Chapter 3.05
INTERFUND LOANS
Sections:
3.05.010 Interfund loans.
(1) The finance director is authorized to make interfund loans of those municipal monies which are otherwise legally available for investment purposes.
(2) When establishing or accounting for interfund loans:
(a) The finance director has the authority to approve short-term interfund loans for a period not to exceed three calendar months. The mayor has the authority to approve loans for a period not to exceed 12 calendar months. Interfund loans made for a period exceeding one year must be approved by the council by ordinance or resolution.
(b) Interfund borrowing will bear a reasonable rate of interest determined by the finance director. Interest will be charged in all cases unless:
(i) The borrowing fund has no independent source of revenue other than the lending fund;
(ii) The borrowing fund is normally funded by the lending fund; or
(iii) The lending fund is the general fund, which, being unrestricted, can loan interest free, except to a proprietary fund.
(c) The finance director will authorize an interfund loan only after determining that the loaning fund has excess funds available to loan and the use of the funds will not impact the loaning fund’s current operations or constitute a permanent diversion of funds.
(d) Only monies that the finance director has determined are clearly inactive or in excess of current needs of the fund may be loaned to other municipal funds or invested.
(e) Appropriate accounting records shall be maintained to reflect the balances of loans payable and receivable in every fund affected by an interfund loan. (Ord. 3306 § 1 (Exh. A), 2024).