Seattle City Council overrides mayoral veto over plan to drain reserve fund

SEATTLE — The Seattle City Council voted 6-2 Wednesday to override a veto by Mayor Jenny Durkan that would have prohibited the city from spending money from its cash reserve fund in order to provide relief from those affected by COVID-19.

Council members introduced the legislation as a means of providing immediate assistance to city residents in need of help with groceries, their rent or shelter after suffering a cororonavirus-related emergency.

Under the terms of the measure, $86 million would come from the city's emergency reserves, virtually wiping out the account that would be used if City Hall encountered an emergency expense that the city had not budgeted for.

“It’s the only cash we have in the bank,” the mayor said last week. “The only cushion we have is our rainy-day fund and our emergency fund. That's what’s going to get us through the whole next year, otherwise we are going to have massive layoffs in the city.”

The council pledged to pay back the fund with money collected by the newly passed Jump Start Seattle payroll tax on big businesses like Amazon.

“The Jump Start payroll tax will replenish the emergency fund and any rainy-day fund that we would use,” said the tax’s sponsor, Council Member Teresa Mosqueda. “It would collect more than enough tax to do that.”

It’s tax money that would be collected beginning next year but could not be spent until 2022. With current COVID-19 impacts to city tax revenue, Council Member Alex Pedersen expressed concern about the repayment.

“We don't know what the bottom is yet (and) it's going in the wrong direction," he said. "So, I’m concerned about draining down the rainy-day fund.”

Pedersen and Councilman Andrew Lewis voted to sustain the mayor’s veto, saying more time is needed to work out a deal with Durkan's office to find common ground.

“It’s just frustrating that we are in a position where the public has to see the leaders of this city not be able to reach a deal (and) to be able to get relief to the people of this city” Lewis said.

After the council over rode the mayor’s veto, it passed an amended spending plan that reduced the COVID-19 relief fund from $86 million to $57 million with the remaining money allocated to help plug a $26 million budget gap that has been identified by the city's budget director.

The move sets up another battle with Durkan, who has 10 days to accept the new spending plan or veto it, sending it back to the council.