Mayor, City Budget Office announce new policies for managing issuance of debt to finance city projects
SEATTLE - Today Mayor Mike McGinn and the City Budget Office announced new policies and practices to strengthen the city of Seattle's debt management for city-financed projects. The City Budget Office and the Department of Finance and Administrative Services first identified the need for stronger policies in order to better manage the City's cash flow needs and have already begun to implement new management practices at the direction of the mayor.
The new practices and policies include:
The City Budget Office first identified the opportunity for stronger policies and practices after conducting a review of the Seattle Department of Transportation's (SDOT) annual capital budget and debt issuance from 2007 to the present. In 2011, it became clear that the existing policies were not leveraging taxpayer dollars as efficiently as possible. In 2012, the City took action by substantially reducing the amount of debt issued for SDOT projects in order to better utilize the funds previously borrowed by SDOT. In 2013, the City took a similar action. The main contributors to this issue were changing project schedules, SDOT's success in attaining non-City funds like Federal grants, lower contractor costs due to the Great Recession, savings in planned contingencies and a conservative approach to managing the budget for each project. A more detailed analysis of the City Budget Office's review of SDOT's project finances can be found on their website.
At the mayor's direction, a similar review will be conducted for other departments that managed city-financed projects in order to better implement the new policies and practices described above.
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