Recitals:

Ordinance 126227, passed November 23, 2020, authorized an interfund loan in the amount of $25,000,000 from the Information Technology Fund to the Transportation Fund, with the loan to be repaid no later than December 31, 2024.

Ordinance 127136, passed November 21, 2024, authorized an extension of the interfund loan term to December 31, 2025. The interfund loan was fully paid and closed in December 2025.

The COVID-19 pandemic and associated decline in revenues related to parking and transportation was a significant contributor to the need for the interfund loan authorized by the City Council in Ordinance 126227. Unlike many City programs, the revenue loss to the Transportation Fund was not eligible to be backfilled with federal pandemic relief dollars.

The Transportation Fund is again in a negative cash position, and the Seattle Department of Transportation (SDOT) is proposing reductions to the current year 2026 Revised Budget and proposing both reductions and revenue enhancements in the 2027-2028 Proposed Budget, that together are anticipated to contribute to restoring the Transportation Fund to a positive cash balance.

An interdepartmental team led by the Office of City Finance and including staff from SDOT and the City Budget Office was formed in July 2026 and is working to identify and address the underlying causes of the negative cash balance in the Transportation Fund.

While this work is underway, an interfund loan is needed to return the Transportation Fund to a positive cash position, consistent with the City’s Debt Management Policies adopted by Resolution 31553.

Seattle Municipal Code subsection 5.06.030.C requires City Council approval by ordinance of any interfund loan for a duration of more than 90 days.

In the normal course of business, the City may temporarily lend cash between funds to maintain required balances.

The Director of Finance and the City Budget Director have determined that the City Council will be acting consistently with the Debt Management Policies adopted by Resolution 31553.

There is sufficient cash in multiple City funds to support a revolving interfund loan of up to $63,500,000 through December 31, 2036 and still meet regular budgeted operating needs.

Funds loaned by multiple City funds to the Transportation Fund are anticipated to be repaid from the Transportation Fund resources. Therefore,

Be it ordained by The City of Seattle as follows:

Section 1.

A. The Director of Finance is authorized to make a revolving loan of up to $63,500,000 principal and interest outstanding from one or more of the City Funds identified in subsection 1.B of this ordinance to the Transportation Fund, to provide financing for expenditures related to maintaining the Transportation Fund at a positive cash level. The loan is to be repaid no later than December 31, 2036, with interest on the loan at the rate of return of the City’s Consolidated (Residual) Cash Pool.

B. To implement the loan authorized in subsection 1.A of this ordinance, the following City funds may be used as the source of cash loaned to the Transportation Fund:

1. Transportation Levy Fund (10399); and

2. REET I Capital Projects Fund (30010).

Section 2. The Director of Finance may effectuate the loan authorized in Section 1 of this ordinance by transferring cash from one or more of the City funds identified in subsection 1.B of this ordinance to the Transportation Fund, or by carrying the Transportation Fund in a negative cash position, in an amount not to exceed $63,500,000 until no later than December 31, 2036. The Director of Finance is further authorized to establish, and modify if necessary, from time to time, a repayment plan and schedule.