Seattle City Council Select Budget Committee 9/27/18 Session I

Hey, good morning, everyone.

Thank you for being here.

Appreciate you being here at 9.30 a.m.

It's September 27, 2018. I'm Sally Bagshaw.

I'm chairing the Special Budget Committee meeting today.

This is the second in our series where we are hearing from CBO.

and from our various departments.

Yesterday, we discussed the mayor's budget and we took the first five departments of Office for Civil Rights, the Office of Immigrant and Refugee Affairs, Seattle City Light, Seattle Public Utilities, and the Seattle Department of Transportation.

Each of the departments gave us a high-level overview of their budget, their plans, and a review of the forecast, the revenue forecast by Ben Noble and our budget office.

So I want to say thank you for that.

Thank you, Council President Harrell, Council Member Gonzalez, Council Member Sawant.

Thank you all for being here.

So we're going to dive in today and receive presentations first from the Office of Housing.

Thank you, Steve Walker, Miriam, glad to see you both.

We'll have Department of Parks and Recreation, Christopher Williams and team is here.

We'll hear from the Office of Labor Standards, the Human Services Department and the Seattle Police Department.

And as I mentioned yesterday, public comment will be at the end of our afternoon presentations.

Public are welcome to come and we appreciate hearing from folks.

And I have set these public comment periods for the end so that people can be informed by the facts from our departments and then adjust their opinions and provide their thoughts to us.

We will continue to do that throughout budget.

And there are, once again, two big, large public meetings that will be available first starting next Thursday, October 4th here in Council Chambers.

We'll start at 5.30 p.m.

Public comment on the entire budget will be taken then.

And then we will have another meeting following about 12 days later on a Tuesday evening back here October 23rd.

And again, we're inviting the public to come and speak to us then at 5.30 p.m.

So with that, I think we'll just dive into the Office of Housing.

Lisa, thank you for being here.

I understand that Eric Sund is out this morning and that Lisa Kay will be taking the lead for Council Central staff.

Glad Tracy Ratzliff is here.

Once again, thank you to Allison McClain from my office for getting things organized.

So with that, any comments from my colleagues?

Okay, let's go.

Office of Housing, you're on.

And how about Miriam and Ben, good to see you.

Ben, will you start with introductions and we'll just go from west to east.

Oops.

You want to introduce yourself?

Sure.

Ben Noble, City Budget Director.

Miriam Roskin, Seattle Office of Housing.

Steve Walker, Seattle Office of Housing.

And Tracy Ratzliff, Council of Central Staff.

Great.

Good morning.

We are glad to be here.

I'm glad you are.

Well, we don't have a lot of budget changes this year.

We are always happy for a chance to share the good work of the Office of Housing and Information and especially answer any questions that you may have.

Miriam and I are going to tag team with I think Ben in the background assisting as necessary, but we have a short presentation that is following the template that was provided us by council.

And so I'm going to ask Miriam to kick us off.

So the first slide you asked us to present is on performance measures, and we have a myriad of data points to choose from, but we decided to focus these points on two components of our work.

One is production, just raw numbers of units that are added to the stock of affordable housing in this city, either via direct investment by the Office of Housing or through the incentive programs that we run.

The second is our direct service programs.

This is where we have staff who go into individual people's homes and provide energy efficiency and home repair services to improve their stability and ability to remain in Seattle.

Yes, that's at the request.

We're not going in without being requested.

That is correct.

That is correct.

There's an application process and we have staff who then respond to those applications.

In terms of the metrics for production, you will see on the first row funding awards.

This includes both rental and for sale.

Rental is by far the majority.

We are on track to exceed our goal for 2018. Those awards will be made later this year either via site-specific requests for proposal or through our regular open competition, the Notice of Funds Availability.

We did get a special boost in funding this year because of $30 million that we actually expect to arrive on Monday from the Washington State Convention Center project via the public benefit agreement.

You'll see our 2019 goal is a bit lower.

That reflects the fact that the convention payment will come in only but once.

Let me ask you a quick question, Mary, before you move on.

Would you remind us what is the total number of affordable housing units that we have paid for really since the beginning of the housing levy, what now, 20 years ago?

How many do we sponsor?

We have about 13,000 units in service.

That is at 60% of the area median income and below that we have funded.

And there are about 4,000 units in service by virtue of the incentive programs, primarily the multifamily tax exemption program.

Thank you.

So is that a total of 17,000 or a total of 13,000?

Seventeen.

Okay.

Thank you.

Moving on to the next row, we just talked about the multifamily tax exemption program.

Those applications, we count these units only at the point where the developer submits a certificate of final exemption, and that only happens at the point when the building is actually complete and a certificate of occupancy has been issued.

and those tend to come in towards the end of the year.

We are projecting for this year an addition of 600 units.

The program really fluctuates with the market, which is why we're reluctant to prognosticate as to where we will be at the end of 2019. Great.

Council Member Sawant has a question.

Thank you.

On that line in the table, when you say market-driven production, you mean all the affordable housing that was generated through the MFTE program?

I'm just trying to understand specifically what you mean by market-driven?

That is exactly right.

We were trying to come up with a shorthand, but that's exactly right.

There is a smattering of units in there.

I believe it is in the 2018 number, I believe it is seven units that represent the performance option under the incentive zoning program that is now being replaced by mandatory housing affordability.

And, sorry, just a couple of follow-up questions.

And I think we know that in 2017 there were $5 billion worth of new building permits that were issued.

How much of that is captured in this and like because I know there's a certain time lag also in terms of you counting these units.

I'm just trying to understand for us to say that the projected performance in 2018 would be 600 new affordable units through the MFTE program.

How many dollars worth of building permits does that equate to?

I cannot translate that into building permits.

Building permits are in for a certain dollar amount.

What construction ultimately costs is probably different.

What we can say is that we track the level of participation, that is to say for each new project that comes online, how many of them choose to participate in the Multifamily Tax Exemption Program?

We will be coming back to you with an updated number when we come to you for renewal of the MFTE program at the beginning of next year, first half of next year.

I will say that the last time we checked, we were at around 40% participation.

This is an important number.

because it represents our calibration of how attractive a program it is from the standpoint of the developer versus the amount of the rent buy-down that is being derived as public benefit.

If you were to have 100% participation, it might suggest to you that the amount of the exemption should be rebalanced in terms of the amount of the public benefit.

Forty percent is about what we aim for.

Thank you and that would be useful to know what proportion of developers are, or proportion of the building permits that were issued and programs that were built, building projects that happen are actually taking advantage of that, that would be a useful number.

And one other question on this table before you move to the next slide is why is the goal for 2019 In terms of the funding awards for new homes, I understand that you are not able to come up with a number for the market demand production because that depends on what developers decide to do.

But for the first row, why is the 2019 goal so low, 560 units?

And I also wanted to connect that to something you just said.

You said we're about to exceed our goal this year.

That may be true in terms of the goal, but given the affordable housing crisis outside, if we're saying that we're exceeding our goals, but the crisis is still pretty raging, then our goals are not, our targets are too low, is what I would say in general.

But more specifically, I'm really curious as to know why it's just 516 new units given the scale of the crisis.

Sure, I'm happy to explain that.

The sort of bump you see here in 2018, the 800 units, is directly related to the fact that we have a $30 million bump in our funding over what we would otherwise expect because of the public benefit agreement and the payment that is pending from the Washington State Convention Center.

That payment is due this year.

There will be no same payment next year.

So we have $30 million more to commit this year than we currently expect to have in 2019. And there is a direct relationship between the resources and the amount of production.

Of course, but I think that, thank you for clarifying the conventions and are part of it, but that also implies that very, very little has been allocated for affordable housing in the new budget.

You know, it can't just be about the convention center project.

It has to be about what is the overall dollars and as a proportion of the total budget that is being allocated.

Obviously, this is not, you know, directly just to the Office of Housing.

This is about the overall proposal from the mayor's budget, but I'm just saying that.

Thank you.

And we do at the end, do have a couple slides on sort of an overall budget overview of the Office of Housing's budget.

Thank you.

Great.

Council Member Herbold.

Thank you.

Can you explain why that bump that you're describing shows up in 2018 production?

I don't understand how $30 million received in 2018 can translate into new units in 2018. These are funding awards.

But the measurement is units.

Correct.

Funding awards for new homes, and it's the number of units that we award funding for.

Will be built at a later date.

Yeah, and generally the turnaround time is about two years, same as you find in the private market.

So simply that we define production as we produce a unit when we fund that unit.

And so that 30 million that we expect to come in on Monday will be awarded in early December as part of our NOFA where we have 200 plus million dollars of applications in our shop right now.

I think the point Councilmember Herbold is making and Councilmember Sawant as well is that we're not going to see 800 new units tomorrow morning.

This is like two to three years out that these 800 new units will be available for people.

Correct.

Now, we do also have statistics on the units that are placed in service year in year out because obviously we were in this business two years ago, four years ago.

15 years ago, 30 years ago.

Do you have a slide that shows that?

And so we can provide those.

In the context of a budget hearing where it's a question of how much is being awarded, how much authority do we have, it seemed appropriate to provide data on the awards.

If you are interested in placed in service numbers, we can provide that as well.

I think we all are.

Reflecting prior years.

So let's write that down as a...

Perfect.

And I do want to follow up on something Council Member Savant said, and I completely agree with her, that the crisis out there is so huge.

And we know that the City of Seattle, and I love the phrase, we can do anything, but we can't do everything.

So my goal throughout this budget is to think, okay, well, what can we do If there's monies available within the city, that's great, but the whole regional approach and making sure that King County and other cities are also stepping forward and helping us with additional housing units is something that you will hear over and over again over the next few weeks.

We know that you can't do everything, but knowing what you are doing, how you're coordinating with our friends in King County, as an example.

It really does help, because I believe that Steve, what's Steve's last name?

I just lost it.

From King County Housing Authority.

Steve Norman, right.

The King County Housing Authority, they also have something like 13,000 units that they oversee.

Maybe my number's high, but they've been doing this for as long as our Seattle Housing Authority, and we still have this giant gap of people who are needing housing and what we're gonna do to get people off the streets and into housing and then into better housing is really one of my sincere goals this particular budget cycle.

And again, I know it's not all yours, but since you guys are the experts, it'll be a wonderful opportunity to hear from you.

What can we do differently and what can we do more?

Thank you.

Just to wrap up this slide, did want to touch on those direct service programs I mentioned.

For our weatherization program, again, this is where, thank you, Councilmember Bagshaw, with an application, we then have staff who go into people's homes and do an energy audit and provide weatherization upgrades using local contractors.

Home repair, people apply.

We have both a loan program and thanks to the most recent levy, a grant program.

This is for people who are at risk of losing their homes for lack of a roof replacement, a side sewer, falling down staircase, you name it like that.

We are, again, on track to meet and exceed goals in the case of weatherization.

This extraordinarily high number represents kind of a blip.

We had a lot of multifamily projects.

This is not just single family.

It's also multifamily with very large unit counts.

And so that's why you do see that bump in terms of the projected year-end performance for 2018. The 2019 goal we'll talk about in a minute.

There's a state legislative change that may have some impacts on our unit counts for that program.

Home repair is running pretty much as expected.

Chair Baxter.

Sure, please.

Council Member Gonzalez.

Okay, thank you.

First of all, I just wanted to say thanks once again for the work in implementing the budget request that we had made and passed.

I think it was in the amount of $150,000 to support the work around identifying root causes of displacement or concerns related to continuing to stay in place and find housing for LGBTQIA plus seniors.

So we all had the good fortune of being together Earlier this week, as that report was released and some of the recommendations were discussed in that venue, one of the recommendations that was discussed was this concept around home repair and retrofitting homes to allow aging LGBTQIA plus individuals to continue to remain in either their rental unit or their house if they own a house.

My questions are going to be related to that particular context, but I was wondering if we have any data on the type of repairs that we are funding through the home repair line, and if so, whether we can get that data.

And then layered on top of that, if there are numbers and data regarding the number of seniors that we have been able to serve through this program, so demographic information related to that aspect would be great.

And I don't know if OH in the course of tracking data actually tracks age and whether or not somebody identifies as LGBTQIA+, then I think it would be helpful for me to have that information as I continue to look at how we advance the recommendations that were made by the consultant that OH contracted.

I believe Tracy has written down those requests and we will get back to you.

Great, thank you.

And then just really quickly related to that, I know that King County has a housing repair program as well.

What kind of leveraging or partnership do we have in terms of the program you're describing here today through our own levy and King County?

Thank you.

So we do work closely with King County on their home repair program.

And in fact, there is a portion of that program where we are now cross leveraging the two programs.

If that's something our program manager, Jennifer Labreck, we would be happy to present any time on that program as it evolves.

But we are happy to provide you any background about what those nascent conversations look like.

Yeah, Tracy, maybe if you can identify as part of the data collection process where we are leveraging and how we're leveraging and for what populations, if that data is available, that I think could also be helpful, again, to add some texture to some of the recommendations we saw out of the Rainbow Housing Report that was just released this week.

Great, thank you.

I'm going to pivot now to some of our strategic priorities for 2019, the upcoming year, beginning with Fort Lawton and our redevelopment efforts out at Fort Lawton.

We are on track.

We were actually scheduled to be in front of the hearing examiner this week under an EIS appeal.

However, that scheduled hearing was canceled.

We're trying not to read too much into that.

We're waiting to hear exactly what is going to be the next step.

We're anxious to hear from the hearing examiner, but I can say that we are on schedule to come to you with the redevelopment plan proposal in the early part of 2019. So that is moving along, and at times it feels moving slowly, but at times it feels like it's rolling along.

Excited to move to that redevelopment plan phase.

Can you tell me a little bit about the interactions with the neighborhood?

I know a year ago summer I mean it's been it feels like 18 months ago that we had multiple meetings with Magnolia neighbors and received their comments Where are we now with that?

Well, we since that time we've been in the EIS process and once we conclude that process and we shift to the redevelopment phase we will be back out in the community with a a second round or a next round of those conversations that are starting to be more tangible and tied to the actual redevelopment plan.

And I'll say with our development partners.

Okay.

And remind me, and you just mentioned the dates, what do you expect with the EIS?

And then if there is an appeal, would that appeal process continue?

Can you just give us a schedule?

Well, we're hoping that the appeal process will conclude really soon.

The canceling of that meeting is indicative of something.

We're not sure yet what exactly, so we're kind of in a holding pattern until we do hear back from the hearing examiner.

But we are assuming that we will stay on schedule and be coming to you with that redevelopment plan in the early first quarter, I'll say first quarter of 2019.

And if the decision by a concerned plaintiff is to appeal the hearing examiner's decision, that it goes to Superior Court and we're, what, 60, 90 days out from that happening?

And I don't know the process as well as maybe you do, but I'd be happy to lay out sort of worst case scenarios.

I'm going to stay optimistic this week and hope that we're staying on track and we do hear from the hearing examiner.

Great.

I'm not being pessimistic, but I know how these things go and I know there's concerns and I'd like to be able to see.

So if things go well for the hearing examiner, what's the date?

And we have all that information in the office and I'll make sure that you have it.

Thank you.

Thank you so much.

I am heeding your advice to make sure to be vocal if we have questions on this end.

So on the following along the lines of Chair Bagshaw's questioning for the Fort Lawton redevelopment plan, Um, it, uh, in the budget book on page 223, it, it talks about how, um, in 2018, it says, quote, in 2018, these costs significantly increased due to unforeseen circumstances requiring additional use of resources by both departments, close quote.

Um, can you tell me what the, what costs are you referring to?

Is it the litigation costs or is it something else?

And if it's something else, what is it?

It is something else.

And what it is is throughout the year 2018, we, the city, took responsibility for maintaining that property as opposed to the Army maintaining that property.

And that was part of the Army's way of saying, you guys are taking a long time.

It's costing us a lot of money.

If we're going to extend this window of opportunity for you, we want you, the city, to own those costs.

The cost that are really driving it have primarily been security costs.

There are existing buildings there that are secured and boarded up, but over time get taken down and people get in there.

create messes and whatnot.

So we have had in partnership with the Parks Department have had ongoing and FAS have had ongoing security and that was a cost that was a cost increase and so that's what we're dealing with right now.

So in the budget, the proposed budget for 2019 and 2020, it looks like there's been about $167,000 and $172,000 respectively allocated to address the issues of the increased costs.

So, I just want to get a better sense from you all, or maybe Ben is the better person to answer this question, but is this the, are these dollar amounts, one, sufficient, and two, are these just the dollar amounts related to these costs being paid through OH's budget.

So in other words, if we looked at the Department of Parks and Recreation, we'd see additional money.

So this is just OH's obligation for these unforeseen costs.

Yes.

I forget the exact split.

It's the same.

It's 50-50.

Parks is using a piece of the property currently.

There's a garage, you know, a large one for larger vehicles.

So they're sharing the interim costs of essentially leasing is the wrong word, but upholding the property.

And there may be actually, so you know that we have another partner in the Seattle Public School District that is looking at the development of some fields at Fort Lawton.

We are going to be entering into an agreement along with when we adopt the Fort Lawton redevelopment plan.

that actually has them paying a portion of these costs.

So these costs for the city, both in parks and OH, will likely go down and we will share those costs a third, a third, a third.

And actually that backdates to 2017 is what the current agreement, draft agreement says.

So these are the costs for right now.

I will suggest to you that if that agreement with Seattle Public Schools goes forward, they will come down in 2019, 2020, and we may even get a little bit of a rebate for a couple of years back.

We don't necessarily have tremendous amount of leverage in dealing with the federal government here because we have taken rather a long time.

But that said, there are some federal facilities still on site.

And we actually had some discussion with them about, no, some of these costs really still are yours.

So this wasn't, we didn't just take this, if you will.

But again, we aren't in the strongest position in dealing with them at this point.

And in developing this proposal and identifying what strategies to fund to deal with, what sounds to be primarily a security concern and security costs.

Was there any other strategies considered to address some of the security concerns that were not as expensive?

When you add this times two with what Department of Parks is spending, it's not an insignificant amount of money.

Agreed.

Nor is it a piece of property of insignificant value.

It was a recognition that we are holding a piece of property and have some obligation with the federal government to demonstrate that we're taking reasonable care in the interim.

It was a difficult situation.

Those are the solutions that we saw that were best.

In addition to security costs, there are some utility costs as well that are wrapped up in those.

I think it would be helpful, these two particular, on this issue, both for the Office of Housing and for Parks, who we're gonna hear from next, if I could get some sort of disaggregation of what is actually included and covered under the increased cost due to unforeseen circumstances language that is referred to in the budget book, that would be really helpful.

And I will say that one thing that we did look at was to take these buildings down.

Ultimately, that's what will happen.

And as we did sort of the cost-benefit analysis, unless we are faced with a unforeseen delay going forward at this point, it made more sense to continue to pay reasonable security costs as opposed to taking the buildings down.

How much would it cost to take the buildings down?

I can get you that analysis, but...

we did do sort of the cost benefit of it.

Okay.

More than $167,000.

Yeah.

It's going to be more than $167,000.

It's not just $167,000.

It's $167,000 plus $172,000 times two, because this is only 50% of what the total cost is to cover the unforeseen circumstances that you've all described.

So it's not just $167,000.

and $67,000.

It's not just security costs.

Again, there are non-trivial drainage costs.

It's a large piece of property, so there are utility expenses that are part of this as well.

And to be clear, the buildings have been broken into.

Security has been an issue.

It's not an abstract concern.

I know it's not.

That's my point is that you know if there are other more efficient cost-effective ways to addressing the security issues that would be helpful to understand as I evaluate the proposed numbers that are in this budget.

And I think, you know, it would be helpful to sort of unpack what is actually being paid for in these numbers so that we can undergo a better, more thorough evaluation of what these dollars are paying for.

Telling me that it's just paying for increased costs due to unforeseen circumstances doesn't tell me very much.

Happy to provide the information.

Thank you.

All right, please continue.

So Fort Lawton is just one example of converting public property into affordable housing, and the city's been doing this for a long time.

However, more recently, we've begun using RFPs, requests for proposals, as a procurement model more regularly to promote.

targeted outcomes, especially in the case of cross-jurisdictional opportunities.

I remind you of what was done with the Sound Transit site, multi-jurisdictions at the station area.

We have a wonderful affordable housing outcome there.

We currently have three such requests for proposals out on the street right now, or some have been just recently responded to.

Those include the K site in Uptown, The Northgate property with Metro as well as The county record site that were in partnership with the Seattle Housing Authority in the central area And what's the status with our Boylston and Madison project?

I believe that it's Plymouth housing and

And bellwether housing.

Bellwether.

That is a proposal that came in to our NOFA round just recently and and we're in the review of applications phase.

Okay.

So that would be considered.

So it's still under consideration.

Correct.

Okay.

The mayor has been a champion of effective use of surplus lands and we are looking forward to capitalizing on every single opportunity that we can.

Collectively, these have great potential and a significant number of units could be created.

Moving on to the multifamily tax exemption reauthorization.

There's been a little bit of discussion here already.

This is the incentive program that does sunset in 2019. And we expect to come to you all in the first half, sometime in the first half of 2019 for that reauthorization consideration.

I remind you that each time we renew the program, we carefully consider the value of the tax exemption and in light of the public benefit.

realize through that rent buy-down.

You can expect that calibration and effort to, again, be at the core of our work with you on that reauthorization consideration.

And then we're also eager to discuss any other considerations that you'd like as we bring that forward.

Chair?

Yeah, please.

Thank you.

You mentioned before when we were talking about MFTE that recalibration, there's sort of a sweet spot when you know that the affordability requirement is is set at the right level to make the property owner want to participate.

And I think you mentioned that 40% was that sweet spot.

Can you talk a little bit more about why we feel like 40% of property owners participating in this program is the sweet spot?

And to be fair, I think it's correct to say that the real way of identifying the sweet spot is determining the amount of rent buy-down that is being offered.

Historically, what we have found is when you hit that sweet spot, that's when you are at around 40% participation.

You're not expecting that the rent buy-down is going to be cost effective for people who have really high-end buildings.

concrete and steel towers, but you are getting a lot of the development that is in sort of more of the regular market space.

So it's sort of like the 40% is a byproduct of the fact that you have hit that right level.

And that is exactly the calibration effort that we will be going through again for 2019.

So when you say regular market, are you talking about like 5 over 2?

That's exactly what I'm talking about.

And as it relates, these are all strategic priorities for 2019, and this is related to MFTE.

Are we going to consider changes to state legislation to address the expiring affordability of hundreds, maybe thousands of units of MFTE over the next, what, five years or so?

Is that something also that we're going to be working on?

Well, it's not called out in our agenda, our legislative agenda this year.

It's on our radar.

We are watching.

We know that in 2021 is the first sort of wave of meaningful unit expiration of the MFTE program, so we're keeping that very present in our in our conversations?

I just think that if we aren't successful at the state legislature, we need another strategy to deal with the loss of these rent-restricted units.

So I think it would be really important to start thinking about that from a city of Seattle perspective if we can't get the changes that we need at the state legislature.

It's a huge loss of affordable units as we're trying to ramp up our production.

Councilmember Herbold, I'd love to talk with you more about this afterwards, sort of a phase one, phase two strategy.

And if you've got some thoughts in mind, let's talk about it offline.

Thanks.

Ben.

I just wanted to take a moment to return to the question around Fort Lawton.

I just received some additional information.

So of the annual cost of about $340,000, $125,000 is security.

And I don't have the details on this, and we will get them to you.

But we just chose to go with a security solution that involved using parks, either park staff or park security, because it was somewhat cheaper than the other alternative.

But again, that's only partial information.

I just wanted to share what I had.

Thank you.

Okay, you can see we're all very interested in this.

Please continue.

On race and equity, I know that just last week the Office of Housing was in front of you with our annual RSJI presentation.

I was out of town and I just watched that presentation and thought it went very, very well.

We hope that one of the takeaways that you had was an appreciation that housing production at its core is a racial equity strategy.

In 2019, we intend to further these outcomes with special opportunity presented by the biennial renewal of our administration and finance plan that oversees how we allocate resources.

A couple of themes that we will include is focus on community preference policies, which we are currently exploring in partnership with SOCR and an opportunity presented in home ownership that in part is building on the three capacity grants that we awarded in this last year.

And so, stay tuned on that, but a lot of activity in our race and equity arena.

Chair Baggio?

Please.

Thank you.

Just a couple points on that.

I really appreciate the work that Office of Housing has done on the community preference policy slide that this council passed last year.

I appreciate the briefings I've received both in my committee and the follow-up that follow-up briefing I just received earlier this week on your work around a community preference policy, as well as trying to pilot a community preference project prior to the development of the policy.

So I think that's really fantastic work.

Councilmember Gonzalez mentioned earlier the funding that was put in the budget last year to look at the housing needs of LGBTQ seniors.

As it relates to strategic priorities for 2019, I want to highlight the fact that this council as part of the deliberations around the housing levy.

In 2016, we put specific language around LGBTQ seniors being a population that this council believed needed particular attention.

Subsequent to that, we included that similar language in the A&F policies.

As we all know, a project applied last year, didn't receive funding, didn't apply this year, but I would like OH to really consider how to make addressing this need a strategic priority for 2019 because of this council's multi-year expression of their interest in serving this need that we're one of the only cities in the country that doesn't have senior housing for LGBTQ people, and we also have one of the largest populations, also growing older.

Absolutely.

Thank you for that.

I know that being there the other night and hearing the launch of the study, it was one of those, it's clear we knew what was going to be in the study, as both of you remarked on that were there the other night.

I would like to say there's great energy in our office.

I think we are really interested in exploring how that community, that senior center could actually be in that same project.

And that, so more to come on that.

Thank you.

Thank you.

And when will more to come happen?

like this month, next month?

Well, by more to come, I'm referring to, we need to explore, is there an opportunity to put that senior center on the ground floor?

And if so, what's the land for that and who's the sponsor that wants to take that on?

If it were to come in next round, I would say more to come early next year.

Okay.

So we could expect to have something, some first quarter information?

Be happy to keep you apprised of progress.

Is that okay, Councilmember Herbold?

Thank you for following up.

Okay, please.

Okay, as far as looking at new models of delivery, a couple of things I want to highlight.

We're always committed to having the biggest impact, and this includes looking at new ways to build on our existing track record.

A couple of years ago, for example, we started exploring new ways of attaining cost efficiencies by looking at scale and larger projects and we have since funded a series of large projects as well as funding projects with some new partners and we have realized some efficiencies in doing so.

We continue to explore ways to innovate and the mayor has been instrumental and supportive in that effort.

This is true for both building technologies, including factory-built alternatives that can potentially deliver on a faster timeline.

Just last week, we participated, staff participated in a charrette that brought together 70 practitioners to focus specifically on the art of the possible around factory-built alternatives.

Innovation also happens in the financing space.

And a couple of years ago, we really were trailblazers in modeling, combining a variety of financings, in particular, since you all have heard of the 9% tax credit and the 4% tax credit and bonds.

Combining all of those together into one project's financing was not something that had been done.

It was something that we encouraged and are happy to say that we have now done it three or four times.

It is now somewhat of a boilerplate around the country for what can be accomplished by combining these resources and scale to achieve efficiencies.

So it has somewhat paved the way for other cities.

Fast-forwarding to today, And the mayor's office has also been very supportive.

We're looking at opportunities to grow our resources with philanthropy and private investment and bringing these two partnerships together in a financial strategy we think could also grow the pie and have great lift for potential future production.

The next slide.

Before you move on.

Okay, two of us down here have questions.

Thank you.

I'm assuming that you're referring to what is referred in the budget document as the housing investment fund model?

Yes.

Is that correct?

Can you just talk a little bit more about that and whether or not there's a budget and staffing associated with overseeing, administering the project?

It thus far is in its infancy stages and early discussions.

We are in discussions with colleagues around the country about the potential of establishing some sort of investment fund.

You know, one alternative is an impact investment fund where the investors are looking for not just a return on their investment, but are interested in and willing to take a slightly lower return for some community impact.

And so, again, we are exploring a lot of options right now, so it hasn't yet landed.

And happy to keep you apprised of that.

And did I hear you correctly in saying that this is a multi-city effort?

No.

What I intended to say was that we are looking at what other cities have done across the country, especially cities of our size and complexity.

So cities of our size and complexity have this sort of private philanthropy impact investment model that's being used for housing.

Not everyone does, very few do.

Everyone wants one.

So we want to be on the side of having established something that could really complement sort of the culture of how we develop affordable housing as well as the market in which we operate.

So it has to be adapted to and, you know, investment could be local investment, it could be national investment, it could even be international investment.

So there's a lot to consider.

Councilmember Gonzales.

Thank you.

I'm gonna come in for some cleanup here if I may.

So I didn't hear you answer the part of Councilmember Herbold's question where she asked if you if the Office of Housing is resourced in this budget to be able to do the exploration that you've described or are you going to accomplish that exploration within existing resources?

Thus far, we are intending to accomplish it within existing resources.

Okay.

And then, what cities has the Office of Housing taken a look at, or what cities are you interested in looking at that have explored this particular model?

One of the great opportunities we have is for years we've participated in a group called the High Cost Housing Cities, and so those are all the cities that would come to mind, I'm sure, to you up and down the East Coast from Boston to Miami, including New York and D.C., Denver, and then on the West Coast, Los Angeles, San Francisco, and Seattle.

We have regular conversations, monthly conversations.

get together periodically and share best practices.

And this is one of the topics that has been on our agenda for the last year plus.

And so New York has a variety of different investment types.

They are always sort of the high bar that everyone's shooting for.

They also have just an entirely different financing reality that they are able to accomplish things that some other states are not able to accomplish or some other cities.

You know, the thing that always grounds us in these conversations is some of the constraints of our own tax reality.

And so when you have an income tax, you have different options available to you than when you don't.

And so rarely is it apples and apples, but it's always a very productive conversation.

And I can say that an investment fund like this to complement affordable housing efforts is always one of these top agenda items.

So does the, I'm sorry.

And I just wanted to say I think that some of the examples we're looking at have been on project specific, project specific basis.

So that there is a group of investors who are really jazzed about a particular project.

Maybe it's that particular population and might come up with $2 million to supplement the overall funding package.

The question is how do you take something like that that is an individual philanthropic placement and expand it out to a full fund?

And that really seems to be the nut that is trying to be cracked by many jurisdictions.

Los Angeles certainly comes to mind.

I believe they're taking a run at it in Denver.

So we have a couple of those folks that we're talking to.

Also a number of banks are looking this and financial institutions.

Just a quick follow-up, when you said Denver is taking a run at it, what are they doing?

We can provide you the detail.

Great.

I just I think I'd like to just note how much interest there is up on this dais to increase funding opportunities and coordinate with the state as well as with the county.

It's critical and we've seen from the McKinsey report and from the Eco Northwest report that we're not like a few million dollars short.

We are hundreds of millions of dollars short in our tri-county region to increase the amount of housing that we actually need.

So I want to come back to that point that we've made a couple of times now.

We, in the city, we've got some money to do things, but even with the housing trust fund that our friend Frank Chopp has put forward, That's $100 million.

We could swallow $100 million in three and a half permanent housing buildings alone.

It's not anywhere near enough.

So I hope that with OIR's help, with your help, learning from other cities, that we can put something together this coming year where we can, if we all have to march down and smile sweetly, that we can really make some change here.

Because we need a ton more money in order to accommodate the additional buildings and housing that we require.

It's not all on your shoulders.

I'm saying we're a team here.

I just had one last follow-up question.

You know, years ago, I had an opportunity to learn a little bit more about the concept of social impact bonds.

Is that something that the Office of Housing is looking at as part of this investment fund and what the model could be or could include?

Yes.

Okay, great.

I only hesitate because- I'm not gonna hold you to it.

People throw the term bonds in there and it becomes something different, but yes, social impact investing, whether that's an actual bond investment or some other kind of vehicle, we're looking at all of those alternatives.

Yeah, no, I appreciate that.

And I think there are some opinions out there that, I mean, the concept is commonly referred to as SIBs, that they're not as impactful as some folks would like.

I know that, you know, it just really probably depends on whatever the economic market is for whatever public sector is trying to utilize that mechanism.

One of the places I had an opportunity to learn more about it in terms of how it was used was in St. Paul, and so I would encourage you all to consider looking at that city if you haven't already, and I think it's been quite successful in that particular area, so.

Thank you.

Thank you for bringing that up.

Okay, let's continue and I do want to point out we still have parks and we have our Office of Labor Standards before we break for lunch.

Yep, so we will.

It absolutely is not your fault.

It's we got a lot of questions for you, so.

All right.

So actually on the budget summary slide that you provided the template, this is a relatively short slide because as Steve said, we don't have a lot of changes to our budget.

You see at the top there the general fund row.

As an office, we have very little general fund relative to our overall budget.

The number that you do see is largely for 2019 is largely composed of pass-through dollars from the general fund for central costs.

And as you will hear from other departments, this was an overall methodological change.

It's simply a matter of the general fund dollars passing through OH's budget rather than being paid directly from finance general.

That's the bulk of that.

We do have, I think it's about $100,000 in there of program related general fund, that is for a portion of a position that is involved in state advocacy and policy work.

That was approved several years ago.

We did take a 25% cut on that position and are now backfilling it with other in-house sources, primarily levy.

Okay.

Council Member Swann.

Yeah, just to follow up on some of the things you said and to make sure I'm understanding correctly, in terms of just the numbers on the table, it's not thousands of dollars, right?

So in other words, the 2019 proposed dollars, it's 576. $1,000.

You're very right.

I'm just making sure because that could be a source of, not that you are confusing it, I'm just saying.

There is not $500 million of general fund going to the office of housing.

Exactly, exactly, exactly.

Because it's not thousands, it's just zeros, zeros, zeros.

It's the challenge that the template works well for a large company.

And I understand you did it, you put that just for the template reasons, but it just for me, you know.

The background I come from, that's not usual.

You don't, you put that figure in only if it's thousands or whatever, you know, you're trying to indicate that.

You just want to make sure everybody's on the same page.

So.

We don't have a half a billion dollars.

Yes, exactly.

Yeah.

So, so in other words, roughly half a million of general fund money as you said, passing through OH.

And can you speak a little bit about what you just said, which is that, am I understanding correctly that most of it is for running the department and roughly 100,000 is for program money?

I was looking for the opportunity to do this because some of what Miriam has described is a change that we have instituted as part of the shift to the new accounting system that I wanted to explain in general.

I was going to wait until we had a tangible example, and we do right now.

Departments that rely almost 100 percent on general fund and on some of the smaller departments, in the past, the cost for centralized services from the human services department, from IT, and some from FAS, had not been in the department's budgets.

HR is providing some level of service, for instance, to the Office of Housing.

IT is as well in the sense of the phone system and the centralized computer systems.

And those costs we had in the past carried in a an account we called Finance General.

It was a centralized thing.

The general fund resources that needed to cover the costs for these sorts of departments were transferred from this accounting structure to, in those cases, HR and IT.

What we've done this year Honestly, to increase transparency and in some sense accountability is that we've put those funds into the department's budgets.

So this year, for the first time, OH has in its own budget an appropriation that covers its share of the cost of human resources and its share of the cost of IT.

rather than paying them centrally.

It's all the same dollars, if you will, and we're not trying to confuse, but trying to go to a scheme where the departments can say, hey, this is what it's costing us, so you can see what it's really costing to keep OH, in this case, running.

And also so that there is a more direct, if you will, customer-provider relationship between the departments and those central services.

Steve can call IT and say, hey, you know, I'm paying you whatever your number is, $150,000 a year.

I'm not necessarily getting, and that's not necessarily the way it will work moment to moment, but we're trying to be very clear about that relationship.

So this year, There's an increase that's in part associated with that.

So what you see here in that 500 and that increase of just over 100,000 for 19 is actually a net of a couple things.

There was some one-time general fund in 18 that's coming out because it was one-time resource.

And there's this new structure of allocating the essential costs to the departments going in.

In addition, there's some underlying programmatic stuff, but it's, again, as Miriam has described, very small.

And we'll see this again, I think, later today when you see the police department budget.

It shows an increase, a significant increase, because that's a much larger department, so their costs for HR and IT are much more significant.

But it's not real, if you will.

Shall I continue?

Please do, because I know we're going to want to get to one of your other budget charts, so let's keep going.

Sure.

Just before we leave this, there is one very small number on here that is significant.

You see that on the employment line, we have an increase of .5 FTE.

The reason I want to highlight this is it's a good example of how budgetary choices really are a reflection of values.

Earlier this year, we had a retirement of a part-time administrative position, did scheduling for the weatherization program.

She was wonderful.

When she retired, we reassessed what were really our needs, and we realized that there were a lot of communities out there that were not accessing our programs in weatherization and home repair to the same extent that largely white well better resourced English speaking families could.

And so we created, we repurposed that position, expanded it to 1.0 FTE from .5 and hired a person to work specifically in the space of public outreach and community engagement in underserved communities.

We mentioned this during our RSJI presentation last week and it's just a really good example of how a very small number on a chart can actually tell a story and we wanted to highlight that.

decision.

Great, thank you.

Next I wanted to highlight four legislative and policy issues that are in front of us.

Starting with the low-income housing tax credit, which we've talked a little bit about, I want to acknowledge Senator Cantwell's multi-year effort to increase and make permanent certain technical fixes within the program that will have very meaningful impact on in our community and across the country.

This is the tax credit, as you know, is sort of the backbone to affordable housing.

And this increase, the way the program operates in our state and the way it travels into our city is serving our most vulnerable.

And so that's a wonderful outcome after many years of effort by Senator Cantwell.

What would that relate to in actual dollars?

So if we go from low income housing tax credit at 9% to 12.5, how much is that in actual money in our hands?

We were trying to figure out how we could put an exact number on it and couldn't come up with a methodology that would really work.

But what I can say is it will translate into what we expect to be one more homeless project in King County each year.

I can go back to my number crunchers and give you a more scientific answer, but...

So are we talking, let's just say, in a complex that has 100 units?

Yeah, so I'd like to think 60 to 100 units of permanent supportive housing, hopefully.

Good, thank you.

The other one I wanted to highlight is the document recording fees, this too, at the state level.

So it started at the federal level, now at the state level.

an increase to the document recording fee.

I want to point out an error in the chart there where it says $14 million.

The increase was $14 on the document recording fee that resulted in a $15 million increase into the county under the document recording fee.

And again, these fees have been traditionally used to provide support services.

So when we're building units that are serving a vulnerable population, in particular, a homeless population, these are the sources that can help support the services.

So this not only was an increase, but as importantly, this was made permanent.

And so that was a great win for our state in the last legislative session.

Thank you, Steve.

I know you were a real leader in this and also to our Office of Intergovernmental Relations.

This was a multi-year effort and when we got it increased and permanent it did provide some security for some investments that we didn't have previously.

We've talked a little bit about surplus property.

Again, at the state legislature under Speaker Chopp's leadership, we had the exciting new legislation that allows local jurisdictions to avail publicly owned land, and we've begun moving on that.

Again, although she's not here, Council Member Mosqueda, in partnership with her, we're trying to work with City Light and hope to see some good things happen there.

And I'd just like to channel Council Member Mosqueda very briefly.

This has been something that has been atop of her priority list.

And earlier in the year, we had some confusion, I think, with Seattle City Light thinking that that didn't apply to them.

When we talk to Frank Chopp, we've talked to others, people are saying, no, it does.

It does apply to Seattle City Light.

And as long as we can deal with rate payer issues, which we're always conscious about, using Seattle City Light property for housing for people at low income and beyond, really important.

Yeah, Council Member Herbold.

Thank you.

So this is a question for Budget Director Noble.

And it may not be a housing question per se, but it relates to surplus property and it relates to an issue that we are getting a lot of emails on.

And this surplus property project does include a significant amount of housing.

So I'm gonna just take this opportunity to ask.

Can you talk a little bit about the housing component of the Mercer teardrop project and what the RFP itself asked for as it relates to that project?

There seems to be a lot of...

a lot of concern in the community that we aren't using the surplus property to accomplish our housing goals.

And it was my recollection through the work of Council Member O'Brien that there was a strong housing component in that project and in the RFP that ended up going out.

Thank you very much.

I actually welcome this opportunity.

We've responded in written form to Council Member Skate and have been sharing that response with you and your other colleagues as well.

It's going to take a little bit of a narration, but I actually think it's worthwhile, if I might.

So through the Mercer project that rebuilt Mercer and connecting, essentially, Seattle Center and the West Side, of Central Seattle, if you will, 2I5.

We've ended up with a piece of property, actually two pieces of property.

If you know the area, there's a site currently occupied by copiers northwest.

That's actually city-owned property, and essentially across the street, a large parcel that used to be, in no small part, Broad Street, which essentially no longer exists there.

Through City Council action, we have vacated a right-of-way that was there, although preserving public access across essentially the 8th Avenue, again, if you know the area.

We've put out a request for proposals to evaluate the potential to transfer the property to a third party, either through a sale or a long-term lease.

There are going to be some restrictions if there is a decision to move forward with a sale or a lease.

There will be some restrictions on the proceeds.

In particular, a portion of the properties were purchased with gas tax dollars.

Per the state constitution, gas taxes are limited to transportation purposes.

Notwithstanding the change in state law with regard to utility properties, it was not a change in the state constitution with regard to transportation properties, if you will.

Approximately 40% of any net proceeds will have to be dedicated to transportation purposes.

Again, assuming we were to transfer to a third party, I would note that even if we don't transfer to a third party, if the city ultimately chooses to use the property for a non-transportation purpose, and that's everyone's interest at this point, there will need to be compensation to SDOT for the portion that is transportation related.

That's sort of a side note.

What we've put in the RFP is requests for folks to bring forward ideas for the redevelopment.

We have indicated an interest in on-site housing.

We did not put that in as a requirement, so we expect to see proposals that include on-site affordable housing and potentially some that do not.

That'll give us an opportunity to understand from a value perspective, you know, what are the trade-offs there?

And I think that's important because one of the things that has been established by council in terms of policy and is supported by the mayor is that any net proceeds from the property will be used for affordable housing.

So essentially, again, assuming we decide to transfer the property in some way, the question will be, does it make more sense to pursue a development opportunity that puts some affordable housing on that location?

Or is it better to take the net proceeds and take those dollars and invest in affordable housing at another location?

or alternatively to determine that given the response of the RFP, it's better to retain the property overall.

We think there's potentially, but we haven't not yet determined an advantage in the transfer approach just because of the way the property is zoned and the potential to use it for valuable commercial use.

So we could retain the property potentially for affordable housing, but we won't take, unlikely to build to its maximum development potential.

So we wouldn't necessarily be exploiting the land, if that's the term, for all of its value.

So the RFP is going to give us information to better assess how to use the value of that property in pursuit of affordable housing, either on that location or somewhere else.

That is the goal of the RFP and really nothing else at this stage.

And we do think in a competitive environment we'll get to really understand the true market value.

decide whether to build affordable housing there or to take potential proceeds and invest them either in that immediate neighborhood or somewhere else entirely.

Thank you.

Good.

Thank you.

Ben, is this the parcel of property that we borrowed against in previous budgets?

That is true.

So in addition to the SDOT obligations, there are approximately $4 or $5 million essentially general fund obligations there.

If we choose not to pursue a sale or a long-term lease, we'll have to address that outstanding debt as well.

And I mentioned the s dot pieces because if you read the budget carefully You will see that s dot is is counting on some proceeds from that property And again explained in the budget is that that doesn't necessarily imply transfer to a third party But but only that if if and when we pursue a non transportation purpose that s dot be compensated appropriately All right.

Good.

Thank you.

You want to continue?

Yeah, I wanted to just point out one last Legislative item, and that is tied to prevailing wages.

As you know, this was one of the lesser known items that came out of the state legislature, and it has a direct impact in a few ways on our housing programs.

A reminder that the city has had a longstanding policy to support fair wages and the development of affordable housing through our prevailing wage policy.

This last session replaced that prevailing wage policy with a collective bargaining agreement wage rate, and that wage rate has increased over the prevailing wage rates, so that will have a direct increase or impact of an increase on our affordable housing.

So we are quantifying that with our partners to understand its impact, but I wanted to just foreshadow that that will have a direct impact on on the cost to produce.

As importantly, it will also have a direct impact on our ability to weatherize homes.

And we are in close conversation with our counterparts around the state that administer this state-run program or the state-funded program to really understand its impact as it may be, it may have a greater overall impact on the viability of the program.

And just how many homes we can weatherize.

Okay, well, we're getting towards the end of your presentation.

I just want to point out to my colleagues on page 222 of our proposed budget, which I've just, I'm pointing to now that in one of the charts there, you talk about homeless prevention and housing stability services of $11.5 million.

Next Wednesday, October 3rd in council chambers, we're going to have a full day that's focused on housing, human services, and what we're working on.

and how we can be getting more housing for people in need.

I'd like to just, when you come to this next Wednesday, if you could talk more about that.

So not now, but I just want to highlight that.

That's something we'll be interested in.

All right, just to wrap up, the final slides of the template that we were provided were zeroing in on budget changes.

Because we have really so few, it was suggested that we do just a general budget overview.

In the interest of time, I'm just going to walk through very quickly.

This is the levy table.

The Seattle housing levy renewed periodically, generally about every seven years by Seattle voters.

is the foundation for our funding.

It is for the rental production and preservation program, just shy of $29 million a year.

That's that 201 you see there divided by seven.

And the levy, again, is the thing we can rely on to be predictable year in, year out.

for as long as the voter-approved measure is in effect.

Other sources fluctuate.

I mentioned, obviously, the Convention Center dropping in this year.

That's something that is a one-time, but we commit to clear the decks every single year.

We award what we have, so Monday does not sit idle.

We have talked in the past with you about leverage, a fancy word for just extending the purchasing power of every city dollar with other people's money.

And that is a core of what we do, particularly in rental production.

Steve mentioned the low-income housing tax credit.

That is the cornerstone of that extension.

We talked about weatherization.

At the end of the day, though, and sort of my concluding remark before I turn it over to Steve, is that in any budget presentation, you're talking about numbers, and you're talking about units, and you're talking about metrics.

And at the same time that we are very excited to talk to you about real estate and units, it is all a means to an end.

Every dollar we spend produces not only units, but also a range of other public and social benefits.

environmental sustainability, good jobs at good wages, and ultimately it is about the people who reside in those units, individual dignity, community stability, strong families.

And so I think that's just an important context to keep as you go through the dollars and cents.

And I'll just close by saying it's an exciting, albeit very challenging time in the Office of Housing, but our work we know is cut out for us.

However, we know that the community supports this work.

And we have a staff that is immensely talented and dedicated to the stewardship of city resources to ensure that everyone has an opportunity to call Seattle home.

So thank you.

Yeah.

Thank you very much.

Any other questions.

All right.

I want to thank you.

This these budgets are oftentimes high level but you can see that your office is one that we're all very interested in working with appreciate the good work that you do.

And I'm going to say thank you for being here and invite parks to come up next.

Thank you.

Good.

Thanks a lot, Miriam.

I'm not going that far.

I'm just going to slide down.

Council Member Juarez, I'm going to ask you to kick this off.

Yes, and I'm going to be right back.

OK.

Go down underneath.

I kind of feel honored here.

I've never had a chance to kick anything off at budget.

I'm abdicating my vice chair duties.

Are you OK?

Thank you.

So let's see.

Let me grab my little notebook here with all my grilling questions to Christopher about parks.

So you guys got a PowerPoint for us.

I'll let you guys introduce yourself.

And you have a?

PowerPoint with page numbers?

Great.

Good job, Christopher.

Thank you.

Tracy, I'll let you guys go ahead and introduce yourself, and you can go ahead and start us off.

I have a few questions for you, but I'll just hold off till we get to those slides.

Lisa Kay, Central Staff.

I'm sorry, can you say it again?

I didn't hear your name.

Lisa Kay, Central Staff.

Allison McClain, Council Member Bagshaw's office.

Tracy Retzliff, Council Central Staff.

Ben Noble, Budget Office.

Donnie Grabowski, Parks.

And Christopher Williams, Seattle Parks.

Great.

Let's start.

Okay, great.

So I'd like to start out with a little preamble.

We've got a PowerPoint presentation here, but I'd just like to remind you when we established the Park District, we had five goals in mind.

To protect the delivery of public park and recreation programs and services.

To provide for the continuity of operating efficiency for the department.

and to create efficiencies.

This was an ongoing commitment to sort of get leaner and leaner over time.

Also, to insulate the department against budget swings that might otherwise threaten our ability to meet the basic mission for the department.

And then last, per the interlocal agreement, to ensure a level of general fund support consistent with rate of inflation or CPI.

This round of budgeting demonstrates exactly why we wanted an MPD.

One could argue that the Park District is performing as intended, or maybe even over-performing in terms of its ability to ensure the delivery of basic programs and services.

I want to acknowledge Michelle Finnegan, Donny Grabowski, and Amy Williams on our staff.

I'd also like to acknowledge our close collaboration with the City Budget Office and the Mayor's Office in developing this budget.

All right, next, first slide.

So every Seattle Park and Recreation employee knows the elevator speech about what we do.

And we call that healthy, healthy, strong.

And that refers to healthy environment, healthy people, and strong communities.

It's our mission in the department to provide welcoming, safe opportunities to play, learn, contemplate, and build community, and promote responsible stewardship of the land.

We're committed to moving toward an outcome-based performance management culture in the department.

This is focused on our vision of healthy, healthy, strong, and ensures our values of equity and opportunity around access and sustainability are part of the work we do.

This slide provides a few examples, and I'll start with healthy environment.

We're on track in the Green Seattle Partnership to have 2,500 acres of forest land in active recreation by 2025. About one-third of the inventory of park land is considered green belts in natural areas, and this is a commitment to restore those green belts in natural areas.

As of 2017, the Green Seattle Partnership had 1,550 acres in active restoration, and more than 150,000 hours of volunteer time donated to support this effort.

We also established as a goal to adopt preventative maintenance as our standard for how we take care of our facilities.

Prior to the passage of the Park District, maybe roughly fewer than 40% of all work orders were preventative maintenance work orders.

We have shifted that and now roughly 54% of all work orders are preventative maintenance work orders.

And this correlates directly to that narrative when the Park District passed that we had some $270 million worth of deferred capital maintenance in the system.

So we continue to make strides to chip away at that.

So can I just ask you a question on that?

That really was a big deal and a big selling point for the Metropolitan Park District that we had such a huge backlog and you mentioned 270, 200, $70 million, that big number, and you say we're chipping away at it.

Will you say that at the end of this first six-year plan, will we have accomplished the maintenance that we had identified in the 2014 vote?

So we made a commitment to complete 120 capital projects at the end of the six-year term, and we are on track to complete those projects.

It's the nature of capital maintenance that the more aware we become of needs of facilities that that number will continue to grow.

So it's sort of a moving target.

And that $270 million was a snapshot in time.

But I think with our practices of adopting an asset management work order system, where we incorporate the life cycle cost of a facility versus a roof here, a boiler there, is a more comprehensive approach to

Is all that on your dashboard?

So if an individual who wanted to know where are we with these projects, can they go to the dashboard and see that?

Yes.

Yes, we've got a dashboard that is up to date and shows where we are in projects.

So under healthy people, we have, so we're on track to offer 345,000 swim lessons this year.

And this is a big goal because Seattle is surrounded by water.

The mayor's proposed budget also includes $15,000 per year for swim safety equity across the city.

This will provide lessons for at least 400 young people across the city with 10 half-hour swimming sessions to learn how to swim.

I know we did this last year in the budget and really encouraged this and I'm delighted to see that Parks was able to step up and make this offer available to people.

That's right.

I also want to acknowledge Bianca Hill, our aquatics manager, in that work.

Under community centers, we were on track to meet our 2018 goal.

These numbers come from the PeopleCounter technology, which counts people walking through the doors of community centers.

The current technology is out of date and needs to be replaced.

We have an item in the mayor's proposed budget to replace the system with the latest technology.

I'd also like to acknowledge Katie Gray, Barb Wade, and our handful of park and recreation, our recreation managers, Carl Phil, Tiffany Johnson, and Trevor Gregg for the great work they do with community centers.

Under strong communities, scholarships exemplify our commitment to create opportunities through access and opportunity.

This measure includes almost $1.5 million in general fund scholarships for school-age care programs and $400,000 in park district scholarships for recreation programs.

AHRQ also supplements these scholarship funds, and we have a donation-based Learn to Swim program.

So that's a complement to the additional $15,000 that the mayor put in the budget.

The Mayor's budget also includes an additional $150,000 in recreation scholarship funds that come from the Sweden beverage tax.

This will result in an additional 700 scholarships offered, which will subsidize those who can't pay.

under ceremonies and events.

One of our big goals in public recreation is to foster community cohesion and connectedness, and we do this through special events and gatherings.

The goal of this measure is to increase community connectedness and cohesion by providing places for events, ceremonies, picnics, and camps.

We're on track to meet or exceed this goal this year.

One more question, Christopher.

Many of the goals that you just described in community cohesion is shared with our Department of Neighborhoods.

Can you talk a little bit about how do you interface and now that we have a new head of our Department of Neighborhoods?

You bet, that's a great question.

Can you just talk a little bit about how do you and how is your money spent to be supporting each other and not duplicating?

Great, so in fact, Andreas and myself are meeting next week, and I think this is the beginning of really knitting together that relationship.

There is an awful lot of overlap between the Department of Neighborhoods, which funds a huge number of neighborhood matching fund projects, Over 75% of those, I understand, are actually park development projects.

So we have a strong relationship on that end.

We have used culturally diverse outreach workers from of Neighborhoods to conduct public meetings.

We overlap a lot with D.O.N. on the community engagement piece, so we're not as siloed as I think the world might think.

Okay, next slide here.

Okay, so we're talking about priorities for the future here.

And before I get into this slide, we are constantly thinking about the park district strategic plan and the pressures that really drive that plan and help frame a sense of priorities.

Pressures like growth in density, climate change, increased expectation for stewardship of public lands, and Increased wage inequality really drives the discussion around equity, and those are sort of the five principal drivers in how we think about the Park District.

So the Park, rather, Parks has begun the process for the next Park District funding cycle.

We're currently updating the Legacy Strategic Plan.

This is our long-range plan that informs our priority setting.

It will also define our vision, mission, values, and goals and needs for the future.

Upcoming work next year will include outreach on the strategic plan and the next park district funding initiatives.

Some plan work include the jointly engaging the Board of Park Commissioners and the Park District Oversight Committee, or PDOC as we refer to it, in the review of the next park district plan.

Also having the city council in your capacity as the park district governing body receive input and regular updates on the strategic plan development and then collecting input from underserved populations, new residents, recreation groups and city staff.

We're also looking at collecting input from various key stakeholder groups related to viewpoints, the preservation of our Olmstead legacy, and how we use our athletic fields.

Also, our closest partner, the Associated Recreation Council, the Seattle Park Foundation will be included in that information gathering from close partners.

I want to conduct a statistically valid survey built on the 2016 survey.

We want to collect input from online and social media outreach.

We are currently in the process of working with the city budget office to deliver a midterm report to the mayor.

This will highlight the progress.

As you'll recall, there was a commitment to develop a mid-cycle report in year three of the six-year plan.

So we are delivering that to the mayor.

Let's see here.

So you'll hear more about that.

I believe we're coming later this month to the Park District Oversight Committee, the council's governing body, to share more in-depth discussion about where we're headed.

And I would like to talk, and this is something that we've discussed for the nine years we've been working together, about the plans for the community centers.

Yes.

You know, we had six that were identified as priorities in the park levy.

and then or the i'm sorry the park district vote and i know we've also discussed the possibility of just restructuring how we do this so that yes with our 20 plus um community centers uh one that's coming in uh lake city but knowing that we have, and the term I've used before is super center.

So within each of our seven city districts that we have a super center, one that has a swimming pool usually with the basketball courts and sport courts available and meeting rooms.

And then maybe having the smaller more satellite ones that we we maintain and care for, but they might not have the staffing or the size.

So I also know that from around our city, everybody wants more.

Not everybody wants to pay more, but making sure that as part of our program, And this three years, I mean, the three-year midterm I'd really like us to be focused on.

What are we going to do?

How much will it take to actually flip this conversation, Council Member Juarez?

I'm just going to, I think, I'm pretty sure, correct me if I'm wrong, but I think out of the plan, two community centers were highlighted for demo.

just complete replacement, and that would have been Lake City Way and Green Lake, just those two.

Everything else was for maintenance and all the other issues, so it was actually two, not four, not six.

And I think that's key, because those buildings were built in the 1950s, and like we say, they've outlived their use.

the kitchen, everything.

But we want to look at that next six-year cycle with the Metropolitan Park District, which we're having a meeting, I think, November 14th.

And we're going to start getting the community more involved about what that means for each district and their community center.

Absolutely.

Thank you.

This is a big policy set of choices for the mayor and the council.

We probably have in excess of $150 million worth of community center need across the city.

There has also been some discussion about replacing the Amy E. Tennis Center.

The list continues to grow.

And I think discussions around debt financing and policy choices and decisions related to that.

We have been working with the Office of Housing to do a feasibility study on Lake City.

This could very well be the first community center that includes several levels of affordable housing on top of a community center.

We have Speaker Chopp to thank for that, for helping us get the state money and then saying, can I throw 50 units on top?

Yeah, that's huge.

Thank you for your efforts and behind the scenes work to ensure that level of state funding.

Absolutely, and the community has been very welcoming to that, so kudos to the Lake City community.

I'll come on here on timing and just think about this a little bit.

I want to recognize that the current spending plan for the Metropolitan Parks District runs through 2020, but recognize that there's clearly an interest and a need, and fully anticipate that the next spending plan will involve significant investments in community centers.

We also recognize that there isn't the patience to wait nor should there should be necessarily the patience to wait that two years before we can even begin this discussion.

So the budget does include funding both continued investments to build the resources we're going to need in part for Lake City.

don't actually have a full project cost, even, if you will, a zero percent design cost estimate.

But we're continuing to allocate resources, knowing that when we do, that's going to be a pretty significant lift.

There's also an allocation for the Green Lake Community Center to start initial planning work around what its And now I'm going to be ahead of myself, either rehabilitation or replacement might look like.

Again, anticipating so that when we move to a renewal or rather the next spending plan for the NPD, we've got some things that are teed up and can move to implementation relatively quickly.

Those both seem to be high-priority items, and there may well be some others that want to at least start moving in that direction.

But that's at a high level of the strategy here.

The resources to really get into this, we anticipate to come with the next spending plan, but we want to be smart about anticipating that.

And, again, obviously decisions haven't been made about that.

So it's a little bit of the balance.

It's a little bit tricky.

Ben, I appreciate you, what you just did to keep everyone's expectations low.

And I understand, I mean, just let me finish.

However, in this next six-year plan, my focus working with Christopher and certainly with the prior superintendent, Agare, has been that we focus on the community centers because that's where people go not just to play basketball.

but to go there for all kinds of events, as well as housing, like they use our libraries.

And if y'all would have just gave me the money that I asked for two years ago and said, drip, drip, drip, I actually would have a design plan done and ready to go, shovel ready.

However, I just want to caution you, this piecemeal thing doesn't work because it's a catch-22.

You're saying, well, We don't have a design plan.

And I'm like, well, if you gave me the money up front, I'd have a design plan.

That was two years ago.

So I'm not trying to scold you.

I'm just trying to say the realities of that.

And I appreciate what you said, because I know you've been on board as well as Christopher.

But we cannot ignore the city of Seattle people that come to us as I chair parks, how important the community brick and mortar is.

Yes, it's important for the parks.

soccer fields and all of those things, but the thing I hear the most about is our community center, particularly in those neighborhoods when we've done the social equity analysis, that that is a place where these kids go before school, after school, events, working with ARC, a lot of them, training centers, education, job, I mean, you name it.

So community centers like libraries have taken on a different role in 2018, so that's why I've always pushed so hard for the brick and mortar piece.

Yes, I appreciate the programming, but, you know, if it were up to me, I'd do it differently, but it's not.

Well, I just want to build on Ben's comments here.

Thanks to the work you've done with the state, we do have enough funding so that we will be into at least schematic design by 2020, second quarter.

And that is true also for Green Lake.

Chair Baxter.

Yes, thanks.

Before we, I just want, before we move off of community centers, I would be happy for some of that drip drip coming towards the needs of, in particular, the Hiawatha Community Center in District 1. That community center was built in I believe it's the oldest community center west of the Mississippi, and it hasn't had any significant overhaul in 35 years.

I know there's some upgrades that are planned in the near future, but we really need to start allocating some resources towards some community engagement about what they want to see for that facility.

That part of the city has grown exponentially.

That center is serving so many diverse needs to so many people, and I'd really like to talk with you about how we can begin to take steps.

The community has identified some resources of its own to begin some of that design work, and I appreciate the conversations that we've already had about Hiawatha and hope to have more.

Great.

Thank you.

And since two of my favorite colleagues here have brought up district needs, Belltown is closing and without any plans.

So I just want to pile on here and recognize that yes, Belltown too.

Yeah, we'll get to that in a later slide.

All right, you can continue.

Just try to continue without being interrupted.

So in 2019, we will continue to have or continue to deepen our commitment to people and systems.

We recognize when something doesn't go right in the department, it's hardly ever a people issue.

It is usually a system that is underperforming or needs to be improved.

under the people side of what we do.

We want to deepen our commitment to increased awareness around the principles around race and social justice and equity, particularly building leadership capacity around these efforts.

To this end, in 2019, the proposed budget adds a full-time position to lead the department's race and social justice initiative and work plans and to staff the department's change team and implement trainings to help address institutionalized racism.

I would like to acknowledge our HR Director, Bobby Humes, for recent foundations of change where we essentially closed the department for one day and trained 900 employees in Building 2, or rather Building 30 at Magnuson Park.

On the system side, we will continue to increase our efficacy around performance management.

This is not new to the department.

Our efforts have increased on metrics and process measures.

As mentioned earlier, we are committed to moving forward on outcomes and outcome-based performance and really driving a culture where we measure what we do.

Parks is also committed to developing meaningful performance measures that go beyond just metrics on delivery.

but also give staff information they need to allocate resources efficiently and make course corrections to best serve the community.

While there's still a long way to go, we intend to keep this work moving forward in 2019 by aligning performance management efforts across all program areas and funding sources.

I'd like to acknowledge Hazel, Bong, Barnett, and Michelle Finnegan for the work they're doing in this area.

Okay, so the next slide is the budget summary.

This table gives a high-level summary of the budget appropriations showing 2016 and 17 actuals, the 2018 adopted, and the 2019 and 2020 proposed budget.

In subsequent slides we will be reviewing major proposed changes to the General Fund, Park District, and REIT.

So the first, actually before I go into that, Park's 2019 proposed budget totals about $235 million, and the 2020 budget is $249 million.

The 2019 proposed budget is lower than the 2018 adopted budget by about $19 million or a 7% decrease.

The first two rows of the table show the general fund appropriation changes by year.

And as you can see, the 2019 general fund amount of $101.5 million reflects a $5.6 million decrease or a 5% reduction from 2018 and another 1% reduction in 2020. The decrease is based on a combination of ads and reductions, which we will further highlight in subsequent slides.

The next two rows show dollar and percent changes to other operating funds, and for parks that includes the park fund, which is where our earned revenues are deposited, and the park district operating funds.

The 17% increase in 2019 and 4% increase in 2020 primarily reflects a proposed park district funding realignment that will be discussed further in the upcoming slides.

The next two rows show the capital improvement program appropriations by year.

This category includes REIT, the Park District capital funding, and other CIP resources.

The 25% decrease in 2019 is due primarily for two reasons.

One is a decrease.

to the Waterfront Spending Plan, where 2018 included a higher appropriation amount than in 2019. And also, there was a one-time funding for the Seattle Asian Art Museum in 2018 that was not continued in 2019. The 17% increase that you see for 2020 primarily reflects an appropriation increase to start the aquarium expansion project.

And the last two rows highlight the FTE changes year over year.

As you can see, they've remained relatively flat from 2018 to 2020. In 2018, parks did receive additional resources for encampment cleanup, which is reflected in that 1% increase for that year.

Great.

Thank you, Donny.

Oh, I'm sorry, before you leave that slide, and thank you.

With the employment FTEs, I was approached by Ian Gordon of Laborers, and one of the comments that he made was, we're continuing to cut FTEs.

I see, compared to 2016, the numbers are increasing.

The concern he raised was there aren't enough people to do the work that's being assigned.

Can you just address that for me?

I'm particularly focused on Laborers Union.

You bet.

So what you're going to see later is an ongoing commitment to create efficiencies.

We have 11 vacant positions that have been vacant for some time across the organization that we are proposing for reduction.

We are always looking at ways to become leaner in the implementation of grounds maintenance work across the organization.

This means combining routes.

This means reassigning people to be assigned statically so they don't have to drive.

There are a variety of approaches that we are undertaking to change the 30-year model, service delivery model for grounds maintenance that we have.

And at the end of the day, if you had an opportunity to go out and look at parks, I think they look great.

And so we're committed to that aesthetic look, feel, safe, welcoming place impact with the public.

So are you, and I believe this is, I hope, to be a softball question to you, that you are including the people who are working in the parks to ask their opinions and how they can better improve so that they're included as we go forward.

Absolutely.

Great.

I think one of the impacts, we've seen 80,000 people move to Seattle since 2010. The impact on parks is more cleaning frequencies, more attention to sort of the safe, clean imperative.

So you have to clean conversations more, you're picking up more litter.

It is really an increase in cleaning frequencies, what we ask people to do when they're at work versus necessarily not having enough people.

Okay, so providing physical and programmatic access to our program services and facilities and parks is a big priority for the department.

As is walking our talk on healthy environment and doing our part to create a green planet.

So under ADA in 2011, the US Department of Justice conducted an audit of Seattle parks reviewing 25% of the 460-plus parks in the system.

This resulted in over 4,000 ADA citations.

In 2016 and 2017, a third-party assessment was conducted, resulting in a barrier removal schedule that listed ADA findings.

This third-party ADA assessment for park facilities and DOJ citations resulted in a combined 7,700 barriers and park facilities.

And by barriers, these are noncompliant ADA conditions.

Or 56% or 13,000 documented barriers on the citywide barrier removal schedule.

In 2019 and 2020, Parks has budgeted to include $3 million of additional funding to address basic ADA issues.

And for example, we're talking about issues where the soap dispenser may be a couple of inches too high or the toilet dispenser may be a few inches to the left or to the right.

There's a collection of little things like that that comprise this big number that we are chipping away at.

Also, on the Green Fleet side, over the last several years, Parks has identified more fuel efficient vehicles and reductions.

We'll continue to explore further ways to do this in response to the Mayor's Green Fleet Initiative.

We have already made great strides toward a Green Fleet.

by purchasing 12 fully electric vehicles, reducing fleet fuel cards by over 50 percent.

We have 300 fewer cards.

We're down to 150 fuel cards now.

And we're reducing fuel costs by 15 percent next year and reducing greenhouse gas emissions by a total of 9 percent.

Next slide.

Major proposed budget changes.

So this first category of major proposed budget changes fits in the area of equity investments.

We're going to provide, again, a dedicated support to the department's race and social justice initiative.

We'll hire a person whose full-time job it is to sort of be the convener and leader of that conversation in the organization.

And there's a lot of excitement in the organization that we have stepped into this.

Funding to operate and maintain new or expanded properties and new public restrooms at Ballard.

This provides an increase of $610,000.

Also, key new facilities opened up recently that we're going to provide new facility cost funding to, which include the Arboretum, Loop Trail, Fort Lawton, Lake Ridge Park, and Yesler Park, which recently opened a few weeks ago.

We're also adding funding to late night programming in South Park.

We're adding a night on Saturday and Sundays, which was piloted last summer, and we expect this to be an increase of $91,000 to fund this.

We're receiving funding from the beverage tax, the sweet beverage tax, to increase youth scholarship programs.

This amounts to $150,000.

The next category is fee increases, and we are looking at across-the-board fee increases at various rates to fund increased labor costs across the department.

Next page, capital investments.

The next category is capital investments.

We were fortunate to receive roughly $17 million in new REIT funding that will be dedicated to capital projects in the department.

We've been here and talked about the assemblage of land to create the North Rainier Park and we just completed that final assemblage and we're here a few weeks ago to talk about that.

We need an additional $1.3 million to build out this site, and that will be included in the budget.

I mentioned earlier the ADA compliance issues.

We're also making great strides to do a comprehensive redevelopment of the South Park site, which includes community center stabilization, potentially includes a partnership with a local donor to fund the athletic field, and lots of playground features.

Can I just dive in on some of these?

Bitter Lake, terrific, glad to see that it's starting to get some attention.

Will you talk a little bit more about your approach on age friendly?

I see you've got the ADA compliance.

You spoke about that a moment ago, but I'm very appreciative of the fact that we're not just focused on kids, but we're focused all the way along for anybody with the abilities to get to your parks.

Absolutely.

So one of our big priorities is to serve the community on an age continuum.

So from youth to silver hair.

And what this means is young people enter our programs, child care programs and as they matriculate through the park and recreation system, maybe they become a teen leader, maybe they become a basketball coach at some point in time, and maybe they become a participant in our lifelong recreation programs.

We have a very active lifelong recreation program that includes opportunities for active seniors to engage in everything from walking to field trips to you name it.

This is a big part of what we do and I think really lives up to that sort of community expectation that we truly have something for everyone.

Thank you for that.

I do notice that there's only one person with silver hair up here, but keep on going.

Okay.

The Bitter Lake Play Area, this provides new funding to restore, or rather to renovate and restore the play area adjacent to the Bitter Lake Community Center.

The Yesler Crescent, Council Member Bakshi, I know this is one you're interested in.

Thank you.

This will provide funding for schematic design for Prefontaine Park and City Hall Park and really updates work that we did back in 2004. Our goal is to get a comprehensive design developed prior to 2021 when a new tranche of funding becomes available in the Park District.

Thank you.

Lake City Community Center, we've talked about that.

There's additional $3 million was added to that.

Green Lake Community Center, we added an additional million dollars there.

and then administrative staffing reallocation here.

This is shifting some capital planning development staff into the CIP.

Also, athletic fill replacements.

On the big picture, we have about $60 million in synthetic turf replacement projects.

This adds an additional $6.2 million to begin to address that bow wave of replacement projects.

And I really want to acknowledge Ben Noble for the partnership with CBO on that.

And I just wanted to say, in general, I mentioned yesterday when I was talking about the somewhat creative use of real estate excise tax dollars that we're employing in the budget that we had not backed off on a commitment to investing in caps.

in the parks capital budget, and I think you saw that on that previous page.

I also want to mention specifically, you know, decisions to increase fees not taken lightly and, again, recognizing increased costs, but also some play between the two.

So you'll notice a significant investment in athletic fields, recognizing if we're going to ask folks to pay more for the use of the fields, we need to be stepping up to provide fields that are that are the best they can be.

So those were things that was all part of our thinking as we put together the budget as a package in this case.

Thank you.

Council Member Herbold.

Thank you so much.

I just want to first off thank the Parks Department as well as thanking the Mayor for the permanent increase in late night hours for South Park.

There was a sort of temporary expansion this year to add Saturday as an opportunity for South Park kids to enjoy the late night programming in addition to Friday, which was already scheduled.

Many, many community centers offer both Fridays and Saturdays and I'm glad that South Park now will and I really appreciate the extra funds in the budget to maintain that.

As it relates to the facilities planning, It looks like the information we have here says that there's 1.8 million in 2019, and it looks like you're describing planning money.

And I was under the impression that the redevelopment is on track to complete the design by the beginning of 2019. So it seems like these should be construction dollars.

Yes, that's absolutely right.

We're actually well into the design and are continuing to shore up what we're looking at as a donation for the Sportsville.

We imagine that will get us over the hump.

So even though the header says South Park Planning, we're looking at most of these dollars going for construction.

Okay.

And then I also see that there's no additional dollars for 2020. And given that I think this project is supposed to be complete in spring of 2020, it seems like there would need to be some funds allocated there.

about $3 million, we are relying on a donation from a potential partner organization for as much as additional $4 million.

We estimate that this is probably a $7 to $8 million project.

So a lot of community planning and design work has been done.

We are, I think, have cleared schematic design and working out the issues with the donor as sort of the next big hunk of work we need to do.

And it wouldn't be, if those dollars don't all get expended in 2019, because the construction takes a little bit longer, we'll just carry those forward.

So the critical thing is the dollars are actually available as early as 19, so that if construction continues into early 20, there won't be any question about having the resource.

Right.

All right.

Thank you.

Okay.

Are you good with that?

I am.

Okay, under major proposed budget changes, again, we made finding efficiencies one of the pillars of our budget process this year.

And I think this table reflects that commitment.

I mentioned the 11 vacant positions.

We are cutting those at a savings of $576,000.

We eliminated $200,000 out of our consultant contract budget.

We want to achieve a 15% fuel savings and 19 for savings of $958,000.

Park resources, non-labor costs, this is things like supply equipment, chips, budget, does not impact people.

We're also looking at planning and development staff efficiencies, moving some staff into the park district.

We're looking at service level efficiencies in the natural area.

This means moving some funding from the Green Seattle Partnership into the park district.

We're looking at position budgeting changes.

This is where we would budget at the mid-step as opposed to the top step.

And we think we could sustain this for as long as two years.

This saves as much as almost a million dollars there.

And then golf, we're also looking at.

I'm sorry, could you, what were you saying?

Mid, mid steps, top step, I didn't understand.

So, so when you look at the way positions are budgeted in the city, they have a first step that increases over an 18 month period to a second step.

and then we'll increase to the top step over another 18-month period.

Our strategy is to budget at that mid-step level, and what that does is it decreases the budget liability for the top step.

So because it takes at least 36 months for a person to get to the top step in most jobs, we think we can do this and sustain this strategy for at least two years.

It's a strategy, and I'm looking centrally at, again, potentials for underspend and whether or not we're budgeting it at levels that are above what folks are actually getting paid.

And that's what we discovered.

On average, whether that can be sustained in the future will depend on how wage levels increase or don't.

I mean, so if someone reaches this top step and then retires and we hire someone in from the bottom, the notion is that on average we have people in the middle.

I think it's more of an accounting function.

Yes, it's a recognition that our allocation for personnel costs may have been somewhat higher than it needed to be based on what folks were actually getting paid.

And we see that evidence in underspent trends over time.

So this is, again, not anticipated to have any impact on services.

And if it turns out to be a binding constraint in terms of their ability to manage compensation, then we can revisit the issue.

Okay, very good.

Council Member Gonzalez.

Thank you, Chair Bagshaw.

I just want to get a little clarification around the vacant positions that are being, are proposed to be eliminated through this proposed budget.

On page 84 of the budget book, it talks about how the department identified opportunities to eliminate 14 vacant positions.

And then on page 89 of the budget book it actually says that That the department reviewed vacant positions and identified 11 positions Which can be eliminated and that is what ultimately is proposed in this budget.

So I just want to get clarity around whether the 14 number was a typo or if there was a policy determination made that out of the 14 identified vacant positions, only 11 should be eliminated.

I think it's the latter.

I think we did look at impacts across the organization.

In fact, these 11 positions that we ultimately are proposing for reduction come from all over the organization.

And I think we did make some value choices around impact and how to mitigate that impact and if we could really sustain the elimination of a position just because it was vacant.

Okay, so then there are three positions within the budget that are still budgeted but vacant.

And which positions are those?

I think there are 11 vacancies right now, and then there are also going to be three positions that will be cut in the 19 budget.

That is completely inconsistent with what I heard the superintendent just say.

Let us get back to you with the full accounting here because clearly we are...

I just want to know, is it 14?

Is it 11?

If it is 11, what was the analysis and the reasoning behind not eliminating the additional three?

and what are the three additional vacant positions and where are they in the organization and what is the logic for keeping those three positions in place?

We'll get back to you.

Thank you.

Let's see, so golf.

We've got a sustainability structural problem with our golf program.

We have a situation where rounds of golf are declining and the cost of labor in Gulf is increasing.

We want to propose a couple of changes here.

One is Gulf is supposed to net the department 5% of the annual gross revenues.

We treat Gulf like an enterprise fund, and theoretically it's supposed to pay the department.

When times were good in Gulf, we raised that cost recovery back to the department to 5%.

We want to lower that down to 3.5%.

to allow more financial flexibility for golf.

The other thing that we're doing is we just completed a golf study and we are developing recommendations to go to the mayor that looks at sort of a bridge solution for sustaining golf over some period of time and looks at whether or not we can make golf sustainable and it can survive.

But we are also looking at how to use more of the REIT funds to pay the debt service on the Golf Master Plan.

So at the end of the day, are we no longer in our enterprise fund capacity making money from the golf courses?

That is the challenge.

And the policy question is to what level should we subsidize public golf?

So, you know, another and I will turn this over to Council Member Juarez in just a minute.

But I have heard requests from affordable housing folks that we allow affordable housing to be built along the edges of the golf courses, that there is public property.

And I don't know what kind of an impact that would have on the golf games.

But I would love to know more about whether that's actually being discussed in real time or whether it's just somebody's fancy idea of where they could get.

So, we feel we have an obligation to explore some of the more restorative steps that are sort of ask the question, can we stabilize golf revenues?

Can we create new revenues for golf courses?

And can we sustain golf in the city?

And does that come down to You know, maybe we can't sustain four golf courses.

Maybe we can only sustain the two most profitable golf courses in the city ultimately.

But we don't feel like we have enough information to be at a place where we can make a compelling case that golf courses should become places for affordable housing.

Thank you.

And go ahead, Council Member Morris.

Just to remind us again, Christopher, how many golf courses do we have in the city?

We have four.

We have four.

So in the golf study report that we asked for, I know that we've been talking about this for a year.

I'm excited to see the results and how much we're underwriting, which ones are performing, what neighborhoods they are in.

But as you know, we are going to have a huge, huge discussion and public push for what the public benefit piece is, like we've done with every other enterprise and concession and park and every public asset in this city.

If you're going to use our property or we're going to use it, we want to know what the public benefit is far and wide, also through the social and equity lens, through the housing lens and all kinds of lenses.

So I'm really looking forward to that report.

And thank you for your hard work.

Thank you.

Good.

Let's see here.

So Donnie, I'm sorry.

Okay, we have, okay, so we have a couple more slides here we'll wrap up on.

Okay, thank you.

Major proposed budget changes continued.

Let's see, I just wrapped up on the.

Golf.

Yeah, on golf.

So, we're looking at, shifting $10 million of general fund operating costs to the Park District, and adding $10 million of real estate excise tax to support funding the formerly Park District funding capital.

And the reason this is possible is because the Park District does not distinguish capital from operating.

Those funds are considered fungible and we don't make the color of money distinction in the Park District as we do with REITs.

So the notion here is the $10 million that's being reduced from the general fund would be moved into the Park District.

That would be backfilled by Park District Capital at the rate of $10 million.

CBO would come behind that and backfill the Park District Capital with REIT.

And, you know, the question arises, so what's the downside in this equation?

There's no loss of services or programs.

There's no loss of commitment to the general fund per the interlocal agreement.

What could be lost but is hard to quantify is the flexibility because you can't use REIT for operating.

So that nuance is part of the discussion.

I've asked Donny to put together a slide that visually explains this.

So I'll just repeat essentially what Christopher mentioned a minute ago, which is this is a simple table that illustrates the general fund park district and REIT realignment proposal.

So in the first column, you can see that the general fund is decreased by $10 million.

And programs that were supported by these general fund dollars are going to transfer to the park district operating budget.

And then secondly, $10 million in new REIT is being used to pay for Park District capital expenses, which in turn enables the Park District to cover the operating costs that were previously funded by the General Fund.

And as Christopher mentioned, the end result is a net zero change to the Parks and Recreation overall budget.

as well as a net zero change to the park district budget.

It's really a color of money issue, which allows more flexible general fund resources to be freed up and used for other city purposes.

Any questions on that?

End of the slides?

That's our story.

Good.

It's a good story.

Thank you very much.

I appreciate it, Christopher, Donnie.

We so much appreciate what parks do for our city and I thank you for being here and for the nine years I've had the pleasure of working with you.

Thank you so much.

Very good.

Okay.

Next one, Marty Garfinkel and our Office of Labor Standards.

Thank you so much.

Do you want to kick this off?

That's fine.

This is another trace department.

So welcome.

Marty, would you like to introduce yourself and we'll get right into this deeply.

Good morning.

Tricia Leon, Council of Central Staff.

And Ben Noble on the slide deck.

Duane McLean, finance operations manager.

Marty Garfinkel, director.

That was nicely done.

Thank you.

All right.

Patricia, are you leading off with this?

I think we'll go straight to the department presentation.

Great.

Good morning.

We're very pleased to be here with you this morning.

By way of a quick background, which most of you know, OLS started, of course, as a small division within the Office of Civil Rights three and a half years ago, April 2015. We became our own separate department only 20 months ago in January 2017. Over that time, the number of labor standards we work with has grown to seven as of today, and very likely will grow to eight by the end of the year.

Our mission, though, has remained the same, to improve workers' lives through education, outreach, community engagement, and enforcement.

The demand for our services was strong from the start, and it has increased rapidly over the years.

And that's a good thing, but it challenges us to keep up with the demand.

Before going any further, I do want to take this opportunity to express on behalf of everyone at OLS our sincere appreciation for the support and interest that this body has shown to us over the years.

And in particular, thank you for approving just this past Monday the Mayor's Q2 Supplemental Budget Request, which will fund three badly needed positions.

I want to start, before I get to the slides, just introducing the topic of enforcement investigations and the backlog.

We all heard about and have heard about.

It's important to recognize that one of the challenges our office has, and has always had, is to how to do robust company-wide investigations, sometimes involving more than one ordinance, often involving employees spread out at various sites that an employer may have without getting bogged down and falling behind.

Despite strong and best efforts in the past, we did develop a large backlog of these investigations, some dating back to 2015. One of my major objectives coming in was to do something about this problem.

An old, aging case hurts the affected workers, obviously, because they're waiting for some redress, but it also distresses employers who are left in limbo and want to move forward.

And beyond that, it has the deleterious effect of enlarging our wait list, which is made up of workers who come with complaints that we have vetted and believe have a potential for merit, and very much want and need to reduce that.

So this slide demonstrates that we have made progress in the backlog, but that more needs to be done.

Now, we've done this by doing a number of things.

In general, I would say three things.

One is simply by heightening our focus on the problem and the office's focus on it.

We've also done a number of things to streamline decision-making.

And we've also tightened our triaging of cases so that we've reduced the number of new cases that have come in somewhat in order to give our investigators time and space to work on the backlog.

As a result, the first two rows from 2015 and 2016 together in the aggregate show, reflect a 79% reduction in our total investigations from 2015 and 2016. With respect to 2015, we're just about completed resolving those cases.

We have one left.

2016, we've reduced it by almost 70 percent.

And we've also made good progress on the 2017 cases.

And this is all the while we've gotten new cases in 2018. In all, to date, we've closed 170 cases.

excuse me, 174 investigations in 2018. But I want to emphasize it's not just about closing cases quickly.

I think we all feel it's important to be efficient without sacrificing a positive impact for workers.

In most of the investigations I've talked about, we have reached good settlements that have resulted in the immediate payment to about 2,000 workers of hundreds of thousands of dollars.

And just to put a personal statement on it, we know that the payment of back pay can have a dramatic positive impact on workers' lives.

We recently highlighted through a press release one worker, Kosai Issa, who is a recent immigrant and a restaurant worker who received restitution of $30,000 from tips that were misused by the restaurant's owners.

He told us that the money will help him go back to school and make a new life in Seattle.

That's really gratifying to all of us at OLS, and I'm sure it's gratifying to you, and it reflects well in our city.

On the policy side, I'm pleased to say that the three main objectives that we started out in 2018 to do have been completed.

We have issued rules, revised rules, on paid sick and safe time to reflect the introduction brought by state initiative 1433 of a state law of paid and sick and safe time, and we wanted to have rules that created consistency between the two.

Secondly, we had a very extensive stakeholder process with regard to the hotel employees' health and safety initiative.

We had 19 meetings with hotels and worker advocates and workers, and after which we issued comprehensive rules that went into effect on July 1. Finally, early on in my tenure, we signed contracts with five primary contractors in the Business Outreach and Education Fund, which, as you know, contracts with organizations that reach out to businesses that are owned by and serve immigrants and marginalized communities.

With regard to priorities in 2019, first talking about enforcement, I see these as falling into three buckets.

The first bucket is to continue to work on our reduction of the backlog and streamlining our processes.

We're very much aware of the statutory benchmark of 180 days, and we are striving to reach that, 180 days being hopefully the average of how long it takes us to complete and resolve an investigation.

I do point out that in the short term, as we're closing out older cases, that number's going to be high as those bigger numbers hit the books.

But over time, I'm confident we can, approach that date, that timeline.

Second bucket is strategic enforcement.

I've spoken to probably all of you before about this, and we have continued the orientation and maybe deepened the orientation of the office to focus on what we call high-risk industries or high-violation industries.

where we know from our own experience and experience of other agencies that there are a lot of violations and there may be in some of those industries reluctance by workers to come forward.

We are trying and are constantly working on creative approaches to try to amplify and maximize the impact of our enforcement cases.

And we're doing that by creative communication strategies, as well as education of business organizations in that sector.

Finally...

Thank you.

Just wondering, as it relates specifically to enforcement, do you have a breakdown of number of cases that originate from complaints and number of cases that originate from a director's filing?

We do have some of those numbers, and I want to answer it in a slightly different way, which is There is a concept of directed investigation that is initiated by the director with no complainant in the picture.

We have many cases from high-priority, high-risk industries where the worker comes in and disappears, or the worker has a complaint about one ordinance that turns out not to be valid.

We don't end the case there.

So we consider in the sense of strategic enforcement, it's not strictly under the definition of what's been known as directed investigations.

We consider going forward with an investigation once the complainant goes away as essentially the equivalent of a directed investigation where it's in a high priority industry with which means industries with large violations and maybe few complaints.

But we do have numbers of where investigations were completely initiated by the director.

It's a particularly useful tool in fair chance employment cases.

where you can look at want ads and you can see violations right off the top and we, and I can get you those numbers in terms of the violations, the investigations we did with respect to that.

We did one very extensive investigation in the flooring industry this year and ultimately it concluded there was no cause to proceed to finding.

But it is something we are very cognizant of.

It seems that as it relates to the sort of hybrid directed investigation, complaint-based investigation that you described, that when those are occurring in what you identify as high-risk industries, that it And I think this was sort of the nature of the desire to have directed investigations, that you could apply what you learned about the practices in those cases to other employers within those high-risk industries and use your ability to do a directed investigation that has no complaint.

And so I'm just really interested in learning more about doing that.

And that's a very good point.

I appreciate that.

Thank you.

Anything further?

I have a question about outreach.

Yep.

Okay.

I'll just do it now.

I was going to wait until the next slide.

We have an outreach slide, but we can do it now.

I was trying to patiently wait for the outreach slide.

So on the, you know, around enforcement and education of workers and employers, One of the things that I think became really pronounced to me is particularly around the debate, discussion, and development of the Domestic Workers Ordinance is the concept around the need for language access and support.

And so I know that this budget proposal in particular emphasizes a lot about how the department is going to implement and begin the enforcement process around the Domestic Workers Ordinance.

And I would just like to get a better understanding from you about what resources you are utilizing and what strategies you are thinking about in order to ensure that language access is permeating the Office of Labor Standards, particularly as we think about enforcement and implementation of the domestic worker bills.

I mean, there were many occasions, as you know, where those workers, impacted workers, workers that will now benefit from this ordinance, came to City Hall and a significant portion of them are monolingual Spanish speakers or some other language.

In any event, very little English proficiency.

So talk to us a little bit about how this budget prioritizes language access and what your strategies are going to be moving forward.

That's a great question.

We, in fact, just the other day had another meeting about language access.

I don't know if this If the council is aware, we translate our core documents into 17 different languages.

I'm not aware of any other department that does that many.

And many of those documents, and it's quite a long list of documents, Many of those documents are required to be translated into the primary language of the workers.

And so what happens often is we reach a settlement with some employer, the settlement requires certain postings, and they say, hey, we have Farsi speakers and you don't have Farsi language documents, for example.

And so then that gets added to the list.

When I started in February, it was 14. And there are more languages out there, quite frankly, that we probably need to do, and we are statutorily required to do them.

We don't have a separate budgetary designation for that.

And it's one of the concerns that I've had because, again, when we do it, I think we do it to a best practice, which is we have a professional translation company that translates all of these documents.

I want you to picture a big Excel spreadsheet now.

So you have lots of documents, lots of languages, and they're in different stages of production.

You have a translation company, but every single document we have done professionally, we send out for community review to make sure it's culturally appropriate.

Because we've had situations where the language comes back not minimum wage, but small wage You know those kind of things so there's a need for that.

That's a terrific practice.

I've had conversations internally and with the mayor's office about How about having a citywide approach to this?

Because I'm sure we're not the only ones.

So we have, frankly, my executive assistant, who doesn't spend much time on my calendar, doing things like working on this Excel spreadsheet, which is calling people up and saying, where's the community review?

Now, because we have to get the biggest bank for our buck and try to be as much as efficient as we can.

What we are starting to look at and think about, and it's very preliminary, is how can we involve our community partners as part of the COEF fund, which is money already allocated, to help us do some of that work that needs to be done.

It's very consistent with the goals of the COEF.

So we're looking at that to try to use existing dollars.

But long range, I do want to highlight that issue for you, not just for our department, but for all departments.

And we need to think about an interdepartmental approach because professional translation, community review.

It's not just true for our documents.

Yeah, absolutely.

And if I can just bail in on this, this has been one of the songs I've been singing for years with Department of Neighborhoods.

And I know with Andres that he's open to this as well.

And no question about it.

And I love your example about small wage.

Those are the kind of mistakes we don't want to make.

But thanks for taking the lead on this.

And if there's something we can do through this budget cycle to help support, let us know.

If I can, please, just finish my line of questioning here, which is that I think, you know, last year, our last mayor of the year, last year before Mayor Durkan took over the helm, actually signed an executive order on language access, and I'm not sure whether that has sort of been shelved and is now dead, or if it's something that's part of Mayor Durkan's work plan moving forward.

It is ongoing work that OIRA, I was about to lean in and say, so departments are being requested to develop, I don't know the moment to moment status, language access plans.

in part around this issue.

And I would note there is some money allocated in the budget specifically around associated with domestic worker legislation to partly address this issue.

But the broader point is needs to say well taken.

Yeah.

I mean it's I would say that the city I think does well in terms of the minimal requirements of compliance.

in terms of the top languages we need to translate depending on what department or agency it is.

But we have, there are many other cities who are far ahead of us in terms of their policies.

related to language access.

So this is something that I bring up all the time, every opportunity I can get, and I can't think of any more critical department for language access to be at the forefront.

And, you know, Marty, you and I, we're former law partners.

We work together on a lot of cases, including representing, you know, classes of people who were monolingual Spanish speakers or spoke some other language.

And I think it's just so critically important to make sure that we have culturally competent, linguistically appropriate translation and interpretation services when there are literacy issues or just when you need to communicate orally with somebody.

And so when I look at the language access issues, I want to make sure that we're taking into consideration not just language in writing, translation, but also interpretation.

And I think what oftentimes happens is that people who are working within the departments are saddled with the burden of also becoming translators and interpreters, even though that's not their job, and they're not being paid a premium to provide that language access.

And I find that to be an inequitable practice and an unfair practice, but it's also a practice that has occurred and been put in place because we don't have a set of cohesive strategies to make sure that we are accessible to people who speak a language other than English.

And I don't say that to take a swipe at the Office of Labor Standards or any other department, because I think the legislature is just as guilty of doing that.

as other branches of the city government.

And so I think we just have a long way to go here and I just want to emphasize my support to making sure that the Office of Labor Standards in particular is as resourced as well as it can be to make sure that it's not perpetuating those language access inequities and that you all have the resources that you need to be able to appropriately investigate and enforce these laws, these ordinances, the labor standards that we have all found are absolutely critical to making sure that we continue to protect the ordinary worker in the city of Seattle.

So I'm sure I'll follow up with Patricia about how to make sure that that is something that we can do and that we have a strategy as it relates to OLS in particular.

Well stated, Council Member Gonzales.

I appreciate that and your leadership in it.

Council Member Herbold.

I as well appreciate your consistency on this issue.

It's so important.

As it relates also to the issue of outreach for the Domestic Workers Ordinance, as you know, we also passed a companion piece of legislation related to harassment and retaliation and discrimination against domestic workers who are contract workers.

And SOCR is committed to also doing outreach around the requirements and obligations and rights.

So rights for workers and obligations and requirements for employers around that piece of legislation.

Your outreach around the labor side is, I think, on a very similar timeline because we've aligned the dates where both go into effect.

And rather than doing two separate outreach efforts, I think it would make a lot of sense to figure out a way to collaborate and do them together, given that you're going to be talking to the same population of people, both on the worker side and the employer side, around different elements of the same issue.

I think it would just make a lot of sense to try to figure out a way to work together and combine that.

And it's a great idea, and it's absolutely part of the plan.

Which brings me to domestic workers.

As council has noted, both the enforcement aspect, I'm talking about enforcement here, but we're going to be talking about outreach as well.

The law goes into effect next year.

The enforcement piece goes into effect in July, but the worker standards board, it goes into a, it's supposed to convene by the end of March of 2019. And so, as far as the enforcement piece, we are quite aware that we need to come up with some creative and different ways of approaching this.

We've spoken about this before.

You're dealing in many cases with households who are not accustomed to being perhaps employers.

They don't have HR departments.

We need to make sure we reach them.

The vast majority of them are going to want to comply and we got to help them do that in a way that makes sense.

So I want to say thank you on that and yes indeed when you were in front of our committee with Councilmember Muscata we talked about that and I used an example of when my father was living with us and during the day I hired people to come in to be there when we couldn't be there.

And it was pretty extraordinary about who we had to pay, which departments, what percentages, and whether it was labor and industries or workers' comp.

And having a template for families that may be hiring a domestic worker would be really helpful so that people don't fall into a trap of, I didn't know I had to pay L&I.

So the more we can do on that, the better.

And thank you for the lead on that, Marty.

And then that, of course, triggers the language access issue again.

If you're hiring, if somebody is contracting a domestic worker who doesn't speak a language, then we have to think about all of these templates being in a language that both the employer and the employee can understand.

And that they're actually saying the same thing because one's going to be in English and one's going to be in Spanish.

So again, you know, I'm going to, beat this drum until it is eviscerated, or until it happens.

But I think, you know, I think you know, Marty, how important this is to me, and I know it's important to you as well, and I just am utilizing this as another opportunity to emphasize that.

No, and I appreciate that, and I do want to emphasize it's not just my interest.

It's really built in the DNA of the office to be a leader on language access, and happy to show you that spreadsheet and show you the documents in all the different languages.

I will note in the Domestic Worker Ordinance itself, there is one document that is specifically called out to be provided in languages, and that is the Notice of Employment Agreement document.

And there is, so that template is actually statutorily required.

Councilmember is discussing possibly other templates as well.

If we turn to policy and outreach and our priorities there, Again, on staying with domestic workers, the two positions that are in the mayor's proposed 2019 budget that are outstanding, are a policy analyst and an outreach person, both of whom will be dedicated to the Domestic Worker Ordinance.

The policy analyst has, they're both really big jobs, the policy analyst is going to be organizing, supporting, guiding the Worker Standards Board.

which is a groundbreaking, I have to tell you all, it's a groundbreaking institution.

There aren't really models for this, and it'll be really exciting to be a part of, but it's a big board to organize and keep on track.

That board has to meet The first meeting has to be before the end of March 2019. And I'll note that the ordinance requires the board to consider a lot of really interesting cutting edge employment law type issues like portable benefits and the like.

And that policy analyst presumably is going to be writing memos behind the scene to help inform and guide.

the board.

Beyond that, that analyst will have to help issue, after a stakeholder process, will help promulgate rules filling in the gaps of the Domestic Worker Ordinance itself.

The second position in the 20 proposed budget is an outreach person.

And that outreach person has a big job because you're reaching out to domestic workers, most of whom, and there are thousands of them, most of whom don't know they have these rights.

It's not rights that have been extended before.

It's rights that have been extended now both to employees and people who are legitimate independent contractors.

So it's a large group and as well as, as I mentioned before, households.

New ways of outreach are going to be demanded of this person and it'll be really an exciting thing to see.

The second bucket over there is just everything else we do and it's just a very summary list of three highlighted areas and I could talk for hours about them but, okay.

So the first bucket is just there are some rules and informational materials that have been on the shelf that we want to do.

One thing that really is a top of the list is we've never gotten around to doing rules filling in the gaps in the wage theft ordinance, which is a major vehicle that we use in our investigations because it has some very broad language of requirements that sweeps in other statutory obligations like state and state law and contractual agreements.

We want, the second one is really important and it takes time to make it happen.

But to forge more and better partnerships with other city agencies and state agencies and even federal agencies.

So for example, we've reached out and now are working I think pretty effectively with the prevailing wage part of FAS.

Because there's an overlap there.

And we've started working on some cases together and separately and coordinating that.

That's incredibly important.

We've reached out to the Employment Security Department of the state because they have data that could be very helpful in our enforcement.

cases, and we're working on a work-sharing agreement.

There are many steps to them, and you need the capacity to make those happen.

But I'm convinced it will have a tremendous impact on our outreach and enforcement efforts.

Finally, on this slide, there's the Labor Standards Advisory Commission, which is made up of a lot of talented people from the business community and the worker advocate community, and it perhaps may not have always been used to its fullest.

We're dedicated to try to invigorate it.

We've, in our last meeting, we've set up two subcommittees, one on worker misclassification, taking Councilmember Herbold's lead, and also a subcommittee on outreach.

And we really want to try to get the experience and the talents of those people to bear.

And it would, we need capacity to make that happen.

And with that, I'm happy to turn the next slide, the budget summary slide, over to our finance and operations manager, Duane McLean.

Thank you.

Thank you, Marty.

You're welcome, Duane.

Good.

Thank you.

As you see, in 2016, OLS started with a budget of $1.9 million, and that grew to $5.7 million in 2017 as it became a standalone office and grew from nine FTEs to 23 FTEs.

The budget remained flat in 2018, and in our proposed 2019 budget, we increased by approximately $900,000 to $6.6 million as we grow by five positions.

But a side note with that is Council passed the Q2 supplemental, which we got three of the five positions and added another $371,000 to our baseline budget.

And also as part of that $6.6 million in 2019, $2.3 million is allocated to contracts with small business and community groups in our Community Outreach Education Fund and our Business Outreach Education Fund.

Any questions about that slide?

The next slide is a brief summary of the legislative framework.

Most of these issues you'll be familiar with, but just to go through them briefly.

The first refers to initiative 1433, which I mentioned before, which raises the state minimum wage, but very significantly introduces a paid sick and safe time leave following the lead of City of Seattle.

That has had effects on our office and will continue to have effects.

We've had to change some of our rules to create consistency.

We've had to change and update our outreach documents, and it also has resulted in increased questions from the public for technical assistance.

As you know, we get many, many inquiries from businesses and business attorneys as well as workers and other organizations, and we answer those questions.

Of course, we talked about the Domestic Worker Ordinance and the impact that that will have.

As you're aware, there's a Commuter Benefits Ordinance that's been proposed.

that will have its impact as well.

I did want to mention something that may not be something you're aware of, which is the Department of Labor and Industries is currently going through a stakeholder process to change something that really needs to be changed, which is are there rules for what's called the white collar exemptions from overtime?

These are the executive, administrative, and professional exemptions.

And part and parcel of those exemptions is what's called the salary basis test.

And there's a threshold salary.

And if you earn above that salary, then you're potentially exempt from overtime.

The threshold under state rules has not been changed since 1976. which would be and is the equivalent of $6 an hour right now.

So obviously salary basis for an executive to be exempt from overtime needs to be higher than $6 an hour.

The Obama administration had proposed changes which have been retracted and now the state is looking at doing it on a state level.

which, as I say, is badly needed.

The reason it has an impact on us is, again, going back to the Wage Theft Ordinance, we enforce overtime laws.

We enforce the state overtime law via the Wage Theft Ordinance.

And if more people are going to be eligible for overtime, which they will if the state changes it in the way that I think they should, then that will mean more demands on our enforcement.

It will have outreach.

implications and in terms of the materials that we distribute.

Do you know, Marty, what the timeline is for that?

They're very much in the middle of it.

I can't speak to that, but I would not be surprised that they issue proposed rules by the end of the year, but I don't know that from first-hand knowledge.

I just know that they've been doing it for many months.

Turning over the proposed budget changes to Duane.

Yes, as mentioned in the budget summary, the major part of the increase comes from these five positions.

The first three comes from the Q2 supplemental, and the last two come from the domestic workers ordinance that goes into effect January 2019. So that's the bulk of our increase right there.

Thanks.

Any questions on that?

Please, go ahead.

Thank you.

As it relates specifically to the investigators sort of category, can you provide some information on what the goal is for investigator caseloads and how close you are to meeting that goal or how far away you are from meeting that goal?

And if you don't have that...

I'll have to get back to you, because it's not a number of case goal.

What we do is we have a weighting system that's quite complex, that has to do with complexity of case.

things like complexity, number of employees involved, number of ordinances involved, and they're assigned a weight because we found that one, a simple case involving a few employees does not take as much time as a complex case, so it would be unfair to treat them as the same on a workload basis.

In terms of the actual targets for the The weight, we could get back to you on that.

I'd have to check with my enforcement manager.

Yeah, and I ask because this question also comes up within the context of the Office of Civil Rights.

And I think they might do sort of an investigator capacity analysis a little different than you do.

But I'm interested in both approaches.

Yeah, yeah.

Well, one of the things, I mentioned that we did this year was really tighten the triage to give us some breathing room.

Because if you notice in that other slide, just from the 2015, 2016, and 2017 cases, that was 200 investigations that were on the docket before we even entered 2018. And we were never going to get rid of that backlog unless we gave people some space.

With additional capacity, we can do what we should do, which is remove people from the wait list as much as we possibly can and maybe loosen that triage a little bit rather than trying, as we have, to refer out cases when perhaps we should be doing them ourselves.

So.

Thank you.

Good, well I'm, this is our last slide.

Oh, sorry, Council Member Juarez, yeah.

Just very quick, I had some, thank you very much, some of the questions I had you answered.

I just had one left on my blue sheet.

So in our district, D5, we have formed, and has been around for well over a year now, a D5 business coalition.

And I think you and I talked about this before.

So with this increase, would the Office of Labor Standards make themselves available to the D5 business coalition, which is not just Northgate mall folk, but small businesses, it's hotels, it's with the recent, well, with the seven labor standard laws and also, we also have way more businesses coming online with the redevelopment of Northgate.

So, can we ensure that your office will be able to come up north and provide that kind of outreach and getting, you know, because it's a great business coalition.

I think we're the only district to have one of all the businesses.

I can answer that.

With or without this money, we will do that and do do it.

And in fact, there are a couple initiatives we're doing right now in D5 with Literacy Source and the North Seattle Community College.

We've been in touch with your office and we're happy to add that to the list because I think that's important.

That's part of what we do.

Thank you.

So I just I want to end this by channeling once again Councilmember Mosqueda and appreciate your coming to her committee.

And I just am so proud that after the months and months that she worked on this.

that we actually have a Domestic Workers Standards Board.

And I appreciate that you're putting two people specifically on that to analyze policy and do outreaching and engagement as we've been talking.

So, well done to that.

Duane, thank you for being here with us, Patricia and Ben.

Thank you.

And this afternoon, we move into Human Services Department and Police.

And their review will start at 2 o'clock.

We will have some time for public comment after those two presentations.

And very much appreciate your being here.

Thank you.

Ladies, too, I want to say thank you, Councilmember Herbold, Councilmember Gonzalez, Councilmember Juarez, for...