City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Matthew Boring, Interim Finance Director |
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Prepared by: |
Melissa Munoz, Accounting Manager |
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Date: |
June 3, 2025 |
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Subject: |
Approving Loan Terms for a Loan from Fund 690 Water Capacity Fee Fund to Fund 680 Water Rate Revenue and O&M Fund |
Recommendation:
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Adopt a resolution Approving Loan Terms for a Loan from Fund 690 Water Capacity Fee Fund to Fund 680 Water Rate Revenue and O&M Fund and approve the transfer of funds
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Background:
The Water Rate Revenue and O&M Fund currently requires additional cash flow to fund ongoing operations, capital projects, and meeting ongoing reserve requirements which is expected to be reimbursed through the increase in Water rates. The Water Capacity Fee Fund has sufficient cash reserves to provide a temporary interfund loan without impacting its operational or capital needs.
Pursuant to Governmental Accounting Standards and applicable state laws, interfund loans must be approved by the governing body and documented with repayment terms.
Loan terms:
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Lending Fund: |
Water Capacity Fee Fund |
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Borrower Fund: |
Water Rate Revenue and O&M Fund |
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Loan Amount: |
$10,000,000 |
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Interest Rate: |
4% |
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Term: |
10 years - payment beginning FY2026-27 |
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Repayment Source: |
Water Rate Revenue |
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Repayment Due Date: |
June 30, 2037 |
Fiscal Impact:
There is no net fiscal impact to the City overall. The Water Capacity Fee Fund will earn interest, and the Rate Revenue and O&M Fund will gain short-term liquidity to meet its obligations. The loan will not compromise The Water Capacity Fee Fund’s ability to meet operational or capital commitments.
Documents Attached:
1. Attachment 1 - Resolution