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Home My WebLink AboutCOW 2022-11-14 Item 5D - Resolution - Interfund Loan from Sewer Fund to General Fund for Fire Department ApparatusCOUNCIL AGENDA SYNOPSIS Initials Meeting Date Prepared by Mayor's review Council review 11/14/22 Vicky 11/21/22 Vicky ITEM INFORMATION ITEM No. 5.D. STAFF SPONSOR: VICKY CARLSEN ORIGINAL AGENDA DATE: 11/14/22 AGENDA ITEM TITLE Approve Interfund Loan from Sewer Fund to General Fund CATEGORY ® Discussion Mtg Date 11/14/22 U Motion Mtg Date ® Resolution Mtg Date 11 /21/22 ❑ Ordinance Mtg Date Bid Award Mtp Date ❑ Public Hearing ❑ Other Altg Date Mtg Date SPONSOR ❑ Council ❑ Mayor ❑ Admin Svcs ❑ DCD ® Finance ❑ Fire ❑ P&R ❑ Police ❑ PW SPONSOR'S SUMMARY Approve Interfund Loan from the Sewer Fund to the General Fund to purchase fire engine as part of the Interlocal Agreement with Puget Sound Regional Fire Authority REVIEWED BY ❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ® Finance & Governance ❑ Planning & Community Dev. ❑ LTAC ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 10/24/22 COMMITTEE CHAIR: QUINN RECOMMENDATIONS: SPONsoR/ADMIN. Finance COMMITTEE Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: 11/14/22 11/21/22 MTG. DATE 11/14/22 11/21/22 RECORD OF COUNCIL ACTION ATTACHMENTS Informational Memorandum dated 10/18/22 Draft Resolution Minutes from the October 24, 2022 Finance & Governance meeting 99 100 W 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 101 102 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 2 103 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 104 Filed with the City Clerk: Passed by the City Council: Resolution Number: Page 2of2 City of Tukwila City Council Finance & Governance Committee Meeting Minutes October24, 2022 - 5:30 p.m. - Hybrid Meeting; Duwamish Conference Room & MS Teams Councilmembers Present: Staff Present: De'Sean Quinn, Chair; Kate Kruller, Cynthia Delostrinos Johnson Vicky Carlsen, Rachel Bianchi, Tony Cullerton, Laurel Humphrey, Griffin Lerner, Brittany Robinson, David Cline, David Rosen I. BUSINESS AGENDA A. Tax Levy Legislation Staff is seeking approval of: 1. Ordinance levying the general taxes for 2023. 2. Ordinance increasing the regular tax levy for 2023. Committee Recommendation Unanimous approval. Forward to November 14, 2022 Committee of the Whole for Public Hearing. B. Resolution Authorizing an Interfund Loan for a Fire Engine Staff is seeking approval of a resolution authorizing a loan of up to $1,100,000 from the Sewer Fund to the General Fund, establishing interest rate and repayment schedule, to purchase a new fire engine. Committee Recommendation Unanimous approval. Forward to November 14, 2022 Committee of the Whole. C. Budget Legislation Staff is seeking Council approval of: 1. Ordinance adopting the 2023-2024 Biennial Budget 2. Resolution Adopting the 2023-2028 Financial Planning Model and Capital Improvement Program 3. Ordinance amending the 2021-2022 Biennial Budget Item(s) for follow-up: Provide information on how REET can be leveraged in the budget. Committee Recommendation Forward to November 14, 2022 Committee of the Whole for Public Hearings. D. Proposed Business & Occupation Tax Staff presented an overview of a proposed Business & Occupation Tax included in the Mayor's budget as a new revenue source to address maintenance of city services in the next biennium. 105