RES 16-708 - Authorizing Revolving Inter-Fund Loan for CDBGRESOLUTION NO. 16 -708
A RESOLUTION of the City Council of the City of Federal Way,
Washington, authorizing a revolving Inter -fund Loan of up to $400,000,
not to exceed three years, from the General Fund to the Community
Development Block Grant Fund to fund the difference caused by the
timing of grant reimbursement and spending of grant funds.
WHEREAS, the Community Development Block Grant Fund has a timing difference
between the time the grant is reimbursed and the spending of grant funds; and
WHEREAS, the Community Development Block Grant Fund will need up to $400,000 to
fund the difference between grant reimbursement and grant spending; and
WHEREAS, the City's General Fund has adequate fund balance to provide a revolving inter -
fund loan, and such funds are being invested in the State Investment Pool at the current rate of 0.49%
(as of August 31, 2016); and
WHEREAS, the City is paying 1.51% per annum on its last General Obligation Bond issued
in 2014; and
WHEREAS, the City's General Fund will earn more than two times the State Investment
Pool current rate of 0.49% from a revolving Inter -Fund loan;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
RESOLVES AS FOLLOWS:
Section 1. The Community Development Block Grant Fund is authorized to borrow from the
City's General Fund an amount of up to $400,000, for the purpose of funding the difference caused
by the timing of grant reimbursement and grant spending. The term of the revolving loan shall be
for a period not to exceed three years from the day of first advance at an annual interest rate of 1.0%
Resolution No. 16 -708 Page 1 of 3
(current Washington State Investment Pool's earning rate is 0.49% as of August 31, 2016). The
Community Development Block Grant Fund may pay off the revolving loan or make extra payments
at any time during the life of the loan.
Section 2. The Finance Director is authorized to process and administer a temporary
revolving loan of up to $400,000 from the available cash of the General Fund, where money
deposited therein is not immediately needed for the purposes of that fund, to the Community
Development Block Grant Fund.
Section 3. Severability. If any section, sentence, clause or phrase of this resolution should be
held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of any other section, sentence,
clause or phrase of this resolution.
Section 4. Corrections. The City Clerk and the codifiers of this resolution are authorized to
make necessary corrections to this resolution including, but not limited to, the correction of
scrivener /clerical errors, references, resolution numbering, section/subsection numbers and any
references thereto.
Section 5. Ratification. Any act consistent with the authority and prior to the effective date of
this resolution is hereby ratified and affirmed.
Section 6. Effective Date. This resolution shall be effective immediately upon passage by the
Federal Way City Council.
Resolution No. 16 -708 Page 2 of 3
RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON this 1st day of November, 2016.
ATTEST:
y
CITY OF FEDERAL WAY
CI Y STEPHANIE 0 O RTNEY, CMC
APPROVED AS TO FORM:
CALe
ACTING CITY ATTORNEY 3.' qn C41.,
FILED WITH THE CITY CLERK: 10/28/2016
PASSED BY THE CITY COUNCIL: 11/01/2016
RESOLUTION NO.: 16 -708
Resolution No. 16 -708 Page 3 of 3