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La Verne approves updated investment policy and adopts fund-loan policy guidance
Summary
Council approved revisions to Administrative Regulation 215 (investment policy) and received-and-filed a new fund-loan policy to guide short-term loans between city funds; staff said the water fund may need a short-term loan from the sewer fund to maintain cash flow, and any future interfund loans would return to council for approval.
The La Verne City Council on March 2 approved updates to its investment policy (Administrative Regulation 215) and accepted a new administrative regulation establishing a formal fund-loan policy to govern short-term interfund loans.
Finance staffer Christy Lopez explained the investment policy revisions align the city's policy with state regulations and that the fund-loan policy formalizes criteria and procedures for short-term loans between city funds. Lopez said the policy was prompted by a water and sewer rate study that showed the water fund may require a short-term loan from the sewer fund to maintain cash flow; the new policy sets the terms, interest calculations and reporting protocols for such loans but requires any specific loan to come back to council for final approval.
Council members expressed support for codifying the rules. "Policies and procedures are a good thing," Council member Crosby said. Council member Johnson said the policy needed to be on the record and approved it. The motion to approve the investment policy revisions and to receive-and-file the fund-loan policy passed (vote recorded later in the meeting as 5-0 with Mayor Cash present).
The new fund-loan policy is intended to provide transparency and consistent treatment for temporary interfund borrowing; staff said all future interfund loans would be documented and returned to council for approval under the policy.
