City finance staff told the council on Nov. 10 that the 2025 budget had contemplated a $1,000,000 principal prepayment on the Trailhead Improvements bond (split between the general fund and REIT) but recommended a different funding approach for 2026.

Kyle said the administration recommends not executing the prepayment as currently constructed; instead staff proposed using up to $500,000 from the tourism capital (lodging tax) fund — because that fund may end 2026 with roughly $600,000 — and relying on golf operations to make the annual bond payment going forward. That approach would reduce use of the general fund for one‑time capital prepayments and preserve general fund capacity for other municipal needs.

Councilors asked how prepayments would change the fund ending balances and whether prepayment increments are constrained. Staff said typical prepayment increments are $500,000 but that they will verify with the bond issuer whether smaller increments are allowed; if the council chose to prepay $500,000 from the tourism capital fund in 2025/2026, the fund’s ending balance would fall to a relatively small carryover, and the trailhead fund would receive the accelerated payment.

Why it matters: the Trailhead bond repayment strategy affects which city fund bears accelerated principal reductions — choices that affect fund balances and the city’s ability to pay for other capital projects. Council members asked staff to prepare specific scenarios showing the fiscal impact of partial prepayment and the contingency plan if golf operations revenues fall short.

What’s next: staff said they will confirm prepayment mechanics with the issuer and bring back a budget adjustment or transfer proposal if the council wants to move forward.