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REQUEST FOR COUNCIL ACTION <br />Date: January 30, 2023 <br />Item No.: <br />Department Approval City Manager Approval <br />Item Description: Approve payoff of interfund loan between PMP and Shopping Center Funds <br />1 B ACKGROUND <br />2 In 2018 the City purchased the shopping center at 2719 Lexington Avenue. To accomplish this purchase, <br />3 $1.5 million of funds were loaned from the Pavement Management (PMP) fund and a receivable was <br />4 recorded. The sale of the former fire station on Fairview was seen as a way to repay this loan, hence the <br />5 interfund loan receivable and payable were recorded. The former fire station was sold and $1,233,171.30 <br />6 was received on February 28, 2022 and the internal loan has been reduced to a remaining balance of <br />7 $266,828.70. <br />8 <br />9 While the PMP fund currently has cash, it is not receiving less interest earnings on the cash balance due <br />10 to this interfund loan receivable. Staff felt it was a good idea to start the conversation on how to eliminate <br />11 this loan. <br />12 <br />th <br />13 Staff discussed options for paying off the interfund loan with the Finance Commission on May 10, <br />th <br />14 where the item was tabled until later in the year. At the November 15 Finance Commission, staff <br />15 discussed some alternatives to eliminate this interfund loan which included: <br />16 Transfer funds from the Excess Cash Reserve fund to the PMP fund <br />17 Transfer funds from the General Fund to the PMP fund <br />18 Do nothing until the PMP fund needs the cash <br />19 <br />20 The Finance Commission recommended transferring funds from the Excess Cash Reserve fund to the <br />21 PMP fund to close this interfund loan. Chair Wanda Davies will provide the rationale behind the <br />22 Commission recommendation. The Excess Cash Reserve fund has a current estimated balance of <br />23 $380,446 after setting aside amounts pledged in the 2023 budget process (Parks & Rec Vehicle fund and <br />24 Fuel Increases). <br />25 P OLICY O BJECTIVE <br />26 To eliminate the interfund loan receivable in the Pavement Management (PMP) Fund to optimize interest <br />27 earnings in the PMP fund. <br />28 B UDGET I MPLICATIONS <br />29 The Excess Cash Reserve Fund has sufficient cash available to repay this interfund loan. <br />30 RACIAL EQUITY IMPACT SUMMARY <br />31 There is no equity impact <br />Page 1 of 2 <br /> <br />