HomeMy WebLinkAbout12/13/1999, C4 - TRANSIT FUND INTERFUND BORROWING council M9713
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C I TY O F SAN LU I S O B I S P O
FROM: Michael D.McCluskey,Public Wor Director` /� �
Prepared By: David Elliott,Administrative Analyst
SUBJECT: Transit Fund Interfund Borrowing
CAO RECOMMENDATION:
Authorize ongoing interfund borrowing up to$1,300,000 from the General Fund to the Transit
Fund until Federal Transit Administration grant revenues are received
DISCUSSION
The current cash balance of the Transit Fund has turned negative,and a return to a positive balance
is not projected until pending Federal Transit Administration(FTA)grant revenues are received.
General revenue management policies listed on pages B-5 and B-6 of the 1999-01 Financial Plan
allow temporary interfund borrowing for up to 45 days to resolve cash shortfalls. Interfund
borrowing for longer periods requires Council approval.
The City is experiencing a one-time delay in getting FTA grant applications approved so that the
Transit Fund can draw the grant amounts due for operations in 1997-98 ($364,900), 1998-99
($330,000), and 1999-00($588,300). Two factors have contributed to this delay.
1. The Downtown Transit Center project was included in the 1997-98 application. Project
scope and location changed throughout 1997-98 and 1998-99, and environmental
documents had to be completed before FTA would consider the application.
2. FTA switched from paper applications to on-line electronic applications. The City
actually submitted its 1997-98 application on paper before the switch, but FTA asked for
resubmission electronically. On-line filing procedures required technical training for City
staff,which was completed in June 1999. The 1997-98 application was resubmitted in
August 1999, and a preliminary 1998-99 application was submitted in October 1999.
FTA approval is pending.
Although the current situation is temporary,discussions with FTA and other cities have shown that
FTA revenues for operations will always arrive well after the fiscal year starts. Because of this
ongoing delay,a standing policy may be needed to allow extended interfund borrowing from the
General Fund until FTA grant revenues are received. If such a policy is found to be appropriate,it
will be included in the 2001-2003 Financial Plan.
FISCAL IMPACT
The General Fund will charge the Transit Fund for lost interest revenue on the proposed interfund
borrowing. That amount is estimated to be$9,600. cmiw Agmda Repmu\Tmnsit FLmd waft ad B 2977ao