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Council approves $1 million interfund loan from Sewer Fund to shore up General Fund
Summary
Council adopted Resolution 24-1111 authorizing an interfund loan not to exceed $1,000,000 from the Sewer Fund (F405) to the Current Expense Fund (F001) to provide short-term cash while the city evaluates revenues and cost-saving measures; the loan uses Treasury bond rates plus 1% as interest and carries a two-year payback schedule.
Faced with declining revenues and rising costs, council authorized a short-term interfund loan to stabilize the General Fund.
Minutes record that the City proposed an interfund loan not to exceed $1,000,000 from the Sewer Fund (F405) to the Current Expense Fund (F001) as a two-year loan, with monthly payments starting one year from the loan date and monthly interest and loan payments from October 2025 through October 2026. The loan's interest rate was prepared using Treasury Bond rates plus a 1% premium. The Finance Committee reviewed the resolution earlier in the day and recommended forwarding it to full council. Councilor Strengholt moved and Councilor Laninga seconded adoption; council approved the resolution 6-0.
The loan provides immediate cash to allow council and administration time (about one quarter) to review the financial situation and propose cost-saving and revenue measures; staff will follow prescribed transfer and repayment procedures.
