HomeMy WebLinkAboutReso 2015-028 RESOLUTION NO. 201�-028
RESOLUTION OF THE CITl' COUTCIL OF THE CITY OF
CHLiLA VISTA .ADOPTING AN INTERFUND LOAI�T POLICl'
VdHERE.AS. in accordance ���ith generallv accepted accountine principles and applicable
leQal requirements. the Cit}� has established ��arious special re��enue. capital project. debt semice.
and enterprise funds to account for re��enues �ahose use should be restricted to cenain acti��ities;
and
��%HEREAS. on occasion, cash flo�i constraints in a particular fund mav necessitate
interim financing of capital projects; and
WHEREAS. interfund borro���inss aze an appropriate capital project financine altemative
to incumng estemal debt. provided that the fiduciar} purpose of the loaning fund is not
ne�ativeh impacted: and
���HEREAS, interfund borrowines should be limited to one-time capital eapenditures and
are not an appropriate funding source for ongoing operations and maintenance activities: and
A%HEREAS, no Cit}� fund should profit nor be penalized for intemal borroH ines; and
V�'HERE.AS. the proposed interfund loan polic}� establishes standazd terms and
documentation required for interfund borro��ines; and
WHEREAS, the Cit}� Council ��ishes to adopt an lnterfund Loan Polic�, as set forth in
E�hibit 1, attached hereto and incorporated herein bv reference as if set forth in full.
NO�'. THEREFORE. BE IT RESOLVED bv the Cin� Council of the Cirn of Chula
Vista, that it does hereb}� adopt the Interfund Loan Polic�� in the form presented, as reflected in
E�hibit ] to this Resolution.
Presented b� Approved as to form b}�
• (><; ,
A4aria Pachadoo 'nan �Glen R�Googins
Deputy Cit} Manaeer /CFO • ity Att e}� ���
Resolution No. 201�-028
Paee No. 2
PASSED. .APPROVED, and .ADOPTED b�� the Cin Council of the Cin of Chula V"ista, �
California. this 17th dav of Februarv 201� bv the follo��ins ��ote:
.AYES: Councilmembers: Asuilaz. Bensoussan. A9cCann. A4iesen and Salas
1�'Al'S: Councilmembers: I�rone
ABSENT: Councilmembers: 1Vone
Man las. Mavor
ATTEST:
��� ��e��
Donna R. A'oms. CMC. Cirv Clerk
STATE OF CALIFORNIA )
COUI�TY OF SAN DIEGO ) �
CITY OF CHULA V1STA )
I, Donna R. Noms, Cit�� Clerk of Chula Vista. California. do hereby certifi- that the foreeoine
Resolution No. 201�-028 was duly passed. approved, and adopted by the Cin� Council at a
re�ular meeting of the Chula Vista City Council held on the 17th day of Februar}� 201�.
Executed this 17th dav of Februazv 201�.
��.�� �
Donna R. Noms. 4C. Cit� Clerk
�
COUT'CLL POLICI'
CITl' OF CHULA VISTA
,
SUBJECT: [nterfund Loan Polic� P L'�C� EFFECTIVE
' NUA4BER DATE PAGE
220-06 2/17/201� 1 of 2
ADOPTED BY: Resolution\'o. 201�-025 DATED: Februan 17, 201�
��'IENDED Bl':
BACKGROU\'D
In order to achieve important public polic<< goals. and in accordance with eenerall�� accepted
accounting principles (GAAP) and applicable leeal requirements, the Cit�� has established ��arious
special re��enue; capital project, debt sen�ice. and enterprise funds to account foc re��enues �chose use
should be restricted to certain activities. Accordinel��; each fund e�ists as a sepazate financine entitv
from other funds, �rith its o��m re��enue sources: expenditures, and fund equiri�.
On occasion, cash flo��� constraints in a panicular fund ma�� necessitate interim financine of capital
projects. Interfund borro���ines are an appropriate capital project financine altemative to incumne
e�temal debt, pro��ided that the fiduciar}� purpose of the loaning fund is not negati��eh� impacted.
Interfund borro�vings should be limited to one-time capital expenditures and are not an appropriate
funding source for ongoing operations and maintenance acti��ities.
PURPOSE '
To establish an interfund loan polic}�, including the standard terms and documentation required for
interfund borro���ines.
POLICY
All interfund loans require approval of the Cit�� Council. At the time of Cin� Council consideration,
the follo���ing information shall be provided, at minimum:
1. The purpose of the loan
2. The principal amount borro�ved
3. The espected repa}�ment term
4. The most recent monthh pooled in�estment eamine rate
�. The estimated total financine cost
6. A proposed repa}�ment plan�reflecting the abo��e factors
7. The e�istin� interfund loan and e�temal debt oblieations of the borro�vina fund
8. The esistine balance of interfund loan advances from the loanina fund
No fund should profit nor be penalized for intemal borro���ings. As such, all financino costs shall be
calculated usin_ the Citv's actual pooled in��estment eamin� rate; as determined b� the Finance
Director/Treasurer. Follo�vine Council appro��al. throughout the life of the loan. the acmal financine
cost shall be calculated based upon the Cit�'s actual pooled im�estment eamin� rate on a quarterly
basis.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Interfund Loan Polic�� POLICY EFFECTIVE
NUMBER DATE PAGE
220-06 2/17/2015 3 of 2
ADOPTED BY: Resolution No. 2015-028 DATED: February 17,2015
AMENDED BY:
In order to limit impacts to loaning funds, the shortest reasonable repayment term is preferred.
The repayment of interfund loans shall, therefore; be considered priority expenses for debtor funds
during the annual budeet process.