Seattle City Council Finance & Neighborhoods Committee 7/10/19

Good afternoon, everyone, and thank you for joining us on July 10th, 2019. This is our Finance and Neighborhoods Committee.

I'm Sally Bagshaw, chair of this committee.

With me, Councilmember Gonzalez, Councilmember O'Brien, Council President Harrell.

Thanks all of you for being here.

We've got a number of important items on our list today, and I want to just go over those agendas, the agenda quickly.

We've got an ordinance to fund housing and community development programs.

This is part of what we call our 2019 annual action plan.

It's a consolidated plan for housing and community development.

We're actually going to have a pro forma public hearing.

We will open it up.

People can speak to it.

Then we will close it.

Then I'm going to ask my colleagues to allow us to move forward to be able to vote on that today.

But probably the reason most of you are here is because we are going to be considering two separate ordinances.

One's related to funding for the Equitable Development Initiative.

We call it EDI for short.

That is dealing with affordable housing and creating a fund for short-term And then our third item of business is an ordinance that is going to look at our sweetened beverage tax revenues and how we're going to spend that money.

And I want to say thank you to Councilmember O'Brien who has been really the sponsor on these and the advocate for all of it.

It's here in my committee today in no small part because he was very interested in moving forward this summer.

So thank you for that and we will definitely get to those items for possible vote later.

With that, I think we can now take public comment.

We've got about a dozen people on the list.

If you signed up to speak, what I'm going to ask you to do, I'm going to call three names, and most of you know the drill already.

The two microphones in the middle, pick whichever one is most comfortable for your height.

The one over there, they all move, they all adjust.

and pull them towards you closely.

And so you'll each have two minutes, Allison, of time.

You'll be able to see the clock.

So if I can call Tanika Thompson, Lynn Cerita, and Lindsey is at Hovind.

And if the three of you will step up to the microphones, get ready.

And then, of course, Jim Krieger will be the fourth speaker.

So welcome, Tanika.

Welcome back.

Thank you.

Thank you for working with Gott Green.

No problem.

Looks like you've got a cheerleader section behind you.

Good afternoon City Council Members.

My name is Tanika Thompson and I am the Food Access Organizer at Got Green.

I am here in support of Council Member O'Brien's legislation of a separate fund for the sugar sweetened beverage tax for 2020. The Fresh Bucks Voucher Expansion Program has helped 2,000 low-income people of color and working families have access to healthy, affordable foods.

However, we could and should do more.

Within 30 minutes of the public site opening, 700 enrollment slots were full.

There is currently a wait list of 3,500 people which had to be shut down after one week due to the high volume of people signing up for FreshBooks.

Asking the 122,000 in addition to the 3,500 families in the food security gap to wait until 2021 for the opportunity to have access to healthy food should not be an option.

Got Green staff and volunteers knocked on hundreds of doors in South Seattle, having conversations with our neighbors to explain why they should not see the SBT as just one more regressive tax.

When people express their concern about revenue from the tax going to the general fund, we put them at ease by telling them all about the programs their money would go to for their benefit.

We told them those things because that was what we were told by you.

The community is holding Dot Green accountable and we are holding you accountable.

You made commitments and we expect you to honor them.

Voting against this solution happening in 2020 will create a relationship built on dishonesty between the community and City Council.

You made a commitment to reinvest the revenue from the SBT back into the community it came from as outlined in the ordinance.

Voting yes to a separate fund in 2020 will ensure that this revenue will be protected from going to the general fund and being spent on who knows what.

Sorry, give me one moment.

Taneika, can I ask you to wrap up, please?

Yep, no problem.

Waiting to put this legislation in place until 2021 will put those who have already worked so hard in the position to start over again.

Is this the legacy you choose?

Please, let's finish what we started.

Thank you.

Thank you, Taneika.

Lynn?

Lynn Cerita?

Very good.

And after Lynn, we have Lindsay.

My name is Lynn Serita.

I am a senior citizen.

I have shopped at the farmers markets with the French Buck Match since it started, you know, I think in 2010. Additionally, I qualified for the voucher program.

I want to tell you that in my apartment building, there are three families, I think, that are now using those vouchers.

They have working parents.

They didn't qualify for food stamps, you know, but they have, you know, bills to pay and everything.

And the vouchers meant so much to them.

You know, it is very important to have the fresh vegetables and fruit.

And I also want to say, generally, I do not like regressive taxes like sales tax.

But I liken this SBT tax to like the taxes that were used on cigarettes, right?

That where the money was going to smoking cessation programs.

And this tax has it right because the money is going directly to people that are affected the most by lack of access to healthy food.

And I would be extremely disappointed if they you put the money in a general fund and end this program because this is a program that is absolutely working.

Like over 65 I have normal blood sugar all that you know and I think like having the vegetables and fruits has really helped improve my health so that's what I have to say.

Well thank you very much and I'm glad you're feeling well.

All I got is arthritis, but other than that, I'm lucky.

Good for you.

Lindsey, then Jim Krieger, and then it looks like Victor Coleman.

Thank you.

These fellow advocates did such a beautiful job.

I'm Lindsay Hoven with the American Heart Association, and we, too, fully support Councilmember O'Brien's proposed ordinance.

Starting in the 2020 budget, this would restore 100 percent of SBT revenues to the commitment Council made to community in 2017 to grow and expand food access and early learning programs.

Let's remember the tax is off to a promising start.

Diverse communities across Seattle are already benefiting from meaningful investments in food access and early learning.

Though actual revenue happens to be higher than projections, which were based on assumptions, please do not divert funding.

from the intent of the original ordinance and that commitment that you made to community.

I ask for your support of the proposed ordinance with implementation beginning with the 2020 budget, respectfully asking that you not adopt the proposed amendment to push it to 2021. Please ensure no more SBT revenue is diverted and ensure it is all used to fulfill the promise to community to expand food access and early learning programs in the communities that need it most.

Thank you.

Thank you very much.

Jim, Victor, and then Abdi Youssef.

Great.

Thank you, Councilor Fiore, Bagshaw, and the other committee members.

I'm Jim Krieger.

I am co-chair of the Community Advisory Board for the Sweetened Beverage Tax and also Executive Director of Healthy Food America, a nonprofit focused on equitable and healthy food policy.

The Community Advisory Board supports the proposed ordinance to set up a special SBT fund and to prohibit the use of SBT funds to supplant general fund support for healthy eating and early childhood programs.

And most specifically, the CAPS supports setting up this fund to monitor how the revenues are being spent.

and to make sure they're being allocated to support specifically new and expanded healthy food and early learning programs for low-income communities.

This is consistent with the original legislative intent and with the promises made to community members who supported the adoption of the tax in the first place.

Importantly, we want to see that the SBT revenues are not used for supplantation effective in 2020 budget.

The CAB's committed to seeing that SBT revenues are allocated to promote social, racial, and health equity, and to address the regressive and disproportionate burden of health problems associated with SSBs, and therefore to be devoted to these specific uses.

We want to see that the revenues are allocated so they mitigate any potentially regressive tax effects by assuring that they're invested specifically in low-income communities and not going to the general fund.

So it's the utmost importance to the CAB to see that these funds are used as intended.

Only then will the SBT be a progressive rather than regressive policy.

Only then will the SBT tax implementation respect the values and express desires of community advocates and community who supported the tax adoption.

It's a matter of honoring the promises and commitments made by city government, maintaining faith in our democratic processes, and honoring the commitments now, not waiting until 2021. We're opposed, therefore, to any delays in the prohibition of supplantation.

Losing another $5 million in 2020 is not acceptable.

In closing, we strongly support the proposed ordinance, but not the amendment to delay until 2021, and thank you for your attention to this matter.

Thank you, Jim.

Victor Abdi-Simon?

Committee members, my name is Victor Coleman.

I'm the director of the Statewide Childhood Obesity Prevention Coalition and member of the Seattle Healthy Kids Coalition.

I'm here to testify in support of the proposed ordinance regarding protecting all of the new revenue from the sugary beverage tax.

This ordinance is needed to deepen the legislative intent and purpose of the original SBT ordinance, which was to ensure to the community that the new revenues are going to create, expand key programs and initiatives.

While the city has, for the most part, lived up to the initial promises on this new revenue, the use of some of these revenues in last year's budget to shore up important programs that were previously supported by the general fund is problematic.

That's why this ordinance is needed.

Trust in government.

Trust in government is a critical part of a vibrant collective society, and the harm done when trust in government is broken or severed really hurts both the citizens as well as the government institution.

This ordinance can help rebuild that trust.

So we strongly encourage you to support this ordinance, and it's important, as you've already heard, that the ordinance be passed and made applicable to the formation of the 2020 budget.

Thank you.

Thank you very much.

Avdi, then Simone, then Marty Koistra.

Good afternoon, council members.

My name is Abdi Youssef, and I'm an organizer at Butcherson SAGE.

I organize South Core, a coalition of over 25 community-based organizations.

Over the last few years, we have seen the mass displacement that's happening in our city, how it's affecting our communities and our families, how it's displacing cultural and religious institutions, and how small businesses are getting pushed out and priced out of our city.

The EDI is the only fund that addresses a comprehensive anti-displacement strategy with a racial justice framework, and we need to grow and protect this important fund.

Last two years, the EDI fund has received over 30 million of eligible asks.

These asks are community-driven developments that put people and institutions in place.

And this year and next year, the fund will see 20% less money than was allocated in short-term rental tax legislation.

We support the Council Member O'Brien's amendment that's before you today.

We also support creating a dedicated fund for this returned beverage tax, as well to protect the revenue for the legislated purpose of that fund.

Thank you.

Thank you very much, Abdi.

Simone, Marty, and then is it Meron?

Hi, I'm Simone Adler.

I'm with Community Alliance for Global Justice and a member of the Coalition to Close the Food Security Gap.

And I'm here to urge you, Councilmember Bagshaw and this committee, to vote yes on Councilmember Bryan's proposal to create a separate fund for the sugary beverage tax revenue.

I also urge this committee to not wait for this to take effect until 2021, because we can't let several more years go by while people are left struggling to access healthy food when they've been told that this tax revenue will support closing the food security gap.

This tax is an opportunity for City Council to demonstrate equity and accountability.

Grassroots community organizations have been on the ground telling people who are most impacted by this tax, communities of color and low income, that the revenue is going to expand and increase city funding for Fresh Bucks so it can reach more people in need, that community-led food access programs will get support, and most importantly, that the tax will be equitable, that people who have been impacted by an unjust food system will benefit from the revenue of a tax on sugary beverages, which is part of this system.

The food access programs that the tax has supported are working, so let's not let another budget process or months or years pass without council being accountable to their commitment to increase the funding of these programs instead of moving the funds to other programs.

It is the mayor and council's job to fund important work, and it should not be at the cost of accountability to community.

We all have the right to eat healthy food, so please help close the food security gap and create a separate fund for the sugary beverage tax.

Thank you.

Is it Maren?

M-E-R-O-N?

Good afternoon.

Marty, I'm sorry.

I jumped you.

I really apologize.

Would you hold on just a second?

Marty, you're up.

Okay, thank you.

Please, nice to see you again.

Hello, Chair Bagshaw and members of the Finance and Neighborhoods Committee.

I appreciated the opportunity to meet with you yesterday with a few other South Core representatives to talk about how the EDI fund has been a critical resource to equitable community-driven anti-displacement projects.

My name is Meron Casohun.

I'm the community development manager at Homesite which is also a member of the race and social equity task force.

I'm here once again to affirm my support of Council Member O'Brien's amendment to use the first five million dollars from short-term rental revenue to fund EDI projects directly as was the original intent and use of the fund.

The EDI fund is the only fund of its kind and has made significant impacts for community-led capital projects such as the Othello Square and Africatown Midtown Center.

The fund, as it stands, cannot currently meet the demands of the community, as the fund has had over $30 million in asks in the last two years.

Therefore, any cutback in its dedication would halt the fund's current anti-displacement progress.

Furthermore, we also support Got Green and our community representatives here urging for the creation of a dedicated fund for the sweetened beverage tax as well.

Thank you.

Thank you very much for coming.

And I just also want to say thank you for coming to my office yesterday.

It was good to see you.

Marty, welcome back.

Hello, council members, thank you.

Marty Koister, I work for the Housing Development Consortium.

I'm here today to show the support of our 180 members for the funding for the Equitable Development Initiative.

It's a testament to our commitment to equity, anti-displacement, community empowerment, and we need the fund to match the need.

We strongly support the proposals that allocate the short-term rental tax funds for the EDI program and its grants, and we need stronger and more sustainable funding sources This is a step in the right direction.

HDC members have been and will continue to be partners on EDI projects.

Recently, at our Housing and Community Development Summit, we joined together with housing and community groups to dive into the important work of collaborating as we work to meet the tremendous need for housing and ensure that housing is reflective and owned by the community.

We know the importance of this work, but it cannot happen without the funds to ensure that communities have the opportunity to overwhelm the destructive forces of displacement, whether that be economic, physical, or certainly cultural.

Today, I am reminded of a favorite quote of the days I used to work with the Native Peoples Initiative from Lila Watson.

If you are here because you have come to help me, you are wasting your time.

If you are here because your liberation is bound up in mine, then let us work together.

The EDI is our first step, and we need to keep moving it forward aggressively.

Thank you.

Thank you, Marty.

I think we've got one more speaker, Katie Wilson.

Hi, council members.

My name is Katie Wilson, and I'm here representing the Transit Riders Union.

We want to express our support for Gott Green's ask that all funds from the sugary beverage tax be protected and used for food security initiatives.

As you know, the Transit Riders Union is a strong proponent of progressive taxation.

And while we recognize that there are some other policy considerations in taxing sugary beverages, it's also a regressive tax.

And that makes it so important that all of the revenue from that tax be reinvested in the communities that are most impacted by the tax, especially low income and communities of color.

And if that's not happening, then we're kind of just taxing poor people.

So we really, really urge you to protect those funds as soon as possible.

Thank you.

Thank you, Katie.

OK.

Colleagues, if there's no objection, the agenda that I mentioned before will be adopted.

Hearing no objection, the agenda is adopted.

Okay, so now I believe we're going to have Allison read in the item number one, and then we're going to open it up for a public hearing.

Item number one, Council Bill 119-550, an ordinance relating to funding for housing and community development programs, adapting the City of Seattle 2019 Annual Action Plan to the 2018-2022 Consolidated Plan for Housing and Community Development, and authorizing its submission to the United States Department of Housing and Urban Development.

Very good.

So this committee was briefed on a draft of this 2019 annual action plan last December 2018. So what we have now is just a confirmation about what the action plan will be and where the investments will go.

So I'm now officially opening a public hearing for any discussion about this.

Anybody want to speak to the action plan?

Seeing none, I'm going to close the public hearing.

So now we will invite to the table the speakers that are going to be introducing and discussing this.

So if I can invite Amy, Dan from HSD.

Welcome.

So thank you both.

Amy, do you want to introduce yourself first and Dan?

Sure, I'm Amy Gore with Council Central staff.

Great, Dan.

human services department.

Great.

Dan, you can move this forward and back and close to you to make yourself comfortable.

Amy, are you going to introduce this or let Dan?

I don't have much else to say.

We're talking about Council Bill 119-550, which adopts the annual action plan and allows us to send it to HUD and make some budgetary changes based on that annual action plan.

And Dan can give you the detail.

Very good.

And Dan, my understanding is there is a small change to this.

The monies that would come from HUD, we have something like $750,000 more than what we understood at the end of 2018. So maybe you'd like to just give us an overview of this, talk briefly about what the more looks like, and then we can put it to a vote.

Yep.

So the 2019 annual action plan was developed last year With the 2019 budget, we used projected revenues because the federal government had not adopted a budget until February of this year.

In April of this year, we got our allocation.

We're able to update the budget.

Our projections were very close.

The four grants that this action plan covers are the Community Development Block Grant, the Emergency Solutions Grant, the Housing Opportunities for Persons with AIDS Grant, and the Home investment partnerships grant.

There were only very small changes to those.

The total was $750,000.

We got an extra $60,000 for the community development block grant.

That's on top of $9.3 million.

That $60,000 increase will go towards funding for the home site, Othello Square project.

The emergency solutions grant was increased by $26,000.

That will go towards emergency shelter, which it funds emergency shelter and rental assistance mostly.

In 2014, the housing opportunities for persons with AIDS formula allocation process was modernized, and our community saw a huge increase in the amount of money that would come in based on that.

So this year, we had an increase of nearly $600,000, which is the bulk of the change from the projected revenues.

That money will be released in a biannual RFP in the spring of 2020 in conjunction with King County Public Health.

Very good.

So I understand we discussed this a little bit yesterday, there's going to be some additional money going to a Rainier Valley site, some emergency shelters, anything else specifically you'd like to highlight?

No, there is a large amount of prior year funds that were identified in 2017 and distributed amongst several projects who then turned that money down.

That's going to be re-released in an RFP this summer to explicitly describe what those funds are and get community facilities who can use that money.

Okay, so our 2019 annual allocation is going to be a total of $21,667,444?

That's right.

Yes.

The allocation for 2019 is about $15 million, then we have about $6 million of this prior year that is authorized by the

adoption at this point.

Okay, very good.

And I know you've got descriptions in this report about where this money is going.

That's on page three of the report.

Council colleagues, do you have any questions about this?

It's essentially we are accepting $21 million.

I'm down with that.

Okay.

So, all right.

So, I'm not seeing any other questions.

Any other questions or concerns?

So, if you have no more questions, I would like to move Council Bill 119-550.

Second.

All those in favor say aye.

Aye.

None opposed.

No abstentions.

Thank you very much, Dan.

Thank you.

Amy, thank you for your help.

Good report.

Okay, Alison, do you want to read in Council Bill 119402?

I would love to.

Item number two, Council Bill 119402, an ordinance relating to the funding for equitable development initiative and affordable housing, creating a fund for short-term rental tax revenue.

Briefing discussion and possible vote.

Very good.

Yolanda, thank you for your good work on this.

And colleagues, I want to just make sure that Council President Harrell, Council Member Gonzalez know I had proposed an amendment to this, but I'm going to be withdrawing that amendment.

I'm supporting Council Member O'Brien's because he and I had talked about this during the week.

I support what you're doing.

I think we're close enough that there's no use making things more confusing.

So I'm going to be supporting his amendment withdrawing mine.

Yolanda Ho, Council Central Staff.

Thank you, Yolanda.

So just to give you all a little background on the short-term rental tax, which has been discussed in the past two committee meetings, it was a per-night tax on each short-term rental operator in Seattle, and it was first established to generate at least $5 million annually for grants to community organizations for the Equitable Development Initiative projects, also known as EDI.

The mayor's proposed budget in 2019-2020 allocated revenues that did not fully align with this intent and made it difficult to amend the spending plans without reducing funding for other priorities.

The Council Bill 119-402 was introduced during the fall 2018 budget deliberation process in response to this to ensure that council's intent was clear and to create a fund that would allow for the tracking of this revenue source.

The council opted not to act on this council bill because the council could not find ongoing resources.

They were able to find one-time resources in 2019. but not ongoing resources to fully align the proposed spending plan with the original intent and also at the request of the city budget office.

So in reference to the memo in table one shows a detailed breakdown of how the short-term rental tax proceeds have been allocated in the adopted 2019 and endorsed 2020 budgets.

The inconsistencies with council intent are that The funding for EDI staff and consultant support are taken from the $5 million intended for EDI grants, leaving grants at about $4 million, and funding for existing supportive housing projects and the rental housing assistance pilot instead of new affordable housing projects, and payment of debt service on bonds issued for affordable housing projects.

So that is kind of the background of the bill.

And on to, as the chair has noted, that she is withdrawing her amendment, so we will just be discussing Councilmember O'Brien's amendment.

So this is a, this amendment to this original bill from last year would establish short-term rental tax fund beginning January 1st, 2020, and establish financial policies that would begin also in 2020, which would direct the first 5 million to the equitable development initiative grants, direct the next 2.2 million to debt service payments on bonds issued for affordable housing projects, direct the next 3.3 million to support permanent affordable permanent supportive housing, direct the next $1.1 million for Equitable Development Initiative staffing and consultant services, and direct any additional revenues to Equitable Development Initiative grants.

So the impacts of this amendment are that unless the revenues are higher than the projected $10.5 million in 2020, this could result in a shortfall of $1.1 million for funding the equitable development initiative staffing and consultant services next year.

So if general fund or other new revenues are not generated to backfill the shortfall, we expect this would hinder the Office of Planning and Community Development's ability to administer the program.

Okay, thank you.

Council Member O'Brien, you want to speak to it?

Yes, thank you.

I'll be brief.

Yolanda, thank you for that background and update.

And Council Member Bakeshaw, thanks for creating a forum here for the past couple of committee meetings and giving me space for that.

And I appreciate your support of this amendment.

Colleagues, this is fairly straightforward, but just to the hierarchy of what we're doing, my top priority and what I've heard from community is that there's no other source for these EDI grants, and so that's why this $5 million is at the top of the list.

So the expectation is we will be able to grant at least $5 million every year going forward, as long as we're collecting the short-term rental tax to fund that.

And then, as Yolanda outlined, the hierarchy would go to the repayment of the bonds, to permanent supportive housing.

to paying for staff overseeing EDI and consulting services.

And then if there's money in excess of what I think would be $11.6 million, anything above that would go to additional grant funding.

We know that last year, I think there was 25-something Grant applications, we funded maybe 20% of them, a small fraction.

There's a lot of really good projects out there.

And if we had good money, I have no doubt that we would be able to do some more amazing stuff.

You know, I'm not sure that we're going to collect more than $11 million on short-term rentals.

It's a little bit up in the air because we haven't been able to track that yet.

But at least we have a path for that.

Very good.

So any other questions on this amendment?

So Council Member O'Brien, would you like to move your amendment?

I will move Amendment 1 to Council Bill 119402. I'll second.

Okay.

Any other comments or concerns?

All right, those in favor of the amendment say aye.

Aye.

There's none opposed.

There's no abstentions.

So now we can move for passage of 119402 as amended.

Any other comments?

Okay, seeing none.

I'll second it.

All right.

Fine, I was going to move that.

So it's now been seconded.

The motion has been moved and seconded.

No further comments.

All those in favor, say aye.

Aye.

None opposed.

No abstentions.

So the motion carries as amended.

Council Member O'Brien, I understand that you are not going to be at this next Monday's meeting, so with your okay and our Council colleagues' concurrence, I'm going to suggest we put this over until you return on July 22nd, at which point you can then speak to it at the full Council.

I appreciate that.

Thank you so much, Council Member Bageshot.

Very good.

And I'm going to say, I just want the public to know, I'm saving my remarks in full support of this until we present it to the full council.

So the speechifying will occur.

It just will not occur today, but I want to thank Council Member O'Brien for this and Council Member Baggio.

So this is, this is, these are critical investments and I think the council is approaching it as so.

So look forward to his return.

Excellent, thank you.

And I also, I'm sorry that Marone, I'm not pronouncing her name correctly, but I'm sorry she left because she and White King and others were in my office yesterday and I just found their stories just very impressive and I just want her to know and thank all of you who have come and talked about this, how important it is.

That's the end of my speechifying now.

Okay, so we can move on to the last item of business.

And Allison, would you like to read that in?

Yes, please.

Thank you.

Item number three, Council Bill 119551, an ordinance relating to creating a fund for the sweetened beverage tax revenue, adding a new section, 5.53.055, to the Seattle Municipal Code.

Very good.

Okay, so this one, I do have an amendment, but Yolanda, would you like to speak to the underlying legislation and the amendment, and then we'll dive in.

Sure, yeah.

So again, I will give a background on the sweetened beverage tax and how we got here and speak to the legislation and potential amendments.

So the sweetened beverage tax is a tax on the distribution of sugar sweetened beverages.

And the revenue was intended primarily to expand programs that expand access to healthy, affordable food, close the food security gap, and promote healthy food choices, as well as support evidence-based child development programs, particularly to reduce disparities in outcomes for children and families based on socioeconomic factors.

In the 2019-2020 proposed budget, surplus sweetened beverage tax funds were used to supplant mostly general fund supported programs and I've done a little more digging into this.

The actual total amount, swap amount is $6.3 million, not the $5.7 million we had previously discussed.

And the programs that were where this occurred were In child care vouchers, that was fully swapped and support for child care providers participating in the voucher program, food banks, parent child home program, of which 52% of the program was swapped for SBT for other funding sources.

nurse-family partnership, farm-to-table, out-of-school nutrition times, senior meal delivery, senior congregate meals, fresh bucks, and food policy program had also a smaller amount of supplantation.

And so what we've heard in the discussions was that by doing these fund swaps in 2019 for programs that were consistent with the Sweetened Beverage Tax Policies but were not expansions or the creation of new programs, the budget office was able to direct this amount to the Human Services Department for various homelessness services and other programs.

So in, so Council Bill 119551 would establish a fund to receive sweetened beverage tax revenues and track expenditures beginning January 1st, 2020 and would codify the spending policies that are described, that are in Ordinance 125324 and amend these policies to increase flexibility for the allocation of funds to one-time or limited term expenditures and prohibit the use of Sweden beverage tax proceeds to supply a general fund or other funding sources, dedicating the proceeds to be used solely for expansion of existing or creation of new programs in accordance with the programs identified.

So as that last point is that they would prohibit the use of SBT in the place of general fund or other resources beginning on the effective date of the ordinance, which could impact any supplemental budgets in 2019. and the endorsed 2020 budget.

So essentially any instances where programs were funded by other resources and SBT was used instead would be partially or in some few cases completely cut as a result of this bill if other budget cuts or new revenue sources are not identified to backfill.

So on to, and so we actually have three amendments, the two that are in the memo, and a third one that Council Member Gonzalez.

will be sharing.

The first amendment is just technical and clarifying amendments.

So removing the word net in reference to SBT, the Sweden beverage tax proceeds, it's not really a relevant use of the term here.

It does mean something, but not in this particular instance.

And clarifying that Sweden beverage tax revenue should be used to expand evidence-based child development programs, so adding that and allowing the sweetened beverage tax proceeds to be used to cover cost increases for sweetened beverage tax funded programs.

Can you talk a little bit more about the impact on net?

You said it doesn't have an impact here, but generally the difference between net and gross does make a difference.

Do you want to speak to that a little bit?

I believe in the ordinance it was in reference to gross, so all the proceeds, and that was how it was kind of allocated, but I believe at the time of the drafting, maybe there had been, I'm not really sure, but when I was speaking, the budget office and law kind of, they evaluated the use of the term and noted that it didn't seem to make sense in this particular instance, but would in, you know, if one was saying net of administrative costs or something like that, but we aren't actually saying that because we are allocating, you know, like certain percentages and then saying within those, administration will be allocated, right?

So we're not, there's no net.

It's just the proceeds.

Great.

And I understand what the second amendment is.

Can you describe the third?

Oh, yes.

Oh, yeah.

So do you want me, I will go through the second amendment even just because I did not speak to that yet.

But the second amendment sponsored by the chair, Bagshaw, would amend the financial policies to align with the endorsed 2020 budget, requiring that any surplus unallocated between beverage tax revenues beginning on the effective date of the ordinance be used only for expanding existing programs.

and creating new programs and to cover program cost increases.

Beginning in 2021, all sweetened beverage tax revenues would be used for expanding existing or creating new programs, including program cost increases in accordance with statute.

And this would give the council and mayor some more time to either create new revenue sources to backfill programs or to make time to create, yeah, new revenue sources or to, yeah, other cuts to backfill these programs where sweetened beverage tax was used to supplant other funding sources.

Can I ask you to talk a little bit more about in the legislation what section A and what section B is and what the expenditures are?

Yes, so section A of in the, in the spending policy, in the financial policies.

So section A is about the limited term one-time expenditures.

So there, and so that is, so there's currently 10% of the proceeds of all the proceeds may be used for either one-time costs necessary to enable the administration of the tax.

So those are done at this point.

Up to $5 million for the 13th year promise scholarship program and up to $1.5 million for job retraining and placement programs for workers who may be adversely impacted by the tax and that it will be identified during the program evaluation.

and also funding for capital projects to construct or enhance classroom facilities for use by the Seattle Preschool Program.

So that's for the first five years that the tax is collected.

And once those five years elapse, so after 2022, all the proceeds will go then to the programs listed under B, Section B, which are the ongoing expenditures.

So these are for the lifetime of the tax.

And so these are the ones about expanding access to healthy and affordable food, closing the food security gap, and promoting healthy choices, food choices, and the evidence-based programs that improve the social, emotional, educational, physical, and mental health of children.

And so those are the two.

And then, sorry, there's a few more items under that.

Administration of assessing and collecting the tax, and ensuring resources for the Office of Sustainability and Environment, and the Sweet and Beverage Tax Community Advisory Board, and the cost of program evaluation conducted by the auditor.

Good.

Thank you.

And I will move on to Amendment 3, which I had somewhere.

And do we have that?

I do.

I have copies as well.

I do have another copy.

Oh, OK.

I think we'll just, if it does not appear.

Mine ends on 2. Yes, so this was just sent around right before the committee.

Oh, OK.

So amendment three is also a, I would consider a clarifying amendment.

This would specify that sweetened beverage tax proceeds should be used to expand birth to age three and kindergarten readiness services.

So this is amending that section B that we were just speaking of, of ongoing expenditures.

And so it's just clarifying the target services that would be funded by the sweetened beverage tax.

Okay.

Which I believe is in accordance with the Community Advisory Board and the intent of the Sweetened Beverage Tax Revenue Spending.

Just to be clear, Council Member Gonzales' amendment is consistent with both of the proposed amendments, Bagshaw's and O'Brien's, correct?

Correct.

And I would say, yeah, with...

In alignment, it's not exclusive to either.

Correct, correct.

And I would actually say all three of them, because the underlying legislation is Council Member O'Brien's intent.

And so, I would say Council Member Bagshaw's amendment is the one that would make the major changes, but both Council Member O'Brien's amendment, which is a technical clarifying amendment, and Council Member Gonzalez's would not be in conflict.

Got it.

And Council Member Bagshaw, I'd like, if possible, to move forward with amendments one and three.

First, and then discuss yours.

Okay, fair enough.

I think, I appreciate Council Member Gonzalez's language in amendment three, and it's totally consistent with my intent, and from conversations with the Community Advisory Board, both these changes I think are pretty straightforward, so we'd love to get those out of the way.

So you wanted to move your amendment and Councilmember...

I guess I was suggesting to go in the order.

Let's go one, then three, then two.

But some discussion first.

Do you want to make sure?

Yeah, totally.

Were you finished with the introductory?

Did you want to take the chair's thunder on it?

No.

I mean, I've got stuff to say about Amendment 2, but I think, overall, I know that we're struggling with a lot of good causes here.

And I said at the last meeting, and I just want to acknowledge right now for Councilmember O'Brien, what I deeply respect is your commitment to this is a feeling that you have, just as a matter of integrity, that you believe that you were putting forward something that you strongly supported and that you feel that your word is on the line.

And I respect that.

very much, and I just want to acknowledge that.

Council President Harrell.

Before you start to subtly argue your amendment, let me make sure I understand what the debate is about, and I'll sort of paraphrase how I'm looking at this, but I might be a little wet on the issue, so Yolanda, you can keep me honest here.

For me, at least, I have very little desire to deviate from the investments that were the basis for the Sweetened Beverage Tax.

And I think Councilman O'Brien sort of captures that spirit.

And so we looked at the communities that we're trying to improve from a health standpoint, we looked at the regressive nature of this tax, and we wanted to sort of be a purist in that sense and make sure the money goes back into the communities, and that's where my values lie.

But if I'm understanding what the practical effect of his amendment that may cause And correct me if I'm wrong, Council Member O'Brien, that by supporting it, we may be requiring the executive to back off this year, in 2019, back off investments in some of our housing, homeless housing investments or some other investments.

And I thought I had seen, Council Member Bechoff, from you, a description of the investments that this may create Withdrawal from that were pretty critical investments.

Now if I understand counselor Bagshaw's amendment That she's not interested at all in pulling back from our Investments in healthy food programs and the great work that got green does and the other organizations she just sort of wants to stay the course this year and the next year and Well, what happens next year?

I'll stop there.

None of this would change 2019. So what we're actually talking about is 2020 and 2021. OK, I want to make sure.

So OK, that was not clear to me.

And my first, what you spoke to is actually my underlying legislation.

My first amendment, which I'd like to get out of the way, just because I don't think it's controversial.

Yeah, just removing the term net and adding the word expanding in front of evidence-based programs is the net effect of Amendment 101. And so I would love to move that and then give Council Member Gonzalez a chance to move hers, because then I think we'll get to the meat of what you're asking about.

Great.

They're just technical amendments.

Gotcha.

So I'll go ahead and move Amendment Number 1.

And I'll second.

Yeah, yeah, I thought your amendment was the big one.

No, no, I understand.

I'm ready to support that one.

Okay, great.

Okay, any further discussion on amendment number one, which is forward deleting the word net and expanding evidence and including associated program costs.

Any further questions?

Just a question.

I'm supporting it, but I think I heard you say that there's not a huge dollar amount, but it actually increases, because you take out the administrative piece, it actually will increase the dollars that goes to the neighborhood organization.

the advocates and the organizations.

Is that true?

What is the effect of this?

Not in regards to this amendment.

The word net.

Is there any effect?

Why are we doing it?

It's a clean up.

I think it's kind of a lingering word that has no meaning in this specific instance.

Got it.

Thank you.

Earlier I'd asked her sometimes net and sometimes gross means a lot in this case.

You're saying that that's not an issue Okay, any other discussion?

Councilmember Pacheco welcome

Are we on an action item?

Or an easy one.

Is this one, two, or three?

This is one.

This is one.

And as we have been going through, this is considered a technical amendment, which I support.

Then we're going to move to amendment three, which Council Member Gonzalez put forward.

Again, we consider that a technical amendment.

Then we'll get to item two.

I just want to make sure he knows that we're on item number three of the agenda.

The sweetened beverage tax.

Oh, the sweetened beverage tax.

That's what I was trying to clarify.

Oh, sorry.

Yeah.

We did it.

We've done EDI passed unanimously.

Okay.

So now we're on to the sweetened beverage tax.

All right.

Any further discussion about one?

Let's vote.

Okay.

So it's been moved.

It's been seconded.

All those in favor say aye.

Aye.

None opposed, no abstentions.

Okay, so the technical amendment number one.

Council Member Gonzalez, would you like to speak to Council Member, I mean, to your council?

I would like to speak to myself.

To number three.

Yes, I would.

Yeah, please do.

Okay, I am now speaking to myself.

I think it's fabulous.

Amendment number three is simply an amendment that clarifies City Council's original intent intent as it relates to programs that would improve the social, emotional, educational, physical, mental health of children in relation to early learning in particular.

So the city has a strong history of investing in the zero to three space.

And obviously through our Seattle Preschool Promise, we have strong investments in preschool that cater specifically to three-year-olds and four-year-olds.

And this is an opportunity for us to make sure that we affirm that we are not going to put, you know, programs related to the nurse childhood program, for example, and child care assistance and parent-child home programs on the chopping block in the event that that is something an administration is inclined to do.

So this is just a a further clarification that really these investments are not to be used for any category of children related to anything, but that it's specifically focused on early learning for zero to three ages and with programs that have a focus on making sure that our youngest learners are ready for kindergarten.

Very good.

Would you like to move your amendment?

I so move this amendment.

Second.

Any further discussions?

Okay, all those in favor say aye.

Aye.

None opposed, no abstentions.

Okay, now let's get to amendment number two.

You've introduced it.

A big show.

Okay, first let me say thank you to Got Green.

I have all the respect in the world for you and what you've been doing.

To the cab, Jim Krieger, thank you.

Lindsey, as you said on the microphone, it's been a promising start and I want to thank you all for that.

So let me tell you what my amendment is about.

My amendment would say let's finish off our biannual budget before we make changes in this amendment.

Now, the reasoning behind that is that the monies that were put in during our last year's budget for both 2019 and 2020 were for programs that all of us love and support.

There is no question about that.

Yes, it was supplanted money.

Here's what it went into.

Parent Child Home Program, Child Care Assistance Program, Nurse Family Partnership.

In the Human Services Department, and you remember, Council Member O'Brien, how passionately that Council Member Juarez argued for more money into food banks, for out-of-school nutrition time money, senior meal delivery, and senior congregate meals.

There is no doubt that these are things that all of us support, just as we support what the sugary beverage tax investments are going into as designed.

My recommendation and my amendment, what it would do is to say, keep all of this.

keep the money that's going into the parent-child home program, the child care assistance, the nurse-family partnership, the food banks, out-of-school nutrition, and senior meal delivery, as well as the Fresh Bucks program of $2.7 million into that Fresh Bucks program.

I want to keep all that for 2020. move forward and change this $6 million, there is no guarantee of backfill money for it.

I think that it's irresponsible and not only irresponsible to these programs that we should back out from them, but also it just does not strike me as being as responsible stewards of the public funds as we could and should be.

Now that said, Under my amendment, we would move forward in 2021 and invest all of the money into what the sugary beverage tax is designed to do under the original ordinance.

We also, under my amendment, if there is additional revenues, and we will know what those additional revenues are in September, all those monies would go forward to the recommendations that you have, Councilmember O'Brien.

and into the original intended investment.

So all the fresh bucks and all of the things that we've identified, we may have more money to do that this year.

I'm just very concerned about midway through our budget cycle, our biennial budget cycle, changing what we argued so strenuously for last August.

So that's the essence of my amendment.

I'm happy to answer other questions.

Allison, do you want to pass that around?

We did just right before this committee get this from the budget office.

People have said we don't know where the money went and what investments that the general fund went to.

Here is what it went to.

Hygiene.

Yeah, I can pass this one out and I can just use Allison's here if you want to pass that down.

Thank you.

So it went to things such as hygiene costs at our encampments.

We had some assistance in building more of the tiny homes.

at 18th and Yesler, monies for assistance with basic shelter to support the annual increase in rent for the Queen Anne shelter.

The monies also went to Bailey Boucher House to assist at the City Hall shelter, the SMT shelter, Angeline's, where we provided some additional services.

YMCA late night motel vouchers.

Peace on the Street for Kids on the Street, some additional support for their facility, additional money for the navigation center, and this was some converting office space to sleeping space for people.

We opened Haddon Hall.

That is, again, enhanced shelter.

We increased case management at Licton Springs.

We increased behavioral health services, assisted Lehigh with some on-site staff, again, at Licton Springs.

We increased some case management at the Interbay facility, management at the North Lake facility.

We increased behavioral health services at Whittier.

We added some nursing care, which is something so critical and it'll be one of my top priorities for the budget coming up.

Add additional nursing services as well for residents at Whittier.

All of these things, I don't think there's a single one of us at this table that would disagree.

It's all critically important.

So the question is, are we going to disrupt some of this now halfway through 2019 and our 2020 budget?

And it's my recommendation that we move forward with my amendment, which preserves the funding that we have put into this budget and all good things that we are supporting.

So love to hear further comments.

I just have a clarification question before we get into the actual debate.

Is that OK?

OK.

I'm not the chair.

You sure can.

Is that OK, Madam Chair?

Absolutely.

But I give you permission.

Thank you.

Great.

Sorry.

So I'm a little confused because I'm seeing this chart of things that are alleged to have been funded by general fund dollars that apparently can be straight tracked back to sugar beverage tax, but I thought the reason we were doing this is because you couldn't track those dollars back to specific uses.

So I have no, I am left with the conclusion that the executive cherry picked these examples to sort of pull on the heartstrings and create a untenable situation and dynamic of, you know, if you stay true to the intent of the ordinance and move forward, then, you know, you hate homeless people.

And I feel like that's really, unfair narrative to try to build at this point, and I just don't have a lot of confidence in how suddenly we can track these dollars with this level of confidence and accuracy.

I just don't understand how we got there in a week or two weeks suddenly where we can track every single cent back to these precise investments when before we couldn't do that.

That's one.

Two is, so I'd like to get a sense from Council Central staff's evaluation what the level of confidence is in terms of the tracking that is being now asserted as being sort of 100%.

Every single one of these dollars we can track back to sugary beverage tax as opposed to other general fund dollars that come in from other sources, a variety of other sources.

That's one question.

Council Member Bagshaw, you listed off a bunch of other things that you said would be cut this year or next year, including Fresh Bucks and the Parent-Child Home Program and the Nurse Program, and I think you made a claim that those are all, because they're all inconsistent with the intent of the ordinance, the sugary beverage tax, and I thought those were the things that we were supposed to be funding with a sugary beverage tax.

So I am unclear as to what the sort of list that you gave initially around sort of, you know, the parade of horribles that would happen if we passed this.

Ordinance of the other things it would be that would suffer as a result of the passage of this bill good So I'll answer your second question first this came from the June 24th staff memo that Yolanda prepared and we went through quite extensively at the June 24th meeting and So her list here is the adopted 2019 budget used sugary beverage tax revenues to supplant general funds in the following programs total SBT funding noted in parentheses.

So if you'll take a look at page two and three of Yolanda's good memo, you will see that she identified from Department of Education, from Human Services, and the Office of Sustainability.

But my point is those things are going to continue to be funded.

I thought I heard you characterize it as these will no longer be funded if this bill gets adopted.

We'll have to backfill with general fund money and those have not been identified to this point.

Maybe I don't understand what that means.

So the issue is that these programs were all either general fund supported or, well, mostly general fund supported.

And so these specific programs all experienced at least a certain percentage, if not a complete swap of that general fund for a sweetened beverage tax.

So it was just a one for one.

So, in the example of food banks, the 1.795 million, that was just a swap of sweetened beverage tax.

freeing up 1.795 million for general fund to be sent anywhere in the budget.

So back to your first question, there is no way of tracking because we don't have a dedicated fund.

So we can't see where a transaction has occurred necessarily.

So there is no, while this is a list of things that were funded by general fund, So we're $1 billion worth of other stuff.

It's true.

Yeah.

So once it's general, it's kind of anywhere.

So it would be hard to say that the $6.3 million that was freed up by doing these swaps, where those went, they could have gone here to any of these programs or to any other.

program funded by the general fund.

Right, so that includes police department, fire department, any of the programs they do, human services department, Department of Neighborhoods.

Legislature, city budget office, mayor's office, deal, parks, anything really that isn't related to REIT or other kinds of dedicated sources of money.

And so back to the discussion about, so some of the, so the effect of this legislation should it pass without Council Member Baxhaw's amendment is that those, that supplantation that occurred would no longer be allowed in the 2020 budget, which has been endorsed.

But, you know, so we, so for instance, that 1.795 million that was used to supplant for food banks would need to be filled by something else.

not and then as and then sweetened beverage tax could be then used to augment or supplement so to add on to so that was the intention I believe of the original sweetened beverage tax revenues was to kind of supplement not supplant necessarily so that's that's where there will be funding cuts if other cuts are not identified or other new revenue sources.

So some of these programs will be affected to a greater or lesser degree depending on how much supplantation occurred.

So then for the programs that were listed in your original memo for the last hearing, the impact is that whatever was supplanted, we need to come up with the difference of that.

So dealing with this bill now would provide the mayor in her process of developing a proposed budget to the extent that she still holds these programs as priorities, an opportunity to take the next several months between now and September to identify other resources to be able to continue to keep those programs whole.

And if she doesn't do that, then council can do that through our own budget process by either identifying a new revenue source or by identifying cuts to those things that were proposed by the mayor in order to prioritize those programs.

That's correct.

Okay.

So I'm going to do my best to be clear, perhaps even concise, but maybe not, on a couple points I want to make.

First, I want to talk to the issue of supplantation, because this is an issue that comes up, frankly, whenever we're trying to raise new revenue.

It's not unique to the sweetened beverage tax.

For instance, when we passed the Move Seattle levy, there was concern that when we went out and raised close to $100 million a year in new transportation dollars, they would simply use that to supplant the base $40 million a year we were spending in general fund on transportation and then spend somewhere else.

And the folks advocating for it said, look, we are in favor of supporting this initiative that would raise an additional nearly $100 million a year, but we want that to be additional.

And so, as part of that initiative, what we committed to was that we would maintain, at a minimum, the existing general fund commitment to SDOT.

And so, I don't have, that's about $40 million a year.

I think we agreed that it would go up adjusted to inflation or something each year.

And so every year in the budget, we do that so that we're clear that those monies that we raised, in this case from property tax, would go to be additional investments in transportation, not supplanted to free up things for other things.

I think that we should be doing the same here.

In fact, I think this is more critical to be doing here.

I want to talk a little bit to the issue of, so where does this come from relative to our 2020 budget?

Because Council Member Bakershaw, you've made a really good point that there are a lot of priorities in the budget.

And how do we figure out what those priorities are and what might be cut if we kind of rededicate this revenue source to the things that it was originally intended to go to?

And there's a question there.

I don't, similar to the Council Member Gonzalez's questions, I don't believe that we can actually answer that today.

I actually believe what this legislation does is it tells the mayor, Don't do this again, and then come back to us with a budget in September, and you will demonstrate to us what your lowest priority is in the existing budget.

Now, I want to be clear, too, that the budget has hundreds of moving parts.

We adopted an endorsed budget last year for 2020 that assumed a certain revenue stream from sales tax, from utility tax, from B&O tax.

Those are all undoubtedly wrong.

As those change, we don't know, OK, we got an extra $3.2 million in sales tax.

Where'd that money go?

It went into the big bucket, and it gets spent.

B&O tax came in a little light.

What cut?

It's like, we don't know.

It all just goes into the big bucket.

And the mayor looks at all the revenue that's available to her at the time and sends us a budget based on what she prioritizes.

When I look at this list, I don't believe, well, certainly for me, these are not probably the lowest priorities in our general fund budget, so I would not believe that these should be cut.

I also don't believe that the mayor thinks that these are the last things that were in the budget and the first things to be cut.

I believe that these will continue to be funded because I think they are higher priorities.

They'll be funded by us if they aren't.

Exactly.

And so what I am asking to do today is to not make a decision whether these will get cut or another set of things get cut.

What I am asking to do is to think about, to my colleagues, Think about what the commitment was to community members when we asked them to tax themselves, especially communities of color, at a disproportionately high rate.

And as we heard today, Tanika spoke very eloquently about that, that while this tax may fall on you significantly, we're going to invest back in your neighborhood significantly.

And because of that, we were able to get people coming out from those communities saying, I know I will bear the burden of this tax, but I'm OK with it because of what you're saying to do.

And I don't think anyone wanted to undo that, but under all the pressures that came up in the budget, this is what was made, and I was part of the council that approved this budget last year, but I don't want to be in a position to have to do that again this year.

So what I'm asking us to do is to take this off the table, to reestablish that commitment, to set up a dedicated fund so if money does come out of it, we will know exactly where those dollars went because it will have a dedicated fund that we could track.

Hopefully the money that comes out of that will only go to the things that are prescribed in this ordinance.

The mayor could propose that we do something else.

And then have the mayor say, of all the other billion-plus dollars of general fund money, now, without the sweetened beverage tax, because that's set aside, now tell us what your priorities are, meaning send us a budget with that.

And I suspect that most, if not all, of these items will still be in that budget.

And if they're not, then we have our budget process where we can choose to reallocate it.

And if we decide as a council, if the majority decides that, wow, everything in this budget is such a huge priority ahead of some of the things like closing the food security gap, and we want to change our mind that we make, hopefully making today, and go back on that.

We could do that.

I hope we don't.

I don't think I will be in that position.

But we have the authority to do that if we so choose.

But I don't believe we want to take the money from this community and use it on other good things.

And so, I appreciate the question that you're asking, which is a fair one.

If we take this away, where will it go?

And I believe the answer is we don't know until the mayor sends her budget.

But what I think we should do, what I'd argue to my colleagues we should do is say, do not take the...

tax revenue we're getting from a population that's being disproportionately taxed.

These are low-income communities and communities of color.

These aren't people that are making bad decisions.

These are people that are in a position where they're marketed too heavily by soda companies, where they live where they can afford to live, which often are food deserts that don't have access to great alternatives.

And we want to fix that.

We heard today that there is no shortage of good programs to be investing that money into.

I heard that within a week, there were 3,000 people on a waiting list to get access to food programs.

And I imagine if we open that for another week, we might get another 3,000 people, and we're only funding 700 people.

And that's just one of the programs that's out there.

So we have plenty of really robust, great programs we could spend this money on.

to live up to the wishes and commitments we made in that community.

And then we'll have to struggle with the rest.

And I agree, that will not be easy.

We will be arguing about that.

The mayor doesn't want to be put in that box right now, but I would think we should put her in that.

She still has a billion plus of general fund money to solve things.

And then let's see how it comes back.

So my request would be to say no to Council Member Bakerstraw's amendment number two.

And let's see what the mayor does in whatever it is, two and a half months, we will see that budget and then we will dive into it and figure out what we'll do.

And I hope we will, when we talk about the sweetened beverage tax revenue, we'll be talking about it exclusively in the terms of how to allocate that money back to that list of priorities that we've already committed to.

Councilmember Brian you are so persuasive and I really appreciate in all seriousness.

I really appreciate Just how strongly you feel about this now my My direction is really not inconsistent with where we want to get.

I'm just asking for the time to allow us, when it gets into budget, to really think about this comprehensively.

I believe there's going to be some additional revenues, maybe not a lot, but some more this year.

We'll find out in September that we can put into this directly.

My concern is the things that we had agreed to last year, and again, I'm looking at a million dollars for the parent-child home program, Child Care Assistance Program.

These also help our most deeply distressed communities.

And to say, well, let's just say we're going to have to find additional monies.

We're going to ask the mayor for additional monies.

I would rather keep it the other way.

I want to fund these things because we've put money into the budget to fund it.

And then when additional revenues come in to say, all of these really good things that the sugary beverage tax is designed to do, let's put more money in it then.

We've got money for 2019. That's not going to change.

We will, I believe, have some more money in September that we can dedicate to this.

Then come 2020, at least our successors will be able to say, we'll have the budget in 2019, but our successors will be able to say, look, we really want to flood the community with these good other benefits that we had designed to do.

So I'm asking my colleagues to hold the course, allow us to do what you're trying to do, effective 2021, but we can definitely add more in this budget coming up.

Council President.

This is a clarifying question.

In fact, it's to you.

So I find Council Member O'Brien's position very compelling.

And so I guess my question is, just so I understand it, that if we supported his amendment, It does, it's still, I thought you said earlier when I sort of given my description of the issue that it doesn't affect any funding this year, but is the practical effect that this year there will be a shortfall on some of the, some of this, whether this is cherry picked or not, I don't know, but this list as an example.

There won't be any impacts on the adopted 2019 budget.

Any supplemental budget, if there is a supplantation proposed by the Sweetened Beverage Tax proceeds for any other general fund, we haven't seen it in the most recent supplemental budget we've received, but it would impact that, but not anything, nothing in 2019.

So then let me ask the chair this question openly and transparently, by the way.

Yes, of course.

So if we were to support Council Member O'Brien's amendment, but we're setting, go ahead.

Mine is the underlying legislation.

Council Member Bakeshia has an amendment to change it.

If we support the underlying legislation.

Without my amendment.

And we're not, there might not be a shortfall this year, but we're setting pretty much a policy statement and a template on values that I think I'm hearing you say you agree with.

Why then would you oppose it or why would you amend it?

I'm not opposing the underlying what the money should go for I'm suggesting we not change course now that 2020 we have an endorsed budget and I want to keep that endorsed budget intact and not have to go back into general fund money to to redo what we did last year.

The general fund money has gone into, in my mind, some tremendous things around increasing housing and supporting services that we needed.

That $6 million that, because we decided to use the money this way, there was $6 million that went into housing and assistance for people who are homeless.

We don't have, at this moment, a dedicated revenue source to backfill that.

But I'm not hearing a need to redo anything.

There's a disconnect here.

Well, we will if my amendment does not pass.

Because then these things that we adopted last year that were supplanted, we will have to find general fund money for that.

And the general fund money will have to come from other priorities.

And it's what Councilmember Gonzalez said very loud and clear.

I think there's a distinction between Councilmember Bakershaw speaking about the endorsed 2020 budget, not the adopted 2019 budget.

Correct.

And so we endorsed the budget in 2020, but we are going to do a whole 2020 budget process again this year.

And that's where I say we will revisit this.

If I could add one thing, because Councilmember Bakershaw, I hope and I actually believe your likely to be right that there will probably be some additional revenues as we get towards budget.

Some of that is just because the economy continues to grow and we tend to be conservative in our estimates.

We'll hopefully see some additional bumps in some certain things.

There's also talk about other rumors or something of other new tax revenues that may come forward, certainly some properties that may be sold.

I'm almost certain the mayor will not send us a budget that says, and here's the $20 million of extra money we got.

Why don't you go figure it out?

It will all be allocated when we get it.

And if she does not allocate it as we want to, we will be forced to do what we did last year and say, I really want to fund what we said we're going to fund, but now I have to cut other things that the mayor just made a public promise to people with.

And I don't want to—that's too hard for us to do too often in a six-week period.

I don't want us to be in that position.

So I believe the mayor will have additional revenues, and she can use that to backfill these things that we're un-backfilling.

She can use it to expand other programs.

She can use it to mix it both.

But she will not—I almost certainly—she won't say, and here's $10 million I haven't allocated.

You guys decide what you want to do with it.

You know, honor the community's commitment, you can do that.

If you want to do something else, you can do it.

We'll almost certainly, at least in my 10 years experience, have to undo something else or find a new revenue source if we want to do it.

And that is not a position I envy, which is why I want to do this today.

Yeah, and I think I've had exactly the same feelings you do, is I don't want to have to undo things.

that we've already done.

If we have additional revenues, then I am all in favor of putting it in there, all in favor of moving forward as you're describing.

I'm just suggesting we don't unravel this now, but move forward with what your plan is in 2021.

Okay, please.

Yeah, I guess I have an issue with the characterization that we're unraveling something because the 2020 budget is always kind of been like a fake budget.

It's sort of, You know, we just, I mean, every year we're like, yeah, we're doing it by no budget.

It's 2019, and then 2020, but 2020 is kind of sort of real, not really, wink, wink.

Like, it's just there for planning purposes, but it's not actually committed dollars.

They have not yet been allocated.

They certainly have not been spent.

And so every year, And I think this is a shared frustration amongst most of us who've been through several budget cycles.

There's sort of an inherent frustration with how we do budget because it's not really an endorsed budget.

We generally look at every budget year as though it's a new fresh budget year and make decisions as though it's a new fresh budget year with whatever revenue we have.

I mean, I don't think that it's fair to say that we're unraveling something for 2020 when we all knew that in 2018 we were simply voting on a 2020 budget for purposes of planning that has always been contingent on having the revenue to support the things that we indicated would be a policy priority for the city council.

You know, I think we have an opportunity to have these conversations during the budget session and I think it's better for us to address this big policy decision in advance of receiving the budget and certainly in advance of getting into the thick of budget where we will be then put in a position of both making these difficult policy determinations around the dedicated resources and also making the tough calls as described by Councilmember O'Brien.

I think my sense from this committee is well intentions on all parts.

We're really trying to solve problems.

I think we see them slightly differently, but I don't have any doubt that we're trying to accomplish the same thing, to use the money as broadly and wisely as possible.

So if there are no other comments on this, Council Member Pacheco?

So this is my first time going through the budget as a council member.

The endorsed budget, I'm assuming organizations in the community then make assumptions based on what we have endorsed as a city, and so then they use that planning document to then say, okay, these decisions are how we as an organization should plan for the future for the next year.

I think it's a planning tool, but there's no commitment.

Like Council Member Gonzalez said, they don't have...

We also, just to be clear, we do not earmark funding for organizations.

So there's no commitments in our 2020 budget or any of our budgets that say, we have $2 million for this, this particular organization gets 100% of those funds.

That's just been a discouraged fiscal practice and policy at the city.

Well, to my point is, so, Do we then, or do you know of examples as a budget chair where organizations then utilize our endorsed budget to then begin to plan for themselves moving forward?

Oh, I mean, of course, there's many examples.

I think we would look at Human Services Department specifically, but we don't say, you know, Plymouth Housing, we're promising you X number of dollars, but we have a pretty good idea In some programs, law enforcement assisted diversion is an example.

and they hope that the monies that they have are something that they can count on, and then hope that we will increase that in years to come.

So, I mean, that is an example that we can say also with, I'm thinking of youth care as an example.

We work closely with youth care, with the state to get money for them, we got money for the, Chief Seattle Club, those are specific things, but they're not guaranteed until the budget is signed.

I would also say there's a distinction in our budget between one-time funding, which clearly signals that you should not be relying on anything other than this one time, and then there's ongoing programmatic investments.

And I think what we're trying to accomplish here through this underlying bill is a follow-through on a commitment we made to both sets of investments, but in a very particular area and space.

I think there's concern amongst us and community members that we have not been fully fulfilling those commitments that we made in both the one-time funding and in the long-term funding.

But I would say that I think it's fair just sort of from a fiscal policy general budgeting sense, organizations who rely on public funds to continue to do their work are pretty nimble and understand that they can rely on funding that is actually appropriated in that year and that everything's sort of on the table again the following year, which is why advocates show up.

I think it's important for us to advocate for no cuts and additions because there is a clear understanding and expectation that everything is back on the table every single endorsed budget process is I think a misnomer.

It's not a true biennial budget.

Council President Harrell.

Yes.

Before we go further with what may be your proposed amendment, Council Member Bagshaw, and we've, thanks for discussing with me and I should probably share a few thoughts as this conversation has occurred.

I couldn't agree more with Council Member Gonzalez's point that the endorsed budget is sort of pliable in nature.

we look at how we're investing, what's working, what's not, we look at our revenues, expenses, et cetera.

I find Council Member O'Brien's arguments very compelling.

And I'm still a little hung up on, it would seem to me that this is a pretty strong policy statement that we all agree on and that that's where his legislation is intended, the points that he's intending to drive.

And I'm still, although I might've described to you, And a support of what you're trying to do to not, quote, unquote, unravel something, I find that argument weakening a little bit in this conversation.

Because number one is, if I'm understanding the base legislation, we're not unraveling any investments this year.

And we're sort of setting an investment policy statement, if you will, directives, if you will, for next year, one of which I support.

If I'm understanding this correctly, I would not be supporting perhaps the amendment and would be supporting the best legislation because we're not unraveling anything and it is an endorsed budget.

But I can be convinced the other way, if you like, before you...

Yeah, before I give up.

I think I've said what I felt compelled to say.

First of all, again, I'm saying thanks.

And secondly, this is not to in any way undo what the sweetened beverage taxes is designed to do.

I do have concerns about 2020 of commitments that we have made.

And I'm thinking, again, I don't want to keep saying Nurse Family Partnership and the Child Care Assistance Program, but those are, however, they are designated in terms of how much money we had set for them.

Now, if we open this all up again during the budget context, yes, we can put more money in here.

Again, we're going back and looking at the general fund money and where it went, and it did, at least I've been told, that the offset here is around shelter and human services.

And if I could just respond, I think what you're trying to do as finance chair is exactly what you're supposed to do and try to, you know, show some fiscal discipline here and guide our investments.

But if this works, this legislation works, it does force, the mayor can't approve a budget.

All they could do is propose it.

So in the way I'm looking at it, it really just creates more work but good work for us in about three months.

And that's okay.

That's the way I'm sort of looking at this.

I mean, I don't see us putting, quite frankly, much pressure on the mayor at all through this.

I see it putting more pressure on us when she simply proposes a budget.

So that's the way I'm looking at this.

Be careful what you ask for kind of legislation here because we are gonna have to be the ones to make these tough decisions if in fact their representations are that it's not going to change anything significantly this year.

Correct?

Yeah.

You said correct, you got me on a boat here.

Yeah, no, I'm saying correct, and I'm looking at a lot of the folks in the audience, and what you hear from Council President Harrell is correct, and we'll need to see you back here in the fall again, but hopefully we'll have a much better starting spot, and that's the goal.

All right, well, I think I'm seeing the way the wind's blowing here.

So I am going to call for a vote, unless Council Member Pacheco, you've got something that you would like to add.

I mean, I appreciate the passion that Council Member O'Brien has brought to this conversation in the last two meetings.

You know, but it's important for me to kind of think about and holistically of how we got here.

And, you know, I certainly, was very much frustrated that lattes and diet sodas were not included when this initially was proposed because we've now not only made a commitment to communities, we then used the money to supplement it for other general fund purposes.

Why I was trying to bring my point about the endorsed budget and how that brings to regards to conversations in the future, I think it behooves us to kind of think of it holistically as well, because, you know, I've been asked, and I'll say this as a personal commitment, what I plan to be doing next year.

And one of the things that I hope to be able to spend some of my time is to see if we can work with the state legislator to provide an exemption for us to revisit this soda tax so that we can then include diet sodas and lattes because I think it was a bit of an injustice.

Now, having said that as well, I can't ignore my fiduciary responsibility as a council member and not be mindful of the holistic responsibility that we have to make when we think through our budgets.

Organizations who are relying on our budget as a city also have to make those decisions.

So I'm happy to revisit this and try to put more money into the SOTA tax so that we make communities whole, but I think it's best for us to do that when we have the proposed budget in hand and make those tough decisions holistically when we can make them all at the same time.

Thank you.

All right.

Well, I'm going to move my amendment number two.

Do I have a second?

Second.

OK, all those in favor say aye.

Aye.

Those opposed?

No.

And you, Council President?

Abstain.

All right, well, the motion fails with the abstention.

Or it would fail if you said no.

But now we've got an amended bill in front of us with amendment number one passing, amendment number three passing.

Any further conversation about this?

Would you like to have this delayed till the July 22nd?

Again, thank you for reminding us.

And just for my colleagues, this is because Council Member O'Brien will not be here on Monday with us, and I want to honor the fact that you've been bringing this forward, and we'll have a full vote on June 22nd.

So, I mean, sorry, yeah, I missed it.

All those in favor of this bill as amended, say aye.

Aye.

No opposed, no abstentions.

Thank you for the excellent discussion.

We will be back with the budget.

All of your points, I think, were excellent, well made.

Thank you for that.

Nothing else on the agenda?

Okay, so the meeting's adjourned.

Thank you.