BoCC lifts lending freeze

Jana Mathia, Gazette Reporter | Nov 16, 20170

The Board of County Commissioners lifted the moratorium on intergovernmental loans Oct. 16, allowing junior taxing districts to once again borrow from the county. The moratorium was imposed Jan.17, 2017.

In 2016 the county had a lot of requests to borrow money from the county to cover short-term, lower dollar spending. It was usually small loans. Bank loans had so many added expenses and fees it was considered “prohibitively expensive and uneconomical” to request small loans from a bank.

While the county has approved interfund loans to districts on an ad hoc basis in the past, the number of districts inquiring about interfund loans was up last year, and this prompted consideration of establishing a formal policy to govern it.

“There was no policy before,” said Commissioner Michael Largent. The commissioners tasked Mark Clinton, county treasurer, with researching and writing the new policy to make it easier for the treasurer’s office.

“So we’re not re-inventing the wheel every time we look at one of these,” Largent said.

Now, when districts request interfund loans, their application needs to address nine points, including schedule for repayment, specific source of funds for repayment, reason why funds cannot be borrowed from a different district fund and reason why a bank or other financing is not being used.

“In general, the BoCC expects that districts will only request loans from the county under extraordinary circumstances, that the dollar amount will be relatively small and that the time frame will be short,” the policy states.

Interest on the loans will be the same as the current rate of the Washington State Local Government Investment Pool and compound daily for the life of the loan.

Largent said the new policy gives the commissioners and treasurer something to point to for future occasions.