Chapter 3.14
INTERFUND LOANS
Sections:
3.14.010 Interfund loans.
A. Authorization. The city council does hereby authorize the finance director to make interfund loans of those municipal moneys which are otherwise legally available for investment purposes, where such loans would be necessary to ensure compliance with the provision of RCW 43.09.210.
B. Procedures. The following procedures shall be used for the establishment and accounting of all interfund loans made pursuant to this chapter:
1. The city council by resolution shall approve all interfund loans and provide in the authorization a planned schedule of repayment of the loan principal and shall set a reasonable rate of interest (based upon the external rate available to the city) to be paid to the lending fund.
2. Interest shall be charged in all cases unless: the borrowing fund has no independent source of revenue other than the lending fund; or the borrowing fund is normally funded by the lending fund; or the lending fund is the general fund, which, being unrestricted, can loan interest free, except to a proprietary fund.
3. The borrowing fund must anticipate sufficient revenues to be in a position over the period of the loan to make the specified principal and interest payments as required in the authorizing resolution.
4. The term of the loan should, whenever practicable, be restricted to a period of three years or less, except for those which are legally permitted to support one another through appropriations, transfers, advances, etc.
5. Only that portion of a given fund which, in the prudent management of municipal finances as determined by the finance director, is clearly inactive or in excess of current needs may be loaned to other city funds.
6. Appropriate accounting records shall be maintained to reflect the balances of loans payable and receivable in every fund affected by such transactions.
(Ord. 910 § 1, 2012)