ORDINANCE ____________________

AN ORDINANCE relating to funds within the City Treasury; amending Seattle Municipal Code Section 5.06.030; adding certain funds to and deleting certain funds from the list of funds receiving investment apportionments from the City's common investment portfolio; increasing the time period for which the Department of Finance is authorized to approve interfund loans; establishing the carrying of negative balances within a common investment portfolio as a mechanism for making approved interfund loans; and eliminating charges for investment services provided to participants in a common investment portfolio.

WHEREAS, to meet administrative and accounting needs of the various City departments, the approved list of funds to receive investment earnings and losses through participation in a common investment portfolio (Consolidated Cash Portfolio, or Pooled Investment Fund) should be altered; and

WHEREAS, approved interfund loans within the City's Common Investment Portfolio can be accomplished with greater administrative ease and equity through the carrying of negative balances within an individual fund in a common investment portfolio than with the identification of a particular "lending" fund; and

WHEREAS, non-City entities and utilities of the City that are not supported by appropriation from the General Fund are charged an administrative overhead amount that fairly compensates the General Fund for services, including fund management and investment, provided by general governmental agencies within the City's approved budget;

NOW THEREFORE, BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Seattle Municipal Code Section 5.06.030 Ordinance 110749, Section 1, (part), as amended by Ordinance 116368 is further amended as follows:

5.06.030 Fund Investments -Interfund loans.

The Finance Director, in consultation after consulting with the Chair of the Finance Committee of the City Council, may in his or her discretion:

A. Determine which funds shall be invested on an individual fund basis, and which funds shall participate with one (1) or more common investment portfolio(s);

B. Apportion earnings and losses to those funds participating in a common investment portfolio. Those funds listed on Exhibit "A" to this Ordinance Ordinance 110749, as that exhibit may be amended from time to time by the Finance Director after consulting with the Chair of the Finance Committee of the City Council, and trust or bond funds shall receive a return in proportion to the amount of money earned by each; and the remainder shall be allocated to the general fund, as authorized by RCW 35.39.034;

C. Approve interfund loans for a duration up to ninety (90) sixty (60) days, and establish a rate of interest thereon when appropriate, provided, any extension or renewal of such a loan shall require approval by ordinance;

D. Establish criteria for identifying when a substantial de facto loan from one (1) fund to another occurs (e.g., an extended delay in making reimbursement without valid cause; a continuous overdrawn status) and, when appropriate, establish an interest charge to be paid to the lending fund; and

E. Make loans to individual funds participating in a common investment portfolio by means of carrying funds in a negative cash position for a period of up to ninety (90) days, or for longer periods upon approval by ordinance, to the extent and for as long as (i) such loans can be prudently supported by the common investment portfolio and (ii) the borrowing fund is reasonably expected to be able to repay the loan. The Director of Finance may also charge interest at the common investment portfolio's rate of return to the borrowing fund. Charge to any common investment portfolio an investment fee to defray the City's costs and expenses in making investments.

Section 2. Any acts taken prior to the effective date and consistent with the authority of this ordinance are hereby ratified and confirmed.

Section 3. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Seattle Municipal Code, Section 1.04.020.

Afrancisco May 5, 1995, 4:45 PM LOANORD.DOC (Version 3)

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