SPEAKER_05

Good afternoon.

The October 17th Select Budget Committee will come back to order.

It is 2-0-1, 2-0-1 p.m.

I'm Dan Strauss, chair of the committee.

Will the clerk please call the roll?

SPEAKER_07

Councilmember Saka?

SPEAKER_04

Here.

SPEAKER_07

Councilmember Wu?

Councilmember Hollingsworth?

SPEAKER_03

Here.

SPEAKER_07

Councilmember Kettle?

SPEAKER_03

Here.

SPEAKER_07

Councilmember Moore?

SPEAKER_03

Present.

SPEAKER_07

Councilmember Morales?

SPEAKER_03

Here.

SPEAKER_07

Council President Nelson?

Council Member Rivera?

SPEAKER_02

Present.

SPEAKER_07

Chair Strauss?

SPEAKER_05

Present.

SPEAKER_07

Seven present.

SPEAKER_05

Thank you.

And colleagues who are not here are excused until they return.

Good afternoon, colleagues.

For the viewing public, many of us here are wearing purple.

Vice Chair Rivera is black.

winning in the purple department.

And we're doing this because, and thank you to Council Member Moore for bringing this to our attention.

It is Domestic Violence Prevention Awareness Day.

And so we are here supporting that effort because domestic violence is never okay.

And we need to do as much as we can to prevent it.

With that, we are going to move into our next number of items.

We have two more for this afternoon.

And then again, for tomorrow, tomorrow is participatory budgeting, human services, no, we've got human services right now.

There we are, sorry.

We've got human resources and then human services tomorrow, thank you.

And then unified care team tomorrow and economic development tomorrow.

Right now, this afternoon, we're doing human resources and Seattle Department of Construction inspections after this.

So with that, clerk, will you read the short title of the first item into the record?

And then we'll take it away from there.

SPEAKER_07

Item four, Seattle Department of Human Resources for briefing and discussion.

SPEAKER_05

Thank you.

And we've got Karina Bull and Director Noble.

As we mentioned this morning, Director Eder is not going to be with us today, the rest of today or tomorrow, and will be back with us on Monday and Tuesday.

So with that, over to you, Karina.

SPEAKER_00

Good afternoon, Select Budget Committee members.

Once again, I'm Carina Bull, Central Staff Analyst.

And in the beginning part of this afternoon's session, I'll provide an overview of the Seattle Department of Human Resources proposed budget and present a policy consideration.

Beginning with the overview, the 2025-2026 proposed budget for SDHR, as we try to scroll to that portion of the presentation, would increase appropriations to the department by almost 10%, reflecting a $40 million increase from 2024 to 2025, and an additional 5.5%, $25 million between 2025 and 2026. Most of these changes would reflect increases for baseline and technical adjustments primarily related to the personnel compensation trust funds for employee benefits.

There also would be reductions on the operational side.

That means HR services performed by staff.

And these reductions would be guided by the department's distinction between core and non-core services.

The department identifies core services verbatim as those required by law or city regulation and divides these services into four categories.

The first category includes employee benefits, leaves of absence, workers' compensation, and talent acquisition.

The second category is HR compliance, including policy, personnel rules, and legislation.

The third is labor relations, and the fourth is classification of positions and wage management.

The department identifies non-core services as workforce development, workforce equity, and learning and development.

So with these distinctions in mind, the reductions include transfer of 11 full-time equivalents, FTEs, which would reflect reorganization or consolidation of programs and projects that would move the Deferred Compensation Unit to Seattle Retirement, Fire and Police Exams Unit to the Civil Service Commissions, and the Police Recruiting Innovation Unit to the Seattle Police Department that was already legislated earlier this year.

General fund reductions to address the general fund deficit would include abrogation of 10.5 FTE for a savings of about $2.5 million.

This would include elimination of the citywide learning and development, workforce development, equity performance management program.

If those words don't initially ring a bell, that means Eliminating the online E3 performance management system for those departments that use that.

They would be doing that on paper by themselves without SDHR support except for advisory support.

Elimination of the workforce equity division as a separate division in the department.

Removal of one position in the benefits unit and reduction in temporary contract labor funding.

So with that in mind, a policy consideration for your review is the elimination of the workforce equity division.

This would include elimination of the division as a standalone unit, abrogating the field director position, which is a full-time position, and a vacant part-time advisor position, removing funds for associated non-labor expenses, and moving the two remaining positions to the business operations division.

So in sum total, there are 3.5 FTE dedicated to this work right now in their own standalone division within SDHR.

The proposed budget would remove one and a half of those positions and move the remaining two to a different division.

As background, the Workforce Equity Division was established by executive order in 2015, affirmed by a council resolution later that year.

The division does a number of things, including managing the city's workforce equity initiative, implementing the five-year workforce equity strategic plan that was released earlier this year, supporting the city's broader race and social justice initiative, now in its 20th year at the city and codified as a city policy last year.

and leading other efforts to advance equity, including implementing recommendations in a recent workforce equity audit that was issued by the city auditor's office last year.

Much of this work is focused on findings that the city of Seattle workforce does not represent the community makeup of King County.

Black, indigenous, and Latina women are historically underpaid within the city's workforce.

That includes underrepresentation as supervisors and high-wage earners.

Indigenous peoples have been historically underemployed and unemployed, and those who have physical or cognitive disabilities are underrepresented in the city's workforce.

If Council accepts this proposal, SDHR's administration of the Workforce Equity Initiative would shift to an advisory role.

The strategic plan would be administered at the department level.

Citywide progress would be monitored through an internal SharePoint site.

It goes by the acronym UNITE.

that would have information on employee demographics, compensation, turnover rates.

It would launch next year, late in 2025. And last, SDHR estimates that removal of the field director position would have the most notable impacts on strategic direction spanning across the federated model of HR services at the city, and that removal of the part-time advisor position would have less impact as it has been vacant this year due to a hiring freeze.

So policy options to consider would be adding appropriations to partially or fully restore the workforce equity division to continue citywide efforts to advance workplace equity, or accepting the proposal, no change in the proposed budget, which would shift this work to the department level and retain two positions to serve in advisory roles.

SPEAKER_05

Thank you, Karina.

Council President Nelson is chair of the committee overseeing this department.

She's not with us right now.

Council Member Kettle, if you want to, I've got some introductory remarks luckily ready to go.

SPEAKER_04

Chair Strauss, I'll defer to your introductory remarks, please.

SPEAKER_05

Okay.

Generally, I can say that with all FTE reductions, whether they're abrogated filled or abrogated unfilled, we're going to be doing a line-by-line review of all of this, colleagues.

So I'm going to ask just a couple questions about FTE.

specifically in your report just now you mentioned that there are 3.5 positions 1.5 would be abrogated two would move out of this work group into a different work group all of that council member kettle said something really smart yesterday which was you can remove people from doing the work but that doesn't mean that the work doesn't still have to be done and so the question comes they're moving different work groups, would their body of work continue to be performed by these individuals or are they taking on a different body of work?

The question comes, really it makes clear, is this a reduction of the work or is this a cut or closure of this work?

SPEAKER_00

Yeah, so the two remaining positions would move to an existing different division.

They would still focus on workforce equity.

They would be serving an advisory role for departments as the departments do this work at the department level.

They would be administering the Unite SharePoint site.

And what would change...

the most about this with this proposal would be that there wouldn't be a citywide strategic vision for workforce equity.

And so that would it would be dispersed among the departments rather than having it live centrally at the SDHR.

SPEAKER_05

And I know from past experience of the council trying to manage departments via the budget process, it hasn't always gone well.

Do we have the ability to say which work group these positions are held within to say, could we keep these two positions in their current work group?

Or do we even have control over that?

SPEAKER_00

That sounds administrative in nature, and right now the division is comprised of these four positions, the field director, the two advisor positions, and then one that's vacant.

And so if the director is gone and the vacant advisor is gone, it would be like a dangling two positions that don't have a reporting structure.

So I believe that is why they are anticipated to move into business operations.

Okay.

SPEAKER_05

That's very helpful.

I see Council Member Morales has some questions.

Or your hand, at least.

SPEAKER_01

Was Council Member Kettle getting them?

SPEAKER_05

No, he deferred to me.

SPEAKER_01

Oh, okay.

Okay.

Thank you.

SPEAKER_05

And Council Member Wu is also present.

SPEAKER_01

Thank you for the memo, Karina.

I do think it's important.

You mentioned one of the core services includes compliance.

And the workforce equity work is really important citywide as we talk about lots of different city departments needing to change their culture.

You know, we are being sued by our own city workers for harassment and discrimination.

We're increasing our budget for judgment claims, and that is at least in part due to the fact that our own city workers are suing us, and yet we're eliminating staff and the programming that can help us start to change culture across the city.

You referenced the technical report from the auditor.

I did work with the auditor in 2021 to understand the impact of hiring and promotion of black women after we were sued by seven black women for discrimination.

And what we found, as you reference here, what the audit found was that women received lower promotion pay increases, particularly women of color.

And Native American women receive the lowest promotion pay of all.

So I think the idea of shifting this work back out to departments is inconsistent with the recommendations of the auditor, for one.

That work needs to be centralized so that we do have an overarching citywide strategy for how we're going to make sure that we are holding our departments accountable for understanding what equity means, what fair promotion practices means.

And I really think that we need to maintain funding for this division.

I think it is a critical part of how the city complies with the law about creating a safe work environment across the city for people who want to be So I am really going to be advocating for maintaining this department in particular.

The work of the auditor is not finished.

There is more work that they wanted to do to continue researching what our hiring practices are, what our promotion practices are, particularly so that women of color in the city are treated fairly and don't have to deal with some of the harassment that we've heard about from some departments.

Thank you for sharing what this change would look like.

But colleagues, I'm hoping for support in maintaining these positions and this work in particular.

Thank you, Chair.

SPEAKER_05

Thank you, Council Member Morales.

Any other questions?

Karina, could you repeat what you were saying about the internally focused I'm gonna call it continuity of growth within city employees.

I'm looking at your memo right now.

I heard you say the words, but I'm not seeing it in the memo.

SPEAKER_00

Can you repeat the question again?

SPEAKER_05

I believe we have, I'm gonna say all of the wrong words, a program within SDHR that assists city employees growing within the city.

SPEAKER_00

Okay, that would be the Workforce Development Unit.

Yes.

So separate from the Workforce Equity Division is the proposed elimination of workforce development at the city.

It would move it again to the department level and SDHR would assist in an advisory capacity.

They wouldn't retain positions, to my memory for this, but an existing position could provide that service to other departments.

It would eliminate the annual tuition reimbursement and mentorships, internships.

SDHR would still do a bit of this work, but the broad career mobility within the city, that would no longer be conducted by SDHR.

SPEAKER_05

Okay, that's something that I'd like to dig in with you a little bit more deeply to make sure that we're supporting our current employees and ways to grow within the city.

Director Noble didn't know that I'm about to use him as an example of why growth within the city is important.

Colleagues, you may or may not know, Director Noble started here at Central Staff in the position currently held by Eric McConaughey.

AS THE CITY LIGHT CENTRAL STAFF ANALYST.

AND THROUGH THE COURSE OF HIS CAREER, HE'S SAT IN MANY DIFFERENT CHAIRS, CENTRAL STAFF DIRECTOR PREVIOUSLY, CBO, FORECAST COUNCIL, CENTRAL STAFF DIRECTOR AGAIN, AND WHEN WE HAD, I BELIEVE IT WAS THE WESTERN ENERGY WORM THAT CAME UP THIS YEAR, THAT WAS A PRODUCT, THE POLICY, AND COUNCILMEMBER WU DID A REALLY GOOD JOB OF SAYING, HEY, I DON'T THINK THIS GOES FAR ENOUGH.

This was a policy that Director Noble had worked on as a staff analyst.

And your insight there was really helpful to us.

And that's the importance of institutional knowledge and growing our own within our city.

Sorry, I used your name.

You didn't know I was going to say that.

SPEAKER_06

It has occurred to me that I've become institutional memory, and I'm not sure I'm happy about it, but it has happened.

SPEAKER_05

And it just really focuses on the folks that we have working for our city.

There's benefit in keeping them and growing them.

I'm not seeing any other questions at this time.

I really appreciate this analysis, and I know we'll be following up in the next week or so.

Colleagues, that was so far, I believe, the fastest presentation we've had.

Nice work, Karina.

Phil, if you could read the next item into the agenda, and we're going to bring up some more central staff analysts.

SPEAKER_07

All right, agenda item five, Seattle Department of Construction and Inspections, briefing and discussion.

SPEAKER_05

Wonderful.

We are now joined by Ketel and Jen.

Thank you for coming up.

And as they're bringing up their presentation, we will dig into the Seattle Department of Construction Inspections, and they'll do the budget at a high level.

I'll turn it over to Council Member Morales, Chair of the Committee, and then we'll go through policy considerations previously known as issue ID.

SPEAKER_08

All right.

Cato Freeman, Council Central Staff.

SPEAKER_00

Hi, Jennifer Labreck, also Council Central Staff.

SPEAKER_08

I'll mention a few things here about STCI's budget just to refresh the committee's memory.

Council Member Morales may have some comments as well about STCI's budget.

Then we'll dive into two issues here, permit review, staff reductions, and tenant assistance grants and contracts administered by STCI with a focus on rental assistance.

Thank you.

Starting out here by way of a reminder, SDCI is an operating fund department.

Less than 10% of its revenue comes from non-construction and inspections fund sources.

The operating fund is the construction and inspections fund.

Revenue to that fund comes from fees and charges for SDCI's regulatory services.

Most non-construction inspection appropriations to SDCI are in the compliance BCL.

when somebody has a complaint about something, say it's a vacant building or something like that, STCI will send an inspector out to see if that complaint could be substantiated in a notice of violation issued.

That inspection is done on the general fund's dime, which is why most of the non-construction inspections fund appropriations are to that BSL.

That's also where the property owner and tenant assistance group is, which also receives some general fund funding.

You may remember that Director Torkelson mentioned that there'll be a BSL restructuring at STCI.

You'll see in the chart above that some BSLs zero out, and that's because of a realignment of staff resources, in part to respond to a permit audit done by the city auditor a couple of years ago, and also to respond to some changes are required by House Bill 5290, which amended the Local Project Review Act.

There'll be some layoffs, defunding, and transfers at SDCI.

Approximately 6.4% of SDCI staff will be reduced.

That includes 21 abrogations, defunding of nine positions, but the position of authority would be maintained.

and transferring 10 positions that do side sewer permit review back to SPU, which had previously done that work.

And then finally, there are two pieces of budget legislation associated with an STCI, 2025 fee increases and 2026 fee increases.

Those are two separate pieces of legislation that make inflationary adjustments and other adjustments to STCI's fees.

So that is my reminder to you about what's in the STCI, what's in STCI's proposed budget.

And I'll, I guess, turn it over to Council Member Morales now to tee things up.

Council Member Morales, chair of the committee.

SPEAKER_01

Thank you.

Thanks, Ketel.

So last night, we heard from a lot of the folks who would be impacted by these department changes.

You all missed it, but we were here till 10 o'clock.

So we heard from folks from the permitting team at SDCI.

We know that MUPs have declined.

But this is staff that still works on implementing changes to our land use.

And these positions still have a lot of work to do.

The department anticipates increased permits with missing middle housing.

They actually also look at single family construction, coaching, pre-submittal conferences, and what we heard last night was that there was an anticipated hit in review time if all of these positions are lost, a reduction of about 55% in the amount of time that it's going to take them to be able to review permits.

You know, it really undermines the progress that we have made and would continue to make with the recommendations from the audit that was done last year.

We also heard from renters last night really clearly that they're interested in kind of a one-stop shop like OLS that combines the renter work at tenant services at SDCI and the renter programs from the civil rights and a request to fund the work group.

We did put $50,000 in last year to fund a work group.

I think many of us have heard the frustration of renters trying to understand and landlords trying to understand what the new regulations are, how folks work together.

and how both tenants and landlords can understand how to navigate and negotiate when there is somebody who is dealing with a challenge paying for their rent.

So, colleagues, that is something that I'm going to be looking at trying to retain in this budget.

The other thing we heard from tenants and a lot of advocates and folks who actually deliver tenant services last night is the need to fully fund renter rights.

You know, not just the $800,000 that was...

proposed to be cut, but significantly more is being asked for so that we preserve tenant services across the board.

And I realize, Council Member Moore, this is actually your part of the SDCI, but I did want to note just some of the comments that we heard last night.

I also have some specific questions, if I can continue.

SPEAKER_05

Unless it's policy considerations, and then let's dive into that.

SPEAKER_01

Oh, you still need to do that part, yes.

Please, please continue.

SPEAKER_05

Why don't we do policy considerations and then I'll turn it back to you, unless, Councilor Moore, you've got something to share right now.

Back to you, Mr. Freeman.

SPEAKER_08

Okay, here we go.

So the first policy consideration here is the permit review staffing reductions.

As I mentioned, the proposed budget would aggregate 20 term limited positions and defund nine positions that do permit review.

Those positions include 24 land use planners, three permit specialists, one of whom is a permit specialist supervisor, a permit technician and a strategic advisor.

At the time the budget was proposed, 17 of those positions had incumbents.

I went back and looked at layoffs after the Great Recession.

So between 2008 and 2012, there were also reductions at STCI.

This is just to give you a little bit of context.

The city reduced position authority at STCI by 48 positions over a four-year period.

So it was about an 11% reduction from a 441 position base down to about a 393 position base, and then began adding positions back in 2013 as permit volumes increased.

So why the position modifications?

We've talked about this more or less already.

Declining permit volumes.

SDCI is an operating fund department.

It needs revenue from permit review services to fund the positions at SDCI.

So there are a couple of mechanisms that STCI has to respond to sort of the volatility in the construction market, and we all know the reasons for the volatility, macroeconomic trends, among other things, and also just the inefficiency of the real estate market.

A lot of developers are chasing the same future tenants, and so a lot of things are being built at the same time.

All of a sudden, the city may find itself overbuilt, and we may be in that position now as looking at American Community Survey data and vacancy rates for rental units in the city are at 8%, according to ACS.

That's pretty high.

SPEAKER_05

Hey, Tito, can you just speak a little closer?

Sure.

Yeah.

You have a very good job of giving a lot of information quickly and quietly.

All right.

SPEAKER_08

Yeah.

So the two mechanisms, sort of the structural mechanisms in STCI's budget to address volatility, so rapid swings and construction activity, are contingent budget authority, STCI has this.

SDOT also has it in its street use division.

This allows STCI up to an approved limit to add positions, to sort of access authority to add positions when there are increases in permit volume, so they don't have to come back to the council.

And during STCI's presentation earlier, I think Director Torgelson estimated that that's about a three-month time savings there that is occasioned by CONTENTION TO BUDGET AUTHORITY THAT STCI HAS.

THE OTHER MECHANISM THAT STCI HAS IS A CORE STAFFING RESERVE.

SO THERE'S A RESERVE TO RETAIN CORE STAFF WHEN THERE ARE PERMIT VOLUME DOWN TURNS, AND IN THE 2025 PROPOSED BUDGET, THAT RESERVE IS 22 MILLION.

THERE'S ALSO $6 MILLION IN UNRESERVED FUND BALANCE AT STCI.

SO THOSE ARE THE TWO MECHANISMS THAT STCI HAS TO ADDRESS rapid changes in the real estate development market.

So as you may have heard last night, there are a lot of things happening next year.

The city will be implementing House Bill 1110, which will increase missing middle zoning in the city of Seattle.

Also implementing House Bill 1293, which requires some changes to our design review program.

And also implementing House Bill 1337, which makes some changes in how we regulate ADUs All of those changes could induce permit activity next year.

Unclear if that will happen, but those are some changes to state law that the city has to implement that could make some, provide some impetus for folks to apply for permits with the city of Seattle.

Also, there is a change to the Local Project Review Act, House Bill 5290, which becomes effective January 1st of 2025. and that those changes, among other things, require the city to streamline its permit processes and run the risk, potentially, of having to refund permit fees to folks if new timelines aren't met.

So those are all changed circumstances coming from the state that sort of may affect staffing needs at SDCI next year.

So the question here for you all is, are the layoffs the right amount?

Is this the right time?

I don't have any kind of rule of thumb here to sort of help you guide that decision-making, but there are certainly some options available to you, and it involves using that core staffing reserve, which is one of the structural mechanisms in STCI's budget to address periods like we're experiencing now.

So an option here for the council would be to use the core staffing reserve to maintain position authority for some or all of the positions that are proposed to be abrogated.

So I think I mentioned that some of those positions are sunset positions, which would in 2025, as it currently stands.

Use the core staffing reserve to maintain position authority for some or all of the positions that would be defunded.

So those are not the sunset positions, but the positions for which SDCI would retain authority, but defund those positions.

And of course, the council could make no change to the mayor's proposed budget.

There is obviously a trade-off with using the core staffing reserve.

If you use it now, there will be less of it for you to use in the future.

So if the downturn lasts longer than, say, the four years that followed the 2008 Great Recession, then there will be fewer resources in the future for the council to look to to maintain core staffing at SDCI.

SPEAKER_05

Thank you.

Ketel?

Councilmember Morales anything to kick us off and then council member Moore.

SPEAKER_01

Yeah, so I do I have a few questions about this That so I think for me the question is, you know if we if these positions are five million dollars in the budget for 25 and 5.2 for 26 We could if I'm understanding right fully fund these and still have half of the reserve.

Is that right?

You said it's 22 million.

I

SPEAKER_08

Yeah, so the salary savings to the construction inspection fund, so it's not to the general fund, so it's not a fungible source of money, but to the construction inspections fund from reducing these permit review positions is about $5 million in 2025 and $5.2 million in 2026. So there is about two years or so of core staffing reserve that could be available to the city if all of those positions were maintained.

SPEAKER_01

And so the risk of reducing that by half is just if things don't come back in the next couple of years, it affects our ability to maintain staffing later.

That's right.

Can you explain why these positions were sunsetted in the first place?

SPEAKER_08

Yeah, I believe many of the land use planner positions were added using contingent budget authority.

So at the time, and this is actually something I'll need to confirm, but at the time those positions were added, they were added because there was an uptake in permit volumes and the city access contingent budget authority for those positions.

SPEAKER_06

Okay.

That makes sense.

The budget office would have gotten indication from STCI that increased permit volume.

They would have seen it in the revenues.

They would have asked for the positions.

But every expectation or some level of expectation that that was a peak issue and that demand would fall off.

So it would make sense to not make those positions permanent, but rather to put some sunset on them.

Probably the date was a little bit arbitrary because you didn't know when the downturn was going to hit, if it was going to hit.

But that's consistent with the way the Contingent Budget Authority has been created and has been deployed previously.

SPEAKER_01

Well, and I guess the question is, given all the changes that are coming in the next year, is there a way to project how many permits we might be getting and whether this is the right number of people to be letting go?

I don't think so.

SPEAKER_08

I mean, possibly.

It depends on the changes and when those changes are actually implemented.

So an example here, sort of where there may be increased activity for master use permits, for example, might be with changes to ADU stuff that could happen sooner than the House Bill 1110 implementation.

So with those changes, may come a change to sort of allow us for fee-simple ownership of ADUs that are constructed through unit lot subdivisions, which you can't do now.

So to own an accessory dwelling unit if somebody develops an accessory dwelling unit.

It's really only accessory and name in this case.

Somebody can develop an accessory dwelling unit, condominiumize that unit, and then sell it that way, but not sell it through fee-simple ownership with subdivided land.

That's a likely change that will come with implementation of some of these state laws.

That change alone could induce some permit activity for folks who may want to dissolve their condominiums and just have that kind of fee-simple ownership.

So that's one possibility.

But it's really hard to know how many folks would choose to do that.

SPEAKER_06

For what it's worth, next coming Tuesday, you'll be joining the Revenue Forecast Council.

and the forecast office will be presenting its revenue forecast.

But underlying that revenue forecast is an economic forecast, as I was indicating, I think, yesterday, as a matter of fact.

And there are specific projections in there about construction activity.

I can't tell you off the top of my head.

I could go try to pull up some files.

And to be clear, it's a forecast, and I was in that business, and it is what it is.

But given the employment trends, there's no evidence that we're headed back to the kind of boom that we were in.

Again, I'm not saying that with any joy.

I just, that's, you know, with...

We're not seeing employment and growth, and it's not projected.

And that ultimately what drove all this construction activity, both the commercial and the residential, was the jobs.

That's right, someone's gotta have people moving here looking for somewhere to live.

SPEAKER_01

Okay, that's my question about that.

I am, sorry, let me get back to my notes.

SPEAKER_05

And we've got one more policy consideration.

SPEAKER_01

Yeah, okay, let's, I'll come back.

SPEAKER_05

Sounds good.

Council Member Moore, do you have a comment on this policy consideration?

SPEAKER_03

I do, thank you, Chair.

I have a question about how these positions engage in tree, Well, basically approving permits to remove trees and approving building permits as part of that.

SPEAKER_08

Yeah, so some of these positions probably do play a role in administering the tree code.

There were some positions that were added last year when the tree code was amended.

I don't think those positions are being abrogated here, but I'd have to double check that to make sure that that is a true statement.

But the types of positions that are being eliminated would play a role in administering the tree code.

So there would be fewer staff to do that, but there would still be staff at STCI that are able to perform that function.

SPEAKER_03

And I think this may be a rumor, maybe you can confirm or deny it, but that there are currently staff who are engaged in reviewing the tree ordinance, or they are reviewing the permits to comply with the tree ordinance, and they would be losing their positions, and new staff would be replacing them?

SPEAKER_08

Yeah, that is new to me.

I can't confirm or deny it.

SPEAKER_03

Okay, if we could get some verification about transfer of staff, because I think we have staff now who have some training and expertise in the tree ordinance, and they would be being replaced with staff who are novice to that.

But if we can get confirmation on all of those questions, I'd appreciate it.

Thank you.

SPEAKER_05

Thank you, Council Member Moore.

Other colleagues?

Otherwise, I've got a couple questions.

Council Member Moore, your question right there speaks to why we have the contingency fund and the importance of it.

Kudel spoke to it briefly in 2008. I couldn't quite hear the total number of employees that we started with.

We had about a 40 employee reduction.

SPEAKER_08

Yeah, there were 441 employees at SDCI in 2008. And over the course of four years, that was reduced to 393. So 48 positions.

SPEAKER_05

And in that time that I spent the last four years really working on this permit issue, the audit was just one step in that.

And what really became clear to me is that during that recession, we lost a lot of really highly trained experts.

PERMIT REVIEWERS, WHICH IS THE IMPORTANCE OF OUR CONTINGENCY FUND BECAUSE IT TAKES, I HEARD LAST NIGHT, TWO YEARS FOR SOMEBODY TO REALLY COME FULLY ON BOARD.

AND WE ALSO UNDERSTAND THAT THESE PERMIT CYCLES ARE CYCLICAL.

AND I THINK THAT'S THE SMART REASON THAT SOME OF THESE POSITIONS WERE LIKELY TERM LIMITED BECAUSE WE KNOW THAT EVERY ONCE IN A WHILE WE HAVE TO COME BACK AND TAKE ANOTHER LOOK AT HAVE WE GROWN TOO FAR?

ARE WE AT THE RIGHT LEVEL?

What is really important to me is that we continue our work towards reviewing and issuing both building permits and MUPs at a faster timeline.

And so that's a concern that I have here.

I know that in some of the slides that we've seen, we're currently in a permit lull, similar to that of 2010 at the bottom of the last building boom.

Do you have a good sense of how many permits these building permits or MUPs that they're reviewing right now in comparison to even the last few years?

SPEAKER_08

I included a chart that was really a proxy chart.

It just lists residential units being permitted, and that's a pretty good proxy because a lot of the development in the last several years has been residential, and that's actually where a lot of pipeline projects are now.

One thing to keep in mind is that in recognition of the declining, well, recognition of increasing interest rates and the fact that we're kind of at a point now where there are fewer building permits, the council extended the life of some master use permits.

That'll actually probably make the lull a little bit longer in some ways because those permits will be alive for a little bit longer and folks can bring them back to life and build their projects again.

in the future when the market returns.

I did include in the memo kind of a proxy shot of just overall residential permit activity and sort of things have kind of, at least for new permitted residential units, things have more or less leveled off and have leveled off since about 2020, since 2022. And it looks like we're more or less on trend for 2024 with that leveling off year to date.

But so yeah, we may be in a trough.

SPEAKER_05

And what's clear to me also is that the national economy is knocking on wood, now beginning slow growth.

The key word there is slow.

The other key word is growth.

We are going in the right direction, but maybe not as, and I heard Director Noble say yesterday, we can't grow our way out of even that $79 million deficit that we have projected in 2027. That said, we also have, as you mentioned, HB 1110, some other policy considerations, the comprehensive plan that was, even more maps were released yesterday, and that we could keep these staff, but that would, we could keep all of the staff for a shorter period of time or a fewer number of the staff for a longer period of time is essentially the way, what I heard you say.

Is that generally correct?

SPEAKER_08

Yeah, that's generally true.

SPEAKER_05

And it's, this is where the balance is, because we need to keep that institutional knowledge that is within SDCI to bridge the gap until we get into faster or the slow growth.

I think that's really, that is the policy challenge that we have right now is at least from my perspective, beyond the fact that each of these individuals are humans that serve the city of Seattle, serve Seattle residents and have lives that, We heard many of their stories last night.

And we can't just look at these as positions on a piece of paper.

These are people who serve our city.

That's an editorial.

I don't think I had a question for you there, Ketel.

Let me just, and I see Council Member Rivera has a hand.

I'll come back to any more questions I've got.

Council Member Rivera.

SPEAKER_02

Thank you, Chair.

Just, Ketel, so these positions, if, so plus one to Council Member Moore's comment about the tree ordinance and, you know, are we losing expertise with any of these positions?

So thank you for getting back to us later about that.

And then in terms of these positions, do we have, is it impacting permitting wait times?

Will it be impacting permitting wait times for the projects that are waiting to get permitted?

Are there any impacts to that?

SPEAKER_08

Probably not in the short term, as long as permit volumes remain low.

But as permit volumes increase, that there could be an impact there, yeah.

SPEAKER_02

Right now, given.

SPEAKER_08

To my knowledge there's not an extensive backlog in the queue to get in the door with your permit application.

SPEAKER_02

So if we went the route as council member, Strauss was saying we're weighing this, do we keep folks now for a shorter time or do we wait till it picks back up and then hire people later?

What would these folks then do if we don't actually have the need really for this service right now given the lull?

Is there something else that they could be doing?

I mean, I'm not clear.

SPEAKER_08

They are permit review staff.

There may be other things that they could do at SDCI, but it depends on the function of what they're doing may not necessarily mean that what they're doing is construction inspection fee eligible.

There are always process improvement activities going on at STCI, and there's a change in BSL structure, I think, to recognize that in the proposed budget.

So there could be some process improvement work that staff that have less of a caseload, a permit review caseload, could occupy themselves with during the lull.

But that's a fair point, Councilmember Rivera.

If there's not permits to review, there may not be as much activity for these folks to perform.

SPEAKER_02

Yeah, and that's the tricky part.

And then, Ben, in general, and I think this is just in terms of these staffing abrogations, is the city help employees find other positions in the city that may be vacant?

Does HR help with that?

I know we do at the department level, but I don't know whether broadly HR does that.

SPEAKER_06

They do.

Project Hire, I believe, is the name of the program.

I'd forgotten it yesterday when I was trying to reference it.

essentially link employees who are getting laid off to other opportunities that are in the city and given some preference at least in terms of access to the positions and interviewing and the like.

But again, ultimately it's a question of skill sets and whether they have the appropriate background for the other positions and that's obviously individual based.

So I just, You already know this, I don't necessarily need to say it, but there is a real tradeoff here because if you retain these positions for a little while and use the staffing, the reserve that exists, if the permits don't come back, then you have to risk the position is, the risk then is that you'll end up laying off more later and then sacrificing, for economists term, that human capital, that expertise.

Then the risk there further is that when it comes back, when the permit volumes come back, you've got that many less folks and much less expertise.

My generalized understanding is that that was one of the things that happened post-Great Recession is permanent volumes picked up quickly once things got going again, and there was a backlog for a while because we had to staff up.

So there's no winning here at some level, and it is really a significant management problem.

We had a discussion yesterday about kind of a general fund revenue stabilization.

You're always running the question of how quickly do you run it down, and that's always a question of when do you think it's going to go back up, and you can never know that.

Again, highlighting, and I don't have an answer, just highlighting that that trade-off is very real.

SPEAKER_02

Yeah, and the inability to, if it goes up again and we can't hire people because we've decided to keep folks now is also very real because then we're managing with those wait times again that are preventing the ability to get projects done.

So definitely hard, hard choices.

But good to have all this information.

Thank you.

And I'm I'm glad to hear that HR does help with some of that, helping employees find other places to land if possible.

So thank you for answering that.

Thank you.

SPEAKER_05

Thank you.

I'm going to just kind of tick through my questions that I'd love to get on SharePoint, and then I'll pass it back to Council Member Morales and or more, should they.

But I think, actually, we've got another policy consideration.

For this, questions for SharePoint, again, about the permit levels.

So that's both building permits and MUPS, that's a distinction, as well as what other tasks are they performing, whether they're fee-supported or not.

For you and me, Ketil, I'll wanna run some options with you regarding the contingency fund levels, projections, and forecasts, especially after Tuesday's revenue forecast.

And then, colleagues, this is not a question for SharePoint, it's just an observation that SDCI is pretty well protected most of the time because their work is fee supported.

meaning that they've got dedicated funds.

It's all kept within the same environment.

This is the moment where it becomes harder because the work that they do is performed based on the funding that they are receiving for the work that they do.

I do appreciate that while And I'm using some pretty specific terms when I'm talking about reductions.

That means that there's still funding in the program.

It's not zeroed out.

Cutting means that it's gone.

Those are just some distinctions from the past.

I am happy to hear that even though we're cutting, that this proposal has the funding cut, the position authority is retained because that is a pretty big hurdle if we need to restaff up to not have SCCI having to return to us to ask for that authority.

They just have the authority and if fee level fee, permit fees come in at a higher rate than they're able to just go without us really getting involved.

That's the good and the bad.

That's my observation.

Anything to, did I get that right?

Did I share with me, Ketel?

SPEAKER_08

No, you got that right.

SPEAKER_05

All right.

All right, any other questions on this policy consideration?

I think we've got another one.

SPEAKER_08

All right, so the next policy consideration has to do with tenant assistance grants and contracts with a focus here on rental assistance, which is in part why Jen Labreck is here at the table with me.

SDCI has administered some rental assistance, but it's not the only department in the city that does that.

She's here for color commentary, among other things.

So in general, as the council knows, STCI has a contracting and grant-making function for tenant services.

That work is done by STCI's property owner and tenant assistance group.

It contracts with 10 organizations, provides tenant education, language access, eviction defense, direct counseling, and other services.

When SDCI presented, there were some questions about sort of, why is this function at SDCI?

And I had to go back and remind myself a little bit of the history here.

Part of it has to do with, it's what the code says.

It currently resides at SDCI.

And that's not, it hasn't historically always been the case.

That was authority that was added to SDCI in 2015. So it's something that's been ongoing here for about 10 years, but it wasn't always the case that STCI had that kind of tenant protection function.

STCI has always kind of had a role when it comes to rental housing, especially making sure that housing is habitable and things like that, but it hasn't necessarily had this tenant protection function.

Part of the reason for STCI taking on that tenant protection function in 2015 was actually sort of a good government impulse of the city at the time.

there had been a scathing state audit on HSD's contracting practices and HSD had been administering some of those contracts.

As a consequence of that, a factor in determining that STCI should take some of this work on, that audit was one of the considerations.

The proposed budget would reduce funding for tenant services grants and contracts from about 2.4 million in 2024 to 1.8 million Depending on how you count it, that's about a 25% reduction, but part of the $2.4 million in 2024 was $1 million added on a one-time basis for rental assistance to be administered in conjunction with eviction legal defense.

Any questions about any of that?

All right.

So the proposed budget indicates that STCI would retain would continue to provide eviction legal defense to the tune of about $527,000.

Again, STCI is not the only entity in the city that provides not eviction legal defense, but provides rental assistance.

I think I just misspoke.

The $527,000 would be provided for rental assistance, so that would be something that the mayor is proposing to continue at STCI, but at a reduced amount.

STCI is not the only entity that provides rental assistance.

HSD was proposed to provide rental assistance.

It contracts, I think, with 11 community-based organizations for that service.

The total amount anticipated in 2025 is $4.6 million.

$2.4 million would come from the general fund, and $2.2 million would come from the housing levy.

That's kind of a baseline amount.

ADDITIONAL FUNDING FOR RENTAL ASSISTANCE COULD COME FROM HOUSING LEVY INTEREST EARNINGS.

SO STCI SHARE OF THAT APPROXIMATELY $5 MILLION AMOUNT IS ABOUT 10%.

THE 527,000 PROPOSED BY THE MAYOR IS ABOUT 10% OF THE TOTAL THAT WOULD BE AVAILABLE CITYWIDE FOR RENTAL ASSISTANCE.

SPEAKER_03

SORRY, KEATLE, I CANNOT HEAR YOU.

SPEAKER_08

SURE.

JUST GIVING YOU SOME PERCENTAGES HERE, ABOUT $5 MILLION CITYWIDE PROVIDED FOR Rental assistance, SDCI share of that, which is a little bit over $500,000, would be about 10% of that total appropriation.

So STCI does consult with peer departments in establishing its RFP for all tenant service contracts and grants.

But there's not, you know, that is a consultation only.

There's not necessarily sort of a formal policy basis for making decisions about how funds should be distributed, like a unified RFP or something like that.

So there are a couple of options here for the council to consider.

One, adopting a statement of legislative intent, requesting that SDC and HSD report to the council on a process for that contracting RFP.

Another could be to make no change to the mayor's proposed budget, and these are, of course, points of departure.

So there are many options here for the council beyond those two in deciding how to make appropriations for eviction legal defense.

and tenant assistance.

I keep confusing those two things.

I meant rental assistance, sorry.

Fair enough.

SPEAKER_04

Council Member Moore, I'm going to pass it to you.

SPEAKER_03

Great, thank you.

I don't necessarily have a question.

It's more just a statement, which is that I think one of the things that we at the, well, the council did and through our committee, the housing committee, was to get through the...

Administration and financial plan for the housing levy was to set aside the interest payment and direct that directly to rental assistance So that had not been done before so that we are looking at having additional Interest monies to direct towards rental assistance of between one and three million dollars a year.

So that's something also that we should be taking into consideration But I just want to be on the record that I believe we need to be going the opposite direction and vastly increasing the amount of rental assistance that's available to our community rather than cutting it.

It's also my opinion that we should It should be housed in one entity, and we should try to be as efficient and one-stop shop as possible.

In addition to looking at having rental assistance to address arrears, What I would really like to see is us being able to have mechanisms where we can identify the need for rental assistance before somebody gets the eviction notice, before somebody's looking at trying to dig out of thousands of dollars of arrears.

And I've got some ideas about how to make that happen.

But I think we have an opportunity here to sort of reset the ship and to look at, to me, rental assistance is a critical piece of our obligation to provide housing because it keeps people housed.

It's going to take us a long time, unfortunately, to get as much affordable housing as we need in this community.

And so I view this as a way to maintain people in our community while we're working to build places for people to live and that they can afford.

So I'm just putting out my policy positions there.

SPEAKER_04

Thank you.

Colleagues, any other questions, comments?

Council Member Morales.

SPEAKER_01

Yeah, I really want to appreciate what Council Member Moore said.

You know, what we heard...

just a couple of things that we heard from folks last night, that the organizations that provide these services are not only doing know your rights workshops and that sort of thing for landlords and for tenants, but they're de-escalating conversations between tenants and landlords so that Evictions don't get processed.

They're supporting reentry for folks.

They're supporting domestic violence victims who need to find a place to stay.

And, you know, they're...

In this budget, these services are losing 50% of funding, but over 50% of Seattleites are renters, and many of them are deeply rent-burdened already.

So these are really important services that are needed to prevent eviction, to prevent the homelessness crisis from getting worse.

I do think that, you know, once again, the one-stop shop idea to support everybody in this ecosystem of rental, you know, landlords and tenants, I think is something that we really should consider.

It's just a small first step, but I think it would help in...

trying to find a place for us to get clarity all across the board on how to make this process smoother and less traumatic for everybody involved.

And then the last thing I'll say about the SDCI budget is we also heard from Habitat for Humanity last night and there is, sorry, let me find my, spreadsheet that I created for myself.

There is 1.7 million in funding for homeownership and sustainability in the SCCI budget.

I would be interested in trying to restore as much of that as possible.

so that we don't fall below the threshold.

There's a potential to create 276 new homes if this funding is restored.

And given the housing crisis that we have, I think it would be really important for us to do everything we could to help 276 families find a safe place to stay.

So...

I will add that or ask central staff to add that to the list of questions to consider.

Thank you, Chair.

SPEAKER_05

Thank you.

Rental assistance is incredibly important to me.

I mean, for the same reasons that Council Member Moore described.

When we're able to prevent somebody from losing their housing, it is a lower dollar amount beyond the rest of the trauma that occurs than to get them back into housing.

I think that the number was $200 of prevention saves $2,000 of rehousing cost.

Don't quote me on that, even though I'm saying it on the record, but that's my recollection.

These dollars save people's money and they save people's lives a lot of the time.

I know that during the pandemic, we were able to get to a historic level, if I recall, a historic level of rental assistance funding, namely due to the federal COVID relief funding that expires this year.

One of the questions that I'll be asking next week, if you wanna put it into SharePoint or just for your own analysis, is over the course of history what has our level of rental assistance funding been?

I know that we're looking at a reduction right now, but is that a reduction from 2019 levels, or is that a reduction from the amount that we were able to get out the door because of federal funding?

my values and my mission is to get as much rental assistance out the door as possible.

I just wanna be able to compare apples to apples.

And I also, Council Member Moore, your point about having a one-stop shop is really well taken.

We just had, we are right now with this budget in the moment of doing a bit of a reset for the city because we've finished 10 years of high growth, low inflation, followed by a pandemic.

Seattle's a bit different today than it was in 2008, 2009. I look at the similar conversation that we just finished having about the Seattle channel.

I see the same conversation that we've been having about arborists all being in one department rather than split across the city departments.

I'm seeing the same thing with rental assistance.

I know that it is helpful to have both the property owner and tenant assistance in the same group within SDCI.

And I've also heard FEARS THAT IF SOMEBODY IS SIMPLY REALLY A LANDLORD WHO'S JUST TRYING TO GET INFORMATION ASKS THOSE FOLKS FOR INFORMATION AND THEY'RE FOLLOWED UP WITH A VIOLATION AND SO THERE'S THERE'S A BIT TO UNPACK HERE BECAUSE THE LANDLORDS THAT ARE HAVE ONE UNIT OR FOUR UNITS THAT ARE HERE LOCAL DON'T HAVE THE TEAM OF LAWYERS THAT A AN EIGHT STORY APARTMENT BLOCK HAS TO UNDERSTAND OUR tenant laws and we need to be able to keep our renters in their homes.

That's one of the most important things.

Question for SharePoint is just about the historic level, like the history of our levels of funding for rental assistance.

Because I do know that during the pandemic, it was a bit confusing for nonprofits even to be able to get dollars out the door because they didn't know exactly who to speak to in the city.

So point well taken.

Colleagues, any other questions on this policy consideration?

I see Council Member Rivera.

SPEAKER_02

Just to lend my voice also to the support for rental assistance and then equally important as ensuring that we're getting folks into units that they can actually afford is really critical because I know I've had at least one constituent that we were able to help with some rental assistance so they wouldn't get evicted and now you know he's continues to need support.

He's got now a voucher, which is great.

And so how do we ensure that we're looking at the system holistically?

So thank you council member Moore for your leadership as chair of the housing committee, looking at this work, making sure it is centralized, efficient, and looking at all the pieces to it and not just one piece, because it's not just rental assistance, right?

and also that home ownership piece as you mentioned and as Council Member Morales mentioned.

So all of that is important and I appreciate you looking into that and doing the deep dive that I know you're gonna be engaged in.

So thank you.

SPEAKER_05

Colleagues, other questions or is there anything beyond these two policy considerations that you'd like to bring up?

Council Member Morales, would you like to close us out here?

The second fastest presentation of the series so far.

Granted, it's the first full day of presentations, but.

SPEAKER_01

Well, I'll just thank central staff.

I know there's a lot to dive into here.

And in my opinion, this is one of the most critical functions that we play if we're really trying to support our neighbors in staying in their homes.

And so I look forward to it.

diving in with you to see how we can preserve as much of this as possible.

Thank you.

SPEAKER_05

Thanks.

Anything further from the table?

No.

Fantastic.

It seems as if we have all been in the chambers for 12 hours yesterday and a lot of hours today.

I appreciate everyone's time and attention on this.

We will come back together tomorrow morning.

We'll start off with the participatory budgeting, followed by Human Services Department and the Unified Care Team with the Office of Economic Development in the afternoon.

Again, Monday is going to be a pretty full day, public safety, police department, care, fire, city attorney's office, and Tuesday is going to be quite interesting.

Both things that are happening on Tuesday are not normal or not standard of the past.

Number one, we have not in the past had the forecast council meet with the select budget committee.

It has been a separate meeting that We've just reported out at the Select Budget Committee.

I made the budget reform process choice of having us all here so that we all have equal access to this information.

And then SDOT, we've talked about, they're going to be coming to bring us what amendments would be to implement the levy should it pass.

Colleagues, is there anything for the good of the order today?

SPEAKER_06

Just real quick.

SPEAKER_05

Please.

SPEAKER_06

On the forecast council meeting that's upcoming, we're still working on the logistics of that, but just so you're generally aware, there are actually four voting members of the forecast council.

There's very little for them to actually vote on in most meetings, like approving the agenda.

They don't actually vote to approve the forecast.

They would vote to make it...

The forecast director will make a recommendation, and it's only if the council wants to override that recommendation that they require a vote.

But all to say that, except for Councilmember Strauss and Council President Nelson, the rest of you are not voting members of that committee, so we're working with the clerk on those logistics, so it's somewhat unusual.

But the real goal will be to have you there to hear the information and to be able to ask questions of the forecast team, and per my suggestion to Councilmember Morales about asking about the construction forecast.

So again, I just...

There'll be more on this to come, but just to recognize, as Chair Strauss was saying, it's a little unusual.

Clearly, a whole lot of upside.

We're just going to make sure we work the parliamentary logistics, if you will.

SPEAKER_05

Yes.

It may be that we just opened the forecast council with the forecast members sitting around the table, and everyone else is up here as visitors.

This is, in my opinion, good governance, and...

increases transparency.

So with that, I hope you all have a wonderful afternoon.

We have reached the end of today's meeting agenda.

The next select budget committee is Friday, October 18th at 9.30 a.m.

where only written public comment will be accepted.

Members of the public may continue to submit written public comment at council at seattle.gov.

Is there any other further business to come before the select budget committee before we adjourn?

Hearing no further business, to come before the Select Budget Committee, we are adjourned.

It is 3.10 p.m.

Thank you.