City Council Special Meeting 8/11/2025

Okay, folks.

Yeah, it's all right.

All right.

The August 11th, 2025 special meeting of the Seattle City Council will come to order.

It is 1 32 PM.

I'm Sarah Nelson, president of the council.

Will the clerk please call the roll.

Council member Solomon.

Here.

Council Member Strauss.

Present.

Here.

Council Member Hollingsworth.

Council Member Juarez.

Here.

Council Member Kettle.

Here.

Council Member Rink.

Present.

Council Member Rivera.

Council Member Saka.

Here.

Council President Nelson.

Present.

Seven present.

And I'll note that Council Member Rivera was excused from today's meeting.

All right.

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

All right, hearing no objection, the agenda is adopted.

And if there's no objection, the rules will be suspended to allow central staff to address the council.

Hearing no objection, the rules are suspended.

And Ben Noble, director of central staff, will join us at the table.

And you're free to begin whenever.

Go ahead.

Thank you.

I am here today to explain to you why you are here today.

And the reason you are here today is that we made some mistakes, technical mistakes, in preparing the legislation that you approved last week to send to the voters for their review, the legislation that would affect Citi's B&O rates.

The good news is that your legislative intent was very clear, and it was inconsistent with the mistaken version of the ordinance.

The other thing that is very good is that there is still time for you to pass an ordinance at tomorrow's meeting, and what you will be doing today would be to refer that corrective ordinance to the full council tomorrow.

And let me be very clear about what it is you will be doing tomorrow if you approve this corrective ordinance.

What you will be doing is amending the ordinance That is being sent to the voters.

And what the voters will see, and you'll be doing this before it is sent to the voters.

So when they get their packet in the mail that describes what is before them, it will be the corrected version of the ordinance that will address the technical issues, which I can describe in more detail if you want.

So there's no problem here, if you will, in terms of the transparency to the voters.

They will see the right thing.

King County Elections is aware that this is the process we intend to follow, and it's consistent with their procedures.

So they are willing to accept this correction.

We've been able to produce it in this timely way.

So with regard to the errors themselves, I'm somewhat embarrassed but honest to tell you that mistakes were made by a combination of There's both central staff and law folks involved in the review of legislation down to these technical details.

I am among those people who were reviewed in that part of that review process.

So I'm among the humans that have failed in this situation.

So I just want to be very direct about that.

But we are going to do a little after action and figure out how we did what we did and what we did wrong.

But fortunately, it's a simple fix, and the ordinance that you will offer today and ideally approved tomorrow will implement that fix.

So that's really the sum total of it, but I'm happy to answer questions.

I think it would be helpful just, you've said correction and error many times.

Why don't you just say briefly what it is for the public?

Absolutely.

So the way the proposal to the voters is established, they would be approving one set of B&O rates to run from the beginning of 26, what was supposed to run until the end of 2032, and then they would fall back to a lower level.

If you recall, The rates for this first seven-year period are set up so that they pay for the lost revenue associated with establishing a $2 million essentially threshold before the B&O tax kicks in, and then also to raise additional revenue.

After that initial period, rates fall back to a level that's needed to pay for the $2 million exemption, but not to raise additional revenue.

And it's the date of that fallback that was wrong.

In the ordinance that you approved, it said 2029. It needs to say 2032. And if it doesn't, you end up in a situation where there are no B&O rates for a period.

So truly a Scrivener's error, as the lawyers would describe, so purely a technical one.

The title of the proposal to the ballot and all of your legislative deliberations, it was clear what the intent was, and that was important in terms of our communications about the correction.

So it's the same date getting corrected four different places essentially, but that's the level of technicality, but hugely important in terms of its actual impact on the tax policy and the tax rates.

Okay.

So today we are approving the introduction and referral calendar to be able to To work on this because we can't vote and refer something on the same day.

Exactly.

So the requirement for ordinances in particular is that they not be referred and voted upon at the same meeting.

So again, a special meeting today in order for you to refer this corrective ordinance for a vote tomorrow.

Okay.

Well, thank you very much for this explanation, Director Noble.

And I appreciate you, you know, You're recognizing the error, but I will also say that last week there was an objection when I characterized our approval of this proposal as rushed.

I mean, what we did in a very short amount of time was restructure Current tax policy for a ballot measure which has externally imposed by the King County deadlines.

And so I just wanted to note that I don't, I recognize that you were under, central staff was under a lot of strain.

And this also happens to be a time of year that is our most busy because committees are scrambling to finish legislation in our pipelines before recess and then before budget.

And this year, we also have the Comp Plan update, which is taking a lot of time, and your staff has prepared 100 or so, or over 100 amendments to that legislation.

So just wanting to...

Recognize that it is a lot to do at the last minute and we knew that we would be having probably some, that the PET revenues were coming in under projection and we could see the writing on the wall that we could be facing some federal budget cuts as well, which this legislation or this proposal is intended to address.

So just wanted to say that Thank you very much for your staff's hard work and also we're very fortunate that King County elections allowed us to get this in, this ballot title revision in after the deadline.

So thank you King County as well.

I appreciate your grace, and thank you.

And just for clarification, it's actually not the title.

The title is the one thing that's not going to be changed.

Let me just say one more thing.

At a personal level, I worry that this issue ends up being a distraction from what I regard as the really amazing work that Tom McSell in particular, Jen LeBrecq as well, but Tom McSell in particular put into this.

You have all expressed your thanks.

It's important for me to acknowledge that in some ways I failed him on this.

I was more involved in the review process.

He was really cranking through on the policy side, the legal side, the technical side.

So really tremendous work.

And I wanted to take a moment to recognize that even in these circumstances.

But again, appreciate your grace.

It was a complicated piece of legislation.

There were complex amendments moving around at the last.

But fortunately, we have a fix, and with your grace, we'll implement it.

If there are any further questions that I can't answer today or here in my office, at any point, happy to do so.

Thank you.

And thank you also, Tom Mikesell, very much.

All right.

Not seeing any other comments.

So with that, if there's no objection, the introduction and referral calendar will be adopted.

Hearing none, the introduction and referral calendar is adopted.

And so this is a special city council meeting.

So is there any further business to come before the council?

All right.

Seeing none, we've reached the end of today's agenda and the city council will meet again tomorrow, August 12th at 2 p.m.

Hearing no, and we will be having our council briefing meeting shortly after this at two o'clock, which is when it officially starts normally.

So hearing no further business, we are adjourned.

Thank you everyone.