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Departmental Matters FUNDING: Staff recommends (funding for this expense to be provided by an interfund loan from the General Fund in the amount of $316,900. While the golf course has performed well over recent years, interfund borrowing has been needed for larger cash outlays (e.g. golf carts, Lakes Course irrigation system replacement). Staff is proposing a four-year repayment period with a 3.0% interest rate. This! interest rate is higher than the yield on county investments for the quarter ending September 30, 2019 which was 2.2%, and likely less than the rate that the County would be charged if borrowing from an outside lender. This loan does not result in a subsidy from the General Fund to the Golf Course. In fact, this arrangement benefits both funds. The financial independence of the Golf Course is maintained, while the General Fund receives a higher interest rate than it is receiving on other investments currently. I Based upon the four-year term and 3.0% interest rate, annual debt service payments would equal $84,172.44 (please ,see amortization schedule attached). Due to the proposed purchase of the "QuieTech" cart, the new loan is higher than the annual debt service payment for the current fleet i of golf carts which, is $66,256.92. Staff recommends another four-year. amortization as this amount aligns with the warranty period on the carts. Therefore, this loan should be repaid before the need to replace any carts arises. Prior to acquiring the new fleet of carts, staff recommends early payoff of the remaining principal of the current balance on the 2015 Golf Cart Interfund Loan totaling $11,015.27. This early payoff satisfies the loan two months ahead of the original final maturity of January 1, 2020. Early payoff of the remaining principal will alleviate the Golf Course from incurring overlapping debt from the two cart fleets. Funding for the early payoff is available in the following account, with the increase in interest expense for the new loan being absorbed in the current budget. Account Number Account Description Budget Amount 418-207001 Golf Course/ Due to General Fund $11,015.27 RECOMMENDATION: Staff recommends the Board approve the final cart selection and purchase price as selected by the committee, and authorize the Purchasing Division to issue a Purchase Order to facilitate the fleet update. Staff also recommends the Board declare 156 carts and one range cart as surplus upon delivery of the new carts and authorize their trade in to Yamaha as indicated in the RFP. Finally, staff recommends an interfund loan from the General Fund in the amount of $316,900 to be repaid over a four-year period as shown in the attached amortization schedule and early payoff of the existing interfund loan totaling $11,015.27. ATTACHMENT: Amortization Schedule 2019 Amortization Schedule 2016 113