R2009-241 AUTHORIZING INTERFUND LOAN

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FINANCIAL MANAGEMENT DEPARTMENT #2009- 69 DATE: November 24, 2009 TO: Honorable Mayor Michael T McElroy an City Council FROM: Ryan P. McCrady, City Manager � Ron E. Neufeld, Finance Director SUBJECT: Loan from 2008 Project Fund to the General Fund SUMMARY RECOMMENDATION: It is recommended that the City Council approve the attached resolution, which authorizes the City Manager to make a loan from the 2008 Project Fund to the General Fund. The maximum amount of the loan would be $1,000,000 and it will have to be repaid before the end of this fiscal year. BACKGROUND: Because of lower fund balances in the General Fund, delays in funding from the state and lower than expected revenues, it may be necessary for the 2008 Project Fund to loan $1,000,000 to the General Fund. This would be in addition to the $1,000,000 loan that has already been made between the two funds. The maximum amount of this loan would be $1,000,000 and it would have to be repaid before the end of the fiscal year. The City Council will be advised of when the loan is made and when it is repaid. We are projecting that we will miss the General Fund revenues by more than $3.9 million. We started the fiscal year $1.6 million less than expected. The State is currently three months behind in distributing the state income tax. It does not look like there is any chance that problem will soon be fixed. We have no way of knowing when the economy will improve to the point that we will see an upturn in the revenues. The General Fund has finished the last two months with a negative fund balance and it is expected that the negative fund balance will be greater at the end of this month. POTENTIAL OBJECTION: There are no known objections to this resolution. INPUT FROM OTHER SOURCES: None STAFF REFERENCES: Ron Neufeld, Finance Director - 424-2702