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Pasco council approves $6.5 million interfund loan to shore up city health insurance fund
Summary
Council authorized a $6.5 million loan from the economic development fund to the city’s medical and dental insurance fund to stabilize cash flow; staff said the loan will be repaid from plan revenues and that the economic development fund retains reserve capacity for future projects.
The Pasco City Council approved resolution 4660 authorizing a $6.5 million interfund loan from the economic development fund to the city’s medical and dental insurance fund to address short‑term cash needs.
Interim finance staff explained that the city maintains multiple restricted funds and that the medical/dental insurance fund had a near‑term cash shortfall driven by plan claims, a recent data breach and related costs, and a long period without premium increases. Staff proposed loan parameters that would permit the insurance fund to repay principal and interest over time and said the economic development fund still maintains capacity for its planned projects.
Staff noted the loan would be repaid from insurance fund revenues; Councilmember Burrows asked for a clear accounting of the city’s fund balances. Staff agreed to provide a breakdown of both economic development and general fund reserves to council. Mayor Pro Tem Grimm and other members said the interfund loan was preferable to using other constrained options and affirmed support for the loan.
The resolution passed unanimously. Staff said they will bring any required mid‑biennium budget adjustments and provide repayment schedules and reporting to council.
Ending: The loan addresses immediate solvency concerns for the self‑funded plan and buys time for longer‑term premium and plan adjustments that staff will propose and implement.
