Tenino council records prior interfund transfers and authorizes short-term loan to cover year-end cash needs

The Tenino City Council on Oct. 8 adopted two resolutions to formally record past internal transfers and to authorize a short-term interfund loan, and passed a second-reading budget ordinance to reconcile this year's starting balances.

Mayor (on Zoom) told the council they need to "make that right" after spending "some money out of our utility funds that we're not supposed to do without prior council approval," describing a package that includes about $1,300,000 in prior transfers that must be recorded and a proposed $500,000 borrowing to cover near-term cash needs. He said about half of the $1.3 million reflects upfront costs for the ag park, and the city expects some reimbursement through grants or state funding.

Why it matters: the actions reclassify money already spent from utility-related funds and authorize a short-term loan so the general fund can meet obligations while staff finalizes reimbursements and audit figures. The council and staff repeatedly emphasized this is an accounting and cash-management step, not a permanent diversion of utility resources.

What the council did: Resolution 2024-06 formalizes interfund loans made in prior fiscal years (water fund and water capital improvement fund loans, and sewer capital loans and reserves) and sets interest and repayment provisions; Resolution 2024-07 authorizes a FY2024 interfund loan of $500,000 from the water fund to the general fund with interest tied to the Washington State Treasurer's Local Government Investment Pool and repayment generally required within three years. The council then passed Ordinance 931 on second reading to amend the 2024 budget and record revised beginning balances across multiple funds (including a stated general fund beginning balance of $393,671.13 and changes to water, sewer and capital funds).

Council members asked questions about audit timing and whether final budget numbers were settled before approving new borrowing. One councilor asked whether the city was still awaiting audit results; staff said the audit and final budget numbers are still being finalized. At least one member stated they would "stay" on the vote for the borrowing resolution pending additional review; the resolutions and the ordinance were adopted by voice vote as recorded in the meeting.

The council also approved the consent calendar earlier in the meeting, which included payroll EFTs totaling $36,739.92 and claims and EFTs of $200,729.76 for a combined total of $237,469.68.

What happens next: staff will record the interfund loans in the city's financial statements, monitor reimbursements from the ag park funding sources, and pursue the ordinary procedures for repayment and audit reconciliation. The ordinance states the budget amendment will take effect five days after passage.