City Council Considers Mulligans Bond Repayment Resolution
Mar 27, 2015 09:40AM
● By James Luke
At the March 17, 2015 meeting the South Jordan City Council entertained the possibility of retiring a debt of nearly $6.5 million dollars with a single payment in early April. Resolution R2015-19, presented for the council’s consideration by Councilmember Mark Seethaler, sets out a plan to fully redeem the bonds that are secured by the Mulligans Golf & Games property.
The city bought the 67-acre recreation center in June of 2004, and has paid about $4,500,000 in annual payments since then. Current obligations under the bond that was refinanced in September 2005 call for a payment of $450,000 every April until 2029.
The resolution notes that about a million dollars is available from money already earmarked for use on Mulligans’ payments. Beginning with this year’s annual payment on the bonds, due on April 1, 2015 in the amount of $345,000, and supplemented by the reserve the city holds as a requirement of the original bond, an amount just over $724,000, the two taken together constitute some 20 percent of the principle due on the bonds.
Adding in nearly $4 million dollars more from the city’s operating surplus from last year, the immediate payment in full of the bond will save the city almost $1,654,000 in interest expenses. Relying on advice from legal counsel and bond underwriters, the resolution notes that the bond is redeemable without penalties or fees as of April 1, 2015.
The resolution states that loan payoff the amount “will originate from the city’s General Fund and be recorded as a non-interest bearing loan receivable from the Mulligans Enterprise Fund.” Councilman Seethaler noted at the March 3 council meeting, when he placed the resolution on the upcoming calendar, that totaling the past payments on the property together with what can be paid off to retire the bond in full in April, “the city is into the Mulligans property for a total investment of about $10,000,000.”
Despite the contentious process of the past few years during which the fate of the property and its costs to the city were considered and debated at length, the council has now come to see the investment in the property as a valuable addition to the city in a form very much as the property currently exists. The resolution specifically notes that the city council affirms that it desires to “retain and preserve the Mulligans property as publicly-owned open space for public gathering and enjoyment as an enhanced and beautiful gateway to the city of South Jordan.”
The work of the Mulligans Review Commission is now well under way in the process of considering the best options to maximize the benefit of Mulligans for the entire community. Together with an opportunity to pay off the bond and save more than a million and a half dollars in interest over the next two decades, consensus on the future of Mulligans as preserved open space that will not be a burden on the taxpayers is coming into focus.