Hildale, Utah – Residents of Short Creek will have the opportunity to voice their opinions on a proposed financial maneuver during an upcoming public hearing. The city council has announced a hearing to gather public input on an interfund loan amounting to $677,762. This loan would see funds transferred from the city’s Sewer Fund to its General Fund, a move intended to provide financial stabilization for the latter.
According to city officials, the General Fund would be obligated to repay the Sewer Fund the full loan amount over a ten-year period. Furthermore, the repayment will include interest calculated at a rate consistent with either the State Treasurer’s investment fund rate or the yield of a United States Treasury notes with a comparable term.
The proposed interfund loan will be formalized through a detailed written agreement. This agreement will explicitly outline the terms of repayment, including the schedule and amounts of payments, as well as the agreed-upon interest rate. This measure aims to comply with Utah Code § 10-6-132, which governs such interfund transactions.
The purpose of this public hearing is to ensure transparency and allow residents to understand the rationale behind the proposed loan and its potential impact on both the Sewer and General Funds. City officials are encouraging residents to attend the hearing and share their perspectives, questions, and concerns regarding this financial strategy.
Mayor’s Statement:
The UZona Record received the following comment from Mayor Donia Jessop of Hildale via email: “Hildale giving itself a loan keeps funds within the city instead of paying a loan to an outside entity. Both Colorado City and Hildale have utilized these resources in the past to cover expenses, such as police cars, ambulances, etc.”
Interfund Transfers in Other Cities:
The practice of transferring funds between different municipal funds, including enterprise funds like sewer or water funds and general funds, is not uncommon in local government finance across the United States. Enterprise funds are typically designed to be self-sustaining through user fees and charges, dedicated to specific services. However, situations can arise where a general fund faces temporary shortfalls or needs resources for critical services.
Many cities utilize interfund loans as a mechanism to address these temporary imbalances. These loans, when structured with clear repayment terms and interest, can provide a short-term solution without necessarily impacting the long-term viability of the lending fund. The legality and specific regulations surrounding such transfers often vary by state and local ordinances, like the Utah Code cited in this case.
For example, a city might temporarily transfer funds from its water enterprise fund to cover unexpected costs in its police department, with a plan for the general fund to repay the water fund over a set period with interest. These transfers are often subject to public disclosure and approval by the city council or governing body to ensure accountability and transparency in the use of public funds.
The proposed loan in Hildale reflects a financial tool utilized by municipalities nationwide to manage cash flow and ensure the stability of essential public services. The public hearing will provide an important opportunity for residents to scrutinize this specific proposal and understand its implications for their city’s financial health.
Hildale City Council will hold a public hearing as part of the regular meeting on Wednesday, May 7, 2025 at 6:00 p.m.(MDT), at 320 East Newel Avenue, Hildale City, Utah 84784
