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Good morning.

The Select Budget Committee meeting will come to order.

It is 9.30 a.m.

The November 17th, 2025 Select Budget Committee meeting will come to order.

I'm Dan Strauss, Chair of the Select Committee.

Will the clerk please call the roll?

Councilmember Kettle is excused.

Councilmember Hollingsworth?

Here.

Councilmember Juarez?

Here.

Council President Nelson?

Councilmember Rink.

Present.

Councilmember Rivera.

Present.

Councilmember Sacca.

Here.

Councilmember Salomon.

Here.

Chair Strauss.

Here.

Seven present.

And Council President Nelson is also now present.

Eight present with one excused.

Present.

are all here and ready to go.

With that, colleagues, there are a total of 32 pieces of budget legislation that must be passed to effectuate the adopted budget.

On Friday, November 14th, we amended the budget ordinance with our amendments, and we will consider that again this coming Thursday.

Today, we're scheduled to pass 30 pieces of legislation that is not the budget bill that we worked on last week, right?

So the legislation was transmitted with the mayor's proposed budget in September and has been included in central staff presentations and memos.

The Select Budget Committee has generated budget legislation as well to reflect certain budget actions taken today.

And so I'm gonna pass it over to council central staff.

We are gonna walk through a presentation of all of these pieces of legislation.

that will be us reading it into the record.

So we're not asking the clerk to read 30 items into the record as well.

So on today's agenda, there is a consent calendar of these 30 pieces of legislation.

Like with all consent calendars, you don't have to pull an item out to speak to it.

And if you would like to vote no or abstain, you can pull it out after the presentation.

So just on today's agenda, the consent calendar includes two budget adjustments accepting the mayor's proposed budget, three bills adjusting the fees for city services, two changing annual retirement adjustments, seven adjusting fees and tax policies and regulations, two, reorganizing and making interdepartmental transfers, two, creating or closing funds, six, authorizing debt refunding, two, regarding the levy 2026 property taxes, and there's only 10 days till Thanksgiving.

With that, if there's no objection, the agenda will be adopted.

Actually, Chair, I have a question.

I've got a point of order from Council President.

Council President, what is your point?

I also had a question because I don't know if this impacts the agenda, but if we want to discuss individual bills, when would we pull them while they're giving their presentation?

We're going to do that after their presentation.

I'm just reading in the agenda right now.

Well, and I didn't know if my question and if the answer to my question would impact the agenda.

Okay, let me take a step back and we'll answer any questions before we adopt the agenda.

Adopting the agenda is just getting it before us from there, Council Central staff will walk through a presentation of all of the bills, each and individually.

At the end of that presentation, I'll ask if anyone wants to remove any bills from the consent calendar.

at that time we'll remove them.

We're then going to vote on the consent calendar.

At that time you can speak to any bill that's in that consent calendar.

It's just reducing the number of times that we all have to say yes or aye.

I think you and I remember a time in budget when we would have to vote aye on all 30 pieces of legislation and it took

I frankly don't remember there being so many pieces of budget legislation that's why I just I'm trying to bring myself up to speed but I understand that we will have the opportunity to pull them and then take them out discuss them and vote on them individually mm-hmm okay exactly just like last week Councilmember Rivera any questions

I had the same question, Chair.

I don't actually know why we're taking the 30 up all together, because this is really the first time that we're being briefed on these officially.

And I would have thought we would have taken votes separately, but I understand what you're trying to do.

But as long as we have the opportunity to pull some out and be able to vote on them individually, then that's, I mean, I guess what we're doing today, so.

Yeah, no, not a problem.

So, and if you've got questions about any of these items, you can ask central staff while we're going through them line by line.

So we're gonna take, we've got all day today, so we can be, we're in control of our own destiny.

We can be here till two, we can be here till six.

We're gonna take as much time as it takes to have all your questions answered so that you're feeling comfortable taking the vote.

So the consent calendar, the consent package is simply intended just to reduce the number of times we say yes or aye.

So colleagues, any other questions?

Council President, is that a new hand?

Nope.

Okay.

Other colleagues checking online once, checking online twice.

So on today's agenda, we have a number of pieces of legislation, making adjustments to the budget, accepting the proposed budget, adjusting fees and services, annual retirement adjustments, adjusting fee and tax policies, reorganizing and making inter-developmental transfers, creating or closing funds, authorizing debt or refunding, and two regarding the levy 2026 property taxes.

If there is no objection, the agenda will be adopted.

Hearing no objection, the agenda is adopted.

Rather than, as I said previously, rather than having the clerk read each of these items into the record, as council central staff proceeds through their presentation, it will be considered them reading that item into the record.

So with that, no further ado, I'm gonna turn it over to Director Noble and Calvin Chow.

Thank you, Chair Strauss.

And we're just going to dive right in.

I believe Cal and I will be able to answer some questions.

If not all of them, we have staff listening and we can bring on folks as well.

These are generally organized by themes and by departments.

I'll take them in the order that you see them.

First, Council Bill 121099. So this is a year-end.

So it's a 2025 bill.

It's accepting grants.

So we have both a year-end grant acceptance and a year-end supplemental.

We do one in the mid-year, and then we do one at year-end.

So this is making last adjustments to the 2025 budget.

1-2-1-0-9-9 accepting grants and 1-2-1-1-1-3 potentially appropriating grants as well as making adjustments in the CIP and other and position authority in some departments as well.

Again, these have been reviewed by central staff that cover innumerable issues, but if you have...

Director Noble, I'm going to pause real quick.

Council Member Rivera has a question.

Okay, so...

Very good.

I'm going to have, we're going to go through each of the bills one by one.

Council Central staff will brief them, then I'll take questions from colleagues.

We'll complete that discussion and then we'll move on to the next one.

And Ben, feel free to take it as slow as you need to, just to make sure that we've got all the information we need.

Sounds good.

Thank you.

So do these questions at the end, just to confirm.

Do you want us to wait till not address them as they go?

We're going to do each bill individually, so I'll have the entire bill briefed and then I'll turn it over to you for questions before we move on to the next bill.

Okay.

Fantastic.

Let me wrap up 121099 year-end grants, again, accepting grants from a variety of sources and then authorizing their expenditure.

If there are no questions on that one, I'll move on to the next.

Next bill, Council Bill 121-113.

Again, this is the year-end supplemental, so adjusting appropriations, appropriating some new revenue sources, adjusting the CIP, and then also some position authority changes.

I'm happy to take questions on that one as well.

Thank you, Chair.

Thank you, Ben.

Thank you, Cal, for being here this morning and briefing us on these 30 pieces of legislation.

On this Council Bowl 121-113, can you tell me what the department position authority changes are?

It's not in the summary and fiscal note, and I just want to be clear on which departments are getting the position authority.

I don't want to guess.

I can guess some.

but I don't know all.

I don't have that information precisely in front of me but in the next few minutes we'll get that to you in the next few minutes here.

Thank you, Ben.

I imagine, for instance, the care expansion would be in there, and maybe I'm wrong, but I just want to be clear on what this position authority we would be granting taking this vote are.

I believe the care position authority was provided in a mid-year bill previously and then in the 2026 budget, but I don't know that.

This is not that.

Okay.

We will confirm.

So thank you, Ben.

I want to make sure colleagues that I know what I'm doing before I actually vote yes or no on something.

Thank you.

Thank you.

Any further questions on 1-2-1-1-1-3?

No, looks like not.

No further questions on 1-1-3.

We'll move on to 3-1-4-5-4-4.

Yes, the next item is clerk file 314544. So this is a clerk file that contains the mayor's proposed budget.

The way the adoption works is You will file a clerk file with the proposed budget and then we'll also file a clerk file with your changes.

So this is again just the budget as it was transmitted.

I think we answered all possible questions we could have about the transmitted budget.

Next item is clerk file 31545 and that is the proposed capital improvement program.

And again, that is the way this works.

There are changes to that.

We'll have a separate clerk file that shows your adopted changes to the capital improvement program.

So, and returning to answer Council Member Rivera's question, there is one position authorized in the year-end supplemental.

It's in HSD.

It's a senior counselor position.

Senior Counsel.

Thank you, Ben.

That's the only one?

That's the only one.

Thanks, Cal.

Thank you, Chair.

Okay, and Council President Nelson.

Does the, is there a difference in the cost or spending with that change?

Ben?

With the position?

Yeah.

I'm sure there's also, I don't know whether the budget is specifically increased or not.

One moment.

It's a grant-funded position to support youth employment program in the SYE program.

So I believe since it's grant-funded, I would expect that there is that additional cost, but it is covered by the grant.

And is that grant a one-year grant or multi-ongoing?

I'm just wondering, is there a budget implication that is not

Yeah, all good questions, and this is a very good fiscal note because it indicates the position is to sunset on July 31st in 2027, presumably with the terminus of the grant.

Thank you.

Wonderful.

And so have we completed 314545 or?

Have we moved on to 105?

I was prepared to move on to pass the clerk files.

I didn't hear any questions.

Wonderful.

Yes.

The next set have to do with adjusting fees for city services.

So, Council Bill 121105 is an update to SDCI's fees.

And these are program specific for a variety of services.

If you recall, we reviewed this legislation as part of the departmental overviews.

Next one is Council Bill 121106. This is street use fees.

So this is SDOT.

Previous bill was SDCI.

And as indicated here, fees are being increased by-to adjust for inflation.

Excuse me.

So 2.6 percent inflationary increase.

Great.

And we've got Council President Nelson.

I have a question about the permit fees.

So can you please explain, it's my understanding when I was doing permitting reform and talking to architects that there is a permit fee that they pay and then they have to pay for blocks of time that go over that initial payment.

Do you know how it works or can you please confirm that?

I see Ketel Freeman coming to the table.

He's just the man to answer your question.

Council President, I think what it sounds like you are describing is the land use hourly permit fee.

And so if you apply for a master use permit, a certain amount of time is part of the base fee that you pay.

Beyond that, there is an increase just on an hourly basis for time that exceeds the amount that is assumed in the base fee.

Most of the changes in the fee update are actually to the development fee index, which is the fee that applies to building permits.

Most of the new revenue from these fees would come from building permit charges, and those aren't based on an hourly calculation.

Those are based on the value of construction.

There may be some associated fees for the land use hourly fee, but most of those permits are going by the wayside.

Most of those permits are associated with design review or CEPA review as a practical matter.

Most projects aren't subject to either of those anymore unless they voluntarily agree to go through design review, so there shouldn't be much of an impact here except for folks who are applying for building permits.

So, but I thought that I understood that the rationale was because there are fewer, there are more smaller projects and less larger projects, which I guess takes more or less time, or I'm not quite sure how that...

Yeah, and most of those projects aren't subject to a land use review, they're just building permit applications, and those projects would be subject to the increased fee.

Okay, over the course of the, I think it's looking at the past 20 years, do you know the increase, the percentage increase in these fees versus inflation?

You know, we actually, we do.

I can't, we requested, we actually posed that exact question to SDCI.

and we have the answer that's in the Q&A.

And I'll just sort of, generally speaking, there was a period of time, at least when it comes to the development fee index, so the value-based fees, where the city was not making any adjustments to those at all.

So there's a little bit of catch-up here that's happening.

But mostly, the fee increase here is not to make, is in large part not to make inflation-related adjustments, although that's a component of this.

it is to maintain the health of the construction and inspections fund and absent the fee increases the council would need to make decisions about either layoffs or reduction in services and layoffs.

You'll recall just to sort of put a little more context on this and the actions that you all took on Friday was a statement of legislative intent asking for quarterly reporting by SDCI on the health of the construction and inspections fund.

So next year the council will get quarterly updates that they can use to make you know, mid-year adjustments to fees as needed.

Okay.

Well, I guess I should signal right now that I'm going to want to pull this one out because it's my understanding that inflation has gone up 35% and the fee cost has gone up 43%.

So it's already more than inflation going up.

And I'll just have to say right here in the hourly fee, I don't think a lot of people realize that it's going from something like 495 or 496 per hour to $551 an hour and so developers and well builders in general are paying the city for hours that are sometimes generated by let me just say incompetence on the part of some reviewers and that is part of our permitting problem.

The circle of the cycle of corrections you know in that are required is something that I was trying to get at in permitting reform, didn't quite get there yet.

Yeah.

A large component of the cost of SDCI's fees are labor costs, right?

So to the extent that the fees are changed over time, they may not reflect exactly what inflation is.

They may reflect increases that are associated with labor contracts that are approved by the Council.

Yeah, and so the additional time that is required or the time that's required to get your permit finally, I've had some architects describe me as it almost gets really close to almost feeling like self-dealing on the part of the city by, taking so long, not picking up the phone, not really answering questions from the get-go, not having the service desk staffed like it used to be.

And this all generates difficulty in communication and mistakes on the part of our city staff and more time.

And now we're going to raise the fee in addition to raising the rate at the hourly rate that people are paid to correct mistakes that are generated sometimes by themselves.

Okay.

I just wanted to make sure I was understanding it correctly.

Okay.

Do you have an additional question there?

No.

Okay.

Anything else on this item?

I see your hand.

Last week we were using a very prescriptive use of Robert's rules so that we could move through amendments quickly.

Today, because we're in briefing and then voting mode, I'm going to return to a more conversational style, which is against Robert's rules, but I'm making that decision so that it's not as awkward.

So you'll have the floor until we move on to the next item.

With that, Council Member Rivera, you've got the floor.

Thank you, Chair.

Ketel, thanks for being here and answering our questions on the permit fees.

So I understand with this budget action, I'm looking at the summary and fiscal note.

I want to make sure I understand we are proposing an 18% increase to fees.

It says year over year.

So can you explain?

Is it 18 percent?

I mean, there were some figures thrown about just now, and I want to make sure I understand with this action what we're doing.

Are we increasing permit fees by 18 percent every year?

There's an 18 percent increase over current 2025 levels.

So there's, you know, it's pretty much the Council has been making changes to STCI permit fees almost on an annual basis.

Yes.

So this is a big jump as compared to what has happened in past years.

Great.

It seems possible to me, probably even likely, that we and other STCI fee ordinance next year, just sort of based on what we have seen in the past, which is to say that there'll be another opportunity in 2026 for the Council to look at fees again.

But yes, the year over year is from 2025.

Thank you, Ketel.

When the executive proposed this in the department, was there a briefing that happened to talk about permit fees and why this 18% seems like a lot to me?

because that's not just inflationary.

Yeah, it was definitely a component of the STCI budget presentation that was given by the executive.

There was some part of the presentation there, as you'll recall, was sort of looking at sort of on a project-by-project, sort of typical project basis, what that would mean in terms of additional fees paid, especially with changes to the construction, to the value-based construction fee index.

I think there was an example for a townhouse project There's an example for a mixed-use project and then another project.

I forget exactly sort of the size.

The townhouse project, there are some pointed questions from the Council of Relief.

Councilmember Rank had some questions about that.

It looked like for a typical four-pack townhouse project, the increased fees would be in the neighborhood of $2,000 to $4,000.

From $2,000 to $4,000?

Sorry.

$4,000.

I think that is maybe per townhouse unit.

That's a one-time cost, of course, that could be translated into an increased cost for a buyer.

So depending on the project, it has an impact.

Every project has its own permit fee associated with it.

Yeah, especially for stuff that is for value-based fees, like building permit fees.

It just depends on what you are building.

And you're saying that we're doing 18% now because for a long time we hadn't done increase in fees?

Did I hear that right?

That's part of it, and also to sort of maintain a cup, there are sort of two mechanisms that SDCI has for maintaining stability, right?

So SDCI is an operating fund department.

It relies entirely on permitting fees for most of its regulatory functions, not so much for the compliance functions when it comes to things like complaints.

Part of that is general fund funded.

There are two mechanisms that STCI has to kind of regulate changes in the industry.

One is they have what's called contention to budget authority, which allows them to staff up when times are good and so they don't have to come back to the council.

There's a limit on that.

So they can hire people quickly to deal with increased permit volumes.

and the other is a core staffing reserve.

So when times are bad, to mitigate against the loss of staff that have institutional knowledge, very experienced folks who can review projects quickly, they have a core staffing reserve to keep those staff on board.

So part of the fee increase proposed by the mayor here is to keep from cutting into the core staffing reserve.

Thank you, Ketel.

My last question is, given that the SEPIN design review we've done exemptions, and the fiscal note does talk about the fact that we're not collecting now fees because we are waiving those requirements.

Yeah, so there was a bill that the council considered, I believe, in August that extended design review on a temporary basis.

I think it made it such that it is administrative design review, not full design review.

The reason there, and to have it be purely voluntary, There are some changes to state law that the city is behind on, so the design of you change was done on an interim basis.

But the world used to be such that if there was a big enough project, you would apply for what's called a master use permit.

That's a discretionary permit.

It's actually a cheaper permit to get than a building permit.

And then you could go out and say to investors, I have this permit.

You should invest in my project.

and then that helps you attract capital, then you go to the bank, get a loan, and apply for your building permit.

That's not really the case for smaller projects.

Smaller projects like townhouse projects are largely self-financed, or there are other financing mechanisms for those projects, but for bigger mixed-use projects, that was the world.

That's not so much the world that we are in now, and that's partly because of changes to design review that are required at the state level, and so there are probably in the future going to be fewer projects that get a master use permit because there'll be fewer discretionary reviews.

Exactly what that looks like kind of remains to be seen because the council has enacted on that permanent design review regulations, but there is a change in SDCIs and how revenue comes to SDCI.

And it's large, it's going to, in the future, it will mostly be through building permits and less through master use permits because there'll be fewer discretionary reviews.

Yeah, and that being the case, Ketel, what I was thinking when I was reading this fiscal note, and I do remember that we passed that legislation related to design review and SEPA exemptions.

If we're not doing those things anymore, why do we need to then increase fees?

I mean, I feel like then we're increasing fees to do the remainder, but since how we pay for the work is the permitting fees.

If we don't have to do the SEPA and design review work, help me understand why we would need to increase the fees to the other.

Sure.

It largely has to do with how SDCI does its accounting for these things.

So there are different cost centers in SDCI associated with different kinds of review and the different flavors of permit revenue that are funding those reviews.

So there is a land use cost center, has been a land use cost center in the past.

That's not as much of a source of revenue now as it was, as it has perhaps been in past years.

Nevertheless, there is an accounting case for sort of keeping track of those revenue streams separately.

I can't, actually I would not be able to tell you what that accounting case is without doing a little bit more research and talking to SDCI, but it has to do with SDCI cost centers.

So there's that.

So even though it is the case that there are fewer land use reviews, there will still be some in the future.

There are projects that are going to be above SEPA thresholds for categorical exemptions, no matter how high the city sets them under the limits of state law.

So there will still need to be those kinds of reviews in the future for very large projects.

And then there may also need to be some sort of what design review looks like in the future remains to be seen.

The council hasn't made those policy choices, so there could in the future also be some land use reviews associated with design review.

Thank you, and Chair, if you'll indulge one last question.

Floor's yours.

So who, I'm thinking of, you know, there are developers that do the big projects and then if you're just building a home, sometimes that's just a person, you know, building that home.

How will this impact the average constituent who is just building their home or remodeling their home, adding to their home, if you will, versus some of these other bigger development projects.

Yeah, there will be an increase in costs for that.

And a lot of, I mean, this is actually, we are currently, I can tell you from personal experience, because we're looking at remodeling our home and costs have gone up.

So some of that has to do with the value of the construction permit that you are receiving.

But there are also some other components that go into increased costs, including sales tax, right?

So sales tax increases such as those that the council has approved for public safety also make an impact in terms of what the cost will be to a consumer.

And does this impact people doing the detached accessory dwelling units, for instance, or the attached dwelling units?

Will this have an impact?

I'm just getting at there's a lot of constituents.

I know I have constituents in my district that are living on fixed income because they're retired.

And so we had this conversation.

You'll recall.

I'm constantly concerned that the folks that are getting squeezed and are then doing things like adding to their homes to rent out so they can stay in their homes, how does this impact them?

There will be an increased cost for those folks.

For somebody who's just building an ADU, it's going to be less than somebody who's building a townhouse.

So if it's a townhouse project and the increase was in the neighborhood of $2,000 to $4,000 per unit, it's going to be less than that.

but there will be some increased cost.

And it sounds like because these are the projects that are getting done, Is it fair to say that these are the projects that are bearing the burden of these costs?

Because I also read that, you know, like the bigger projects are stalled, right?

They're not building the bigger projects right now because there's a lot of reasons why.

Yeah.

So, you know, it will be just because by virtue of the fact that it's mostly smaller projects being built, that's where the revenue is likely to come from, at least in the near term until the real estate market turns around.

Right.

But then it will be larger projects that will be, I mean, most of the fee revenue, because it is based on the value of construction, it is those larger projects that bring in the majority of the fee revenue to SDCI for permit review.

Thank you, Ketel.

I'm just concerned that the smaller folks are the ones that are getting squeezed here.

So thank you for indulging all my questions.

Thank you.

Thank you, Chair.

Thank you.

Council President, is that a new hand?

Yes.

Sorry.

Right.

Yeah, so it, to me, this feels like a policy discussion.

And with all due respect, I would say that this should, I would think that it requires a lot of, um, uh, more discussion than we can really have today because here they are.

I mean, the fiscal note says this legislation, um, SDCI is proposing an 18% year over year fee increases to meet construction master use permits.

There is no quantification of what is the delta in number of permits and what is a lot of the reasoning for the size of this increase.

You just said that a permit for a townhouse will go from $2,000 to $4,000.

That is doubling.

That's not the cost of the entire permit.

The entire permit may be a little bit more than that.

Yeah, that's not the hourly rate, which is also going up.

I'm sorry to interrupt.

This is how the cost of housing, you know, this is one small piece of why housing is so expensive in Seattle.

It's expensive to build.

The fees that we lay on is one very small part of many of the expenses for why it's very difficult to, you know, to build here.

And I would suggest that this requires more discussion because maybe it can be used as leverage to to see some system improvements on behalf of SDCI staff.

Again, the corrections that are necessary.

Get those people back full time at the service desk like it used to be.

So do you know what the, I'm referring again, I have the legislation itself open here.

Do you know what a land use hourly is?

I don't have legislation in front of me, you have the benefit of that.

Yep, that's what it says all the way down this proposed 2026 fee.

It says land use hourly times one half, land use hourly times one, two, four.

So there's a lot of information that we don't have in order to make a really sound decision on this increase.

This is, you know, this is important stuff here and the fact that it got, you know, slipped into just the pro forma budget stuff doesn't seem, that seems, it's not, it prevents us from doing our due diligence.

Under the comments, for reasons why some of these fees are going up.

Again, I'm looking at attachment A of the legislation.

The comment that is repeated all down this column is, keep up with cost of doing business.

that is, you know, I would want there to be more information about why is, why does the cost of business go up warranting 18% increase year over year.

So colleagues, I would just suggest if, you know, I don't even think that this should be voted on during the budget discussion because, you know, I don't want to just vote yes or no.

I think that the land use committee should really have a chance to look into this and require some improvements in permitting before giving them all this extra money that is going to raise the cost of housing and everything else.

That's why I wanted to know about the agenda.

That's what was giving me pause in the beginning because I was thinking, well, what point would I suggest taking this off the agenda completely instead of just voting up or down because we're not going to be able to get enough information if central staff doesn't even know what the land use hourly is and we don't know what the cost of doing business is right now per project.

Thank you.

Anything further?

open it up for discussion if anybody else has any other questions.

Thank you, Council President.

And I'll remind the body, and the agenda says September 30th, but we did have a very robust discussion about this very issue in committee with SDCI present.

Council Member Juarez asked some very pointed questions in which we then got into the core staffing fund directly with SDCI.

So just letting the record reflect, seeing are there any other questions here?

Thank you, Mr. Chair.

Council Member Ward.

Just as a point of order, I appreciate that the, I love using this word, robust conversation.

So can we then, as you are sharing, is a consent package that our colleagues request that something be pulled and then we can have the discussion at the end.

So we have 32 matters here.

So central staff can get through each one and then our colleagues can pull what they deem they want to discuss at the end.

And then I think we can be more engaged because I think this is an important conversation.

So I was just waiting for our colleagues, which whomever chooses to pull something because that's the point of it.

And we discuss it at the end.

and that we have time to formulate our own questions and concerns as well.

Thank you.

So you're requesting that we hold discussion until central staff completes their presentation at this time?

Right, because if you do a consent, as you know, that's why we have the opportunity to say, I would like to pull, you know, CB 12105 to the end.

and then we can say, okay, we're gonna pull that one and we'll put it at the end.

Now let's keep going so we can hear from central staff of the 32 matters that are in front of us.

Thank you, Council Member Juarez.

Colleagues, if there's no objection, I'm gonna ask to hold discussion until the end when you pull individual items so that we can get through the entire consent package.

And then when you pull an item, we can go through questions, discussion, you also don't have to pull an item to speak to the item.

Any objection to letting central staff get through their entire presentation and coming through one by one?

Seeing none, I'm gonna turn it back over to Director Noble and once you finish the presentation, colleagues will come back to individual bills that you may have questions on.

With that, Chair, I'll move on.

So that was significant discussion about, but perhaps more to come, about 121.105.

That was SDCI fees.

Next time I was then talking about was 121.106.

That's SDOT.

So that was before it was SDCI.

This 106 is SDOT, street use fees.

Again, it's indicated that there the focus is really on inflationary increases to those fees.

The next bill is Council Bill 121107. It sets fees and charges for the Parks Department.

And again, these are generally reviewed on a regular basis.

Staff has reviewed the bill and not indicated any specific concerns, although you may well have questions.

I'm going to continue to move on.

Next two bills are resolutions, making some annual adjustments to elements of the city's retirement plan.

One is that each year the city determines its contribution rate to the retirement system and that rate is often made, that rate is settled upon based on the recommendations of an actuarial analysis that is done, so that's what this resolution does.

It sets at the actuarial recommended contribution rate.

The second resolution, 32185, sets the interest rate that is paid to members.

So members can take their retirement as a standard defined benefit, but can also at times make a lump sum withdrawal depending on how they choose to take their benefit.

If they do take a lump sum, there's a calculated interest rate for the contributions that have been made, and this sets that interest rate based on a variety of factors, but most specifically what market interest rates are.

So those are two resolutions related to the retirement system.

Next deals with fees, tax policies, and regulations, so a series of bills here.

The first having to do with the red light camera funding ordinance, and this makes a technical correction there.

It's not a change in city policy, but rather adjusting the percentages of money that are directed to one program and the other.

Next bill is CB121-108, and this is a sweetened beverage bill.

This is actually a bill that was introduced relatively late in the process because central staff noticed an inconsistency in some of the language, so this corrects that, so it corrects the allocation of the sweetened beverage tax money can be consistent with the budget.

The next item is CB1-110, which is the short-term rental tax.

So again, this allows allocation of short-term rental tax for debt service, so the remaining proceeds go to EDI grants and the like, but it's again a change in the use for the short-term rental tax, again consistent with the proposed budget.

Continuing in the same set, CB121114, this is raising the thresholds for the general business license.

So if you operate a business in the city, you have to get a license if your annual revenue previously had been $2,000 and now will be $4,000.

So again, reflecting inflation since the last time this adjustment was made, this has the effect of reducing the regulatory compliance for very, very small businesses.

Next has to deal with definitions in the model business license tax ordinance to be consistent with changes in state law.

Next, CB121123.

Actually, I'm going to turn this over to my colleague who knows more about these two bills than I do.

Yeah, these next two items are related to council amendments to the budget to make Seattle Transit measure funding available for passenger transit.

and also for transit security.

So next up is having to do some reorganizations and interdepartmental transfers.

So CB 121092 takes the major institutions and school program and transfers that from the Department of Neighborhoods to the Office of Policy, excuse me, planning and community development.

So it's the major institutions program and associated staff being transferred.

Next up is Council Bill 121-109.

This transfers authority to enforce the graffiti nuisance code from Seattle Public Utilities to Seattle Parks and Recreation, again consistent with organizational changes that are reflected in the budget overall.

Next to one closing of funds, so these are more of a technical nature.

One is to close a fund that's no longer needed, dealing with Interfund loans.

And then the second here is CB1-122.

This is council-generated and creating the new Fund for Central District and Southeast reinvestment consistent with again actions that were Approved by men in terms of amendments at the last meeting So the next few have to do with debt financing so Seattle Public Utilities on the drainage and wastewater side with Council Bill 121089 and on the water side with 121091 will be issuing new debt to help build out infrastructure, the drainage and wastewater infrastructure for the first bill, water infrastructure for the second.

The third bill here, 121091, excuse me, 121091 essentially allows for refinancing, so when we issue debt sometimes we discover that interest rates have lowered and we can take advantage of that to reduce debt service costs, in this case costs borne by ratepayers, so this is authorizing that kind of refunding or refinancing essentially.

Again, in the same frame, Council Bill 121101 amends an Interfund loan bill.

Again, the notion here is that we're going to provide an Interfund loan for about a year until long-term debt can be issued for the Memorial Stadium, and that will become the permanent financing for that project.

Council Bill 121103 authorizes what's called LTGO.

Those are limited tax general obligation.

Those are basic councilmanic debts to pay for a variety of things in the capital improvement program, a total of just over $38 million.

And then Council Bill 121104, returning to the utilities, authorizes debt for City Light to issue again for its capital program and underlying infrastructure for the electrical system.

Next, two bills have to do with property taxes.

In state law, you're required to pass two property tax bills, the long and the short.

So those are Council Bill 121-119 and Council Bill 121-120.

And what you're doing here is setting the property tax rates and actually you're setting the amount of revenue to be collected for each of the voter-authorized levies and for the general fund as well.

And then in terms of 2026 budget, Council Bill 121-115 is a grant acceptance for the first part of 2026. So the executive has anticipated a set of grants that will be received in early next year, and this is accepting those and providing budget authority via the budget.

and then the last is Council File 315456 and this will be where the changes that you have adopted to the budget and the CIP will be filed.

So that is the full set of bills before you.

Thank you, Director Noble.

Colleagues, at this time I'm going to first provide an overview of the next two or three steps that we're gonna take and then we'll go through those steps one by one.

And so the first step we will take is calling out the bills that you would like to pull out of the consent package for an individual vote.

We'll then take additional questions and discussion on those items at the end of the meeting.

After we do that, the second step we will take is speaking to any of the items that remain within the consent package.

We can take as long as we want there.

And then from there, we will take one vote on everything in the consent package.

And then we will return to each of the items removed from the consent package for an individual vote.

So we don't need to move it out of the consent package to speak to it.

you do to vote on it individually.

So we ended discussion at 121105 and continued further through.

When we return to the discussion, we'll only speak to the items that we did not speak to already.

With that, colleagues, are there any bills folks would like to remove from the consent calendar?

Yes.

Councilmember Rivera and then Council President Nelson.

Thank you.

I'd like to remove Council Bill 121105, 121106, and 121107.

Reading back, 121105, 106, 107.

Yes, and also Council Bill 121092.

Say the number one more time.

Sorry chair, one sec. 121092.

Council members, I hear that to be the SDCI 2026 fee update, the SDOT 2026 street use fee up schedule update, the parks 2026 fee and changes ordinance, and the major institutions and school program ordinance.

There it is.

Thank you.

Just took a minute to find that.

Councilmember Rivera, any others?

That is all.

Thank you, Chair.

Just gonna check in.

Do you have questions on the...

We didn't speak to the major institutions one.

Would you like to...

Do you have questions about it before deciding to pull it or...?

No, I have questions about all of them, but I'd like them individual both.

Fantastic.

Thank you.

Council President.

So I might, excuse me if I repeat some of the ones that my colleague just said, but Council Bill 121113.

121113, the 2025 year-end supplemental ordinance.

1-2-1-1-0-8, 1-2-1-1-10, I'll just say the last three letters, or numbers, 1-14, 1-23, 1-24, 0-9-2, 1-0-2, 1-22,

102-122?

Yes.

Any others?

I have a question mark on one.

Let me see.

Did I say clerk file 314546?

3145A.

Um, that clerk file cannot be acted on now anyway because that is going to, um, document all the changes to that council makes.

So that will actually be held out.

That is not part of the consent package.

Okay.

Disregard then.

Okay.

Any others?

Um, I don't remember if I said 109, but 109.

The graffiti ordinance?

Yes.

Council member, would you like, chair, would you like me to confirm all the items?

Just let me get my notes in order.

Yes, please.

Okay, starting from the top.

Council Bill 121113, the 2025 year end supplemental ordinance.

Council Bill 121105, the SDCI fee ordinance.

Council Bill 121106, SDOT street use fee ordinance.

Council Bill 121107, parks fee ordinance.

Council Bill 121108, the sweetened beverage tax amendments.

Council Bill 121110, the short-term rental tax ordinance.

Council Bill 121114, the general business license amendments.

Council Bill 121123, the material change for passenger transportation.

Council Bill 121124, the material change for transit security.

Council Bill 121092, the Major Institution and School Programs Ordinance.

Council Bill 121109, the Graffiti Nuisance Ordinance.

Council Bill 121102, the Fund Closure Ordinance.

Council Bill 121122, the Central District and Southeast Seattle Reinvestment Fund.

and I believe that is all the ones that have been pulled.

Did you call 1-2-1-1-0-2 the OCF fund closure ordinance?

I did, yes.

Great, thank you.

Just checking there.

And so I'm just going to check, Council President and Council Member Ferrer, just checking in.

You are planning to vote no or abstain on these motions today, correct?

Well, partway through this discussion, we chose not to ask questions, and so...

Aha.

Okay.

So I'm going to pause here, and I'm going to go back into question and answer mode.

So we can go through, and Council Member Juarez, let me know if you've got a different perspective on this one.

Rather than pulling all of these out to go through individual votes, let's see if your questions can get answered.

if you know right now that you would not support these, then let's pull them out and we'll continue on.

But if the answer to your question may change how you vote, let's get those answered right now.

Chair, with respect, this is an unusual amount of end of year or budget.

It's an unusually high number of bills that we are passing with the budget.

And just having central staff read the title or simply the description is not very much information and we have a lot to get through.

I can't commit to either abstaining or voting no just because I pulled it.

I think that the ones that I pulled, I pulled because there is a policy component.

It's not simply making this fee in line with that fee or conforming to state law or whatever that some of these are.

and moving something from DON to OPCD.

Well, how is the outreach different in OPCD than DON, for example?

Those are the kinds of things that we should know.

I mean, our votes matter to us and we should all be taking our decisions here seriously.

This is a lot of bills.

And so I'm just saying, I have individual questions on a lot of these that I asked to be pulled out, but again, I don't know if it merits, I think that they, nevermind, that's my point.

So then what I'm gonna do right now is before we go through pulling these out for individual votes, if we're gonna go through questions and answers and then we'll come back to this motion of whether we pull things out or not.

And so the last item that we had questions and answers on was 121105. The next one is this SDOT street use fee schedule.

And I'll remind the body that these bills are actuating the discussions that we've had in previous portions of the budget meetings.

And Director Noble, I may ask you, it is my understanding that there are many pieces of legislation that are used to actualize the budget every year.

And if you could remind me what an average number of pieces of legislation are.

I don't have an average for you.

Not to be argumentative, but simply descriptive.

This is not an unusual number of bills.

This is pretty standard for the adoption of the budget.

There's usually a set of fee ordinances, often a set of bills related to debt issuances, and then depending on pieces that are moving, some policy questions as well.

Just not to minimize the importance of any of this, but again, but just to describe, we've had most of these bills for a better part of a month and have reviewed them at some level of detail and had not identified concerns, but it doesn't mean that council members don't have questions that should be answered, just to be clear.

So I'm happy to answer as many of those questions as we can.

I would also add that The budget is balanced against the changes, and so depending on what actions the Council chooses to take, we'd have to revisit balancing of individual funds and the like.

And again, not to say that that shouldn't or couldn't be done, but just to be clear, there are revenue implications for many of these, as well as expenditure implications, so we'd have to sort through those as well.

If I may, council members, for comparison, last year there were 34 items on the consent agenda item and three items that were agendaed for individual vote.

Thank you.

I stand corrected.

It's not above average.

It's not, yep, thank you.

It's not about being right or wrong.

I just wanna make sure everyone's questions get answered so that they feel comfortable taking the votes today.

I understand that these bills, you know, when I even go back and look at SDCI's presentation that I know we spoke about the core reserve staffing, et cetera, I couldn't remember what day exactly it was, right?

So we've been through a number of weeks of a lot of information and I wanna make sure everyone's questions get answered.

Council Member Saka, I see you've got your hand raised, and then we're gonna ask questions about 121106 after you speak.

It's focusing on the street use fee, and then we'll go through each of these items that have been identified.

Council Member Sacco.

Thank you, Chair, and thank you, Chair, for making sure all of our questions get answered about this.

This is important stuff irrespective of whether there is a substantive policy at issue or strictly required legally to implement the budget.

These are important topics.

Cal, you noted last year that there was 34 pieces of legislation that were included in the consent package.

I note that a number of these are required to implement or council additions.

Any sense of last year, how many of those pieces of 34 were made pursuant to council additions?

That would be a good comparator, the most apples-to-apples comparator.

Central staff?

We can do that.

Comparing a second year for the first year is already not apples-to-apples, so there really isn't a rubric here for the number of pieces of legislation.

I'm not trying to be difficult.

It varies year to year.

Thank you.

Councilmember Sokka, anything further on this?

Thank you.

Councilmember Rivera, do you have general questions?

No, I just want to make a statement, if I may, Chair.

Please.

Thank you, Chair.

I just want to say, because people are viewing, that we all work really diligently up here, all nine of us, to do our best to read through all the actions during budget.

Budget is sizable.

If you're reading the full budget, it's hundreds and hundreds of pages long.

So this action today is yet another component of the budget.

Some of these conversations we did have in committee, not everyone sits on every committee.

Some committee work that we do does not yield some definitive things.

We know something's going to come down the pipe.

We need to be able to respond.

at the time that we need to take a vote and that requires additional information.

So all that to say, I don't want to leave it unsaid that everyone is doing their due diligence.

I don't want people viewing to somehow think somebody didn't do their due diligence because now we're asking questions.

We are at voting time now and so we are asking these questions now so we can all feel good about the votes that we're taking irrespective of how much we delve into it then and whether or not we even sat on the committee that had the deliberation at that time.

So just to level set, I'm going to thank everyone for indulging everybody's questions because we all want to support each other as we pass this very important piece of legislation, which is I would argue one of Council's hugest and most important task, which is to pass this very enormous $8 billion budget every year.

So thank you, Chair.

Thank you, Council Member Rivera.

Well said.

With that, colleagues, we're gonna focus on each of these bills that have been identified, and we're gonna go by them one by one.

I see SDCI has joined us in the crowd.

We're not gonna take further questions now, but we might later.

With that, we are on Council Bill 121106, the SDOT Street Use Fee Schedule.

Colleagues, are there questions on the street use fee schedule?

Yes, thank you chair one second let me get to my Okay On the fee schedule, so the summary and fiscal note says the updates to the fee schedule to reflect January 2026 sunset of the citywide fee waiver for new permit applications for street and sidewalk activities and vending as authorized.

What were those street and sidewalk activities permitting that we are now no longer, that we're sunsetting?

That was a fee waiver program that was initiated during COVID era to make it more easier to take advantage of street activation.

So things like Street vending and street dining was the major purpose.

It led to Council's consideration of Cafe Street legislation and this was the final sunset to actually start to begin collections for that program moving forward now that we are out of the emergency.

So now we'll have to, folks will have to pay if they want to do, are those allowed anymore?

They are allowed, it is a nominal charge.

I can't recall off the top of my head how much it is, but there was a reset to make it generally cheaper, but it was part of a larger council effort to realign our practices with, to encourage, to continue to encourage outdoor dining and outdoor activities.

Thank you, Kellen.

I was here in the mayor's office when we were working on that, so I remember the streeteries, but other people may not.

So I want to always say for the record the things that we're doing and if we're sunsetting something, why?

So thank you for taking us through that.

and it seems to me like that is the main piece of this budget action other than the tree planting, pruning and removal permit fees.

Can you tell me a little bit about those?

I don't have too much more to add beyond what the fiscal note says about the tree program.

I think the main focus of this legislation is just the across-the-board CPI inflation calculation to all the schedules is sort of the main sort of budget impact of this.

I'm afraid I don't have a lot more to add to the tree portion of it.

Okay, so all of this is inflationary except where we're sunsetting the streetery program.

That's correct.

Thank you.

Thank you, Cal.

Thank you, Chair.

Thank you.

Council President Nelson, questions on 106?

Yes.

So the ability for the city to get up and going and grant the permission and permits to restaurants to be able to sell outside was one of the shining examples of I don't know, of necessity being the driver of innovation in Seattle, and that was great to see.

So what is the rationale for going back to a fee?

what was the debt incurred by the ability to not necessarily debt in a formal sense, but is it why not just continue the way it is right now?

Because it was, it is successful.

And I think that council member Strauss, you were a champion of the legislation that made it easier to set up eateries, streeteries, et cetera, during the pandemic.

I think Part of the rationale, I think there's two rationales.

One is that there are program costs to make sure these are done adequately and that they follow inspections and those program costs have to be recaptured in some way or subsidized in some way.

So having some fee to administer the program seems appropriate.

and in addition, these are public uses of the public right of way.

So they are installing furniture, installing shelters in the right of way.

We are using parking spaces to provide some of these or other street, excuse me, sidewalk locations.

So there is a trade-off from the public's use of the right of way, which would also tend to be a rationale for charging a fee.

Got it.

Yeah, you're absolutely right.

It is.

We're using public property for private uses and profits.

There is that also.

So I just want to make sure that regardless of the fee necessarily, what is important is that that work is done in a really efficient manner because before the pandemic street use efforts to use street sidewalk for various different purposes was really difficult and took a really long time and then the pandemic happened and then all of a sudden it was easy and so I just want to make sure that regardless of the fee that it is still that the processes are efficient and collaborative and also there is some public outreach available so that people who are neighbors or small businesses down the block who are opposed also have a way of weighing in as well.

Thanks.

Thank you.

Colleagues, any further questions on 121106 street use fees?

I'll just mention that in the pandemic, we allowed people to have free permits to do streeteries and we did not regulate their construction methods.

This may have been fine for a short period of time, but over if we are going to make these permanent features of our city, which we have made the policy decision to do so, we also need to hold them to different construction standards to withstand wind, rain, potential fire or electrical hazards as those construction standards were implemented through a renewed permit.

That's when this fee was set up.

And so this is the end of that cycle.

Those fees, both the initial and the reoccurring fees are lower than what somebody would have had to pay pre-pandemic.

That's that.

So I'm gonna ask, Council Member Rivera, you had asked to pull this one.

Do you still want it pulled?

I do not, but I believe some Council President may have also requested its removal.

But I'm fine keeping it in the consent agenda, Chair.

Okay.

Council President, do you need to have this one pulled?

No.

I mean, if you're asking, it can only be pulled if I plan to abstain or vote no?

Correct.

What if people choose to vote maybe yes after thinking about it a little bit?

Oh, that's what I'm at.

Yes.

So that's what I'm checking in.

If all of your questions have been answered, I'll just mark it on my chart so that we're moving on.

Okay.

Mine have been answered.

Great, so we're gonna leave this one in the consent package.

We're gonna move on to 121107, the SP, the Seattle Parks and Recreation 2026 fees and charges ordinance.

Council Member Rivera, you had pulled this one.

Yep, so we're gonna turn it over to you, Council Member Rivera.

Thank you, colleagues, and thank you, Chair, I mean, and thank you, colleagues, indulging my questions and opportunity to read through some of these.

The reason I had this pulled is because I have questions and concerns about some of these fees, increase in fees for the programs at parks.

In particular, Parks Department administers kid programs in the community centers like the swim program.

And so I'm wondering what is the increase in those fees because sometimes these increases are such that they're cost prohibitive to some folks.

And so I want to make sure that we're not, you know, we're not creating a situation where kids don't have access to something they should have because we've now increased these fees.

if this is not that, I'd like to know that, but if it includes that, then I'd like to know how.

Director Noble?

It's obviously a fair question, and it is not that.

So just reviewing the ordinance itself, it adjusts fees in relatively few situations, in particular fees for what are described as non-park uses of parks property, in particular thinking like stadiums and the like where people have non-park events.

So there are remarkably few fees actually adjusted in this ordinance.

What it is is they missed a couple things in the 2025 adjustment, and they're correcting that.

But there are not broad-based fee changes.

implemented through this ordinance.

It's just a limited number.

The 2025 was a, it was a 2025 and 2026 fee schedule ordinance.

And so these are roughly technical corrections to that ordinance.

So it is not broad changes.

Okay, great, you now have, I feel more, I feel relieved to hear it's not, because I know in the past we have considered things like increasing fees to, for instance, the SWMM program, that's just off the top of my head, and I wanna make sure that's not what this was doing.

Okay, thank you, thank you, Chair.

Thank you, Councilmember Rivera.

And this was part of our discussion last year, fees were increased and I know that there was some consternation amongst us about it.

Colleagues, are there other questions on 12107, the Parks and Recreation fees?

Just to say, Chair, I'm fine keeping it in the consent calendar.

Gotcha.

I mean, consent package.

Wonderful.

The next item identified was by Council President Nelson, the 121108, the Sweetened Beverage Tax.

cost.

President, you are recognized.

Yes.

Hold on a second.

I'm trying to find the actual fiscal note to remember.

I can describe this bill in some detail now that I...

So the issue here is that there was a previous bill that allocated sweetened beverage tax revenues, and it was very specific to the previous biennium and directed certain percentages and the like.

As part of the overall balancing strategy, and we did discuss this at least at a high level, one of the things that has happened is that the new Families and Education Levy, and I'm forgetting all of its names, as approved by the voters, included funding for a number of programs that are currently funded with sweetened beverage tax.

So that provided some relief, potential relief, for the general fund.

But in order to take full advantage of that, the sweetened beverage tax money needs to be directed somewhere appropriately, So it's now going to be redirected to the Human Services Department.

And as part of that, so it's going to now be used to support some previously existing programs.

So in order to do that, we had to remove some non-supplant language.

So in order to take advantage of the potential general fund relief, provided through the families in Ed Levy, we actually had to increase the flexibility about how this particular revenue source gets used.

So that's primarily what this does.

It had also referenced some sunsetting things that are just no longer relevant because, again, it was from the not current biennium but the previous biennium.

So this does very much provide additional flexibility about the use of the sweetened beverage tax revenue.

It does that in order to take advantage of the general fund release effectively provided by the families in Ed Levy.

Thank you.

Council President.

Yes, I would like to know what programs were, so basically you're saying that what was paid for by sweetened beverage tax revenue is now going to be paid by everybody who, well, by property owners and renters, for example.

So I would like to know what are those programs that are, that are then now being put onto everybody, you know, people on fixed income who already have a hard time.

paying their property tax, et cetera.

I think this is part of the lump of $300 million that was in the, is that part of the FEP?

I see Jasmine Marwaha is here.

Jasmine, be well positioned to answer that.

Good morning, Jasmine Marwaha, Council of Central Staff.

So, Council President, are you asking what was previously sweetened beverage tax that's now planned to be part of funded by the FEPP levy?

So it's primarily early childhood investments, so the Nurse Family Partnership, for example, that helps both folks, women who are pregnant as well as young, with young children with public health outcomes, and it's childcare as well.

There's some childcare assistance program that was funded by the Sweetened Beverage Tax that is now gonna be funded by the FEP levy.

I don't have the other, I think there's two other programs.

I don't have them off the top of my head, but it's primarily early childhood investments.

So all of the funding used to be sweetened beverage tax or most of it, and now it's going to be FEP levies.

It can't be paid for by both taxes?

It could be, but in the budget discussion so far, the mayor's proposed budget proposed to swap the sweetened beverage tax investments that are currently in deal for the FEP levy.

and the sweetened beverage, and as Director Noble mentioned, the sweetened beverage tax is now going to be used to support food investments in HSD to supplant general fund.

I'm going to let her have the floor and then I'll...

That was sort of the proposed budget, and I don't believe there were any council budget actions to undo that.

Right.

Yeah.

I was very much in favor of the FEP levy, and so I didn't want to raise a stink about all the other programs that were being put in there because we didn't have enough money in the general fund or in combo with the sweetened beverage tax revenue to pay for it anymore.

And so we put it into the FEP levy, unfortunately, but in any case.

So I appreciate that there is flexibility by not requiring a non-supplant.

So I don't need to pull this one out.

So it's all about childhood education for the most part?

Yes.

Early childhood investments.

Thank you.

Councilmember Rivera, I see you have a hand.

Thank you, Chair.

Just to address this question, it was child, well, anything that was swapped out, if you will, did have a nexus to either childcare, all the things that the FEP levy currently pays for.

I guess that's the bottom line.

So there was nothing transferred over that didn't have an access to childcare, you know, early learning, preschool, promise, and K-12 investments.

All the things that got transferred over to FEPP were related to one of those buckets that FEPP currently pays for, including at least one thing that I always say Deal was transferred for Deal to do that was not originally part of the FEP levy and they were doing with general fund but it had a nexus to the work that Deal does as part of the FEP investments.

So just to reassure you that because I had a question about that as well when the mayor originally sent his package down and there were some items from the sweet and beverage tax that got transferred to the FEP levy and I wanted to make sure that there was nothing being transferred over that did not have a nexus to the early learning preschool promise, K through 12, in some way.

I appreciate that.

So that's a great question.

My comment was not, it was, had nothing, it was not a comment on your oversight of those, yeah.

I mean, it would have to have something to do with kids or school or something in order to be in the FEP levy.

Yes, yes, and that's true of the sweetened beverage tax pieces that got transferred over.

Not taking offense, just remembering that this is a great question because it was a question that I too had and Jasmine and I talked a lot about.

And the bottom line is that the Sweet and Beverage Tax Rep.

Council President, Councilman, I was letting it get a little loose, but everyone gets to have the floor.

Everyone gets to have the floor and then we'll move on to the next individual individually.

Councilman Rivera, you currently have the floor.

Anything further at this time?

No, Chair, thank you.

Thank you for letting me add to what Jasmine already explained, which was the things that were transferred over were, had an access to the FEP levy, just for everyone's peace of mind.

Thank you.

Thank you.

And Council President, anything further?

No.

Okay.

And so colleagues, either Councilmember Rivera or Nelson, do either of you want to pull this item 121108, Sweetened Beverage Tax?

I had none.

Okay, we're not going to and that was a good discussion something that I believe we had earlier in this select budget committee where the bottom line here is that the sweetened beverage tax funds are diminishing.

They are going down year over year and the programs that they looked at funding were really important.

and so I'm gonna move us onto the next item.

Sure, just confirm, is this item still pulled or is this, it is no longer pulled?

No longer.

And we'll go through the whole list at the very end as well, just to update our lists here.

The next item that was identified was identified by Council President Nelson, 121110, the short-term rental tax.

If you'd like to give a brief- Yeah, I think I can provide some helpful background here.

So in 2019, Council Passed a bill to allocate the short-term rental money into three fundamental categories, debt service on some debt that was issued to support housing capital, funding for permanent supportive housing, and the Equitable Development Initiative.

That particular ordinance, again, was written in a very prescriptive way.

It had actual dollar amounts for the amount that needed to go to debt service, and then the remainder allocated.

Since that time, that debt has been restructured in some ways, and so the specific dollar amounts no longer apply.

So what this ordinance does is to establish, again, that those remain the fundamental uses.

So beginning in 2025, the resource will be allocated first to that debt service, because we need to pay off that debt.

that was issued in 2018 and 2019. And then the remaining is to go to the Office of Planning and Community Development for EDI grants and to the Human Services Department to support permanent supportive housing contracts.

And the amounts allocated are to be reflected in the annual budget.

So this ordinance doesn't say how much in any given year, but it establishes that those three purposes, debt service on previously issued housing bonds, Permanent Supportive Housing Operations and EDI are the eligible uses of the short-term rental tax.

And I'd have to go back and look to see precisely how much is being appropriated for each of those uses, but that is in the proposed budget.

Thank you.

Council President, you as the one identifying this one, you are recognized.

What was the allotment order previously?

Has there ever been discussion about this tax paying for other things?

Every other year I hear from the convention center that they are really that they would appreciate some more support from the city as well.

So I'm just wondering when, how much is the, what is the significance of this change of allotment if and if you're basically saying there is no change whatsoever is has there been recently a conversation about expanding the use of things that could be paid for with this resource?

From a policy perspective, there isn't a change.

The dollar amounts that have been dialed in before were prescriptive to the needs at the moment, but the same fundamental uses, housing bonds, permanent support of housing operations, and EDI remain unchanged.

I am not aware of a recent conversation about the potential uses of a short-term rental tax.

I know that in its creation there was a fair amount of discussion with both locally and ultimately at the state level, taxes authorized at the state level about the way lodging is taxed generally and what the uses of those taxes are.

The city in general does not have direct authority to tax lodging.

That's more of a county function, but this is a notable exception.

Just to follow through, the underlying legislation establishes very specific, scripted dollar amounts for each of these specific buckets, and so this legislation removes those dollar amounts, and so it does provide more flexibility for the executive and the council to consider spending among those different authorized spending categories.

Could you repeat that, please?

Instead of having the first $5 million going to OPCD for grants, that is now just an eligible use of the funds.

And so in the budget cycle, you can make decisions about where this money goes.

Got it.

Thank you.

Council President, anything further?

What is the next category?

The categories are...

I can reread you the underlying legislation.

So the first five million is for OPCD for grants to organizations for the EDI program.

The next 2.2 million was for debt service payments.

The next 3.3 million is for HSD to support investments in permanent supportive housing.

The next 1 million and 69,000 was for OPCD for consultant services and then any remaining funding goes to direct grants.

That was the previous allocation.

The new allocation doesn't set those dollar amounts but just sets the broad categories and says the budget will show what the allocations are for any given year.

So this legislation would take the money away, the amounts away, but it also changes the order.

Let me just read what it says now.

Basically, could we pay all the debt in one year, for example, and then the following year get going with all the other

It makes it clear that the first proceeds shall be directed to the annual debt service.

So we're going to pay the mortgage first, if you will.

And then it says the remaining proceeds shall be directed to, one, the Office of Planning and Community Development for grants made to organizations for the EDI program, and two, to the Human Services Department to support permanent support of housing contracts.

Amounts allocated to each category will be reflected in the annual budget.

Yeah, it puts debt first, the other two tied, and the actual dollar amounts to be established with the budget.

So it is possible that if you take care of the debt, when you said the remaining money, what if there is no remaining money?

And then people are counting on that for different EDI projects.

But we know what the debt service, we issue the debt, it's long-term debt, so we know what the annual debt service is, essentially the mortgage payment, if you will, and we know what the...

How much is it?

have to look in the budget currently was originally allocated at five million so my guess is it's in several millions of dollars but I don't know how many I do know where to look this will take a moment if there are other questions as we research

I'll save you the hassle.

Basically, every year that we can pay the debt service and there's leftover money to do other things, then that's fine.

And just taking out the dollar amount doesn't make that much difference to me.

I was just wondering if there was a change in our preference of what category gets funded next after debt.

I don't read it as being a stated change in that.

The key issue is that the debt service be paid first because it's a legal obligation of the city.

Understood.

Council President, any other questions?

No, no other questions.

Okay.

Thank you.

I have one quick question, Ben.

Just remind me, so when short-term rental tax got passed, it was passed to pay for certain categories, or did that come later?

I'm just trying to...

The bill I was describing was passed in 2019, so I believe it had categories when it was first established, but I can't recall the specifics.

I can tell you that in 2026, we're expecting revenues of approximately $13 million, 6.75 directed to EDI, $4 million to permanent supportive housing and approximately $2 million to debt service and that $2 million to debt service is projected to be continued on an annual basis as far as this chart goes out because again it's a fixed mortgage payment.

So you're basically looking at roughly $7 million to EDI, $4 million to permanent supportive housing and $2 million to debt service on the projected totals of $12 to $13 million.

Thank you, Ben.

My question was broader than that.

Just when they passed the tax, they passed it with categories in it.

Sometimes we pass taxes, they go into general fund, and then other times the legislature passes taxes that go specific to a category.

So this is a piece I was just trying to clarify.

When the city first passed the short-term rental tax, It always had categories, that's my question broadly.

It did, it had these same categories.

The difference is that this proposal removes these specific dollar amount requirements.

Like PET.

I'm sorry?

Like PET, when it got passed, it had categories.

I guess what I'm getting to is we're passing all these taxes with categories instead of putting a different approach is to put it in general fund and then pay for all the things we want to invest in that we've prioritized.

But in this case, I'm trying to come up to speed on all the various taxes that Council has passed that have categories attached to it versus the things that go into general fund.

So I'm just high-leveling it, what things...

These three spending categories were identified in the original legislation.

Okay, thank you, Cal.

I would like it pulled out for individual vote, please.

Council President, I'm gonna ask just for you to wait until you recognize, because I couldn't hear what you're saying, and we're all taking notes here.

So I'm gonna still retain facilitating between council members.

I wanna check, are there any other council members that have questions on the 121110 short-term rental tax?

And Council President, you had initially indicated pulling this.

Do you still want it pulled?

Yes.

You would, okay.

Marking that down.

We're now gonna move on to Council Bill 121114, the OCF General Business License Amendment Ordinance.

And Council President, you had pulled this.

We'll quickly brief it again and then we'll turn it over to you.

I'm trying to find this one, so this is the...

Hang tight, Council President.

I'm going to ask you to wait to be recognized.

We have central staff giving a quick refresher for us, and then over to you.

Yes, again, quick refresher here.

This is a change to be consistent with state law, so that if...

In general, if you operate a business within the city, you need to get a business license.

There's a threshold of revenue that triggers that requirement.

I will invoke a very personal experience.

When I was in graduate school, I worked as an umpire and was paid roughly 50 bucks a game and at some point stayed below a threshold such that I didn't need a business license.

proven particularly successful in that career, I might have required one.

Now the minimum level of revenue that would trigger the requirement for a license is going to increase from $2,000 to $4,000.

Again, this is consistent with a statewide change.

And then there's an index, so that number will continue to grow with inflation, so we don't have to revisit this all the time.

But the idea is to reduce the burden on obviously very small businesses, probably consultancies, the nature that I just described are of that like.

Thank you.

Council President, you are recognized.

So I read the fiscal note, and nowhere does it list the cost of the actual business licenses.

Do you have that anywhere?

And maybe it's in the actual legislation, but I just didn't pull that up.

And I see Tom Mikesell walking to the table.

Tom Ikes Hill, Central Staff.

So, Council President, the cost of this business, so anything, any business activity, total revenue of less than $20,000 for a business that's seeking a license would be $68 in 2024. So if a business-making...

Could you say that again, please?

Yeah, so there are tiers.

So there are tiers of license that are required.

So the first tier, Tier 1, starts at...

caps it, so zero to $20,000.

So this, because the threshold is going up to $4,000, this activity would fall in Tier 1, which the fee for 2024 is $68.

And what will be the revenue hit to the city?

So the fiscal note states the revenue hit would be about $3,600 per year.

And that's included in the budget, the 2026 proposed budget.

Thank you.

Thank you.

Any further questions?

Council Member Salomon.

Thank you very much, Mr. Chair.

I just wanted to get clarity on the fees.

Okay, so the fees are tiered.

So if you're making under 20, you're looking at 68. Is that a year or is that permanent?

Just one time?

Councilmember Solomon, that is per year.

So you have to get a business license certificate every year that you're doing business in Seattle.

And to just kind of pull back a little bit, these are for businesses that are not located in Seattle, but do business within Seattle.

So that's what this threshold pertains to.

Okay.

So if you're located in Seattle, you're getting a business license regardless of the revenue amount.

All right.

Thank you for that clarification.

Thank you very much, Mr. Chair.

Thank you, Council Member Salmon.

Colleagues, any further questions on Council Bill 121114?

Further questions?

Council President, you had indicated, you had identified this bill.

Would you still like it pulled?

No.

Okay.

We're gonna now move on to 121.118, the OCF sales definition ordinance.

And if central staff could quickly brief it, and then Council President, you had indicated.

Oh, no.

Aye.

This was not one highlighted.

Sorry about that.

We're going to move on to the next one is 121-123, the STM material change passenger transportation bill.

And if, Calvin, you could give a brief reminder and Council President, you had indicated to pull this bill.

So we'll turn to you next.

Yes, so Council Bill 121123 is related to Council Member Strauss, your proposal to extend a summer pilot of passenger transit service from Ballard to Golden Gardens.

This would make the Seattle Transit measure be an allowable use of funds to fund that proposal.

Thank you.

And just for the general public, I'd prefer that Metro be able to provide the service and I'd prefer a union-based service provider, but with Metro unable to provide the service at this time, this is the outcome.

Council President, you had pulled this.

I wanted to know what, who defines what, when is this, is the additional service that is not Metro, when is that chosen or when is, who makes decisions for when changes to what our revenue is used for is used for?

So every year there is some work that SDOT does with King County Metro to identify where the priorities in for city spending of additional transit service should go.

And that is affected by Metro's ability to provide additional service as well as the city's budget to actually fund that service as well.

So it's a bit of a moving target and it changes depending on usage and other changes that Metro is doing for the entire system anyway.

As sound transit stations came on board, we had a lot of restructures of metro routes.

And so that's an example of something that the city purchases have had to adjust to and change our spending to.

Over the last several years with the pandemic, King County Metro has not necessarily been able to provide as much service as the city has sought to provide both for coaches and for drivers to operate them.

So that has also been a factor in recent years.

The proposal that Councilmember Strauss has put forth or that is included in the amended budget ordinance right now is a different kind of service and it could follow through from King County Metro provided service.

King County does things like the trailhead service, which shuttles people to parks in King County.

They also do some rideshare version, a light version of a on-demand transit service.

So there are some other options that King County might be provided.

Another option to look at would be the downtown shuttle, the waterfront downtown shuttle, which is operated separately and not through Metro.

But this legislation would make both of those types of transportation provision allowable for the purpose.

And is frequency of service along the same routes also?

Could we buy some more frequency along certain lines as well?

Yeah, so typically we look for things where there's overcrowding or we look for things where there are sort of expansion of core service.

The general thing that Seattle has tended to focus on is, I forget the exact term, but there is a core network of transit service, the high ridership, sort of longer run transit line connections that we want to make sure has close to 24 hour service or 18 hour service.

That has been a priority of Seattle transit measure spending.

But another component is when there is overcrowding, and to handle sort of the demand that has been, that was much more relevant in the first round of the Seattle Transit measure before the pandemic, when that was probably why it was, why voters approved it.

But in the pandemic, transit service is still recovering.

And so the span of service and the reliability and regularity of service has been sort of more of the focus.

Got it.

Well, it's for discussion next year when those discussions about the renewal are on the table.

but as long as frequency can be considered, that was my main question there.

Thank you, and I don't mean to take away from our parking ticket revenue, as the FYI guy mentioned, illegal parking at Golden Gardens in the summertime is the highest location for parking tickets, and it is in part because it is easier to catch a bus from Seattle to Mount Sy than it is to Golden Gardens Park.

With that, Council Member Rink followed by Rivera.

Thank you, Chair.

Just one quick question for today related to this.

Could we get a definition of what the expansion of these revenues being spent on private transportation service operators would mean for our system?

Can we get examples of who these private transportation service operators would be?

And Council Member Rank, I believe that they just mentioned that the two examples here being either Trailhead direct which is the preference of the sponsor or the free waterfront shuttle as the exception but I'll let central staff also brief the item again.

Those are two examples of services that we know are operated and so those are the only two that I could really offer you right now is what would be contemplated by this proposal.

Are there any other eligible organizations that we may be aware of at this time?

I'm just trying to think about the universe of possibility.

and maybe I'll jump in because Calvin is helping craft this policy.

At this point, we are looking for anything that can get folks from the 44 line or downtown, the D line out to Golden Gardens Park.

Preferences that it's a unionized service.

And other than that, we just want to get folks to the beach without having to drive.

Understood.

Thank you, Chair.

Thank you.

Thanks.

Council member Rivera.

Thank you chair.

Can you, I believe you said this, but I'm just going to attempt to restate it in a, I just, I needed plainly stated Cal.

Um, this particular budget action, this expansion is to a particular area of the city.

It's not throughout the city.

No, so this is sort of in the nature of enabling legislation.

So the budget action that you all took on Friday identified a specific budget ad for this connection from Ballard to Golden Gardens, and it identified a certain amount of money that would be necessary to provide that pilot service.

This legislation makes the funds eligible for that purpose.

So this is not specific to that proposal, but it enables that proposal to be lawful.

And does it enable then expansion into other areas as well?

It could, it would allow this source of money for these types of purposes if other purposes were proposed in a supplemental or other purpose that would be part of it.

Given that this funding source is going to go away in next year, essentially, and we'll have to come up with whether there'll be a proposal to renew, I think this will all have to be part of that discussion for sure.

Got it.

Thank you, Cal.

Thanks, Chair.

Thank you, colleagues.

Any other questions on 1-2-1-1-2-3?

Any additional questions?

And Council President, you had asked this to be pulled.

Would you still like...

Could you say that number again, please?

Yes, this is 1-2-1-1-2-3, the material change on STM passenger transportation.

Nope, my questions were answered.

Okay.

We're going to move on to 121-124.

Council President, you had pulled this and we'll let Cal brief it, turn it over to you.

Sure.

So this piece of legislation, similar to the last one, is related to Councilmember Saka's proposal to fund a Chief Transit Security Officer.

And so this, again, makes a similar change to the use of the Seattle Transit Measure funds to specifically allow for that spending.

Council President?

I support additional safety and security on our public transit, and I was wanting to know, I remember there were a couple of measures that we made last year that increased that.

I can't remember the precise budget items, but are there other jurisdictions that also contribute to any kind of the, I'm not talking about the chief security person, that's just one person, but could you please remind us what are all the additional security benefits that we paid for already and how may they be shared with other jurisdictions?

Well, I guess I should start by saying that transit security has been a very high visibility and priority for the region in general.

The King County had established a task force, some of you have sat on, to really focus on this activity.

There was a report that came out I believe last month that highlighted a number of transit agency and law enforcement recommendations.

So there is a lot of ongoing work to try to focus on transit security.

In terms of specific dollar amounts that the city has, as part of the transportation levy proposal, The council added, I believe it was one million allowable from the transportation levy funding to help support transit security improvements.

This piece of legislation is talking about a different funding source.

This is talking about the Seattle Transit measure.

So it would sort of open up another possible option of transportation revenue for transportation safety improvements, but it doesn't actually...

But again, like the other one, the budget action is what actually directs the money.

So this is an enabling legislation, not direct spending.

So is there an approximation of what would be the trade-off of what would not get funded by allowing for this?

presumably you would spend less on transit service.

You would purchase less service hours.

Roughly by how much, yeah.

Maybe just the salary of one person for one year.

I mean, that's not that much money.

I'm just trying to understand, you know, how are we paying for additional security, which I support, and if other, you know, so you're almost there.

So there are, I mean, there is a certain amount of security costs built into the charge that we pay for.

So when we pay for a transit service hour, that does support Metro's transit security operations in part.

I don't know the exact breakdown of how much of overhead that is.

So there is some contribution that way.

I want to say that we're spending something on the order of $40 million in general on transit service hours.

I may have that number wrong, but that's what's coming to the top of my head right now.

So if we are talking about one position plus a small program budget, that is much smaller.

This piece of legislation doesn't specify the amount of dollars.

That was the budget discussion, but this makes that available.

Noted.

Thank you very much.

I'm fine with it staying in.

Okay.

Councilmember Rivera and then Councilmember Ring.

Thank you, Chair.

Thank you, Cal, for taking us through that.

I, too, support transit security.

And in that vein, Chair, if you'll indulge me, I really just want to give a shout-out to Sound Transit Security Officer Burrow, who the other day I was on the light rail and they de-escalated a situation.

They came quickly when they were called into the light rail station.

I've told people many times there is a number on the train marked a phone number where you can just text and say the train number that you're on if someone's having needs assistance for any reason on the train and they will You can text with Sound Transit, they'll send the security officer and they show up.

And I really wanna give him a shout out again, Transit Officer Barrow, because the situation was, a person was very, very agitated and he really diffused the situation, calmed the person down.

was able to remove the person.

He went along with the person to make sure they were fine.

So a really great example of alternative response.

And I will give Sound Transit a shout out for transit security because they do a very great job with the transit security piece.

that is often required on the trains as we ride.

So thank you, Officer Burrow, and thank you, Sound Transit, for providing that.

And thank you to my colleague, Council Member Saka, who's the big advocate on the transit security, and I join you in that.

So thank you, thank you, Chair.

Thank you.

Council Member Rink.

Thank you, Chair.

So my understanding is that this budget action is a part of a larger policy decision related to the Seattle Transit Measure.

And I'm wondering, could you help me understand specifically what this action is before us today and if subsequent action is needed to put this into effect?

So this legislation specifically says that the Seattle Transit Measure sales tax revenue can be used to fund transit security.

and that is all it does.

The action that you took on Friday amended the budget proposal to include Councilmember Saka's proposal to fund a position and a small program in SDOT for transit security.

And is there any further subsequent action in order to make the policy change?

This would be the action.

Colleagues, I would like to request that this is pulled for an individual vote.

I'm happy to share my broader remarks on this policy decision during the individual vote.

Thank you.

Colleagues, any further discussion on 121-124?

Seeing nothing else on 121124, I see 121092 that both Councilmember Rivera and Nelson pulled and we also had a published public hearing dedicated to this issue as well.

With that, if central staff you want to brief it at a high level and then we'll kick it over to our colleagues for questions.

I'm going to invite Ketel and I'm going to withhold comments myself.

I'm conflicted on this issue, so better for you to hear from others.

Thank you.

So Council Bill 121092 would move authority from the Department of Neighborhoods to the Office of Planning and Community Development for administering part of the city's regulatory program for major institutions and also changes to public schools.

It would also move a position that sort of provides a support role there from DLN to OBCD.

Thank you.

And Council Member Rivera, you had pulled this first and then Council Member Nelson, so I'll give you the floor, Council Member Rivera, and then Council President Nelson.

Thank you, Chair.

Ketel, can you give more information on what this person was doing at Don?

Yeah, so among, as part of the city's sort of regulatory function with major institutions and also public schools, the city convenes some advisory groups, in the case of a major institution, it's called the Resident Advisory Group, that provides input to major institutions or universities and hospitals about their major institution master plan.

to be periodically renewed.

I'm kind of stepping way back, sort of what the purpose is of major institution master planning.

These large institutions, they tend to grow beyond their boundaries.

What the city does through a major institution master plan is require a major institution to tell the city how it's going to grow over time, and then they have the benefit of knowing how much they can grow and sort of as part of that they indicate how they're going to mitigate some impacts associated with that growth along the lines of transportation and other impacts to the neighborhood.

So the Resident Advisory Committee is convened by a DON and staffed by a DON staffer and ultimately advises a major institution both when a master plan is being developed and also as a master plan is implemented over time.

So similarly with public schools, generally there are some more permissive standards for public schools, but it's often the case that schools being what they are, they don't necessarily meet those development standards or can't meet those development standards.

And so there is a staff person, there is a regulatory pathway for getting departures from development standards if you are a public school.

and there is a similar residence advisory committee that provides input to STCI as part of that decision making.

Thank you, Ketel and colleagues.

I knew this information, but I wanted Ketel to state it for the record.

Anyone watching also would have the information on what this person does.

You've all heard me say in the past and in particular, especially related to the comprehensive plan, I lack confidence in OPCD's ability to do the proper outreach because I didn't think they actually did that during the comprehensive plan.

I know that this, that Don, the Department of Neighborhoods is our outreach department, if you will.

and that they engage residents when there is development happening in their neighborhoods.

I think that it is really important to have resident advisory committees.

I think it yields better outcomes all the way around for the major institution expanding and for the neighborhoods that are neighboring and for the residents to be able to provide feedback.

I think outreach is really critical because of that.

And the other piece to this is Don, OPCD as the land use department is not necessarily as objective as an outreach person at the Department of Neighborhoods.

And so I actually think that this person should stay at Don and then Don should be the department that is providing, continuing to do this work in working with the resident advisory groups as these projects come up.

I will also say that having just listened in on one last week, OPCD is usually present at these meetings as well.

It's just that Don does that coordination piece and that a liaison piece with the resident advisory groups.

And I think that's an advantageous setup all the way around.

So for these reasons, I pulled this particular one and I am gonna be voting no to transfer this particular body of work to OPCD.

Thank you, Chair.

Thank you.

Council President Nelson.

I basically just wanted to know what was broken that this fixes.

So that was already addressed in this conversation.

Great.

Council President, anything further?

Nope.

Colleagues, any other questions on 121092 major institution and school program department change?

I'm seeing none right now.

And Council Member Rivera, you've indicated you'd like it retained as pulled out.

So I made that note.

Moving on to 121109, the graffiti nuisance code updates.

And it looks like Council President, you pulled this.

We'll have a brief reminder from central staff and then we'll turn it over to you.

This is a piece that follows other actions that are in the proposed budget, and in particular the executive has proposed that the graffiti enforcement and the staff-associated significant number be shifted from SPU to Seattle Parks and Recreation.

So that's an organizational shift.

the number of staff moving as well and this then also transfers the authority to enforce the graffiti code to Seattle Parks and Recreation as well.

So it's an organizational effort to, I think it's smart to consolidate the graffiti efforts at Parks and Recreation.

Thank you.

Council President.

I wanted to know what is meant by enforce, like what are the actual actions?

I understand that we also did create a civil violation, that we changed the nature of the penalty of graffiti this past year.

Not the nature, but the actual crime, I believe.

what are the actual actions that are happening and also to what extent is, so I assume that there is no law enforcement involvement in graffiti, in enforcing our graffiti laws.

So just quickly to clarify, so last year the council moved over nine staff, nine FTE and about $3 million worth of the program.

That's like the graffiti rangers and things.

The one remnant that was left in SPU was one position and it's the person who does like the intake and Distribution of assignments and things so it's like the coordination of the program and the enforcement the code also had a reference to where any type of enforcement which I believe is the requiring folks to to do the painting and things was That it's literally just the definition that's changing.

So right now the definition refers to The Director of Seattle Public Utilities, and so this bill would change it to the Superintendent of Parks and Recreation.

Okay, so these are people that are going out, and so this regards one person that is sort of the coordinator of the work that is cleaning off graffiti from public property, correct?

That's my understanding, yeah.

So the bill before you actually is just, so the budget has that, the transfer of the position into, so SPU would be kind of out of the graffiti game and it's all in Parks and Recreation.

The bill is very simple in that it just changes the definition, the reference to what director means in the code.

Thank you.

I'm good with it in the thing.

Thank you.

Colleagues, any further questions on the graffiti nuisance code updates ordinance?

Seeing none, Council President, do you still want this pulled?

No, I'm good with it in the thing I meant.

It can remain in the consent package, please.

Thank you.

Colleagues, we're gonna move on to 121102, the OCF 2025 fund closure ordinance.

Central staff, if you could give us a brief reminder, and then Council President, you had indicated interest in this one.

This is largely, almost exclusively, a technical bill.

So the city opens up funds or creates funds.

For instance, the time that it issues debt, there was a fund created, one of the ones that closed here, when the first Bridging the Gap levy was proposed and approved in 2006. So what's happened here is that these funds are no longer needed because in case of the 2006 levy, those dollars have all been expended.

In the case of the The bond funds, they've been distributed to the departments.

So these are really technical cleanups.

I can pull and read you the full set of funds that are closed, but just to give you a sense that 2000 Parks, the 2000 Parks Levy Fund, the 2011 LTGO Multi-Purpose Bond Fund, So that's really the nature of this.

It's essentially cleaning up the city's accounting for funds that are no longer needed.

Thank you.

Council President.

So there are a lot of lines here.

I'm not seeing a total amount that is being transferred.

I understand that why this has to happen.

What is, the Alaskan Way Seawall Construction Fund has 34,000 if I'm not mistaken, and it says not applicable.

So where in those categories, what's gonna happen to that money?

And also does the budget already spend these amounts that are listed in the third, the right column?

I need to read further about where the dollars are being swept to.

The largest one is 200,000.

The others here are less than 35. Bond funds can only be used for capital purposes and or to pay debt service.

So to the extent that there is balance there, those are being, I would think, being swept out to do that, to make such payments.

And yes, these resources should be and have been accounted for in the proposed budget.

they're already spent then correct yeah so for instance the 2000 parks levy fund the remaining balance will be transferred to the Parks and Recreation Fund there's something related to Key Arena there was Key Arena settlement funds from when we sued the Sonics for leaving those dollars will go to the Seattle Center Fund and the like

Okay, some of these funds are from, like, 2015, et cetera, so this is money that's been sitting around, and so basically, would it be true that we're looking under the cushions here with this exercise?

Yeah, we're just cleaning things up.

I mean, what happens with a bond fund is you end up earning perhaps a little bit more interest than you meant to because the funds got dispersed a little bit later than you thought, so those are being transferred to an open LTGO fund, an open bond fund, and then will be used for debt service on outstanding bonds.

And also, I should just state that, you know, aside from the Bridging the Gap Fund, which was about 200,000, the vast majority of these are very small, under $30,000 each.

Right.

You can see how a council member, though, might be interested because we're adding up all these columns and thinking maybe I have a different purpose I'd like to spend that money on, so I'm just asking.

One of the first things we do when we get the budget is to look at fund balances and identify potential flexibility.

So we have, I don't know, exploited is the right word, but taken advantage of those when it's been possible.

Thank you.

Anything further, Council President?

No, but, well, I didn't until something that Ben just said.

Okay.

Are you saying that these, because these monies are already allocated to something else, they are not available for any other purpose, capital or otherwise, capital project or otherwise?

And they are accounted for in the budget, so they've been directed to some other capital purpose, for instance, in the case of the bond funds, so they're not sitting free for appropriation.

Noted, thank you.

As for example, we have moved the construction of the Bakken building on the waterfront up sooner, which requires funding.

Colleagues, I just want to remind the body that this presentation was provided to us.

We were supposed to get through this presentation on Friday ahead of votes today.

Committee took a little bit longer than intended.

All of these bills effectuate the things that we have taken up over the last eight weeks.

And so I would ask that we stay focused on the questions that will determine whether you will vote yes or no.

We have just the last one here, which is

Do we want to keep this in the package?

Thank you.

Council President, do you need to keep this one in?

Remain in the consent package.

Thank you.

Next up is 121-122, the Central District and Southeast Seattle Reinvestment Fund.

Council President, you had pulled this item and so we'll take a quick briefing and then we'll hand it over to you.

This is very much council-generated legislation, so staff drafted this, and it was introduced relatively recently.

As described on the screen, this legislation creates a new Central District and Southeast Reinvestment Fund starting January 1. The purpose of this fund is a repository for public and private revenues to support equitable development, cultural preservation, and community-led revitalization in the Central District and Southeast Seattle neighborhoods.

I believe the initial funding is in the neighborhood of 1.2 million, but I need to go back and refresh that.

But that was in a council budget action.

I can give you a little bit more.

One moment, if I can pick the right piece.

This is the specific language in the ordinance that defines the purpose of the reinvestment fund and how it will be funded.

Council President.

Yeah, I was wondering how, if it has already been, and I didn't notice this highlight here, but I was wondering if it had already been decided what categories of expenses this fund will pay for.

And I say it that way because I think that that kind of rigidity is unfortunate.

It used to frustrate me with the jumpstart fund that the percentages and the uses of that money were so fixed and so I just wanted to know whether or not but from this language that I'm seeing here that appropriations are decided by council maybe every year or something like that so it's not such a

Correct, and as described it will receive funds from a variety of sources, so it has neither a dedicated funding source per se, nor does it have, beyond the general purposes described, does it have specific allocations in percentages or dollar amounts?

Thank you.

Council President, anything further?

That was my question.

Okay, any statements on this one?

No statements.

Great.

Council Member Rivera.

Thank you, Chair.

Ben, just to say, is this a little bit like the Arts Fund?

Sort of a mechanism like that, where it doesn't say exactly...

Exactly.

It becomes a repository, and so you can clearly see what level of investment is being made for these purposes, and depending on what your sources are, you can deposit them there and know that they will be used for that purpose, but then it provides you the flexibility.

So in some sense, it's an opportunity to track some level of accountability, like to be able to see this separate and apart from the general fund more broadly or from other funds.

It's more similar probably to the finance general situation, except as a fund level instead of an appropriation.

Got it.

Thanks, Cal.

Thanks for that explanation.

Thank you.

Thank you, colleagues.

And there will be further discussion next year in the policy committee about this.

It's difficult to take a policy and budgeting simultaneously and be able to focus on both with enough attention to do both well.

Colleagues, any further discussion on 121-122, the Central District and Southeast Seattle Reinvestment Fund?

and do you need it pulled out of the package?

No, it can stay in there.

Wonderful.

So the other two bills that were on the presentation that are not part of the consent package today are the annual grant acceptance, 121-115 and the council changes clerk file, which is 314-546.

Those will come up on Thursday.

We need a week to make sure that everything is correct.

So that's also why if anything is pulled out of here today, we may, I can't guarantee that it would be voted on.

We may have to extend our schedule.

I see council member Rivera's got a question.

Then I'm gonna go back up to the first two items that we had had initial discussion on and that we come back to.

Council member Rivera, I see you have a hand right now.

Thank you, Chair.

Just quickly on the Council bills related to the bonds, the 089, 090, 91, et cetera.

There's like three more after that.

I assume that Director Carnell reviewed the, you know, I mean, when I see bonds and- They've been through the debt management policy advisory committee process as well.

Okay, great.

Thank you.

Thanks for confirming that, Ben.

Got to do my due diligence.

Thank you.

Thank you.

And then Council President pulled 1-2-1-1-1-3, the 25-year-end supplemental ordinance.

Ben, you want to give a quick brief there and then we'll call on Council President.

Again, this is supplemental, so it covers innumerable, not innumerable, I could probably count them, but a number of departments and a number of changes.

And I don't have those details in front of me.

Again, staff have reviewed them and are available to answer any specific questions there might be.

The changes here, again, have been incorporated.

The way I think about this is when the mayor sends down the 2026 budget, he's also, he or she, cleaning up the end of the 2025 budget, and that's what this does.

And then the resources that are, typically this ends up freeing up resources that are then spent as part of 2026. So they're very much integrated, and we view them in that context.

Thank you.

Council President?

Ah.

Council President is no longer with us.

I would say we would move on to the next item, but that was also Council Presidents.

Council Member Rivera, do you have further questions?

We have Council President back.

Council President, we are on 1-2-1-1-1-3, which you indicated you'd like to pull.

Do you have additional questions about the year-end supplemental ordinance?

I'm trying to remember.

Excuse me.

I remember that I had questions, but I'm not bringing them to mind right now.

Let's see.

So I don't want to waste anybody's time.

OK.

Would you still like it pulled from the consent package?

No.

Okay, and then we're gonna come back to 121105, the SDCI fee update to see if you have further questions at this time.

Since it came up before, we had SDCI arrive, which is good because I was gonna ask us that we play back the video recording from September 30th, which while informative is not as maybe directly focused to your questions as the subject matter experts who do this work.

Do you have further questions on- You have the floor.

How many, what is the different, what is the delta in number of projects from one year to the next, which is one of the reasons why this is, says this is necessary?

And I'll also, we've got SDCI coming up to the table and if you'd like to pull up the September 30th presentation, it has, I know some of this information contained there as I was just reviewing it.

and for the folks who have just joined the table, if you could introduce yourself.

Colleagues, this is not standard process of having departments come up on the last day of budget and we appreciate you so sincerely and also thank you.

I know that when we had you in committee before, we had some very pointed, direct and sometimes felt there was a little bit of tension but only because this is a difficult conversation of do we lay off employees that we then have to rehire once permits come back as was slightly described a moment ago and after especially after we had to lay off employees last year to write to stabilize that core staffing fund.

This fund has had a lot of challenges and we need to make sure that we stabilize it to the best of our ability so that we don't lay more people off and then have to rehire them only to find ourselves in a lag.

With that, I'm gonna...

Were we bringing up this other presentation?

I'm working on it.

Working on it.

Introduce ourselves.

Please.

Okay, you can go first.

Good morning.

Brooke Bellman, Acting Director, SDCI.

Green light means on.

Okay.

Scott Domanski, Principal Economist, SDCI.

Thank you.

Shane Mukave, the Finance Director, SDCI.

And, Council President, your question was how have permit levels been fluctuating over the past two years or...?

Yes, I would like it.

Basically, one of the rationales is that there are, I think it was fewer big ones and more little ones.

So that's one of the things.

I note that the fee as per either Kittle or Ben earlier goes up from $2,000 to $4,000.

That's a significant increase for a townhouse.

And so I'm just wanting to understand better the rationale for this.

And when are the plans to bring back the service desk?

Right, so first the, yeah, so over the past, what, decade, we've seen a lot of larger high value projects coming in the door, which brings in a lot more revenue compared to smaller and mid-sized projects.

And it has sustained us quite a bit over the years, but there's a structural change in the types of projects coming in the door now.

So we have a lot of these smaller and mid-sized projects coming in the door and the amount of revenue that we are earning from those projects is not enough to cover the cost of doing business.

And we do not anticipate a lot of the larger high value projects coming in the door until at least once the vacancy rates begin to drop downtown, we may be seeing more of that interest rates drop.

Really the vacancy rates are still very high and there's not going to be a lot of really large complex projects High value projects being built until that time Yeah, I can say that our construction volumes they have been increased in the past couple years about two to five percent But the valuation of those projects has been a lot lower like Shane mentioned last year we brought in about three billion dollars, which would have been a very low year for project valuation for us.

This year, we're trending towards about $2.5 billion, which is a substantial decrease.

We're looking at about roughly the same level of project valuation next year.

So it's been a notable decline.

The types of projects that we're bringing in now are more of the ADU.

With the new compound, we're anticipating some of the fourplexes, but those are not high valuation projects either.

So it's really put us in a kind of a difficult bind where we're still seeing work come in, but the type of work that's coming in is less complex.

And if you can see the chart, up above, you can see over the last, since 2023, our permit volumes on construction permits have been increasing, which is a good sign.

But on the other hand, the construction project valuation has decreased, and we're getting close to the lowest point, similar to where we were at during the Great Recession.

and lower value projects means lower permit revenues.

So what we're struggling with is a change in the project mix.

What we need in order to really stabilize is a 35% fee increase, but we were gonna start with 18% in 2026 and then see how we did with that and how the economy did, and then look at a possible similar increase in 2027. If we aren't able to do that increase, it was anticipated to bring in about eight and a half to $9 million in revenue per year.

And we would probably, we'd be exhausting our building cost center, which is our building permit fee revenue cost center and land use cost center by the end of 2026. So we'd be looking at laying off equivalent of $9 million of staff, which is about 60 staff.

If you look at it at about $150,000 per employee

Could you say that starting with the 60 staff and how many staff were laid off last year?

Could you please walk me through that again?

Yeah, so last year 29 29 altogether, 29 staff.

It was- I'm going to point at information, which is 29 from your department.

There were more staff in other parts of the city that were also laid off.

Yeah.

So 29, we abrogated 20 positions because there were sunset pockets and those pockets were meant to expire in 2020 at the end of 2025 or 2026. I can't remember offhand, but but a large portion of them were, sorry?

So it was nine human beings or 29 positions?

29 positions.

At the end of the day, it was about five people were laid off because more than half of them were already vacant and then the other people ended up finding jobs because we had that extra six months.

of time.

We meant to do it at the end of 2025 or into 2024, but then the council wanted us to extend until mid 2025 positions that were filled.

And so we did that, but as time went on, those people got new jobs.

And so at the end of the day, we laid off about five people.

But yeah, by the end of 2026, just the equivalent of revenue in terms of staff time is about 60 people.

That would impact the permit intake group the hardest, which is where staff come in when they first start at SDCI and they begin their career in permit intake.

It's the most diverse group of people we have.

they would be impacted hardest because of bumping rights, HR rules, bumping rights for people that have been there longer.

So those people who have worked longer with the city, they will bump people at lower levels.

And that's just, I don't have any control over that.

That's something that HR handles.

But that would impact our permit intake staff, which would definitely degrade service and cause backlogs.

in the permit process.

And we don't want to do that.

We want to be ahead of any kind of permits that come in the door.

Thank you.

Now that we've had departments rejoin the table, I'm going to take a little bit more fixed facilitation while we're doing this discussion.

Thank you for that answer.

Council President, do you have additional questions for SDCI at this time?

Yes.

Great.

The floor is yours.

From what you just said, it sounds as though it's the value of the project that you're basing the need for a higher permit fee, more or less.

But why is that?

How does that relate directly to the time it takes an individual FTE to do the work to issue the permit?

or are you just because the way I can I explain why I asked it sounds to me that it's almost like well this is a big project they're already spending a whole bunch of money and therefore the the increase or the cost of the permit isn't that much when you look at the whole cost of the project and so why would it be a big deal to increase it a little bit it's sometimes it's it sounds a little bit that that could be some reasoning underlying this and I just want to make sure I just wanted to know if for real why you kept saying the cost of the value of the big projects and whatever.

And I'm going to back to the committee table.

I might ask us to stream the September 30th conversation again just because it hit all of these points.

But I want to bring it back to the committee table.

Okay, so our construction permit fees are value-based, so it's just a calculation based on occupancy, construction type, and square footage, which sets the project valuation, and then that project valuation goes through a fee schedule, which sets the permit fees.

It's supposed to be a proxy for the complexity of the project and how much review time it's going to take.

If we build everything hourly, it would become cost prohibitive for the less complex project, so there's some subsidization that happens from the larger complexity projects to the smaller complexity projects.

But without those larger complexity projects coming in the door, we lose that subsidy and we have to extract more money from the lower complexity projects.

Thank you.

Very helpful.

Council President, further questions?

yes when you're talking about you know the loss of projects or the gave the two numbers between one year and another has it has there been an exercise within SDCI to think about improvements to your processes so that perhaps more projects would be built here because one thing that you will hear people say out there in the in the world is that it People are discouraged from building or opening here.

Thank you very much for nodding your head.

It's making me feel better for being kind of mean.

Because Seattle is really difficult to get a permit.

And the review process is really frustrating.

So that could be one reason why that is happening.

And so I'm just wondering if there's an internal conversation.

and I believe that it was the director's first or maybe day before first day on September 30th when SDCI presented with interim director Kay Lee providing the direction and I think that that may have been your first day interim director.

So with that, I'm going to turn it over to you as a brief introduction to city council and to help us understand council president's position a little bit better.

Great, thank you very much.

It was indeed my first day.

And so Kay did take that, came down to present the budget.

I was emphatically nodding about the process improvement question.

I am six weeks into the job now.

and that is one of the first things that I'm doing is helping the department think through with fresh eyes what our processes are, working very closely with the PACT initiative, looking at a variety of tools, looking at our processes, looking at our organization as a whole.

Streamlining permitting is very much on everybody's mind.

It is something that we would like to get to and I will tell you that I've been met with great enthusiasm within the department about ideas and ways that we can go about that.

So that is definitely something that we are looking at.

As it relates to the volume of the types of work that's coming in, I will just say we still have a very high volume of work coming in.

It's just smaller work that is coming in from people who haven't always gone through the permitting process.

So people who might be intimidated, people who aren't used to it.

So some of those processes take a little bit harder or longer time to get through.

And so we're spending a lot of time working with individual property owners, individual developers and so forth to get them through the process.

You also asked a question about the service desk.

We actually have a counter on the fourth floor of SMT that is open.

I've heard a lot of feedback about the ability to go back to the 20th floor.

We also have a tool called Zendesk that has been taking a high volume of some of the calls and some of the intake that we do to help people get through that initial start of the process when they're looking at permitting.

Again, these are all tools and, frankly, questions that I've been asking to better understand what are the right tools for people coming into the process, people who have advanced levels of the process, and what are the right ways to meet them so that they can get through our processes faster.

Thank you.

Council President, further questions?

I have a comment which is thank you very much for explaining that.

There are a lot of people that recognize that there is a counter but that it doesn't, it doesn't, that's not a substitute for an office where employees sit and then they can go ask their colleagues questions when somebody comes up with something that looks like it might or might not conform to the building code, et cetera.

So just encouragement to actually open up the real service desk.

and then my, might be my last question, I don't know.

How does our, how do our permit fees compare to neighboring jurisdictions like Bellevue and the rate or the frequency at which they go up or increase year after year or every few years?

And council president, I'll remind you that this was discussed during the budget process earlier.

I will return to the committee table, but If these are questions that will change your vote on this bill, I'm happy to continue these questions or if there is a position.

But I'm concerned that this is all stuff that we've got.

Literally, this material is what we've gone over in the budget before.

So I'll pass it back to the committee table because I believe that this answer is in the packet.

Just a couple more slides down.

And then we'll come back to you, Council President, for further questions.

I looked at this a little bit, and this was one of the things that we talked about previously.

Compared to Bellevue, it's about the same range with the increased fees, I think.

For a million-dollar valuation project, the fee charged currently at STC would be about $7,091.

Currently at Bellevue, it would be about $7,283.

with the proposed change it'd go to about $8,000 for that valuation.

That's actually less than what Tacoma and King County charge, sort of an equivalent project at Tacoma would cost about $12,600 and at King County it costs about $9,270.

Council President, further questions?

Yes.

What about the hourly rate?

Yeah, I did not look at the hourly rate, I was just looking at the valuation-based fees.

Yeah, that's what the combination of the fee plus the hourly rate, which seems really expensive to me, but then I wouldn't know what other cities charge if that's normal.

496 or 498 per hour move going up to like 551 or something like that.

That's, you know, that's what we're asking our clients to pay as well on top of the fees.

Yeah, that's for the land use hourly rate and that's for we aren't doing as much of the land use projects anymore because design review and SEPA changes both at the state level and locally and so that's where a lot of that fee came from was from design review and SEPA projects and now there's fewer of those projects it's mostly small variances and and those projects are...

that's one reason that our land use cost center is really suffering right now as well.

So we have a lot fewer of these projects coming through, less hourly.

work to be billed, but yeah.

Thank you.

Council President, any further questions?

We are verging on the point of, I might ask us to stream the September 30th meeting again, just to give us all an even footing of what has and has not been discussed.

I just want to note that I didn't ask these presenters to come here.

I didn't ask to take up this time in the meeting.

This was quite unexpected for me.

I asked the questions that I needed answered before and said what I wanted to have happen with the legislation.

And you say that, yes, this has been presented and we all covered this already.

I do not remember these specifics.

I don't remember the statement that some of the fees would double.

the dollar amount of the hourly rate.

So maybe I wasn't paying attention, but I don't remember a lot of that information being presented before.

And so that is why I have so many questions about this piece of legislation, increasing those fees.

Thank you, council president.

We just want to make sure that you're getting all the answers to the questions that you're asking and that we're not asking folks to take too much time out of their day.

That's why I'm saying we might want to go back and look, but I just want to see council member Rivera.

I see you've got a hand.

I do, Chair.

Thank you and thank you all for being here.

It's nice to meet you.

I'm looking forward to actually meeting you.

I'm having an opportunity to chat and thank you for all you've said because as you can see pruning has been a real challenge in the city and we're all grappling with how to best do it.

And that includes your staff who's actually doing the work.

So just wanna acknowledge all of that.

My concern with this fee increases, I'm hearing you say the type of work is less complex.

We are getting lower project value projects, which means less money, but then we're increasing the fees for those smaller projects, which probably and I said this earlier, but then that means that the folks that are doing these smaller projects are bearing the brunt because those bigger projects and higher value projects are not working.

So I'm concerned about that.

So my question is factored into this fee increases, I mean, is there like some kind of I mean, I think you called it tiers.

I'm thinking sliding scale, but that's not the right word for this.

But just like, to be honest, based on the value of your project, if it's really small, I just feel like, again, the little person is bearing the brunt of these fees because the bigger companies are not doing these projects right now.

And that is really my huge concern here.

Back to the committee table.

Okay, so we're regulated by RCW 820-2020 and we need to cover the cost of providing the services.

And if we're not able to cover those costs, we don't have many options.

We have either fee increases, laying off staff, and the other option maybe, which we're already working on as well, is improvements to the permit process through new technologies and things like that, but that's not an overnight.

but I'm going to interject here just to say in the conversation that we had on the 30th, general fund usage was another option.

I was about to wait to that point.

So what's being described here and I think well described, I'll try again for what it's worth, is we talked about cost centers.

So there are a set of costs and we, the city, are trying to recover the cost of providing the service and it's a service that is not for the general public, it's for folks who are developing projects remodeling or building new ones.

So we try to recover the cost of the time for the folks at SDCI who are involved in reviewing those permits.

We historically tied the cost of that permit to the value of the project because that was seen as essentially a proxy for the relative complexity, a proxy for the amount of time.

As it turns out, we were probably in some sense overcharging the big projects and that they were becoming- they were a source of revenue that helped keep the fees down for the smaller projects.

Larger projects have gone away on the whole, so we are now left to recover fees from a smaller set of projects that have less value, but we're trying to recover lesser money because we've laid some folks off, but not So we can either recover that money by charging slightly higher fees or contemplating a subsidy.

So that would require introduction of general fund to a subsidy to development.

I think we could probably do it in a way that is general enough that it wouldn't be a gift of public funds.

But those are resources that we currently have not identified as part of the overall budget process.

and have to know how much incremental revenue the fee increase is expected to bring in and think about whether or not that's something you'd want to try to prioritize general fund to, or alternatively, as described, try to find efficiencies that can otherwise keep the fees down.

But there was a cross-subsidy over time, which is not unusual in the context of trying to set fees.

It's disappeared, and so what's left are facing a higher fee in order for us to recover our costs.

Thank you.

Councilmember Rivera?

Thank you, Ben.

I'm also hearing the type of work is less complex, so I'm almost hearing, and forgive me, I don't think you're intending this, but it's almost like on the one hand you're saying is less complex and on the other you're saying it takes a long time.

So that seems incongruous to me.

If it's less complex of a project then that to me denotes less time to put into the project from SCCI's perspective.

So can you reconcile what I'm hearing here?

If I could try.

I think the link here is that the fees were being set on the value of the project, and that's a very imprecise link.

It turned out for bigger projects, we were probably over-collecting.

per project basis.

But now we only have the smaller projects.

So they are relatively simpler, but they still require some amount of time.

They're no longer, the department is, they're no longer being subsidized by the bigger projects because they don't exist.

So they're having to face the full cost and that full cost is higher.

But that's the thing, Ben.

I'm hearing you say the projects are less complex, so I would think they're not taking as much time as the bigger projects, which are very complex.

Are you saying the amount of time is the same, regardless of the complexity of the project?

The amount of time hasn't changed for the small projects hasn't changed year to year.

What's changed is that there's less revenue coming in from the big projects.

So the little projects are taking the same amount of time, but the fee revenue from the big projects isn't helping to pay for them anymore.

So they have to, SDCIs to be whole, the little projects have to carry their full weight.

Well, but what I'm saying is they don't take as much time in general, but they're taking up the burden.

I just don't think that that's fair to those smaller projects, right?

They don't take as much time.

Your only other option is a general fund subsidy.

Thank you.

And the reason I'm raising my hand physically in the chambers now is simply because we, this is why we had such a robust conversation on September 30th, which is that, and we presented it.

And I remember council member Juarez even saying, Strauss, what are you about to do here?

When I really teed us up for the four options here, we could lay staff off, we could increase the fee, or we could put general fund in.

and the reason that we wanted to highlight those three options so early in the budget process was so that if colleagues had thoughts, feelings, policy decisions about the choice of those three options, that those could be taken up during the budget process.

And so- Is the floor still mine, Chair?

If you have direct questions, we are now at 12.05.

We've been on this topic for about 20 minutes.

If we continue for another 15, I'm going to ask that we all watch the September 30th committee.

Council Member Rivera, I'll give you the floor and then I see Council President Nelson and then we're going to close questions on this and I ask that the questions be focused on determining whether you would support or not support this bill.

Yeah.

I think that these are tough choices and what you're hearing is the grappling with all of these things coexist and they're true and we're grappling, I'm grappling with it because we are sticking the cost to the smaller projects that don't take as much time.

So I appreciate you laying out what the options are, but they're not easy.

And so I will also say that we can have differences of opinion upon how robust the conversation was at that time.

And also as elected officials, we have to do our due diligence on behalf of our constituents.

So we need to have the time if we need extra time today to discuss this.

I'm gonna advocate and I'm going to request to do that and I'm not gonna apologize for that.

So this is not as simple to me as it is being presented and also I need to be able to, as I'm taking this vote, lay out all the things that I'm grappling with so that my constituents know that I have their interest at heart as I'm doing this work because this permitting issue is a longstanding issue and we can't present, oversimplify what the issue is.

So I appreciate you laying everything out and also we need to have the ability to ask these questions today.

So, thank you for presenting this.

As I said earlier, I'm struggling with this vote.

I would like to take an individual vote, but all that to say is it is a really hard vote because I don't like saddling the projects that are at least in a position to absorb these costs.

than the bigger projects that are in a better position to absorb the costs.

This is really, it's difficult.

We're trying to incentivize more development across the city.

Everything's getting more and more expensive and that just makes it hard.

And to pretend it's not hard, it's not, I don't think it does a disservice.

So whatever, however I vote on this, please know I don't take it lightly.

I'm struggling with it as you can hear.

I appreciate all the hard work SDCI is putting into it.

I look forward to hearing more on how you're gonna tackle this at the department, the permitting process, because it is, I think, in many ways, one of the things that we're most struggling with at the city.

Thank you, Chair.

Thank you.

Ketel Freeman, I see you've raised your hand briefly and then I'll pass to Council President.

Just to remind the committee sort of where we are, Council Member Strauss laid out sort of three options.

You know, there's general fund subsidy, increase fees, make cuts, and sort of where the committee landed as of Friday was a somewhat different approach.

It was raise fees, it was kind of a trust but verify approach, raise fees as proposed, but get information in 2026 that the council can use to make mid-year corrections.

at least as things stand as of Friday, STCI would be reporting quarterly on the health of the Construction Inspections Fund so that you all could make decisions mid-year, which could include increases, could include decreases, but you will have more information throughout the year next year.

Mr. Thank you, Mr. Freeman.

That was not clear to me, Kito.

What was the discussion on Friday?

What was the bill that we were discussing that you're saying is linked to this one?

There's an SDCI statement of legislative intent that requires quarterly reporting by SDCI, basically on the kind of information that you were just looking at a few minutes ago, so construction volumes, the value of construction, and that report would come quarterly to the Council so that you could make decisions about fees mid-year, should you decide to.

So that means you bring that up now because we don't really have to make this decision now on these fees?

We could make it in a subsequent court?

Are you suggesting that that's...

So the fees are baked into the budget proposed by the mayor, right?

So if you were to not approve this bill, there would probably need to be some kind of changes that we make after action today, including cuts at SDCI.

Okay, well, before I ask that, I would just say that I would encourage you to look at the discussion that was in my February 13th, 2025 committee, because that, I think it was then, it really does go through some of the discussion from pretty well-respected architects talking about the various numbers of problems and really what should be done to fix them, some of the solutions, which, and that was the basis of a couple of bills just a couple of months ago.

My last question is how much are we short when we're talking about, okay, these are our options, firing people, using general fund and moving money around or raising the fee.

Can it be quantified how much we are already under?

Well, 8.2 million in 2026. And then in 2027, we were looking at a similar increase, which would be around 8.2 to 9 million.

That's the 8.2 is the amount of revenue to be generated by the- By that 18%.

Yeah.

Okay.

That's the revenue.

It's not the deficit, the current deficit or the need.

Yeah.

So where we're at right now, is so our building cost center, which is our largest, it's a building permits, it funds 55% of the department.

It'll end the year at negative 10 million, which means it's gonna drain the core staffing reserve by that 10 million.

By the end of 2026 with the 18% proposed, it'll be at negative 13 million, which means that our core staffing reserve would be drained down to just 7.6 million.

That's with the 18%.

If it's denied an increase, we will just about exhaust the core staffing reserve by the end of 2026, because we'd be at a deficit of 20.5 million.

And in 2027, we'd be at a deficit of 32 million.

And our core staffing reserve would be just negative 10 million, 11 million.

and I mean just, it's just, it would be zero, but we can't go into it anymore.

and land use, which is the other part of the 18% is, so it has a 7.1 million core staffing reserve amount, but the cost center will be at negative 5.4 million by the end of this year, which leaves about 1.7 million of core staffing reserve.

With an 18% increase, it will exhaust, Anyways, by the end of 2026, we'll be at negative 7.3 million, which will exceed the land use core staffing reserve.

If there is no fee increase, land use will end at negative 8.1 million.

So we would exhaust the land use cost center probably by the third quarter.

in 2026, but building is the big one because it funds 55% of our department.

It's all the permit intake, permit reviewers, zoning reviewers, building inspections.

And that is, yeah, it's gonna be about negative 10 to a negative 11 million by the end of 2025.

Just to put some additional context there, so SDCI recognizes the historical cyclical nature of the building business, so in good times it very purposely builds up reserves, potentially very significant reserves, which then are these core staffing reserves as Shane has described, and those When we hit a slow patch, if you will, we rely on those.

So as Shane is describing, the department, these cost centers are running in the red.

We are spending more on the staff than we are taking in fees right now, and we are running down those balances.

We are doing this very purposely to keep, I'm going to invoke some economists speak here, to keep our human capital.

So we have a bunch of city folks who are very well trained in this work, and if we let them all go during slow times, when the better times come we have to go find them again maybe not the same people and then retrain them and that's a policy call and a management call about how you know how many folks do you want to keep in that core but we are running in the red and as that balance is shrinking and it is now some sense shrinking faster than perhaps hoped and planned realizing that we're not going to make it We're not going to make it to the next uptick without some additional revenue.

And that's what this fee increased.

And again, this is still a prospective planning endeavor.

So how low is this going to go and for how long?

I can't tell you and no one really can.

Their modeling is tied in part to the work of the Forecast Office as well.

So they're seeing us run in the red, seeing our reserves drawn down, and making a decision that we need to bump up some more revenue or we're going to run out of that reserve sooner than we had otherwise hoped.

and that's a judgment and a policy call, but that's the nature of what's going on here.

Thank you.

Council President, any further questions?

I feel like we've spent a lot of time on this and I'd like to continue moving forward.

Director Noble, I appreciate you explaining all of that.

We always have to exercise our oversight and make decisions based on what we think is good policy.

What I think is good policy is sending the signal that we want more economic activity in this town, we want more building, we want more housing, et cetera.

And so to me, this is sending the wrong signal at precisely the wrong time.

And you can say, and meanwhile, we know that there are $10 million regularly in the underspend.

and so to me it seems as though we really do have to prioritize both our human capital and the future of this city and wanting to attract more business growth in building and housing and so that's just where I'm coming from.

I really appreciate you all coming up here and providing more information at the last minute without even knowing this conversation was going to happen today.

Thank you, Council President.

And Council Member Rivera, I see you've got your hand.

If you'd like to make your statement now, then what I will ask is that when we bring this motion up for individual consideration, we do not have discussion and questions because we've spent over a half an hour on this one.

You want to wait?

It might be easier just to do it right now.

Save it up.

Yeah, I will wait.

Thank you.

Okay.

Sounds good.

So I'm assuming council member Rivera, you would still like this one pulled for an individual vote.

Yes.

Okay.

With that, Colleagues, please have your lists ready to confirm or request for items to be pulled out of the consent package.

At this time, I have the following bills asked to be removed from the consent package.

That is 121105, the SDCI Fee Update Ordinance.

I have CBO short-term rental tax ordinance, 1-2-1-1-10.

I have the 1-2-1-1-2-4, the Seattle Transit Measure material change and 1-2-1-0-9-2 major institutions and school programs ordinance.

I see central staff confirming that is their list, clerks confirming.

Colleagues, were there any other bills?

An SDCI wouldn't go anywhere quite yet because I don't, it seems like we're gonna come back to your issue in just a second.

Do I hear any other items going once, going twice?

Those items are removed.

121-105, 121-110, 121-124, 121-092.

So understanding that, is there any other discussion on any other items?

Otherwise I would like to move to adopt the consent calendar.

Second.

You jumped ahead of me, but I love it.

So I moved to adopt the consent calendar.

I hear a second.

So with that, I would like to ask the clerk to call the roll on the consent calendar, excluding 121105, 110, 124 and 092. Council member Hollingsworth.

Yes.

Councilmember Juarez.

Aye.

Council President Nelson.

Aye.

Councilmember Rink.

Yes.

Councilmember Rivera.

Aye.

Councilmember Saka.

Aye.

Councilmember Salomon.

Aye.

Chair Strauss.

Aye.

Eight in favor, none opposed.

Thank you.

The motion passes and the items contained within the consent calendar will be sent to the November 21st City Council meeting.

We're gonna come back now and I will move Council Bill 121105, the SDCI fee update ordinance.

Is there a second?

Second.

It has been moved and seconded.

Council President, I'm gonna request, you just made your closing statements a second ago, so I'm gonna give Council Member Rivera the floor for closing statements, and then colleagues, I'm going to call a vote on this item.

Thank you, Chair.

Colleagues, I don't, this is where, if we were going to be short eight or nine million dollars, why didn't we take that from the general fund when we were deliberating back and forth on how to use any underspend?

I don't understand why now we're passing on these costs to these smaller projects rather than if we felt like we needed to fill a gap because there weren't enough reserves at SCCI, why did not, Why did we not prioritize that service?

I was unaware that this was the option until today.

Budget moves really fast and to me it would have been a good use of general fund to help backfill for what the department was going to be short rather than to transfer this cost to these smaller projects.

And I feel in general, colleagues, that we are constantly passing on, rather than making the hard decisions, we're passing on these costs to all our taxpayers.

And I don't think that that's fair.

I feel like we don't wanna look, we don't wanna accept reality, and we're constantly trying to, you know, requests more and more at a time where people are strapped and we keep talking about an unaffordability problem at the city, but we're creating that unaffordability problem to a big extent.

So if we needed that, then we should have prioritized this service as part of the general fund.

So I really I support the department and their ability to do the work and I want to also support these smaller projects and not pass on what the big projects and they're not developing big projects now.

I don't want to have to give the little person the overdue burden of taking up what the bigger person can't do right now.

And then we don't have an end in sight or when are these big projects going to come up online again?

We just don't know given all the craziness across the country with this crazy federal administration.

So these are really hard decisions for us to make.

Again, please know I don't take it lightly.

I would have prioritized general fund for this purpose but now here we are today and I don't suspect that I will have others join me but I can't in good conscience vote for this knowing that we had a different option we could have chosen and we didn't because we had underspend that we used for many, many different changes.

We had many, many amendments last week, and this could have been one of them.

So thank you, Chair.

And that's all I have to say.

Thank you.

Will the clerk please call the roll on 121105?

Council Member Hollingsworth?

Aye.

Council Member Juarez?

Aye.

Council President Nelson?

No.

Council Member Rink?

Yes.

Council Member Rivera?

No.

Council Member Saka?

Aye.

Council Member Salomon?

No.

Chair Strauss?