Economic and Revenue Forecast Council meeting of 10/2025

Thank you.

Good morning.

Today is Monday, October 20th, 2025, and this meeting of the Economic and Revenue Forecast Council will come to order.

I'm Councilmember Dan Strauss, Chair of the Economic and Revenue Forecast Council.

Here today with my Forecast Council colleagues, we don't formally call roll, although I think we may in the future.

We have Council President Sarah Nelson.

Council President, are you here?

We have Seattle Mayor's Chief of Staff Andrew Meyerberg.

Andrew, are you present?

Present.

And City Finance Director Jamie Carnell.

Present.

Wonderful.

We'll come back to Council President because I know that she was just here a second ago.

Council President, you are here, correct?

Hey, Eric, what are we waiting for?

Fantastic.

We are waiting for them to kick off the meeting.

Ian, we can hear you.

You are off mute, or Mr. G?

I think they could be still setting up.

Mr. G?

Ian?

I'm not seeing my camera icon at the very bottom next to the audio.

I'm going to take just a moment to...

This economic and revenue forecast council meeting will be on recess for just a moment.

Yes.

I thought I saw it earlier here.

Yeah.

I'll get Taman.

The City of Seattle, biggest day in franchise history, no matter what the outcome, and we are excited for our Mariners, looking forward to that opportunity to prove ourselves for the World Series.

With that, welcome.

Today is Monday, October 20th, 2025, and this meeting of the Economic and Revenue Forecast Council will come to order.

I'm Dan Strauss, Chair of the Economic and Revenue Forecast, here today with Council President Sarah Nelson.

Are you present?

Council Chief of Staff Andrew Meyerberg.

Present.

City Chief Finance Director Jamie Carnell.

Present.

Thank you.

We have quorum and we'll announce Council President being here.

I know that she is here.

We're just having some technical difficulties and we've got a little administrative work to do before we get into the meat of this meeting.

So we are joined today by staff from the Economic and Revenue Forecasts Office, as well as representatives from the City Budget and City Council Central Staff.

The purpose of today's forecast council is to receive the update on the economic and revenue forecasts.

City Council is currently reviewing the Mayor's 2026 proposed budget, and we are now going to receive and review a final revenue forecast update for this year.

This revenue forecast is especially important because- Oops, sorry.

Good morning, Mr. G. Hope you're out.

I don't know why my audio is on.

How are you today?

Yeah, I'm sorry.

I don't know why my audio is on.

All right.

With that, the main...

This revenue forecast is especially important because it will serve as the basis for the remainder process of updating the 2026 adopted budget.

will set the stage for the City Council's deliberations for the remainder of our budget process.

Before moving on today, we have two items on the agenda today.

We have approval of the minutes from August 4th, 2025. We have a presentation on the October 2025 economic and revenue forecasts, and we have the formal adoption of the 2025 forecasts.

If there's no objection, the agenda will be adopted.

Hearing no objection, the agenda is adopted.

Sorry, we're just using a different format of the script.

So it looks like I do need to formally adopt the agenda.

Is there a second?

Second.

Thank you.

It has been moved and seconded to adopt today's agenda.

Today's agenda is before the forecast council.

Is there anyone that would like to add or remove an item?

Or are there any proposed amendments?

If there are no objections, today's agenda will be adopted.

Hearing no objection, the agenda is adopted.

We're going to move on to the first item of business, reading in the approval of minutes from August 4th, 2025. A copy of the minutes from the August 4th meeting of the Forecast Council has been circulated to the members and posted on the website of the Forecast Office.

I move and seek a second for the approval of the minutes.

Second.

Thank you.

It has been moved and seconded to approve the minutes from our last meeting.

Are there any objections?

and no objections.

The minutes are approved.

Moving on to the second item on the agenda, which is a presentation of the October 2025 economic and revenue forecasts and recommendation from the Office of Economic and Revenue Forecasts regarding the 2025 and 2026 revenue forecasts.

Moving in to this main item on today's agenda, which is this presentation of the revenue forecasts.

This presentation will be led by staff from the City's Independent Office of Economic and Revenue Forecasts.

as well as staff from the city budget office because the work is still split within two different departments.

To ensure the forecast council is fully informed and able to have its full range of questions addressed, the staff from the city council central staff will also be participating in this briefing.

The Forecast Office will present three economic and revenue scenarios, baseline, pessimistic, and optimistic.

The Office will then provide a recommendation about which of these scenarios should become the formal forecast.

We'll have that opportunity to discuss this recommendation and whether to affirm the recommendation or consider a different revenue forecast scenario.

With that said, Director Duras, welcome.

Pleasure to have you here.

I'm going to have you lead the conversation and if everyone who's presenting today, both from the Forecast Office as well as the City Budget Office, we'd love to have your introductions and then take it away with the presentation.

Thank you very much, Chair Strauss.

Good morning, Forecast Council members.

My name is Jan Duras.

I'm the Interim Director and Chief Economist at the Office of Economic and Revenue Forecasts.

Thank you, everybody.

Good morning.

I'm Sean Thompson.

I work with Yon as an economist with the Office of Economic and Revenue Forecasts.

Hi, I'm Richard Dadsey.

I'm the manager for the Economics and Revenue team in CBO.

Good morning.

I'm Alexandria Zang, an economist with the City Budget Office.

Good morning.

Joseph Russell, economist, City Budget Office.

Ben Nobles, City Council Central Staff Director.

Sarah Nelson, council president,

So I'm not sure why, but it's sharing it differently on each screen.

But yeah, I guess let's just take it away.

All right.

So once again, good morning, forecast council members.

The outline of today's presentation is the usual one.

We are first...

Now I don't think the screens are actually updating.

So...

Alright, thank you very much.

With the usual outline, I will first talk about recent economic developments and changes in the US economic forecast and how that feeds into the changes and how it results in changes in the regional economic forecast.

And then in the second part, we'll have a look at the October revenue forecast update itself, first for general fund revenues and then for selected other government revenues.

This is a picture that shows what's going on throughout this year or informs and what's behind the changes that we have seen throughout the year.

There has been quite a dramatic spike in economic uncertainty following the terrorist announcements in April and as you can see this Economic Policy Uncertain Index, which just summarizes how much uncertainty there is overall, has come down since that peak, that big spike in April, but the amount of uncertainty is still highly elevated.

Certainly is noticeably above what's been kind of more typical before pandemic, but even elevated above what happened throughout 2022 through 2024. That said, there has been, in April, quite a dramatic drop in the US stock market.

It fell about 20% between February and April in response again to those policy changes, announcements, the fear of trade war.

but over time as the trade negotiations started and continued on and as the retaliation by trade partners had been relatively restricted and the impact on the inflation has been smaller than what was initially feared you can see in this chart that the stock markets have recovered so the change between that April 10 red dot and the August fours represent the change that happened between the April revenue forecast and the August revenue forecast.

So essentially all the losses have been recovered and since then stock markets continue to grow.

They are 30% above that bottom.

that we saw in April, 5% above the August 4th level.

So there are all sorts of things going on.

In addition to that uncertainty, there is quite a lot of expectations, high expectations regarding the impact of AI and how that is going to improve the productivity and improve economic growth, and that's part of a story here.

The gains in financial markets, in stock markets are heavily concentrated in the tech sector and I'll talk a little bit more about that As I mentioned, tariffs have not had any major impact on inflation, certainly not the kind of impact that was expected after those initial announcements.

This chart here shows what was underlying the August forecast, the red line shows the baseline scenario, the brown One represents the pessimistic scenario.

As you can see, there isn't any particularly big increase in inflation or there wasn't any big increase in inflation expected back in August.

under 3% in the baseline scenario, so nothing comparable to what we have seen a couple of years ago where the inflation was reaching 9%, 10% at its peak.

In a pessimistic scenario where there was the assumption that the trade response will be stronger, the restrictions on trade will be more severe, tariffs will be higher.

You can see that the chart shows a more meaningful increase in inflation.

But if we compare that and if we compare that to what the current forecast looks like, the red line, the brighter red line now represents the current baseline scenario and the darker brown line, the current and pessimistic scenario.

There has been a little bit of an uptick, so inflation is expected to rise gradually certainly is expected to be higher compared to the previous baseline scenario by about half a percentage point.

But again, no dramatic increase, at least what the current U.S. forecast by Moody's Analytics and S&P Global would suggest.

So what that means is that the balance of risk has shifted from the inflation, from high inflation towards weak job growth and the Fed acknowledged that this balance of risk has shifted and has already moved to support the labour market and economy more broadly by cutting the interest rate, lowering it by 0.25 percentage points.

At this point, at least one more interest rate cut is expected in October, quite possibly even two cuts.

So the second one then would be following in December meeting.

Now, turning from the inflation forecast to the economic forecast itself, again, the chart here, these two panels show what the forecast looked like back when we were presenting the August economic forecast.

The red lines are the baseline scenario.

The brown ones show the pessimistic scenario.

As you can see, the pessimistic scenario means that the economy goes into a recession as GDP falls below, GDP growth falls below zero, and there is a notable decrease in employment in a pessimistic scenario as well.

The current baseline scenario, and here the forecasts that are presented are the average of the two forecasts, one's from Moody's Analytics and one from S&P Global.

just like we did in August.

The average of those two forecasts currently shows the real GDP growth somewhere around 2%, so that's pretty solid real GDP growth.

At the same time, that weaker employment growth is still a part of the baseline scenario forecast, Again, in response to trade, immigration policies, in response to or as a result of AI related investments, there is this general sense that firms are a little bit more reluctant to hire.

They are trying to wait and see how things play out and that overall increase in certainty just delays the hiring.

So there hasn't been any uptick in layoffs but hiring and job growth has certainly been very weak and it's expected to be like that at least in near future.

The current pessimistic scenario is not dramatically different from the one in August, just kind of postponed or delayed recession, so the recession would not start at the same as it was expected in the second half of 2025, but more in the second half of 2026, so delayed by about a year, but it will have similar impact on the economy and the job growth itself.

Turning from the national economy to the regional one, here the picture is a little bit more, maybe even a little bit more worrying when it comes to the employment growth in the regional economy.

There has been some bad news.

We have seen a downward revision in the employment estimates.

Washington State Employment Security Department has revised down their estimates of employment numbers going back to the fourth quarter of 2024, and currently those employment estimates show that the employment has declined about 0.7% or about 13,000 jobs in the Seattle metropolitan division area.

That's King and Snohomish counties.

and the decline is year-over-year first eight months of 2025 relative to the same period of 2024 the chart then shows how different industries have contributed to that decline so the top bar the red bar that's 0.7 percent total decrease in total non-farm employment and as you can see those declines in employment are broad-based, only three sectors, education and health services, leisure and hospitality, and government have contributed to the growth, kind of offset the decline, but all other sectors, their job numbers in those sectors have declined, most notably professional and business services where there are about 11,000 fewer jobs in the first eight months of 2025 compared to the same period of 2024. So that has an impact on the employment forecast and the regional economic forecast and by extension also on the revenue forecast itself.

We have for the baseline scenario incorporated the new employment estimate and that's why when you compare those two red lines, the one that's higher in 2025, early 2025 that shows the baseline scenario from August and then the darker brighter one that's below, that's the current baseline scenario from October.

Again, incorporating that estimated 0.7% decline in the first eight months of 2025. So going forward to the right of that forecast line, the growth is expected to pick up somewhat and we are not expecting employment and job losses to continue on.

expected to turn to modest growth, below 1% in the baseline scenario.

In that pessimistic scenario, similar to the U.S. economy, there would be job losses kind of comparable to the 2008 or 2001 recession, about 2.5% jobs lost in the bottom, and the recovery, complete recovery, will be reached by the end of 2029. So that's the overall summary of the regional forecast.

Now moving to the revenue forecast itself.

First, a quick summary.

By this point in the year, the city has collected obligations for first and the second quarters.

Just one more.

I just want to pause to see if...

Any of the members of the Forecast Council have any questions on the information leading up to today's recommendation?

Council President, if you've got questions, I'll just need you to speak up because we still have some technological difficulties here.

Wonderful.

Seeing no questions, Director Duress, please take us into the meat of this agenda.

Thank you.

So about half of the revenues is in general collected by the time we work on this October forecast.

So even though the current year is almost over, less than a quarter of a year left, the city has by this point collected only about half of the revenues for the current year.

It varies quite significantly depending on which revenue stream we are looking at.

About 75% of revenues for REIT, are collected by this point, and so we have a good sense where REIT is heading for the year.

Much less information is available for business and occupation or sales tax, and for payroll expense tax, the payments that we are receiving are just estimates based on the previous year's obligation, so that's very limited to no information regarding the eventual outcome for payroll expense tax.

All right, so I'll talk a little bit more about sales tax in a second.

This chart here provides some kind of additional context for what we are seeing when it comes to sales tax collection.

The chart here shows the year-over-year change in the consumer spending as measured by the spending by consumers using credit and debit cards.

In recent months we have seen a significant weakness in the consumer spending.

The thread line shows that year-over-year consumer spending has declined in the metro area Again, significantly weaker sort of a picture compared to the national economy where the consumer spending grew very modestly, but still grew year over year throughout 2025. So, like I said, this is in line with what we are seeing for sales tax revenues, in particular sales tax revenues coming from the retail trade.

I have shown this chart a number of times in past meetings and the black line here shows the year over year change in the total sales tax revenues and then those different bars they show how different parts of the economy contribute to the overall sales tax growth or decline and recently it has been a decline.

So five out of seven months for which we have sales tax obligations for 2025 sales tax revenue has declined year over year, largely due to a well-known slowdown in a construction sector.

That sector is in a notable downturn, but lower revenues from trade, from retail trade and weakening leisure and hospitality revenues are contributing to those declines as well.

Now, going forward, and that's more important certainly for the forecast itself, lower interest rates should provide some relief starting late this year and going into 2026. Again, at least one more interest rate cut expected this year, more likely two, a couple more in 2026, depending on how things evolve and how FED will react to the changes in the outlook and the balance of risks.

Even with those interest rates cuts, the forecast would show only modest growth in sales tax revenues.

The table on the next slide will show a more dramatic increase, but that's largely due to policy changes.

The Senate Bill 5814 and the House Bill 2015 have added additional revenues, and those are already incorporated in this October forecast here.

So first at the very bottom, you can see that overall there has been an increase in the general fund revenues for 2025 and 2026. So in general, this can be considered good news or certainly not bad news.

The increase is modest.

It's about 0.3% for 2025, 0.5% for 2026 if we are taking out the grants and fund balance transfers.

and the amount in the dollar amount, 12.1 million is obviously more substantial rather than looking at the percentage change and its dollar amount that probably matters more here.

So again, positive news in general.

We'll look at those individual revenue streams.

Those that are highlighted blue are the ones that are in purview of the Office of Economic and Revenue Forecast.

The rest are forecasted or the forecasts are overseen by the city's Budget Office.

So first, let me talk a little bit about those revenues that the Forecast Office is responsible for sales and use tax going from 340 to 344 in 2025 and then 400, almost 402 million in 2026. Again, a notable increase between the current year and the next one.

Again, that incorporates the impact of the Senate Bill 5814, which is expected to increase sales tax revenues and the new 0.1% public safety sales tax.

So that's a year-over-year change.

When it comes to the difference between the October and the August forecast, the total two-year difference is 1.6 million, so not particularly large.

about half percent only for the next year.

Again, part of it is that the overall uncertainty remains.

There is weakness in job market, weakness in consumer spending, so there are a few things that would suggest more dramatic revision, upwards revision would be called for.

In general, those policy changes are the more important ones for the forecast here.

Director Duras, would you mind stop having this as full screen because we'll need to use this to attend to the Zoom participants.

Please exit out of full screen.

Thank you.

It'll still share full screen for Seattle Channel.

Or Council President, you could, if you want to join us in person or speak up, we don't have access to see if you have questions.

That's the problem at the moment.

Yeah, I'll voice if I have questions.

Fantastic.

And let's just continue.

Thank you, Council President.

Sorry for throwing you off, Director Duress.

You were right in the middle of it.

No, that's perfectly fine.

I'm happy to answer any question and try to accommodate the best we can.

So moving on to the business and occupation tax, slightly more noticeable upwards revision.

Again, less than 1% for 25 and 26, but more noticeable.

as the revenue collection so far this year has exceeded the forecast.

For sales tax revenues, the current collection is close to where we are expecting it to be, as you might have seen in the revenue report, the third quarter revenue report we sent out earlier this week or last week.

And then when it comes to private utility taxes, Sean can provide more context for that.

Thank you, Jan.

Yes, private utility taxes outlook continues to improve from last forecast.

Revenues that are affected by the weather actually had a colder winter this year than initially expected, raising revenues, but it's actually been tempered by a warmer spring.

Outside of those temperature kind of base revenues, we see a cable and telephone.

Cable's actually been bottom out recently in terms of decline, which is really nice to see.

We finally saw our first month there was no decline from previous month.

No real growth either, 0%, but still, Alongside that, telephone tax revenues actually had a lot larger and more current payments than previous years, which is also a very exciting thing to see.

Both those, overall the impacts of all those events, ultimately private utility tax revenues increase over the 2025-2026 at 2.3 million, roughly about 4.2% for 2025 and 1.7 for 2026. So yeah, overall it seems to be a really stable revenue group.

I'll toss it over to CBO.

Sure, I will speak to the property tax.

So the upward revision in 2026 has to do with the fact that we've been starting to get more information about the different determinants of the property tax for the next tax year from the assessor's office.

And so the two main determinants are new construction, which is the extra amount that we're able to levy beyond that 1% growth factor.

The other determinant is the refund re-levy, which is essentially refunds given in the prior year that we're able to re-levy in the next tax year.

And so those numbers have become a bit clearer.

New construction is higher than we had anticipated as well as the refund re-levy.

So those are impacting 2026 positively.

For other city taxes, the increase is just driven by the tax on transportation network companies.

And that's mostly because actuals have been coming in a little bit higher than anticipated for 25, and that's rippled into 26. I guess I'll pass it on to Joe.

Yeah, I'm going to speak to the line label parking meters here.

We see a downward revision of about $1.4 million across the two-year period here.

This is driven mainly by a preliminary version of the parking rate changes that are coming next month that are expected to bring revenues down a bit on net, and then also a revision to the meter hooding forecast for the fees we collect for meter hooding.

The actuals there are trending down significantly relative to last year, so we have revised down accordingly.

Court finds here, the line label court finds.

This is a combination of, we don't see too much on net, too much change here, but there are, underlying this are parking citations, parking tickets, which are up a bit.

There's also a downward revision in the 70% share of red light camera citations that go to the general fund.

that the share there was previously 80% of those revenues and it has been revised 70% based on legislation passed by City Council in May that allocated an additional 10% to sidewalk repairs of that revenue source.

So that's why we see a small downward revision there.

All right, thanks, Joe.

So I'll speak to licenses and also the revenue from other public entities.

The first one I want to point to is with regards to license permits and interest income.

The downward revision over the two years of about $700,000, really is a reflection of some of the things that Director Drus has talked about with regards to interest rate cuts.

So next week, I believe, the FOMC is going to meet again, and so we'll find out how many basis points they choose to cut if they decide to do so.

There won't be a meeting in November, but there will be a meeting in December, and perhaps we might see another rate cut there as well.

and so the downward revision here of about 700k is really a reflection of those kind of fact patterns.

With regards to revenue from other public entities, the downward revision really has to do mostly with sort of our digesting, if you will, of the actuals as they come in from the state.

So many of these revenues are state shared revenues.

And so the downward reduction there really is a reflection of the fact that some of those actuals have not been coming in, if you will, as rosy as perhaps we would expect.

and I'll wrap it up with the last two categories.

So service, charges, reimbursements, that's also reflecting higher actuals that are coming in for 2025, specifically law enforcement fees.

And so that includes things like police presence at the sporting events, like the Mariners games.

The grand category, we have discovered an error in the revenue tables and unfortunately after these slides were sent out.

And so the change in grants should actually, I'm sorry.

should actually be zero in both 25 and 26. And so the impact of that on the bottom line is simply just the total general fund line should be the same as the total general fund without grants and transfers, as there's actually no change in grants or fund balance transfers.

So we'll make that correction right after this presentation.

I have a question.

I can.

Council President.

For the interest income, a few lines up there, licenses, permits, interest income, is that interest on what?

Is that money that's sitting there waiting to be encumbered, has been awarded, et cetera?

Yeah, so much of that is a reflection of the cash balances that the city holds, which are then invested in various treasuries based on a variety of the city's investment policies that it has.

So much of the interest income there is actually reflective of general fund balances that have not been used yet and therefore are invested.

Does that answer your question, Counsel?

Yes.

Okay.

So for 2026, of the 73.6 number there, how much is interest income?

So the interest income number is right around 15, around 15 million, yeah.

Okay.

All right.

Thank you.

That's it.

Thank you.

Please continue, Director.

Thanks.

One more thing regarding the business occupation tax.

The table on the previous slide, as I mentioned, incorporates changes in sales taxes that are already part of the law.

There is one more policy change that has been proposed and it's up for the voters to decide whether to approve it or not.

because the water still need to approve it in line with the best practice.

The impact on revenues and general fund revenues has not been incorporated in the table on the previous slide.

The proposed budget assumes about 81 million in additional revenues.

If this proposal passes, the updated estimate is 85.6, so somewhat higher.

Thank you.

And, Director Dura, similar to the jumpstart payroll expense tax, we've been collecting the payroll expense tax for fewer than five years, meaning that there's been a fair amount of volatility, and I think that that makes sense because five-year smoothing really gets us to that constant average that we know we can depend on.

With the update in the B&O tax, I would assume that we need to see how everything settles and then have some time, maybe three to five years before we feel very secure about the forecasts moving forward to just let all the chips fall where they are and then make forecasts from there.

Do you share that opinion?

What is your recommendation for how we are forecasting the B&O tax over the next three to five years?

Yeah, that's a correct assessment of how things will look like.

We'll need a couple of years to figure out what the overall impact is on business and occupation tax, and we'll be following closely the changes in number of taxpayers, the changes in obligations, and compare it to what we were expecting to see and adjusting our forecast accordingly.

Thank you.

So moving on to the pessimistic scenario forecast, overall you can see it's a lot of red on this slide.

because that pessimistic scenario assumes a recession, slowdown in economic growth, slowdown in employment growth, that contributes to overall weakness in consumer spending, slower growth or declines in in cross receipts for business and occupation tax.

And so it's about 33.5 million less over two years in general fund without grants and transfers.

So that's about 1.7% decline for 26 following a 0.3% decline.

0.3% decline in 2025. So again, this would not be a very deep recession.

It would be more closely resembling the 2001 recession rather than the pandemic, but the impact on revenues will be certainly notable here.

Director Duras, before we move on, The only good thing about 2001 in this situation was that was the last time the Mariners were this far in the playoffs.

That said, throughout this year, this year was the first time that we adopted a downturn forecast in April in a long time.

We have seen that volatility throughout the years.

Once we get to the end of this presentation, I'll ask us to go back to some other slides to look at growth, et cetera.

Right now, we're in the middle of a federal government shutdown as well, where some of the information that we would expect to use for forecasts such as this, again, I'm not worried because throughout the pandemic, this forecast office had a better and more accurate forecast than even Washington State.

So I'm not concerned with the quality of the material you presented today.

I just ask between April and now, in April, we made that decision to adopt a downturn forecast, a pessimistic scenario What are the factors that you're looking at that would lead you to suggest we should either adopt the baseline or pessimistic?

Is there a reason that we are not adopting the pessimistic today?

Can you share what would lead you to ask us to adopt the pessimistic?

Yeah, so I have a couple of slides on this forecast recommendation and scenario recommendation, and I will get to that in a second.

The general approach is to consider those scenarios, those two scenarios, and evaluate which one is more likely going forward and what the overall risks are if we approve a particular one, what would we later mean for the budget process, how changes in April then impact what has to be done by August, how much time is there to incorporate the changes.

Back in April, the main reason why the pessimistic scenario was recommended is that the baseline scenario that was underlying the revenue forecast was back from March.

Again, there is a little bit of time that it takes between the time that the US forecast is released the regional forecast is prepared and then the revenue forecast is prepared.

And so by the time the revenue forecast in April was prepared and the announcement about tariff was made, we have realized that those underlying assumptions in the US national forecast in the baseline scenario are just not going to play out.

with very high probability it's going to be more like the pessimistic scenario.

The other thing is that the pessimistic scenario in April did not assume that there will be a recession.

It was worse than the baseline, but the US forecast in the pessimistic scenario called for Lower growth, still growth in GDP, still growth in employment.

And so recommending that scenario did not mean that we were expecting to see a recession, we were just expecting to see lower growth in GDP, lower growth in employment, lower revenue growth.

and that led us to that recommendation.

The impact on revenues was significant not just because of that pessimistic scenario recommendation, but also because the revenues for payroll expense tax came significantly below what we were expecting for 2024 and that was why that impact on revenues was so large.

Thank you.

Very helpful.

Yeah, so I will turn to, as I said, the scenario recommendation and the overall assessment and why we are recommending the particular scenario after talking about the other revenues.

For October baseline scenario, for the payroll expense tax, there is a slight upward revision in the revenues.

There are some late payments as firms are still trying to figure out how much their larger obligations are, how different things that happen affect their obligations.

So we have incorporated some information we obtained from the Office of City Finance.

and then the overall improved outlook for the stock market contributed, again, partially to that increase in payroll expense tax revenues for the top line.

There is a second line that's new in these tables and Richard will talk more about that one.

Yeah, so this is the payroll expense tax fund interest income.

So since the prior forecast, Several of the things that have been noticed was that, you know, a lot of interest was accruing to the payroll expense tax fund.

As a matter of fact, in 2024, that fund accrued about $11.2 million in interest.

And so given that we were still living in this world of a high interest environment, it became prudent for us to pay a bit more attention to that particular sort of revenue stream.

And so the forecast we prepared sort of shows that in 25, those collections are gonna go down a little bit, but again, that's a reflection of the interest rate environment and the cuts that have occurred.

And then in 26, we expect it to go down even further.

And that is also a reflection of the fact that we expect perhaps one or maybe even more rate cuts in 26. And so, I find it necessary to point out that The necessity to present this has a lot to do, I think, with the fact of the matter, which is that interest rates have been historically high, and so cash has been earning a tremendous amount of return.

And so we're reflecting that here to sort of point that out, right, that this fund has been accruing a lot.

But I think it would be very tenuous to think that this amount of interest income will be accrued through time, right?

Simply because we're transitioning to perhaps a different interest rate environment than we've experienced over the last couple of years.

Thank you.

Very helpful.

Moving on to the next line, Reid.

There has been a couple of larger properties sold.

again since the August forecast and that is part of that 1.4 million upward revision for 2025. For 26, the updated forecast from S&P Global and from Moody's Analytics expects fewer homes sold and lower home prices compared to that previous forecast, and that's why for 26, the revision has been downward revision.

Overall, it's very little changed for the two years, just 0.3 million more compared to the August.

There has been no revision, no change in No change to the admissions tax forecast as that one trends close to our forecast and we need a little bit more time to incorporate Potential impact of changes in number of visitors to Seattle and other things to evaluate the overall impact for 26 Take more cautious approach to World Cup impact and things like that Then moving on to Sweden beverage tax and short-term rental again Yeah, so for Sweden beverage, you know the

The actuals have been coming in a little bit more rosier than we would typically expect.

So that's what's reflected here with the increase above the August forecast of about 200,000.

And then we're still holding and a lot of the data and evidence will suggest that next year could potentially be a relatively good year for this particular revenue stream.

and so we're still expecting about a $22.3 million total collection in 26, which also is an upward revision from what we had previously stated back in August.

For short-term rental tax, that is of course directly impacted by both domestic and international tourism.

In 2026, the outlook for international visitors is a little bit more pessimistic than in August, in large part because visitors from Canada have really precipitously dropped.

And so that's that's why we have a slight downward revision in 26.

Okay, thanks, Alex.

For transportation benefit district sales tax, the change is small, again, reflecting kind of mirroring what we are seeing for general fund sales tax revenues, taking into account, again, the general fund has additional impact of the new 0.1% public safety tax, which is not impacting this one.

and then further our last- Yeah, and then for the vehicle license fees, the main factors that we consider there are population, but also we consider the vehicle registrations, since that's where much of that fee that's being collected is coming from.

and so we're expecting and I think that is a reflection of Seattle still being, Seattle population still growing, although at a marginal rate.

So we're expecting an upward tick for 25. Much of that is also a reflection of the actuals that are coming in and then a slight decline in 26.

And for commercial parking tax, there's a slight upward revision in 2026 for the most part because the employment outlook for the region is slightly better at this point than previously thought.

And so hopefully that's indicative of a slightly more economic activity, especially downtown.

And finally, the final line in this table, automated traffic safety cameras.

That is a relabeling from previous presentations, which this fund was called SSTPI.

It has now been renamed ATSC.

There's very little change here, a small downward revision in 2025 of $200,000.

No change to the forecast for 2026. Underlying this is a small downward revision to school zone speed cameras, which continue to show a downward trend.

Then this was offset by the 30% of red light camera revenues that now go into this fund, and that is up from or excuse me, that is up from 20% in previous forecasts.

And again, that was a response to the legislation passed by council in May overseeing the camera program.

Thank you and just like the last revenue forecast, I will give you the grace of the up and down swings of both parking fines and automated camera enforcement, all to say we made changes to the parking fines for the first time in, I believe, over a decade.

as well as we made changes to the automated traffic camera program and are still waiting the contract to be signed for the expansion we thought was coming a lot sooner.

So you continue to do a great job.

We continue to move the puzzle pieces for you in real time, and we look forward to having a more stable scenario for you to be able to forecast against.

Thank you.

And Director Duras, if you've got nothing else, I've got a couple questions here, but I want to make sure with you.

Fantastic.

Looking at the real estate excise tax, I know over the course of the last few revenue forecasts, even though at times when sales tax or property tax was down, REIT was starting to come back up as I've analyzed budgets over a number of years, I've always found that the real estate excise tax is a bit of the telltale, the canary in the coal mine.

Things getting better, things getting worse.

It usually impacts REIT first and then the other revenue sources.

So I've been heartened because REIT has been slowly increasing.

Here I'm a little nervous because it's seeing over the course of two years, it is still plus 0.3, but that That said, you mentioned a couple properties being sold, which increases it for this year, and you're seeing us start to table off next year.

Can you help us understand any additional context here?

Sure.

Yeah, so as you mentioned, over the last couple of years, REIT has been recovering from that large drop.

that we have seen in 2023. And the expectations are that the REIT is going to grow.

What changed is the speed, how fast we are expecting REIT to grow.

So there has been a little bit of downward revision in REIT in the out years as well.

Again, because that speed is maybe not as fast as we were expecting based on the information from S&P Global and from Moody's Analytics, how they predict home prices and sales of homes.

That's an important factor that informs these forecasts in the long run together with the long-term interest rates, are stubbornly high even though short-term interest rates are coming down.

Thank you.

Looking at the admission tax, I appreciate you keeping it baseline and also being aware of FIFA World Cup next year.

I'm just going to say if we are lucky enough today to earn the privilege to be in the World Series.

I'm hoping that that number is going to change for the positive.

So seize the moment.

Let's go.

Mariners refuse to lose all of the above.

And Mr. Meyerberg, I believe.

So do we, I think.

If there are no other questions, let's move on.

So one more additional slide of context for one of those largest revenue streams on the previous slide for payroll expense tax.

And again, kind of going back to the first or second slide in this presentation, which was showing the stock prices growing.

As in past, we expect that the changes in the stock prices are going to be one of the significant factors for the performance of a payroll expense tax revenues.

The outlook, at least in baseline scenario, is for the stock prices to continue to grow.

For SAP 500, 13.7% growth this year, then followed by a more modest 2.1% increase in 2026. But that stock market overall, as I mentioned, those gains are heavily concentrated in the tax sector.

and that's what this chart is trying to illustrate here.

These are some of the large tech companies that are where the stock prices clearly reflect the high expectations regarding the impact of AI and the increased investment in AI infrastructure.

If you look at how large the gains were in 2024, it was tripling of a stock price for Nvidia, doubling for Facebook.

Amazon stock price grew 50%, Oracle stock price grew more than 30% and so on.

For 2025, those stock prices are, again, expected to continue to grow maybe a little bit less than in the previous year and there might be again a little bit maybe overall a little bit of a slowdown in 2026 but on average these stock prices here they are expected to go up 10 to 30 percent in next year.

based on the expectations of Wall Street analysts.

So again, that would clearly, as the past suggests, have a positive impact on on the payroll expense tax revenue, but note here the uncertainty in the lines, the red lines stretch from the low to the high estimates.

So there is quite a lot of uncertainty regarding just how productive AI is, how big the payoff to all those investments in AI will be.

And so on the low side, we could see quite a notable correction in some cases and much less of the growth.

And that's also clearly reflected here in the pessimistic scenario forecast for payroll expense tax revenue, where slower stock prices, slower growth of stock prices together with some potential negative impacts on employment in the case of a recession.

All that would result in close to 37 million less in payroll expense tax revenue relative to the August baseline scenario forecast.

And for interest again.

Interest, you know, the fact that these are staying positive is partly a reflection of the fact that a lot of the city's sort of cash investments are, I believe last I looked, the duration is around right around two years.

and so many of these monies, if you will, are already exposed to the interest rate environment and they're not just going to disappear in one year.

However, if we look further out in the out years, then we could expect those numbers to go down even further.

The interest rate, sort of the pessimistic view here, if you will, would be that those interest income collections won't be as high.

But just note that a lot of the city's investments, if you will, are typically exposed about two, two and a half years in terms of the duration for potentially earning interest.

Then the next one is again REIT.

So here, unlike in the baseline scenario, REIT would actually decline next year.

Again, impact of a recession would be quite notable for REIT.

Overall, 16.5 million less relative to the August baseline scenario.

Smaller dollar amount decrease in admissions tax, but still some downward revision for that one.

If, again, the pessimistic scenario turns out to be the path that the economy goes down, sweetened beverage, Richard.

Yeah, and that further downward sort of adjustment there or revision there, again, is just reflecting if things are not as rosy or, you know, not as much sugary drinks and stuff are distributed in sort of retail, then we would expect those numbers to go down.

But note that in 26, that 21.7 million would still be one of the highest collections for the tax on record.

And much of that has to do with the cautious optimism as it relates to the World Cup and other events that will potentially bring people to Seattle.

for short-term rental, simply just a more pessimistic outlook on tourism in 2026. I think it's a little bit less intuitive comparing this to the August forecast, but if you also compare this to the baseline, it's obviously lower in the pessimistic than the baseline.

And let me just skip real quick to commercial parking tax.

This is the same story, essentially.

It's not as pessimistic as August, but for example, for 2026, it would be, we would expect 2 million lower than the baseline.

So the final one that the forecast office is responsible for transportation benefits sales tax, again mirroring the changes that we would see for general fund recession having a negative impact on sales tax revenue collection overall.

And likewise, further sort of pessimistic outlook on those vehicle license fees, which again are mostly modeled and driven by vehicle registrations, right, and the data that we receive from S&P related to that.

Yeah, and finally, the traffic safety cameras.

Under a pessimistic scenario, we'd expect to see some decline in the on-time payment rates, probably an increase in tickets going to collections, which means the city doesn't see too much revenue from those.

So it's mostly a payment behavioral component here under a pessimistic scenario.

Alright, so here's a quick comparison of the alternative scenarios relative to the baseline, what the pessimistic scenario would mean relative to the current baseline, what the optimistic scenario would mean relative to the current baseline, focusing on those revenues where the impact is most noticeable and then showing the total.

So overall, pessimistic scenario, again, recession would have not surprisingly significant impact on total revenues, minus 114.4 million less in over two years.

On the upside, 94 million more in the optimistic scenario, so probably a little bit more balance in terms of how far the downside versus the upside are from a baseline compared to what we have seen in the past.

Please.

Yes, I think that we have, at least I've got a few questions.

I don't know if my other forecast council members do as well.

I'm just noting cautious optimism here, where throughout the year and at the end of this presentation, I'll come back and ask a series of questions to demonstrate the level of volatility in the economy that we're in currently.

I think this slide also helps illustrate that.

either we may have $70 million more next year, or if things go very, only a few things go wrong, we could be at a $90 million deficit.

That is functionally the difference between people receiving food, shelter, across the board, the social services that the city provides, especially as the federal government continues to withhold withdraw or cut funding for the very programs that they should be responsible for that they are putting on the plates of municipal governments nationwide here in the City of Seattle.

I see us having some cautious optimism where we also need to be sure not to spend this money that is forecasted to come in necessarily, but to hold it so that we are ready for the things that we cannot anticipate today that will come in these next six months.

And so just as I have this outlook, I use this slide as a guy, as a North Star in many ways, to understand that in six months, a year from now, we could be at that $90 million deficit, or we could still be at the $70 million in the plus.

However, the amount of funding that the federal government provides to this region is more than $70 million.

And the need for us to be ready to be responsive, to step in if the federal government fails us, that the municipalities of this region are the last and first offense for the residents of our region to continue to provide the basic services, whether it's potholes, streetlights, electricity, water, and also clothing, food, shelter, insurance that Seattleites are working families are able to thrive and survive here in our city.

So that's not necessarily a question, it's just this slide is very illustrative of the cautious optimism that we can sit with today.

If you've got additional context of things I either got wrong or things that you'd like to share, please, Director Duress.

Thanks.

Yeah, no, that's a very good point.

That's some of the things that I will try to address, maybe not as well as you did.

But yeah, some of those points regarding how wide that interval is, how much uncertainty there is, will be presented next as part of the overall forecast rates assessment and scenario recommendations.

So here, quick summary first for the economic outlook.

There has been a slight improvement in the economic outlook.

Stronger real GDP growth, but at the same time weaker employment growth expected in the future.

To address that deteriorating labor market, Fed is expected to continue the monetary easing.

and then when it comes to the probability of a recession in the next 12 months, there is still quite a bit of unease regarding how likely we are to go down that pessimistic scenario.

The probability of a recession is still highly elevated.

It has not changed since the August forecast.

The Wall Street Journal survey of economies still puts that probability at 33%.

So less than 45 in April, a little bit down but still very uncomfortably high likelihood of economy going into a recession.

The S&P Global itself is slightly more optimistic probably about the overall outlook.

They put a 30% chance on the optimistic, only 20% on the pessimistic scenario.

And so to mitigate that risk of being overly optimistic in our forecast, we took the same approach as in August and used the average of the S&P Global's national forecast and Moody's forecast to kind of average out what they believe the outlook is as Moody's analytics is more, Moody's analytics forecast is more conservative, more worried about the impact on inflation, on employment and the overall potential downside risk.

Then finally, government shutdown has continued for longer than what those two forecasts assume.

They have built in the assumption of a two-week government shutdown, but it has exceeded that, so that presents further risk to the forecast itself.

And moving on to the regional economy, I have talked in more detail about the overall picture when it comes to the employment, when it comes to consumer spending and those have important implications for B&O and sales tax.

Then in addition to that economic situation there are some policy changes and in particular Senate Bill 5814 which will impact the city's sales tax and business and occupation tax collection.

We believe that the overall impact of that bill is to the positive side but there is a lot of uncertainty around this estimate because there isn't enough data or the right kind of data available to assess the impact and what that means is that for 2026 there is an additional source of uncertainty and the potential reason why the actual 2026 revenues might differ more notably than what was typical in the past from the current forecast.

So, with all these things in mind, with all these considerations in mind, we are recommending to use the baseline scenario of the presented forecast as the official revenue forecast, but then those funding decisions that will be made should take into account overall large amount of uncertainty.

That's more than typical what we have seen in past regarding where we might be a year from now.

And with that, I'm happy to answer any questions.

Thank you, Director Duras.

Colleagues, members of the Forecast Council, I'll ask for your questions first and then we'll move to central staff.

I guess, Ben, you're the only one who's not forecast council member up here.

So colleagues, Council President, if you've got questions, just speak.

I see you've got a hand.

Council President.

Ms. So my mind is still stuck on page eight, and you did touch on it in your very last page about the regional economy.

But could you go to that page, please?

Yeah, that one.

It's stunning to me that we are worse than the national average in so many of these categories.

Well, yeah, in all of them, it looks like.

Why is that?

So there are a couple of factors here.

One thing that I should mention when it comes to the national employment numbers, there is an expected downward revision that will take place once the BLS incorporates the administrative data.

They do what's called benchmarking to the administrative data only once per year in spring.

They do some preliminary announcements and preliminary estimates in fall and they have suggested that there will be a significant downward revision in their national employment data as well, so that 1.1% growth will be revised down.

To what extent it's a little bit harder to tell.

In addition to that, the regional economy, in particular the manufacturing sector, has been affected by Boeing layoffs, and that's one thing that shows up in manufacturing here.

The construction sector, well, Seattle has been growing very fast in a decade leading to the pandemic.

Now we are seeing that slowdown, so that's something that's not happening in the national economy overall and the decline in the construction sector employment is reflecting that.

When it comes to things like information sector, professional and business services, that might have more to do with the AI, the investments in AI and potential impacts where some employers might see the ability to to either slow down the hiring or wait with hiring, and then the attrition would lead them to have lower head counts.

Again, we just have to wait and see.

Occasionally, these employment numbers for the regional economy and those revisions are reversed, so the picture might be significantly different when we are presenting in April.

That's what I wanted to know.

Are we ever better across the board or mostly across the board?

in terms of employment versus, you know, compared to the national economy.

When was the last time you remember that in general?

When was the last time when, can you repeat that?

When we were better, I'm thinking about jobs because, you know, as economic development chair, that means everything to me.

So if we are losing jobs compared to everywhere else in the country, that's concerning.

Go ahead.

Yeah, so recently when the regional economy was hit by the pandemic, we have seen a more significant impact on the regional economy.

There was an extended period during which the declines in employment numbers in the regional economy were larger than in the national economy.

Seattle area is...

heavily dependent on tourism, again, construction sector.

Construction slowed down significantly during pandemic and then the restrictions that were imposed here in the regional economy were stricter than in the national economy.

So there has been a period in the recent past where the Seattle has grown slower.

It's kind of lingering now for various reasons, as I said.

But again, this should be taken with a little bit of grain of salt because those, the data for the region is just more noisy and could be revised significantly.

But it's certainly worrying.

What we are seeing is certainly worrying.

Yeah.

Thank you.

Thank you, Council President.

Any further questions?

One last thing on the last page, the conclusions for the regional economy, you indicated that when it came to B&O tax, I think I noticed that, is that good news or bad news that you were referring to?

You said something like, we could be getting more money with all these considerations in mind, let's see, in particular the B&O and sales tax.

We will be generating more money, about 81 or 86 million more, if voters approve that.

But were you also indicating that it was a concern to the overall that it could have a negative impact?

It seemed like your point was nuanced, so could you please refresh?

So if I understand it correctly, you were asking about the impact of the B&L restructure.

Yeah.

So it's again something that we'll have to wait and see how it affects the overall economy and the revenue collection.

One thing that we can say for sure is that the tax base will be narrower with fewer taxpayers paying the business and occupation tax and so that would in general imply more volatility kind of like what we are seeing with payroll expense tax where decision of individual companies matter to a larger degree for business and occupation tax.

And then in addition, we have, when we are preparing the estimate for the B&L restructure, there is that underlying assumption of Senate Bill 5814 and the impact on business and occupation revenue, because that's a starting point now.

And because we have less uncertainty about what 5814, what the implications of that are for the business occupation tax, by extension, figuring out how business and occupation restructure will change the actual collection is harder to tell.

There is just more uncertainty because of that.

I don't know if that answers your questions, Council President.

Ms. I'll just ask questions offline.

Thank you.

Thank you, Council President.

Thank you, Council President.

Any further questions?

Ms.

No.

Thank you.

And Jan, if you, or Director Duress, if you could share screen again, but keep the tiles up on the Zoom, that'll help us do both.

Chief of Staff, Meyerberg, Director Cardinal, questions, comments?

Just a comment.

Thank you again for this forecast.

I think I echo Council President's concern on the regional economy and the labor data.

I'm hoping that we get the U.S. data soon and we can then see the trickle down and that it's not as bad.

Just hearkening back to last October when we were here and we were considering baseline versus pessimistic, realizing that this pessimistic is very different than last, I just want to voice, you know, just appreciation for your last paragraph to just make sure that we're considering a bit more conservative approach just given the weak labor market and the continued volatility.

I mean, it's always an entertaining news day around economics and federal issues.

So I just, for me, it's important that we keep that conservative side in mind as we're going through this.

Thank you, Director Carnell, something that I share as well.

And, Director Duras, if you could tick back to slide four of the original present- of the first presentation.

I know that you don't- you've got the years shared out every other year.

Am I correct in understanding that the 2025 started at about the bottom of the trough just before this increased volatility?

Yes.

and I appreciate you highlighting 2020, those first couple months, because what we saw in the beginning of this year was volatility that was higher than the pandemic.

Is that your assessment or am I reading this wrong?

That's what this particular measure of uncertainty is telling us, that the amount of policy uncertainty, what will happen when it comes to federal policy and that uncertainty was even higher in April than in early pandemic.

Which is really, and I have to give credit to the city budget office this year for managing a budget through such large amount of uncertainty and decreased revenues at times, it is only parallel to 2020. And the need for the payroll expense, the jumpstart tax and the jumpstart revenues to be able to stabilize our government over these last five years, has been the difference between success and failure, between the difference of us having to lay off many staff and not provide basic services to everyday working families in Seattle.

So understanding that this last April we had volatility that was higher or at least akin to the pandemic, if you want to move on to slide five, because I think that this helps us also understand where we were to Director Carnell's point a year ago.

Am I correct that 2025 started at about the high point before that drop-off?

Am I reading that correctly?

Yeah, the stock market was at record highs before February, well, in February, yeah.

And bringing us back to 12 months ago where we sat, not necessarily around this physical table, but we sat together, it was our understanding that we would engage in slow growth over 2025. Things were not gonna improve drastically, but we had gotten out of the worst of that downturn economic, national economic situation.

Yet for what we didn't see coming was the volatility that was akin to the pandemic, which dropped us off the cliff.

From here, what I'm reading today is we are finally at a place where it seems that we have maybe not gotten back to where, if we had said a year ago, October 2024, where we would be in October 2025. But looking at this graph, it seems like we are more back on track today than we have at any other point in this year.

Am I reading all of this information correctly?

Yeah, that final point, that's correct.

If we were to compare this revenue forecast with the forecast from last October, there will be very similar, very little difference in general.

Taking, again, into account of 5814 and other policy changes.

And using weather metaphors, it felt like April, we were in the first, in the front of the storm.

Maybe by the time we had gotten to August, we were, or somewhere in there, we were in the eye of the storm and things were feeling more calm.

It feels like today that we are at least getting the last whips of the storm that was created in April by the tariffs and that economic volatility.

Do you feel that way?

Do you feel like there's potentially another storm front on the horizon?

Red skies at night, sailors delight, red skies in the morning, sailors take warning.

How are we feeling today?

So it's a little bit harder to tell what might be coming from Washington, the other Washington when it comes to trade policies.

I don't think that we have seen the last of tariff announcements.

The markets have at least it appears they have figured out a way how to deal with those announcements and certainly are reacting less to these new announcements.

Trading partners, again, are not really retaliating and trying to figure out a way how to deal with those tariffs that are being announced in an unpredictable way.

So uncertainty is high.

as you mentioned in early April, it was similar to pandemic days.

And so the April change in the forecast was rather dramatic, kind of like what we have seen in 2020, early revenue forecast updates.

And again, CBO did a really great job accommodating that.

Thank you.

I'm glad to see that we are back on track.

But as my earlier comments mentioned, I have a lot of fear about what may come in these next six months after experience over these last 12, as well as the federal government, the amount of money that they put into any economy in this country, that that may be in jeopardy.

If we can tick forward to slide eight, I also have a question about the difference between regional and federal payroll employment levels here.

In the past, we've seen manufacturing and trade outperforming national averages, and today we're seeing that it is underperforming national averages.

Was there something that changed here locally, or is this all based on federal volatility?

So it's a little bit harder to say what exactly caused the Employment Security Department to revise down the trade employment in particular.

We can certainly try to follow up with them, try to see what sort of factors led them to a significant downward revision for a trade sector, but that's the reason it's just been revised down.

The employment estimates are occasionally revised down going back, so that can change things quite significantly.

Thank you.

We'll move on to the next question here, just to note that manufacturing and trade makes up one-third of the city's use and sales tax.

If you could move on to slide 13 to now Slide 8 where we were downturn in trade manufacturing.

Here on slide 13 in the final column, there's still a plus amount for trade sales tax revenues.

Is that saying that even though we may not be employing more people in trade industries here in the City of Seattle, trade is still occurring and we're still receiving more sales and use tax than we expected.

Help me understand the connection between these two graphs.

Yeah, so in this particular chart, trade, sales tax revenues are revenues coming from any purchase, for example, made by the households or businesses.

So even with fewer employees in the trade sector, as long as households and businesses are spending more, we can see an increase in sales tax revenues and that uptick in April, for example, most likely represent the front loading of expenditures when the tariffs were announced.

Consumers, to the extent they were possible, were bringing forward some of the purchases that they might have done later.

And so that bit of a blue bar in April that significantly contributed to the sales tax revenue growth in April, that would be an example of, again, just changes in the behavior.

not necessarily related to the employment changes.

Okay.

Thank you.

Those were the questions that I had for this presentation today.

Colleagues, one last check for other questions.

If not, I will move us on to item three of the agenda.

So seeing as we have no further questions, we'll move on to item three of our agenda, which is the forecast, the adoption of the forecast.

Let's read this a different way.

The Forecast Council adoption of the October 2025 revenue forecast.

So per the ordinance, and I'd like to also provide this clarification, We are today meeting in council chambers for the first time.

This is not indicative that the city council is outweighing the executive's office here.

All that to say is that the council chambers is set up for the technology and administration of meetings such as this in a way that other rooms in our city are not.

And so I think So that is why we are here at the committee table even though not all council members are members of the Forecast Council.

So with that, per the ordinance that created the Forecast Office and this Forecast Council, it is the role of the Forecast Council to review and approve the forecast together.

in terms of approving the forecast.

If we all concur with the recommendation of the forecast scenario, then no formal vote is required.

The goal of the legislation that created this Council was to remove the risk of political influence over the forecast and receiving recommendations from the staff of independent experts in a public, receiving that information in a public forum is the best way to achieve this aim.

That said, we represent the elected leadership of the legislative branch through myself and council president and the executive branch through Chief of Staff Andrew Meyerberg, and finance director Jamie Carnell, is also appropriate that together as the joint body of executive and legislative, that we have the authority to override the recommendation of the forecast office, should we judge that that decision should make sense.

Per the establishing ordinance, such a decision would require a three member vote approving an alternative scenario.

As you've heard, Interim Director Duras recommends that the baseline scenario of the October 2025 forecast should be used as the official forecast.

In the case that there are no objections to this recommendation, I'm simply going to request that the meeting minutes reflect our concurrence regarding the recommended forecast.

This is the formal step called for under the bylaws as the way we adopt reports to our and approve our forecasts.

So I'll take all of that said, I will take this moment and I'll take a long pause to ensure and ask the questions.

Are there any objections to utilizing the recommended forecast as the baseline forecast for the forecast?

I'm hearing no objections, so I will direct the forecast office to record our concurrence with the recommendation in the forecast, with the recommended forecast in the meeting minutes.

Thank you.

Colleagues, seeing as we...

There are no other items on today's agenda and that we have reached the end of our formal agenda.

I will also pause here to see if there are other questions or any items for the good of the order.

I'm not seeing any today.

Director Duras, anything that you'd like to leave us with today?

No, I'll just say thank you very much.

Well, I think one thing that I would like to say, I would like to thank the team of Director Cornell's team in the Office of City Finance.

We really appreciate their collaboration.

Their partnership is providing us the right kind of insights, which are particularly important in these uncertain times.

And again, we are happy to help in any sort of way that we can to the whole forecast council.

Thanks.

Thank you, very well said.

Hearing no further questions, the Economic and Revenue Forecast Council is adjourned today.

And today being the greatest day in Mariners franchise, if we're lucky enough, tomorrow will be as well.

With that, we are adjourned.