What do Interfund Loans typically finance?

Interfund loans are typically used to finance short-term capital outlay projects. This is because these loans are designed to provide temporary funding until more permanent financing can be secured, or until revenues are available. Short-term projects often require immediate funding to address urgent needs in the municipality, such as repairs, maintenance, or other essential services that cannot be delayed.

In contrast, long-term investments in infrastructure typically involve bonds or other financing mechanisms that align with the duration of the project, making them unsuitable for funding through interfund loans that are usually short-term by nature. Operating expenses for the general fund might require a different approach to funding, as they are ongoing costs rather than the immediate need typically addressed by interfund loans. Legal fees related to bond issuance are specific costs associated with securing financing and are not typically covered by interfund loans, which are generally more focused on project financing rather than administrative or legal costs.