ninth holes west of the river, using vacant land along the riverbank for the holes.
“Our use was down quite a bit during those construction years,” said Bob Spada, course manager. “However, we have seen a steady increase in rounds played on the course in the past few years.’
He said there were 46,273 rounds played on the course in 2012, which is up 7.8 percent from the 42,915 rounds played in 2011. The count is only for nine- and 18-hole rounds played on the main course.
He added that play on the par-3 course also increased from 2011 to 2012. Total rounds on the par-3 in 2011 were 19,006. The number increased to 22,234 in 2012.
More rounds equate to a 12 percent increase in revenues from 2011 to 2012. The revenues that include all money taken in by greens fees, sales in the pro shop and other sources were $1.87 million in 2011 and increased to $2.1 million in 2012.
Spada said the unsettled spring weather this year limited play on the course. But, since the weather has gotten better, play has increased.
“The last month or so, the course has been very busy,” he said. “I think we are making up ground and could see the play increase in 2013 for the third straight year.”