4.90.020 Procedures for Interfund Loans.
The following procedures shall be used for the establishment and accounting of all interfund loans made pursuant to this chapter.
(1) The monthly interest rate will be the same monthly rate of interest paid by the Washington State Local Government Investment Pool where the city has an account for short term interest earnings. Interest shall be paid by the 15th of the month following the month the loan was made and by the 15th of each successive month and prorated on partial months as appropriate.
(2) Interest shall be charged in all cases unless:
(a) the borrowing fund has no independent sources of revenue other than the lending fund:
(b) the borrowing fund is normally funded by the lending fund; or
(c) 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.
(4) The term of loan should, whenever practicable, be restricted to a period of one year, but in no case shall the term of loan exceed three years, except for those funds which are legally permitted to support one another through appropriations, transfers, advances, or other means.
(5) Only the 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 municipal funds or invested.
(6) Appropriate accounting records shall be maintained to reflect the balances of loans payable and receivable in every fund affected by such transactions. (Ord. 13-4 §3, 2013).