Finance, Native Communities and Tribal Governments Committee 5/21/2025

Good morning.

The May 21st, 2025 Finance Native Communities and Tribal Governments Committee will come to order.

It is 9.30 a.m.

I'm Dan Strauss, chair of the committee, joined with the council members with the first name starting with Robert.

Will the clerk please call the roll?

Councilmember Rivera will be a few minutes late and council president has been excused.

Councilmember Kettle.

Here.

Council Member Saka.

Here.

Vice Chair Rivera.

Chair Strauss.

Present.

Three present, two excused.

Thank you.

We have two items on the agenda today with the We have the exceptions.

We just vote briefings today.

There are no votes.

We have a briefing discussion on the exceptions bill amending ordinance 126955, which adopted the 2024 budget and a briefing and discussion on the advance repayment of the 2014 bonds.

Before we begin, if there's no objection, we'd like to adopt the agenda.

Hearing no objection, the agenda is adopted.

Moving forward into public comment, I see we have no one present physically, and we have one remote speaker that is not present.

So David Haynes, you are the only one signed up this morning.

If you'd like to, I'll read the instructions, and if you are present by the time we're finished reading the instructions, we'll call on you, and if not, we'll move on.

We'll now open the hybrid public comment.

Public comments should relate to items on today's agenda within the purview of the committee.

Clerk, how many speakers do we have signed up today?

We have one online and zero in person.

Thank you.

Each speaker will have two minutes.

We'll start with the only speaker present.

Public comment period will be moderated in the following manner.

Public comment period is up to 20 minutes.

Speakers will be called in the order in which they registered.

We'll begin with our one remote speaker.

Public comment period is now open.

David Haynes, welcome.

see you're with us now star six to unmute david there you are take it away hi thank you david angs we need morally compassed noble rules of laws that stop the stall in progress that's causing a digress into a mess of oppressing the working class sold out denied a better choice in home needing a three and a half day work week seven day pay you can double the shifts boost morale and increase the tax base because as it is now We have an immoral financial system of middlemen, donors, from the slave master misinterpretation of neoliberal conservatives whose debt service police state economy during the lifeblood of Main Street small businesses pitted against workers to make ends meet, being shaken down every month and three-month quarterly dividend, forced to pay rundown, dilapidated, inflated lease and rentals that need a renegotiation, and a teardown and rebuild of 21st century first world quality for spaces.

Because it shortchanges business owners, workers, and the community at large that are being sold out for non-working shareholders, foreign and domestic investors, the molesters of the honest, worth-right, diligent working class.

The foundation of our civilization just applies to revolt if legislators keep sliding with the evils of greed.

Just look at the bonds that were issued in 2014. It was more like another favor for big bank donors.

Let's borrow some money to finance some debt and then let's not do anything with it.

Where's the legislation that takes a share of the unforeseen capital gains and actually gives it back to the workers who do all the work.

It's the, it's the crux of the problem in our economy.

All these people think that if you can hustle the workers and drain the lifeblood of their efforts and pocket a whole bunch of unforeseen capital gains that you deserve a tax break or you deserve to be taxed so that you can continue to rip off the workers.

It's revolting, and yet we still don't have legislators sliding with the working class.

That would be noble.

Thank you.

Thank you, David.

That concludes our registered public commenter.

Seeing as we have no additional speakers present or remote, we will move on to the next agenda item.

Clerk, will you please read the short title of the first item of business?

An ordinance amending ordinance 126955, which adopted the 2024 budget, including the 2024 to 2029 capital improvement program.

For briefing and discussion, presenters are Ben Noble, director of central staff and Tom Mikesell of central staff.

Good morning, Ben and Tom.

And council member Rivera is present, was here during public comment for the record.

Good to see you, Vice Chair.

Today, I'm going to use the same facilitation style that I used last time.

I will ask follow-up questions if the presenters hadn't gotten to a topic that was discussed during our initial briefing, but I'll save my comments for the end.

So we'll allow the presenters to get through their items, and then we'll follow up with questions.

So over to you, Ben and Tom.

Thank you, Chair Strauss.

Good morning, members of the committee.

I'm Tom Mikesell with your central staff.

This morning, we're gonna be talking about Council Bill 120979, which is the 2024 Budget Exceptions Ordinance.

Comments today are gonna cover three main topics.

First, I'm gonna give a background on budget adjustments and how they sequence during the year, then cover some historical trends of recent historical trends for this type of bill, and then finally cover the Council Council Bill 120979 specifically.

So by way of background, there are really four main principal steps in the budget.

So when you think about the budget, you think about the fall process, which is indeed the core of the budget development.

That takes place in December prior to the start of a fiscal year.

And then when you get into the fiscal year, there's a number of adjustments that are made You will typically see what's called a carry forward bill, which is essentially adding funding to the current year budget to reflect things that were not completed in the prior year.

Next, you'll see supplementals by way of comprehensive, so supplemental adjustments that add funding to city budgets for things that weren't anticipated during the fall budget process.

Those take the form of comprehensive bills that cover multiple departments and standalone bills that affect one department for a specific topic.

And then finally, and this is after the fiscal year ends, you get an exceptions bill, which is sort of a cleanup process that retroactively adjusts the prior year's budget for items that exceeded the authority that was provided for that year.

And that's what we're talking about with Council Bill 120979. So, of course, the exceeding budget authority is not the ideal.

Fortunately, it's an exception.

And what we have here is a graph showing over the last seven years the trends with regards to exceptions.

And so these are in the context of a $8 billion plus financial program.

So even though we're talking in the range from $2 to $30 million, it's still very small in the context of the entire city budget.

The good news is that over this time period, generally, the number of budget exceptions has been going down from a high point of four exceptions, so four departments with budget exceptions totaling around $30 million in 2020, to actually the low point, which is today's bill, which is two exceptions totaling $1.8 million.

So part of the progress can be perhaps attributed to council action by way of implementing the fiscal transparency program, which which highlights budget to actual variance during the year, and also put in place some major adjustments to the city budget director's budget transfer authority to allow that director to make modifications to the budget where there's resources in one place that can be used to cover overages in another.

So those two actions appear to be having an effect, at least manifested in today's bill.

And so now I'll get to the topic of the day, which is the 2024 budget exceptions.

So this is a requested increase to Ordinance 126955, which was the 2024 adopted budget.

and the request is $1.8 million.

That takes the form of two items.

One is a $1.1 million industrial insurance fund increased to the Department of Human Resources to pay for unanticipated costs due to pensionable claims.

So these are claims that are, so this is basically for work injuries and the injury was so severe that the individual filing the claim is unable to return to work.

So the city needs to then pre-fund a pension amount for that person to have a pension since they're out of work.

And those are typically large in nature and unpredictable, and hence why there's an exception in this case.

And the second is within the law department, and that's a $658,000 general fund request to cover unanticipated costs for a variety of factors, including the criminal case management system project, which had seen several delays and there has been some difficulty sequencing budget with the costs, and then also some workday implementation challenges.

So again, this is the smallest exceptions bill in the history that we've been tracking.

And then finally, this bill would require a three quarters vote by council for adoption.

And then to go into kind of next steps in the budget adjustment process, for this bill specifically, there will be a second hearing and possible vote in the Select Budget Committee on June 4th.

Then on June 10th, there would be a final vote on the legislation.

And then kind of pulling back to the broader budget adjustment cadence for the year, there will be a 2024 carry forward ordinance also receiving initial briefing on June 4th at the Select Budget Committee.

Mid-year supplemental, mid-year grants and acceptances and appropriation bills will be submitted in June to July timeframe.

And then the year-end supplemental and year-end grant acceptance will be submitted with the mayor's proposed budget for 2026 in September of this year.

And that concludes my presentation.

Thank you, Tom.

I'll now open it up to colleagues for questions on this.

If you don't have any off the top of your heads, I've got a number of them.

I did forget to mention at the top of this meeting, today is one of the first steps that we're taking in the budget reform process that we've been working on behind the scenes.

This bill before us demonstrates that exceptions are at an all-time low, both in number and fiscal amount.

as well as our next agenda item will be an advance repayment of bonds that we have using interest money that we earned off of having other bonds.

So just wanted to set that framework.

I'll get into what we're up to in our select meeting coming up on June 4th at the end of this committee, but wanted to give that preview that this is really a budget reform in action meeting today.

Colleagues, do you have any questions on the presentation that we've just received?

Please, Vice Chair.

Thank you, Chair.

Thank you, Director Noble and Tom for being here.

On the SDHR's 1.1 million, does this...

So it comes out of SDHR's budget, not the budget of the department where...

that is incurring basically the costs?

Is this like a fund that SDHR manages and then departments or employees put into the fund?

How does it work?

I know I'm getting a little in the weeds, but.

No, love the weeds.

So this is kind of a charge that's assessed to all the departments that have payroll.

So any department that employs somebody is assessed to this charge in the budget.

And so they collect all those charges across all the city budgets and then build up a balance in the industrial insurance fund.

And city budget office works during the year to determine what the right charge is, to have the right amount of money, to pay all the claims.

And so it's a forecasting exercise and it's highly variable.

And so that's how it works.

The balance that they designed in the fund for 2024 was not sufficient to meet with how the claims were coming in.

They actually made and received a six and a, I think $6.7 million increase in a budget authority in the year-end supplemental for 2024. So they saw this happening.

It just, the actual amount was slightly higher than even their kind of efforts to catch up with what the claims were coming in.

So yeah, that's kind of how the mechanics work.

And as far as taking this information and building it into to keep up with what emerging claims activities are.

Yeah, because that makes sense.

It's variable.

We don't know how many employees might get hurt on the job, et cetera.

And so there's no way of knowing ahead of time.

But I imagine that they look at past years and then they make an estimate on how much they might need.

And then this year it went over by a bit.

That is correct.

Okay, thank you.

Thank you, Chair.

Thank you, Vice Chair.

Colleagues, any other questions at this time?

I can jump into a few.

Tom, if you could return to slide three.

You've mentioned that the transparency ordinance helped assist in the exception, both the number of exceptions and the fiscal amount being reduced.

Can you speak a little bit more to what did you mean by that?

Dig in a little deeper and help us understand what contributed to the reduction in both numbers of departments as well as the amounts that they were needing to be relieved of.

Share more on that story of how we reduce the number and fiscal amount.

Thank you for the question, Chair Strauss.

So the fiscal transparency program did several things.

One of the things was it enhanced reporting.

And so in this specific case, it's budget to actual monitoring.

And it's part of a formalized process with the council, but it's also part of an informal process with CBO.

So the budget office has been ramping up their budget monitoring activities.

monitoring cost versus budget is kind of the first line of defense against figuring out if you have enough money to be able to pay those expenses.

And so that's kind of the behind the scenes.

The fiscal transparency program itself requires a semiannual budget to actual support.

I believe the first one is coming up this year, which will, you know, basically at a BCL level, compare budget to actual progress, and then there will be one at year end as well.

And so that's kind of how it works, is enhanced budget monitoring leads to better scrutiny of budget actuals, leads to fewer exceptions.

Thank you.

Ben?

Excuse me, just to add to that, it doesn't get much credit, and probably among folks who deal with the system, more eye rolls than not.

But in 2019, we implemented a new financial system citywide that has also provided the technical tools needed for better monitoring, both actually at the department level, but most specifically at the centralized, at the budget office level, and even to a degree for central staff as well.

We don't have the staff to be monitoring day in and day out.

but the systems themselves let you poke in right away and see what is posted on any given day and what that is relative to budget.

And systems before were tracking the stuff we had to balance our books, but not as cleanly.

And really importantly, from a centralized management perspective, not as...

consistently as they are now.

So there was a lot of work done among the accountants before the system rolled out on defining terms and defining how costs were going to be booked so that you could look at everyone's books the same way and sort of interpret the results rather than, oh, well, this is X department.

They do this that way, in which case you have, which in the previous system, those kinds of things had evolved over time.

So that technology system We had to replace it.

It was going on 30 years old and kind of blue screen old technology, but this is one of the benefits.

Thank you.

So you're saying the technology through the program developed in 1994 is not working as well as the program developed in 2018, if you would.

As it turns out.

Yeah.

And is this technological change also what helps contribute to the ability to track what the budget appropriation is to real time spending?

Yeah, that's exactly.

The systems are updating in a much closer to real-time way about what things are.

And that's been a real benefit.

I'll just leave it at that.

Thanks.

Can we move on to slide number four, just the two exceptions that I wanted to touch on?

Vice Chair, thank you for touching on the first one.

Ben, I know that you've had conversations with the city attorney's office regarding their exception here.

As the vice chair mentioned with the first one, it's hard to predict.

There are a lot of variables.

This seems like a typical exception.

We only have two this year, which is great news.

Can you share with us what you...

what you discussed with the city attorney's office as to why they have an exception this year.

So doing our due diligence, we did, in fact, want to follow up.

So actually, I've spoken directly to the finance director at the city attorney's office, the law department.

And he was not...

There was a set of circumstances.

Those circumstances emerged at the city attorney's office rather than somewhere else.

But in particular, there were some expenses related to one of these IT systems.

So city attorney's office along with SPD and the courts are moving to a new case management system.

And that was delayed in its implementation.

which meant that the department had to incur costs both to license the old system for an extra year and to keep some personnel on, because at some point you sort of ended with duplicate personnel, some who are working with the old system and some who are working with the new system, if you will.

So that was an unanticipated expense.

They had some personnel expenses that they didn't anticipate.

And I was about to mention one of the other...

Financial systems, in this case, caused a complication.

So the city has recently moved to Workday as our timekeeping system, payroll system.

And through last year and even into this year, we've been working out some of those kinks.

And because there was some delay in the way time was getting posted and the cost of labor was getting posted, they didn't have a real-time view into what their expenses were versus what their resources were.

So, again, we're working those kinks out.

It demonstrates how important those systems are.

Bottom line, having talked to law and to CBO, there's some level of embarrassment.

It wasn't intended, and they've both committed to and have been following through on more regular check-ins to be sure that they are, in fact, know where everyone stands on expenditures relative to budget.

Thank you.

What I heard, because we do have other departments that have faced both.

new technological systems that haven't had this cost overrun.

That said, there is a perfect storm at times when multiple factors are compounding on each other, noting that this is a lot of money, $658,000, but relative to our overall budget, I'd say we as the city have done a good job to minimize exceptions.

Ben, you discussed ongoing conversations throughout the year to make sure that this doesn't happen again.

Can you elaborate a little bit more on what steps we're gonna be taking with the law department and other departments to ensure that we don't have to come back and provide exceptions?

Again, this isn't day-to-day monitoring that we do.

Central staff isn't built for that, if you will.

But the budget office, in the way that Tom described, the budget office, again, thanks to these systems and a generalized approach, is doing more regular tracking of expenditures relative to actuals.

Evermore, this year, as they're looking to actually purposely underspend the budget, that will be actually an evermore important part of the work.

So having spoken to, again, both budget and law department, it's apparent that neither of them wants this to happen again.

So they were instituting it for themselves.

OK, let's keep track of what's going on here and make sure we don't end up in this situation again.

And that is an approach that is used generally department to department.

And as you can see, in this case, it has generally worked.

And again, I would be very surprised if we got exceptions this year, well, rather, next year from this year, again, because the executive is targeting underspend in many of the funds in order to manage the current drop in revenue, the revenue forecast.

Let the record reflect.

The central staff director hopes that we don't have any exceptions next year.

Thank you, Ben.

I will say, you know, I'll be meeting with the city attorney next week with yourself and others just to dig in more to this perfect storm and understand what accountability measures will be in place moving forward.

Council Member Kettle, I do see you have a hand.

Yes, thank you, Chair Strauss.

I just wanted to follow up.

Thank you, Mr. Noble.

Thank you.

Mr. Weixsel, too.

Appreciate the presentation.

On that point, on the point that you were just talking about, the Seattle Municipal Court did get their case management system up and running.

The law department was delayed, but I did talk to the chief technology officer, Mr. Lloyd.

The third part of this story is the data exchange between the court and the attorney's office.

And Mr. Lloyd told me that was fixed.

So I'm assuming that hopefully this will not be reoccurring because one would assume that the data exchange is fixed that the other piece of this is also fixed and we'll be engaging on it as well.

I did not get into the details with the finance director, but he indicated they weren't expecting this, that the system had shifted over, they weren't expecting these additional costs this year.

I just wanted to pass that and, you know, the old page two and now the rest of the story from the old radio show.

Paul Harvey.

Thank you.

Colleagues, any other questions on this ordinance?

We will bring this for a vote in the Select Committee on June 4th.

Any other questions today?

Thank you.

We'll move on to the next agenda item.

Clerk, will you please read the short title of the second item of business into the record?

Briefing on the advance repayment of 2014 bonds.

This item is for briefing and discussion.

Presenters include Dan Eater, Interim Director of the City Budget Office, Jamie Carnell, Director of the Office of City Finance, and Tom Mikesell of Council Central Staff.

Thank you.

Thank you for joining us today, Ben.

We have Dan Eder, Director of CBO with us and Director Carnell, the Director of Finance with us today.

Over to the three of you to walk us through.

Again, colleagues, if I hear information that has been missed from our original briefing, I'll ask those follow-up questions.

Otherwise, I'll save my comments for the end.

Over to you.

Thank you.

Chair, I'm going to pass over to Budget Director Eder to start us off.

Good morning, Chair Strauss, members of the committee.

I'm Dan Eder, the Interim Director of the City Budget Office.

As the chair noted, we're joined remotely by my colleague Jamie Carnell, the City Finance Director.

I also wanted to thank Christy Beattie, the City's Director of Debt Management, whose team did the heavy lifting on this legislation, along with Director Carnell.

Unfortunately, Christy is not able to join us today.

She is out of town on leave.

The bill up for discussion today would allow the city to redeem or pay off some Limited Tax General Obligation, LTGO bonds, that were issued in 2014. We could just skip to slide two, please.

In terms of providing some brief history and context, In 2014, the city issued $6.7 million in bonds to purchase a property referred to as Aurora Stone in North Seattle.

The map on the right side of this slide shows that the property is located at 130th and Aurora.

The city intended to develop this property and acquire the property for the purpose of creating a new and expanded North Precinct for the Seattle Police Department.

The city has not moved forward with developing that project.

The city has leased the property to a private business through a series of short-term leases over the years.

This has both helped the site to remain activated and has generated some regular income to offset the cost of holding the property.

Last year, the bonds became callable, meaning that the city can now redeem or pay off the remaining principal.

Specifically, there is $3.4 million remaining of the original $6.7 million in loans.

Paying off the bonds will end the debt service.

This will save the city approximately $75,000 annually in interest payments through the expected 2034 end of the debt service if we were not to redeem the bonds.

In the way that we are approaching, we can reduce our budgeted debt service through that period of time and reduce the interest expense that we're paying on these bonds.

The next slide is showing a high-level timeline.

It repeats some of the information, but just shows it in a graphical way.

In 2014, the city issued the original bonds.

$6.7 million was used for this property purchase.

In 2024, according to the bond covenants, the bonds became callable, allowing the city to Earlier than the full period of time that the debt service was originally scheduled.

We are here today proposing that we appropriate funds to redeem the bonds, and if the legislation is passed then we will redeem the remaining $3.4 million in outstanding principal plus approximately $100,000 in interest payments that will depend on exactly which day the bonds are redeemed.

Slide four shows the approach that we're proposing to use to pay off the remaining principal.

There is, again, a total of $3.5 million that's been identified for the redemption of the outstanding principal.

This breaks down to about $1.9 million in interest earnings on past year's taxable bond funds from 2017, 2018, 2019, and 2021. In addition to that $1.9 million, there's an additional $1.3 million that we've identified as available in the unrestricted cumulative reserve fund.

This is interest that exceeded forecast levels.

And finally, there's about $300,000 real estate excise tax one capital funds, and this, too, is the amount that is above the previous forecast.

Director Eder, before we move on, just digging into this a little bit more deeply.

Sure.

A lot of facts there.

With each of these accounts, we used bonds in the past to fund projects.

Is that a correct understanding for each of these line items?

Yes, that's right.

And when we received the money from the bonds, there was time between us receiving the money and expending all of those funds in that account.

Is that a correct understanding?

Yes, that's accurate.

And during that time, we received interest that exceeded the amount of dollars that we needed for the project that we called the bond for.

Is that generally the correct understanding there?

Yes, that's correct.

And from there, after we completed the project, we had this interest sitting in these accounts that I know that over the past year and a half through your leadership and our work together of budget reform and scrutinizing every account, these funds were identified as dollars that we could use, the interest from these previous bonds.

Is that where we find this money today?

Yes.

The culmination of that work has resulted in us determining that there are some several hundred thousand dollars in each of these bond funds available for this purpose.

They are limited in terms of what kinds of expenditures we can use the funds for.

This is one of those acceptable uses, and we're proposing to do so to save the interest earnings that we would owe on the outstanding bonds otherwise.

The restricted nature of these bonds are that they have to be used for capital projects in the public sphere.

In my opinion, I think we're making the right choice today.

But if we were to look at a more broad definition, I could use these dollars to build the dog park on Leary Way because it's all capital money and it's all in the public sector.

Is that correct?

I know that there are very specific restrictions.

I don't know whether the example that you gave just now meets those restrictions or not.

Director Carnell perhaps could answer that question.

Yes, thank you, Director Eder.

If that project was a bond-identified project, had gone through the CIP budget and been approved, then we would look at ways to utilize these funds for bond projects as well.

We've done that in the past.

The interest is being earned here because of the good interest-earning rate over the last several years, so we do have this ability.

But we always take a look at what we have

sitting in the bond funds and whether or not we could utilize that for another project once the project's been approved through the capital budget process this that could be a potential thank you for that additional clarity i just wanted to dig into where did this money come from what are the full universe of uses colleagues i think this is a smart piece of budget reform back to you

I would just follow up on that by saying that my understanding is this is the extent of the interest earnings in these bond funds.

There isn't another pot of money available for other purposes.

So that was the first question I asked as well.

That's great that we've identified these extra funds.

Can we use them for anything else?

And unfortunately, we can't.

The next slide, slide five, is highlighting the financial benefits that I've touched upon.

By redeeming the bonds, the city will no longer need to pay the debt service on the outstanding principle that would otherwise be paid for with REIT funds, real estate excise tax funds, through 2034. This results in approximately $75,000 in interest, in savings that would otherwise be used to pay for interest.

That total is about $675,000 nominally over the remaining life of the bonds through 2034. The last slide is just a high-level summary.

If the legislation is approved, the city will redeem the bonds shortly after the passage of the legislation.

And the debt service on those bonds will conclude, resulting in savings to the REIT fund through 2034. I'll be happy to address any further questions.

Thank you.

Colleagues, Vice Chair?

Thank you, Chair.

Thank you, Director Eder, for being here.

I understand.

I do have a question about, on slide, the property itself.

You indicated.

The elimination of the debt service would save the 75k annually and will provide flexibility in how this site is used going forward.

What does that mean?

We could still develop it for a municipal purpose, such as the one that was originally conceived of.

Much needed expansion of the North Precinct, which I agree.

Exactly.

Relocation and expansion of the North Precinct.

We could sell it.

We could use it for some purpose that is not a normal municipal purpose like we're currently doing in an interim basis, which is to say continue There's a car dealership that is located on the northeast portion of this very large site.

They don't take up the entire property.

And in the time that we're deciding what the long-term plans are for that project, that's a perfectly acceptable use now that the debt is paid off.

And if you don't pay off the debt, can you still sell the property?

Yes, we could, but we would have to then use a portion of the proceeds to repay the outstanding bonds.

So either way, you could sell the property or use it in whichever way you would like.

That's right.

It's not a newly available option.

I just note that that's in the realm of possibility as well.

Yeah.

Thank you, Director Eder.

I just wondered what this flexibility, the identified flexibility is, but it sounds like either way we could use the property however we'd like now or if we pay off.

So I was trying to understand what this flexibility is.

It doesn't seem like any different.

It was perhaps a loosely used term.

We're trying to just describe that there are options before the city after we redeem these bonds, including municipal uses, non-governmental uses, and just disposing of the property.

And has the city identified a use?

Is there a use identified for this?

No, we have not at this point.

All right.

Thank you, Chair.

Thanks, Vice Chair.

Council Member Kettle and then Council Member Saka.

Thank you, Chair Strauss.

Thank you for the presentation.

As always, being smart on finance is always also meaning being smart on budget.

This is yet another example, so I understand it.

it makes sense.

But to follow up on the vice chair's comment related to the bottom bullet on slide two, selling it would be a mistake.

And I would say the city should be making a new north precinct because the north precinct that, you know, the building that houses the north precinct now is substandard.

It's substandard to the mission and it's substandard to the men and women who are forced to work there.

So my recommendation is, as chair of public safety, is that we should look at it as being the location of a new north precinct.

So I hear questions like, what's the city thinking about?

I could tell you what the city's thinking about, at least from the legislative side, particularly the Public Safety Committee.

we have to do right with respect to North Precinct, and that's gonna be huge.

And we talk about all the issues in D5 right now, and I know Council Member Moore's not here, she would easily chronicle all of them.

And part of it is we need to invest in the North Precinct, we need to invest in the north side of SPD.

So I just wanted to...

I put my oar in the water, if you will, when I hear questions like, what's the city going to do?

That's kind of like this up in the cloud kind of thing.

And it's quite clear what needs to happen.

particularly since it's already been bought.

It's for that purpose.

It's a good location.

It makes a lot of sense.

Thank you, Council Member Kettle, and I'll say that this ordinance is going to help us secure and keep that property for the future.

Director Eder, I see you have a hand, and then I'll call on Council Member Saka.

I was going to make the same point that you just did, Chair Strauss, that this does preserve that option.

Between having the land and having a north precinct developed on that land, there's In 2014 timeframe, we determined that there was a need for about $160 million of expenditure on top of the acquisition of the property.

So that has only grown since then.

I don't have an estimate of what the cost to develop a new north precinct on that property would be, but it is significant.

Exactly.

Thank you, Director Eder.

Council Member Sacco.

Thank you, Mr. Chair, and thank you, Director Eder, for this presentation today.

This matter before us involves one specific bond as part of the city's broader exercise of its bonding authority, which we know is the ability, it's a lending mechanism.

It's not new revenue.

It is essentially an older, wiser version of ourselves as the city paying for a longer-term, durable investment in the form of typically a capital improvement project of some sort that our younger version of ourselves today could initiate and start to build.

And typically, those projects will will be durable enough that future taxpayers can still benefit from them long after the bond itself is paid.

So this matter before us relates to one specific bond, but I would be curious to better understand.

Would you mind following up with my office with an inventory of all of our outstanding bonds?

just high level inventory of all of our outstanding bonds, current dollar amounts and repayment schedule.

That would be very helpful.

And also I note that, the forthcoming transportation funding task force to look at how the city is going to creatively find appropriate funding for three principal asset classes and categories for transportation, bridges, roads, and new sidewalks.

I imagine that they are going to recommend a blended approach that includes the city exercising its bonding authority to bring to life some of those investments.

So in any event, just be curious to better understand the current landscape with an inventory of all of our outstanding bonds.

Thank you.

Happy to do that council member.

Thank you.

Vice chair Rivera, new hand.

Thank you chair.

I just wanted to follow up.

Um, uh, when I asked about, um, does the executive have, has I, has the executive identified a use for this space?

was not to say, Council Member Kettle, that I very much support, as I said earlier, a new north precinct or an expansion of the north precinct.

We need capacity there.

It's the biggest precinct in the city that services the D4, 5, and parts of 6. And so that's definitely something that Council Member Moore and I very much support and we've talked about in the past.

I actually would like to know and I guess formally request here that if a use of this space is identified by the executive, we would like to know sooner rather than later so that we can be involved in those conversations because I know since 2014 this has been difficult, the conversation about the North Precinct, because of the costs involved in developing a new precinct.

And I don't want to give up on that, and I want to make sure that our precincts are resourced and that we are supporting the ability to provide our constituents with the best public safety resources that we're able to provide.

You know, all that to say, Council Member Kettle, yes, an agreement, which is why I said earlier, I support the use of the space as a new north precinct.

And also, I wanted to know if at the conclusion of the debt service, if there was an identified a use for this space other than the originally intended.

That's why I asked that question.

So I just want to make sure that as we're moving forward with the space, we're very clear, like I said earlier, rather than later on, if there's a different use anticipated or a sell of the property, it would be unfortunate for us to find out during a meeting after the fact that the executive is intending to sell the property.

very much especially since I understand we have a huge budget deficit and I think all things are probably on the table having worked upstairs and I want to make sure that that we are getting that kind of information as soon as possible thank you thank you chair absolutely colleagues any other questions on this item again no votes today just briefings

Seeing no further questions that'll end this item.

I'll give a little bit of a roadmap of how we're moving forward.

Really this meeting kicks us off into heading into the budget process for the remainder of the year.

Because we are talking about exceptions today, we are finishing last year's budget, so we are now moving into next year's budget.

Up next, we'll have the carry forward, so the money from last year's budget that we're gonna carry forward into this year, as well as the supplemental budget, which adds funds to certain and hopefully minimal amounts of programming.

We'll then have the forecasts in which we actually base the budget from.

We had the forecast this last April.

It's really for informational purposes to make sure that we're able to make the changes within the year that we're in, should they be needed.

This year they are needed.

We'll then move into the 2026 budget in the fall of 2025. We have made changes to this committee's calendar this year because of the downturn revenue forecast in April.

We're taking additional review of the carry forward legislation as well as we're adding time to review the forecast, the current budget situation and actions that are needed this year in 2025. Our next meeting will be a select budget committee where all members will be present.

So I'll be asking for your help as finance committee members to share information that we are taking up here in this committee because we'll be taking votes in the next select committee.

We'll also, we've changed the calendar for the select committee to really focus on reform in two ways.

process and content within the process.

We'll have a briefing about the summer and fall budget calendar.

This does include changes from last year.

We'll be adding back steps into the budget process that were used in the past, but that I did not inherit.

So I'm going back and saying the way it was done before, I'd like to bring that back.

And so what this adds is another moment for council member proposals ahead of the chair's package.

So everyone can get everything out on the table.

We'll also have in the Select Budget Committee on June 4th budget reform content We'll receive a briefing from Director Eder who's here with us today on the current budget situation this year in 2025 and the reform mechanisms that he's already been talking about today for the remainder of this year.

We will also have a vote on the exceptions bill that we were briefed on today and we will have a vote on the bond repayment ordinance that we were briefed on today.

We'll also have a potential briefing on the budget reform slides.

I had originally...

thought to take up a fair amount of this committee meeting on the statements of legislative intent focused on budget reform from last year.

However, some of these other issues are a bit more pressing.

We will also have a potential briefing on the carry forward legislation.

If we are able to do that, we may be voting on it in finance.

So I just wanna provide that roadmap for the next essentially month of our committee work as we're starting to ramp up in the amount of stuff that we're doing.

Any questions on that, colleagues?

Yeah, Vice Chair.

Chair, can I say, thank you, Chair.

When we're looking at the carry forward legislation, one thing, Director Eder, that I'd be really interested in knowing is given the budget deficit and what we'll have to do in the fall, how you're taking that into consideration as you're proffering your carry forward proposals.

It would be unfortunate not to, given what we know is here, not coming, but here, that we wouldn't take that into consideration as part of the carry forward legislation.

So just formally and for the record, requesting that we know how you are taking that into consideration when you're bringing forward that carry forward proposal.

Thank you, Chair.

Thank you, Vice Chair.

That is exactly why we're bringing Director Eder back next time and why we had originally scheduled to have the carry forward legislation actually voted on today.

And so that schedule has slipped for good reason.

Councilmember Saka.

Thank you, Mr. Chair, and the approach that you outlined a moment ago makes sense from my perspective in the timeline as well.

Follow-up question to my earlier question and comment, so thank you in advance, Director Eder, for agreeing to revert back with an inventory of our outstanding bonds.

But just curious, at a high level, taking a step back at a very high level, We obviously, in the city of Seattle, we don't wanna be a spendthrift writing checks that we could never possibly cash.

That's why I'm mindful of what's outstanding and what might potentially be subject to future asks, ultimately of the voters on a going forward basis.

But are there state mandates or caps limits that govern our ability to issue bonds in any way.

And it's fine if you have to follow up offline.

And to the extent there are, like hard caps, for example, whether dollar or percentage of budget, whatever those caps might be, curious to where, based off of our current total outstanding bonds, where we fit within that.

If you have any initial comments, Please share, but happy to have you follow up offline as well.

I think I will, for a substantive response, take you up on that offer to follow up.

I will say that the city has established a number of financial policies that we've relied upon for many years and that have contributed to, on the plus side, they have contributed to our top, top, top AAA bond rating, which gives us access to the cheapest debt that municipalities have access to.

The downside of that is it does limit the number of bonds that we can issue to ensure bondholders that we are going to be able to repay that debt service over the decades that the debt services do, which is a limiting factor in terms of how much more debt we can take.

Those are within the city control, but they also influence ultimately the cheap money that we have access to because people trust that we have very solid financial policies.

Thank you.

So because of our internal self-imposed financial policies, And the potential existence of some outside external state regulations.

Yeah, please do follow up.

Thank you for the initial response.

Please do follow up offline.

Thank you.

And I'll add because Director Carnell is good at her job.

With that, again, the committee, our next meeting is a select committee.

We'll have a briefing on the summer fall budget calendar, briefing on the current budget reform in 2025, vote on exceptions, vote on bond repayment, and may have briefings on the carry forward and budget reform slides.

This will be a packed committee and I'll be asking each council member to receive briefings ahead of that select committee.

I'll also ask you again, colleagues on the finance committee for your help sewing the fabric of the finance and select committees together.

With that, this does conclude the Wednesday...

May 21st, 2025, Finance, Native Communities, and Tribal Governments Committee.

Our next select budget committee is Wednesday, June 4th, 2025. Additionally, our next Finance, Native Communities, and Tribal Governance meeting is Wednesday, June 18th, 2025. Any further business to come before the committee before we adjourn?

Seeing none, we are adjourned.

Thank you.