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Council debates sales-tax revenue bond to replace failing golf-course irrigation system
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Summary
City staff presented a plan to replace a 24-year-old irrigation system at the municipal golf course and proposed financing via a 30-year sales-tax revenue bond (resolution O2032026B) with a direct placement authorization up to $5,000,000; staff said golf revenues are intended to cover roughly $300,000 annual debt service.
City staff told the Cedar Hills City Council on Feb. 3 that the municipal golf course’s 24‑year‑old irrigation system has reached the end of its useful life and requires replacement with more durable materials and controllable heads.
The staff presentation described replacing PVC pipe with high‑density polyurethane piping and installing spreader heads that allow zone‑by‑zone control to improve water efficiency. A bond financing plan was proposed to cover construction and associated course refresh work, with a staff estimate of initial borrowing of about $4,000,000 and bond parameters up to $5,000,000 to provide structuring flexibility.
Speaker 6 explained the financing mechanics: “Resolution authorizes up to 5,000,000,” and said the proposal is for a 30‑year, direct‑placement sales‑tax revenue bond that would be callable so the city could refinance if market conditions improve. Staff emphasized the intent that golf‑enterprise revenues and reserves — not the general fund or a property‑tax increase — would be the primary source of debt service; staff estimated the annual payment would be on the order of $300,000.
Councilmember Speaker 3 moved to adopt Resolution O2032026B, authorizing issuance of sales‑tax revenue bonds to fund the golf‑course improvements. The motion was made on the record, but no final vote or rolling call appears in the provided transcript excerpt.
Supporters said a direct placement provides flexibility and a callable structure, while bond counsel and staff noted constraints such as IRS spend‑down rules for construction proceeds and differences between direct placement and market sales (direct placement often has higher stated rates but is callable sooner). Staff also highlighted cost‑of‑issuance estimates (roughly $30,000 for direct placement vs. $60,000 for market sale as discussed in the presentation).
The council’s packet places the bond item as packet item 8; staff noted the course will be closed at times for construction and that the project also includes course refurbishment (bunkers, tee boxes and surfaces) with an anticipated opening of a refreshed course in 2027. No final action on the motion is recorded in the excerpt.
Next steps: the council heard the motion to adopt the resolution and staff said they will return with finalized bond documents and recommended terms for mayor and staff signatures once negotiated.