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In 1991 Mayor Norm Rice convened a blue ribbon commission to review the City's financial management functions. That group proposed the formation of a Finance Department under the executive branch of government, to replace the existing elected offices of Comptroller and Treasurer. A City Charter amendment to that effect was referred to the voters at the November 1991 general election. The amendment passed and the details of the reorganization were laid out in Ordinance 115766. Preparations proceeded the following year to determine the organizational structure, responsibilities, and budget of the new department, which was inaugurated in January 1993.

The department was organized into four divisions to reflect the main functions of treasury, accounting services, data processing system services, and Finance Department administration. In July 1994, the department's responsibilities were further broadened through a merger with the Department of Licenses and Consumer Affairs. This merger created one central location for obtaining licenses, making utility payments, and getting other types of financial services. The department also became responsible also for the city's animal shelter.

On January 1, 1997, the Finance Department was reorganized into the Executive Services Department. It became known as the Finance Division, and continued essentially the same services performed prior to consolidation.

The new Department of Finance, headed by a Director of Finance, was created in 2001 based on another reorganization outlined in Ordinance 120181. In May 2002 the Department was reorganized again to create two separate departments: the Department of Finance, which focused closely on financial management, and the Department of Executive Administration, which handled the operational and administrative tasks performed by the previous larger department. Finance was responsible for budget development and monitoring, debt management, financial policies, financial planning, performance measurement, and overall financial controls for the City of Seattle. The department also oversaw policy on city taxes, investments, accounting, and related activities.