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Council asks whether enterprise funds can subsidize general fund; auditor urges caution
Summary
Councilors pressed auditors on whether enterprise‑fund profits may be shifted to the general fund; auditor said unrestricted profits can be transferred but cautioned against routine reliance and noted bond language or restrictions may limit flexibility. Auditor said he had not provided a 'support letter' endorsing transfers.
During the audit Q&A, a council member asked whether profits from enterprise funds such as the marina can be legally transferred to the general fund to assist operations. Auditor Lewis Breedlove (S6) answered that transfers are common "as long as there aren't restrictions to the revenue," and said cities sometimes use utility or enterprise funds to assist general operations, but he recommended monitoring and cautioned that regular reliance is not ideal.
Breedlove also addressed whether auditors produce letters to support such transfers. He said he had not provided such a letter in his experience and would be cautious about doing so because auditors should not appear to direct management decisions. Councilors noted state legislators were considering proposals to limit or tighten transfer authority; staff said any change should include mechanisms to permit transfers in constrained but justified circumstances.
