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1 RiversideCA.gov1
RiversideCA.gov
INTERFUND LOAN STATUS UPDATE; INTERFUND LOAN POLICYFINANCE COMMITTEEMay 14, 2025Finance Department RiversideCA.gov2
•The City has a long history of utilizing interfund loans as an efficient and cost-effective method of providing its departments with short-term project financing. •These loans are made from City funds with available cash balances that are not immediately needed for operations or capital purposes.•The use of an interfund loan program is a common practice among public agencies throughout California and is supported by accounting guidance to ensure proper reporting and compliance.–GASB 34 provides guidance on interfund activity including transfers and loansBACKGROUND 4/29/2025
2 RiversideCA.gov3
Interfund loans have been historically repaid in full with interest, at the City’s pooled interest rate, ensuring the lending fund receives a return equivalent to what it would have earned had the funds remained in the City’s Investment Account cash pool.BACKGROUND RiversideCA.gov4
Interfund loan balances as of April 1, 2025:INTERFUND LOAN BALANCES
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3 RiversideCA.gov5
Balances as of April 1, 2025•General Fund–Utilities Plaza $517,868•Loan to RDA approved by City Council on March 11, 2008–Lender: Sewer Fund–Transferred to General Fund in 2012 with dissolution of the RDA•Funds used to purchase the land & building•Loan matures in FY 2027INTERFUND LOAN DETAILS RiversideCA.gov6
Balances as of April 1, 2025•Redevelopment Loans–Riverside Golf Course $982,161•Loan approved by City Council on March 1, 2011•Lender: Electric Fund•Funds used for Golf Course purchase and redevelopment•Loan matures in FY 2028–Reid Park $143,345•Loan approved by City Council on March 1, 2011•Lender: Electric Fund •Funds used for Reid Park acquisition and redevelopment •Loan matures in FY 2029INTERFUND LOAN DETAILS 4/29/2025
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Balances as of April 1, 2025:•Enterprise Funds–Airport Loan $2 million•Loan approved by City Council on April 18, 2024•Lender: General Fund•Funds to be used for urgent CIP including but not limited to hanger door, roof replacements/repairs, and deferred maintenance.•Loan matures in FY 2037–Parking Loan $2 million•Loan approved by City Council on April 18, 2023•Lender: General Fund•Funds to be used for infrastructure upgrades•Loan matures in FY 2034INTERFUND LOAN DETAILS RiversideCA.gov8
Balances as of April 1, 2025:•Enterprise Funds (continued)–Refuse Loan $2.87 million•Loan approved by City Council on September 17, 2024•Lender: General Fund•Funds to be used for Refuse vehicle purchases •Loan Matures in FY 2028INTERFUND LOAN DETAILS 4/29/2025
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•Replaced outdated language•Strengthens internal controls•Improves transparency and disclosure requirements•Removes arbitrary thresholds and aligns lending with fund-level liquidity•Adds guidance on revising loan terms•Clarifies roles of the staff, CFO, City Manager, and Council regarding loan approval and adjustmentsINTERFUND LOAN POLICY UPDATE RiversideCA.gov10
Strategic Priority 5 -High Performing GovernmentGoal 5.4 –Achieve and maintain financial health by addressing gaps between revenues and expenditures and aligning resources with strategic priorities to yield the greatest impact.Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
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That the Finance Committee:1. Receive an update on the City’s outstanding interfund loans; and2. Review and provide feedback on the revised interfund loan policyRECOMMENDATIONS