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Cleveland proposes using $89 million in carryover to fund 2026 capital projects, then reimburse with bonds
Summary
The administration told council it plans to encumber about $89 million of 2025 carryover to finance 2026 capital projects up front, use cash on hand through the year and then issue bonds for executed contracts late in the year to reimburse the general fund. Council pressed for details on legal limits, reserve impacts and how much borrowing will be needed.
Cleveland's finance team told City Council it will use roughly $89 million in unspent 2025 carryover to fund capital projects in 2026 and then replenish that cash by issuing debt only for projects actually executed during the year.
Finance staff described the approach as a temporary, self-repaying funding strategy intended to avoid borrowing in advance and to lower long-term interest costs. “You can think of it as sort of a loan to ourselves for a year,” the director said when explaining that the city will encumber carryover cash, spend it on approved capital contracts and then complete a bond deal toward the end of the calendar year to restore the general fund balance.
Why it matters: Council members pressed for clarity on how the move affects near-term flexibility and long-term obligations. The finance director said the approach avoids roughly $68 million of additional borrowed principal that would…
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