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Mounds View City Council August 26, 2002 <br />Regular Meeting Page 14 <br />• Finance Director Hansen indicated it would be two or three years. <br />Council Member Stigney suggested that before the funds are transferred around the City should <br />wait for resolution of the state auditor issue. <br />Finance Director Hansen indicated the TIF districts have a need to borrow the money today. He <br />then commented that the TIF districts can borrow money more efficiently internally than <br />externally. <br />Council Member Stigney commented that once the money is borrowed from the City, the City <br />has no access to the money until it is paid back. <br />Council Member Thomas commented that there is a great likelihood of having all of that money <br />paid back before resolution on the community funds. <br />Finance Director Hansen said he hesitated to make a prediction but feels that within 12 months <br />the TIF districts could be paying back. <br />Council Member Marty indicated that borrowing money internally allows the City to pay itself <br />back rather than paying an outside entity interest. <br />Council Member Stigney commented that the City money is earning interest now but once it is <br />pulled out it is no longer earning interest. <br />Finance Director Hansen clarified that the money would earn interest either way because the fund <br />doing the borrowing would pay interest to the fund doing the lending. He also commented that <br />there are costs associated with originating a loan on the outside. <br />Council Member Stigney asked how much interest the money is currently earning. <br />Finance Director Hansen indicated the money is invested in a pool of all City funds with interest <br />rates that vary depending upon the security purchased. He then said the interest being earned <br />ranges from 1.5% to 5%. <br />Council Member Stigney commented that the City cannot loan out the monies in fixed <br />investments. <br />MOTION/SECOND: Quick/Thomas. To Waive the Reading and Approve Resolution 5829, a <br />Resolution Authorizing Interfund Loans for the Year 2002 and Setting an Interest Rate on Loans. <br />Council Member Marty commented that the Resolution shows loans to the golf course of <br />$223,514, $306,800 and $250,000 for a total of $780,342. He then said he only recalls a loan to <br />the golf course of $250,000. <br />• <br />