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FINANCIAL MANAGEMENT DEPARTMENT <br /> #2009- 39 <br /> DATE: July l, 2009 <br /> TO: Honorable Mayor Michael T McElroy an ity Council <br /> FROM: Ryan P. McCrady, City Manager <br /> Ron E. Neufeld, Finance Director <br /> SUBJECT: Interfund Loan Authority <br /> SUMMARY RECOMMENDATION: <br /> It is recommended that the City Council approve the attached resolution, which <br /> authorizes the City Manager to make interfund loans between various funds. The <br /> maximum amount of the loans would be $1,000,000 and they would have to be repaid <br /> before the end of this fiscal year. <br /> BACKGROUND: <br /> Because of lower fund balances, delays in funding from the state and federal government <br /> as well as lower than anticipated revenues, it may be necessary to do Interfund loans <br /> between various funds. The maximum amount of the loan would be $1,000,000 and it <br /> would have to be repaid before the end of the fiscal year. The City Council will be <br /> advised of each interfund loan that is made as well as when it is repaid. � <br /> The City Manager raised the suggestion of an interfund loan policy during discussions of <br /> the 2009-2010 Budget. Many of the City's funds have revenues that are very cyclical but <br /> expenses incurred on a regular basis. The lack of an interfund loan policy requires us to i <br /> keep an artificially high fund balance to supplement to times of low revenue activity. An I <br /> interfund loan will allow us to better allocate our financial resources and lower the fund <br /> balance requirements for some of our funds. � <br /> POTENTIAL OBJECTION: There are no known objections to this <br /> resolution. <br /> INPUT FROM OTHER SOURCES: None <br /> STAFF REFERENCES: Ron Neufeld, Finance Director- 424-2702 <br /> The Finance Director, Ron Neufeld will be in attendance at the City Council meeting to <br /> answer any questions of the City Council on this item. <br />