Seattle City Council Select Budget Committee 9/26/18 Session I

This I do not doubt.

Thank you everyone.

Thank you for being here this morning.

And this is Wednesday, September 26, 2018. And this is our Select Budget Committee.

And the meeting will come to order.

It is 9.31.

I want to say thank you to Council President Harrell, my right-hand man here, Council Member Gonzalez, Council Member Juarez for being here.

I'm going to try to do the Tim Burgess approach to budget, which is to get it started immediately on time.

So today is our first committee of this budget season.

We're working on our 2019-2020 biennial budget.

All of you know that the mayor sent down her budget on this past Monday on the 24th.

that's required by law that she has to have it to us 90 days prior to the next fiscal year.

So all of us know that city officials, city elected officials have a role.

The mayor proposes the budget, which he's given to us.

Our city attorney reviews it and makes sure that it complies with our state and city laws.

And now we council members have an opportunity to review it, to amend it, and then pass it, a balanced budget, and send it back to the mayor for signature.

I want to remind people that the copies of the proposed budget are online.

We have a select budget committee website that is available and searchable and hard copies are available, as I understand, Ben, in your office and also in the public library if people have a desire to see it in hard copy.

And it's truly my privilege to serve as budget chair this year.

And even though this is my first swing at being budget chair, this is my ninth year on the council, my ninth budget cycle.

And it's truly a privilege to be in this role.

I want to say thank you to my colleagues.

We will be working closely with each other.

And my primary goal now between here and Thanksgiving is to make sure that We've heard from the public, that we've heard from the departments, that we've gotten the information that we need.

And my goal is to have a, I mean, really four elements of this goal as we're putting together a fiscally responsible budget, is that it's sustainable, that when we talk about using a race and social justice lens that we're doing it in a way that is actual and positive and is focused on improving conditions for everyone in our city, particularly those who may have been left out in the past.

I also want to make sure that we coordinate closely between our departments so that we know that the expenditures are not duplicating each other and that we're moving towards our goals.

And I also want to be working with our regional partners so if there are things that King County and ways the state can help fund us that we're looking forward to that as well.

And of course that I want to have a tone of this budget that is respectful.

I've never felt disrespected here among our colleagues but I also want to encourage as we're having public comment that it's thoughtful.

and we have a civil process.

So with that, just to make sure that the public knows that we will have two opportunities for public hearings next Thursday, October 4th, beginning at 5.30 p.m.

in chambers and then about two weeks later on Tuesday, October 23rd at 5.30 p.m.

We will also have opportunity for public comment, but that's going to be at the end of the period of time when we have our speakers.

And so we're going to have our speakers and department information first so that as the public has an opportunity to comment, they're also going to be informed by facts.

that they hear from the department.

So today we're going to hear from five city departments.

We'll have a couple this morning and three this afternoon.

Other key dates for my council colleagues, and I know that most of you have already gone through this before, is that we will have the budget proposal worksheets due on Wednesday, October 10th at 10 a.m.

And I want to say thanks to Patty Weigrin, wherever he is, Thanks for putting together the materials, extremely helpful to us.

And then what's known as green sheets are the budget action request worksheets will be due 15 days after that, Thursday, October 25th at 10 a.m.

So I know that we all up here in the council know that what we are creating in this budget is a moral document.

And if the last few years are any indication, we will be reminded of that frequently by our public during comment.

But in addition to making this a moral document, I want to make sure that we've received the quantitative analysis and forecast and we have information about the actual revenues that we're going to be able to spend.

It will be my goal to make sure that we do have sustainable revenues, that we're not borrowing or planning a budget.

based upon monies that we don't have, that we've got to have a sustainable and dedicated source before we pass this budget.

So the presentations we're going to be hearing today will be from our Office for Civil Rights, the Office of Immigrant and Refugee Affairs, Seattle City Light, Seattle Public Utilities, and the Seattle Department of Transportation, SDOT.

And in addition, we're going to have the context set today for us.

The CBO, our central staff and committee, we will hear more from.

But today we're going to first hear from our budget office, Office for Civil Rights, and ORI Red.

Then we'll break for lunch and come back and hear from City Light, Seattle Public Utilities, and SDOT.

But before we get going, before I ask the folks at the table to proceed, I want to acknowledge good work that Eric Sun head of the table has done, Kirsten Aristab, thank you so much.

We've been working on this since January, so this is not something that is just started in the last few days.

I also want to acknowledge, in addition to Eric and Lisa, Lisa Kay, who is back there.

As I mentioned, Patty, the materials that he has put together for the staff.

Allison McClain of my staff, who's sitting at the table, has been invaluable.

I appreciate all the work that you have done and you will be doing, because you are the glue that's holding this together in my office, and I appreciate it very much.

Amelia Sanchez, thanks for being here today.

And I know how hard this is that you're always juggling things.

And we're always asking you for one more thing to do right before the meeting starts.

So thank you in advance.

And all of you, and of course, for Council Central staff who are here or watching, it's going to be, I hope, a very organized budget season.

And I appreciate the fact that many of you are going to be called upon to do work between now and Thanksgiving.

And thank you, Council Member Herbold, for joining us.

So city budget overview, this will be our first outlook and our revenue collections and you'll give us a high level summary of the mayor's budget as a whole.

And then I'd just like to turn this over now to Eric if you've got any comments that you would like to make and thereafter we'll turn it over to Ben.

Thank you very much all of you from CBO for being here.

Thank you, Chair Begshaw, members of the committee.

I am Eric Sund of the Council Central staff.

Just have a few brief comments, kind of placing today's meeting in the context of our overall process.

So the first of today's presentations, as you noted, will be from the CBO's Revenue Forecast Team.

It will be giving an outlook for revenue collections in 2019 and 2020. I just want to remind that the forecast is not a static thing.

It evolves over time and CBO provides the council and the rest of the city with three updates over the course of the year, the first of which is in the spring and helps with the development of the executive's early proposals from departments to the mayor.

The second is typically completed in August, and that is the one that informs the balancing of the mayor's proposed budget, which you've seen, first saw on Monday, and we'll be talking about more today.

It's always important to bear in mind as they talk about the revenue that the additional revenues that they may, will be showing have generally been programmed into the mayor's proposed budget and are not, immediately available for programming without making other adjustments to the mayor's budget.

We will receive a third update to at least a portion of the revenue forecast that is put together in October.

This year we will actually receive it in October, sometimes it's early November, and that will be used as the second forecast update is by the mayor to ensure that the council's budget is balanced as well when it is adopted in November.

So the remainder of the sessions today and tomorrow will be focused on how those revenue collections are allocated for use in the mayor's proposed budget in a series of, a select group of the city departments.

There'll be a third meeting next week which focuses on funding for services for the homeless across departments.

And so this is giving some background and a foundation for the council's review of the budget.

So I encourage committee members to ask questions if they have them.

This is also one of the earliest opportunities to signal support or concern about proposals that have come forward from the mayor.

After that meeting next Wednesday, there'll be a public hearing on Thursday, October 4th, to provide an opportunity for the public to comment on the mayor's proposed budget.

And then the committee will take a little bit of a break, a pause, until October 17th when the That will allow the council members and staff both to take a deeper look at the supporting documents we've received on the mayor's proposed budget and Identify some issues meriting further investigation in starting again on October 17th.

So there's a long road ahead this fall Pleased to be here.

Thank you.

Thank you and I Councilmember Herbold if you have a question, please let me know because sometimes I get focused on what I'm hearing from the table.

So make sure that you don't get left out down there and I don't I want you to know that I'm not leaving you out.

So please sing out if you've got a question.

One of the things Eric you just brought up which I didn't mention but I want to highlight is that next Wednesday October 3rd that we're dedicating that entire budget day to human services and including affordable housing conversations.

So it's going to be a budget committee.

It's not our special committee on housing and human services, but we're getting in deeper than we had at our last meeting where we're asking the executive to come back and talk with us about statistics that they have, that they've generated from the second quarter, recommendations that they may have.

and any issues that want to be brought up at that point, particularly around housing and homelessness, that'll be a day where we're really dedicating a deep look and a deep dive into what's going on right now.

Very much.

Any questions so far, team?

Okay, well then let's go.

And Ben, it's all yours.

Thank you.

Being respectful of time, I'm almost immediately going to turn this over to Dave Hennis and the remainder of the revenue team to give you the overall forecast update.

Just to highlight, I'm going to follow that with a very high level summary of the mayor's budget, just a few slides, and then we'll dive into individual departments and the details of their budgets.

Everybody at the table want to introduce yourselves.

We all know you, but let's just have it.

And that's all I need to say.

I'm Dave Hennis, CBO, Economics and Revenue.

Ben Noble, City Budget Director.

Tom Kern, City Budget Office.

George Emerson, Budget Office.

Jeanette Blankenship, City Budget Deputy.

So take it away, Tom.

Okay, to set the context, as always, we start with the U.S. economy.

And the current expansion now is the second longest on record, more than nine years in duration.

And we've seen a pickup in growth this year and expect to see strong growth at the national level both this year and next.

Driving that is a fiscal stimulus from the federal government that's resulted from tax cuts.

of $1.5 trillion over 10 years that were voted in and signed into law last December, and then a bipartisan budget act that added 10% to 2018 and 2019 federal spending.

Since the tax cuts and the spending increases are deficit financed, they give a big boost to the economy.

And we've seen that already in GDP figures for the second quarter at 4.2%.

And employment growth this year is actually stronger than it was last year for the same period.

Now, after two strong years, we expect the economy to slow in 2020 as the boost from the stimulus fades.

In addition, the Federal Reserve has been raising interest rates.

They've made seven quarter point increases since the late 2015, probably make another one this afternoon.

And they're expected to keep raising rates into 2020 from close to zero several years ago to about 3.5% than in 2020. So the higher interest rates, along with the fading stimulus, are likely to slow the economy in 2020. And that'll increase the risk of recession.

So last May, the Wall Street Journal had a poll of private sector forecasters.

And they asked them what was the most likely year for the next recession to begin.

And over half said 2020. So here's a graph of US employment change by year over the course of the recovery.

You can see these are in millions of jobs.

2.7, 2.8 million jobs added in 2015, which was the peak year.

we see a drop in 2016, another drop in 2017, and then reflecting the effects of the stimulus, a bounce back in 18, strong in 19, and then a fairly steep drop in 2020. So if we turn and we look at Seattle metro area, in this case defined as King and Snohomish County's employment change, It shows a similar pattern to the national pattern.

In this case it's quarterly data and this is employment change year over year.

So it's from a given quarter in one year to the same quarter in the following year.

And you can see again a peak in 2015 and in this case into 2016 and then from about second quarter 2016 employment growth has slowed.

Two reasons I put in a little box there on the side.

Boeing cut almost 10,000 jobs from the middle of 2016 through September 2017. And Amazon's hiring has slowed in the past year.

OK.

Now.

Instead of employment, here's a graph of population, and this is for Seattle.

So it's annual population growth for the city.

It's April 1st data.

The first data point, 2010, is the census figure.

The other data points are for April 1st of the following years, and these are estimates made by the Washington Office of Financial Management, and you can see Very little growth in 2011 and 12, and then kind of a steep ramp up to over 25,000 people added in 2017, and then a fairly big drop to 2018.

But is that just through the first half of the year, the 2018?

No, estimates are made for April 1st, so that's presumably the, I mean they're estimates, but it's the population as of April 1st.

But I'm sorry, Tom, I'm not being clear here.

Is that green bar on the end of 2018 an estimate for the full year?

No, it's just April 1st.

In fact, all of these data points are for April 1st.

It's just the one point in time.

So they're all apples to apples.

They are the same 12-month period.

I see.

Gotcha.

Gotcha.

Okay.

So now I want to talk a little bit about the housing market, which has been cooling as the economy has slowed.

I made a graph here of median multifamily rent in Seattle.

It's monthly data, and these are year-over-year growth rates.

And the data comes from Zillow.

And if you look at the middle of the chart, from about mid-2013 to, say, mid-2017, rents are increasing between 6% and 11% per year for a four-year period.

And then if you look to the right side of the chart, you see gradual decline over time.

And actually, in the last three months shown on the chart, rent increases have gone negative.

So that last data point is July of this year.

It's roughly minus 3%.

So according to this data source, rents in July were 3% lower than they had been in July of the previous year, July 2017.

Do we believe that that's based on supply or is that part of the population slowdown that you're talking about too?

Yeah, a lot of it is supply driven.

2010 was an extremely strong year for housing completions in the city with over 10,000 new units added to the stock.

And we've still got, as of the end of first quarter, about over 20,000 permitted but not yet completed.

So that's the supply side.

Demand side, the economy's slowing, population growth is slowing, so you've got supply increasing, demand weakening.

Together you get prices weakening, vacancy rates going up, and a lot of buildings are now offering incentives to new renters.

I thought I heard you say 2010, but 2017 was where you had 10,000 new units.

Yeah, 2017. So 10,000 completed in that year?

Yes.

And 25,000 more, you said, are in the pipeline?

Well, more than 20,000.

I think it's 22,000-something as of Again, April 1st.

Okay, and those are just within the city not King County.

That's just in the city But it's important to note that those are permitted not necessarily under construction and it's it's not to be too Saying but it's patterns like this that will that will shift the decisions about whether to build apartment units or not, right?

as the prices start to drop.

And that's a good thing, the prices are dropping.

I'm not trying to send a message otherwise.

But when we think about the other side of this and our dependence on construction revenues, this kind of softening potentially previews a softening on the construction side as well.

Thank you.

Can I ask a quick question?

Yeah.

So we have, in 2017, we have 10,000 new units, correct?

New units completed.

Completed.

Is there a way to tell us where those are?

I'm sure there is.

I don't have that with me.

These are data that the planning department prepares.

We should be able, with the data from the Department of Construction Inspections, we should be able, I would imagine we can identify locations.

Can we identify that quickly?

I would really appreciate it.

As you know, we have a community meeting tonight for two and a half hours.

And homelessness is number one on the issue, and rent.

And D5 has 51% renters and 49% homeowners.

So this is the number one question with the community tonight, is how many units have been created, actual units, and where they're located.

And then if you have 22,000 in the pipeline where you said they're at permitting stages.

They've been permitted.

They've been permitted, OK.

There's a permit when you're given a permit to build, so then you can build, and then there's another process at the end where you get a permit when it's completed.

And so they're in that stage between having been permitted for construction, but not yet.

completed, so an occupancy permit, for example.

And it doesn't have to be, like, write-down specific, but I at least want to give a general idea for the North End to be able to say, there are 10,000 new units, and this is generally where they're going to be.

Here's the 22,000.

This is generally where they're going to be.

We know, but are you counting this as well, Ben, the 1,200 units that Northgate is planning to build and 1,200 on the Metro site, which is in the North End, which, again,

Those are unlikely to have been permitted, so they're probably not in this relatively more certain math.

I know we've already compiled some data per request related to affordable units specifically.

And then also, in addition, we gathered data on the MFTE units, which are another level of affordable, multi-family tax exemption units.

But I don't think we've compiled that data.

for all units and I don't know whether we'll be able to do that in the short time that remains.

Let's just make this a continuing conversation and I will continually be asking because we have light rail coming in in 2021. So the big focus there is treasure-oriented housing, affordable housing.

And then we're also looking up at moving light rail on 130th per what I've learned from Sound Transit to come online when Linwin comes online.

So if I even just have some basic numbers to work with, I'm not gonna hold you to write down to every unit, that will be easier for me to respond to the constituents and not just in District 5, in District 6, 4 and 6 as well.

I think if we gather this data, we will, and we think we have it, we can do it for all districts and be able to report.

That would be great.

Thank you.

Thank you very much.

Thank you.

Council Member Herbold.

Thank you.

This is not something I need immediately, but I'd be very interested to take a look at the housing market slide and the rent numbers and see if there's a way to decouple incentives, move-in incentives from actual rent.

Because this is useful to look at the market overall, but since move-in incentives benefit people who are new tenants, it doesn't say a whole lot about existing, the rent that existing tenants are paying.

So if there's a way to sort of pull out the move-in incentives and just look at the rent.

Okay, I'd have to look at the data source.

I would assume that these numbers don't include like the first month free rent, that kind of thing, or a free parking space or whatever it is.

I assume that's not in there.

If that's the case, then that would be good to know as well.

But I was under the impression that typically this kind of data treats financially based move-in incentives as rent for purposes of reporting this kind of data.

But if I'm wrong, I'd like to know that too.

I'll have to look, because this is not our data.

Thank you.

And thank you.

I think we'd all like to have that information and please proceed.

I just want to say a few words about the home sale market, which is also cooling, particularly have seen that in the last few months since about May.

And prices are still going up, but instead of going up on an annual basis at double digit rate, they're now going up at a single digit rate.

The latest monthly data we have is for August and for the median single family home price for Seattle from the multiple listing service data source in August was up 4.1% from the previous year, so a big slowdown.

from what it had been.

And the number of units sold was down 21% from the previous year.

So the number of sales has declined as well.

And again- Do you have a slide on that, Tom?

Or is that just information you're giving us separately?

Do I have a graph?

A slide on that.

No.

I had one at one point, but it got pulled out.

But yeah.

We can send that to you if you'd like to see a slide on that.

Yeah.

Since you've got all this good data, it's good to have it together.

So if you've got something.

Okay.

Yeah, I can.

I can send the multiple listing data.

And again, the explanation is on the demand side, you know, the economy is slowing, so demand has weakened.

The other big factor is, of course, prices.

So mortgage rates are going up, which makes it harder to afford a house.

And prices have been going up a lot.

And so with higher prices and higher mortgage rates, you know, we increasingly have more people priced out in the market.

So I'm going to turn to the forecast of, in this case, the metro area economy employment data.

Again, annual growth of Seattle metro area, in this case defined as King and Snohomish.

And you can see the pattern over the cycle, 2016 being the peak year.

A fairly big drop to 2017, part of that's due to aerospace slowing.

But then, with the national economy picking up in 2018, ours has maintained employment.

This is the forecast, so we expect employment growth this year to be almost the same as last year.

Then a little drop to next year, and then the bigger drop going out to 2020, consistent with the national forecast.

And then when it turned to the sales and B&O tax base, they account for about 42% of general fund revenue, and they're two of the taxes most dependent on economic conditions.

And so what the graph here shows, the bars are the growth of the tax base year by year during the recovery, and you can see Between 2011 and 2018, growth was ranged from 6% to 10%.

Big increase in 2014 and 2015, that was due to a big ramp up at construction.

And then construction growth slowed.

It didn't go negative in 2016 and 2017. And that's why growth slowed in those years.

This year, we've seen a little bit of a bounce back.

A lot of that's due to construction.

The other thing that's happened is we are now getting a larger share of sales tax on online sales from out-of-state businesses.

And that's due to a state law that took effect the first of this year, as well as a Supreme Court case, US Supreme Court case in June.

And those two together have led to most out-of-state online sales now being taxed by the sales tax.

Do we have an actual number on, since those laws went into effect, what additional sales tax we've received?

So we have an estimate from the state that we built into the forecast that was made several months ago, and they're in the process of updating it.

But they predicted $4.6 million added this year for the city of Seattle.

And it's pretty clear that number's too low.

So it's going to be even more than that.

And then rising to $9 million in 2020 as compliance increases over time.

Thank you.

So that's a big change.

To come back to sales and B&O tax again, in this case, in this slide, we've added property tax.

So these three taxes, revenue from construction over time, was a little less than $40 million in 2010. And this year we expected to be about $116 million.

So that's a tripling over eight years of revenue from construction.

So it gives you a sense of how much construction is added to our tax revenues.

And then the forecast we're using, showing after that, is for a modest drop in 2019 and another one in 2020.

Thank you.

Next is just a quick look at the real estate excise tax split between the three main categories that we have of residential single-family homes, condominium units, and commercial properties.

The forecast for the following two years is expecting the commercial activity to slow, but the slack will be picked up in single-family and condo unit sales.

Condos have become to be constructed again within the city limits, and we're expecting both those types of residential types to have an increasing share of REIT for the following two years.

George, may I ask a question about that?

A moment ago Tom was saying that housing sales have dropped and dropped significantly.

How does this work with your real estate excise tax projections?

It is true that Tom mentioned that year-over-year sales in July, corresponding to a 4% price increase, that sales dropped in units, I think it was about 20%.

That is something I'm seeing in my data as well.

My forecast calls for prices to be relatively flat on an inflation adjusted basis and sales will be about the same as they have been for the prior two years going forward.

So I think that's largely consistent.

It's just that the makeup of REIT, more of that will be from single family sales than commercial activity and slight growth.

Please continue.

So then that brings us to our traditional closing point, which is to show you the table of the general fund revenues.

As you can see down the left-hand side, you have the listed taxes or revenue sources, property taxes, sales taxes, et cetera.

Across the top on the columns, we've got four years of information, 2017 through 2020. And then you can see in the gray shaded areas for each of the years 18, 19, and 20, we've got change from the previous year.

So the change for 2018 is 2018 over 2017. We want to point out just a couple of things in addition to as you take in the numbers that are policy or otherwise notable changes.

The first one is in the property tax line.

In the far right column, 2020 change, you see a large number, 29.5 million.

That includes an assumption of a 27 cent renewal on the EMS Medic One levy.

Which is what they're currently planning or proposing, I guess proposing is the better word.

And so until that changes, if they change it going through their process, that number would change.

But we wanted to include that in there so you could see the effect of that.

Remind us when that's going to be on the ballot.

So that's on next year, 2019. For renewal and cash coming in 2020.

Okay, but is it November or August?

That's a decision they have to make.

Traditionally been November, I believe.

The next thing I wanted to point out is that we are separating out sweetened beverage tax and short-term rental taxes as new taxes that have been added.

I think you're familiar with the sweetened beverage tax.

What you see here you may see is a much higher number in 2018 of $20.6 million.

The original forecast was for $14.8 million.

prudently conservative, shall I say, not wanting to get ahead of ourselves.

We didn't have a lot of information, and so we're happy to increase this forecast.

But just so you can see the new numbers there.

Just real quick, David, another point about that, and I'll have you elaborate, is that we've also changed some of our expectations about the risk of this revenue source declining over time based on observations from other cities.

Can you say a little more?

Sure.

So the original assumption is that you put on a tax, there's an effect on consumption.

We think that effect occurred.

We don't know how large it is.

There's some studies going on that you all have sponsored through the auditor's office to find out what's going on with that, consumption patterns and so forth.

But the bottom line is other jurisdictions, so Berkeley, Philadelphia, they're actually seeing some increases after the tax goes into effect.

What you would expect is income increases or people's behavior returns to normal patterns.

They start consuming again, perhaps at a more normal rate.

Though even if the whole total consumption is down from where it was previously, perhaps, but it still starts to rise again is what this forecast assumes.

Short-term rental tax hold on just a second.

Oh, I'm, sorry.

I don't mean you jump ahead You're going to go through all the lines.

Is that what's happening?

I wasn't going to go through at this point We can take questions about any line you want, but great.

Thank you.

Um, just a question about the um other general fund revenues, uh reduction um Of 14 of almost 15 million from the proposed 2020

Yeah.

So that was one of the ones I was going to talk about.

So what's in that category is a whole bunch of stuff.

And we did that to simplify the table so you didn't get line after line after line.

So what's in there are a lot of inter-fund transfers, and that's really the source of the negative, I think, is that, and those are, inter-fund transfers are department to departmental movements of money to pay for services provided by one department to the other.

For the revenues in that the they're not revenues available to spend more or less.

They're already accounted for and so The you're talking now, but the general fund revenues at the bottom correct the other general fund revenues line at the very bottom Dave, do you also have the grant effect in there?

Grants are in there.

Interest on investments is in there.

A variety of licenses, permits, and fees is in there, like street use and so forth.

There's various service revenues, so legal services, law enforcement services to the mariners or whomever.

There's state shared revenues, liquor board profits, marijuana.

taxes, et cetera.

But I think the culprit here for most of the variability of these numbers across the 5 million change in 2018, the 27 million change in 2019, and the negative 14 is the Interfund transfers movement of all that.

And so why does that appear in one year?

Why aren't we seeing those Interfund transfers sort of through in the impact of them through multiple years.

And why is there such a big negative number in a single year?

I would point to 2019 in particular as that it turned out IT overcharged in 2018 and to fix that overcharge they're going to send and they were only overcharging general fund departments they are going to transfer back 15 million dollars in 2019 so that's half of the change from 18 to 19 and that explains almost all of the change from 19 to 20 once that transfer is done it won't happen again so that's just kind of the year-over-year change and when you're talking about

Some of the department overcharging, we're not overcharging customers, we're overcharging within other departments.

It was just an error, yes, it was just an error in how they were allocating their costs to other general fund departments.

A non-trivial component of the budget is purchases being, excuse me, services being purchased by general fund departments from, for instance, Seattle IT and actually under ways that we've reorganized the budget for transparency from Seattle Department of Human Resources as well and then also from FAS for things like rent.

So what you're seeing here is us trying to get those numbers right and realigning how that happens and correcting for a fact that You know, IT had set rates, assuming a certain level of productivity.

They didn't achieve, so they can't justify, if you will, the bills that they charge.

So, and the easiest way for us to deal with that is just to lower the rates the following year as a form of refunding the money to the department.

So, in the end, if you think about it sort of over time, there's actually a pretty steady pattern here, and it's just we're fixing year-to-year fluctuations.

And would our exterior Auditors appreciate and approve this.

Is this part of some general government financing structure, Ben, that you would say is It's consistent with best auditing principles.

We've actually been working with IT and some outside consultants to develop a more clear and precise and predictable pattern about their rates.

So I don't think it's not an audit issue in the sense of losing track.

It's us being able to develop a system where We have rates in a predictable way.

But this pattern of refunding is something that we think we're going to try to establish going forward in the sense that if we collect resources and ultimately don't expend them within the year, that becomes a way to lower the rates the following year.

And we'll do that kind of reconciliation to be sure that costs are being fairly allocated.

Thank you.

Council Member Warras.

Thank you.

I apologize for this being a very elementary basic question if you've already answered it.

The short-term rental tax, that's the Airbnb, correct?

Correct.

So all the assumptions are the same across the board?

Yes.

So can you tell me?

We just don't have great data yet on what's going on.

We're relying on the state's information at this point.

And so we decided it was probably more prudent to just go with an initial estimate and then keep it constant for 2020. We have a chance to change 2020 later once we learn a little bit more.

Okay, thank you.

And then I guess the only other thing I would say is as you look at the sales tax, the business taxes, you see the general theme that we have here of slowing growth.

It's still growth, but it's just slowing.

We're starting to slow down.

As Tom illustrated, we're just seeing a lot of that.

Chair?

Council Member Herbold.

Thank you.

I also have a question about the 2018 grand total general fund is $1.3 billion and there's reflected a change of $86 million but the adopted budget for 2018 was Almost 1.3 billion.

The math isn't working out for me here.

What's the- I can't speak.

Well, there was one significant change from the city updating our system of record from summit to 9.2.

And in doing that, we went to a model of kind of direct funding.

So any resources that historically had gone to departmental funds to pay for their work that was in Basically, general government activity, that money is now going into the general fund and being spent directly out of the general fund.

So the best example of that would be the finance and administrative services.

They do a number of activity, which is general government nature, animal shelter, revenue and consumer protection.

with that is a host of regulatory licenses that they have.

That money used to go into FAS's fund to then pay for the work being done on that.

Now that money is coming to the general fund and will be spent directly out of it.

So there is a change there in how we're calculating what's general fund.

There are new revenues to the general fund in effect.

So the change column reflects the difference between the endorsed and revised budget?

No, no.

It's the change from the 2017 actuals column.

The other?

Oh, so this is a comparison?

Year over year.

I see.

Across the table.

Yeah, this is year over year.

Got it.

Thank you.

I was comparing it to the endorsed budget.

All right.

Thank you.

Are you okay?

Yep.

All right.

There's no more questions?

I think one thing that I'd just like to ask about in the parking meter line, which is second from the bottom, does this include all off-street parking?

I'm sorry, all off-street?

The off-street?

No.

I'm sorry, the on-street parking.

Yes.

So it's just the on-street parking.

Yes.

It's not fees that we might get from...

Commercial parking tax is not in that line, yeah.

The commercial parking tax is not a general fund revenue source.

It's dedicated specifically to transportation purposes.

So it's an SDOT revenue, but not a general fund one.

So then, just a few highlights on potential risks to the U.S., to our forecast on the national side.

Again, as Tom has highlighted, we're seeing concern about the potential risk of a recession and that risk seemingly exacerbated by policy at the federal level with respect to tariffs and trade.

So a trade war, if you will, certainly has the risk of slowing down the US economy, and with it, our state economy, and with that, our local economy.

Do we have any projections that you can rely upon in that?

Because I know you read about it every morning in the paper, and concerned about whether it's hitting cherries or hitting airplanes.

We don't have anything specific.

And again, this is certainly an export-dependent region, both in the way you just noted on agricultural commodities, but then obviously also Boeing and others as well.

So we are going to continue to monitor that.

I mean, the impacts experienced to date have been limited, but the pattern is potentially concerning.

And as we indicated, at a national level, economists are increasing their forecast of potential recession.

both related to this trade issue and then also to the lessening effects of the stimulus, you know, that occurred at the federal level.

There was a push there with the tax cuts and with deficit spending, but that's not something that can be perpetuated.

And so as that wears off, if you will, and it's the risk of recession is increasing where if I knew it was coming, I'd be doing a different line of work.

And then locally, again, as we've indicated, we see softness in residential market on the housing side.

So the potential to lead to softening in the construction side is there as well.

And then just more generally, we know there's a lot of, on the commercial side, a lot of product coming onto market, coming up out of the ground.

Again, with economy cooling concern that demand for the next set of projects won't be there right now.

And then more broadly, Amazon and the hiring patterns both from them directly, from likely their suppliers and from other high-tech firms, that hiring appears to be slowing.

We know most directly that Amazon is considering locations for a second headquarters and where they presumably would direct considerably more of their near-term hiring.

So those are all risks that we see.

And as we again talk about the budget itself, all the more reason for us to put our spending on a footing that is more sustainable, that's not reliant on one-time sources, and that recognizes that these risks are out there.

Council Member Gonzalez.

Thank you, Chair Begshaw.

I just have a few general questions and And really it's focused and centered around this message that we continue to hear around an economic downturn and a potential recession or a higher risk of entering into a recession and ultimately I would just like to hear from you all how this budget that we have before us as proposed deals with the potential of recession.

In other words, How does this budget actually address the concern that you all keep telling us from that table about the fact that there's going to be an economic downturn and has it risen to the occasion of meeting the challenges inherent in that potential forecast?

So, I would describe it that we have taken an initial step to mitigating the potential impacts of recession but in some ways, if and when it comes, there will still be a difficult set of choices to be made.

And let me explain more specifically.

We have had a pattern, and it's certainly happening this year in 2018, of expending resources, one-time resources, on activities that have an ongoing expectation.

So what we've tried, and those are then particularly at risk in the context of recession because you'll have committed to more money, to providing services that cost more than you are regularly taking in and you're using, you know, you're selling property or other one-time, using other one-time sources.

So what we've tried to do is to balance one-time, excuse me, ongoing expenditures with ongoing revenues so that we're at least in a place where we're not counting on one-time sources to sustain ongoing activities.

It is true, however, that we are counting on those revenues to be ongoing.

We have also I mean, by 20, you'll see this, by 2020, the growth rates that we have forecast are quite modest.

So we are now balancing to a modest level of growth rather than to, you know, rather than 5 or 6 percent overall growth, much, if you look and do the math, the revenue growth that we project for 2020 for the general fund is actually just under 3 percent.

So we have built a budget that is not anticipating continued large growth.

It does not anticipate the negative, you know, a decrease in revenues.

So if we come into a recessionary period and actually experience that decrease in revenues, we will face some difficult situations.

Having gotten us closer to balance, that will be an easier difficult situation.

A point that I'll make, well, I'll make it again, I'll make it now, is that we continue to have reserves, particularly on that side, a loss in revenues on the rainy day fund or the revenue stabilization account.

And we would likely dip into that to help mitigate the impacts of recession.

But having gotten closer to balance, we would only have to dip, we have to dip less into that in order to sustain activities.

But that's what we were trying to do is at a minimum align revenues and expenditures so we're not in a situation that the budget is inherently unstable.

and then again balancing it on a forecast of objectively moderate growth rather than counting on the continued growth rates that we've seen or continuation of the growth rates rather that we've seen over the past nearly a decade now.

So I think what I hear you saying is that that a potential area of risk in terms of impacts related to our economy entering into a recession are, at least as reflected in our budget, are those programs that have ongoing costs and financial obligations but are not tied to a specific use revenue that would allow those programs to continue to be sustained and maintained.

Is that Is my sort of crude summary of what you just said accurate?

Yeah, I mean, the only thing I'd modify is the general fund is a large revenue source in itself that's supporting a wide variety of activities.

So it's not necessarily that there is a dedicated revenue source supporting a dedicated program, but rather that the full suite of programs and services are being offered up at a level, if you will, that could be sustained with an assumption of moderate growth.

And that's what we're trying to do overall.

So I think the reality for, I mean, in my mind, the reality is that it's difficult.

The way that I have viewed this proposed budget is to get us ready for a potential change in the economy.

And there are various factors that impact the change in that economy in a negative way.

including policies that we see coming out of the federal administration.

We just heard an announcement today that interest rates are likely to be increased.

So I think there's a lot happening in our national economic policy that is gonna inevitably impact us here at the local level.

And so I view this budget as an opportunity to really take a look at, is the city ready for when that economic downturn occurs?

It's hard for me to evaluate whether or not This budget accomplishes that goal or even gets us closer to that goal if if I am not If I don't have the information related to some of these issues that you've just highlighted particularly around programs who have gotten one-time funding through revenue sources that are being you know, they're shrinking or they're going to go away.

And so I just think for central staff, it would be helpful if you all helped me understand what some of those one time funding programmatic obligations are for the city and how they are addressed in this proposed budget at whatever degree they might have been addressed or if they haven't been addressed that I think for me would also be helpful to understand because again we keep hearing that times are gonna get rough and if that is the concern then I want to make sure this budget is responsive to that concern and that we are moving towards a direction that Where we are we are again, you know prioritizing the things that we need to prioritize through basic service and other issues, but I also want to have a clear sense of What those tough decisions are going to be when the time comes?

Yeah, councilmember Juarez then her bolt.

Thank you.

Thank you, Ben It's just I'm going to ask some basic questions and then I have a more I would guess for my level, sophisticated question.

So the mayor's budget is $5.3 billion?

$5.9 is our total.

OK.

And the $5.9 is based on, as you shared with us and we heard in the mayor's speech, four areas.

She listed those four areas that she was pushing for, infrastructure, homeless, and I can't remember the other two.

A large component, almost half the budget is the utilities.

Utilities.

Expenditures, and they include components of those things, but yes.

And so one of the things we know is that the economic growth that we have seen or experienced in the last few years is not going to be sustainable.

Is that correct?

That is what our forecast indicates.

And that's really more a comment on the pace of that growth than, you know, things going into tank, if you will.

Sure.

So my understanding, you said something that, and I wrote it down in quotes because I just want to make sure I understand.

So when you say we're anticipating modest levels of growth, so is it 3 percent?

Is it 5 percent?

I will hold you to that.

Just so I have an idea.

The data are right here.

For instance, if you look at the general fund itself, the growth rates from 18 to 19 are about 6%.

So you see there's a growth of almost $80 million between 19 and 18. But I think what's notable about that is that $10 million of that is the introduction of the short-term rental tax.

So there is a component of that that is is not something that's from the economy, but rather for a change in policy.

And as we explained also, there's a significant bump in the other general fund revenue category.

If you get to the underlying economic growth in terms of driving our revenues for that period, it's a lot closer to 3.5%.

I don't want the number in front of me.

And then again for 2020, we're looking at something that's just below 3%.

So it's that notion and we've been experiencing growth rates well in excess of five or even six percent.

So that's the slowing that we see and we're building a budget that can be sustained at those levels of growth.

Okay, thank you.

Thank you.

So I'm seeing a proposed 2019 budget that is approximately 6% growth and a 2020 budget that's approximately 3% growth.

The next thing that we're going to be getting into is you're going to do the high-level overview.

If in that overview you can give us a sense, you know, again, also high level of where that 3% between the 2019 proposed and 2020 proposed, what areas are going to feel that reduction?

And it's, I mean, it's a reduction in growth, not a cut, but I think there may be some things that you can tell us about how that is accomplished.

Yeah, I think, I mean, again, as you point out, there isn't, I mean, between 19 and 20, we're not seeing significant reductions.

It's really more essentially sustaining what's there.

In order to get the balance in 2019 and with that expectation of being carried forward to 2020, there have been reductions that are about both reducing overall expenditures and then also freeing up resources to sustain and to grow activities in certain areas, and I will certainly,

I'll certainly highlight some of those.

Are you saying that essentially that the increase cost to the city to produce and provide, not produce, provide goods and services increases about 3% from one year to the next?

And so that if the budget differentiation between 2019 and 2020 is 3%, that's keeping things steady?

Essentially, yes.

Thank you.

Okay, so again, at a very high level here and respectful of time, just some context.

Some of this already talked about, total budget of 5.9 billion, again.

A significant share, 2.6 billion of that for utility services.

As you know, utility revenues are restricted to be used for utility services, so that's really just providing those basic services.

Very significant expenditures for public safety.

Consider that the overall general fund is, you know, between 1.3 and 1.4.

That's essentially half that of those expenditures are for public safety, and the vast, vast majority of those for police and fire.

Again, it's significant investments in transit and transportation.

Actually, only a small component, about $50 million of that $600 million is a general fund.

The remainder is dedicated revenue streams for transportation and bonding against those revenue streams.

And then just to highlight, because it's obviously an issue of concern in the current crisis, almost $90 million projected for 19 and a comparable amount for 20 for homelessness services of varying kinds.

In terms of budget priorities, again, as we've just been talking about the first one, about a sustainable budget.

And highlighting the almost nearly $700 million investment noted above public safety and the basic service that it represents.

significant focus on homelessness and housing, transit and transportation.

I do want to spend a moment to talk about some of the investments around increasing equity across the city as well.

And then just to highlight in a couple, as we talk about difficult times, also remembering that the budget is looking to the broader future as well, and making investments that are designed to help guide the city into that future, and perhaps to help buoy the local economy as it does.

So moving on, in terms of a sustainable budget, so again, we're just talking about ongoing revenue streams to support previously one-time funded activities.

The most obvious of those are the $15 to $20 million that's being spent in 2018 around homelessness from one-time sources of one sort or another, property sales in particular.

How are we going to fill that gap?

Well, you've just seen that we have a general fund that's going to provide a share of modest growth.

It is, as Councilmember Herbold has effectively described, it has to be growth above inflation to be helping us take on these one-time issues.

Short-term rental tax revenue.

So this is a place I want to highlight.

So the short-term rental tax, as now projected from the state, we're anticipating about $10 million, $10.5 million a year.

Consistent with council policy direction, we're going to put half of that money, about $5 million, into equitable development.

That will include some support for the staff that have been implementing that program.

But I think I would just note what a significant development this is for the equitable development initiative.

We have to date, I'm going to gesture to the whole across the ground, as I like to call it, a piece of property where that many years ago now was a home of the city's public safety building.

The city has sold that site.

We're anticipating revenues of about $16 million.

And that $16 million had essentially been the sole source for funding the Equitable Development Initiative, which is designed to make significant capital investments in a number of neighborhood projects, both some that we've been identified and some that we expect to be identified in the future.

That was not at all a sustainable approach.

We were going to run out of that money, and we were going to have significant challenges meeting the commitments, soft or hard, that had already been made.

We now have an ongoing source that will really provide an opportunity for that program to be sustained into the future.

So that's exciting.

And which is your ongoing source?

So that's the short-term rental tax, so Airbnb, if you will.

But in addition, half that money per council policy and the restrictions at the state level can be used for affordable housing.

And this is a place where we're getting a little bit creative about the use of those revenues.

And for instance, I believe it's between two and a half and three and a half million of that will be used to support, to take up funding for permanent supportive housing.

So there was an addition in the 2018 budget For current supportive housing, it did not have an ongoing source.

This is an eligible use for that money.

It maps very tightly.

And then in the future, also the commitment we've made around $30 million of bonds issued for affordable housing and a revenue source to repay those.

I believe in the biennium we used some of this money for that, but going forward it provides that opportunity as well.

So that's a good use of that one in my view.

The next one is a little bit harder to be candid.

So the sweetened beverage tax, as just described, it's now a revenue source that's $6 to $7 million larger than we had anticipated.

And it's, I recognize that the intended use of those revenues was both to help discourage the consumption of sugar-sweetened beverages and to expand access to food.

Taking that latter definitions perhaps somewhat broadly, and again I'm being very direct about this, we're going to use a share of those monies to fund what are existing food programs in the Human Services Department, things like food banks and meal distribution.

That is access to food.

It's an important access to food.

using those resources that way, we'll free up general fund to help again pick up some of the one-time commitments, the ongoing commitments rather made with one-time resources.

Great.

Council Member Gonzalez.

Thank you.

I wanted to get a little bit more information about the impact on the Mayor's proposed cuts to the city's fleet costs.

I think I heard her say during her speech that it was going to be a 10% reduction to fleet services.

Is that what I heard?

So what's in the budget currently is a reduction of about a million dollars citywide in fuel.

And the executive order is a commitment over time to reduce fleet size by 10%.

So the budget currently does not reflect a 10% reduction.

It has not been achieved.

But our anticipation is that we will be able to do so in the near future.

But we also want to be careful about the way the work is done and that we are reducing the fleet while not negatively impacting basic services.

And again, the fleet is, it's not as simple, you know this, but I don't mean to be, it's not as simple as the sedans many of us see occasionally parked at Seapark Garage, nor is it all the police vehicles, but there are a number of heavy vehicles, relatively specialized heavy vehicles.

in places like parks and the utilities and the like.

So we are, in the near term, we are imposing a set of review restrictions on ordering new vehicles.

So any new vehicles for replacement are going to have to go through a process of review to determine whether they are really needed so that we're not going to keep building the fleet while at the same time we're developing proposals to reduce it by 10%.

So those steps are being taken essentially as we speak because the executive order was just issued.

So, you know, I think I'd like to just get a better sense from you all about the definition of fleet.

You know, we have a we have a motor pool program at the city of Seattle for city employees to be able to utilize what is mostly an electric car inventory to conduct city business during the day.

And so I'm a public transit writer and user, and so I'm also a citywide representative.

So sometimes my office has to be way up in District 5 or way down in District 2 or over in District 1. getting there and back in an efficient amount of time using a bus is pretty difficult.

So we rely a lot on the motor pool, and I think that's true for a lot of other departments throughout the city.

And so I want to make sure that I have a complete understanding of what the intent is in terms of how this potential policy direction will or will not impact the motor pool policies and the inventory of the motor pool that we currently have at the City of Seattle.

I mean, certainly, we try to encourage, as a good employer, our employees to ride public transit into the city of Seattle.

And I think one of the benefits of doing that and one of the incentives for doing that is that if an employee needs to get somewhere during the day, they have a motor pool car available to them.

So I don't want to damage our commitment to that particular program, which, you know, I think contradicts the climate goals that are being stated for why we want to reduce our fuel consumption.

So maybe you can talk a little bit more about that, or if you don't have the information here, you can give it to me later.

No, no, you've described this well, and this is why we want to be thoughtful about it as well.

Don't come for my motor pool, Ben.

What we know about the motor pool is that, this isn't hard to imagine, the challenge is sort of a peak load one, right?

So how many vehicles do you need to meet demand at its highest point?

And then what cost do you incur to have vehicles available for that peak, vehicles that are potentially not used very often?

And are there solutions regarding things like car share or alternative means?

And another thing we're potentially going to be looking at is sharing vehicle resources with neighboring jurisdictions or?

jurisdictions were contained within, is an obvious example.

King County, Sound Transit, both near us, potentially have overlapping.

We all have fleets, and maybe there's opportunity to streamline there.

It's something we've looked at in the past, but ever more motivated to look at again.

And I do want to emphasize that at the same time that we're looking at fleet reductions, again, as a way both to decrease cost and to take on the issues of climate change, we're also investing significantly in electrification.

So the budget includes several million dollars, real estate excise tax, you didn't ask, to invest in plug-in infrastructure, if you will, both in Sea Park and in some of the remote locations more remote locations where SPU and other departments have vehicles.

And in some ways, we're investing in that ahead of.

ahead of the purchase of the vehicles because it's going to be cost effective to move, to install that infrastructure at the same time.

And we know clearly where the fleet is headed evermore in terms of electric vehicles.

And we're looking forward to electric vehicles not being restricted just to sedans, which is where the market is thickest, if you will, right now, but also to things like pickup trucks, which are a significant share.

And then ultimately to these more specialized vehicles that are largely now diesel engines.

So let me get back to some revenues.

So I talked about sweetened beverage.

I do want to highlight that we did not take the entire increment and direct towards the existing programs.

There is approximately a million dollars that is reserved specifically for recommendations from the advisory board.

And we will sustain the programs that the advisory board recommended.

And we've actually were just included in the third quarter supplemental that you I think passed just yet, Monday.

So we're trying to strike a balance between the recommendations and the overall fiscal reality that we are facing.

A really big one I want to highlight is the real estate excise tax.

As shown in the forecast, that revenue source has grown to an $80 million revenue source that seems sustainable at something at least north of $70 million.

So we are taking it up.

That is a very restricted source.

It can be used for capital purposes and only capital purposes.

We're taking advantage of of some flexibility we have in the NPD to use that money to free up more flexible dollars from the Parks Department.

And this movement of funds works as follows.

The current Metropolitan Parks District spending plan includes a significant emphasis on capital, particularly on major maintenance.

I anticipate that current spending plan runs for the next two years.

We'll then have a discussion and you will have decisions to make about what the next spending plan looks like.

You'll recall the MPD is a permanent taxing source.

It doesn't require returning to the voters, but we went to the voters with a six-year spending plan and we're approaching its end.

I fully anticipate that the next six-year plan or however many years will have a significant capital component.

I think specifically of community centers and I know and the interest and pressures around there recognized.

I say that because What we're proposing to do is to take $10 million of REIT, put that into the Parks District, or rather use it to pay for projects that are now being paid for by the Parks District, and again, in an ongoing sense, anticipate using approximately that amount of money going forward to pay for things that the Parks District would otherwise have been paying for.

that frees up parks district money.

Parks district money is by definition available to support parks activities, broadly speaking.

That includes parks operations.

So that will free up $10 million a year of MPD resources to pay for parks operations.

That in turn will free up $10 million of general fund that now supports parks operations to support other things.

It's going into the general fund broadly.

Again, I point to the most growing demand and pressure demand has been around homelessness, so you could think of it going there.

But that's not the only pressure, to be clear.

There are other, for instance, wage pressures on the general fund as well.

We were building the general fund at large.

We were not necessarily seeing the money from parks goes here or goes there.

But I want to emphasize that believes that is a sustained, excuse me, a sustainable shift in funding.

We expect, it implies that the NPD will focus on operations and that REIT, if you will, will focus on the capital needs of the department going forward.

But in addition to this $10 million that we're using to free up resources, I don't have the number off the top of my head, but there's close to the, I think there's more than that amount going to support basic capital needs in the Parks Department.

So I want to emphasize there is no lack of commitment to the Parks Department overall.

This is about freeing up more flexible resources to provide, to use for other priorities that require the more flexible resource across the general fund.

So I like, Ben, what you said your last sentence, because we want to make sure that the commitment from the general fund stays where we told the voters that it would stay.

And I can't remember what the number was, 83 million or some such.

And that has got to be our baseline.

And I understand your need to have move the colors of money.

But we don't ever want the voters to think we're taking from the MPD for other sources and that we are diminishing the commitment.

So I appreciate.

And I agreed and I'm actually expanding to say that there's even more there because we already on a regular on an annual basis we're supporting parks capital investments with the neighborhood of $10 million of REIT.

I want to emphasize this is in addition to that so we are not we're not backing off in our ongoing commitments to investing in parks, both the ones we have and in acquiring new ones as opportunities arise, and then developing those once they do.

So this is about flexibility.

It is not about parks being less of a priority.

You'll see the Parks Department did bring a number of efficiencies to the table.

So as we looked at the overall push as well beyond just this swap, to be direct, we've looked at opportunities to, again, provide Comparable levels of service in more effective ways, but I wanted to be clear about that great.

Thank you I think councilmember Juarez has a question just briefly.

I just wanna make a few comments So we know the six-year plan for the MTV MPD is coming out next year and we know that the focus before on the six-year plan was on operation and maintenance and So we know we're going to have some room there when we come out with the six-year plan.

And is it, just so to crack my memory, I think we're looking at increasing the tax on that in that six-year plan.

Are we from 24 cents to 26?

Or that's something we're going to discuss.

So that's important to note.

Right.

So the current plan runs through the end of this biennium for 19 and 20. So we're beginning some of the work to think about Now is about the right time, if you will, to begin thinking about what, renewal is the wrong word, what the next financial plan will look like.

And one of the options, well, inherently the options will be to set a tax rate that brings in more money or less money or the same amount.

And again, we know that there are a variety of needs, both on a capital and operating side.

And starting here in the near future, you know, well in advance, we'll have a good opportunity to vet those and to develop a proposal that reasonably meets those needs and we can decide whether that's a six-year plan or a five-year plan or an eight-year plan.

And so I just want to note that, and you've heard me say this before, because of the 27 community centers, we know that in 2014, two of them were probably, and had been listed, that they should be demolished.

And one of them, of course, is Lake City, and one of them, of course, is Green Lake.

So we're hoping in the six-year plan, if there is an increase, that we are going to be really focusing on those capital projects to meet those needs, and also to meet the surrounding needs of parks around The two light rail stations that are going to be coming online So that's what my concern is and also some of the issues in parks in West Seattle as well.

Yeah, and okay exactly I'm worried about timing here.

So there are a number of reductions again across departments About nine million dollars in the categories.

I've described here consultant contracts and fuel and the like abrogating Excuse me a large number of positions many of them vacant positions, many of them vacant, not all.

Many unfunded, but some funded as well.

So on the position side, we're essentially clearing up the books in a lot of ways, taking off vacancies that have been there for a very long time.

This, from kind of an oversight perspective, on your behalf, that means that departments don't have position authority that they can immediately start spending dollars and directing dollars to.

They would in fact have to come back here for approval of those new positions rather than just reallocating them And then just to give you a sense, I wanted to highlight that we are continuing to build reserves.

Again, per Council Member Gonzalez's question, one of the ways that we are preparing for the potential downturn is to maintain our commitments.

So we have two reserves, the rainy day fund for revenue shortfalls and the emergency sub fund for unanticipated expenditures, roughly $60 million of each.

Both of them at their all-time high levels.

Policies have us growing them each year.

So, and we haven't dipped in in some time.

So we have on both those funds, we are at the capacity, we're at $60 million each.

We have internal policies that we have set about how they should be maintained and we are at the levels recommended by those policies.

Chair Pagshaw?

Sure.

Remind me, is one of those funds, the reserve funds, there's a statutory limit on how much it could be increased?

The emergency, I think I'm gonna have this right, the emergency sub fund, the maximum is tied to the city's assessed value.

That's the maximum amount.

We've revised policies, that's set by state law.

We've revised policies, so our contributions to the emergency, we were seeing really on, Historic levels of escalation in the city's assessed value as the property values were going up.

So we modified those policies somewhat.

So the emergency sub fund is growing at inflation currently.

And that was in part to strike a balance between putting monies into reserve and addressing the crises on the ground.

Thank you.

And also, as it relates to the 150 primarily vacant positions, just a question about the word primarily.

How many of those positions aren't vacant?

And you may have answered this next part of the question, but I didn't quite hear it.

How many of those were funded positions and not just the position authority?

I don't have the funded number in front of me.

I believe a total of 40 filled positions.

that are being cut.

But of those 40, a large chunk are part of the summit re-implementation project.

So this was a big push by the city to switch to a new accounting system essentially.

And so those positions are sunsetting at the end of the year.

And those people in those positions were expecting to, they knew these positions would be going offline.

So a big chunk of the filled positions are expected to be removed.

Did that answer your question?

Well, I still, I guess you'll get me an answer on the funded positions versus position authority positions.

Fantastic.

Thank you.

Great.

Council Member Johnson.

Just a brief one.

Since we were talking about policies related to financial reserves, it raised the question for me about what you talked about.

Mr. Noble related to the REIT funding supporting the Parks Department.

One of the other policies that we have relates to sort of debt service coverage and a city obligation around expectations about debt service coverage vis-a-vis our general fund revenues.

Have we made any that would result in concerns for that debt service coverage?

No.

So the, from memory, the restriction is that no more than 6%, on a long-term basis, no more than 6% of the general fund should be used for debt service.

So our mortgage payments, if you will, shouldn't be more than 6% of our income.

A little simplistic, but that's the notion.

I believe it allows us to go to 7% over a short period of time.

We are well below those limits.

I don't have the number in front of me.

I think we're actually below 5% at the moment.

principally because we've been constraining the amount of debt we've been issuing while revenues have been growing.

And you'll see there is, as part of the budget, anticipated bond sale of approximately $50 or $60 million.

Only a portion of that is general fund backed.

A fair amount of it is backed by transportation revenues.

But no, we're And again, that's another issue.

So we're well within our policy limits.

And as we think about the risk of a recession, that's why we have those limits in part, because as, you know, if our income were to decline in the context of a recession, our mortgage payments, our bond payments would not.

They are long-term obligations.

So that's one of the reasons we have that policy.

And again, as we think about where we stand, it's nice that we are above it in terms of having a cushion.

Well, and presumably the change that you're describing here with REITs funding more capital from the Parks Department helps to continue that trend line in the positive direction.

To the extent that they might have otherwise been funded by debt, yes, absolutely.

And again, yeah, that's it.

Great.

Thanks.

Good.

Thank you.

Then to talk a little bit about some of the expenditure side and to highlight.

So again, we are trying to keep overall growth modest and make sure that we have sustainable sources.

But that doesn't mean that there aren't investments that have been made.

So there's funding to increase total number of police officers by 40 over the biennium, 10 in 2019 and 30 in 2020. Recruiting for the police department has been a challenge of late because until we had reached a tentative agreement and until it's finally approved, police department has essentially been recruiting at 2014 salary levels.

And that had become an ever-increasing challenge as salary levels in other jurisdictions increased.

So for- People knew we were going to be retroactively paying, right?

Is it a real concern?

I think if you have a choice for a certainty of being paid, you know, 10% more somewhere else versus, you know, waiting for the outcome of this labor agreement, you could imagine that that could make a difference.

We've also had an issue of separations where folks have been recruited away with signing bonuses or even just, you know, if you have a choice between which department to sign on to, With the terms of the agreement are approved, our salary levels will be quite competitive locally.

We think we'll be able to reverse this.

But there is also some concern that the level of separations could be relatively high in the next couple of years as the uncertainty around the contract is resolved.

that could lead to retirements at a somewhat higher level.

And in order to have a net addition of officers, SPD first has to replace the ones that separate, separate is the term that's used, either retire or leave otherwise.

So the goals, the net increase goals might be seen as modest for 19 and 20, but expectation is that actually recruitment will have to be quite high in order to even get to those levels.

I know that this has been an issue that those of us who have been here for a while have been wrestling with, but we had identified years ago that we were going to increase the number of police officers by 40 a year, I believe.

How have we done if you compare it to just as an example from 2012?

Relative to, the number I have is relative to 2014, so relative to the previous administration and their initial commitment for 100 officers.

And we have achieved the addition of roughly 100 officers since then.

We had anticipated, well, there had been a forecast going into 2018 that we would add something like 35, I think the number was 37 more, as we continued towards a goal of an additional, a second 100, if you will, that we'd hoped to achieve by, if I recall, mid-2020.

This year has proven to be a bigger challenge on the recruiting front than that those projections had anticipated.

So again, largely treading water this year.

But we did get the first 100.

Exactly.

So we've achieved the first 100. This year has been one of treading water.

We now, with a contract in place, with the resources that would be provided in the budget, opportunity to increase by as many as 40 more.

And I would note, in both directions, there's some uncertainty here.

So if separations are larger than anticipated, it could be hard to achieve a net gain.

If we have fewer separations or recruitment goes well, it could be that we'll want to revisit this issue next year and potentially provide additional resources if available to increase rate of hiring.

I'm sorry, Council Member Gonzales here.

Sorry, my mistake.

And I want to be clear that SPD is continuing to work very hard on the recruitment front.

So they are actually traveling around the nation looking for folks and this overall challenge of recruiting isn't limited to SPD, other municipalities.

Part of what's happening is that a lot of municipalities are finding themselves as You know, we were sort of quick to come out of the recession, other municipalities less so.

So around the nation there's increasing demand for officers.

So it's competition, bottom line.

The slide related to this particular slide related to recruiting is quite oversimplified.

And I just wanna make sure that we are not approaching this particular issue as, oh, because we didn't have the SPOG contract, that's the sole reason we've had difficulty recruiting, because I don't think that that is true.

I'm not saying that it hasn't contributed to the department's ability to continue to be competitive.

But there are a lot of other issues related to recruitment of police officers, including the fact that all recruits have to go through the state academy, which presents us with a little bit of a logjam, if you will, in the recruitment process.

And so this is a complicated issue around recruitment.

I don't want to continue to promote and advance a narrative that oversimplifies this recruitment issue and distills it to effectively being that we, you know, have been in a position where we haven't had a contract with SPOC for four years.

Because I think it's very complicated in terms of how the police department does recruitment and how potential recruits are trained, The timing plays out in terms of how we can actually get them fully onboarded, the field training, all of these things are contributing to difficulties in recruitment.

And I just want to make sure that we're not oversimplifying it to just this particular sole contributing issue.

Absolutely appreciate that clarity.

Let me just mention one very simple one, demographics.

You know, 25 to 30 years ago, we hired a lot of folks, and they were very naturally reaching retirement age.

So without regard to salary levels or other things, we would have faced some challenge.

Because again, as you described, there's throughput issues, if you will, at the academy.

So yes, did not mean to simplify in too drastic a way at all.

Thank you for that clarity.

And related to that, the question of separations, I recall that there was some reports in the media that there had been a large number of separations, but I recall that that was refuted in the period of time that they looked at.

It was 39 in the period that they reviewed last year and 41 this year.

Yeah, again, I don't know if that's a separation problem.

It would be helpful, I think, to look at this maybe over a larger number of years.

I think Chief Best will be here, I think, tomorrow, perhaps, to prevent it.

I think we'll all be better off if we have the relevant experts on hand.

I know some of this information, but not all of it.

It's just, again, as Councilmember Gonzales said, I just want to be careful not to feed into a damaging narrative on that issue as well.

Agreed.

Very good.

Thank you.

Just one quick thing, time check here.

We've got four more slides, things that we're all very interested in, and we also have two departments, so we're asking the questions.

I just want to point that out.

I will move quickly as you let me, and I don't mean that disrespectfully.

community services officer program funding for 12 community service officers, that includes two supervisors.

Again, Chief Best will be here tomorrow.

Again, I believe we'll be able to provide you more details here.

It is part of an overall effort around a new collaborative policing bureau.

And then there are some technology upgrades that are funded in the budget as well, in particular data terminals and video systems.

On the fire department side, continuing our pattern of having two recruit classes per year, that is above what had traditionally been the case, and that is making sure that we have enough firefighters, excuse me, to maintain overtime that's demanded of any of them at a sustainable level.

And again, some technology upgrades there, including around scheduling and time tracking.

And I'm just going to disobey what I had just suggested, is that we move forward here.

But when you get to firefighters, there is something, and I've talked with Chief Scoggins about it, I've talked with a number of the officers, a real concern about a systems review about what we're asking our first responders to do.

And so often, they will, and now downtown, feel that they have to have six firefighters or responders to answer something that is a call at DESC, as an example.

Because earlier in the spring, there was a real concern that our firefighters were being jumped and assaulted by people on the street, which made them feel unsafe.

So now we have six of our firefighters first responders in two ladder trucks responding on the street.

And as Chief Scoggins has said to us before, They're doing their best to track this, but is there a smarter systems way that we should be evaluating this?

For example, rather than taking somebody up to Harborview, which is $2,000 a night, is there a better approach?

An example that's come up many times is can we help fund a nurse at DESC as an example to reduce the number of calls?

So I know this comes up every year, and when we say something like, well, we should have a nurse or we should have a different kind of response, people will say, well, that doesn't impact our budget, it impacts somebody else's budget.

But I'm hopeful that as we're looking at this homelessness and housing and the firefighters first responders, that we can really coordinate spending better so that the system changes that we need to be able to just respond to some of these low acuity things, looks at the costs, the total costs of what we're spending and I don't expect you to be talking about this now, Ben.

I'm just hopeful that as the departments come in, that they can help us focus on that near-term cost, but are we expending our resources in a smart way that's achieving the outcomes that we want to see?

I think those are obviously all good questions.

Moving quickly here, I actually don't think I'll spend really any time on this slide.

You have almost a day alone dedicated to this issue, just highlighting that the budget does include almost $90 million for homelessness services and that it largely sustains the one-time activities that were funded both initially in the 2018 adopted budget and then in supplementals.

And again, you'll have more of this.

And again, I think for now, move on.

Transportation and transit, again, highlighting here that there's additional spending here.

A lot of this has to do with deploying resources, transportation dedicated resources, and I tried to highlight that here.

So on basic infrastructure, we're using funding from the School Safety Fund and from REIT.

to increase funding for curb ramps, sidewalks, sidewalk repair, you can see the list here.

On the transit side, opportunities with, I should have updated some of these slides and we'll give you some more information about this.

Available resources in the transportation benefit districts.

benefit district.

We'll both be buying service hours and we'll be able to provide you information about where and how much those service hours are.

I was anticipating your question there.

And then we are also looking at capital investments to improve the reliability and speed of transit service.

And then we will sustain funding for the ORCA Opportunity Program.

And that's coming out of which?

Which pot of gold?

So that's the Transportation Benefit District, which is, again, voter-approved revenues that are specifically focused on transit and transportation.

And then there are a number of investments using commercial parking tax and other existing revenues around the period of maximum constraint and around issues downtown.

So signal timing is a simple thing, but we don't, if we're not, there's not an immediate way to increase lane capacity, being able to increase throughput was obviously important, and I am not a transportation planner.

Also supported Avesta's Transportation Operations Center, so if issues arise, they'll be able to respond to them quickly.

And then more broadly, an effort to reach out to employees and to employers.

about emphasizing potential advantages of things like flexible scheduling and minimizing the number of times folks try to come downtown.

And then I've listed it here under maximum constraint but thinking even longer term about ways to address congestion downtown and the notion, studying the notion of congestion pricing and actually A recent grant awarded from Bloomberg, this may be a place, there's some city dollars invested here, but opportunity to leverage those grant resources potentially, because an area of interest, both in the context of congestion and also in the context of climate change.

So I'd just like to add one thing there around transportation in this period of maximum constraint.

We've been talking with our Department of Transportation for a really long time and with Metro on a number of things and new techniques, whether it is, you know, adding hours for buses, but at what point are we going to say we've got to reconfigure so buses come in, drop off at the north end and the south end, whether it's Chinatown International District as an example, or where the convention place station was, so that we don't have as many buses going through and people, any bus is the right bus if you're getting downtown.

I know that Metro has said that may or may not be workable, but it's something we've talked about for at least the last two decades.

And also the freight mobility strategy.

I have not heard from SDOT how we're doing this.

Like for a period of time we discussed Changing the hours that trucks could deliver so that you could deliver from, I'm making this up now, an hour, but like 8 PM to 6 AM in the morning, so you're getting more of the.

the actual delivery time changed.

I'd like for, when ASDOT comes in, to talk a little bit about that.

Again, it's the system change that I'm looking for, and what's workable, and how do we save, not just save money, but to save people's time.

Well, I believe ASDOT will be here this afternoon, so you'll have that opportunity.

Good.

This is just a heads up to them, if they're listening.

I hope they're listening.

If not, we'll let them know.

Again, we talked about equitable investments and inclusive.

I just again highlight, as I already mentioned, the $5 million ongoing for the Equitable Development Initiative, sustaining funding for the Legal Defense Network, using some resources in Department of Neighborhoods to do outreach and engagement around the upcoming decennial census, and making sure that we are the residents of Seattle are counted.

And then an important piece here, Mayor mentioned it, I wanted to make it very specific and tangible, response to the city's anti-harassment interdepartmental team.

So the budget does a number of things.

There's funding for an independent office of employee ombud.

That includes the ombud and initially two staff.

The goal of this unit is to have a place where employees can go and seek guidance and advice about how to deal with workplace issues.

The notion here is that they don't have to be concerned with issues of trust around the HR function within their own department or our central HR function.

We heard from the IDT that there was a question there about trust and really wanting to have someone whose interest was clearly the employees and not anything else.

So the notion here is advice and assistance for employees who find themselves potentially the victims of workplace misconduct of some form.

In addition, The budget is built around the idea of centralizing serious investigations within the central Department of Human Resources rather than in departments.

So individual departments would not be leading investigations of misconduct issues in their own department.

Those resources exist now.

What's added is a person in SDHR to coordinate that work.

There's actually some staff there already.

What we anticipate by the end of the year is bringing a proposal to you to transfer some staff and resources from the departments where it is now into the central SDHR to complete this step, if you will.

We received recommendations relatively recently, so we haven't been through the analysis of how to do that.

But again, the notion is we have resources that do investigations, but we want them in a central place rather than in individual departments to minimize any perception or reality about conflict.

Questions?

Council Member Johnson.

Just generally, Ben, independence is a great thing, but independent people still have to report to somebody.

What's the structure about governance and oversight?

The notion is that the ombud, and we struggle with this issue, that the ombud would be a report to the mayor, but outside of, importantly, outside of Seattle Department of Human Resources.

So it's not, it is outside of that chain.

And the goal is, you know, again, someone who can be assistance to city employees without a concern about them having any kind of conflict, again, with the management, if you will.

Councilmember Herbold.

I just want to point to a parallel effort to that of the IDT.

The Office of Civil Rights is doing an analysis including a racial equity toolkit analysis about based on the council's request last year at looking at making SOCR a independent department from both the council and the executive.

So Council Member Johnson, I think your points are well taken.

Being independent from individual departments does not mean being independent of the executive.

So I think it's important to take a look at those structures.

One of the reasons why we've asked SOCR to do this work is because we were actually looking at whether or not it might make sense for SOCR to take on some of the functions that you're describing for the ombudsman.

But again, that's some parallel work and we can continue to talk about that.

In addition, a leadership position at SDHR to coordinate training.

Again, there's some resources there, but our sense is that there are sufficient resources in the departments to conduct the training, but we want to be sure that, again, training would be mandatory and someone to ensure that there is follow through on that.

Also, it's not a budget issue, but part of the executive order is for SDHR working with OCR to establish a very clear set of workplace expectations around these issues.

So that's another component here, not a budgetary one.

What's the timing on that?

I don't know on the workplace expectations.

My guess is a couple of months, not longer.

I mean, that is, executive order was issued relative, I think, late last week, and that work is underway.

So we'd expect it first quarter?

Absolutely.

And if I'm wrong about that, I will correct, but I don't see that.

I assume that that's the expectation of timeline.

And then outside the city, if you will, the corporate city, investments around protecting workers as well.

The supplemental budget that you just approved included some additional staff to be sure that the Office of Labor Standards can meet their existing responsibilities.

But then there's additional staff also proposed.

to both educate around and then enforce the new Domestic Workers' Bill of Rights legislation.

And then lastly, and I promised to wrap up, we focused here in the immediate term, I want to acknowledge that there are a number of really longer term investments that are being addressed, some of them coming to fruition sooner than others, but that are really setting the stage for Seattle of the future, if you will.

And I don't mean that lightly.

I mean, these are really major generational scale investments.

ST3, so Sound Transit is now in active planning for the implementation of ST3.

There are resources from using transportation colored money, if you will, efforts to support staff across the city in both SDOT, OPCD, there's an extra E there, DON, and SDCI.

I have been in the city long enough to recall the efforts around planning for the investments that we see coming, well, that have opened in Southeast some time ago and that are coming to fruition now in the North End.

And that's a major body of work for the city, neighborhood planning, the logistics of the actual construction and the like.

So stepping up to that.

Continue to work on implementing Waterfront for All, so the viaduct now expected to come down early next year.

And then we're beginning to rebuild the Alaskan Way surface roadway and ultimately the park and other facilities that are anticipated along the waterfront.

Seattle Center, you all approved just this week.

redevelopment of key arena Seattle arena I want to highlight that there are some budgetary impacts on that that you'll see so the budget includes a request for authority for an interfund loan of approximately $5 million to help Seattle Center deal with the financial impacts of that.

So just for the period of construction, they'll be losing some critical revenue streams.

What we know is on the other side, they will be earning more than they had anticipated, more than they currently do.

So we'll be able to issue the loan and then repay it from the increased revenues on the other side of this.

I think this is prudent.

Seattle Center actually has a track record on this front.

They borrowed some money when the Sonics first left, and they were adjusting to those financial impacts, and that loan was repaid.

So they're experience rated on that front.

And then just a one-off item here to note, investment for an apprenticeship program at Seattle Colleges, and I would note The budget also anticipates the passage of the Families and Ed Levy as well and the investments associated with that.

Thank you, Ben.

Thank you.

North Seattle College, thank you very much.

We're very excited.

Any other questions down here for Ben?

So I just also want to say thank you.

You have done a great job of introducing this to us.

And within the investing in Citi's future, I want to say thank you to Council Member Johnson for his companion, resolution he brought in Monday around transportation.

And as SDOT is coming in this afternoon, what we're really looking for there is specifics about projects, when they're going to be underway, and what particular fund is going to be used, whether it is the OVG funds, whether it is general fund, whether it is another one of the voter approved funds, but having a real sense of when it's going to happen.

This is especially downtown with your period of maximum constraint.

We're looking for some specifics.

So I just hope if anybody now starts listening that that's going to be something we're going to be asking for.

Any other questions, colleagues?

Very good.

Thank you all.

Appreciate it.

CBO very much for coming and your attention to the detail and willingness to answer our questions.

Thank you.

So, the next group up, and I'm hopeful that we're still close to on track, time-wise, Office for Civil Rights.

I'm going to invite you up, and then after, we'll have the Office of Immigrant and Refugee Affairs.

Council colleagues, either with the first ones, Council Member Gonzalez and Council Member Herbold, do you have any introductory remarks you would like to make at this point for your department?

Get into it, thanks.

Okay, great.

Then we can just, we can dive in here.

The Office for Civil Rights, we appreciate as you're getting settled the services and programs that you all provide.

I mean, to the general public, it's a broad group that people that are working in your department, also the constituents that you're serving, whether it's immigrants, people of color, women, people with disabilities, lesbian, gay, bisexual, transgender, queer communities, appreciate the work you're doing.

So, who is introducing this?

Is Asha, is this one yours?

Yes, I'm Asha Venkatraman, Council Central Staff.

I do staff the Office for Civil Rights.

Great.

Thank you.

And do you want to do, once again, introductions at the table, please?

Still Ben Noble, Budget Director.

Mariko Lockhart, Interim Director at the Seattle Office for Civil Rights.

Thank you.

Latrice Barr, Operations Manager.

Good.

Nice to see you all.

All right.

Do you want to kick it off, Asha, or whoever is going to introduce this?

Sure.

I can do a quick overview.

So the Office for Civil Rights for the years of 2019 and 2020 has a budget of about $4.7 million, and that's divided between its major divisions, so policy, enforcement, and the race and social justice initiative.

As you'll see in the budget, the one-time costs from, or pardon me, not costs, one-time budget additions from last year have been removed of about $830,000.

and then some about one and a half positions and reclassifying some positions have been added back into the budget for the office.

Those are the major additions to the Office for Civil Rights budget and I'll pass it off to Marco to present the rest.

Thank you.

Good morning, and thank you for having us.

I thought I would start out by letting you know that our office recently revisited our mission, and we have collaborated around that.

And I would share our updated mission with you, which is to end structural racism and discrimination through accountable community relationships and anti-racist organizing, policy development, and civil rights enforcement.

So our primary services for our office are in civil rights enforcement.

the Race and Social Justice Initiative, and our policy work.

We have performance measurements for enforcement and RSJI.

I'm going to start out with our enforcement division, which conducts responsive and proactive enforcement of six civil rights laws that prohibit discrimination in employment, housing, fair chance housing, public places, contracting, all gender restroom access, and the ban on conversion therapy for minors.

In addition to investigating cases of discrimination and violations of civil rights laws and conducting employment and housing tests to identify discriminatory practices, the enforcement team also conducts civil rights trainings in the community, participates in community outreach events, and provides technical assistance to businesses.

So in the chart, what you see are the number of cases filed, our goals, and our status as of August 31st.

Cases filed and closed are based, our goals are based on the capacity of our investigative team.

We have five investigators, which we estimate file and close about three cases per month.

I just want to clarify, so the goals that you set for investigations are not related to the number of complaints received, they're related to what the department estimates can be accomplished with the current staffing capacity?

That is correct.

Thank you.

Thank you for clarifying that.

So the cases filed include director's charges.

Those are charges that do not come from complaints from the public, but that are initiated from our office.

They don't include the all-gender restroom.

And we don't have goals for trainings, conducted outreach events, or technical assistance, although we provide them every year.

As you can see, the number is quite high.

Because those events and those activities are conducted by our investigators and not by separate staff, we don't really have the ability to set goals for those.

What are tests completed?

Yes, I'm going to talk about that a little bit later, but we do housing and employment testing.

You might be familiar with paired testing, where we send in two testers who have all of their qualities are similar except for the one that's being tested for, like race or national origin, to identify if there's discrimination happening.

I appreciate it.

You had mentioned that the department does provide for director-initiated investigations.

I was under the impression that there weren't funds that were sufficient to do that.

It would be helpful to know of these cases filed, closed.

How many of them are director-initiated investigations?

Sure.

I think last year we had 25 director charges, 17 of which were as a result of our testing program.

And so in that case, it's not a significant burden on our staff, but rather we would send a letter, a compliance letter to Whoever wherever we've found discrimination and seek compliance through that way most of the discrimination Cases that we found were settled So it hasn't been a large body of our work, but it does include a small number of our cases Thank you And so in our race and social justice division, we track trainings.

I'm sure all of you are familiar with the trainings that you can sign up for in Cornerstone.

They include, for example, Race, the Power of an Illusion, Implicit Bias, and the Racial Equity Toolkit, among others.

We also get requests every year from different departments for specific and customized trainings.

And while we don't know ahead of time which departments are going to ask for what trainings we have over the years built up an expectation of about how many trainings.

will be requested.

So you can see that our goal for this year was set at 48 of the customized trainings.

In both cases, we're well on our way to either meeting or exceeding the trainings that we were anticipating to provide.

An example, just so that you understand what a customized training might be, is we provided training to Seattle IT on conducting racial equity toolkit analyses for technology-related projects.

We've also provided training to the Human Services Department on implicit bias and grant making as so large part of their body of work is grant making.

So moving on to our strategic priorities for 2019, the Enforcement Division has priorities that fall into these three buckets, outreach and public engagement, strategic enforcement strategies, and the testing program.

In 2019, we will be addressing two new pieces of legislation.

So for outreach and public engagement, we'll be adding that body of work.

One of those provides protections for domestic workers.

That will become effective in July of next year.

And the other, harassment and expansion of the statute of limitations.

Thank you to your leadership, Councilmember Herboldt.

And we will be focusing on raising awareness and understanding of both of these.

will increase our focus on worker and business engagement and partnerships through training and technical assistance.

For strategic enforcement strategies, every year since 2012, we've had new laws to enforce.

So depending on the nature of the law, we have developed new ways to educate and enforce them.

An example, just so that that becomes clearer is with the all-gender restrooms, we did not anticipate having people come forward with complaints.

So we developed a multimedia campaign to educate people that included a Twitter hashtag for reporting and enforcement.

You may be familiar with these educational pieces that we distributed around the city.

They are also multi-purpose.

businesses can use these as temporary signage for their restrooms.

Thank you.

I think Council President Harrell has a question.

I'll wait for her to get to the testing program section.

Okay, I am going to talk about the testing program next.

I just wanted to say one more thing.

We have been developing alternative enforcement strategies to address discrimination and civil rights violations that are more efficient and effective.

Strategies include addressing discrimination prior to filing a discrimination complaint using director-initiated enforcement tools.

such as compliance letters, which I was mentioning before, and also providing proactive technical assistance to businesses.

So instead of relying solely on people to come forward with complaints, we're also being as proactive as possible, educating businesses and landlords and the public at large about their rights and their obligations.

When we issue compliance letters, that is when we have evidence of a violation of the law and that requires compliance within 30 days.

Then if a compliance is not met, the director, I can issue a formal complaint and an investigation is initiated.

So for the testing program, our strategic priorities in 2019 are to continue to partner with community organizations to educate communities on bias and discrimination using testing data.

We have our 2017 testing report available.

It's on our website.

And as I mentioned before, one of the ways, and it's a primary and probably the most well-known way of doing testing, is through paired testing, as it's called.

And our report last year covers housing.

And then this year, we will also be able to provide a report on our employment testing as well.

Are you saying pair testing?

What is that?

So we pair two different folks to go and, for example, apply for an apartment.

And then one person may be, they'll be similar in all of their qualifications except for the tested quality, which may be race, national origin, the use of a subsidy.

So historically, I thought there's been sort of a discrete amount for testing, a few hundred thousand or so, sort of segmented so you can know what you're dealing with.

Do we still segregate the amount for testing?

And if so, how much are we using for testing?

So we received an allocation from the budget that supports a full-time staff person, and then we have one additional person.

I think it's a temporary, is that right?

A temporary this year.

A temporary this year.

So currently we have two staff people working on that.

But one of them is a permanent position that is ongoing.

Yeah, I was thinking more, Mariko, that we had a contract, subcontract money, contract money.

I think we were using, historically, a company out of Tacoma to do the pairing.

They use actors, that kind of thing.

Do we still use that at all?

And that was a discrete amount of money.

For some reason, I'm thinking it was like $150,000 or $200,000 or something like that.

I don't know myself the amount.

No, it started out that way, but it's $100,000 now, and part of that we're using not with the contracting company in Tacoma because they don't do employment testing.

We've been contracting with other agencies that can help us with employment testing.

So you must have a pot of money for that then to form that up?

Yes, we have $50,000.

Just $50,000?

$100,000 this year and going forward it'll be $50,000.

So $100,000 next year, maybe $50,000 after it's actually going down?

Yes.

Okay, that's in the mayor's proposed budget?

It's been ongoing when we got it through a couple of years ago.

It was $100,000.

The funding was included with some of the money we had received from HUD for testing, which we haven't received any.

So to supplement it, one year we got an additional $50,000, and then it would go down to fit back to $50,000.

But we haven't gotten any contracts from HUD.

HUD to do any testing in the last several years.

And then how, assuming there's money for that to do the testing and to use community-based organizations, how do you determine what you're testing, what kind of bias you're testing for, whether it's race or same-sex marriage?

I mean, you could go religion.

I mean, you go through the litany of issues to test for in terms of bias.

How do you make a policy decision on what you're testing for?

We've been testing for, I'd say, probably most of the protected classes to see if there is discriminatory practices.

So, I mean, is it discrete?

So we could see, well, let's say you have $100,000.

$25,000 is going to immigrant status, citizenship status.

$25,000 going to race.

$25,000 going to disability.

I'm trying to figure out.

It seems to me that we want to really hit, we want to test There should be some kind of logic on how we test us.

I don't know how we're doing it I'm not trying to put you on the spot, but it would like I would like to know what we're testing for now years ago I had discussions with some of your predecessors where there was a pot of money, and I know they were sort of deciding how much would go to a certain kind of testing.

And we're trying to see if we could see trends whether, and it was pretty alarming what we still see out there, by the way.

So I'm trying to get a feel for if we're looking at using testing, who are we using and what we're testing for moving forward, if we could sort of figure that out.

So I'll talk to you offline about that, but that's something I'm interested in.

Again, there's so many things to test bias for, but it seemed to me that we should be very intentional if we're going to allocate monies for it.

We'll look into seeing if we can discern, you know, how the budget is allocated for the different types of testing.

Good.

I think Council Member Herbold has a question.

Thank you.

I would be very interested to have more information about the the backlog of cases that you're unable to take because of the staffing limitations.

And in particular, it would be really useful to have some sort of in the weeds information about that backlog and what the, cases that aren't being taken, which laws they relate to, so we can get a sense of across all of the different areas of enforcement that you do, including the new things that the council has put onto your plate, where the biggest backlogs are.

I think that would be really useful.

And the other piece of this is, SOCR is one of two departments in the city that act as an enforcement agent.

And I would like to sort of take a look at the levels of staffing that you have for enforcement at SOCR as compared to the Office of Labor Standards.

I think it's important that we have some parity there because you're doing really similar work and it's incredibly important to the city.

And again, much like in the area of labor standards, we've been We've been adding new requirements, and I want to make sure that we're definitely adding new funds, not just for the education and outreach piece, but for the investigation piece as well.

Thank you for that question.

I'm sure we will be able to find more detailed information for you, but I would say just overall right now what we have is about 15 to 20 cases are waiting to be assigned to an investigator, which essentially is a wait list.

And it takes approximately one month before they can be assigned to an investigator.

So that's about the waiting time that cases currently have.

I don't know the breakdown by what kind of case.

And we don't put cases into that list based on what kind of case they are.

But we could certainly look at who they are and what they are.

And we can let you know how they fall out.

And also, are there cases that you don't take because of your staffing capacity issues?

Or are people on the list for as long as it takes to get an investigator?

Yes, we don't turn anyone away for lack of capacity.

It's just a longer wait until they can have their case investigated.

Thank you.

Thank you.

Please continue.

So continuing with strategic priorities for our policy division, we are looking to strengthen in policy or community-driven solutions throughout the policy development process.

So for example, our policy team right now is supporting a bail reform work group, and our office is overseeing the community engagement process to ensure that outcomes are vetted by the communities most impacted by bail and would be impacted by bail reform.

And there was earlier mention about the equitable development initiative our office is supporting.

It has been requested to support the Office of Housing in supporting the community engagement process there.

Did I just hear you say correctly that bail reform, you're talking about bail bonds and what we can do for municipal and superior court?

That's correct.

Great.

Would you make sure that I'm included in that as well?

Absolutely.

I'm beginning to work on it and I just don't want, I don't want to make, I want to make sure that we're not conflicting at all but that we're completely consistent and this is coming from work I've done with the prosecuting attorney's office.

Okay, that's great to know.

Thank you.

For the race and social justice initiative division, so for next year, strategic priority is looking at the design and planning of a citywide train the trainer model.

You know, as you know, there is a requirement across all city employees for taking race and social justice training.

And capacity is often limited.

Again, we have wait lists, et cetera.

And there are folks throughout the city that do training.

They're located in other departments.

And we want to be able to tap that.

So while we won't be able to roll out a full plan next year, we do plan to begin the design and planning.

do some testing of what a train-the-trainer model would look like.

And then the other big priority for our Race and Social Justice Division is dedicating staff to evaluation and tracking of how RSGI is being implemented citywide.

And we'll be able to support that.

We're very fortunate because there is a proposed new position in our budget of a deputy director, which I'll talk about shortly.

But that position will have a large responsibility for performance management overall for our office.

And that will include race and social justice implementation citywide.

So our budget summary here, you can see 2016 through 2020. I will just really highlight the change between this year and next year's budget.

And you can see in 2018, a bump up and then the reduction in 2019 of $416,000.

That mostly reflects baseline adjustments to our budget.

We had a number of one-time additions last year, I'm sure you will probably recall a number of them.

We had $600,000 added for both zero youth detention and youth diversion programs as for pass-through contracts to community organizations.

We also had $150,000 added for one-time funding for the racial equity toolkit that we're conducting on our own office that you mentioned, Councilmember Herbold, as well as $50,000 the mayor added in one-time funding for fair chance housing outreach.

And then there was 28,000, that was the last of a three-year program.

It was a gender pay equity initiative that was added to our budget in 2016. Additionally, we have reduced some of our discretionary funding by $30,000 on things like printing, travel, and training.

Those baseline adjustments and that small reduction operating costs combined with the ads that I'll discuss later end up resulting in that $416,000 change from this year to next year.

Just a logistical thing.

When our department heads are going through that data, Is it online?

Should I be linking to it online?

So I'm following the PowerPoint.

She's giving a lot of important detail.

So you're just on the?

Yeah, I'm just on the computer about if you punch the button about twice, it'll come up.

Just wait for it.

OK.

No, it's OK.

I'm talking about she was going a little more detailed than that.

I just finished my notes to the PowerPoint last night, so they are not part of your document.

I'm happy to share them.

And the overall budget document is online.

Yeah.

And you could click through to, in this case, OCR where you went through it and see some of this.

And some of those items that Ms. Lockhart were describing from last year's budget, I was just trying to see that some of that money carry over what we have now.

I remember all those ads because we all put them in and work with the mayor, but I don't know what's in there this year.

And so I was trying to thumb through it.

Are you looking for underspends?

Well, underspins or what Council Member Gonzalez just gave me, which is what's in there now.

I think the budget document itself is pretty clear about which of the one-time items are not being sustained because they are one-time items and then what additions are being added and actually which of those are intended to be sustained and which are not.

The budget overview section of the budget that's online covers the cuts and additions.

Yeah, I just add most of the one-time ads that council made last year, because the bulk of it was that $600,000, are not added by the mayor's office budget.

Thank you.

You have what you need for now?

Yep.

Okay, please continue.

Okay, so now on to legislative and policy framework.

To describe impacts of different legislative actions this year, there were three significant council legislative actions that impacted enforcement and policy.

The first one, fair chance housing, that ordinance went into effect.

In February of this year, it is aimed at preventing unfair bias in housing against renters with a past criminal record.

The new ordinance prevents landlords from unfairly denying applicants housing based on criminal history.

It also prohibits the use of advertising language that automatically or categorically excludes people with arrest records, conviction records, or criminal history.

And so this year our enforcement team has begun education and community awareness around that and enforcement.

So how many cases have come to your attention so far this year?

It has not been a lot, and some of them we have started issuing director's charges where we look for advertisements for housing where, you know, it's illegally requiring a criminal background check.

I don't have the number right now, but I can certainly provide that.

Good.

So I'm interested in knowing, was it a tsunami of cases that came to your attention?

No, quite a few.

And I'm not sure that we've had any actual complainants.

So we started to do director initiated charges to make sure the law is being implemented.

Thank you.

Good.

Council Member Gonzalez.

Thank you.

In the more detailed budget paper that's included in our budget notebook, I think it's like page 450 or something like that.

400 and 450. 447 and then it goes for a few pages but there's I think Council President Harrell brought up the issue around sort of what's what was one time funding and what's being carried over and what's not being carried over.

If I'm reading it correct, if I'm reading that document correctly, and I'm hoping you can clarify for me one way or the other, is my understanding accurate that the $600,000 that you're describing around the youth diversion programming in particular, that is one-time funding and that is being continued into 2019 from 2018?

No, it is not.

It's a reduction.

That is a reduction.

Okay, because that was a little confusing to me because on one page, on page 450, it talks about adjustment for one-time budget additions in a total amount of $820,000.

And then on the next page on 451, it then starts talking about investments of $600,000 that we're gonna be doing in youth diversion.

So I'm a little confused as to whether we're taking it away or putting it in or what we're doing.

the language seems inconsistent to me.

So in other words, on page 450, it talks about how $500,000, and then, let me finish, and then on page 451, it talks about how we are adjusting and extending a temporary strategic advisor position so that who was responsible for managing and administering the $600,000 that you're now telling me is not in the budget.

Yes.

But why do we have a position to manage grants that no longer exist?

That's how it reads to me.

Yes.

I know that is very confusing.

And I am going to address that in the last slide, but I'll answer it now, which is those grants are being distributed now.

The administration of those grants won't be completed by the end of this year.

And so we have an ad in our budget to continue the position.

through June of next year to finish up the administration of those grants.

So the grants were awarded roughly mid-year.

This year will run for a year and so need staffing through mid-year next year to complete the oversight and implementation of those.

So we didn't receive, we received the funding to pass through in community grants, but we didn't receive any funding for a staff person to do that work.

Because we didn't have the staffing, we did ask the mayor's office if we could use carry forward from last year's underspend and were able to do that, but that delayed us in being able to hire a staff person.

So we're somewhat behind schedule and the grants were just issued very recently.

Okay, so I think I'm tracking what you're saying.

And I am also recalling that Mayor Durkan made an announcement, I think just yesterday or earlier this week, in response to the surge of shootings occurring in the Central District that come with some level of funding.

Can you thread the needle for me between that announcement and this, or is that funding that is gonna be running through Human Services Department as opposed to OCR?

It's not OCR.

Yes, I believe it's in the Human Services Department.

None of that $7 million is going to the Office for Civil Rights.

Okay.

That's my understanding as well.

I will confirm.

Anything else on this?

No, I'm going to let it go.

Okay, so the second item there is the removal of protections.

The first in time went into effect in January of 2017. That required landlords to take the first qualified applicant who met the screening criteria It also required landlords to advertise their screening criteria in all housing advertisements.

But in March of this year, a King County District Court judge struck down those first-in-time provisions.

So the following month, City Attorney Pete Holmes filed the Notice of Appeal.

with the Washington State Supreme Court.

So that is currently pending, and we are not currently enforcing the first-in-time provision.

And then the last item there, the statute of limitations, which I mentioned before, became effective in June of this year, amending Seattle's laws against discrimination, extending the statute of limitations, which is the time to file a claim.

and also providing a new definition of discrimination.

So those are all actions that would impact our enforcement team in terms of what they are and aren't enforcing.

Thank you.

And you've got one more slide.

Yes, final slide.

So these are the major proposed budget changes which we've discussed a little bit earlier.

One is the addition of a deputy director position.

So this position didn't exist before.

When I arrived, the policy manager was serving a dual role.

She was also acting as deputy director, which really wasn't sufficient capacity for either of those positions.

By adding this position, it will greatly increase the capacity, the operational capacity, operational management.

and performance management of our office.

And so you see that ad there.

Then your question, Council Member Gonzalez, about that funding for the administration of the community grants that continues that staff person to administer the grants.

through for six months in 2019. And then finally, that last item, reclassify the RSGI positions.

So it's a pretty small team of about six people.

And so because some of them were in positions that limited their ability to, you know, fully serve all of the needs that we have, we are reclassifying, we hope to reclassify three positions that are planning and development specialists and two strategic advisors.

The people in those positions were basically doing the work of strategic advisors, but with some limitations.

And this will allow us to both acknowledge the level of their work and provide more capacity to that team.

I think you probably just said this, but how many positions?

Is it three for the 223?

Yes, we're reclassifying three positions.

There's two Planning and Development Specialist 1 positions and one Planning and Development Specialist 2 position.

And those are people who are on staff now, you're just reclassifying the positions, it's not like a new addition?

That's correct.

So this is just the beginning of the budget process and so let me just, it's more of a knee-jerk reaction to what I'm seeing.

So I'm seeing a reduction of your department's budget by 8%, about 416,000 is proposed, which to me is programs, policies, substantive work that for whatever reason is proposed to be reduced by 416,000.

But then I'm seeing, What you're increasing is, and again, this is just a knee jerk, and I don't mean to offend anyone, is a new director, deputy director, a new grant position, and then three people get basically raises, right?

Increase in salary declassification.

So it seems as though you're increasing positions, and I'm not, they could be very much, It would be very appropriate to give them a raise, so I'm not denigrating that at all.

That could be very appropriate.

But it just seems my knee jerk is we're cutting down on all of our services, but then you're just adding headcount and compensation, which I'm missing something apparently.

Let me explain.

So the reduction is very focused.

It is a program that was funded for two years, and it was not our understanding that the intent was to continue it in our understanding from the It was a council addition and our understanding was that it was, again, designed for the two years that it has run.

It'll actually run into 2019 for the reasons that we described.

So that was a program that had been run for a couple of years that was coming to an end.

So that was one thing.

What program are you talking about?

That was this $500,000 to $600,000 of grant money that was going out the door to various agencies.

I see.

But more broadly than that, there is an ongoing commitment to the work of OCR, both its broad policy work and then specifically the RSJ work within the city.

And what you see are our recognition that the staffing resources the department had weren't sufficient to do that body of work.

Director Lockhart made that appeal and made that pitch, if you will, convincingly.

And so the mayor's budget adds, again, as you can see, roughly 200 plus thousand dollars to support staff, both adding a new position and to appropriately compensate the folks who are there now for the work that they are doing, again, particularly the work they are doing around the city's RSJI effort.

They weren't in opposition.

It was an intended move.

Does that answer your question?

Well, it's a response.

Council Member Herbold.

I have a question about the timing of the Deputy Director position and the decision-making about that timing.

We talked about the The racial equity toolkit process that your office is going through currently, that process is really focused on the structure of the office.

And I'm just concerned that this recommendation is coming for a new director is coming out before we have the outcome of the Rett process, which might, again, ultimately affect decision-making around the structure of the office.

Yeah, I mean that's definitely true and I appreciate you bringing that up.

There's so much that we don't know about what's going to happen with the RHE process that we also don't want to, and we don't know exactly, you know, what actions will be taken once we have the report from the RHE team.

So we also did not want to sort of put everything on hold while we're waiting for that report.

And these are, the deputy director is really an operational position.

It's not a strategic position.

It's more adding capacity operational.

It's kind of a COO position, which I think it's hard for, it was hard for us to imagine in any scenario in which additional operating support wasn't going to be needed.

But I think, you know, you will have flexibility should there be a new direction for the office to, you know, change some of the scope of work of that position.

Council Member Juarez has a question.

Just a quick question.

You may have answered it in the slide, but I apologize.

So the Office of Civil Rights, your budget isn't funding the new OEO position.

No, that is, as proposed, the OEO's Office of Employee Ombud is outside of OCR and is separate, so that's a, it's a new office and distinct, and it's a distinct funding.

So the, how does, will the OEO be working with the OCR, all these acronyms, the OE and the OCR?

We definitely anticipate a role in the development of the office.

So I co-chaired the anti-harassment IDT along with SDHR and was actively participating throughout the process.

supported all of those recommendations, including that the establishment of that new function.

It won't be, you know, as Ben said, it will be an independent office outside of existing departments, but we definitely anticipate very strong coordination because the model that we're looking at for that office, it borrows heavily from the ombuds office in the University of Washington.

And so it's a place for, you know, for people to come forward in a safe environment.

It's a neutral space.

And then if, you know, the issue that's raised by the people that come to that office should be, needs to be channeled to for example, our office or to SDHR's new investigative unit, then that ombudsperson can recommend that, and the person can decide which way they want to go.

Right, but just for budget purposes, I just wanted to clarify that your office would be taking on some additional duties in working with OEO.

That would be a fair statement.

I don't think it's ongoing duties.

I'm not trying to minimize the role OCR has had and will have in helping establish the office.

But in terms of the work of the office in providing employee support, I think we expect that that will be the work of OEO, I'm getting used to that, as opposed to OCR.

Yeah, I would say, I mean, OEO is not kind of the determining factor here.

It's more with the anti-harassment executive order that the mayor has issued.

There may be changes in, you know, the number of complaints that are, you know, brought forward both to our office and to the new investigative unit as well as the OEO.

So, you know, and I hope that people will feel more comfortable in bringing forth complaints.

What we know now is about 80% of people who experience harassment do not file a complaint.

So we anticipate a change in the work, but we don't know what it is at this point.

OK, thank you.

Other questions?

Council President Harrell.

One last question.

And I just don't know the reclassification process, but when we're looking at reclassifying positions, it's been my experience at least that there's a process by which personnel gets involved and there's sort of an application and then they sort of approve it or disprove it, I think.

So is all that done prior to the request when we're asking, when you're asking for budget to reclassify?

No, it has not been done yet.

We didn't want to request of SDHR without knowing that there was budget for it.

So we will still have to go through that process.

You're right.

So what would happen if we approved it, but then they deny the reclassifications?

We are very hopeful that they will approve it.

That's that's is an unknown.

I mean having reviewed the situation, is that how most of the departments will go forward moving for the budget process that some may ask for reclassifications prior to the actual process?

In the larger department, you know, the increment is small enough that that's usually something they're able to absorb without a specific line item in the budget.

In the case of OCR with relatively few staff, that's not possible.

So if they'd gone to the classification, it would have come potentially as a supplemental.

But whether or not we would have had the resources midyear would have been a question.

Marginally unusual here, but again our understanding the situation and if in fact The they don't go through that would that would leave someone potentially to an underspend in OCRs budget And then we depending how that played out we can talk about how those resources might be reallocated That's helpful.

Thank you

Any other questions?

So colleagues, we have one more Office of Immigrant and Refugee Affairs, and I am looking at the clock.

Are you able to stick with this for another half an hour?

I can't.

My colleagues can't, I'm sure.

All right.

We'll handle it well for you.

Thank you very much.

Thank you, Marco.

Thank you so much for being here, Ben, once again.

So, let's move on.

The Office of Immigrant and Refugee Affairs.

Kuk Vu is here with us.

Patricia Lee.

Thank you for being so patient in the audience.

Marco, thank you, and thank you for raising the bail bond issue.

I want to make sure we circle back and connect with each other on that.

Welcome.

Patricia Lee, would you like to start with introductions?

Thank you.

Patricia Lee, Council Central staff.

And still Ben Noble.

I think I heard, and still, Ben Noble.

I'm Ku.

I'm the director of the Seattle Office of Immigrant and Refugee Affairs.

And I'm Catherine Cortez, the finance and operations manager.

Great.

Thank you very much.

Patricia, are you going to lead off?

No, I think we'll go straight to the presentation by the office.

Great.

Thank you, Patricia.

I'm going to speculate that I think this might be the first budget presentation by our office to the full council.

I can't confirm or deny that, but perhaps Ben might be able to.

I think by my recollection that is also true.

Okay.

So it might be helpful for us to take a look back before we look forward.

We were established in 2012, so we're newish.

And when I began my tenure as director of the office, I took on a role that saw the office with two FTEs and one temp, a budget of about $385,000, and a body of work that was largely relationship management.

And so we've grown, as you can see, and that we'll talk about.

And that growth has reflected this council's commitment to ensuring that Seattle is a welcoming and safe city, and the executive office's similar commitment under Mayor Murray and continuing with Mayor Durkan So looking back, one of the first things that we did was to develop a framework.

And here, we started with three rails of immigrant integration.

And these are areas that we thought, if we did nothing else but these three things, we would be doing a great service to our immigrant residents, and largely because these things have an economic impact.

And studies show that a naturalized citizen gains, on average, 11% more than his or her counterpart.

English as a second language kind of makes sense.

The more English that you know, the more job opportunities that you have access to.

And for us, language access is the other side of the same coin as ESL.

And that's the responsibility of government to provide equitable information and services to its residents.

Since 2017, when the country elected President Trump, we've added a fourth rail, and that is protecting residents and workers.

There have been many examples that you've read almost on a weekly basis about our federal government's attempt under the Trump administration to increase enforcement and is resulting in millions of people who are now mired in the legal system and facing deportation.

And much of that attack has been at worksites and other places that affect workers.

Our model over the last four years since we've really built out the office is predicated on a couple of early things that we noted.

One was the community told us enough talk.

We want to see action.

We want to see results.

And that prompted us to scour the country to learn what other cities are doing and best practices that we could bring back to make Seattle a leading city on immigrant integration.

So we developed this model.

And strengthen and protect residents because immigrant residents face a number of barriers to equity.

For example, they have lower home ownership rates, have a higher reliance on public transportation, higher enrollment in public benefits and whatnot.

There are a number of things that we can do that can strengthen their ability to gain and maintain economic self-sufficiency.

So that's our Ready to Work program, our naturalization program, for example.

And then we've added protecting residents, which relates to the legal defense network, and we'll talk a little bit more about those things a little bit in the upcoming slides.

Engaged communities and good government to us, they're related, somewhat different but related, especially for communities in Seattle, many of whom are refugees.

Washington State now is the third largest refugee receiving state in the country.

And many of those refugees come from countries that have government suppression or folks have faced human rights violations.

So we actually really need to be intentional about engaging these communities and practicing good government because their futures are predicated on their ability to understand how these decisions that we're making affect their future.

And so related to those items, we've got our language access program.

our Ethnic Media and Community Outreach Program, and then our Immigrant Family Institute.

And I think, well, we'll just stop at that.

Was your photograph from the Seattle Center event?

That I think Council Member Gonzalez and others helped.

I'm sorry, I didn't hear.

Is this a photograph of the Seattle Center event?

That is.

This picture was from our February 3rd event earlier this year at the Seattle Center.

And that day we served 1,026 people providing free legal services and free naturalization application assistance.

Thank you.

Good.

So Ku's just given a little bit on the outcomes, the metrics for that particular event, but I'm going to highlight a couple of other programs and the metrics that we see on those.

And first in the area of strengthening and protecting communities.

So one of our largest, our largest program by funding is the legal defense network that was started up thanks to the leadership of this council and Councilmember Gonzalez and the support of the executive that is for people at risk of removal as we call it or deportation from the country and and offers them legal services, advice, and direct representation.

So you see the numbers related to consultations are intakes and assessments to people who perhaps might end up being referred just for legal advice or some other component.

And then there's the component of cases, which are those that are taken on then for direct representation.

We are on track to meet or exceed the target that we set in 2017 with our partners.

But as we've been learning a lot about this, this has been a first-time program, and we still have yet to understand how this might be continued in terms of the case rate.

As the partners continue to prosecute the cases, very few have closed so far.

within the Legal Defense Network and then would be taking on new ones in future years.

Then I would also just highlight our Ready to Work program.

It is operating at three sites across Seattle and is, as Ku highlighted previously, especially engaged to help people get into the workforce and get strong jobs.

through both ESL classes and then case management.

And you can see the metrics on those again.

We're expecting to overperform in this year and intend to continue the work at those sites, which will be in fact, and as I know you're interested in Council Member Herbold, funded at the same levels that we have in the current year.

to go on and in both our North, South, and Southwest or West Seattle sites be seeing still more students in 2019.

Do you have a question?

She anticipated it and answered it.

Thank you.

So just going on to the next slide, we have also programs, of course, to engage communities and our Good Government Program.

And I'll just highlight this last one in the interest of time, our Language Access Program.

which was established by executive order in 2017, or not the whole program, but many aspects of it.

And through this program, OIRA is supporting other departments in order to make sure that all of our Seattle services are fully accessible to people even who may not have English proficiency.

So our strategic priorities are broad, but intentionally so, because the challenge we have ahead of us is so big.

Obviously, the highest priority for us in 2019 is to be responsive, and that is in light of the constantly changing landscape on federal immigration policies.

And so we will be working as hard as we can to protect residents from those unjust federal policies.

And at many levels, including program, as reflected in the Legal Defense Network policy, And we'll look a little bit more in the slides on our legislative framework and legislation working with OIR and other city departments to monitor state and federal legislation.

As a small team, obviously, we can't do everything.

The concept of immigrant integration touches on every aspect of our city, affordable housing, good transit, safe neighborhoods, et cetera.

We also need to continue engaging and collaborating and coordinating.

That means across the city with community partners as well and with other government offices.

And there, there's some examples where the need for education is so high because information is changing so rapidly.

And we've seen around one of the Trump administration's intentions is to so fear misinformation and confusion.

So education is a huge priority there.

And services, make them community responsive.

It strikes me as I was listening to Marco's presentation about OCR that this is also our orientation.

And an example of that is last year when Jeff Sessions announced the end of DACA, we worked very quickly and got a stakeholder meeting together and then organized and offered a free DACA workshop to walk people through the renewal steps.

And in this year, we are hearing that affordability is an issue for the $495 application fee.

So we intend to put some money behind what's left of the DACA money from last year to helping people afford those fees.

And community engagement, this is really at the heart of the work we do, and it threads across every programmatic area.

because we need to understand how these programs are affecting people and what we can do better.

Maintain excellent services.

This is a lot of general words for what we mean, which is we need to do what we say we'll do.

That is the greatest way to ensuring trust by our residents about not only our office, but city government.

And for many of the members of the community who are interacting with city government for the first time through our office, That level of accountability continues to be a high priority.

And then we also have to balance long-term and short-term.

So the long-term is those three rails that we talked about.

It's naturalization because that is the greatest defense against deportation.

ESL not only helps improve access to jobs, but also improves a person's sense of belonging in their communities and their societies.

And then we have to balance that with the short-term stuff, which is, you know, on any given week there's a fire drill of the day.

You've heard over the weekend the Trump administration announced the public rule change.

This was a release rather than a leak now by the Department of Homeland Security.

that changes a longstanding definition by Congress of what a public charge is.

A public charge is a provision of immigration law that allows immigration officials to determine entry into the U.S. and I guess the word isn't award, but adjudication of applications for legal permanent residency or what we sometimes call as green cards.

And the Niles were rare because it was defined, public charges were defined as 100% reliance on cash benefits by the federal government.

and over a period of years.

Now this administration has changed that so that people who are entering the country or would like to become legal permanent residents can be dismissed on any basis of receiving food stamps, Medicaid, SNAP, and other cash benefits.

I can't even begin to tell you how devastating this is, both to Seattle's commitment to equity, but also the lives of people.

There was a press conference yesterday, and a woman who was at a mammogram van in front of ICHS.

the health provider in the international district, came and said that there was a client in Yakima who said that she didn't want to continue breast cancer service anymore because she was afraid that it would put her in this category of public charge, and she was afraid of being removed from this country as a result.

So those are the kind of challenges that we face, and it's a tall task.

So I'll just speak about the budget a little bit.

As Ku has said, we have grown from a very small office when she began her tenure, and our program funding in particular has grown to meet very strong community need.

But our nine-person office has stayed the same size for a few years now.

So we, I would just point out a couple of things that you would see here that in the 2017 actuals, that does include three months of the Legal Defense Network, our single largest program by funding.

But that number is not included in the 2018 adopted since it was, of course, adopted as a supplemental in 2017 and then continued on through the end of 2018 through carry forward.

And that number then is at the level of almost 1.6 million in each of the 2019 and 2020 budgets.

You'll also see that there's a change in the other appropriation, and that is not a change in the net funding to our office, but that's community development block grant funding that supports some aspects of the Ready to Work program, and that's simply been shifted into the general fund instead of appearing as a separate appropriation.

May I just ask you a question about that?

What impact will that have on your office?

Kou, you were just describing the tremendous workload that you have and the fire drill of the week, as you just described it.

What impact does this $400,000 have?

Has it been removed from your ability to get it?

Just to be clear, it's not been removed at all.

This one, honestly, is purely an accounting issue.

The Community Development Block Grant dollars are now flowing through the general fund, so it appears in the line above.

In some ways, it overstates the appropriation lines.

The GF overstates the increase because it includes that 400, and it's an accounting thing, part of our switch to the new accounting system.

So the CDGB Block Grants are available to you.

You haven't lost that.

Correct.

Thank you.

I think that's an important question, so I appreciate the clarification around what that number actually represents, but just to put a finer point on that, there is a reduction in discretionary funding budget line for OIRA in the amount of $126,000.

And I was going to wait to ask a little bit more about that when we got to that part in the presentation.

But I just want to make sure that that reduction in discretionary spending is not going to impact the ability of OIRA to continue to do the important work that it has been doing.

And, you know, the reality is that we need OIRA to continue to be incredibly nimble and in these times because we just don't know what we're going to be dealing with.

And I want to make sure that the capacity of the department is where it needs to be in order to be as responsive as it can be to emerging and pressing issues.

Great.

And I think we're, did you want me to respond to that or just was that just a statement?

Yeah, if you can respond to that, that'd be great.

You know, as we've been working, this has been a really difficult thing and the big picture is that there is a revenue shortfall.

And I think every department has a responsibility to move towards.

And so to me, the most important thing is in the mayor's budget, making the Legal Defense Network a permanent program.

And so that is there and that's gonna address a critical need that we're seeing, which I was gonna touch on it during the legislative and policy framework of providing those critical legal services for people who can't afford a lawyer.

And then the programs and services that we offer will maintain what will change for us is some of the discretionary spending that we have used for community engagement and policy expertise.

It's such a complicated area of work that we have one person who is an immigration attorney in our staff, but that's not her day-to-day position, but we try to to tap her expertise as best that we can.

We often have to turn to our community partners, and you know Jorge Barron with the Northwest Immigrant Rights Project is quite busy, but he makes time to help provide those analyses and interpretations.

I think that we can make some offset for some of our participation in national coalitions like Cities for Action.

They do have a full-time general counsel that specializes in immigration law and policy, and this is a benefit to all cities across the country.

And for Seattle, we take advantage of those biweekly meetings, and we're part of that leadership group that they call the steering committee.

So I think we will figure out a way to work with the reduction in the discretionary spending, but I firmly agree with the larger vision that all the departments have a part to play in meeting this larger city goal.

Thank you.

But the question's been answered at this minute.

So on the legislative and policy framework, rather than going through point by point, let me just summarize.

The first is obviously the most significant change, which is the Federal Immigration Enforcement.

And this is unprecedented times.

And we have a few numbers from the Immigration Customs Enforcement, or popularly known as ICE.

And based on their fiscal year 16 and fiscal year 17 data, we see that there is a 25% increase in the number of arrests with people who have a criminal history, but a 209% increase in arrests of people with no criminal history.

And this spike is a reflection all across the country.

And in some cities, if you can believe it, have increases in the three nearly 400% range, including Miami and Philadelphia.

We're also seeing immigration enforcement take place because of intentional coordination now between the ICE and other federal agencies, which is a departure from past practice.

So for example, there's greater denials of naturalization applications and denials of application fee waivers.

And we're seeing another issue that's been playing out in the news quite significantly is the separation of families at the border.

So the effect of this is even though demand was already exceeding capacity for legal services in Seattle King County, that will continue to be even worse because of these changes.

With DACA and temporary protective status, DACA stands for deferred arrival.

Deferred Action for Childhood Arrivals.

These are programs that provide temporary status extension for humanitarian, economic, and other reasons.

And the Trump administration rescinded DACA and then announced the elimination of TPS status for 10 countries.

So by 2020, we could have more than a million people who become undocumented because of these changes.

What that means is that in Washington, that's 17,000 DACA applicants.

We don't have breakdowns by state or county.

And TPS, that number, 318,000 across the country, We don't have a breakdown of that for the state, but what we do know is that probably the largest community affected by that TPS change is the Salvadoran community.

So, this is going to create a huge demand for legal services and people who lose TPS and DACA will also lose their work authorization.

So, we're looking at a significant number of people who are going to be facing employment barriers.

One thing that I haven't talked about, but I have a greater appreciation by the day, is the mental health impact on children and adults.

There have been studies that have shown that trauma is a thing for children of undocumented parents these days.

And so we are likely to see some of those health issues as a result of these changes.

And what you see here are examples of administrative rule changes and policy that effectively have the potential of upending people's lives.

And they are an attack against welcoming and safe cities like Seattle.

And as Mayor Durkan put it, our values around equity and inclusion.

I mentioned the release of the Department of Homeland Security's 447-page document outlining a change to the public rule charge.

And we just heard from news accounts this morning that DHS wants to, has a plan to propose a concurrent rule to deny green cards to people who are already in the country if they use The defined cash benefits for five years, that includes people who are legal permanent residents.

I can't even imagine what that's going to mean for families.

And the effect of that is that we're seeing self-withdrawals from benefits that people are entitled to.

and many of those other things that I think we're going to see.

And so we're working hard on this, and the scale of these problems will require a citywide response, and we look forward to working with city departments.

I'll just quickly then touch on the major proposed budget changes for the upcoming 2019 and 20. First, of course, the legal defense renewal.

And I did want to make one note with respect to the presentation that Mr. Noble gave that stated that the funding was also being provided at the state level.

I just want to clarify that that's not funding for this particular program, but it does serve immigrant legal defense focused outside of Seattle and King County across Washington.

The funding for this program is split between the City General Fund and funding that's been appropriated by the county in its Veterans, Seniors, and Human Services levy, which we are hopeful will be able to be blended here.

And then we are replacing a database that's a very old database to allow us to make sure that we're protecting information of folks who are enrolled in our citizenship programs.

And also have achieved some target reductions, as Ku said, participating in the response to shortfall in revenues.

And that's included some changes that we've sought to try to make, for example, in a model change in our citizenship clinics to be able to have a higher rate of per clinic of being able to assist people.

And also saving a little bit of, finding some efficiencies and saving a little bit of money that way.

And as Ku said, also then making discretionary cuts in order to try to make sure that we move together as a city.

Chair Bagshaw?

Thank you.

On the Legal Defense Network budget change, I'm not exactly tracking this math and I'm hoping that you all can help to clarify here.

So, I don't understand why, I mean, have we gotten the commitment from the county that we're getting $795,000?

It's a little complicated.

So no, we have not gotten a commitment from the county that we're getting $795,000.

The short answer would be no, and there is discussion about what portion of the Veterans, Seniors, and Human Services levy would support our legal defense network, our joint Seattle-King County legal defense network, and so it's too early to tell.

How much of that would go towards the legislation that is written is quite broad and it would go to other legal services for immigrants.

And a specific example that they use was eviction notice.

Right.

So what I'm seeing here is that this is actually not $1.59 million.

It's actually $795,000.

Let me just explain.

So, because the other money isn't ours and it's not committed.

So, I just want to be really sort of transparent and honest about what is included in this budget and what isn't.

Yeah.

No.

So, at the time that we developed the budget, we had anticipated that the current arrangement where we have been in close partnership with the county would continue.

So, and that was our expectation.

As described, that expectation has not played out in exactly the way that we thought.

So, I was going to make this point.

right here, right now.

So that was, and what we, as we get better clarity about what the relationship with the county is going to be going forward.

I mean, we had, it was actually, it was a very pleasant at some level experience when we reached out to the county previously and said, hey, We've got a significant interest here and significant level of funding, and at the time they did as well.

And it just felt sort of obvious, hey, can we seem sort of silly to do this separately, can we do it together?

And that was a partnership that we formed basically on that very intuitive notion as the county has, I think, We now recognize that that isn't going to be a one-time commitment, but rather an ongoing one.

And the county, I think, is recognizing, too, that there are ongoing needs here.

And I think that recognition is leading to some further thought on their side about how to proceed.

So again, at the time we developed this, we had this one understanding, and things have evolved since then.

So that's where things stand now.

No, and I've been in conversations with the folks at OIRA on this with both Ku and Catherine, so I just want to make sure that when we are looking at this proposed budget and the numbers that are being presented before us and to the public that I feel like we're misrepresenting a little bit about how much the city has committed to this.

And so when we're talking about the city's budget in terms of how much of our general fund is going towards this legal defense fund renewal, it's actually $795,000, which is, we're banking on the fact that King County will follow through on a continued partnership at a level that is I don't want to be equivalent to ours, but I just want to make sure that we aren't committing to community and people who need these legal services and our legal service providers that we have more money than what we actually have.

And we currently have $795,000, and the other 50% is in unknown.

I think it's important for us to all recognize that this, if the county money doesn't come through, this is actually a renewal, but it's a reduction from the original level of a million dollars.

It is, well, the only caveat I'd add to that is that we had, the million was allocated for an unknown period of time as a one-time issue, and we have spent it down so that, and not in any way disagreeing.

No, and I committed to you that I was gonna come back for it, and here I am.

And here I am following through on my commitment.

If I am anything, I am consistent.

I know this well and appreciate it.

I only want to clarify that rounding it to 800 just for this, we have $795,000 on an ongoing basis for the program.

And again, back to this issue about one time versus ongoing.

Yeah.

And my point is I'd rather have at least a million on an ongoing basis.

Understood.

OK.

Anything else from the panel?

Any other questions, colleagues, on this?

All right.

Well, thank you very much.

Thank you for holding in here with us.

Colleagues, thank you for the extra half an hour.

We will pick up again at 2 o'clock with Seattle City Light.

We've got Seattle Public Utilities, and we have Department of Transportation this afternoon.

And then at the conclusion of that, I will offer Time for some public testimony.

Anything else?

All right, so we will take a recess until 2 o'clock.

Thank you.