HomeMy WebLinkAboutVIII-08 Write-off Internal Loan Between Sewer Utility and Hydroelectric Plant
City Council Memorandum
To: Mayor Fasbender & City Councilmembers From: Chris Eitemiller, Finance Manager Date: December 6, 2021 Item: Write off internal loan Council Action Requested: Council is requested to authorize the Finance department to write off an internal loan made more than 17 years ago between the Sewer utility and the Hydroelectric plant. Background Information: Early in 2021, staff research revealed that there was an internal loan on the Hydro Plant’s balance sheet. This internal loan showed as a liability in the amount of $300,000. During discussions with Public Works staff, Finance could not determine either the date of, or reason for, this internal loan.
No data is available prior to 2006, but the Finance department has been able to trace this liability as being on the Hydro balance sheet as far back as 2006. There have been no payments made by Hydro to the Sewer fund toward this loan. After discussing with the City’s auditors, Finance recommends writing off this loan, and reversing this balance from both the Sewer and Hydro balance sheets. Financial Impact: This change would have no cash impact, but would affect these two funds’ net position. By eliminating the asset, the Sewer fund’s net position would be adversely impacted by $300,000, while the Hydro net
position would be improved by the same amount by eliminating the liability. Committee Discussion: N/A Attachment: N/A
VIII-08