Council approves $5.1M internal loan from insurance fund to shore up Solid Waste financing

The City Council voted 4‑1 on June 16 to shift $5.1 million of a previously planned tax‑exempt financing obligation into an internal loan from the city’s Insurance Fund, rather than leaving the full balance in the Water Fund or pursuing external market debt. Finance staff said the Insurance Fund has a balance sufficient to support the loan and proposed a 15‑year repayment schedule at an internal interest rate tied to city earnings (approximately 4%).

Under the arrangement, Solid Waste’s annual payments to service the obligation fall from roughly $695,000 to about $635,000, producing an estimated annual savings of roughly $60,000 for the enterprise. Councilmembers discussed reserve sizes, interest‑rate tradeoffs and the need to continue planned utility rate studies; Councilmember Bridge dissented, arguing for a shorter repayment term and faster paydown to reduce interest costs and keep ratepayer dollars in the utility funds.

Council approved the resolution authorizing the internal loan and transfer by majority vote; staff said the move avoids an immediate rate increase and reduces near‑term borrowing costs compared with the assumed external financing in previous plans. Implementation details, payment schedules and the loan agreement will be finalized by staff and returned to the council as needed.