Council reaches consensus on 1% interest for interfund loan to water service repairs

City Manager Eric Underwood summarized a memo from Accountant Lisa Hassel presenting examples of simple-interest interfund loans to finance the Water Service Line Repair Project. The memo showed interest paid at the end of the loan in example scenarios; Underwood explained the concept and said the repayment structure would not affect ratepayers.

Councilors reached a consensus that a 1% simple interest rate should be paid on money borrowed from the sewer fund and directed staff to prepare a resolution for the February council meeting. No formal ordinance or resolution was adopted at the Jan. 13 meeting; the item will return for formal action in February.