Seattle City Council Select Budget Committee 10/11/22 Session I

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Councilmember Hueso?

Here.

Councilmember Juarez?

Here.

Councilmember Lewis?

Present.

Councilmember Morales?

Here.

And Chair Mosqueda?

Present.

Nine present.

Thank you, Madam Clerk.

Thank you all for joining us today, the first of four days in week three of the budget.

Today, we will have an opportunity to dive into the fundamentals of the budget with our This will be followed by a presentation on the general fund balancing and related fund policies from central staff members, including Tom Mixell and Ali Panucci.

Colleagues, this is the beginning of four days that allows for us to really understand what the proposed budget from the mayor is, get into some specific questions on certain departments, and really analyze more about options or issues that the central staff have identified.

we're going to talk about how we're going to do that.

Before we can get into department presentations though it's important for us to have a fundamental understanding of the shifts the changes and the proposed use of our various revenue streams.

Before we even begin discussing investments.

So I look forward to having this foundational discussion today really allowing for us to get the content of how the So colleagues today, those are the two main items on our agenda.

And before we begin with those, I've also included in the chair's report, a report from Dr. Khan, the director of the Seattle Public Health, Seattle King County, who is here to give us a brief update on COVID infections and other infectious diseases in our region.

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

Hearing no objection, today's agenda is adopted.

I'm very excited that we have with us the newly appointed Public Health Director.

Thank you so much for being with us, Dr. Khan.

Really excited to have you back in Seattle City Council Chambers.

Thanks to Council Member Herbold, who oversaw the appointment process that was jointly done between Seattle and King County.

We now have the opportunity to hear directly from you about the current status of COVID.

There's been much conversation about the pandemic being over.

I started my remarks on the first day of the budget season, emphasizing the points from local reporters, health reporters, about how the pandemic is clearly not over.

With two to 300 deaths a day still occurring across this country, we want to make sure that we're recognizing the hardship and stress and trauma that those families are currently enduring, and also remind folks why we are here, asking for folks to remain mass, practice social distancing every time it's possible, and encouraging a hybrid approach to these meetings.

So Dr. Khan, as part of my opening comments, I'd like to turn it over to you to really provide us with a status update so we can know better how to protect our community, protect ourselves, our family, and our local economy.

Thank you, Dr. Khan, for being with us.

Thank you, Council Member Esqueda.

Thank you, Council Members, for this opportunity.

I'd like to begin by providing a brief update on the status of COVID-19 and the stage of the pandemic that we find ourselves in today.

There is cause for cautious optimism, but I underline the word cautious.

All that progress that we've made over the last five to six months will be reversed very quickly if we do not continue to exercise the universal precautions that Council Member Mosqueda just referenced.

The wearing of masks, social distancing, and, of course, completion of the vaccination series, including boosters, yes, including the Bivalent Omicron booster, as well as the seasonal influenza shot that is now readily available across the region, are critical in trying to prevent what is anticipated to be a moderate to severe influenza season, as well as the next surge in COVID infections.

Hopefully, the peak of this surge, which is inevitable, will be barely palpable in terms of comparison to previous surges.

And we can get to that point only by ensuring that the most vulnerable, the most likely to end up with severe ramifications are protected around us.

Our efforts right now are concentrated around encouraging universal precautions as we enter the regular influenza season and while COVID remains a threat by encouraging vaccinations and booster shot updates.

At the moment, just about 10% of the population in the Seattle-King County region has taken up the Covalent booster.

That is nowhere near enough.

That is nowhere close to where we ought to be.

And so that's what our efforts as a public health agency are going to be focused on.

Our hospital systems are already overburdened and stressed out, not the least of which is financial stress that they've experienced cumulatively throughout the pandemic.

Just this week, Harborview Medical Center had to institute some emergency precautions as a result of being overwhelmed by the number of patients they were seeing due to non-COVID related issues.

You can imagine what would happen if another surge were to hit us today.

The future remains uncertain, and I know that sounds terribly cliched at this point in the pandemic, but regrettably, that is where we are.

We simply don't know what the next three to six months will hold.

I remind everyone to keep an eye on what is happening in Europe as they enter their fall and winter season and they begin to see a surge in COVID-19 related illness.

The same will play out on the eastern seaboard and it will make its way to the western seaboard.

Yet that is inevitable due to the hyper-connected world we live in.

Please also keep an eye on the experiences of our public health colleagues in the New York City region.

They are dealing with a quadruple threat related to COVID-19 influenza, measles, and polio.

Yes, those familiar old enemies are making another appearance.

Our public health workforce across the country, including the Seattle-King County region, is already exhausted in dealing with a pandemic of the last two and a half years.

So we need everyone to work together, accept a sense of personal responsibility in exercising common sense precautions as they go about their normal business.

As we enter fall and winter, it is even more important to wear a mask and be watchful of those around us.

to protect those that are most vulnerable in our inner circles and our circle of friends and family.

Thank you.

Council Member Mosqueda.

Thank you very much, Dr. Khan.

And for these reasons, we continue to promote a hybrid option and encourage remote participation.

I want to thank every single person who's in the room today.

The few folks that are with us do have masks on, so I thank you for that.

And thanks to everyone who continues to participate remotely as well.

Are there any questions for Dr. Khan today?

Okay, I should have raised a big question for all of us that only 10% of the population currently has its booster.

If you have not been boosted, please get your booster, get your flu vaccine as well as we head into the fall winter season.

It is very concerning as Dr. Khan illuminated to see.

what is occurring on the East Coast and to know that it's a simple five-hour flight from the East Coast to the West Coast and many of these communicable diseases spread very quickly.

So, Dr. Khan, we're at the ready and look forward to continuing to help you address the multifaceted challenges that public health is facing with increased communicable disease.

and I want to also appreciate all that you have brought to your new leadership position.

We are very thankful for the team at Public Health Seattle King County for being on the cutting edge of the pandemic response and other strategies to protect our public's health.

So this is one of the forums that I hope will continue to get the message out to the general public that the pandemic is not over and for these reasons, Please continue to respect social distancing, the use of masks as a protection strategy, and get your boosters.

All right.

Thank you, Dr. Khan.

We will look for any way we can to amplify the messages from public health in the upcoming months.

we're going to continue to do that.

Thank you.

Take care.

the federal investments of American rescue plan and cliffer relief funds, also from our very own investment as a city, as a city council to spearhead jumpstart progressive revenue, the payroll tax, payroll expense tax.

This has helped to stop to the city and to our region, help to support small businesses and our most vulnerable.

And as federal dollars go away, what we want to do is to make sure that these tough budget decisions are still rooted in the values that we as a council have prioritized.

Investing in our most vulnerable, making sure that people have housing and housing is being built in the pipeline, making sure that those who need supportive services are able to receive those by a stable workforce that invests in wages and inflationary adjustments.

By making sure that we're investing in the health and safety of our community, both in terms of infrastructure safety, but also public community safety and the health and well-being of folks, not just responding to COVID, but preventative efforts like making sure people have food, and diaper services protection from domestic violence.

And lastly, that we invest in our economy and create a stable economy by creating workforce investment opportunities, training for local workers, and support for our smallest businesses as folks either seek to reopen doors or struggle to keep their doors open in the wake of COVID.

We walked into this budget season with $141 million in operating budget deficit for 2023 and 152 million in 2024. But I don't think those numbers show the full picture of the challenge in front of us.

It's not just how we close that gap, it's how we write our budget.

It's how we make sure that our investments that we've codified into statute stay true to those investments and that we create stability in future years.

We're going to walk through a central staff memo today that helps underscore not just the concerns with the $141 million operating deficit for this upcoming year, but will help us understand better the proposed budget in terms of investments, Well, the budget that's been admitted does some tough work to balance 23 and 24. As we will see today, they arrived there by diverting general fund adjacent revenues, ending one-time investments, but adding ongoing investments to the tune of nearly $60 million over two years, and making potential greater gaps in the deficit for 2025 and beyond.

We've known this is coming.

We've been working with central staff, the mayor's office, the city budget's office to try to identify greater efficiencies in terms of policy strategies so we get real-time reporting on where we can do better budgeting within departments.

We've looked at ways to leverage state and federal dollars and will continue to do so throughout our budgeting process over the next six weeks and over the next six years.

and we will continue to push for progressive revenue.

Progressive revenue to stabilize this gap that we continue to see.

The progressive revenue stabilization work group has been identified.

The mayor's office has sent around a note to all council members today informing them of the process and we must secure additional progressive revenue to stem the to address the concerns that are outlined in the budget memo that we will review today.

So look forward to those conversations with you all throughout the next six weeks so that we can create a greater stability over the next six years.

Colleagues, again, the central staff memo that was circulated outlined what the process is gonna be over the next four days, and I'll quickly summarize it.

It was in our week three budget roundup as well that we sent yesterday.

Today is dedicated to central staff introduction, general fund-related fund policies.

This afternoon, after our one o'clock break, beginning at two o'clock, we will look at the balancing strategies and related fund policies that will include jumpstart, TNC tax, short-term rental tax, and other strategies to try to address the gap this year.

We will break around 4 p.m.

today so that we can have a public hearing for folks who want to participate in that public hearing.

Wednesday will be office of planning community development, department of neighborhoods, office of economic development in the morning and in the afternoon starting at 2 p.m., office of housing and miscellaneous issues.

On Thursday, day 3, at 930 we will have the department of transportation and the proposed transfer of the parking enforcement officers from SDOT to SPD.

We'll take a break at 1 p.m., and when we reconvene at 2 p.m., we will cover the Seattle Police Department and the Community Safety and Communications Center, the new department that council created two years ago.

And finally, on day four, we'll begin our day with the Human Services Department.

This will include funding for homeless services that are remaining at HSD, and then we will have an overview of encampment cleanup and garbage cleanup in the mayor's proposed budget.

We will break at 2 p.m.

and conclude our day with parks and any overflow topics as needed.

All of these days we seek to end the public hearing at 5 p.m.

We will start at 9.30 a.m., but only today are we doing a condensed public comment period.

So with that, I know there's people eagerly waiting to testify in public.

I do have one person only signed up in person, so, okay, two people.

I think I'll just go ahead and do the two people that are in person and then go to the folks on the call.

What we are going to do normally is we are going to have difference to the people who are dialing in remotely.

But this morning, I'll go ahead and do the folks in the room, and then we'll go to the people on the line.

So we do have three people, excuse me.

Yes, now three people signed up in public comment.

The first one will be Patrick Dunn, followed by Peter Krull and Matthew Sir Flynn.

Good morning.

Patrick, please make your way to the podium.

Morning, Council Members.

Morning.

You're welcome to go ahead.

I just want to confirm your microphone is on.

Thank you.

One second.

Let me just confirm it's on.

Can you all hear him online?

Can you hear me okay?

Yeah, that's better.

Go ahead.

My name is Patrick Dunn.

I'm a 26-year Seattle firefighter veteran and a longtime resident of District 1. I'm here to speak in favor of funding of Laddershock 13 and Medic 26 in support of Councilwoman Herbold's efforts to continue the funding.

There are many differences between engines and Laddershocks and medic units and aid cars.

Not all is which known, and I can detail some of these in a letter that I'll leave without going into specific details.

but I want to point out an area of West Seattle, the southern portion is nicknamed the dead zone.

Years ago, there was a plan to add a fire station after the city of Seattle absorbed the most southern part of West Seattle.

This plan never came to fruition and the additional real estate has resulted in the longest response times in the city and timeframes that exceed the survival window for CPR and other life-threatening events.

The workload and number of 911 calls in the city has grown steadily and the addition of resources has lagged beyond the city's growth.

When an event is happening that requires additional resources, 911 dispatchers move available fire engines and trucks strategically throughout the city to maintain coverage.

When a fire apparatus is added to any district, it helps all districts.

Medic 26 serves South Park and responds second into Rainier Valley.

Both are historically economically disadvantaged areas and tend to have a greater demand for 911 services.

Ladder 13 and Medic 26 are in place and working right now.

The ramp up work has already been done.

Seattle is a leader in fire service worldwide and I'm asking the council to please continue the funding for Ladder 13 and Medic 26. Thank you very much.

Thank you very much.

And you modeled really great timing.

I forgot to mention folks have two minutes today.

So thank you for staying under that time.

And we'd be happy to receive any written materials you have.

Thanks.

Thanks for your testimony.

Peter Krull followed by Matthew.

Good morning, Peter.

Thank you, council members.

My name is Peter Krull.

I'm president of Driver Union.

We represent thousands of Uber and Lyft drivers who work in Seattle.

I'm here to ask City Council to preserve Paris's share of tech for a designated purpose, including funding the Office of Labor Standards as well as housing and transit priority.

Only two years ago, an incredible diverse collection of more than 65 organizations came together behind a five-year plan.

The plan is funded by a tax on Uber and Lyft ride.

This tax make investment in three areas, affordable housing, near transit, transportation option, including the streetcar and protection for vulnerable gig workers.

The Office of Labor Standards is responsible for imposing more than a dozen laws, including a new pay standard for gig workers who deliver.

These are often the same workers who dry from over and leave.

The Office of Labor Standards needs continued funding from the Fair Share Tech to protect these gig workers.

The Fair Share Tech will not advance without our close support.

Yet although this fire remain partial to all of us, the proposed budget diverts this tax revenue from its dedicated purpose and into the general fund.

We are calling on the city council to respect the intent of the fair share tax and maintain and maintain this funding for affordable housing, transportation option, and labor standard.

Thank you.

Thank you very much.

I appreciate you being here, Mr. President.

And the last person in person is Matthew.

Good morning, Matthew.

Good morning, Chair Mosqueda.

You know, my mom's always complaining about my handwriting, but it's Matthew Sutherland.

I'm the advocacy director at Transportation Choices.

I don't blame you for not being able to read that handwriting.

Thank you for the opportunity to comment on the 2023 Seattle City Budget.

We'd like to thank you for investing in Division Zero as people biking and walking face higher rates of injury and death.

This is an important investment for public safety.

We also appreciate the investment in transportation equity programs, the Move Seattle Levy projects, and commitments to public engagement for the Seattle Transportation Plan.

We're grateful that the city Center Seattle streetcar received some attention.

However, I think urgent action is required that actually breaks ground or frankly, this project will not be completed.

The city looks to balance priorities in the future in preparation for the 2026 World Cup of concern to us and many other organizations.

And as our colleague, Peter mentioned from the drivers union today.

We're concerned about the use of the fair share tax for purposes other than what was intended and promised.

65 organizations worked to make a tax on TNCs that would be invested specifically in affordable housing, completing the streetcar and protections for vulnerable workers.

These funds should not move back to the general fund.

These funds should be dedicated to projects that were promised to fund.

Without a dedicated funding source, we know these projects will fall by the wayside.

Affordable housing, multimodal transportation options, and labor protections are critical to a livable, equitable, and sustainable city.

We ask that you take more time to solve general operating budget issues without sacrificing the fair share promises.

budget reflect our values and we don't want to see these values left behind.

So thank you for your continuous thoughtfulness in a difficult budget process.

We're grateful for the leadership and the opportunity to provide comments.

So thank you, budget chair Mosqueda and other council members for your time.

Thank you so much.

Okay, wonderful.

Well, thanks to all for your public comment.

And we are going to turn to the people who are waiting patiently online.

I can read these handwritings really well because it was typed in here.

So Howard Gale, followed by Peter Conda and BJ Last.

Everyone, you know the drill.

Once you hear your name called, please do hit star six on your own phone.

Make sure your phone is unmuted.

You'll hear a chime at 10 seconds when your time is about to run out.

Please do wrap up your public comment.

and send in any remaining comments to council at Seattle dot gov. With that good morning Howard.

Thanks for getting us started.

Good morning.

It's Howard Gale District 7 with Seattle Stop dot org.

Next year's budget proposes more money for the police and wastes over eleven million dollars in a police accountability system that still has police investigating police.

This is $11 million spent denying victims of police violence any appeals or any semblance of justice or accountability.

This budget provides for more monies for victims of violence unless that violence is perpetrated by a Seattle police officer.

This budget provides monies to stem gun violence unless that violence is perpetrated by a Seattle police officer.

This bias embedded in the budget is embedded throughout our public safety system.

Seattle police do not even count police killings as homicides in their homicide data, though King County and other entities, of course, do.

Why exclude only the victims of police violence from city support?

Why defend and support those that perpetrate the violence when they are policed, but deny their victims and their families support?

Our current accountability systems are not assisting victims with navigating a thought system more designed to protect police officers as opposed to holding them accountable.

Victims' complaints are lost in bureaucracy and dismissed the vast majority of the time without any process or even a right of appeal, despite the fact that there's a city law mandating such a process for five years now.

We need a budget that serves people, especially those injured by how you spend your tax money, those people injured by police, and not the interests of those that perpetrate the violence.

We need a fund to support victims of police violence and their families.

Thank you.

Thank you, Howard.

Peter, good morning, Peter.

Good to see you again, followed by BJ Last.

Thank you, Chair Mosqueda.

This is Peter Conant in District 6, speaking about the Seattle Police Department's budget.

The SPD should not be allowed to receive funding for more officers than they have staffed.

In each of the past three years, SPD's hiring plans have anticipated net growth of about 25 or 30 officers.

Instead, voluntary separations have led to a net reduction of 260 fully trained officers since June 2020. Dollars from higher than expected attrition throughout the year, or salary savings, and dollars from FTEs the department never planned to fill in the first place, ghost positions, are allowed by default to stay within the department where they might be spent on weapons, bonuses, and problematic surveillance equipment such as ShotSpotter.

It's time for Seattle to budget for a shrinking police department.

Council needs to take proactive steps to move functions, responsibilities, and budgets out of the SPD.

Council needs to defund SPD's empty positions and abrogate unfilled FTEs so that we can permanently invest in true public safety, housing, jobs, education, healthcare, and community programs.

We've already seen a reduction in calls to SPD in the past two years.

Moreover, many calls are still superfluous and are initiated by officers themselves.

According to page 12 of the SPD call analysis completed by the National Institute for Criminal Justice Reform, these so-called on-view events make up more than a third of the department's calls.

The most common on-view event is a simple premise check, which has an arrest rate of less than one in a thousand.

This is self-dealing.

If an officer is having a slow day, there's nothing to stop them from just registering their time as a premise check.

SPD's inflated staffing plans and unaccountable budget go hand in hand with systemic racism, violence, and anti-democratic norms.

Deliberately reducing the size and scope of the police force today is a commitment to the long-term transformational change that most of you acknowledged just two years ago is necessary to produce true public safety without police violence.

Defund SBD, thank you for listening.

Thank you very much.

And BJ, followed by Castille Hightower.

Good morning, BJ.

Good morning.

My name is B.J.

Lass.

I'm a Ballard resident and small business owner.

I support the solidarity budget.

Mayor's proposed budget fails the people of Seattle.

It defunds Jumpstart next year with 28 percent of next year's Jumpstart funds going to the general fund instead of Jumpstart's priorities.

This is taking money from housing Green New Deal economic development and equitable development and economic revitalization.

Of the ninety five million dollars of Jumpstart going to the general fund Over 22 million of that will go to the Seattle Police Department since Seattle Police Department eats up roughly a quarter of the general fund.

And that is before we add in the courts and the cost of incarcerating people.

At the same time the budget allows SPD to keep 17 million of so-called salary savings for positions it has no plans or ability to fill to use as a slush fund for other items.

We should not be defunding housing to give SPD a slush fund of salary savings.

and we should be abrogating positions, SPD has no plans to fill, instead of letting them be the one department that gets to constantly budget for more positions than they plan on filling.

Additionally, the budget cuts the pay of homeless service providers by making their pay adjustment lower than inflation while giving hiring and retention bonuses to SPD.

SPD officers already make more than twice as much as homeless service providers.

This is cutting the pay of low paid workers give bonuses to highly paid employees.

More than that, it's defunding people who can support our unsheltered neighbors and can help get them sheltered in order to give money for cops to endlessly sweep people who have nowhere to go.

Combined with defunding housing by moving Jumpstart to the general fund, this budget is a homelessness policy of sweeps instead of housing and services.

Additionally, SPD's request for $1 million of weapons should also be reallocated to homeless service provider pay since SPD is double dipping this request.

Thank you.

I yield my time.

Thank you very much.

The next person is Castille followed by Alice Lockhart.

Good morning, Castille.

Hi, can you hear me?

I can.

Thank you.

In 2004, my brother Herbert Hightower Jr. was shot and killed by Seattle police when he was experiencing a mental health crisis.

No one was held accountable and we are still fighting for justice and accountability.

When he was killed, we received little to no support and still continue to struggle as a direct result of his killing against a hostile system that pours millions into justifying my brother's murder and so many like his while providing no resources to victims and families except a broken accountability system designed to protect police officers instead of actually holding them accountable regularly loses victim complaints, what complaints do get through are almost always dismissed or minimized and without any process or right of appeal.

Unfortunately, our story is not unique.

This city touts that it has a more obligation to victims of violence, but when the victimizers are police officers, you allow a double standard.

It is only right to create resources specifically for victims of police violence and the surviving family members during next year's budget.

We should not be left at the mercy of a broken accountability system and zero resources just because our trauma, our harm, and our loss bloodied the hands of SPD.

We demand support, we demand accountability, and we demand to be included in this budget.

Justice for Herbert Hightower Jr. and justice for all victims of police violence.

Thank you.

Thank you very much for dialing in again.

Alice followed by Penny O'Grady.

Good morning, Alice.

Good morning, Budget Committee.

Thanks for this opportunity to comment.

I'm Alice Lockhart and I volunteer with 350 Seattle and Solidarity Budget.

I've dug into just the top level of Mayor Harrell's budget proposal, but it takes me back to this past August when Budget Chair Mosqueda pointed out that if we over rely on Jump Start now and the revenue forecast worsens in November, we will have an unstable and unsustainable budget.

The mayor's budget proposal to raid Jumpstart funds is unhumane, unsustainable, and unnecessary.

Transferring Jumpstart surplus to the general fund to prevent cuts in critical city services on which we all rely makes sense.

But the mayor's proposal to raid Jumpstart by an additional $22 million in 2023 compromises already long-delayed Jumpstart investments in housing, small businesses, Green New Deal, and equitable development initiative.

Moreover, taking a look at the mayor.

Alice, we just lost you.

Okay, Alice, hold on one second.

We got another minute and three seconds for you on the clock.

Sorry about that.

Zoom suddenly muted me.

I don't get it.

No problem.

Alice, we just want to make sure to get you back to your original time.

Go ahead.

All right.

Moreover, taking a look at the mayor's top-line expenditure survey, I see that He prioritizes policing and his own office over real public safety.

SPD gets an increase of 5.7%, while Office of Labor Standards takes a 35% cut.

This feels like basically legalizing wage theft.

The fire department takes a cut, as does the Office of Emergency Management, while the mayor's own office gets a 36% raise.

I hope council will work with community to find changes to this budget that will protect Jumpstart and real community safety While keeping the promise to cut excessive spending at SPD, I trust community council central staff and this committee to remove the harm in the mayor's budget and preserve spending that allows us all to thrive.

Thank you.

Thank you very much.

Penny followed by John Grant.

Good morning, Penny.

Good morning, council members.

Thank you for your work.

I live in district six.

I am speaking in full support of the solidarity budget.

I urge you to use all Jumpstart money to invest in its intended purpose for housing and food security investing in communities of color small businesses and community health.

The more Seattle invests in healing harms from the wounds of racial and social oppressions and invests in basic human needs the safer we are collectively.

The more the city invests in creating harm and trauma the less safe we are.

Instead of taking funds away from Jump Start to make the budget work, take funds from the punishment systems that disproportionately harm our black and indigenous residents.

Take funds from SPD, Seattle Municipal Court, and the city attorney.

In the context of a budget shortfall and a desperate need for affordable housing and mental health crisis response, funding positions that SPD has no way of filling is not just government waste, it is a refusal to address the safety needs of Seattle residents.

Instead of funding the proven ineffective shot spotter, invest in real community safety solutions, such as scaling up violence interruption programs to address increases in community violence.

In this context, it is outrageous to consider any pay cuts to human service workers proposed in Mayor Harrell's budget.

Where police officers are being offered recruitment and retention packages, this legislation is a slap in the face.

If we are serious about ending homelessness, we need to pay human service workers more, not less.

I support the Solidarity Budget's pay increases and retention bonuses for human service providers and all the other pieces of the Solidarity Budget, which I know you've received.

Thank you for listening.

I cede my time.

Thank you so much.

Next up is John Grant, followed by Gomezina Schmidt.

Good morning, John.

And John, just star six to unmute.

Morning Chair Mosqueda and committee members.

My name is John Grant and I'm the Chief Strategy Officer for the Low-Income Housing Institute.

I'm testifying today to bring to your attention critical provision for the tiny house village program.

First, I wanna thank the mayor for making important investments in RV safe lots and adding new funding for additional tiny house villages and ask the council to retain those proposals.

Lehigh is requesting a much needed $2.8 million investment to sustain the existing portfolio of 11 tiny house villages Eden Lake Front Shelter.

$276,000 will go towards one-time maintenance and repairs at all the sites to replace damaged tiny houses, aging kitchen facilities, and other items that are at the end of their useful life.

Last year, this body supported Councilmember Lewis's proposal to add funding for behavioral health staffing to address the rise of opioid and fentanyl addiction, as well as support mental health counseling at our villages.

This investment was made with one-time funds, but has been crucial to ensure that we get people housed.

$880,000 would go towards maintaining substance use disorder and mental health support at all of our sites.

As the city has ramped up its removals of homeless encampments, we are seeing much higher acuity program participants.

As a result, Lehigh increased our 24-7 sites to ensure the safety of our program participants, the safety of our staff, and the safety of the surrounding community.

This expense is directly related to the higher acuity HOPE team referrals from the city, but we have not received additional funding.

Therefore, we are asking for increases to our ongoing 24-7 staffing support in the 2023 budget.

Finally, the City Council increased funding this year to address food insecurity at some of our sites, and we ask you to please continue full funding for Operation Stack Lunch.

In total, these requests come out to $2.8 million and are absolutely necessary to maintain our existing capacity at our villages.

Please support the Tiny House Village Program, and thank you for your time.

Thank you very much.

And Tomasina followed by Julia Buck.

Good morning Tomasina.

Good morning.

My name is Tomasina Schmidt and I'm the Executive Director for Seattle Neighborhood Group a local nonprofit focused on community safety and crime prevention.

We have two funding requests for the 2023-2024 city budget.

First we'd like to ask the council to restore a proposed funding cut to our safe communities contract Second, we'd like to ask for increased funding for our Rainier Beach, a Beautiful, Safe Place for Youth contract.

We have held both contracts with the city for over a decade.

Both contracts are community-led, place-based violence and crime prevention programs that have been researched and evaluated by professional criminologists working in various universities in the United States.

These programs have made significant impacts in the community and have helped with reducing violence and crime.

The city council has stated that one of their priorities is to advance the reimagining of policing with a larger civilian response.

The safe communities and Rainier Beach, a beautiful safe place for youth contracts, helped to achieve this goal.

We understand that this is a difficult economic climate and that the city is facing a revenue shortfall.

Considering this shortfall, we have serious concerns about the proposed spending of $1 million for a gunfire detection system.

With dollars being limited, it makes sense to put the money into community-led solutions that have been working for years.

Instead of investing in questionable technology to increase public safety, we propose investing in community-led programs that are already doing this work, such as Safe Communities and Rainier Beach, a beautiful safe place for youth.

We thank you for your ongoing support and consideration.

I yield my time.

Thank you so much.

The next person is Julia followed by Amanda Daniels.

Good morning, Julia.

Good morning, Council.

My name is Julia Buck.

I'm a resident of District 6 and I'm calling in support of the solidarity budget.

The mayor's proposed a budget that's going to raid Green New Deal dollars that are meant to be focused on frontline neighborhoods first to fill budget holes for programs that are based in wealthy neighborhoods in the North End who are better equipped to withstand the climate crisis.

He has also proposed a budget that is designed to cause service providers to leave the city, social service providers, to either leave the city or the profession by offering no cost of living adjustment during record inflation and no shelter options to offer people when they go to the multiple weekly suites.

If Seattle has progressive values, the city cannot continue to take money out of black neighborhoods, out of non-white neighborhoods, immigrant neighborhoods.

If that money is for any purpose other than surveillance, restriction, and confinement, that money's got to go.

so that Seattle can give it to the wealthiest white neighborhoods for things like community gardens and small business cafes and shy dog parks.

I would encourage council to bring the mayor's budget more in line with Seattle's values.

Thank you.

Thank you so much.

The next person is Amanda Daniels followed by Lucinda Stroud.

Good morning Amanda.

Good morning Chair Mosqueda and Vice Chair Herbold and members of the Select Budget Committee.

My name is Amanda Daniels and I live in West Seattle City Council District 1. I'm a longtime human services worker a current Masters of Social Work student and a parent of young children.

I'm here to address the compensation for human service workers.

I know firsthand the difficulty of making ends meet due to low wages of human service work.

Like other professionals in the city We human service workers are paying expensive housing costs, increased grocery bills, and often student loans which were necessary to obtain educational requirements for this type of work.

Mayor Harrell's budget includes a 4% cap on inflationary wage increases for human service workers.

I urge you to look to other areas of the budget for cost savings.

In a year with inflation calculated at 7.6%, the 4% cap would be a wage cut for workers like me.

Human service workers are among the essential workers that brought us through the pandemic.

These are the workers that care for our collective mental health our loved ones and care facilities our children and daycares the unhoused and many others.

Human service workers need to be compensated to sustain their livelihoods in our great but costly city.

Their work with some of Seattle's most vulnerable residents directly impacts the stability and safety of our communities.

Council members please remove the 4 percent gap from the capped from the 2023 budget.

Maintain the current alignment of inflationary wage increases with actual inflation for human service workers and increase wages for human service workers to move toward pay equity.

Thank you.

Thank you so much.

The next person is Lucinda.

Good morning, Lucinda.

Hi thank you for the opportunity to speak.

My name is Lucinda Stroud and I'm a certified nursing assistant living in District 7. The current budget continues troubling classist racist and ableist structures through its dehumanizing and unconstitutional treatment of unhoused residents in Seattle and incarcerated people and its underfunding of human services workers.

I'm calling in support of the Solidarity Budget's call for a budget to live.

which calls for defunding all resources dedicated to the sweeps of homeless encampments.

These sweeps exacerbate the complex tingle of poverty, trauma, and mental health and substance use disorders that unhoused people experience, further destabilizing them, leading to degraded community safety, and increasing the likelihood that unhoused people will suffer premature death.

The current funding of the city attorney makes our city even less safe as the attorney's campaign of aggressively prosecuting people for low-level crimes, largely crimes of poverty and addiction, is overcrowding the jail and leading to truly cruel and unusual punishment for people who should be presumed innocent until proven guilty.

These conditions included no potable running water, menstruating people denied sanitary products and clean clothes for weeks, incarcerated people having no access to essential medicine, including insulin and the treatment of injuries, and a suicide rate eight times the national average.

While the city cannot control funding of the jail, they can control funding of an overzealous city attorney directly responsible for overcrowding it.

The funds allocated for sweep logistics and for the city attorney must be redirected to funding people's basic needs, including adequately compensating human services workers, so that they have real capacity to meaningfully support the survival of some of the most vulnerable people in society.

Thank you very much.

Thank you so much.

The next person is Shaina, followed by Phonetica Phonetica Zhang.

Good morning, Shaina.

Hi, good morning, council members and guests.

My name is Shaina LaPard.

and I'm the Early Intervention Program Manager at Youth Care.

I work with families for reconciliation.

I work in school-based intervention programs and juvenile rehabilitation reentry programs, primarily with under 18 young adults.

The intention of our program is to prevent homelessness.

I'm here today to ask you to invest in our workers.

I've seen the impact of low wages both as a frontline worker and a program manager.

At Youth Care we work to support young adults who are among marginalized communities to break the cycles of poverty and trauma that could hold them back from their full potential.

This work is emotionally taxing.

We regularly manage secondhand trauma that we are experiencing and we cope with the truth of society that we see firsthand in our work.

Things like overdose.

children living outside cold and hungry.

We're handed Seattle's biggest human crisis poverty and homelessness.

The people of Seattle need stability and a continuum of care with service providers they have a relationship with and trust.

And we can't do this with our current turnover rate.

These turnover rates I believe are related to a high stress job and low wages.

Higher wages give us the monetary resources we need to find solace on our time off and effectively manage secondhand trauma.

It helps us afford to live without stress of how we will pay our rent or provide food to our families.

The current living wage in Seattle is $70,000 and a frontline worker at youth care earns $48.

This is a large gap between what we're earning and what's needed to live.

Thank you for your time and attention.

We look forward to working with you to recognize the importance of moving funds from our harmful police force.

Thank you.

Thank you so much.

And the next person is Fonica, followed by Maureen Ewing.

Good morning, Fonica.

Good morning, members.

Good morning, council members.

My name is Seneca Chong, and I am calling on behalf of Solid Ground, a multi-service organization that supports community members around Seattle with critical services.

And I'm joining fellow human service advocates today and the Seattle Human Service Coalition in urging council to fully fund human service contracts.

The proposed 4% cap on the city's required inflation adjustments to human service contracts is an effective cut on worker wages.

Because public funds don't cover the full cost of services and private fundraising is limited, organizations are hard-pressed to fill this gap and keep up with rising costs.

And unfortunately, this could lead to cut in services.

This inflation cap not only harms our communities now, but will continue to inhibit our ability to provide services in the future.

I urge the council to support the recommendations made by the Seattle Human Service Coalition continue to fund the services that community members are relying on and the workers that provide these critical services.

To sustain current services we need at the very least to adjust human service contracts commensurate with the inflation that is actually impacting our organizations and our community members.

And this is one really important step towards wage equity for undervalued human service workers.

We can't achieve the safe One Seattle that we all envision without the critical human services that build well-being for our community members.

Thank you all so much for your attention to this issue throughout these challenging budget discussions to come.

Thank you so much.

Maureen followed by Clara Contour.

Good morning Maureen.

Good morning Chair Mosqueda.

And Council Members, I'm Maureen Ewing, the Executive Director of U Heights in the U District, and I'm speaking in support of maintaining human service wages with inflation.

Every day we see firsthand how our human service workers are making a difference, not only in the lives of our neighbors who are in-house by connecting them with housing and services, but are also on the front lines addressing our city's public safety, mental health, and gun violence crises.

They risk their own safety to walk along freeway encampments and go into some of the most heartbreaking parts of our city to support our most vulnerable populations.

And they should not have to worry about their own financial stability.

If we want a safe and equitable city, we need to invest in the human service workers who have devoted their careers and take on extreme emotional and physical burdens, with most of our workers only making $20 to $25 an hour.

This is not the place to cut when our human service workers are needed now more than ever, and the labor shortage is already gutting our human service workforce.

Along the same lines, we are under-investing and serving the nearly 50% of unhoused people who live in cars and RVs, and we need to invest in ongoing outreach and safe lots to not only serve the folks who are living on the margins, but also to mitigate the issues created in the right of way for small businesses and residents by not having enough safe places for people to park.

Thank you for listening and for your work in making these hard decisions about balancing the city budget.

Thank you very much, Maureen.

Clara, followed by Christopher Lampkin.

Good morning, Clara.

Hello, can you hear me?

I can, thank you.

Hi, my name is Clara Cantor, and I'm a community organizer with Seattle Neighborhood Greenways.

I live in District 2, and I'm here to speak today in support of the Whole Solidarity Budget, which we've heard a number of commenters speaking about specific portions.

And I'm also here to speak specifically about two items.

The first is to ask you all to please keep the parking enforcement division in SDOT instead of moving it back to the Seattle Police Department.

Civilian workers belong in a civilian led department and parking enforcement officers in particular should be partners in curb space management to get people parking in places that allow everyone access to sidewalks and bike lanes and curb ramps and more rather than just being an enforcement department.

This kind of culture shift requires a lot more than one year to take place and to return the division to SPD locks us into that enforcement and punishment first paradigm that's not actually working to make people safer on our streets.

And the second item that I wanted to ask is to ensure that 100% of the revenue from automatic light, automatic red light camera enforcement is reinvested into safe streets projects rather than being directed back into the general fund.

As someone who gets around by bike and transit, I know firsthand that Seattle streets often are incredibly unsafe for me just walking or biking around to get where I need to go.

And an increase in revenue from automatic ticketing indicates that the street is less safe and more in need of safe infrastructure investment.

And using that funding for the general fund also makes us a city that's more reliant on enforcement revenue for funding instead of using that revenue for the things that are solving the problem.

Please support the Solidarity Budget, Budget to Live and Budget to Thrive in its entirety.

And thank you so much for your work on this.

Thank you so much.

The next person is Christopher, followed by David Heldy.

Good morning, Christopher.

Seems like you are still muted.

Could you hit star six one more time, Chris?

There we go.

How's that?

Better.

Much better.

Great.

Thank you, Madam Chair and the honorable members of the council.

I'm Chris Lampkin.

I'm a resident of District 1 from SEIU 1199 Northwest, and I work with our members at DESC.

What lessons have we learned from the pandemic?

Our underfunded public health, our underfunded healthcare system, and our underfunded behavioral healthcare system were placed under incredible strain when they were most needed, and it resulted in human suffering and preventable loss of life.

While we are still in the pandemic, asking our human service providers the front lines of caring for those most vulnerable of our neighbors to take an effective pay cut is the wrong takeaway from what we have learned during this pandemic.

I call on you, the council, not to do anything new, but to stand by the wise commitment many of you all made just three years ago to support our human service workers with inflation adjustments so that they can afford to do the work that they provide.

Thank you, Council.

Appreciate your time.

Thank you so much, Christopher Lampkin.

David, followed by Michael Melini.

Good morning, Michael.

Let's see here, Michael.

Looks like we have David.

Good morning, David.

Sorry about that.

Star six.

Unmute yourself, please.

There we go.

Hello, my name is David.

I am a member of the 1199 Northwest and I am a shelter case manager at the.

I just wanted to point out that, well, I wanted to state that I am here talking in favor of maintaining the inflationary adjustments.

That was something that we worked very, very hard for a few years back.

And to hear that that might get taken back and get removed from the budget is extremely disheartening.

So please, please maintain those.

It is incredibly meaningful.

The people that I work with are struggling just to get by.

I know one of my coworkers was driving around with a nail in her tire because she couldn't afford to get it fixed.

And she would just add air to her tire every day, just hoping that she didn't have a catastrophic failure.

Another coworker, despite having health insurance and dental insurance, has not had a cavity fixed for months because she can't afford the co-pay and has had tons of migraines and headaches from it and has been chewing on one side of her mouth for like going on six months now because we're just living paycheck to paycheck We are at the very verge of not being able to get by.

And if these contracts are not keeping up with inflation, we're just getting, we're just moving backwards.

We're making less and less every year.

So please, please keep that inflationary adjustment.

It's so necessary.

This job is hard.

Thank you very much, Wilson.

And please send in any additional comments to us, David.

Michael, good morning, followed by Katie Gendry.

Hi, my name is Michael Malini.

I'm a resident in District 3 calling in support of the solidarity budget.

The mayor's proposed budget should not support the spending of city resources on ShotSpotter, a surveillance technology that's proven ineffective and impermissible.

as evidence in court because it contributes to biased policing.

Additionally, parking enforcement officers should stay within the Seattle Department of Transportation to allow for greater collaboration with SDOT.

The mayor should not be permitted to provide funding for positions that SPD does not have any intention of hiring.

Additionally, the budget should support Vision Zero, which provides funds for new sidewalk construction, protected bike lanes, and school safety improvements.

and should defund sweeps of housing and campus and fund mobile pit stops and vehicle safe lots.

Additionally, all jumpstart funds should be retained for their intended use.

Thank you.

I hold my time.

Thanks so much for dialing in.

The next person is Katie followed by Jennifer Lee.

Good morning, Katie.

Council members, my name is Katie Gendry and I live in D6 and I fully support the solidarity budget.

Stop the sweeps by ending all funding that goes to traumatizing our unhoused neighbors.

Without shelter, people die.

The number of unhoused people dying continues to increase each year, and the city must end these deaths by stopping sweeps.

Shelter and tiny homes are not long-term housing, plus tiny homes are full.

Houseless people want to live inside stably and want to remain in their local community with their existing support network.

Sweeps are so expensive and make everyone in the neighborhood feel less safe because they worsen the conditions that lead to isolation, harm, and violence.

Sweeps disrupt the progress made by working with human service providers.

Defund sweeps of people living unsheltered and fund outreach and human services, harm reduction efforts, mobile health support, local med management, public bathrooms, mobile pit stops, and vehicle safe lots.

Where are unsheltered people allowed to exist?

As a human services provider myself, barely covering my bills, I'm very disturbed by the pay cuts to human service workers proposed in Mayor Harrell's budget.

Working in human services is an emotionally heavy and stressful job.

In a budget where police officers are being offered recruitment and retention packages, this legislation slapped to my face.

We are serious about ending homelessness and building up our communities.

We need to listen to the needs of unhoused people, and we need to pay essential workers more, not less, to support those needs, including those working frontline at shelters and treatment centers.

This is why I support solidarity budgets, pay increases, and retention bonuses for human service providers.

Stop the sweeps, defund SPD, and pay essential workers more.

Thank you.

I yield my time.

Thank you so much.

The next person is Jennifer Lee, followed by Felicia Owens-Parson, who is listed as not present.

Please go ahead, Jennifer.

Good morning, Council Members.

My name is Jennifer Lee, and I'm the Technology and Liberty Policy Lead at the ACLU of Washington.

We oppose the $1 million allocated to gunfire detection technologies in the mayor's 2023 to 2024 proposed budget.

These technologies are not effective.

They are costly to purchase and maintain, and they exacerbate police violence.

The 2021 peer-reviewed study of shot spotter use in 68 U.S. counties showed no reduction in firearm homicides, murder arrests, or weapons arrests.

There are no independent peer-reviewed studies of shot spotters accuracy.

In 2017, A ShotSpotter forensic analyst testified that the ShotSpotter accuracy claims were put together by ShotSpotter's sales and marketing department, not their engineers.

We also know that ShotSpotter has a close relationship with law enforcement that further makes it inappropriate to use ShotSpotter evidence in court.

A ShotSpotter expert admitted in the 2016 trial that the company reclassified sounds from a helicopter to a bullet at the request of a police department customer saying such changes occur all the time because, quote, we trust our law enforcement customers to be really upfront and honest with us.

The use of ShotSpotter has not been effective at picking up actual gunshots, and it's rather led to many false alarms that have led to wrongful convictions and deadly police violence.

In response to ShotSpotter's ineffectiveness and its proven harm to communities, many cities that have spent millions on this technology, including Buffalo, Charlotte, and San Antonio, have actually ended up canceling their contracts.

We urge city council to reject the use of gunfire detection technologies like shot spotter, which are not effective at reducing gun violence.

Increased surveillance are inappropriate to use in court and will cause further harm to communities.

Thank you.

I yield my time.

Thank you so much.

Next is I'm going to go to the next folks.

I'm going to actually list the next five people who are listed as not present and then we'll end with the two that are here.

If anybody hears their name and can still dial in, we will be happy to come back to you.

Folks signed up to speak but are not present include Felicia Owens-Parson, If you just heard your name, Felicia Patrick John, Bill Darren Salomon, please do dial in.

We're going to go to the last two that are listed to speak that are present.

And that includes Tiffany Coleman and David Hines.

Good morning, Tiffany.

Star six, thank you.

Good morning, committee members.

My name is Tiffany Coleman.

I'm a longtime resident of West Seattle, as well as a current firefighter for 20 years.

20 of 22 years 20 of them on engine 37 located in the south end of West Seattle serving the areas we're discussing today.

Keep in mind my proposal speaks to lifesaving actions non-discriminate to our communities and populations should a person become hopeless death or permanent brain damage is imminent outside of four minutes.

Fire growth becomes severe and greatest risk to occupants and firefighters within the first 10 minutes.

I appreciate District 1 was prioritized with the decision to place a ladder truss to the community fire station 37 in the High Point neighborhood and a medic unit fire station 26 in South Park.

I'm asking that you please continue to provide funding for these two units.

This southern area of West Seattle is one of the greatest largest response districts in the Seattle Fire Department already pushing out response timeframes.

Both units provide specialty skill and tasks to our area that cannot be performed by an engine company and are specific to a ladder truck or medic unit.

This delay potentially can be outside of life-saving minutes for medical calls.

This delay can also interrupt our task priority and ability to fight fire and risk firefighter safety.

I understand that though these resources were originally intended to stay in place through the bridge opening, I'm grateful they have sufficient funding to remain in place through the end of 22. However, this is not a sufficient commitment to these residents of West Seattle, specifically the underserved areas of Delridge, High Point, Highland Park, South Park, and Arbor Heights.

Without the ladder truck at Station 37, there's only one ladder truck to serve all of West Seattle.

Any major response to ladder trucks are dispatched per those calls.

extrication, fire-related research.

I'm so sorry that the time expired but please send in the rest of your comments and we definitely caught the gist of what you were getting through but please send that to council at Seattle.gov.

John Rios followed by David Hines.

Good morning John.

Hi.

I believe you all can hear me now.

My name is John Rios.

I am an intensive case manager for DESP's host program.

I'm calling in to talk about the budget proposals today.

My work specifically, I work all over Seattle from the south end all the way up to the north end, but I think most prominently is a lot of the work that we do on 3rd Avenue.

Over the last few years, we've definitely had a lot more increased attention.

and pressure on folks in the 3rd Avenue corridor to get them into housing and other services, which has been complicated by, of course, the pandemic and just all the issues that we're facing in the human services sector right now.

Right now, we have an incredible amount of unstaffed positions.

wages are incredibly low and about three years ago a lot of us came to city council to talk about the increases for inflationary or the inflationary increases and at that time it feels like that we had made a an agreement at that time that that was the least that we could do for our folks working in human services was to see some of those increases tied to inflation.

There's a lot of work that needs to be done right now as far as wages, but I want to keep this brief at this time.

I'm really concerned about right now the proposal to cap things at 4%, which is not what we agreed upon.

And in a time when all of us are struggling so hard, we're frontline workers.

We've been here during the entire time of COVID and kept working with very difficult populations.

It is extremely difficult to keep people stabbed and in positions when we know that what's going to happen right now being proposed is effectively a decrease in our wages.

So with that, I will go ahead and yield my time.

Thank you for dialing in.

David Hines, you are listed as the last speaker present.

Good morning, David.

Thank you, David Hines.

We have a public safety crisis exacerbated by City Hall policies still exempting evil drug pushers from jail if they have under 3.5 grams.

And we have a homeless crisis with compounded exponential suffering caused by City Council's racist skin color policies of discriminations and misjudgments purposely not helping innocent law-abiding house of citizens while prioritizing BIPOC repeat offending criminals, given the motel housing and services first, instead of improved jail, resulting in three George Soros funded nonprofits co-opting our criminal injustice system, squandering a majority of the homeless public safety money given to just care lead and public defender, spending $120,000 per repeat offending criminal while council and nonprofits refuse to invest $20,000 each, helping innocent, law-abiding, forsaken citizens.

Yet City Council continues to pay off George Floyd and Black Lives Matter protesters from last budget, pocketing $60 million for unqualified alternative policing and misinterpretation of equity.

This year, during election season again, they're going to get the same $60 million.

yet that money was originally earmarked for homeless crisis where all these people are still suffering with no capacity.

The only capacity council cares about is building community loyalty.

Now our budget process needs to have an investigation of the CBO offices because it seems like they're trading favors, helping council's personal agenda while not being fully transparent with the spending allocations, using words to describe what and who was pocketing the money by saying, et cetera, et cetera, et cetera.

Censoring and hiding from the people this corrupt, treasonous, racist budget process with the same failed spending policies doubling down, gambling with the futures, proving this council is a threat to real progress and proper policy.

Please resign.

You've ruined this city and...

All righty.

With that, I don't see anybody else sign up for public comment that is present.

Thank you all for dialing in today.

I appreciate that so many folks dialed in remotely.

That is what we are strongly encouraging given Dr. Khan's opening comments about the ongoing pandemic.

We do want to make sure that we continue to hear from folks, though.

That is why we have identified five opportunities for public hearing only.

So today was an example of our condensed public comment period.

We have committed to starting out each week that we meet with at least 90 minutes of public comment to make sure that we get through everyone.

We have gotten through everybody who signed up for public comment today.

And we will continue to have extended public comment at the beginning of our meetings that are noted on the public the public comment summary document that communications has posted on our website, we put on our social media.

So again, this evening, we do welcome public comment.

It starts at 5 p.m.

We are encouraging folks to dial in remotely.

There will be the opportunity for folks who do want to testify in public to come.

If you are signing up remotely, you can start signing up at 3 p.m., two hours prior to the hearing.

and we will actually start with the first 10 people who have dialed in remotely.

Then we'll go to the next 10 people who are in the room.

For anybody who wants to sign up and provide public comment in Chambers, you can sign up starting at 4.30 p.m.

outside of Council Chambers.

As a reminder, the rest of this week, we will have written public comment only, and you can always send us comments to council at Seattle.gov.

We have postcards that are placed outside of the council chambers as well, and at the front desk of City Hall and our legislative department to receive your public comments if you come and would like to write us a note instead.

This is our way of trying to make sure that we hear from everybody, but that we also protect everybody's health and safety.

So again, in-person sign-up starts at 4.30 p.m.

Those who are dialing in remotely online starts at 3 p.m.

Just by way of reminder, apologies to those who might have asked us earlier from different offices.

The public comment for the upcoming public hearing starting at 5 p.m.

We will make sure to get through everybody who's dialed in.

Again, I'm going to call on the first 10 speakers remotely, then the next 10 people in person.

I'll call on people in the order in which they are registered on the council's website and in person on the paper as well.

I will rotate between the online groups and in person in groups of 10. As I noted in my comments in briefing and in the Monday memo, that we send to council.

There is not an opportunity for group testimony this year.

Given the remote nature of our hybrid meetings, we do need to treat everybody equally.

So since there's no opportunity for remote group testimony, we are giving everyone the same amount of time, either online or in person, but there's not an opportunity for group testimony.

So please do dial in.

Of course, feel free to sign up in the order in which you prefer if you'd like to have sequential comments.

If you do not have a mask in council chambers, we're gonna encourage you to wear one.

We will have masks available on site.

And I wanna make sure that folks know that all of the mics will cut off after the allotted time.

So everyone will have 10 seconds timer to wrap up their comments, whether they're in person or on the online platform.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot of people on the phone.

We have a lot public comment period.

We will have a public comment period in the room.

So again, that will help us make sure we get through everybody and please do feel free to raise your hands in support if you are in the room.

But there will be no applauding or booing.

I look forward to hearing from everyone this evening who is going to join us for our public hearing, one of three public hearings solely dedicated to getting comments from the public in that we're going to be doing in the next couple of days.

And then we're going to be moving forward to the next committee meetings.

Okay.

Colleagues, I also want to remind you that as we head into these deliberations that are coming up about the base understanding of the budget, the revenue streams that are being used, how the not only biennial budget but the six-year financial plan is being configured as we go into the department discussions over the next three days, a reminder that amendments to the Please do make sure that you are discussing ideas with central staff as soon as you can so that when you submit your amendments to central staff with two co-sponsors, they have a general sense of what you're seeking and can brainstorm with you in advance if possible.

With that, our public comment for today.

Let me just double check that nobody else signed up.

Okay, great.

Our public comment for today is now closed.

Madam Clerk, we're going to move on in to items listed on today's agenda.

We're starting with item number one.

Agenda item one, introduction and budget hearings overview.

Wonderful.

Thank you so much.

for our introduction and budget hearing overview, we do have with us Director Esther Handy, Deputy Director Ali Panucci from Central Staff.

And colleagues, I want to thank you again for your participation today.

We are going to go over the Central Staff introduction with the Director and Deputy Director and get right into the balancing related to our funding policies.

This is an opportunity really to orient ourselves to this week.

We'll be unpacking the general fund and the general fund adjacent revenues in the afternoon.

And throughout today, I want us to be thinking about the financial stability of not just the biennial budget, but the upcoming six years.

We've spent a lot of time talking about how we got to this place where jumpstart progressive payroll attacks.

The American rescue plan, the federal coronavirus local relief fund have been used in the last two years as we have sat in this chair as, sat in this position as chair of the budget committee to make sure that we've protected against austerity, protected against cuts, and we need to figure out the long-term stability for our city as we also craft a stable two-year financial plan.

So this morning, we'll have a chance to get into those details about what is being proposed.

And this afternoon, we will have more of an opportunity to look at the general fund adjacent revenues, including the short-term rental tax, the transportation network company tax, and the jumpstart payroll expense tax.

we're going to move on to the next item.

Central staff has begun identifying issues for discussion in some cases there are options for us for consideration.

You do not necessarily need to weigh in with specific priorities at this juncture.

We are all in absorbing mode for sure.

This is the first of our four-day deliberations but central staff has begun to identify issues for our We will be taking a break every day from 1 to 2 p.m.

for a lunch break and many of us It is also my goal to make sure that we get out of here by 5 p.m.

each night.

Many of us have other obligations in community with family and friends.

So we want to make sure to keep those.

And for anybody who is dialing in again remotely this evening, we're going to try to end our conversation today at 4 p.m.

so that there's an hour break between today's deliberations and the upcoming public hearing starts at 5. Welcome, Director Handy.

Thank you for orienting us to the conversation when we met on September 28th.

You started with a series of questions that you'll be looking at, and I really appreciated those because those questions were rooted in what the council, the executive branch had codified in statute, priorities that have been put into law that mirror our values and we're going to be able to do that.

And I think that's where our discussions, our deliberations should really center around in terms of how the resources are And now we're going to walk through fundamentals of the budget as proposed so we can have a grounding before we head into the departments.

I'll turn it over to you for a quick orientation as to where we are at in our deliberations and appreciate you being here with us and your team.

Thank you.

Thank you, Budget Chair Mosqueda.

Good morning, Council Members.

Esther Handy, your Central Staff Director.

This week we kick off our budget hearings where we are going to hear from both city departments and your central staff team about the details of the 2023 and for proposed budget.

As we kick off, I want to just start with a thank you for my team.

This team includes 16 incredible analysts who over the course of the past 10 business days have reviewed the entire $7.4 billion proposed budget.

They have authored 35 budget overview papers and detailed appendices.

And I am incredibly proud of the work that they have done.

Hattie, if you want to go to the next slide, I just want to pull up their names.

You will see them online throughout the week.

And I just want to take a brief moment to acknowledge them up front.

From our infrastructure team, Brian Goodnight, Calvin Chow, Lisa Kay, Eric McConaughey, Tracy Ratzliff, our land use and labor team, Yolanda Ho, Karina Boll, Ketel Freeman, Jasmine Marwaha, and Liz Whitson.

The Community Safety and Health Team with Asha Venkatraman, Greg Das, Amy Gore, and Ann Gorman.

And finally, our incredible budget team led by Ali Panucci, our Deputy Director, our two analysts, Tom Mikesell, and our newest analyst, Eden Sissett.

And finally, Patty Wigrin, our executive assistant who has done just an incredible job this week taking all of these materials, getting them agenda ready both for council members and the public.

Thank you to our team.

I also want to thank the analysts and the leadership in the city budget office and in department finance staff who have fielded literally hundreds of questions from our team.

They have sat patiently with us on calls and provided detailed responses in writing to many of our questions, If you are on the line listening, we appreciate you and our work would not be possible without your partnership.

These last 10 days have been a sprint.

And I'd like to say that the work in front of you today and this week, it is not perfect, but it is rigorous and it reflects our best understanding that we have been able to develop in that time.

So today, today we are going to look at a close look at the general fund.

Our goals of today's discussion are first and foremost to understand the nature of that $141 million operating deficit.

We then would like to define the strategies that have been used to address the deficit in the mayor's proposed budget, looking at two broad categories.

First, the structural approaches.

Where have items been cut in an ongoing way or where are there changes proposed to revenues or fund policies that permanently impact the budget.

And the second category are temporary strategies for reductions, vacancy savings, sort of belt tightening to balance in 23 and 24. We will build this analysis through the morning in our presentation with the hope of landing at uncovering the future year impact of the structural deficit and how the proposed strategies impact that.

And our hope is that spending a full day on this today is that we set the context for department and programmatic specific conversations that follow this week.

Before we get into the details, I'll give you just a brief preview, a couple spoilers on this next slide.

The first is that like last year, without the jumpstart payroll expense tax revenues, you would be receiving a deep cuts budget.

The second is, as we build our analysis and share today, the general fund structural deficit continues to grow in the out years and without more substantive changes or a new revenue source, we will continually be having this conversation.

And finally, and we mentioned this to you often, There are not easy answers.

There is a trade-off to every balancing strategy that the Mayor and City Budget Office have done in their proposed budget that you will also face.

As you think about those hard trade-offs, I remind you that it is the Council that has the final call on how to prioritize resources amongst competing needs in your adopted budget.

Ultimately, this budget process will come down to your choices about policy priorities.

And as you think about those priorities, I'm just going to put up on the screen the same questions I invited you to consider last week about some of those priorities you have collectively set through legislation and work as a council.

Does the proposed budget use a regional solution to serve houseless individuals and families?

Does it maintain a clean city with accessible parks and open space?

Does it support a public safety system that recruits and retains our public safety workforce?

And also, does it advance a reimagining of policing with a larger civilian response network and new alternative 911 responses?

Does the budget advance a Vision Zero transportation strategy that invests in our core road and bridge infrastructure?

Does it invest in partnership with local tribes?

support our Native communities, and care for our most vulnerable residents, as well as those that offer frontline services to them.

And of course, as you think about your priorities, does the proposed budget advance the initiatives you have legislated through committee work this year?

I'll turn it over to Allie to remind us of the process, and then Allie and Tom will walk you through the details.

Thanks for your time today.

Thank you, Director Handy.

Good morning, Chair Mosqueda, council members.

I'm Ali Panucci of your central staff.

Today, as Director Handy and Chair Mosqueda have described, we're on step two in the budget process where we will present our analysis of how the general fund balances and then move on into department-specific presentations.

If we can move on to the next slide.

This just outlines the departments and topics that will be covered for the rest of the week as Chair Mosqueda described earlier this morning.

This is not covering every detail of the proposed budget but rather highlights where there are key changes and areas where central staff through our work with all of you throughout the year And in the last two weeks have identified issues and identified potential options to help inform your decisions about whether to accept or reject the mayor's proposals.

This reflects a tremendous amount of work by our incredible team of central staff analysts to unpack a 700 plus page proposed budget, along with numerous technical documents to highlight these key issues.

And we look forward to continuing those conversations throughout the week and over the next six weeks of the budget process.

If we can move on to the next slide.

Coming quickly on the heels of these budget hearing discussions will be discussion of council members proposed budget amendments.

Those amendments will be discussed October 25th through the 27th.

Just as a reminder, any item you want considered for inclusion in the initial balancing package needs to have a budget amendment request submitted.

I won't go into those details as Chair Mosqueda covered that earlier in the day.

I'd just like to take a moment Before we move into the main show for today, I want to second the appreciation for the City Budget Office offered by Director Handy and for our entire central staff team.

The work to develop the proposed budget by the City Budget Office and then the work of the central staff team to unpack and prepare these detailed papers.

Exactly two weeks from the day the proposed budget was transmitted is a big task.

And I'm just endlessly impressed by the thoughtfulness and commitment to public service that they all bring to this work.

And then finally, I just wanted to thank Director Handy specifically for her leadership and encouragement to do the work and endless optimism that makes it easier to show up and do this work every day.

So with that, I think I will turn it back to the chair as we move on to the next agenda item.

Okay.

So that was a short overview of where we are at in the process.

Does anybody have any questions about the agenda and the timeline before we dive into the slides?

All right.

Sounds good.

Well, I appreciate all of the thanks.

As the Council President knows well, I really do want to make sure that we honor the work of our teams that are doing this and I choked up a little bit walking into City Hall today because somebody stopped me on the sidewalk and said, Council Member, I just want to thank you for your service.

Started crying a little bit because these are tough times that we're dealing with, folks.

So I want to thank all of you for your service.

And as Allie and Esther noted, really thank the central staff and the city staff, including the city budget's office, for all of the work that they've done.

In this process, we're going to have lots of opportunity for questions.

There's going to be many concerns that come up and many positions that might put us in.

the city of Seattle.

I know we have a lot of contradicting positions within our colleagues, but I think folks know here well that all of this is done in the service of the city trying to make sure that everybody has the resources that they need and that we are creating a more stable and equitable Seattle.

Thank you all for your work on this to the city family and to the members of the public who Madam Clerk, could you read?

Are we going into the next agenda item or are we still on number one?

Agenda item two.

Agenda item two, general fund balancing and related fund policies for briefing and discussion.

Okay, great.

Let's go ahead.

Esther and Ali, Director Handy, Deputy Director Panucci, please take it away.

Thank you.

I think we have outlined sort of the general plan for what we will cover today.

So I think we can just jump right in and I will turn it over to my colleague, Tom Migzel, to kick us off.

Thank you, Deputy Director Panucci.

Good morning.

Chair Mosqueda, members of the Select Budget Committee, as described in prior comments, we are going to cover in this series of presentations this morning the general fund financial planning analysis.

And then I believe in the afternoon we'll cover related fund policies.

All of this work is captured within a detailed memo that was distributed yesterday and as will be provided with the agenda.

And I'll make references since there is a great amount of detail that is impossible to cover within the limited time.

I'll make references to the page numbers in the memo where where they apply.

Wonderful.

Thank you, Tom.

And I'm just wondering as well as we We have so much appreciation for the work of Tom Mikesell in our office amongst the city council members and staff for the detailed analysis that he's brought to unpacking the budgets in the past.

I want to just say how important this foundational memo is.

If you haven't read the first 34 pages, please do take the time to read it.

If not today, then later it will be important for our deliberations going forward.

And then in the PowerPoint presentations, maybe in the future, if we get the chance to cite the memo page number on the PowerPoint slide, that'd be helpful too.

But thank you for noting that as we walk through.

And thank you for all of the work that you've done throughout the last two and a half years that I've been in this seat.

And especially starting on May 4th, when we really had an opportunity to walk through unpacking of the revenue projections.

And this is another great example of a central staff memo.

So I just wanted to prop that up and encourage folks to read it if they haven't yet.

Thank you.

Thank you, Chair Mosqueda, for the warm comments.

And I'm happy to add value to the process for this budget process and for all prior budget processes.

So with that, if we could go to the next slide.

So this is just a high-level view of the various pieces that are covered in the memo and will be covered this morning.

I'm going to talk about where, as Chair Mosqueda alluded, that we really started looking at the general fund financial gap in May of this year and discussions with the Finance and Housing Committee with a follow-up in August, right ahead of receiving the proposed budget.

We'll cover where we were before the budget was proposed.

Then we will take a brief tour into the final adjustments for the current 2022 budget because those adjustments have bearing on financial status going into next year's budget.

Kind of spend a bit more detail on looking at the high-level changes and the broad moves ongoing, one-time revenue and expenditure, excuse me, in the mayor's 2023-2024 budget proposal.

Then extend the analysis out to future years to kind of close the loop on the financial sustainability discussions that were started on May 4th and are continuing today and through the upcoming process to kind of show an update on how the sustainability is essentially made a little bit more difficult.

And then cover, I believe later in the afternoon, some other fund policies that are related to the general fund financial planning, but also are important within the context of those funds themselves.

So if we could look at the next slide, we'll dive into the details.

So this represents the financial plan table that will be familiar to those on the Finance and Housing Committee.

We have also shared to the broader council as we've had the discussions during the year with regards to financial sustainability.

The numbers that you see right here represent the update that was provided at the Finance and Housing Committee on August 17th.

It included the latest update on revenues that we received from the City Budget Office and the Office of Economic and Revenue Forecasts that were also presented on the 17th.

The presentation that that we covered not only covered the upcoming two years of the budget, but also the future years to give a view into future sustainability.

This table includes a lot of numbers.

I'm not going to go through a lot of the details as we move along, but really talk about the key performance indicators, I guess, for lack of a better term, for the committee to consider when reviewing the budget.

And these are the figures that are highlighted in blue One is the operating surplus deficit, which is the difference between ongoing, so the annual regular revenues that the city receives and the expenditures against those revenues, as you can see, and as was discussed at committee, that number was negative.

And then finally, the ending unreserved fund balances, which is the level of resources that is remaining in the fund at the end of each year.

So it takes any amount of starting balance that was available adds in the revenue, subtracts out the expenditures, adjusts for reserves that are not part of the appropriated budget, and gets to the bottom line.

And as you will recall, there were reports, and based on this material, that the 2023 budget was projected to have a $17 million ending unreserved balance and a $443 million ending unreserved balance at the end of 2026. So definitely indicators of an unsustainable financial plan.

And the next slide, I think, makes this point even better, which is a comparison of the lines of expenditures and revenues.

And at that time, we illustrated that there was about an average operating gap of $142 million in every year.

So that's the kind of broad context.

If we can go to the next slide, there are just some key technical details that are covered in the memo.

And I will give you the page reference.

Page five, thank you.

So page five of the memo.

So in order to really highlight the sustainability at committee, the staff, I have made some adjustments to some of the numbers.

using the exact same information that CBO uses, but reorganizing the display.

And this relates to just basically how revenues and reserves are treated in the financial plan.

So what you see before you on the screen now is the CBO format for the financial plan.

So it's the same numbers, it's just reorganized slightly.

And the difference is going to be really shown in the operating surplus deficit, which is the comparison between revenues and expenditures.

And I'm showing you this because the remainder of the presentation will be using the CBO format for display, because that is how the budget is received.

And there are critical details, particularly with regards to the treatment of reserves, that means using the central staff approach wouldn't be effective.

And if we could look at the next slide, I'll show you the lines that are changed.

So if you recall, I indicated there was $142 million average structural deficit indicated by the operating surplus deficit row.

So this number in the CBO format is significantly lower.

And the reason is, however, the ending unreserved fund balance is the same.

And if we can go to the next slide, you'll see what the adjustments are.

The adjustments are how non-appropriated reserves are treated between the two different plans.

In the CBO format, growth in some key areas of general fund expenditure, notably labor costs, are put into what's called planning reserves, which is a non-appropriated item in the financial plan, so not part of the budget adoption schedules that are submitted to the council.

However, they certainly represent elements of growth and to really get a good look at sustainability, those amounts need to be considered against the annual revenues that are collected to support them.

And so you can see the comparison between the expenditures and in the CBO plan versus the central staff plan.

They're higher in the central staff plan because I adjust the reserves line to show those amounts as expenditures because they are key elements of demo fund growth.

So at the bottom line, there's no difference in the plans.

The underlying outputs are the same.

It's just really a technique to highlight the sustainability in a better, in my opinion, better way.

So with that being said, no more.

Super technical things I just had to point that out because because it is an adjustment that is sort of a.

Translation between are we how we're looking at these numbers during the year finance committee and the numbers that we're going to be looking at and contrasting changes in the budget against.

Okay tom let's pause here for a second because I don't want to get this point to get lost.

And for folks who are following along in the memo, we're on page number six, looking at the summary takeaway here.

The reason that I think that it's important to pause here is because for the last four or five years that I've been on council, there's this constant theme that comes up when there's concern around maybe unknown amounts for future bargaining or unknown amounts for future liability.

And the message that I've received repeatedly was, don't worry, it's in the planning reserves.

I think it is very important, I think, for us to pause here and understand the advantages of breaking out the planning reserves in the way that central staff has in this memo.

I think it will be very informative for the next four or The difference between the CBO format shows significant elements of general fund growth, particularly in services for personnel.

Employee wages, salaries, and benefit costs as a cumulative increase to the planning reserves instead of showing these as projected costs as expenditures in the year that they are added to the plan.

So it's clear that we know we need to account for wages, salaries, benefits, other items that we think are on the horizon that we need to plan for.

that's not included in the above the line expenditures that we're going to be spending a lot of money in these planning reserves, it's important that we're drawing this out, that central staff uses this alternative format to better identify issues of financial stability, i.e., what's actually going to be spent in this biennium and in future bienniums.

Tom, could you elaborate a little bit more about the benefits of drawing out this model

The key benefit just from a, uh, uh, perspective of understanding the city's finances is that it allows the, the building of the chart, um, that we saw a few slides earlier, um, that compared revenues and expenditures.

If you use the expenditure line from the CBO, uh, financial plan in that, in that type of a chart, you're going to see a much lower expenditure total.

which compares against revenue and shows a much smaller gap.

But you're leaving out then these key pieces of growth, which are in the CBO format shown as a below the line accumulation of reserves.

And it's important for me to note that the CBO's plan does account for those elements of growth.

It's just a matter of display at this stage.

Though there is concepts that I'll cover later in the presentation whether or not there are other other possibility a possible ways to structure those reserves, which would include not to not to spoil the presentation, but would include appropriating some portion of that amount building that those those annual increases in reserves as part of the budgeted appropriation and the year that they get that they're shown in the plan because currently.

The budget as proposed does not include them in the budget appropriation request.

They are shown below the line as a reserved amount.

So it's really that.

It's a display ability to better understand sustainability and then further whether or not the adopted budget should truly match what the expectations for expenditure are in that particular year.

we're going to move on to the next slide.

Thank you so much.

Thanks for drawing that out.

I think it's a really important point.

Again, the CBO model will be used for the rest of the central staff presentation here, but just know that the analysis that central staff has at their fingertips will be to help us understand what is included or what needs to be we're going to go ahead and move on to the next item.

Just in terms of defining Tom, I just wondered when we look at the term non-appropriated reserves, is that a combination of planning reserves and expected or assumed underspend?

Is there anything else that makes up non-appropriated reserves in its definition?

And then there is the financial plan, which includes the submitted appropriation amounts, and then as well, an underspend assumption and accumulated reserve balance, both of which are not included in the formal budget adoption schedules.

So those are the key pieces, and I'll talk about them further in the presentation.

Great.

And then just my final question for orientation purposes, if we look at the previous slide, I spent a lot of time trying to explain to our friends, stakeholders, members of the public, the operating deficit that we are walking into, 141 million for next year, 152 million for the previous, for the following year in 2024. Can you help us understand a little bit more about this bottom line number?

we have the same numbers as the ending unreserved ending fund balance because no matter which way you slice it as you noted for the operating deficit, we still have the

Thank you.

And if we could perhaps move to, this is the CBO format, and I think the point is better highlighted with the central staff format.

I believe it's prior slide.

There we go.

Thank you.

So how it all ties together.

The operating surplus deficit row really only looks at the money coming in each year and the expenditures that are going out each year.

And in this format, the expenditures going out each year includes the planning reserves that we've discussed this morning.

So that's that metric.

It's kind of like a sustainability.

Each year when you operate, do you generate more or less money than is needed to fund those operations?

The bottom line number, the MD9 reserve balance, really is looking at each year how much money is available in the fund to be spent.

And we'll cover some of these concepts a bit later in the next few slides.

But a big piece of the financial plan in this display and in the post-budget is the starting balance.

And so the starting balance is just a block of cash that's in the fund that's unobligated and it's available to be spent.

I lost the presentation view.

Okay.

And so as you can see, there is starting at least in the August 17 display, a $184 million of just cash in the fund that is available to be spent.

And so if you work in the 2023 column down, it was predicted to be about $1.5 billion of revenues, 1.7 million dollars of expenditures, there are, which would lead to an ending budgetary fund balance.

So this is the, you know, taking the revenues annually from the expenditures annually and calculating that difference.

And then adding in a planning reserve assumption, which is essentially the amount that was held in 2022's budget.

And then after all that is said and done, you end up with $17.4 million in the fund balance.

So essentially the difference is the operating surplus deficit really compares just annual ongoing revenues and expenditures.

The ending unreserved fund balance takes into account whether or not how much money you start the fiscal year with.

And so that's key to why there's a difference between the 141 and the 17 is because this implies that the budget is spending down all of that $184 million that the fund started with in 2023. Excellent.

Thank you.

I don't see any additional questions.

We can keep going.

Thank you.

So I believe we were just going to head into a final recap of 2022. So this is covered in section 3 of the memo, pages 7 through 9. And this table collects various pieces of kind of final adjustments for 2022 that have an impact on, you know, now it's useful to say it had an impact on how much cash we start 2023 with in the proposed budget.

So there are a number of standalone adjustments that have already been adopted subsequent to the August 17th presentation.

In total, they added $1.3 million of new revenue.

There was about a half a million dollars in the new expense.

So that actually had an advantageous impact on the surplus deficit and the ending fund balance.

So those bills have already been approved.

They're noted in detail on the memo.

The next column, working from left to right, is proposed supplementals.

So these details summarize at a high level the proposed supplemental grants and appropriations bills that were submitted as budget legislation with the mayor's proposed budget.

So these are the final grant acceptances, which are included and detailed on attachment A to the memo and the final kind of high level budget expenditures, which are highlighted on page eight.

In total, These spend a net $33 million of money.

So expenditures are $33 million higher than the revenues that are coming in.

And the revenues are largely grants, which decreases the ending unreserved fund balance.

And I do see a question.

I don't know if I should go.

Yeah, that sounds good.

Are you done with the summary of this slide?

I would just like there's only one final piece.

And that's an important piece.

I can I can address it fairly quickly.

And this is in the other category.

And this is, you'll see in the expenditures row, a $20 million reduction.

And so this is covered in the memo, it actually shows up not only in 2022, but in 23 and 24 of the mayor's proposed budget, this is an underspent.

So What this represents is not a budget cut, but rather an IOU or a commitment to come in $20 million under the adopted or revised, I should say, 2022 budget.

For 2022, you will recall there was a list of items, and they're included as attachment B with the memo, of various programs and ads that were added, largely representing items added by council that were held for expenditure during this year.

So these were items that were included in fall 2021. However, no monies were spent on them.

And it's indicated that that list will largely represent this underspend commitment or this IOU to come in under budget.

And then finally, there are some adjustments to the planning reserves that we have discussed that we can't really go into much detail on those, but they do actually reduce the amount of the plan of reserves in 2022. And much of it is to support items that are being spent in the proposed supplemental column.

So with all that detail, the key indicator of this table is what it does to the resources that are available for expenditure beginning in 2023. And I think the next slide does the work of really highlighting the number to pay the most attention to, you know, in understanding the kind of decision around the proposed supplementals and the other adjustments is that at the end of 22, there will be $171 million rolling into 2023 for appropriation in the budget.

And so that does, that covers the details of this table.

Okay, thanks so much.

So colleagues, again, we're on section 3 of the memo, pages 7, 8, and 9. Councilmember Nelson, I saw your hand first.

I retract.

Thank you.

Oh, okay.

Thank you very much, Councilmember Nelson.

Well, I have a number of questions.

I have a number of questions about the concept of an IOU in a budget.

Can you tell me where you've seen this type of budgetary strategy used in the past, if at all, Tom?

In terms of having just a broad number, I'm not necessarily familiar with it.

What I'm more familiar with is a more detailed department-level review of expenditures.

So as part of the budget request asking each department to to indicate where they are with regards to their spending projections for the year, and reassess those expenditures in work with the central budget office, and essentially say, we at a department level are going to spend $500,000, let's just say, less than the adopted budget.

And then through that kind of more detailed departmental work, come to an underlying estimate of what resources would come available.

It's not so much that that reassessment of budget to actual spending isn't normal.

The key is that there is not necessarily, particularly with regards to 23 and 24, which we'll discuss a bit later, there's not really a formal plan of how that number is going to be impacting individual departments.

And as I noted, for 2022, there is the list and it's largely representing council ads from the in the 2022 budget.

So in that sense, there is some form of a plan, though.

It's not clear, particularly for 23 and 24, how the underspend will be met.

And it's not a budget cut.

It's just really a commitment that spending will come in lower than budget.

I think that's all I have to say.

that included a number of council priorities.

I think that there was a good faith and honest effort with the executive to try to identify a handful of priorities, especially priorities of council that could potentially be put on hold given the budget crisis.

I think the question that we're going to all have to grapple with is those priorities totaling up to 20 million, squarely being council priorities being put on hold, we're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

Yeah, I'm sorry, but so this 171, that is what we then start 2023 with, right?

Right.

Well, then what happens?

What happens to our operating deficit of one hundred and one?

Because if I look back on on slide two, the 20, I realize this was the August 17th projection, but same thing there's a there's an ending budgetary balance in this case of 184 which then goes to the top you know that's the starting budgetary balance but we had an operating deficit of 89 million then so how what's going on with our deficit every year how can we

Well, I would just note that the 2022 number is the revised budget number.

Yeah, I get that.

Right.

And so it's really kind of not indicative of the future sustainability because you need to look in 23 and 20 and beyond.

Will the starting budgetary balance of 2023 be

171 million.

Correct.

Yeah, and we will cover that in, in, in the next few slides.

All right.

I think you understand my question.

Yeah, or I'll let me give it a shot Councilmember Nelson.

I think that one of the important things with this ending fund balance or the starting fund balance is this is representing in most cases one time resources from underspend or revenues coming in the previous year over the budgeted amounts.

and carry forward in that sort of thing.

What we are seeing happening in the long-term plan is that as there are decisions to sort of reduce some baseline expenditures in certain areas, accept all vacancy savings in the proposed budget, that there is less likelihood that we'll have such significant amounts of underspend or revenues that come in higher than projections that are available to balance.

That's why you see in 23 about a $17 million problem at the end of the day that we discussed in August, but it gets much worse in the long-term.

We can balance 2023, but it gets more difficult in 24 and 25 because we've depleted that large one-time fund balance to balance 2023. Does that help?

Great.

I'm seeing nods and thumbs up.

Okay, great.

Thanks for the clarification.

Let's continue on.

So now we're going to jump into discussions of the actual proposals for 23 and 24. And this starts on page 10 and goes through to page 12 of the memo and covers the revenue changes.

And so the numbers are gonna be in the context against the baseline financial plan that was discussed in August that were indicating the projected deficit in those discussions.

So the first are fairly some smaller magnitude changes, some really just technical items based on FAS's work, items that really should have been included in the baseline forecast, but weren't.

That's 1.6 and 23 and 1.9 million in 2024. There were also some expenditure, some revenue increases that are packaged with expenditure increases.

So this is going to represent some grant funds that are received in the mayor's office that are then supporting programs, as well as some support for animal control officers in the general fund and FAS that are supported with transfer from the Seattle Parks District.

So that's the revenue and to support a higher expenditures.

And then finally, and this will be covered in more detail later on in the discussion about other funds, there is about $2.1 million in both 23 and 24 that are generated from increasing the administrative fees for the short-term rental program and the transportation network company program.

And so those costs right now are currently covered from other general fund revenues.

And so these increases would increase the cost of covering the program.

And if we can look at the next slide, we'll cover the kind of the more significant moves.

So within the kind of higher level budget changes, $94.6 million and $93 million are around different treatment of the jumpstart fund transfers to the general fund.

These are done, well, the first two are largely Um, done within the allocation of the jumpstart funds use for administrative program costs, which are 5% of the jumpstart resources.

Um, the first is a $3 million transfer in that is intended to support existing costs in the city.

Um, and so it's, it's, they're not specifically detailed, but it's part of our, our sort of normal.

Um, administrative costs in the city and they will be, um, rerun the rate models to determine where those civic costs are.

specifically allocated to address those underlying GF costs.

The next piece is actually an increased transfer in to support new administrative costs that are added in detail, I believe, in attachment F of the memo.

This is $5.8 million in 23 and $6 million in 24. And each of these supports new programs in each year of the biennium that are then supported with this transfer from the Jumpstart Fund.

And then the final change is a transfer from the jumpstart fund to the general fund for a revenue backfill.

And so I think in the prior discussion, the prior question from Council Member Nelson, this is one of the key differences is that in the 2022 budget, jumpstart fund was including, was transferring resources under the existing policy, which allowed a level of jumpstart transfer at a certain general fund threshold.

However, that threshold had been met for 2023, and so that transfer would go away.

The proposed change in budget legislation submitted by the mayor would, and we'll cover this in a bit more detail on the next slide, would make a policy change to allow for a level of transfer to continue.

In terms of the budget, the transfer at one time of $84.1 million in 2023 and or $85 million in 23 and 84.1 in 2024. However, the actual proposed policy change is slightly different than the way the numbers are applied in the budget.

We can look at the next slide.

We'll talk a bit about the differences in that and how the numbers are used versus how the proposed change is applied.

So if we could turn to the next slide.

Are we on the right slide, Tom?

No.

Is this the right slide?

Maybe the prior slide.

OK, here we go.

Thank you.

So this just goes into a bit more detail on the Jumpstart Revenue backfill transfer to the general fund.

So the proposal that's submitted with the budget would change the ordinance to allow for a transfer to continue in 23 and 24. And frankly, the proposal would make that change permanent, and it would then tie that transfer to inflation.

Later on in the presentation, particularly with regards to the discussion around the Jump Start Fund, there will be more detail provided about the specific numbers.

However, I just know at a high level, the numbers that are included in the budget for 23 and 24 are lower than what would be allowed.

by the policy.

Essentially, the inflation adjustment is greater than what the amount that's budgeted in the general fund in the proposal.

That's lower than what would be allowed for in the proposed policy that the mayor has transmitted to council to go along with this proposed budget, correct?

Correct.

The actual dollar amount is lower in 23 and 24, and the proposed policy change in the proposed ordinance would allow that to continue in future years as well.

However, in the budget as submitted, they've only programmed that on a temporary one-time basis in 23 and 24. And there's a part of issue identification.

We'll discuss alternatives to that approach.

But that's how it's packaged at this time.

And I've just pointed out for the benefit of the committee The reasoning for the need for a backfill transfer to the general fund is largely due to shortfalls in some policy-related revenues.

And really, these bullets here, and as included in the memo, are just lifting information that was provided by the Office of Economic Revenue Forecast and CBO when they presented their forecast to the Finance Committee in August, and talks about the areas of the general fund revenue portfolio that are lagging.

lagging behind because there are some categories, sales taxes and B&O taxes in particular, that are actually outpacing forecasts that were available prior to the pandemic.

But these categories, which represent a fairly large share of the budget, include property taxes, which are really not grown by inflation, but rather by a policy constraint in state law that limits it to 1%.

plus the value of new construction.

So it's not necessarily consumer inflation that drives that growth, but rather that growth in new construction.

And then permit fees, service charges, and other revenues, which are about 14% of the revenues.

And these are really driven by policy factors, things like cost recovery, minimization of collection of late payments and things of that nature.

So So they're not really also, I mean, they can be driven by policy, by inflation, but though that inflationary adjustment would take place largely through some policy change to the level of fee being assessed.

And then similarly public utility taxes, which can grow by inflation, but it's an indirect method through growth in the policy decisions about rate choices that are made for utilities and city like Seattle Public Utilities.

So they're not really directly linked to inflation.

Making the change as opposed would be then applying by way of this transfer, a kind of standard inflationary adjustment to the jumpstart transfer to remedy some other structural stability issues in the revenue portfolio that are not linked to inflation.

Not that it's inherently a bad thing.

It's just a sort of a, correcting one problem with a different solution.

But it is certainly an approach that can be taken.

I just wanted to point out what's going on under the hood.

Thank you so much, Tom.

And we are going to pause here for questions.

Colleagues, again, this afternoon, from 2 to 4, we will spend a lot of time going into the details of what is being proposed, either to fundamental changes to spending plans codified and corresponding with revenue streams, including jumpstart progressive payroll tax, the transportation network company, TNC tax, and the short-term rental tax.

But I do want to pause here for some questions just so that we understand what is being summarized in pages 9 through of the memo.

And we'll have a lot of time this afternoon to get into some of the maybe more detailed questions about the impact of some of those

Thank you chair mosquito Tom thanks so much for this explanation of the challenges that we all know exist with our ability to generate revenue to pay for the things that we need to do.

Are there other aside from these kind of policy related constraints that are placed on us.

Are there other.

elements that we should sort of daylight as we are talking about, you know, what you describe here as inherent issues with our financing structure.

We know about some of the constraints with how we generate revenue, but are there other things that we have been doing as we move through these budget processes that we should be be aware of and contemplate changing as we move forward so that we can increase our security and sustainability and stability of our budgeting process.

Thank you for the question, Councilor Morales.

I think one of the things that we are doing is actually what started in Finance Committee this year, which is taking a long-term view and really focusing ahead of the budget process on what that view looks like so that the underlying rates of growth and expenditures and revenues can be clearly identified.

And so because that really identifies when challenges are beginning to arise and so that they can be addressed sooner rather than later.

I would note that looking at proposed budgets, proposed budgets as far back as 2017 indicated a future year deficit.

It was small.

However, instances of the pandemic exacerbated that problem and really kind of upset the apple cart.

So it's like understanding the fragility of the system when it's easier to make change is beneficial versus kind of taking a more reactive approach.

have any kind of quick fixes to offer about how to remedy that.

And again, the proposal is one remedy for that.

There also is the discussion about new progressive revenues that will be covered.

And as Chair Muscat mentioned, with the Revenue Stabilization Task Force, that will kind of take a more deeper dive into this exact question.

So that's what I would offer.

I think that's a great question.

Thank you.

I really appreciate that question, Councilmember Morales and I think that's something that would be a useful north star as we think about how we address the proposed budget, not just the concerns that we have for the immediate quote-unquote solutions that have been proposed but also what do we want to do to create greater stability over the

Thank you, Chairman Skater.

I think Tom highlighted this a bit, but I would just reiterate continuing to support and encourage and provide oversight on the work the city budget office is undertaking, you know, starting this year, but really more in earnest going into next year and looking at really tracking budget to actuals and departments and really looking at where spending is happening.

and working to address our personnel system and how we're tracking positions and vacancies and funding for those positions.

So I would encourage you all to stay on that and support that work because it will help identify where there are perhaps efficiencies that can be achieved within the existing budget to try to avoid a situation where the city is faced with making significant cuts to programs and services.

I'll also add to that, I think we spent quite a bit of time in the September 28th meeting appreciating that Director Julie Dingley was really taking that charge, that need seriously.

She did indicate in that meeting that the actual systems, the technology to help better track in real time were maybe a few years out.

So in lieu of having a technological solution, we need the answers now, and I think we're all on the same page.

we're talking about a lot of the things that we've been talking about in terms of accountability and in terms of wanting that.

I think that the message from deputy director Panucci as well is how do we bake that accountability into our budgeting process.

We spent a lot of time talking about vacant positions that were receiving funding.

A lot of those discussions centered around the Seattle that we're not going to be able to do that in the next year and a half.

And that's why I think the first time that we've seen investments in positions that were not filled or never going to be filled was actually a practice among many departments.

So this is really the first time that I think the budget is being presented in a way that shows where those vacant positions are, how money is either being shifted back to the general fund to then be spent on something else or shifted within the we're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

We're going to be able to do that.

And again, encourage folks, pages nine through 12, if you have additional questions before we move on, our goal in the next hour and 15 minutes will be to get to slide number 25. So if you have questions after the set of slides that central staff presents, of course, feel free to raise those with the recognition that we're gonna get more into the details here this afternoon, starting at 2 p.m.

on these general fund adjacent revenue streams, including the TNC tax, short-term rental, and Jumpstart.

That said, I do have a question, Tom, that I'd like to ask you to lift up a little bit more.

You started to explain sort of the uniqueness of applying an inflationary adjustment to a revenue stream.

And if we look at the bottom of page 11 and the top of page 12, you talk a little bit about how it is not congruent with what we see in terms of where growth occurs.

It says on the bottom of page 11, it's worth noting that one key reason that some of the general fund revenues have not recovered fully since 2019, despite growth and inflation, is because they do not grow commensurate with inflation.

And it goes on to say that as much as 52% of the general fund revenue portfolio grows at a different rate than inflation.

The top of page 12 notes.

The proposed policy change to increase the level of revenue augmentation from Jump Start Fund could result in permanently backfilling revenue losses that are due to non-inflationary factors in other funds.

Put another way, the Jump Start Fund transfer would be permanently solving sustainability issues inherent within the existing general fund financing structure.

that when the payroll tax was passed, it was not the intent to supplant funding, and you're right, it was the intent of providing net new investments beyond urgent needs of COVID-19 emergency, and it's important to highlight that factor.

I just wanted to lift up this section because it is going to be a cornerstone to our analysis of what types, if any, what types of changes are being considered by this council and the impact of future years And I'd like for just a second for you to ask you if you have anything that you'd like to add to that in terms of how we would see JumpStart permanently solving sustainability issues or problems within our existing general fund structure before we move on.

Sure, Madam Chair.

Thank you for that question.

It's really a matter of, and I believe I explained it previously, there are some categories of our revenues that because of higher inflation are doing better, but sales tax and business and occupancy tax or occupations tax in particular.

The problem is these other categories kind of detailed in this slide, they don't grow by inflation and never did.

And in many cases, the policies that have impacted them that may make the growth lag are are not solved by inflation so permit fees for example a permit is is intended to recover costs.

The service that's being provided so there may be some exercise that work whereby that those permit fees could be adjusted to better recapture the cost at a very high level.

And similarly public utility taxes or if they were the rate adjustments that were that were delayed and not fly in 2021 for good policy reasons to minimize the impact, the financial impact on rate payers.

Because there is a general fund tax on these utilities, the general fund revenue was impacted by those changes.

And it's not necessarily an indictment of the decision, but it's just showing a key distinction of that.

And some of those declines are because there are policy reasons behind them.

And again, it's not to say that it's not a legitimate approach to take, but it's just highlighting that just applying this inflationary adjustment measure to the jumpstart transfer kind of covers over what the impacts of those policy adjustments were earlier in the pandemic and why those revenues are essentially lagging.

And in the policy change, as I mentioned, it's a permanent adjustment.

And it's at a higher level that's built into the budget.

So it's just kind of something to note in contemplating that decision and possible alternatives.

Thank you so much, Tom.

I think we can go ahead and move on.

So this is just a stopping off point before looking at expenditures, what happens to the ending balance after just applying these revenue changes.

And as you can see, the ending fund balance is positive.

It would be $66 million at the end of 23 and $6.8 million at the end of 24. But again, this is just a kind of signpost along the path of this general fund financial planning.

But I just wanted to give that update of what the balance looks like.

And if we can then move to the next slide, we'll get into a discussion about the proposed expenditure changes.

And, um, and I believe we touched on this a bit earlier, but there are kind of two key elements of, of the expenditure side of the budget.

One is the, uh, the proposed appropriated adjustments that are in the mayor's budget.

And then also there are the kind of non-appropriate elements, the things that are, that are included in the, in the executive's budget materials.

as draws on the resources that are available, but they're not actually part of the appropriated budget.

So by way of describing and discussing the expenditure changes, the detail of which is in pages 12 through 15 of the memo, and with supplementary tables that are included as attachments, C through E of the memo, will cover kind of the high-level moves in terms of expenditures.

So in reference to the baseline numbers that were discussed earlier in the presentation, the proposed budget would increase total dental fund expenditures by $17 million in 23 and $40 million in 24. There were some very minor baseline corrections that were submitted by CBO after the numbers that they provided in August, a little under a million dollars in 23 and a bit under $2 million in 2024. that were just really coding errors that were made, and they also had lowered their retirement contribution rate assumption.

And so just applied those adjustments to the base.

In terms of more kind of policy and technical items, there are a total of, and so I guess I should explain, I'm gonna handle this in a three-step process.

First, I'm gonna talk about the kind of reductions writ large, then talk about the ads, um, kind of separately and then, and then follow up and then conclude with a description of what that happens on a net basis and then provide a, uh, kind of an overview of what that means for each individual department.

Um, so in terms of the, uh, the actual reductions, there was $71.9 million of reduction in 23 and $51.6 million of reductions in 24, which is about four and a half and 3.2% of those, um, those years budgets respectively.

Within those amounts, the cuts that are ongoing in 23 are $34 million and $30.6 million in 24. And I'm pointing out the differential between ongoing and one time because any cuts that are ongoing in nature continue into future years and they have an impact on the sustainability analysis.

And these are all detailed in the memo in attachments.

This one is attachment C, which shows a summary divide apartment and then shows the actual detailed cuts that are applied in each of those departments.

If we could go to the next slide.

This is the increases, the increased side of the equation.

And I'll just highlight it.

I said three buckets, there is an actual Fourth bucket, and this is shifts.

So there are a total of $23 million of cost-neutral shifts.

So this analysis is at the general fund level, of which there are multiple departments that are receiving funding from within that higher-level total.

These shifts are important, and I don't want to minimize the impact and the policies that are implicit within them.

But at a high-level general fund analysis perspective, they're cost neutral.

They have zero impact on sustainability and on the total budget.

But there are $23 million of these changes of funding between departments.

And those are detailed in a table and in the memo.

I'm trying to find it.

On page 14. And it shows you the department that is the monies are shifting out of and the departments that are receiving.

And each one of these will be covered in subsequent department level issues, papers, and presentations later this week.

And so finally, there are appropriation increases in the budget of $84.2 million in 23 and 88.3 in 24, which are about 4.5% of each year's general fund baseline budget.

And then again, getting to the sustainability focus, those of those increases in 23 and 66 and a half million dollars is ongoing.

So we'll continue into future years and 82.6.

So most of the 2024 adjustment is ongoing in the proposed budget.

And that's, that's key because that means that those costs would continue into 25 and in the future.

And I believe these adjustments are similarly detailed in the memo and attachment D, so it shows the summary by department and then the individual items of increase.

If we look at the next slide.

So this is, as promised, the kind of tracking graph of where the kind of on net, so taking the taking both the decreases and the ads.

And I believe this was covered in the CBO presentation in a different way, but this kind of teases out where the cuts are hitting the most and where the ads are then being applied.

So as you can see that the Seattle Police Department receives the largest net cut of $12.2 million.

Finance General, which is sort of the kind of reserve structure for the general fund where monies are held to supply transfers to other funds for central costs and for other items that are being planned and deliberated during the year.

That's similarly being reduced by $9.2 million in the budget, and then with a number of other departments.

I would note, as you see footnoted below, that this does not include the impact of cost neutral shifts within the general fund between departments.

And this principally will impact in this display, the Seattle Police Department, because there is the issue of the Parking Enforcement Officers Division shifting between SDOT and the Seattle Department of Transportation and the Seattle Police Department.

So this nets that out to show how the budget for 2023 looks.

And I'm only showing 2023 because the council, the city's biannual budget approach adopts a 23 budget and then endorses a 2024. So So just to make it simple, just showing the 2023 proposed budget that would be adopted and the level of decrease.

And then the next slide shows at a, again, department level where the increases are being applied on net.

So in this slide, you can see that the human services department is receiving a $17.9 million increase above baseline budget in 23. And then the Seattle Department of Transportation is receiving 8.9.

And kind of the other side of this, the explanation, the SDOT amount does not include the impact of the kind of general fund neutral shift of the PEO function between SDOT and SBE.

And again, all of this information is detailed in the memo.

It's sort of a technical guide as you have deliberations and review of department budgets in the next few days.

But it's all there and available to kind of help understand within the details what's going on, what the broad moves are in the department budgets.

I'm going to go to the next slide, please.

Tom, quick clarification on this slide.

I think one could look at the human services department up there and think, oh, good, the human services inflationary adjustment has been included in the proposed budget, but would you say the you're seeing the proposed unified care team being slotted in.

Is that why there's such a large increase in that section?

Thank you for the question, Chairman Esqueda.

I don't need the details.

I'd have to refer back to the technical guide, though I do know that this is net of the decrease to provider costs that were discussed.

I'm not sure what the individual lines are, and that would be detailed in attachment D.

Great.

And a good reminder for our colleagues, including myself, that department-specific questions, we are going to have the chance to ask the departments in addition to central staff who's focusing on these issue areas over the next three days.

And HSD, for example, will be covered on Friday morning.

Chair Mosqueda, I would just add that, yeah, those details will be covered more, and as you said in the HSD presentation, but I do think your description is accurate, that this is generally reflecting some of the new proposed spending in the areas of some of the shelter and RV, as well as the, well, yeah, those two items primarily, and it doesn't reflect the inflationary adjustment as Tom noted.

Great.

I think I interrupted you, Tom.

But as I did, let me turn it over to council member Nelson for clarifying question as well.

As the it looks like the the table in attachment D says that the unified care team is two hundred and ninety five thousand, I guess.

So just for your reference, that is less than a lot of the other increases like I don't know, you can just, you can look on page two of the attachment D and C, the increases to the Human Services Department.

Well, the Unified Care Team is much larger than 200 and some thousand dollars.

That's an increase.

So we, I'll pause here for a second to see if central staff has anything they'd like to add for context, but again, we'll be able to get into those questions specifically on amounts within the HSD section on Monday or Friday morning, followed by the proposed unified care team discussion following the HSD section.

Please go ahead, Director Handy.

Yeah, I was just going to say that the Amy Gore on our team will break all of this out on Friday morning.

The items related to the unified care team include the expansion of the system navigators team and unified care team, which are just over a million dollars combined as part of that expansion.

And that of this $17 million, some of it is also around community safety initiative and programs like this.

So we'll be digging into sort of the variety of items.

The $17 million is not the inflationary increase, which is part of the base.

And this would have been bigger had all of it been included.

the budget.

Thanks so much.

Councilmember Peterson, I see you next.

And then I have a question that I want to circle back on the HSC inflationary adjustments just to ground us as well as we head into the next few days.

Councilmember Peterson, please go ahead.

Thank you, Chair Mosqueda.

A question for central staff regarding these last two slides here, where the footnotes as compared to the August 17 baseline is another way of describing that the what would be called 2022 revised or 2022 actual.

I just trying to understand what you're comparing it to from 2022.

Thank you for that question, Council Member Peterson.

It's an important point.

The 23 and 24 baseline budgets are essentially The cost of providing the services that were adopted in the 2022 budget.

So it's essentially a refresh saying there was an adopted service level in 2022. What does it cost to provide that level of service in 23 and 24?

And so it's kind of a department level process run by CBO where they look at all those central costs, apply inflation as necessary, look at current law, what areas of the budget are just naturally growing based on new ordinance and applying those adjustments.

So it's not necessarily a 2022 revised, but it's a 23 cost of providing 2022 level services.

I saw it.

Thank you.

Okay, great.

I'm getting better at reading lips, which is hard to do with a mask on because our chambers are near empty and it's easier to probably see what I'm saying.

I'm going to remove my mask when I speak most times unless we have a full audience here.

I'm going to take a quick second to ask central staff and perhaps Esther or Ali, Tom of course, feel free to add to this.

I'm going to turn it over to you, Mr. Chairman.

I'm going to turn it over to you, Tom.

And on the 28th, about this concern, why wasn't that inflationary adjustment that's codified in statute included in the base budget originally?

Thank you, Chair Mosqueda.

So there's a distinction between including in the budget and including in the financial plan that I would kind of elevate.

So since adoption, the amounts have been included in proposed budgets.

What they haven't been done and what I highlighted through my analysis on the materials presented at the 17th is that they had not been included as a growth assumption in future years.

So given that they look at the sustainability of the fund requires looking at how costs grow in the future.

essentially what the exercise was, is looking at the baseline adjustments that CBO had put in for baseline changes in 23 and 24, which included the contract provider cost growth.

However, noticing that there was no inflationary growth being applied in 25 and 26. So that made the projected costs of the general fund lower than they would have been if those measures that are in ordinance had been applied.

So it was really more of a technical adjustment to the financial plan.

I don't know exactly the mechanisms by which those weren't included in prior plans.

But they had been included in the budget, and they were included in the baseline budget numbers that we discussed on the 17th.

The footnote in the memo, which you lifted up, is really Highlighting the technical aspect and that's something that I noticed in the reviewing of the budget detail was that the CBO made a change, that proposed change, which is corollary with the proposed policy changes that have been submitted with budget legislation that would cap the fees at 4%.

They coded that change that would be effective through that policy choice as a baseline change.

I separated that piece out because, in my view, that is a policy change and not just purely a baseline technical adjustment.

So that kind of explains the reasoning why that footnote is included, just to kind of signal a different treatment of that number, because it does show as a baseline adjustment in CBO's presentation in the budget, and then to also indicate that the key finding that I had from the 17th was that they just hadn't been growing the costs in the future years as they should have been growing.

So I hope that helps to explain the kind of technicalities around that, but then also to help understand what the policy, like what the policy decision is inherent to budget.

the cost of living adjustment was not included in the 6-year outlook.

So it does help a lot.

And thank you for that clarification that it was in the financial plan, the 6-year outlook that the cost of living adjustment was not included.

So I appreciate that.

And I do want to thank you.

I believe it was Tom from central staff who really identified that in that 6-year financial we're going to be able to work with the central staff to make sure that our team on central staff really be able to pull through the materials and work in collaboration with CBO to underscore issues or concerns they see and then jointly we can more proactively address some of these issues.

But, Tom, thanks for your early analysis on that and helping to really lift that up in early review of the budget and for the

What is council's role?

I thought I remembered hearing a few months ago that we have sort of a consulting, not a consulting role, but we can give input to that plan.

Is there a way that we could formalize that in the future so that if we are, before the budget is announced, briefed on a six-year plan that does not include particular policies and adherence with laws that we've passed, that we can we could provide, I know the council in past years used to pass a budget priorities resolution.

We don't do that anymore.

But if we are aware because we see this six-year financial plan and we see in advance that there are some key planning priorities that aren't being adhered to, it would be great if there was a way to sort of avoid us being in the position that we're in now by being able to use whatever input opportunities we have to that plan.

Council Member Herbold, if I might take that question.

I think There is work we can do to continue to partner with CBO to improve the financial plan that's really what we have been doing this year by by digging in more to the financial plan and identifying these details I just want to clarify that.

And that is in fact how we have incorporated the assumptions about the inflationary adjustments into the financial plan central staff did that first in.

May, when we presented an updated updated financial plan, and it was also an assumption included in the financial plan presented in August.

What we can't control is other choices between those presentations and when the mayor prepares the budget of other policy choices they make in order to balance and pay for their priorities.

So in this case, I would suggest that the work to dig into that the council is doing to provide more oversight on the financial plan throughout the year is the mechanism to get them to incorporate more of that.

And we can talk offline about other ways to make that more clear, generally speaking, I would say that the financial plan should incorporate any laws that have been passed that have costs associated with them.

And again, we're continuing to work with CBO to refine their approach, as well as our approach to financial planning.

I think that's all I have to say.

we're doing a great job of lifting up what is in the financial plan in the next six years so we can address that as well as biannual Nelson, back to you.

Yeah, Tom, you said that the proposed budget back in August did not include the cost of living adjustment.

Did it include the cap?

I mean, did it include an adjustment that would be the four percent that we see in this proposed budget or just did not have any increase whatsoever?

And.

So I'll just say, yeah, thank you for Nelson.

So the May 4th financial plan did not include the adjustment.

Any at all?

We caught the, most likely no, in the future years, we caught the discrepancy in the transition between the May plan and the August plan by way of having access to the baseline adjustments information that CBO was applying.

to the budget.

And so just kind of to add to Deputy Director Panucci's comments, this is part of the kind of improvement process that's been underway.

There was an actual resolution that was sponsored by Chair Mosqueda in the 2021 budget that sort of provided the entree for closer coordination on these financial planning details.

And so that's where the food is being born.

The 2017, The August 17th numbers did include deflationary adjustment, the full measure of the inflationary adjustment that was indicated in statute, but it did not include the new proposal that's packaged in the budget, which would then cap those increases at 4%.

So the 2017 number was the actual adjustment for ordinance, but it didn't include the new proposal, which is now embedded in the 23-24 proposed budget.

And I would just add, just for the record, Director Dingley has been clear that this was not an intentional miss in the financial plan, a choice to leave it out of the projected long-term expenditures.

And that since we have been engaging in these deeper dives with the financial planning exercise, with the city budget office, they have not objected in any way to including it.

slightly different approaches, but again, it wasn't, you know, she's been very clear that this was not an intentional decision to not include those assumed costs in the, in the out years.

And since then have adjusted their, their financial plan to include those assumed costs now at the 4% level in 25 and 26. So beyond the biennium.

And so it is now embedded into the financial plan that CBO transmitted for the 23 and 24 proposed budget.

that.

I think that's all I have to say.

Thank you.

Great.

Thank you for that addition.

Thank you for the clarifying questions, colleagues.

And yes, we'll just underscore the point that we tried to make on the 28th of September as well.

There is a huge amount of appreciation for the transparency with the new director of CBO, the willingness to provide another layer, another few layers of information that has not been previously provided to central to be able to do that.

I think it's important for us to be able to do that.

we're going to have to look at the 6-year financial plan and that's going to be a routine regular quarterly analysis of both the financial plan and presentation versus policy decisions that the executive may have chosen to make in the upcoming budget.

That would be more where the 4% policy decision was made by the executive versus the 6-year the budget.

And we will continue to work with CBO to get additional information to central staff to dissect the budget in further detail.

Great.

We have 40 minutes left in this section.

Let's continue on.

But as I discussed earlier, there are non-appropriated elements.

There are two categories of these non-appropriated changes.

One is, again, a commitment to underspend $10 million in 23 and 24. So this is not in any form a permanent reduction to any budgets.

It's just saying that in 23, total general fund spending will be $10 million less.

There's no detailed plan behind it.

Just want to, again, touch back to the way that the 2022 underspend was met, which was largely through holding expenditures on council priorities, but just kind of as a signal of how at least that amount was met of underspend.

No indication that that is specifically going to be the case in 23 or 24. that I'm just kind of highlighting past practice.

But again, this is not part of the appropriate budget.

So the ordinance that the council will ultimately revise and adopt does not include an actual $10 million reduction for this change.

It's just a financial plan estimate that they've included.

And then similarly in the non-appropriated category, we discussed much this morning, the planning reserves.

So these are the kind of below the line non-appropriated reserves that are in the plan.

They reduced those amounts by $28.6 and $30.9 million.

We typically don't discuss what the nature of those changes are, so I cannot offer much detail, but they do have a positive impact in terms of the general fund financial plan because they bring down total cost.

And there are issues identified in the issue ID section about these two particular adjustments and alternative ways that they can be handled in the budget.

Tom, just on this slide briefly, you highlighted past practices.

Have we balanced the budget in previous years based on assumed underspend?

Can you talk about the risk of doing so?

Not that I'm familiar with.

Of course, the broad reach of history is longer, and perhaps I wouldn't have captured anything.

But we haven't been provided any information that this is a common practice that's applied.

So again, it's a somewhat of a projecting forward thing.

It's not even similar to the 2022 review that I discussed, where departments are asked to re-estimate their spending based on, some experience in the fiscal year.

This is just looking forward saying of the total budget, we will spend $10 million less though it's not specifically determined where that will occur at any level of detail.

You trailed off there at the end.

I think that's a really important point.

I think Deputy Director Panucci, that was part of the questioning that I had before and maybe you can elaborate on that.

I saw your hand up.

Any thoughts about this approach?

Yeah, Council Member, I understand the difficult choices that the Budget Office and the Mayor were making as they were trying to balance this budget.

I would say we haven't identified this as a common practice in other cities, and I'm not aware PB, Lisa Smith-Miyazaki, she or him?

or 24, we're not going to be able to balance next year.

There'll be difficult choices.

I would say any of the new spending proposed by the mayor or the council is in certain ways the easiest to not spend in any given year for new initiatives or new contracts.

However, the budget office has been clear that their intent, their strategy going into next year is not to focus on council member budget actions as the strategy to achieve the underspend.

But as Tom noted, it is a possible outcome, frankly, if faced with, you know, different revenue news in the future, or there are not other ways for the departments to achieve the underspend.

So I think the risk is we may be more out of balance or projected to be more out of balance as we go into budget discussions next fall.

for adopting the 2024 budget.

Yeah, go ahead.

I would actually add, and it's all here on the slide, that as covered a few slides earlier, there are some reductions, both one-time and ongoing, that are in the proposed budget.

But those dollars are cutting areas that perhaps are vacancy savings and things of that nature, which would, in a normal year, be the source of underspend that you would realize in the general fund.

So it's kind of like the opportunities for realizing the underspend are being cut.

But then those monies are then being added back in the budget for other things that may not necessarily have the same kind of natural underspend, meaning vacancy savings and things like that, that we would normally experience.

So that kind of enhances the, I guess, riskiness of the approach.

given the nature of the cuts and how they got reused in the budget.

Okay.

Thank you.

That covers the non-appropriated changes, which then takes us to the bottom line results in the financial plan.

This is the table that we started with, just looking at years 23 and 24. Um, and it starts with the, the, uh, budgetary.

So the starting one-time balance of $171 million for 23. And then you'll see there are rows for the baseline numbers that were discussed in August.

Um, and then the proposed changes and the revenue category expenditures, um, the underspend, which is kind of shown below the line and the reserve changes.

And so when, um, under this financial program, um, 2023. would end with a positive general fund balance of $87 million.

But then by 2024, that balance will have been spent down to $6,000.

So this would be considered a balanced budget for these two years, given that there is a positive ending unreserved fund balance.

But as we'll cover in the next section, there are some sustainability issues that I would highlight.

I think what we'll do, colleagues, is we will get through the next five slides or so.

Let's get to slide 24 or 25, and then we'll take all the questions related to the summary of the presentation, if that sounds okay.

Okay, and Tom, if you think that a different pause point makes sense, please let me know.

I'll do.

So I think we can move to the next slide.

And I apologize, I lost track of the tracking in the memo.

I was looking at one of the more detailed attachments.

We are page 17, I believe, of the memo.

And so this just highlights really the focus numbers for this particular presentation, which is the positive ending on the certified balance.

And so let's maybe move to the next slide.

And I believe there are some issues identified And so this is one issue is that the proposed underspend amounts are not identified.

And so these are the 2023 and 2024 amounts, not identified by program or department, and they don't actually represent a budget cut of either a temporary or permanent nature.

So really the options that we would identify is to look at the new spending that is added that's detailed on attachment D.

and reject increases totaling $10 million of either temporary or ongoing natures, which would codify the $10 million underspend.

Another approach would be to just create a line in the finance general budget of a negative $10 million.

This would be not, you know, it would still suffer from the same issue of not really identifying where that is occurring at the individual department level, but it would then formally adopt a budget that includes that underspend assumption within it, which then through adjustments next year, the underspend could be offset with reductions in departments where there's actually underspent budget to fill that obligation.

Option C is actually a more detailed approach, which is to say, to look at the reductions that are taking place at the department level and identify an attachment C and perhaps increase some level of a reduction to some select departments to be kind of a more surgical approach.

And then finally, no change is also an option.

Let's continue.

The next issue is also something we have covered this morning, which is the way that the budget doesn't include all of the elements of spending, most notably the underspend, but also the planning reserves.

And this is really just a choice to continue the past practice of not appropriating that full amount that's covered in the reserves.

or as identified in option A to appropriate some portion, all or some portion of those planning reserves as a formal line, perhaps most likely in the finance general reserves portion of the city budget.

Great.

Colleagues, I'm just going through these because we're not obviously taking a vote today, but we will have a chance to walk through the next three slides here and then we'll come back for questions.

And if folks have comments that they'd like to share with the public, of course, folks are happy to express those or welcome to express those.

But let's go through the next three slides here.

OK, so this slide, then it kind of is the closing the loop on the sustainability.

discussion that started in May and continued in August, and then now reflects the changes in the proposed budget.

As you can see, well, if you compare back at the August presentation, it was projecting a $142 million average gap between revenues and expenditures in each year.

Proposals in the mayor's proposed budget would, in fact, increase that gap to $193 million per year in 25 and 26. And you can see that just very clearly in these two lines.

There are some real key reasons why the budget sustainability, why it's getting less sustainable in the future.

They're detailed on the next slide.

And this is covered on page 18 of the memo.

So the key factors is one, as we discussed, there is a program transfer from the general fund to, jumpstart funds to the general fund of payroll expense tax revenues.

That's included in the budget at about approximately $85 million per year in 23 and 24. However, it's one time and it terminates in 2025. So that drops, leads to a drop in revenue to the general fund in those in 25 and 26. Again, as mentioned earlier, statement of legislative intent that was passed in 2022, institutes the creation of the Seattle Revenue Stabilization Work Group, which would look at potential other options of progressive new revenues for the general fund.

And I understand that the discussions with the mayor's office and the budget chair's office are underway to repanel that group to begin those discussions.

So that is maybe one factor that could then enhance the general fund sustainability beyond the proposed budget.

Another topic that that we have covered is that because the underspend assumption is not ongoing and it's not specifically programmed in the budget, it's only temporary and one-time in nature.

So it only provides relief in 25 and 26, but not in future years.

And then finally, a key takeaway is that amidst all the details of the budget, the cuts in the ads as previously described, The general fund budget would actually add a net new $52 million ongoing spending in 24, which is basically the base of growth for 25 and 26. The budget, because it does a lot of one-time things to cut spending, but then repurposes those appropriations in 25 and 26 for new ongoing spending, it actually increases the total level of ongoing spending in future years.

Those are the key reasons why the gap, is still present and in fact is growing based on the proposed spending in the mayor's budget.

And then this is kind of the third item for issue identification.

In light of that increasing unsustainability of the general fund financial plan, we can look at the next slide.

It really then highlights different options that we could identify.

in light of that growing budget gap.

One is, and that was discussed in another issue identification is to actually formally appropriate as ongoing the underspend assumption of $10 million per year.

Reject one or more of the expenditure increases that are ongoing, that are identified on attachment D with the memo, or identify other areas of expenditure reduction in city programs.

Another option would be to accept the proposal to make the jumpstart funds transfer in future years permanent and tied to inflation beyond 2024, or alternately to identify a new general fund revenue source to support some or all of the proposed new general fund budget ads and then finally a no change.

And this is something that was highlighted in August, but it's a key point is that Council is not adopting years 25 and 26 of the financial plan that is truly advisory in nature.

It's kind of a signal as to how the decisions that are being contemplated right now would have an impact on finances in the future.

So as we demonstrated, the budget is in fact balanced for 23 and 24. And so no change is also an option.

I think we will pause actually right back at that before we get into section 6 of the memo.

Is that OK?

Sure.

Or do you think that it would be preferable to wrap up section 6?

I believe I can cover section 6 fairly quickly with the fiscal reserves.

So if we can move it to the next slide.

I do recall in the 21, 2020 and 2021 budget process, there was a reliance on the city's fiscal reserves to, um, to meet COVID emergency expenses and to provide general budget balance.

Um, this is just a sort of, um, given those uses to provide some tracking of how the budget, um, replenishes those reserves.

And, um, so what you'll see here is our each, each of our key reserves, the emergency fund, which is just for.

on unexpected expenses, and then Revenue Stabilization Fund, which is available to offset declines in general fund revenues, both of which were used.

However, council did add back balances in the 22 budget to replenish those years.

And also, notably, by way of a supplemental adjustment this year, was able to fully replenish the Revenue Stabilization Fund to its full policy level in 2022. This chart or this table just tracks the changes starting from the 23 beginning balance through the end of 2024. And as you can see at the bottom line that at the end of 24, the emergency fund will be about 78% of its policy level.

Its policy level is essentially whatever the 2016 amount was, which is about $60 million growing by inflation.

So again, with the deposits that are planned and the starting balance that we'll have at the beginning of 23, it'll be at 78% of the maximum policy.

And then Revenue Stabilization Fund, really those are maintenance transfers just to keep up with general growth in taxes.

The Revenue Stabilization Fund cap is 5% of general fund tax revenue.

And at the end of 24, and in fact, at the end of 22, it's at 100% up level.

So that's just a recap of where we are with reserves.

you know, before closing say the 23 and 24 amounts are not specifically required to be $10 million per year.

There was a policy change in the last year's budget that given the level of use of the emergency fund during the pandemic provided for a longer repayment prior to that change, the requirement was that the emergency fund be 100% replenished at the end of the year given all of the fiscal challenges as previously discussed, the change that was proposed and which was adopted by council was to allow for a five year repayment horizon.

And so at that time, it was indicated that to get it back to policy level at the end of 2026, it would require $10 million per year.

And so that's what is included in the budget is that $10 million transfer.

However, I would say that the policy would allow for a complete lump sum repayment in 2026 of the full amount.

So it doesn't provide a specific guidance up to what the cadence of those transfers is.

It just says you have five years to get back to policy level by 2026. And I believe that concludes through section six of the memo before heading into the other policy, other fund issues.

All right, great.

Well, thank you very much.

Colleagues, I'm going to focus some of my comments and questions on section five.

Feel free to get in the queue as well if you have additional questions.

Can we go back a few slides, Tom?

I want to take a look at that graph that you showed, figure number three on page 18 of the memo.

Council members, if you would like to skip to a slide, I'm actually running the presentations right now.

So if you could tell me the exact slide that you would like me to go to, we will get it right there.

Okay, we just missed it.

It was slide number...

It's slide 22. 23.

Thank you, Patty.

22. 22.

Thanks so much.

OK, so I wanted to have this visual up here and I would like a chance, Tom, for you to elaborate on any of the takeaways that I have written down here and colleagues.

This will be.

we have time for today.

But what I heard you mention earlier in the presentation, I believe we're on page 13 of the memo, is that the cuts in the mayor's proposed budget are one time in nature.

The ads are ongoing.

So the $17.6 million in net new are actually contributing to a more unsustainable.

that's what this chart is suggesting.

So could you tell me a little bit more if I've understood your summary of what the one-time cuts are, the ongoing ads, and if the 17.6 million in 2023 and the 40

More or less, Chair Mosqueda, so the kind of net overall numbers of $17 and $40 million, 17 and 23 and 40 in 2024, doesn't really touch on the ongoing and one-time nature of what's going on behind the scenes.

So at a more specific level, and I believe it's highlighted on the next slide, when you peel back the layers of the onion, there is $52 million of ongoing spending that is added in 2024 that will continue in the future years.

And so that is, you know, peeling back, because the actual level of total cuts and total ads is larger on both sides of the equation.

But this targets on the fact that amidst all of that balancing work that is taking place in 23 and 24, the mixture of all the the cuts and the ads and the ongoing and one-time nature of all of those.

What comes out at the end of the day is a $52 million.

I believe that is the number correct.

$52 million of just ongoing new spending that's added in the budget in 24 that will continue into future years.

And so that plus the one-time underspend assumption that is used to help balance 23 and 24, which is not a permanent reduction, plus the phase out of the jumpstart transfer in 25, those are the key contributors to why that's occurring.

But yes, it is accurate that in general, and specifically, the budget does add ongoing costs that continues above what the baseline we considered in August.

Thank you for that clarification.

Then on page 16 of the memo, you describe that, Let me quote it here.

in the budget.

So I think that's a good point.

Further, the proposal does not include details about where the underspend amounts will be realized.

So in essence, there's no actual details on the IOU that's baked into the budget and as central staff noted, this presentation and on the 28th, there's no

Chair Mosqueda, I would say there isn't a specific plan for exactly where those underspends will be achieved, but I will say that what I have heard clearly from Director Dingley is her current plan is not to hold council budget actions as the strategy to achieve the 2023 or 2024 underspend.

I think what both Tom and I are suggesting is that given the one time and ongoing reductions already assumed in the proposed budget, the executive may find themselves in a position where new spending is the place to look to achieve that underspend.

And that could be either new spending proposed directly by the council or new spending or adopted by the council or new spending proposed by the mayor that the council accepts.

So either holding it back any of that new spending.

I'm sorry.

I'm sorry.

Okay.

All right.

we're going to have to look at what options the council may want to consider and obviously I'll signal some of my opposition to adopting the proposal that's been sent we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how we're going to be looking at how

Yeah, we're talking about long term sustainability, but isn't it the case this gap that we're looking at right here?

That's not inevitable.

So in I mean, before we're talking about a new revenue source, I think that, you know, our our role right now in the next couple years is to think about how how we can address spending so that we don't get to this big gap.

And so And when we're talking about the mayor's increases to the ongoing expenses that are increasing the general fund spending, that's, we've also got increases there that are ongoing.

So I guess my point is, I'd like to have a, I'm going to be looking at how I feel about some of those increases in the mayor's proposed budget that increase the ongoing expenses.

In general, I would say that it's good to look at this planning and good to think about sustainability, but let's think about also the funds that we've got on our hands right now, our existing funds, instead of thinking about an ongoing new sorts of revenue.

councilmember Nielsen.

Thank you.

Thank you for sharing your comment, councilmember Nielsen.

I think just to clarify the point that I would like for councilmembers to really take away is the comparison between this slide and slide 3. we're going to have to look at how do we get change to create greater instability in the future?

Is that something that we want to consider and address if we look at the out years?

Because if you look at slide three as Patty is showing on the slide, thank you very much, Patty, you can see that there is definitely still an average operating gap of $142 million.

But if you fast-forward What is being proposed would actually create greater instability in the out years.

And that's the biggest takeaway and opportunity for us to analyze.

Is there an alternative path?

The proposed budget is just that, proposed.

And the council gets the chance to opine on whether or not that instability that we see widening and the higher amount of the average operating gap in the out years is something that we want to accept.

modify, reject, etc.

So that's I think an important distinction and I'm glad you raised the issue so that we could really do a comparison between existing status quo, how we address the two-year biennial crisis, but in keeping in mind the long-term or the six-year fiscal outlook.

So the instability is caused by how we spend first and foremost, right?

It's detailed in the 34 pages that we've read about not just the spend side, but the revenues and how the revenues have changed, most notably on some of our existing revenue streams coming in lower than anticipated because they're not keeping up with needed expenditures, lots of shifts in behaviors in the last few years under the pandemic.

So it's not as simple as that.

I'm gonna let that question.

we have control over spending is what I'm trying to say.

Thank you, Chair.

I sort of in keeping with the question that Council Member Nelson has about this $52 million, you know, in looking at attachment D, and thank you for itemizing this in some some way, there is a significant increase for the Office of Hearing Examiner.

And then there are five other departments that have at least double digit increases being proposed.

So I wonder if you could give just kind of broadly what those are intended to do and if they, just so we have some sense as we move forward.

And I know we'll get into the details later, but for today's presentation, what is that $52 million representing in terms of what we will be doing differently as a city?

Across the entire general fund, I wouldn't have the detail.

I don't have that kind of department-specific knowledge.

I'm looking at it from a broad general fund context.

I would say, though, that much of the new ads are going to be discussed in departmental presentations over the next few days.

So if there are noteworthy items that are on the table in the attachment that beg further scrutiny and perhaps alternative assessments the level of those increases or whether or not they should be included in the budget at all, that the expertise would be provided at that time by those analysts who are the subject matter experts.

So I'm just trying to provide a broad framework of all the various bits and pieces to provide leads that will then be followed up in discussions over the next couple of days.

And we are very thankful to you for that, Tom.

And I would just add that every department, whether or not it has a place on the agenda this week, there will be a central staff paper that will be published to the agenda for tomorrow's agenda.

And where analysts will know where there are sort of changes, you know, take the example of the Office of Hearing Examiner, the bulk of that is a one time ad that I believe is a technology related investment so then the new spending is a mix of sort of one time, you know, technology or other needs of a, of an office and it looks significant particularly in a small office like the Office of Hearing Examiner, but it also includes increased investments in human services, the unified care team proposal.

lots of other things that I'm not thinking that will be detailed in many pages of budget overview papers that will be available for you all to use as reference throughout these discussions posted to the agenda later today.

Thank you.

Thank you, Council Member Morales for that question.

I'm going to go to Vice Chair Herbold.

Thanks.

I do want to go back to the issue related about sustainability and I just want to, it's been said before, but I want to say it again because of the comments from Council Member Nelson about spending.

I think it's really important to look at the revenue side again.

The items that were on a prior slide represent 52% of the city's revenue.

So those revenue sources aren't growing at the rate of inflation.

That accounts for 52% of the city's revenue.

So it's not just a spending problem.

It is inherent to some of our sources of revenue that do not, by design, do not grow at the rate of inflation.

So we could correct this problem tomorrow and we'll have it again next year.

Because as long as more than half of our budget is relying on these revenue sources, it is going to be a continual problem.

I understand which people.

Council Member Nelson, I have not recognized you, Council Member Nelson.

Thank you.

That was just part of my statement, my comment.

I did want to also ask Tom, as it relates specifically to JumpStart and the use of JumpStart, am I correct in that if we, and maybe you've said this, but I think I want to make sure if I'm going to say it more plainly, I want to make sure I'm correct.

Does this proposed use of JumpStart actually create a situation where the general fund becomes more dependent on a jumpstart for backfill in the future?

Thank you for that question, Vice Chair Herbold.

Essentially, yes.

I mean, the 2022 budget was balanced using a jumpstart fund contribution, but that was temporary under the current policy.

The proposed budget then for 23 and 24 continues essentially the same level of transfer from the jumpstart fund and then includes an assortment of expenditure increases too.

And then going in the future, and this was one of the items explained and the kind of reasons for the sustainability is that when the jumpstart transfer drops in 25 and 26, that leads to the average operating gap continuing and in fact increasing.

So it's essentially being used as as a portion of the general fund financial plan in the next two years.

And in that sense, it is supporting the level of general fund spending that is being proposed.

So it's all part of it and its presence and lack of presence is part of the sustainability issue.

Thank you.

Thank you.

Well, colleagues, you have come to the right place.

If you are interested in continuing to have a dialogue about not just revenue, but also expenses, we are going to continue this conversation specific to revenue streams and the general fund adjacent revenue streams this afternoon.

I want to acknowledge and thank the mayor's office, senior deputy mayor and her team for This is an outcrop of the statement of legislative intent that I sponsored last year with the support of the city council at the time.

We have a task force to review the Seattle tax structure and identify ways to make more equitable investments and raise new progressive revenue.

This task force will be we're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

We're going to continue to do that.

in response to the statement of legislative intent last year, and this body is not going to be able to make recommendations for this upcoming biennial budget, obviously, but is tasked with helping to identify sources to help be available beginning in 2025 at the beginning of the next biennial budget.

So very much appreciate our shared interest and shared commitment to identifying new, progressive, and stable revenue sources.

With that, if there's no objection, We will go ahead and adjourn for today and reconvene at 2 p.m.

Oh, are you objecting, Council President?

No, I'm not objecting.

I'm going to end on a thank you note.

Whoever did attachment D, thank you very much.

Thank you very much.

I dislike it when you lay it all out there, so I appreciate that.

If you haven't had a chance, it's riveting, kind of anchors the conversation, it kind of narrows it down.

Thank you, Council Member, Madam Chair, for explaining to us on the revenue side.

Thank you, Council Member Nelson, when we start talking about the spending side.

And of course, thank you for your leadership, Council Member Muscat, because I know the elephant in the room is going to be HSD and the 4% cap.

how we work our way through Jump Start and what that means not just for this year but in the future as Councilor Herbold brought up.

So I'm hoping we can do this in a good way because I know we want what's best for our city and the Mariners are ahead 1-0.

Thank you, Council President.

Thanks for your optimism and centering us on where we have a shared interest.

All right.

We will convene at 2 p.m.

If there's no objection, the Select Budget Committee will recess until 2 p.m.

Hearing no objection, we'll see you back then in an hour.

Bye-bye, everyone.