R2010-73 EXTENDING THE INTERFUND LOAN FROM 2008 PROJECT FUND TO GENERAL FUND

Home Browse Search

r r FINANCIAL MANAGEMENT DEPARTMENT #2010- 20 DATE: April 13, 2010 TO: Honorable Mayor Michael T McElroy and City Council FROM: Ryan P. McCrady, City Manager � Ron E. Neufeld, Finance Director SUBJECT: Extension of Interfund Loan from 2008 Project Fund SUMMARY RECOMMENDATION: It is recommended that the City Council approve the attached resolution, which extends the repayment of the $1,000,000 Interfund loan from the 2008 Project Fund to the General Fund, from April 30, 2010 to Apri130, 2011. BACKGROUND: On November 30, 2009 the City Council approved Resolution No. R2009-241, authorizing an Interfund loan of$1,000,000 from the 2008 Project Fund to the General Fund, stipulating that the transfers would have to be repaid by April 30, 2010. The State of Illinois is currently four months behind in State Income Tax payments to the City of Decatur, or nearly $2,000,000. That along with much lower tax revenues in all our major revenues has caused a serious cashflow problem in the General Fund, and make it impossible to repay this interfund loan at this time. POTENTIAL OBJECTION: There are no known objections to this resolution. INPUT FROM OTHER SOURCES: None STAFF REFERENCES: Ron Neufeld, Finance Director- 424-2702 The Finance Director, Ron Neufeld will be in attendance at the City Council meeting to answer any questions of the City Council on this item. BUDGET/TIME IMPLICATIONS: � This has no direct impact on the City budget, but does extend the time when this Interfund loan has to be repaid. Negative fund balances are strongly discouraged by the auditors and noted in our financial statements.