HomeMy WebLinkAboutFIN 2022-10-24 Item 1B - Resolution - Interfund Loan for Fire EngineW
z City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance & Governance Committee
FROM: Vicky Carlsen, Finance Director
CC: Mayor Ekberg
DATE: October 18, 2022
SUBJECT: Interfund loan from the Sewer Fund to purchase a fire engine not to exceed
$1,100,000
ISSUE
Authorize an interfund loan from the Sewer Fund to purchase a new fire engine as part of the
Interlocal Agreement with the Puget Sound Regional Fire Authority (PSRFA).
BACKGROUND
The City's Public Safety Plan provided for the purchases of fire apparatus and equipment. For
apparatus, a new engine was planned in 2024 and was to be funded via financing through the
State of Washington's LOCAL program. This would be either a 10- or 20 -year repayment
schedule with interest being paid to the State.
Per the agreement that City Council approved at the October 3, 2022, Regular Meeting, the
engine will be ordered by the Puget Sound Regional Fire Authority and reimbursed by the City.
DISCUSSION
The City's Sewer Fund currently has a healthy fund balance available from which to transfer funds
of up to $1,100,000 to purchase a fire engine as part of the interlocal agreement with PSRFA.
Fund will be repaid by 2026 with interest. This loan will not impede the ability to move forward
with planned capital projects in this fund nor will utility rates increase because of this loan.
Repayment of the loan would occur in 2026, after a positive vote for annexation of the fire
department in to the PSRFA. Interest will accrue at the rate in effect with the Local Government
Investment Pool (LGIP) as of the effective date of the interfund loan. Interest will be calculated
on an annual basis. Repayment will occur as one lump sum in 2026 that will include principal and
all accrued interest.
Payment for the engine is expected to occur no later than January 15, 2023 but will most likely
occur in the latter part of 2022. The interfund loan and purchase of the engine will be included in
the year-end budget amendments.
RECOMMENDATION
Council is being asked to approve the resolution and consider this at the November 14, 2022,
Committee of the whole and subsequent November 21, 2022, Regular Meeting.
ATTACHMENTS
Draft Resolution
13
14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AUTHORIZING THE TRANSFER
OF FUNDS FOR THE PURPOSE OF MAKING A LOAN FROM
THE SEWER FUND TO THE GENERAL FUND;
ESTABLISHING AN INTEREST RATE AND REPAYMENT
SCHEDULE FOR SAID INTERFUND LOAN.
WHEREAS, the City's Public Safety Plan originally planned for the purchase of
Fire Department Apparatus (new engine) in 2024 that was to be funded through the State
of Washington's LOCAL Program for a 10 -year to 20 -year repayment term; and
WHEREAS, at the October 3, 2022 Regular Council Meeting, the City Council
authorized the Mayor to sign an Interlocal Agreement with the Puget Sound Regional Fire
Authority for Fire/Emergency Medical Services; and
WHEREAS, at the October 3, 2022 Regular Council Meeting, the City Council also
approved the expenditure of up to $1,100,000 utilizing an interfund loan for Fire
Department Apparatus (new engine); and
WHEREAS, utilizing an interfund loan will provide the City with greater control over
the repayment terms; and
WHEREAS, the City's Sewer Fund presently has sufficient funds from which to
transfer funds in an amount not to exceed $1,100,000 for the purpose of making a loan
to the General Fund to cover the authorized expenditure, in accordance with the
requirements set forth herein;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA HEREBY
RESOLVES AS FOLLOWS:
Section 1. Interfund Loan Authorized. An interfund loan in the principal amount
not to exceed $1,100,000.00 is hereby authorized from the Sewer Fund (Fund 402) to the
General Fund (Fund 000). The effective date of said interfund loan shall be no later than
January 16, 2023.
CC: Legislative Development\Interfund Loan Fire Engine 10-6-22
VC:AY Review and analysis by Andy Youn
Page 1 of 2
15
Section 2. Interest. Interest on the interfund loan authorized per Section 1 shall
accrue at the rate in effect with the Local Government Investment Pool (LGIP) as of the
effective date of the interfund loan. The interest rate shall be calculated on an annual
basis.
Section 3. Repayment Schedule. The interfund loan authorized per Section 1
shall be repaid in full to the Sewer Fund (Fund 402), together with accrued interest
consistent with Section 2, as sufficient revenues become available to the General Fund
(Fund 000), but in no event later than December 31, 2026. Nothing in this resolution shall
be construed as authorizing a permanent diversion of the funds transferred through said
interfund loan.
Section 4. Implementation. The Finance Director is hereby authorized to
implement such administrative procedures as may be necessary to carry out the directions
of this legislation, including, without limitation, taking such action as may be necessary to
amend the budgets for the affected years to reflect the interfund loan described in this
resolution, and including bringing forth budget amendments or reconciliations to Council, if
Council approval in addition to this resolution is determined to be necessary under State
law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of , 2022
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk Thomas McLeod, Council President
APPROVED AS TO FORM BY:
Office of the City Attorney
CC: Legislative Development\Interfund Loan Fire Engine 10-6-22
VC:AY Review and analysis by Andy Youn
16
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Page 2of2