HomeMy WebLinkAboutResolution 2010-130 N.C.S. 07/19/2010Resolution No. 2010-130 N.C.S.
of the City of Petaluma, California
~SOLUTION TO AMEND T~-I~ INTERFUND I.OAN POI,~C'Y
WI~EREAS, the Interfund loans can be handled in a more efficient manner without
reducing accountability, and
WHEREAS, the City pools cash for investment purposes, and
WgIEREAS, at various times of the year due to timing in cash receipts and
reimbursements from grants various funds will need to overdraw their cash balance and this
overdraft or interfund loan can be covered by the pool, and
WHER~AS, efficiency can be improved without impacting accountability by modifying
the Interfund Loan Policy reporting requirements to eliminate quarterly reports of interfund loans
and requiring the reporting of interfund loans to be included in the CAFR (Comprehensive
Annual Financial Report) as required by GAAP (Generally Accepted Accounting Principles).
NOW, TH~REF'ORE, BE ~T RESOLVE~D that the City Council has reviewed the
Interfund Loan Policy hereby amends the Interfund Loan Policy as follows:
1. Short-Term Interfund Loans
From time to time cash balances in the pooled cash will be overdrawn due to timing
differences. The Treasurer is authorized to allow these overdrafts as long as they
represent short term cash flow issues which can reasonably be expected to be covered
from revenues or other resources in the fiscal year in which the overdraft occurs. All
overdrawn cash balances at June 30th will be reported and accounted for in the CAFR
(Comprehensive Annual Financial Report) in accordance with GAAP (Generally
Accepted Accounting Principles).
The quarterly interest on the pool will be allocated as interest earnings or charged as
interest expense in the event of overdrawn balances on all funds based upon the average
cash balance for each fund over the quarter.
2. Long-Term Interfund Loans
In rare instances when it becomes necessary to create a long term interfund loan for a
specific purpose or project, the Council will approve a formal loan agreement between
the two funds which will contains terms for repaying the loan with interest. If for some
reason the payments cannot be made on schedule this shall be reported to the Council on
a timely basis. Otherwise these loans will be reported on annually in the CAFR.
Resolution No. 2010-130 N.C.S: Page 1
3. General Parameters
Delete the second paragraph: "The City Council will review all interfund loans that
exceed $200,000. A status report will be included with the Quarterly Treasurer's
Report".
4. Effective Date: The amendments to the Interfund Loan Policy shall take effective
retroactive to July 1, 2009.
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Appr ve as to
Council of the City of Petaluma at a Regular meeting on the 19`h day of July, 2010, ~ or :
by the following vote:
AYES: Barrett, Vice Mayor Glass, Harris, Healy, Renee, Mayor Torliatt
NOES: None
A BSENT: Rabbitt
ABSTAIN: None
ATTEST:
City Clerk
Resolution No. 2010-130 N.C.S. Page 2