Economic Development, Technology & City Light Committee 9/14/22

You can begin now.

Thanks.

Good morning.

September 14th, 2022 meeting of the Economic Development Technology and City Light Committee will come to order.

It is 9.33.

I'm Sarah Nelson, chair of the committee.

Will the clerk please call the roll?

Council President Juarez?

Here.

Council Member Sawant?

Present.

Council Member Strauss.

Present.

Council Member Herbold.

Here.

Chair Nelson.

Present.

Five present.

Okay, there are nine items on today's agenda.

A discussion and vote on a possible vote on an ordinance establishing a Seattle Film Commission.

A briefing by the Office of Economic Development on Neighborhood Recovery Investments.

A discussion and possible vote on two reappointments to the Seattle Music Commission.

a possible vote on City Light's 2023-2024 rate ordinance, a briefing on Seattle City Light's annual independent audit, and a discussion and possible vote on three reappointments to Seattle City Light's review panel.

If there is no objection, the order of the agenda will be changed to move Council Bill 120411 from item five to item nine.

All right, I am not seeing any objection.

The items will be heard in this order on the agenda.

Okay, hearing no objection, the agenda is adopted.

With that, we'll move into public comment on items listed on the agenda.

And we'll roll the video, please.

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Thank you, Seattle.

All right, today we will start with people who are here in person to give comment, and everyone will have two minutes.

Could you please give me the list?

and please state your name before you speak.

Okay, we've got Sabra Boyd, please.

Good morning city council, good morning council.

Oh, this microphone is not on.

Good morning.

Thank you.

Good morning City Council Members and Council Member Nelson.

I'm here to comment on the Film Commission proposal because as an actress and screenwriter and Screen Actors Guild member, I'm concerned that the proposal doesn't have any line about or any verbiage about housing.

And I feel like housing is a huge issue for the artist exodus in Seattle.

You know, I've lost a lot of, well, not lost, but a lot of friends have had to move away who are artists because housing here, in my opinion, is the biggest obstacle to the arts community here.

So anyway, I just wanted to add that consideration.

Thank you.

Thank you.

Our next person here is Kate Becker.

Good morning, council members.

I wasn't planning to testify this morning, but I changed my mind because how could I resist the opportunity to talk with you all about the Film Commission?

My name is Kate Becker.

I am the Creative Economy and Recovery Director in King County Executive Dow Constantine's office.

Prior to serving in the exec's office, I was the director of the Office of Film and Music at the City of Seattle for more than five years.

And I have worked with the film industry throughout these last nine years.

And I am so excited about the opportunity to have a film commission and have industry and community voices from the film industry at the table with our city leaders to help advance this industry, which will provide clean, green family wage jobs.

and help us tell our stories from this region and get them out to the world.

Not just our stories, but also our commercial capital.

Film industry works with companies to market their materials and export their products to the world.

So all very important.

And I just want you to know it's a critical moment in time.

The state has just gotten a $15 million tax incentive for the film industry, which will help grow the industry.

At King County, we have a new film initiative and we have Harbor Island Studios, the first major scale soundstage in the region since 1996. And the city coming on with the Film Commission makes a nice trifecta for all of us to move forward together to really grow this industry.

So I look forward to your support and just want you to know that King County stands at the ready to partner with the city of Seattle on whatever we need to do to grow the film industry here.

Thank you very much.

Thank you.

All right, I believe that we have one speaker who, on the phone, so I will call on Tom Mara.

Thank you, Council Member.

This is Tom Mara, Executive Director at KEX, excuse me, at Seattle International Film Festival, recently retired after 34 years at KEXP.

Two things I'd like to say briefly.

One is really to echo what Kate had been mentioning.

I'm really excited about the commission being able to be an accelerant economically, you know, development for the film industry.

There are so many different kinds of jobs that are going to be upheld by any strategy moving forward.

And the second thing I would love to say is Count on Seattle International Film Festival as a partner, as a champion, for the council moving forward.

Lastly, appreciation to the committee for bringing this legislation to this point and I wholeheartedly support it.

Many, many thanks.

Thank you very much, Tom.

Are there any other speakers on the ready to speak?

I'm not pulling up my link.

Okay, that's all for our remote speakers, and if there's nobody else in the audience that wishes to speak, I will close public comment.

All right, will the clerk please read item number one into the record?

Agenda item number one, CB120412, an ordinance relating to the establishment of the Seattle Film Commission and adding new chapters to the Seattle Municipal Code and amending chapters of the, or sections of the Seattle Municipal Code for discussion and possible vote.

Thank you very much.

All right, at our August 10th meeting, we had an in-depth briefing and discussion with Council Central staff and also the Office of Economic Development on the bill in the draft form.

I spoke of film as a major driver of economic development in the creative economy, as well as in Seattle's economy as a whole.

Because so many of the skills that are required in film are used in other sectors.

And those are living wage jobs.

I also laid out the long history of advocacy for a film commission.

And most recently, that was with the creation of, driven by, largely I have to extend appreciation to my colleagues, Council Member Herbold and Morales and so on.

There was a film task force formed in 2019, and they represented a broad cross-section, in fact, every single segment of the film industry.

And these diverse members had their primary concern was a diversity of race, age and gender in the film industry and how to advance that through a film commission.

They produced a report in 2020, and this legislation is based on those recommendations.

So last weekend was the ninth annual Seattle Film Summit.

And in case you have never been, that is a gathering of creatives and nonprofits, labor, policymakers, educational institutions like Shoreline Community College, Cornish, and there was even the International Stunt School, which is based in Everett and is world famous.

Who knew?

I didn't, but now I do.

Anyway, I was invited to be a keynote speaker to talk about establishing a film commission in Seattle.

And after my talk, the Montana's commissioner of the film office, the film office commissioner, came up to me.

And she said, she looked straight in my eyes and she said, Seattle has to have a film commission.

to be taken seriously by producers who are looking for a location because they want to see that government has skin in the game and that they'll be a really positive partner if they choose to locate there and do a production.

So mind you, Montana knows how to promote itself.

They've had a film office since 1974. And from July, let's see, July 2020 to June 2022, 119 productions have been filmed there.

And you may have heard of Big Sky or Yellowstone, that keeps coming up on the on my feed there.

So that translates into 840 local jobs and an economic impact of $154 million.

And so that was a new angle for me, coming from sort of another place and outside of what I've been talking about so far.

So if the question is, why do we need another commission?

Or why is a film commission important?

I would just say that, well, why would we not have a film commission?

It's what our creatives want and need to thrive in Seattle.

And it's also what our city needs to fill our promises for advancing equity and opportunity.

And as we heard in public comment, it's what our region and state needs to take advantage of this historic moment.

of $15 million of new incentives and everything that's going on at the county and the opening of Harbor Island Studios.

It's what we need to align all of our policies to frankly just put Seattle back on the map as the best city to make film in the nation.

So with that, I am going to turn it over to Yolanda from Central Staff.

We're in the last episode here of a very long journey.

She'll go over the legislation, and then we'll open it up for questions.

Go ahead, Yolanda.

I gotta find my unmute button.

All right, so, Yolanda Ho, Council Central staff.

I will be going over Council Bill 120412, which would establish a new film commission as described by Council Member Nelson.

So presentation, we will just be providing a recap of the proposal as the background was discussed at committee length last month by Council Member Nelson and my colleague Brian who did Excellent job of referring for me while I was out.

I will also note some minor changes that were made between the pre introduction draft and that draft that is that in the legislation that is before you today and then discuss some of the potential impacts of the creation of this new commission.

So as a quick summary, legislation was developed in collaboration with the Office of Economic Development and film industry representatives.

And so this Council Bill 120412 would establish a new Seattle Film Commission staffed by Office of Economic Development, also known as OED, to advise and make recommendations to the city on the development of policies and programs that enhance the economic development of Seattle's film industry, including promoting the sustainable growth of family wage jobs for workers who have historically underrepresented in the industry.

The goals of the commission are to inform and influence the regional film industry and community in partnership with the city to advance disparities caused by systemic racism, so that Seattle is at the forefront of driving equity, inclusion and economic prosperity.

and to advance the city's economic development priorities in the creative economy, serving as a conduit in the city, the film industry, and community to attract and retain local, regional, national, and global business, build inclusive career pathways into the film industry, and advise on the development of efforts that reinforce and grow the role of film in the region's content and creative industries.

In terms of membership, the commission would have 11 members, five appointed by the mayor, five appointed by the council, and one by the commission members once the other 10 have been appointed.

And all of these appointments would be confirmed by the council.

And you can see the numbers would present district groups as listed on the slide.

Same as last time you saw.

So in terms of duties, It would be engaging with industry professionals to inform development of city efforts, advocating for the interests of the local film industry to the city and wider community, collaborating with the city to ensure that Seattle's film priorities are in alignment with those of King County and Washington State, and advising the city in the development of efforts to support the film industry, such as equity and inclusion strategies, education, training and workforce development programs, and improving permitting processes.

And additionally, the commission would be required to meet monthly and annually with the Seattle Music Commission, elected chair and vice chair every year and adopt bylaws.

Terms would be three years with a limit serving a maximum of two consecutive terms.

Initial terms will be staggered to maintain membership stability over time as the commission gets established.

And it also authorizes OED to provide compensation if serving on the commission presents a financial hardship.

So just to highlight the differences between the pre introduction draft that was presented to the committee last month and the introduced version today.

Attachment one to the memo on the agenda shows a red line version is minor changes to clarify intent and align goals with that intent specifically around the goal of increasing diversity, equity, and inclusion.

Also, OED had requested the removal of a reference to the Seattle, City of Seattle Industrial Corporation, which is no longer active to anyone's knowledge.

Any questions so far?

No?

Okay.

So potential impacts.

So, just noting that the city does have over 70 boards and commissions that provide advice and recommendations on a variety of topics to the council mayor and see departments, there is no advisory board for the film industry.

this new commission would provide industry-specific expertise to advise on the development of film-related efforts to advance the city's economic development priorities in the creative economy.

Just so you're aware, there is already a Seattle Music Commission that was established initially by resolution in 2010, later codified in 2014. The new film commission would be required to meet annually with the that existing music commission to encourage collaboration between the two complementary industry groups.

In terms of fiscal administrative impacts, this new advisory body, as all advisory bodies, will require dedicated staffing to support its work and potentially additional funding to provide hardship compensation.

Noting that OED has a filled film program manager position who is expected to be assigned responsibility for staffing this new commission.

So no additional staff are anticipated to be required for this purpose.

The amount of hardship compensation cannot be known at this time.

Members would need to request compensation from OED and OED would then need to determine what an appropriate compensation rate would be.

And noting here that the city is currently in the process of evaluating its compensation practices for advisory bodies across departments to help establish standards moving forward.

So that will inform that.

compensation rate.

Once the members have been appointed, they may request additional ongoing funding to support their efforts, which has been the case for a number of the city's advisory bodies.

For example, the Music Commission is allocated $50,000 annually for city music career days and industry roadshows.

And it is also possible that the work of the new commission could provide financial benefits to the city indirectly via increased tax revenues, as the committee learned about last month and also during public comment there by Kate Becker there are a couple of related efforts at the state and county levels so there was the increased business and occupation tax credit cap for the motion picture competitiveness program, and also the recent opening of King County's Harbor Island Studios.

And that was in Seattle, that was last year.

So in conjunction with the establishment of this new commission, these efforts combined could result in increased revenues for businesses in Seattle that are directly and indirectly related to film production.

Finally, on the topic of racial equity, one of the Commission's goals is to address disparities in the film industry that have resulted from systemic racism.

A report released last year by a consulting firm found that Black talent is underrepresented throughout the industry at the national level, and this disparity is particularly pronounced in off-screen positions and at the executive level, which has traditionally been and continues to be predominantly white and male.

This legislation explicitly recognizes this reality and the commission in partnership with the city would endeavor to shift the regional and local film industry and community so that it is more welcoming and inclusive to black, indigenous and other people of color.

With that, that is the end of my overview of the legislation.

answer any questions.

Do my colleagues have any questions?

Yes, Council Member Herbold.

Thank you so much, and thank you, Madam Chair, for getting this work over the finish line.

As you mentioned, a number of us had been endeavoring Several years prior under the previous administration, I particularly requested recommendations from OAD on seeding a filled commission back in 2019 when I chaired the committee with oversight of the Office of Economic Development.

I also sponsored a statement of legislative intent in 2020 requesting that OAD provide recommendations about being a film commission.

OED, to their credit, did absolutely provide a response in November 2020 that did offer some high-level guidance.

But the legislation establishing the new commission did not move forward until now.

So again, thank you so much.

One thing that I, you may have covered, Yolanda, but I didn't catch.

Can you talk about the Creative Industries positions within the Office of Economic Development that are intended to support the Film Commission?

Sure.

So there is the Film Program Manager position, which I believe you, Council Member, helped create and budget a couple of years ago.

There is currently a proviso on one of the positions that Council Member Morales I believe sponsored during the budget last year that was the creative industry policy advisor position so previously there was what was formerly the director of the Office of Film and Music position that had been a creative industry director position that during last year's budget got repurposed into a new position may recall the division director position so that is no, you know, kind of more of a generalist leadership role and then there was kind of a proposal in that budget around creating this creative industry manager position right and so I believe OED is in the process of kind of evaluating its work.

workforce needs.

There is also the folks, right, of course, who are doing the permitting for events.

And so those people continue to do what they're doing.

Those positions are the same.

But I think there is the Creative Industry Policy Advisor that had been added in the 2020 adopted budget that is kind of in flux right now.

And so OED is in the process of kind of developing their proposal for that role within the larger picture of their priorities.

It sounds like there may be some changes as a result of that re-evaluation, but it also sounds like there are not currently any positions to help

support the film commission at this time that are no there is there is the yeah it's the film program manager position so Chris Winston, yeah, yeah.

All right.

So, Chris, okay, but Chris is like so involved in the on the ground permitting work right.

So we happen to have the director of the Office of Economic Development and yeah I just mean like the like the support to the Film Commission, I think is might be a little bit of a different role than, than what we're talking about but I may be completely wrong.

Chris wears a lot of different hats.

a lot of different hats but he is our subject matter expert on film he's been the one leading the development of this commission both within OED as well as with our partners throughout the region so Chris is actually best suited to support this commission as it gets started.

Now, as I've said to this committee before, and as I've talked with you, Council Member Herbold, OED is going through a lot of changes, both staffing as well as on focus.

So that might change over time, but at least right now, as we get it set up, Chris is by far the best positioned at OED to help get it off the ground and make sure that it's set up for success.

Thank you, I appreciate it.

Okay, are there any other questions I also have to say that, speaking of the creative economy, and you might have been the driving force of this Councilmember herbal but this is the report from 2019 creative economy report.

City of Seattle put it together in conjunction with, let's see.

Well, it was Kate Becker over there and Randy Engstrom, who is the Director of Office of Arts and Culture and Carl Stickel, Interim Director of OED.

So we do have 67 pages of information about the creative economy.

And the prop I was looking for earlier was here's the final 2020 report.

from the Seattle Film Task Force.

And so we've got a lot of momentum going here.

We just need, as you're right to say, some focused attention.

And I believe that I echo Director MacIntyre when he says that Chris's Really the right person for that.

Anyway, I'm sorry, I just want to say I absolutely was not the driving force for those for those for the 2019 report, but I returned to them often citing the stats.

from those reports because they are some of the best reports that identify both the need for the workforce to really pay attention to growing, particularly the parts of the workforce that are primarily BIPOC represented.

I returned to that report over and over again, but it was not my brainchild.

I firmly believe that Randy and Kate's brainchild.

Great.

Now that we've got that straight, it was your staff that sent it to me.

So thank you, everybody.

Let's see.

I don't see anybody, other hands raised.

So now, Yolanda, it would now be time to move the bill and the amendment.

Would you like to speak to that?

Or just go ahead and move?

Do you want to move the bill and then we can talk about the amendment?

Sure thing.

I move that the committee recommend passage of Council Bill 120412. Is there a second?

Second.

It's been moved and seconded.

And as Yolanda mentioned, there is an amendment, Amendment 1. I move to amend Council Bill 120412 as presented on Amendment 1. Is there a second?

Second.

Thank you.

Go ahead, Yolanda.

All right, so amendment one is attachment to to the memo on the agenda would make technical edits and clarifications, specifically that the commission's film industry specific efforts are intended to advance the city's better economic development priorities in the creative economy.

Second, the Council will confirm all appointments to the commission.

or the required annual meeting between the Seattle Film Commission and the Seattle Music Commission should focus on identifying economic development priorities and opportunities for collaboration.

Okay, so.

Any questions about that, please?

Okay, let's move on to a, will the clerk please call the roll on the amendment?

Council President Juarez?

Aye.

Council Member Sawant?

Yes.

Council Member Strauss.

Yes, absolutely.

Council Member Herbold.

Yes.

And Chair Nelson.

Aye.

There are five in favor, none opposed.

The motion carries and the amendment is adopted and the bill as amended is before the committee.

All right.

Are there any further comments or questions on the bill as amended?

Okay, seeing none, will the clerk please call the roll on the bill?

Council President Juarez?

Aye.

Council Member Sawant?

Yes.

Council Member Strauss?

Yes.

Council Member Herbold?

Yes.

Chair Nelson?

Aye.

There are five votes in favor, zero opposed.

Way to go.

Unanimous.

Excellent.

The motion carries and the committee recommends, excuse me, recommends that Council Bill 120412 pass as amended.

And this will be forwarded to City Council for final consideration on September 20th.

And I'm basically out of lines.

So I will leave it there.

If you're interested in following this through to the end, that will be on September 20th.

Okay, thank you, everyone.

Thank you for stepping up to the plate, Director McIntyre and helping out there.

All right, we will now move on.

Will the clerk please read item two into the record?

Agenda item number two, briefing on the Office of Economic Development's Neighborhood Recovery Investments.

This will be a briefing and discussion.

Okay, I'll let, I will give folks time to get here.

Now while they're settling, this is, it's important to know that what, the Office of Economic Development has been doing to support neighborhood recovery.

If you watch the Finance and Housing Committee meetings, you might hear a line item about what's going on with the federal relief dollars.

And here we have people from the Office of Economic Development to talk about their work over the past couple of years.

So would the presenters please introduce yourselves?

I'm Marken McIntyre, the Office of Economic Development Director.

Hi, I'm Teresa Barreras, the Director of our Neighborhood Business District Programs at the Office of Economic Development.

Hi, I'm Maria Vargas, Community Business Development Manager at HomeSite.

Hi, Shara Amlak, Strategic Advisor with OED.

Hi, Bennett Vining, Community Development Specialist for OED.

Hi, everybody.

My name is Iris Viveros, and I work as a Community Liaison with the Department of Neighborhoods.

Hi, my name is Anne Huynh.

I'm the Community Development Manager at the Seattle Chinatown International District Preservation and Development Authority.

Welcome.

First of all, thanks for having us, and thanks, everyone, for joining us at the table this morning.

I'm really excited about this presentation.

We have some of the best-staying neighborhoods around, and at the Office of Economic Development, we want to make sure that we're celebrating them, we're helping build capacity, and we're making sure that they can have vibrant business districts.

And so what we're here to talk about today is both how we've been responsible stewards for these federal recovery dollars and helping make those neighborhoods vibrant, helping them get through the pandemic and then hopefully recover well, but also how we've been creative in deploying those dollars and thinking about both geographic equity and racial equity in particular for how we distribute the dollars and the projects that we're funding and making sure that we're prioritizing some of those neighborhoods that have been historically underinvested in and thinking about how we can maybe use some of what we've learned with distributing the federal dollars going forward with how we develop our programming at the Office of Economic Development.

So through this program, we've supported a ton of meaningful progress projects all across the city.

We were very lucky to work with the Ballard Alliance recently to host Senator Patty Murray to come to Ballard, see how those federal dollars have been deployed.

She seemed very impressed talking with the small businesses and hearing about just the network that we've developed there with the Ballard Alliance and the projects that we developed there.

Next slide.

So what we're going to talk about is we're going to give a quick overview of the fund, again, share some of those incredible projects and stories, and then focus on this BIPOC cohort, which is a really exciting development that came up through this Neighborhood Economic Recovery Fund project, also known as NERF, which is perhaps one of the best initialisms in the city.

So that's what we're going to talk about today.

Next slide please.

Quick overview of OED priorities and I actually have a hot off the presses amendment to this particular slide because we now have five buckets.

OED has been working on a future of Seattle's economy project Um, as part of our, uh, uh, recommendations for how to spend the payroll expense tax dollars, and we've actually come up with five pillars.

So we've got talent and workforce development, key business and industry growth, asset ownership, neighborhood investment, and, uh, small, minority, and women-owned business supports.

So we'll amend this slide.

We didn't have it ready for this particular presentation, but those are gonna be the five pillars for OED priorities going forward.

So very excited about this.

This fits nicely into the neighborhood and placemaking investments bucket.

But as we know that when we're supporting these healthy economic ecosystems in the business district, it has a ton of knock-on benefits for small businesses, for asset ownership, and a variety of other positive impacts.

So with that, I'm gonna turn it over to Teresa to walk through the presentation.

Great, thank you.

Next slide, please.

So just to set the stage here, during the coronavirus pandemic closures, our neighborhood business district saw a lot of direct and indirect impacts.

And the local organizations really worked quickly and efficiently and worked very hard to support their local businesses and their local communities.

They helped board up windows to try to prevent breakages and then also helped get murals on those windows so that the streetscape would stay vibrant.

They organized the, excuse me, the distribution of supplies to businesses, the PPE supplies to help businesses continue operating.

And they helped businesses access all the many resources that were coming out and helping spread the word and help them apply to so that they can continue operating their businesses.

So our local business neighborhood business districts worked very hard during the pandemic to try to support the businesses and the communities.

Next slide please.

So about a year ago, last summer, 2021, using the coronavirus local fiscal recovery funds from the American Rescue Plan Act, which were those federal funds coming into the city, OED designed and launched the Neighborhood Economic Recovery Fund.

And the goal of the fund was to help neighborhoods and businesses rebound from the impacts of COVID-19 and thrive.

We designed the program to support community driven solutions and to really focus on racial equity.

It was, the program was modeled and launched from our longstanding Only in Seattle program at the Office of Economic Development that has been working for more than a decade to invest in building and sustaining capacity within neighborhood business district organizations.

And it allowed us, this federal funding allowed us to really invest quickly and deeply in those neighborhood business districts and to support even new community driven solutions.

Next slide, please.

And as we mentioned, in order to prioritize projects, we really focused on those neighborhoods and business districts and communities that were impacted the most from COVID.

And based on an analysis that the city did, looking at COVID impacts to businesses, to residents and across geographically, it was very clear that there were disproportionate impacts from COVID on our communities of color.

And so we really focused and tried to prioritize our investments on those highly impacted communities.

Next slide.

As a result, we provided direct grants to organizations, existing neighborhood business district organizations, such as business improvement areas, local chambers of commerce, and similar neighborhood business district organizations, 31 in total across the city.

We provided $4 million to them and provided larger grants to Organizations working in those highest impacted communities.

So we were able to provide 2.3 million within those high impact communities.

and the rest to all around the city.

We also opened a public request for proposal of $1.35 million.

And all of that funding was directed at the highest impacted communities in 25 organizations.

And so overall, we were able to provide a majority of our funds to support the COVID impacted communities And you can see a list of all of the grants that we provided and a little description of those projects on our website, which I have the link here in the PowerPoint.

Next slide, please.

And just to give an example of the types of activities that the neighborhoods were engaged in, here are a few examples, activating spaces, which is basically the public space within neighborhood business districts, trying to bring new energy and activity to those spaces, such as events out in public space, doing vendor markets outside, but it also includes commercial space trying to bring businesses into vacant commercial spaces like commercial pop ups and and those kinds of activities.

Also, cleaning is very was very important, trying to come back from pandemic, you know, maintenance, doing graffiti paint outs and garbage pickup.

doing digital equity projects to support small businesses to get online so they can continue operating during closures.

And as we kind of gradually recover from that, from folks not going to businesses as much, physical improvements, more community safety projects, and then direct support to businesses.

So this is an example of the types of activities and projects that we funded.

Next slide.

And just to date so the projects have just gotten started late last year or early this year and so far from What we've heard and reported and received reports on we've served about 750 plus businesses directly held 54 activations and 82 plus physical improvements so lots of activity is happening and a lot of the neighborhoods are I think feeling the effects of these funds.

And now we'll give a few examples of projects Bennett and I will kind of.

Go back and forth on this.

Um, so one example in lake city the organization build lake city together.

It's a It's actually a program of the children's home society.

This is an example of A vacant commercial space activation.

So there was a space that they were able to get access to and offer up as a affordable commercial space for some startup businesses as well as providing some space for arts and culture events and activities in the community.

Next slide.

Homesite and West Seattle Chamber of Commerce have great examples of digital equity projects.

West Seattle Chamber of Commerce is expanding their current digital equity project.

They're providing direct business technical assistance to local BIPOC businesses in their districts.

They are helping upkeep their websites and digital profile with key information and home site is actually taking a very unique approach to digital equity.

During the start of the pandemic, many businesses relied on delivery services or hit hard by the fees of third party apps.

Homesite is leading the design of a nonprofit or co-op app that will engage businesses within Southeast Seattle and will reduce the high fees that often hurt local BIPOC businesses.

An example from the South Park Business District, they're supporting a lot of the local businesses with digital equity projects, trying to get businesses online with websites, providing an online directory, as well as in-language business assistance on marketing and how to create videos and having in-language technical assistance events.

Next slide.

Simply Soulful Cafe, in addition to having great food, is a great example of how physical improvement can help sustain and grow other local businesses.

They're converting their old location into a commissary and community pop-up space.

They'll have low costs and barriers for other local businesses reentering the pandemic and trying to grow their business.

A couple examples of public space activations.

There are a lot of vendor markets popping up.

There's one run by Community Roots Housing Foundation.

And then examples of some legacy events like the Ballard Seafood Fest were able to jump back and open back up with NERF funding.

Black Arts Love is a commercial space activation project.

They secured a lease in Capitol Hill and is transforming the space into a more reliable and permanent vendor market for BIPOC artists and vendors.

Many artists and vendors rely on pop-up events and they are striving to regularly serve 25 to 50 BIPOC vendors and artists.

And finally, in Chinatown ID and the little Saigon neighborhood business districts, a lot of projects have been funded and they're doing a variety of things from putting security film on local storefront windows to help prevent breakage, to doing extra pressure washing of the sidewalks and graffiti paint out and a lot of different events, both legacy events and new pop-up events in the public spaces.

So as you can see, a variety of projects.

This is just a tiny touch, a handful of some of the work that we funded and will continue to be supporting through next year.

And now we will turn it over to Shara Almag from our office and Bennett to talk about our BIPOC cohort.

Good morning, everyone.

And so the Only in Seattle program, which launched and manages the NERF activities and grantees, has been providing racial equity trainings for five plus years within its program.

And in 2021, when we received some feedback as we did assessments once the trainings were done, One of the feedback from the cohort members, specifically BIPOC members, were wanting deeper work in racial equity trainings, specifically for the BIPOC communities.

And so we took that feedback from the participants of those racial equity trainings in 2021 and began to design a pilot program, which we called the BIPOC Cohort.

And with our partners who have been helping us facilitate these racial equity trainings, Equity Matters, they had brought to us a pilot program that they had already completed with local philanthropic organizations doing similar work for their BIPOC staff and communities as well.

And so with that, we launched the 2022 BIPOC cohort that included both our Only in Seattle direct grantees, as well as the organizations with the RFP.

And so with that, next slide.

We designed a three-month cohort with Equity Matters facilitating it that really rooted BIPOC stories, visions, and demands for what they would like to see in a more racially just economic development system in Seattle.

And so with that, we brought together some of the BIPOC cohort members and some of the learning and findings through that cohort.

Next slide, please.

So these are all of our participants for this spring cohort, we have a great mix of our direct grantees and RFP grantees, and for our speakers today.

This is the first time presenting in front of council members, so we're really happy this space was able to provide the opportunity for this group to navigate through city systems.

Next slide, please.

During each session, our cohort split into two caucuses, a People of Color caucus and a Black and Indigenous caucus to dig deeper on the concerns and lived experiences within each community.

Because each community has varied needs, there is a lot of answers to the question of how to make a more racially just economic development system.

And our facilitators from Equity Matters synthesized our answers and really boiled it down to these five key themes for priority.

Next slide, please.

And I wanted this opportunity to highlight some of the work that our office is doing that is in alignment with some of these themes.

There was actually a specific ask to keep this cohort continuing and only in Seattle is dedicated to keep this cohort continuing and reengage the group.

to further sharing knowledge with each other, uplifting each other's work and build capacity for this group to organize.

In addition, our office was tasked to conduct a survey on the future of Seattle's economy.

And after receiving the first list of participants, We noticed some BIPOC cohort members were not included in the study, and we were able to get the additional participation from Chief Seattle Club, Greater Seattle Business Association, and Simply Soulful.

And lastly, I want to uplift our wealth building team.

They're doing some really great work in preserving, restoring, and investing in BIPOC businesses.

Some of the programs they launched were the Capital Access Program, Tenant Improvement Fund, and Seattle Restored.

Next slide, please.

And now I have the pleasure to hand it over to our cohort members.

Just a quick note, Bob Luciano was unfortunately able to make it today.

With that, I'll hand it over to Ann to answer this question.

Thanks, Bennett.

Good morning, council members.

My name is Anne Huynh, and I work in the Chinatown International District as the Community Development Manager at SCID PDA.

The CID has gone through a lot in the last two and a half years with COVID, hate crimes, and an ever-changing state of community safety.

Our small businesses have experienced much of the direct impacts of these issues.

For both small businesses and our staff, the last two and a half years have been a series of reactionary responses to emergencies and regulatory changes, we've barely had the chance to start thinking long term because of so many immediate needs.

I was glad to be a part of the NERF BIPOC cohort where we had a chance to step back and reflect on our experiences as BIPOC community workers in BIPOC neighborhoods.

We discussed how to better implement equitable programs, how to allow for experimentation with different economic development models, and uplift the issues we've been hearing on the ground to drive policy and programs.

We know that economic development is not one size fits all.

The cohort provided a space where our BIPOC communities were heard so that we could begin to create equitable policy demands that address our unique economic development needs.

Thank you.

Hi, everybody.

Hello again.

My name is Iris Riveros and I work as a community liaison with the Department of Neighborhoods.

I'm also a program manager with Beacon Business Alliance, and I am a PhD candidate at the University of Washington.

But I want to share with you that as a CL, as a community liaison, I've been working with Latinx small business owners before the pandemic hit, precisely with the Department of Neighborhoods.

And most of the business owners that I work with are immigrants, not English speakers, and for many of them, their business is all they have.

As we know, the COVID-19 pandemic made the inequalities and vulnerabilities of BIPOC small businesses more visible.

In working with small businesses during the pandemic, I witnessed that the most effective strategies to build equitable economic practices have developed out of collaborations alliances and most importantly strengthen community-based practices.

For example, the SS collective essential southeast Seattle that was built during the pandemic, the Beacon Business Alliance and many others.

I'm just picking the ones that for the ones that I know.

and the BIPOC spring cohort that I was part of this past spring.

In these collaborations, community members identify specific and collective challenges and worked together to build focused strategies.

The spring 22 BIPOC community cohort provided space to learn from one another to honor the role that each community has played and continues to play in building our city, and to create a collective vision in which we are empowered participants in the present and future of our rapidly changing city.

I just want to end by sharing with you that in my scholarly work, I look at the role of community-based practices in response to displacement.

And it's been humbling to witness the resilience and dignity of our people in Seattle, keeping up with the challenges of not only a global health crisis, but also a rapidly changing city.

Thank you.

Hi, everyone.

My name is Maria Vargas.

I am a Community and Business Development Manager at HomeSite.

And very similar to what my colleagues have just said, I first want to take a moment to show gratitude for the BIPOC cohort and for the space I provided.

I think a major takeaway that we all experienced was just collaboration, but in addition It was a sense of relief and sense of having an open and welcoming space for all of us.

I think it can be really challenging to continue to support and hear the grievances of businesses and do all we can.

But it was a nice refreshing just to be able to collaborate and share ideas.

And at the end of the day, we all left that room more energized and ready to tackle on more challenges and to help more people.

But yes, and my specific district, Othello and Graham, is one of the most diverse communities.

Over 30 languages are spoken.

And I definitely agree, the pandemic has really wreaked havoc on these small businesses.

But they continue to open every day despite break-ins, despite everything, and they show their grit and determination.

And I think we all have such, appreciation and admiration for these small businesses and what they go through and whatever they need, we would love to support in any way we can.

Thank you.

And I'll close with a couple of written responses from a couple other members.

The first one is from Hayward Watson from the Central Area Collaborative.

He says, the BIPOC cohort process is important to me because it allowed me to put words to my experiences of working in an historical excluded community and vocalize those experiences in a way that is understood by the people in OED.

And I'll close with this response from Anthony Johnson from Chief Seattle Club.

From an Indigenous and Native perspective, what we know to be true is that the Native peoples in the Puget Sound have never had agency or the future of their land, people, or economy.

spaces like this seek to repair that gap or misalignment within not only the native community, but the broader people of color community in Seattle.

It's the first step in a long list of ways in which the city must change to meet the needs of its marginalized citizens.

The tides are shifting, and I applaud the city and OED for creating this space and the funding opportunities provided to Chief Seattle Club and others.

Natives today stand on the shoulders of giants and fight for equity, and the fight for equity continues.

In the words of the late activist, Clyde Belcourt, we are the landlords of the country.

It is the end of the month.

The rent is due.

With that, we'll conclude our presentation and take any questions.

Wow, I am moved, first of all, by all the work that OED did to get the money in the hands of people who really needed it.

As a small business owner, I think I speak on behalf of I'll just take the liberty of speaking on behalf of the 700 small businesses that did receive relief and help from you.

So thank you.

I know that that was a huge push to get that money out the door.

So thank you very much.

And special thanks to you, Teresa, for leading this endeavor.

Because I came into office wanting to be Economic Development Chair, and my two priorities were downtown and neighborhood business district revitalization and reducing the displacement of BIPOC-owned small businesses.

And this work that you just described today basically is the nexus of both of those two goals.

So I really appreciate you coming and presenting this work.

And to all of you who came, especially folks that have never been to chambers, I appreciate your eloquence and sharing what was going on in your communities.

And I would like to see the documents, the other documents that you referenced, all the other demands and issues that didn't make it onto slides, but count me as an ally and a partner going forward, because we've got a lot of work to do from here on out.

It's not over.

So colleagues, do you have any questions or comments?

Okay, I'm not seeing any hands up.

Everybody out there in TV land.

This presentation is linked on the agenda.

So if you go to Seattle channel, you can find a link to that.

And I just want to say thank you very, very, very much.

One question though, before you go, you mentioned the capital access program and OED has done a great job since the beginning of the year, since I've been in office, expanding some of these programs.

Was Seattle restored part of this endeavor?

I didn't, if I missed a reference to that program in the slide pack, excuse me, but is that part of this whole thing?

Yeah, I think Bennett mentioned capital access program as part of our kind of commercial affordability suite, the capital access program, tenant improvement fund in Seattle restored.

And so we're working on how to scale those because they've all been incredibly successful and the need is clearly out there.

Okay, and we're not done.

There are still new initiatives to be revealed.

So thank you very much, everybody.

I appreciate it.

Thank you.

Okay, as folks are leaving the table and other people are coming up, We'll take items three and four together.

Will the clerk please read them into the record?

Item number three, appointment 02369 reappointment of Denise Burnside as member of the Seattle Music Commission for a term to August 31st, 2025. Agenda item number four, appointment 02370, reappointment of Casey Ann McKay as member of the Seattle Music Commission for a term to August 31st, 2025. Briefing discussion and possible vote on both.

Okay, will the presenters please introduce yourselves and speak a little bit about the Music Commission and about these reappointments.

Sure, thank you very much, and good morning, council members.

My name is Scott Pluskalec.

I'm the nightlife business advocate with the Office of Economic Development and staff support for the Music Commission.

Excuse me. quickly for a brief overview of the Seattle Music Commission.

As you heard in the Film Commission presentation, the Music Commission was created in 2010 and was ratified by council ordinance in 2014. It is a 21-member commission, 11 members appointed by the mayor's office and 10 by council.

The commission is a group of industry and community volunteer stakeholders assembled to advise the Office of Economic Development in its advocacy for and policy related to the City of Seattle's support and growth of the local music industry and community.

And the commission strives to enhance the growth and development of Seattle's music sector and convey the city's commitment to the industry, musicians, and live music audience that comprise the city's local music economy.

Before you today, and the reappointments of two of our current council members.

Denise Burnside, who was originally appointed in August of 2021 to fill out the remainder of an existing term.

And this reappointment will be for a full three-year term.

Denise is the co-owner of the Clock Out Lounge on Beacon Hill.

and is the executive director of SMASH, which is the Seattle Musicians Access to Sustainable Healthcare, which is a local nonprofit dedicated to providing local musicians with access to free and low-cost dental, medical, and mental health care.

And also before you today, Casey Ann McKay, also known as Miss Casey Carter.

She also had been originally appointed last year to fill out the remainder of that term and will be reappointed to a three-year term.

An event producer, creative director, blogger, marketer, and promoter, Casey is dedicated to providing guidance and help to up-and-coming talent in the Seattle music scene.

And she is currently working on helping artists with branding and communications.

Those are my presentations and I'm happy to take any questions.

Do any of my colleagues have any questions?

All right, seeing none, I want to thank the whole Music Commission and recognize the hard work the members of Seattle Music Commission engaged in during the pandemic to keep the industry afloat and these individual businesses from going out of business.

They were a big part.

I've been to a couple of those Music Commission meetings, and I've heard stories, and they were a lifeline, I have to say.

Through their creative and resourceful thinking, the Music Commission rallied the community together, using digital and other platforms to really keep music alive when all of our venues were shuttered.

And because of their work during this difficult time Seattle remains a place where musicians thrive communities are strengthened and music businesses flourish.

So, I just want to say thank you to Denise Burnside, and also Casey McKay as.

for your service and for your willingness to continue serving.

If there are no other questions or comments, we can move on to the votes.

Will the clerk please call?

Oh, I move that the committee recommends confirmation of appointment 02369 and appointment 02370. Is there a second?

Second.

Thank you.

It's been moved and seconded to recommend confirmation of the appointments.

and I didn't see any further comments or questions.

Will the clerk please call the roll on the committee recommendations that appointment 02369 and appointment 02370 be confirmed.

Council President Juarez.

Aye.

Council Member Sawant.

Yes.

Council Member Strauss.

Yes.

Council Member Herbold.

Yes.

Chair Nelson.

Aye.

There are five in favor, zero opposed.

Thank you very much, everybody.

Scott, please convey my gratitude.

And we'll just move along here.

Will the clerk please read item five into the record.

Agenda item number five, briefing on Seattle City Light's annual independent audit, briefing and discussion.

While we're waiting for them to come to the table, those appointments will be before full council on September 20th.

Okay, well, if the item title wasn't obvious, this is a presentation of the results of the regular annual audit of City Light's financial statements.

We understand that there's good news.

City Light received an unmodified opinion of the financial statements.

So with that, would the presenters please introduce yourselves and begin the presentation?

Hello, council members.

My name is Natalie Hayashi.

I am the controller of Seattle City Light.

Good morning, council members.

My name is Julie Levin.

I'm general accounting manager at Seattle City Light.

I would like to introduce Aaron Worthman.

Aaron is Baker Tilly's partner in charge of the Seattle City Light Audit.

He has been the partner in charge of our audit for the past 10 years.

He has been on the audit, part of the audit team for the past 12 years.

Aaron specializes in serving energy and utility clients.

He is an expert in this area.

He is an instructor and teaches a utility education courses for the American Public Power Association.

He's also authored regionally and nationally published articles on utility regulation and accounting issues.

And Aaron will be providing the results of the audit.

Hello, Aaron.

Hello.

Thank you, Natalie.

Good morning, everyone.

Again, my name is Aaron Werthmann, partner with Baker Tilly, and I'm pleased to present the fiscal year 2021 financial audit.

Next slide, please.

So if we were to take a step back and look at the audit in general, I'd say this year's audit went very well.

The audit was conducted entirely remotely, and that's been the case now for the past couple of years.

If we learned anything through COVID, one of the things we learned is that we can conduct an efficient and effective audit 100% remotely, and that's what we did this year as well.

I do want to say that management and staff were prepared, cooperative, and readily available.

That's always great to hear.

They always answer our questions on a timely basis.

Our audit effort, we spend about, to give you some perspective, we spend about 1,400 hours conducting your annual audit.

In addition to that, your management team, although they may not spend 1,400 hours, they spend a significant amount of time preparing for the audit, answering questions, putting your financial statements together, things like that.

So this year's audit went very well.

We conducted four weeks of field work, one we do in the fall, and then we do three weeks of final field work in March and April.

Our last day of field work was April 8th.

And one good thing to note is as part of this year's audit, we did not identify any adjusting journal entries.

Next slide, please.

So our audit was performed in accordance with generally accepted auditing standards.

Those are the standards we're required to follow as your audit firm.

In addition to that, with government auditing standards.

Those are additional standards relative to our continuing professional education as your audit team, the supervision of that team, the independence of our team, due care and quality control.

Our audit objective is to obtain a reasonable assurance that your financial statements are free from material misstatement.

At the end of this year's audit, your financial statements have received an unmodified opinion, which is also known as a clean opinion, which is the highest level of assurance that we can provide as your audit firm.

Next slide.

But to give you some perspective on the audit, 30% of what we do is specific to internal controls.

Most of which are information technology based.

So much so in fact that we have a certified information systems auditor conduct that IT testing.

So what we do is we go about and we outline your major processes, whether it be your fixed assets, your disbursements, payroll, accounts receivable billing, we'll outline those processes and then we'll identify what key controls need to be in place in those processes we then test those controls for effectiveness.

That's part of our internal control testing.

But again, that's 30% of what we do.

The remaining 40% has to do with our substantive tests.

That's the nuts and bolts of our audit, if you will.

That would be confirming your cash and investments with your outside parties, you know, confirming the fair values of those investments, verifying and looking at your fixed asset additions, tracing those to outside documents.

taking a look at your retirements, the disbursements, your accounts payable, things like that.

But that's about 40% of what we do.

And then the remaining 30% has to do with planning for the audit, and then reviewing your financial statements.

But what I've done on this slide is I've outlined some of the main areas of focus, which I think if you were to look at your financial statements, would make perfect sense.

Again, information technology, main focus area, capital assets.

Again, if you were to look at your balance sheet, you'll notice that most of your balance sheet consists of your capital assets, revenues, accounts receivable, expenditures and payables.

And then lastly, the financial reporting.

One item we also pay particular attention to are the significant estimates within your financial statements.

So I'll often get asked by governing bodies, you know, when you're looking at these financial statements, what areas of concern should you have or what areas do you definitely want to be aware of?

And my answer will always be, Anything that has to do with a significant estimate, because it's exactly that, it is an estimate.

Some of the significant estimates that are within your financial statements would be your pension and OPEB liabilities, your environmental remediation liabilities, your allowance for doubtful accounts specific to your customer accounts receivables, your unbilled revenues, and then your self-insurance liabilities.

Next slide, please.

So I mentioned earlier that we're providing an opinion on your financial statements.

What I did want to point out, though, is we do not provide an opinion on internal controls.

However, we're required to communicate any breakdown in internal controls that are deemed to be material weaknesses or significant deficiencies.

So the profession requires us to categorize any control deficiencies we identify in order of severity.

The most severe would be a material weakness.

and that's any breakdown of controls or combination of controls that could lead to more than a reasonable possibility that that breakdown would result in a material misstatement to your financial statements.

Again, that's the most severe and we did not identify any material weaknesses.

The next categorization down is what we call significant deficiency, less severe than material weakness, but it's a large enough deficiency that it would warrant your attention as governance.

and pleased to report that we did not identify any significant deficiencies.

Now, as part of any audit, we will always have minor control deficiencies, industry best practice recommendations, things to that extent.

Those are things that we communicate with management at the end of the audit, but none of those rose to your attention being a material weakness or significant deficiency.

Slide, please.

One of the documents you will have received was your audit results letter.

Many things within that letter, but a couple of things I want to call attention to.

It does contain a section for our required communications to you charged with governance.

It'll go through all these items in detail, but a couple of things I just wanted to highlight quickly here.

One of the items are all of your significant accounting policies can be found in the notes to your financial statements, an example of which would be your capitalization policy.

What we do is we review that policy.

We make sure it complies with generally accepted accounting principle.

And not only that it complies, but we make sure then that you're following those policies.

If we had any difficulties encountered during our audits or any significant issues or findings, we would be required to communicate those.

We did not identify anything like that.

Just know if we did, this would not be the first time you folks would be hearing about that.

I would reach out to the chair to have those discussions on a timely basis.

The last thing we want are any surprises when we get to this presentation.

If we had any immaterial uncorrected misstatements, we would be required to disclose those to you.

And if you look in this audit results letter, you will see that we have those summarized.

Again, those are immaterial and significant, but what we're required to do is keep track of them.

We find these with many clients just in order to close the books.

Oftentimes, management may find an entry that could potentially be posted, but because it's immaterial, it's insignificant, they're choosing not to, just to continue to be able to close the books and move forward to the next year.

But we just need to keep track of that.

You can find that in this document as well.

The only other item I already mentioned, we did not have any material corrected misstatements.

One item we do include in this letter is what we call our management representation letter.

It contains all the representations that management makes as part of the audit process.

You can find things in there relative to their thoughts on your accounting policies, internal controls, fraud, things to that extent.

So if you haven't, I would urge you to take a look at that letter to see what types of representations your management team makes as part of the audit process.

And just want to touch about independence.

Obviously, independence is a significant issue relative to your audit.

And I'm here to say that not only our firm, but every individual on your audit engagement is independent with your organization, in fact, and appearance.

But to wrap up here, again, I'd like to thank the entire management team, Kirstie, Natalie, Julia, and also Jeff and their entire team.

There's a lot of people that put a lot of work and a lot of effort into this, not only your accounting transactions throughout the year, but then also assisting with this audit process.

So for that, we're extremely thankful.

And with that, I'll open it up to any questions anyone might have.

Thank you very much.

I have to say item that wasn't on that long list that was referred to, however, was that a half hour of those 1400 hours was spent in a meeting with me. to surface any concerns I might have.

And I had none.

You'll read that in the letter maybe.

So I just want to say thank you for this exhaustive body of work.

Your background and your experience, Erin, your company's experience in auditing public utilities, engenders trust in the findings that you presented here today.

And then, of course, I want to congratulate City Light for a stellar audit, and I would not expect anything less, but I just have to say that it's testimony to your integrity that we have such a, basically, I'm not gonna say pass with flying colors, but however, no problems surfaced whatsoever this year.

So colleagues, do you have any questions?

All right, seeing none.

Thank you very much for this presentation.

I do have one question.

Is it required to present publicly the results of the audit?

I'm seeing nods, yes.

So this presentation is also fulfilling a requirement of the utility.

So thank you very much.

You're free to go unless anybody has anything else to say.

Thank you.

Thank you.

Okay, moving on, we will similarly take items six, seven, and eight together.

Will the clerk please call the roll, please read items six, seven, and eight into the record.

Agenda item number six, appointment 02371, reappointment of Anne Eyre as member of Seattle City Lights Review Panel for a term to September 30th, 2025. Agenda item seven, appointment 02372, reappointment of Leo L. Lamb as member of the Seattle City Light Review Panel for a term to September 30th, 2025. And agenda item number eight, appointment number 02373, reappointment of John Putz as member of the Seattle City Light review panel for a term to September 30th, 2025. All three are up for briefing discussion and possible vote.

Thank you, Steven.

We've got Lee Barreca from Seattle City Light to present on these reappointments.

So please go ahead.

We bring before you three reappointments of current City Light Review Panel members.

The first being two of these appointments are midterm, midyear.

Their first year, their first term They joined midterm so both of two of these have only been on the panel probably a year first is Leo lamb he lives in district six is and is our customer residential customer representative.

Anne Eyre, who lives in District 5, is our industrial customer representative.

She works for Cal Portland.

And finally, we have John Putz, who lives in District 4, and he is our member at large.

Thank you very much.

Would you like any overview of these people?

Sure.

Yes.

Sure.

Sure.

So an an air is an environmental manager at Cal Portland.

She manages environmental compliance and permitting for their northwest region.

And this region spans 26 active facilities, including ready mix plants, concrete terminals and mines.

Thank you.

Mr. Lamb has been a Seattleite for over 20 years and as a former electrical engineering faculty at University of Washington and a keen researcher in sustainability, he cares deeply about Seattle's energy supply chain.

Mr. Lamb strongly believes that city light and the energy culture of the country must be part of solutions to both climate change and equity issues facing the city and the nation.

Thank you very much.

I'll open it up for questions.

One more.

Mr. John Putz is a 15-year veteran of the energy, energy software and trading industries.

He has experience in a wide variety of areas, including strategic consulting, risk management, training, energy software, asset and portfolio optimization.

and Hydrogeneration Optimization.

He received his PhD in Environmental Particle Physics from the University of Washington.

And Leo Lam is also a PhD.

These are incredibly, incredibly qualified members of our panel.

Thank you very much for that presentation.

Now I'll turn it to my colleagues, see if there are any questions, concerns.

Well, I'll move and then say a few comments.

I move that the committee recommend confirmation of appointments 02371, 02372, and 02373. Is there a second?

Second.

Thank you very much.

It's been moved and seconded to recommend confirmation of the appointments.

So I, go on.

Oh, sorry, Council Member Herbold.

Go ahead.

I'm sorry.

I was going to say some things, but I have a feeling that you and I are going to end up being repetitive.

So I'll just hold my comments and let you, Madam Chair, go forth.

Well, you're welcome to add to or fix my comments.

Typical comments of appreciation.

Thank you.

So I want to thank these three members for being willing to continue serving and the whole panel for their service.

The scope of their work is very, very technical in nature and time consuming.

And serving on the panel is a very weighty responsibility.

That's what I really want to convey.

These folks, as you mentioned, and as you laid out, are extremely well qualified.

We're lucky to have them.

And as the watchdogs of the utility, their ultimate duty is to protect the interests of our rate payers.

And that's a big job.

That's a big responsibility.

I want you to know, review panel members, that I appreciate your oversight and rely on your recommendations when I make my decision.

like today on today's rate ordinance coming up.

And I also rely on the integrity of your work, which helps maintain the public's trust in our utility.

So thank you very, very much to all of our panels and to these reappointments.

All right, anything to add anyone?

Nope.

Okay, will the clerk please call the roll on the committee recommendation that appointments 02371, 02372 and 02373 be confirmed.

Council President Faras.

Aye.

Council Member Sawant.

Yes.

Council Member Strauss.

Yes.

Council Member Herbold.

Yes.

Chair Nelson.

Aye.

Five votes in favor, zero opposed.

The motion carries and the committee recommendations that the appointments be confirmed will be forwarded to the city council for final consideration on September 20th.

Thank you very much.

Thank you very much.

All right, we're at our last item.

Will the clerk please read item nine into the record.

Agenda item number nine, council bill 120411. An ordinance relating to the City Light Department, amending rates, terms, and conditions for the use and sale of electricity supplied by the City Light Department for 2002, or sorry, 2022, 2023, and 2024, and amending sections of the Seattle Municipal Code.

Discussion and possible vote.

Thank you very much.

So this legislation codifies the rate path set forth in resolution 32061. At our August 10th meeting, we had a comprehensive presentation from City Light and committee members were able to ask City Light leadership a lot of questions about the cost drivers and anything, any new policies reflected in these rates.

The legislation was introduced the very next day after our committee meeting, so this is the first time it's actually before us, but given the detail of our discussion last time, I'm hoping that we can vote this out of committee today.

Eric McConaughey of Central Staff will go over key takeaways, and then Michael Hansen, who's chair of Seattle City Light's review panel, will talk about that body's position in support of this legislation.

Carson Croft from City Light is also here to answer questions if need be.

Go ahead, take it away.

Please introduce yourselves.

Good morning, council members, Chair Nelson.

My name is Mike Hanson.

I'm the current chair of the Seattle City Light Review Panel.

And I've been a member of the panel since 2019. I serve in the commercial customer position on the panel and I'm the chief operating officer at Sebi Corporation.

The review panel has submitted a letter to the city council dated August 25th that I believe you have in front of you.

And it endorses the utilities rate design proposal.

I want to make sure that you all are aware that there was unanimous support from the panel.

And after a lot of question and answers, we had some new members, but I think everybody got very comfortable with the direction and what it meant.

Because the panel is not made up of rate design experts, but we do have some very talented people, we approached our review of this proposal from a policy perspective.

We reviewed what policy goals are being promoted here and what the expected impact of the changes are.

As I know you realize, rate designs are very complicated and often about trade-offs.

It's about making choices about how to collect needed revenues from a wide array of customers with different needs and financial capabilities.

The new rate proposal really provides three key things.

The first is the gradual increase in fixed basic service charges for residential customers, which is similar to other major utilities across the country.

The second is the introduction of a fixed basic service charge for non residential customers.

And the intent on the basic service charge is really designed to cover the cost that it takes to have a customer.

It's things like billing cost and meter reading and customer service.

These are all overhead charges that were previously embedded in the rate.

So this is really a great move towards a more transparent approach.

And I would also like to point out that the tools that City Light has for the discount programs are some of the most robust in the country.

And those remain in place for anybody that needs financial assistance.

The third key point is the introduction of a voluntary time of day or TOD rates for residential and additional commercial customers.

This gives customers a greater control over their billing rate by time of day.

And if enough, as we hope, if enough customers embrace it, that will reduce the overall peak demand and allow City Light to save on their costs of purchasing additional peak power.

As is noted in our letter, this proposal is not intended to increase the overall amount of revenue that is being collected.

It's about a policy choice on how the revenue is collected.

In 2019, the review panel spent a very intensive six months studying rate design and options for City Light at the City Council's request.

We engaged dozens of stakeholders in that effort and ultimately submitted a report to the City Council which had eight overall policy goals.

This proposal in front of you tackles several of those key policy goals that we identified in this report.

And I will just quickly mention a few of those.

The first was transparency of rates.

And this allows customers to see what that basic service rate is.

And so it answers that question.

I think it's a great first step.

Revenue sufficiency was another one of the keystones and we have a good fix on the amount of revenue that's required and the ability to collect that is not impacted by this proposal.

efficiency, the proposal creates financial incentives for customers to save money on electric power and to use it at a time when there is less demand and therefore, as I said before, reduces the utilities cost on the open market.

Decarbonization was another key element and the electrification of transportation will advance the city's climate agenda.

And one of the outcomes we hope that people adopt the time of day option will help offset that growing electric need from transportation.

And the last one I'd like to mention is customer choice.

We've heard loud and clear that the customers want a choice in how they purchase their electricity and this time of day option will provide that.

So additionally, we have endorsed a rigorous outreach and education effort to explain the new opportunities and those advantages to the customers across all classes.

The panel will monitor the impacts of these changes to ensure that the desired outcomes are achieved.

From this policy perspective, the panel supports the rate design proposal.

I am glad to see this proposal before you after the major effort we undertook in 2019 and the review panel is unanimously recommending that the city council give a favorable consideration to city lights request on this proposal.

And finally, I'd like you to know how professional and patient Deborah Smith and her entire staff have been throughout our work and my time over the last three years.

You have an absolutely terrific team in place at Seattle City Light, and you should be very proud of what they've done.

Thank you, and I'd be happy to answer any questions anybody might have.

Thank you for that.

Colleagues, Are there any questions before going on to Eric McConaughey?

Nope.

Okay, I will turn it over to Eric to touch on some brief points.

Although that was a great setup, right?

So go ahead.

We do have a central staff memo.

So the floor is yours.

Thank you very much.

That was a great introduction.

And I appreciate that.

I appreciate his work and all the work of the folks on the on the panel.

I have the good fortune of sitting in on those meetings, and the work is significant, and the questions are always interesting, and the support from City Light staff and the general manager is great.

It's a good working system.

That being said, much of this ordinance has been covered in the previous meeting, and today was well covered in the presentation just before me.

I'll just very quickly sketch the kind of key takeaways, the things to note for kind of for the public and for you all about the bill and then leave a little bit of space for questions and perhaps some comments from Karsten.

As you've heard, this bill would codify the new rates in the Seattle Municipal Code for 2023 and 2024. It would establish a new base charge for non-residential customers beginning in 2023. It sets up optional time of day rates beginning in 2024 for residential, small general service customers, and medium general service customers.

That would include charging electric vehicles for medium and large general service customers.

It updates the large customer solar export rate as well, beginning in 2023. And there's some technical changes too.

It reorganizes the rate schedules for non-city customers for legibility to make it easier to understand.

It updates the 2022 rates to reflect the actual effective rates based on a reduction in the rate that comes from a vulnerable power pass-through.

And then it makes some technical changes to definitions that correspond to the updates that I just mentioned.

So it's a quick rundown kind of for the record.

Overall, the bill does stick to what was approved by the adoption of the strategic plan and the right path.

And that would mean an increase on average across all the customer classes of 4.5% in 2023 and 2024. And that's my rundown.

Happy to answer any questions about that.

I'm also happy to use some space here for Carsten to answer questions or offer any pieces that I missed.

Thank you, Eric.

I do want to touch on something that Mr. Hansen referred to as customer choice.

You know, we heard news reports this past week, or maybe it was the week before, that the extreme heat in California led utilities to urge electric vehicle owners to charge their cars at night to decrease demand during peak hours.

And when these rates are implemented, not only will the time of day rate option provide some relief to our grid, customers will also pay less.

So that's a great innovation that came out of that work.

that you mentioned starting in 2019 at the council's request.

So I know that that's been a priority for a long time of my colleagues, and I think that it is doing right by our rate payers and our constituents.

So thank you.

By the way, what position do you hold, Mr. Hanson, on the review panel?

I'm currently the chair.

Oh, no, but what my job?

I'm the commercial customer representative.

Got it.

I'm sorry, I didn't say that.

I must have forgot.

Well, I'm probably missed it.

So I work for Sebi Corporation.

Thank you.

OK, colleagues, what I do see that Council Member Herbold has your hand up.

Go ahead.

Thank you.

I can't remember stress.

I really appreciate the customer review panels guidance and comprehensive review of this proposal.

don't have as much experience working with the City Light Customer Review Panel.

I did have a lot of experience working with the Seattle Public Utilities Customer Review Panel, and I really relied on them, not just for guidance on Seattle Public Utilities rate proposal, but also for looking at ways to innovate and push the utility, much like I see the customer review panel is doing in this instance.

I'm very interested in the the voluntary program that allows optional time of day rates, and I appreciate that there are some criteria that customers must adhere to in order to opt into that program.

It seems like a fairly low bar, and this this this ability to opt into these rates I think um are essentially of of great benefit and I'm wondering um what their uh Frank you can tell me or our representative from the customer review panel can tell us because I I know one of their recommendations um relates to uh to public information and um and thorough communication about the rates.

And I'm just wondering, what can we do to let the public know about this option and the criteria to opt in and how it might benefit them?

Certainly I can I can address that again.

My name is Karsten Kroff.

I'm the manager of the financial planning and rates team at Seattle City Light.

And customer communication is going to be a huge part of these time of day rates.

And we're really excited about being able to to have them and design them.

But a lot of work is going to go on in terms of implementation.

So being able to reach out to customers, being able to let customers know if they'd be a good candidate for being able to be on a time of day rate for potential savings, and being able to give them ideas about how they can shift their consumption to be able to save on their electricity bills.

So that customer outreach is work that will be ongoing next year, and certainly a very high profile for the utility.

Any follow-ups there?

Council Member Duval?

It wasn't clear to me on the ability to opt into the time of day rates for vehicle charging.

I may have misread, I looked at the memo quickly.

Is that only for commercial vehicles or is there an ability for personal vehicle charging?

to be to take advantage of the time of day rates as well.

You know, residential customers will be able to opt into time of day rates and it will be a whole home or a whole house time of day rate.

So they will, you know, if they have an electric vehicle, they will be able to take advantage of that as well.

All right.

Super.

Thank you.

And just for my information, customers can opt in at any point.

You mean they can just doesn't have to be, they don't have to commit right away.

I mean, they're not going to miss the boat if they don't get the memo as we're trying to do all this outreach, they can, they can switch over.

It'll be ongoing.

Um, you know, and, and this is just, you know, the first phase of introducing, uh, the time of day rates and, you know, we expect, um, uh, to continue to evolve them, um, you know, as, as time goes out, um, um, and be able to potentially even provide more options.

but the enrollment will be ongoing for customers, so.

Got it.

And just as a, so just to weigh in, thank you, Carsten, and thank you, Chair.

The rate will be available at the beginning of 2024, and the code does provide for sort of opting in for a certain amount of time, but there isn't, as Carsten just mentioned, there isn't like a narrow window where everybody has to get in, otherwise you can't get in.

And my understanding, maybe this is a question for you Karsten, my understanding, once folks opt in, they sort of stay within that rate structure for a while.

You sort of don't bounce in and out.

Maybe you could say a couple words about that if you don't mind.

Yeah, there will be a provision where, you know, if a customer opts in to the time of day rates that they can opt out at any time if they're seeing, you know, that not not seeing the bill savings they want or they want to opt out for any other reason.

The one thing is they won't be able to re opt in, you know, for one year period.

Right.

So this is you be able to protect against people changing, you know, for seasonal variations and customer or seasonal consumption changes.

Okay, Council Member Strauss, you have a hand up.

Thank you.

Thank you, Chair Nelson.

Carson, great to see you.

Great to see you, sir.

My questions are gonna be rhetorical in nature.

Can you remind me what our rate increases were during 2020 and 2021?

2020, we did not have an effective rate change.

And 2021, we had a, I believe 3.9% adopted rate change, but then that was offset by a BPA pass through.

So the effective rate change was just a little over 2%.

Okay, so we had no rate change in 2020 and a 2.1%.

rate increase in 2021, which was less than the adopted rate increase that City Light could have taken.

Correct.

And then in 2022, I'm noticing slide two from your presentation on August 10th, you state that the 2022 rate increase was 2.1% which is less than the 3.9% increase approved by the former strategic plan.

Is that an accurate understanding?

That is correct.

And can you remind me of the rate increase that we're talking about today?

Today, we have average rate increases of 4.5%.

for 2023 and 4.5% for 2024, again, through the strategic plan.

I will add, and this is something that Deborah mentioned last month, that preliminary information from BPA and in terms of BPA's rates for 2024 look very optimistic for City Light that our bills will be lower than planned.

Those savings would be able to be passed through to the customers.

So things are very uncertain, but at this point, it looks like the rates will be lower.

The effective rate increase will be lower than 4.5% in 2024.

Thank you.

So the effective rate increase that we're talking about today is at most 4.5%, and I'm seeing from slide 10 on your August 10th presentation that the current 2022 outlook for inflation is 4.8%, 5.1%, and 3.1% in 2023. So I guess what I'm getting at here is you're asking to raise the rates lower than the inflationary costs that you're taking on.

Is that a correct assessment?

That is correct.

And I will note that those were inflation numbers from the end of 2021. And as you know, since then, inflation for 2022 has continued to grow.

So that would be an underestimate of the inflation impact.

Well, I got to say, I am somebody that doesn't like to increase the rates to our customers.

And I just, I asked these questions because I think that your department has done a really good job in keeping rates as low as possible.

Um, and in fact, right now you're not even asking to raise the rates as much as the inflation that you're experiencing.

So I just wanted to note that before I vote yes today.

Thank you, Carson.

Thank you, sir.

Okay, I'm not seeing any other questions, so I'm going to move this legislation, and then I have some closing remarks.

I move that the committee recommends passage of Council Bill 120411. Is there a second?

Second.

It's been moved and seconded to recommend passage of council bill for 120411. I have a further comment, and let me see if anybody else has raised their hand Nope.

You helped, thank you very much Council Member Strauss for those questions and your statements because it does, I think it's really important for our rate payers to hear what's behind and many of the challenges the utility is facing.

City Light has held customer bills steady by eliminating an approved rate increase in 2021 and reducing it in 2022, as noted.

And at the same time, costs for generating and distributing electricity went up significantly in the last three years, and inflation keeps driving it up.

The price of steel, aluminum, and copper rose by 70 to 80%.

The proposed residential rate increase will cost the average household about $4 a month, if I'm not mistaken.

Yep.

And that increase is less than, and the actual rate increase is less, as noted, than inflation.

And City Light is cutting a lot of other spending in other areas to keep holding rates down.

So I guess what I'm saying and what you were getting at Council Member Strauss is that no one likes it when electricity bills go up, but it would be worse without City Light's hard work here.

I say that with appreciation.

I'm grateful for the oversight provided by the review panel.

for their independent endorsement of this legislation.

And with that, will the clerk please call the roll on the committee recommendation that Council Bill 120411 pass.

Council President Juarez.

Aye.

Council Member Sawant.

Yes.

Council Member Strauss.

Yes.

Council Member Herbold.

Yes.

Chair Nelson.

Aye.

There are five votes in favor, zero opposed.

The motion carries and the committee recommendation that council bill 120411 pass will be forwarded to the city council for final consideration on September 20th.

All right, this has been a big committee.

So this concludes the items on our agenda for the September 14th meeting of the economic development technology and city light committee.

Our next meeting is scheduled for December 14 at 930 and in case anybody out there is wondering why so long we're about to go into.

the budget season, so committee meetings are canceled for the most part.

If there is no further business, and I'm looking to see if there is, not seeing any, this meeting will adjourn, but before we do, I have to say thank you, committee members, for your hard work and approval on the Film Commission legislation.

That was a big milestone for me, thank you.

It's great to see it rolling.

Oh, believe me, there is no end to my to my film puns, et cetera.

And I'm not over yet.

So.

All right.

Hearing no other business.

It is eleven twenty three.

And this meeting is adjourned.