Assembly clarifies interfund-loan rules after executive session; adopts Resolution 3155

After an executive session in which the assembly discussed legal strategy related to an interfund loan to the South Tongass service area for an aerial ladder truck, the Ketchikan Gateway Borough Assembly returned to open session and adopted Resolution 3155 on Nov. 3, 2025. The assembly reported that it discussed strategy but took no action during executive session.

Resolution 3155 clarifies three main points in the borough’s interfund-loan practice: (1) how “borough funds invested” are defined for interest-rate calculation (the resolution clarifies which dedicated or segregated accounts are excluded), (2) that interest comparisons will be based on net investment returns (not gross returns), and (3) that the borough will use a three-year rolling average of the most recent annual rates of return to reduce sensitivity to single-year market volatility.

During debate Assemblymember Arntzen successfully moved an amendment replacing the phrase “not included” with the word “excluded” in the section defining excluded accounts; the amendment was seconded and adopted. Staff and the borough attorney explained the intent is to provide an administrable, durable rule for calculating a fair internal loan rate while protecting dedicated accounts (for example the local education fund and certain airport or bond accounts) whose interest earnings are retained by those accounts.

The resolution passed on a recorded vote. The assembly instructed finance staff to apply the clarified method on a calendar-year basis and to adjust service-area loan rates in the annual budget cycle (generally implemented on July 1) where appropriate; the resolution also notes the borough will err on the side of undercharging to avoid statutory conflicts in unusual circumstances.