Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Interfund Loans topic
No spam. Unsubscribe anytime.
Council questions interfund loans for tertiary plant and arena; staff to seek auditor opinion
Summary
Councilors and members of the public pressed staff to reconcile interfund loan balances that link the tertiary treatment plant, the arena and general fund. Staff said some transfers are "paper" items and will ask the auditor whether past general fund payments should be treated as loan repayments or written off.
City councilors raised questions Thursday about interfund loan balances connecting the tertiary treatment plant, the horse arena and the general fund, seeking clarification about whether past payments should reduce outstanding loan tallies.
During the workshop, finance staff member Andrea described several interfund loans and said the accounts are confusing because some funds were used to pay others and some charges were only recorded on paper. She said: "If the general fund owes the tertiary plant, but every year we pay 400,000 average to the tertiary plant, wouldn't those first payments just be considered a loan payment?" Andrea asked the council.
Council member Dominic (council member) and others said the arena historically borrowed from the tertiary fund, and that the city had later changed charging arrangements (for example, reduced charges for the arena). "We gave the arena a deal a couple of years ago, and we just decided to charge them $3.50," one councilor said, noting that revenue that should flow back to the tertiary fund instead had been routed to the general fund.
Public commenters also urged the city to resolve the issue; one resident noted the tertiary plant had cost over $1.2 million and urged payoff or reclassification. Andrea said accounting choices such as recording depreciation or booking donated assets have further complicated fund balances and that auditors should be consulted on appropriate accounting treatment.
Next steps: Andrea said staff would research whether historical general-fund payments count as loan repayments, whether debts can be defeased, and whether assets (including donated facilities) should be booked and depreciated in the enterprise fund. She said she would "get an opinion on that" from the auditor and the city's finance partner.
Ending: Council directed staff to continue reconciling interfund loans and to request auditor guidance on debt, depreciation and potential write-offs.
