Title
WASHINGTON WAY BRIDGE INTERFUND LOAN UPDATE
COUNCIL STRATEGIC INITIATIVE ADDRESSED:
Council Initiative: Continue effective financial management
CITY ATTORNEY REVIEW: N/A
SUMMARY STATEMENT:
Resolution No. 2166 established an interfund loan in the amount of
$1,435,000.00 from the General Fund to the Arterial Street Fund for the purpose
of providing for the City’s share of costs for the Washington Way Bridge. This
Resolution calls for City staff to present to Council the status of the loan on an
annual basis.
The effective date of the original interfund loan was January 1, 2016. In
September 2016, the Arterial Street Fund repaid $300,000.00 principal to the
General Fund, reducing the principal balance of this loan to $1,135,000.00. For
the period January 1, 2016 through September 30, 2016 the interest paid on this
loan totaled $4,895.74. The average interest rate for this period was less than
one-half of one percent (0.4548%).
In December 2017, the Arterial Street Fund repaid an additional $300,000.00
principal on this loan which left the remaining principal balance on this interfund loan at
$835,000.00.
In December 2018, the Arterial Street Fund will repay an additional $100,000.00
principal on this loan. Following the principal repayment of $100,000.00 in
December, the remaining principal balance on this interfund loan will total
$735,000.00. The interest payment for the period January 1, 2018 through
December 31, 2018 totals $16,101.10. For the period October 2016 through
December 2016, the average interest rate was 1.1027%.
Had the City sought conventional bond financing for its share of the Washington
Way bridge project life-to-date interest costs at 3 percent, interest would have totaled
$98,150.00. Having borrowed the money internally from ourselves, life-to-date
interest charges total $33,169.63, resulting in an interest savings of $64,980.37.
RECOMMENDED ACTION:
No action required.
STAFF CONTAC...
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