Budget Committee Meeting Session II 09-28-26

In the September 25th select budget committee meeting will September 28th select budget meeting will come back to order it is 1 30 p.m.

Will the clerk please call the roll?

Council Member Rink Present Council Member Rivera Council Member Socket Council Member Foster Council President Hollingsworth Council Member Juarez

Here.

Councilmember Kettle?

Here.

Councilmember Lin?

Here.

And Chair Strauss?

Here.

Six present.

Thank you.

We're going to jump right in and Councilmember Rivera is now present.

We're going to jump right into- and Councilmember Foster is now present.

We are going to jump right into SDOT.

So Director Brady, we are waiting on you now.

Would the committee table like to introduce yourself as we're waiting?

Director Pannucci, good to see you again.

Deputy Director Chow, good to see you again.

We're gonna turn right over to y'all.

Good afternoon, Council.

My name is Chris Castleman, and I'm SDOT's Director of Finance and Administration.

Good afternoon.

My name is Kyle Butler.

I am SDOT's Finance Manager.

Wonderful.

We're going to jump right into your presentation.

Something that I would like to have clarified right at the start is Director Brady, I believe that you are the Director of Sound Transit.

You are the Sound Transit designated representative and also clarify what your role is with Office of Waterfront and any responsibilities and how you're splitting your time between those three priorities.

So with that, I'm going to turn it over to you and then we'll have Council Member Saka open us up and close us out.

Okay, why don't I, all right, I'll introduce myself and then I'll speak to those points and then we'll get going.

Fantastic.

So thank you for having us here today to discuss the Mayor's proposed budget for the Seattle Department of Transportation.

I'm Acting S-DOT Director Angela Brady.

I'm joined by our Finance Administrative Director, Chris Castleman, and her sidekick over here, Kyle Butler, our Finance Manager.

So yes, I am the acting director of SDOT.

I am also supporting the mayor as our Sound Transit designated representative, which means I interface with the CEO over at Sound Transit and support you, Council Member Strauss, as well as the mayor in your board chair seats with Sound Transit.

I was formerly the director of the Office of the Waterfront Civic Projects, where I delivered our new Seattle waterfront.

So have handed those duties off to a very capable team in Barbara Lee, who is now our waterfront director.

She worked with me for almost a decade on waterfront Seattle improvements.

So those are the other hats that I wear at the city.

First, I'd like to thank the finance team at SDOT who helped put this budget together and many thanks to CBO for supporting us.

I'd also like to thank the staff, all the staff at SDOT, who work hard every day to do the challenging work to keep our streets safe and functioning.

I want to begin this budget discussion with an overall financial picture to provide some context for this year's budget development.

Over many years, city leaders, voters, and taxpayers have created a diversified funding model for transportation.

It's been 20 years since voters passed the first transportation levy.

That vote marked the start of a new era for the city of Seattle.

We went from being funded to do a minimal amount of maintenance and just a few transformational projects every year to gaining a revenue source that provides SDOT with the ability to improve our transportation network significantly.

Back then there was no light rail, no protected bike network, no rapid ride system, no safe routes to school program, and Vision Zero was just an idea.

Since then, the city of Seattle's population has grown by almost a quarter of a million people.

The transportation network, how people get around and what is expected of SDOT is now completely different.

In those 20 years, mayors, city councils, civic leaders, and community groups coalesced around a vision for SDOT that recognized how important transportation investments are to a growing city with global aspirations.

We saw that on full display this summer when we hosted very successfully the World Cup right here in Seattle.

As I'm sure you've all seen firsthand, the desire for our communities for more and better streets is insatiable.

This is what past decision-makers foresaw, and we are making tremendous progress.

These same communities have reaffirmed that the 20-year history of new taxes, fees, grants, and levies in the end have been worth it, and SDOT has delivered.

Our diverse funding streams have also made us not more resilient to the ups and downs of the economy.

Many of our revenue sources remain stable or are growing, and they are supporting major investments in streets, bridges, sidewalks, transit, and safety.

But resilience is not the same as immunity.

SJOT is right now facing a significant decline in flexible funding, particularly from the city's general fund.

As a result, we are looking at funding reductions in the amounts of tens of millions of dollars.

This funding dynamic makes us less agile and less able to take on new and emerging priorities and projects.

Why?

Our other funding sources are inflexible.

They are dedicated to very specific purposes and those dollars cannot simply be moved around to fill the gap.

That means we have both a well-funded portfolio of major levy projects and at the same time insufficiently funded core services and day-to-day operations paid with flexible funding.

Chris will be walking us through that financial picture in detail in just a minute and explaining how today's reality is reflected in both our 2026 year-end and our 27-2028 budget proposals.

But before we get into those numbers, I want to say something about the department in general.

Our work has not always been easy.

Major projects are disruptive.

They often involve trade-offs and consensus is pretty rare.

We know people expect us to be good stewards of the public dollars and effective in how we deliver.

We share that expectation and have put together this presentation with transparency and clarity in mind.

Today you'll hear us advocate for responsible reserve funds, for example, and the higher cost sharing for private interests using public space.

We understand that people want streets paved.

They want bridges repaired.

They want sidewalks built.

They want safer streets and better connections to reliable transit.

They want a transportation system that works for the city they navigate today and into the future.

That won't change.

Our teams are delivering major projects, maintaining complex transportation systems every day, and putting public investments to work.

That record of delivery matters as we enter a very difficult current budget environment.

We come into this conversation confident in the department and clear-eyed about the challenges ahead.

The financial pressure is real.

Our reductions are significant.

and they will require hard choices.

This tension between our shortfall and flexible funding and requests of SDOT to be agile and take on new and emerging projects should become clear in our presentation today.

That said, our responsibility remains the same to manage public resources carefully, to be transparent about the trade-offs and to deliver as much value as we can for the people who depend on Seattle's transportation system every single day.

and with that, I'll turn it over to Chris to walk through SDOT's proposed budget.

Thank you and hello again.

I want to thank you for hosting us today and for your ongoing partnership with SDOT.

As Director Brady has indicated, today we are delivering proposed changes to the SDOT budget under very different circumstances from prior years.

Our costs have continued to rise while revenues have flattened or declined, resulting in recent budget appropriations outpacing available resources and driving down our fund balances.

We are at a critical financial inflection point, and targeted intervention is needed now to balance the budget, maintain cash to fund our daily operations, and safeguard our future with a path toward long-term financial stability.

This intervention will require dynamic adjustments to the budget for 2026 this year, as well as in both 27 and 28, to bring expenses in line with available resources and make progress on moving SDOT into a more sustainable fiscal position.

That means that we are proposing significant budget changes in the 2026 year-end supplemental, as well as in the proposed budget for the upcoming biennium.

The changes proposed in each year are essential to improve our financial stability in the year that follows and should therefore be seen as a continuum of budget rebalancing efforts with each step along the way necessary and reducing the severity of the following year's balancing needs.

SDOT has approached this problem with broad reductions across our portfolio.

We are also proposing revenue tools to partially offset reduction impacts to programs and services.

I want to emphasize that in developing these proposals, we have focused on preserving essential services and transportation safety across all aspects of our work.

Therefore, this budget balances the goals of financial accountability and delivery on priorities.

It supports the future financial resilience of SDOT while maintaining our top priority programs, including Vision Zero, transportation levy deliverables, and expanded transit programs if the Seattle transit measure passes.

Now we're going to look at what's been going on with Estat's budget and outline how we propose to course correct.

This chart helps us understand the diversified funding streams Director Brady mentioned and how SDOT can use them.

At the top are our restricted funding sources, which means they can only be spent on the specific programs and projects they were designed for or are determined to be eligible for.

We then have a group of moderately restricted funding sources, which are mostly spoken for in certain designated programs by design, but can sometimes help us cover shortfalls in other eligible programs.

Lastly, we have our two flexible funding sources that Director Brady was referring to, Commercial Parking Tax and the City's General Fund.

These funds can be used to support any SDOT service or project, but we rely on them to fund our day-to-day business of operating and maintaining a safe and reliable public right of way.

We are very fortunate to have stable funding from the transportation levy and a few other sources, but most of our funding base is not stable.

And, in fact, much of it has been and continues to be in a state of decline.

You've seen that in the city's revenue forecasts over the last few years.

What we're working through today is the reality that many of our revenues are in a down cycle, but that is especially urgent for us.

But what is especially urgent for us is that our flexible funding sources are becoming even more tightly constrained, and yet they are used for core services and help us to be responsive to emerging needs from both our elected officials and the community.

We're also addressing the very real need to create financial stability for the department.

As you'll see throughout the rest of this presentation, most of these issues are occurring in the Transportation Fund, one of several funds that SDOT manages.

But before we get into reductions, positions, and new revenues, we want to share this administration's and SDOT's shared goal for responsibility to fund our depleted reserves.

First, I want to apologize for the very small font.

There was a lot of information to put on this slide.

But the chart shows our recent history of financial reserves in the Transportation Fund.

SDOT is supported by several funds, as I said, but the Transportation Fund supplies over 40% of our funding and houses most of our fund sources, including grants and partnerships.

This slide demonstrates the precarious position SDOT is in with respect to our ability to maintain a fund balance and essential reserves in the transportation fund so that we can reliably plan to support our project and service portfolio and also have some amount of contingency if our reserves further deteriorate and our revenues further deteriorate, or should something unprecedented happen?

The slide first shows our ending fund balance in the transportation fund for years 2018 through 2025. Positive ending fund balances are shown in the blue bars, with the lighter blue indicating the reserves contained within those amounts.

Orange bars indicate negative fund balance.

You can see that we ended 2018 with a positive fund balance of over $30 million.

Then, in 2019, the pandemic arrived and SDOT's and the city's revenue base began to severely decline.

SDOT also faced the West Seattle Bridge emergency in 2020, and during this period, we experienced soaring costs in our capital project delivery, including for concrete.

In addition to scaling back our services to reduce spend, deferring or even canceling some capital projects, and selling bonds and securing federal funds to support the West Seattle Bridge Repair Project, we had to draw down our fund balances and reserves between 2019 and 2021, the orange bars.

Fortunately, some of our revenues began to rebound, and through careful financial management, we were able to build a fund balance back up in 2022, including cash and reserves.

and we maintained that through 2024. So we were back to blue, positive.

In 2025, expenditure budgets were structured with planned spending of reserves in the adopted budget.

But this, compounded with lower than expected revenue collections, resulted in our fund balance dropping to $2 million by year end.

These circumstances continue for 2026. The double bars on the right for 26 through 28 show what we project our fund balance will be if we take no intervention versus what we project as a result of the budget changes we're proposing.

Recent adopted budgets mean that without action, we would find ourselves at the right side of this chart in orange.

Inaction would result in a worsening deficit for the fund that could not be offset by other transportation funding sources.

These projections are based on our current financial state in 2026, along with the assumption of our baseline budget for 27 and 28 unchanged and current revenue forecasts.

Without intervention, you see a drastic change in our ability to keep the transportation fund, and therefore the department, financially solvent.

Today we're proposing actions to balance our budget and immediately begin to build back reserves over time and by 2028 to get to the healthy reserve levels we should be maintaining.

This positive trajectory is shown in the blue bars on the right.

Doing this means taking some of our revenues now and placing them into our depleted reserve fund to bring greater stability to SDOT during uncertain economic times.

These actions, while difficult, are necessary and responsible and demonstrate to the public that we are serious about sound financial management of SDOT's resources.

Our proposed budget challenges address the transportation funds' fiscal challenges head-on and sets the fund on a path to sustainable, balanced budgets, healthy cash availability, and prudent reserve levels.

This represents good governance and sound financial management.

Again, the light blue bars on the far right show our gradual return to financial stability as proposed in our year-end supplemental and the upcoming proposed budget.

We now shift with this chart that shows how we keep those critical reserves funded based on resources and expenses each year.

As a reminder, this is just in the primary transportation fund and does not reflect resources like the transportation levy, which has a separate fund.

This line graph illustrates where we have been and where we want to go.

As with any organization, household, or business, we want our expenses to be less than our available resources.

In this graph, our expenses are shown in orange and resources in blue.

We always strive to have the orange line above the blue, and you can again see that confluence of unprecedented events that started in 2019 and 2020 and took us off course.

When the orange line meets or crosses above the blue line, our expenses have exceeded resources and the reserves are tapped.

The administration and SDOT believe it is essential that the two lines don't cross unless there is a true emergency or economic event like we had earlier this decade.

I also want to focus our attention on the steep decline in the dashed blue line, which represents the budget proposal we're delivering today.

Our revenues were on an upward trajectory from 2025 into 26. We rebounded, but now we are again at a pivotal moment.

With our funding streams declining and oversubscribed, we find ourselves pivoting mid-cycle for the current year and planning spending reductions in the next budget cycle.

The scale of the drop in resources within the transportation fund that is now projected for 27 is extreme.

We are preparing for resources to not only go below the prior year, but to go below resource levels in 2018. Just as a side note, the figures that these lines are derived from are nominal dollars, and they don't account for inflation.

So, the dotted lines show our current trajectory for resource availability this year and in the upcoming biennium.

And in the orange dotted line are efforts to realign expenditures with available resources and allow for the buildup of reserves to weather future challenges or address opportunities.

The budget proposals that are before you achieve this goal.

As we've said, rebalancing efforts are necessary now and in the coming two years with a focus on the general fund and the transportation fund.

And now we're going to get into what we're proposing for each year.

With this slide, we're shifting our presentation to spending reductions to close out this year, our starting point for getting into balance.

Note that we are starting from the 2026 revised budget, which includes administrative transfers and changes enacted in the Q1 and Q2 supplementals, accounting for a 2022 million, excuse me, 22, all right, let's try this again, a $22 million in increases over the 2026 adopted budget.

However, our proposed 2026 year-end supplemental reduces our current budget by $178 million, including $115 million of timing changes for capital project delivery, primarily for levy projects, to put the budget appropriation into the right year, and includes extensive adjustments in the transportation fund totaling $56.7 million.

The primary strategies we are employing are, as I indicated, abandoning capital carry forward for select projects, funding realignments to focus on levy deliverables or shift to automatic traffic safety camera funding for eligible safety projects and retaining services, and reducing spending in various projects and programs.

The pie chart on the right shows you the reduction levels in the transportation fund for each of those primary categories.

We are tapping some levy funding earlier in programs that have a mix of levy and local funding, allowing those programs to retain staff skill and know-how while delivering levy priorities in 26. In future years, their funding mixes will shift back to the transportation fund starting in 29 to ensure the levy keeps balanced on its internal priority funding categories.

Notable project reductions, as you'll see, include emergency services, signal major maintenance, and bridge rehabilitation and replacement.

I'll just spend a few words on each.

For emergency services, this line item is mostly used by SDOT to respond to inclement weather events like snow and ice, urban flooding, and wind storms, as I'm sure you all know.

Due to a mild winter to start 2026 and the projected mild winter for the remainder of the year, significant savings on emergency services labor projects is anticipated.

Signal major maintenance.

This savings is achieved by deferring work on several projects in 26 and pushing them into 27. These aren't new signals, but regular maintenance and upgrades at a few different locations in the city.

Bridge rehabilitation and replacement.

This reduction affects contingency set-asides for one bridge repair project and select area way work.

Contingencies are not zeroed out, but reduced to what engineers see as an acceptable level based on the specific projects.

We now shift from the 26-year end supplemental to SDOT's 27-28 proposed budget.

For balancing purposes, we have assumed the changes included in our 26-year end supplemental proposal are approved.

The table shows reductions only and does not reflect some of the revenue proposals SDOT is also advancing, which we'll review in a few minutes.

The table shows reduction totals by the major funds that support SDOT's portfolio.

As we can see, reductions are still necessary across several key funds in 27 and 28 to align with revenue trends in the transportation fund and to support goals of building up fund balances for future resilience.

For example, REIT and vehicle license fee supported programs have reduction targets following the August revenue forecast shown here.

We are also, as Director Brady mentioned, participating in general fund reductions that are happening across city departments.

We'll share examples of some of our proposed reductions in just a couple of minutes, but first I want to emphasize again that the transportation levy passed by voters in 2024 is a property tax with stable funding, so it does not have any program level reductions.

although the budget does reflect timing changes to align with updated project delivery schedules.

Overall, this budget supports sustainable spending levels by adjusting budgets through reductions, adding revenues and through legislative means and allocating projected revenue increases as well through new revenues from the King County Transportation District.

It's a balanced budget that starts building up our reserves again while also aligning levy budgets with planned project spending timelines.

This slide shows how decisions proposed on prior slides affect SDOT's workforce.

Please note that these funding changes and spending reductions do affect SDOT staffing levels in 27 and 28. Nine position reductions are proposed.

We focused on positions that have remained unfilled due to savings targets and do not represent a direct change in service level.

We want to put these reductions in perspective for SDOT as a whole.

Our total budget reductions for the biennium equal approximately 4% of the combined 27-28 budgets, totaling $47.9 million over the two years.

As Director Brady mentioned in her introduction, our proposal aims to make broad, shallow reductions throughout our portfolio instead of deep reductions that severely disrupt service or project delivery.

That means that nearly half, 48%, of SDOT's budget programs are taking cuts, reflecting the strategic approach underlying these changes.

So, with a 4% reduction, SDOT remains well-funded overall, but real impacts will be felt in almost half of our programs through increased service wait times and deferred project schedules due primarily to the reductions in our flexible funding sources in the transportation fund.

We've listed a few examples here from both our operations and maintenance services and our capital project portfolios, with full details included in our budget change submittals.

In operations, as an example, a 23% reduction in our street service maintenance budget means longer service intervals, and a 10% reduction in our pothole repair budget could impact the 72-hour response standard we aim for.

In capital, as an example, we are reducing our arterial major maintenance by 24%, which aligns to historic budget levels, including in 2024. And a 20% reduction in our structure's major maintenance will be managed by deferred project delivery schedules, moving timing into 27. We now shift to the revenue side of the equation.

Our balancing strategy does assume some additional revenues for SDOT coming from expansion of the traffic safety camera system and King County's new increase in its transportation benefit district sales tax.

First, let's talk about traffic safety cameras.

Automated traffic cameras are an important and effective safety tool for our community, as you know.

School zones remain our primary deployment.

Estot and Seattle Police Department completed expansion of 37 school speed zone cameras at 19 locations citywide, which became active in November of last year and will be fully operational in the current school year.

These cameras also provide revenues beyond the cost of maintenance and enforcement, helping to fund other transportation safety programs throughout the city.

Next, the new King County Transportation District revenues.

The King County Transportation District approved an additional 1% sales tax for 10 years and all cities in the county collectively receive 12.5% of those tax revenues after administrative fees.

These revenues are meant to support transportation services.

Seattle's share is a percentage of that 12.5% which yields ongoing flexible new revenues for SDOT with $4.7 million anticipated in 27 and in 28. We send thanks to the elected leadership who advocated for a fair share of this countywide tax being paid by Seattleites coming back to the City of Seattle.

We know a lot of work went into that request, and because of that effort, we can do more work in Seattle's public right of way.

These revenues may vary year to year as our share will be affected by economic activity and relative population growth of King County cities.

In 27 and 28, we've designated these funds for urban forestry and bridge and structures maintenance work to stave off what would otherwise have been painful budgetary reductions.

Now I need to find the rest of my notes.

It did not print out, so I'm going to switch to my online version, if you'll bear with me.

And as Chris is finding her notes, I'll just say that SDOT was waiting in the wings since about 10.30 a.m.

this morning, so thank you for being with us all day.

Our pleasure.

Okay.

Thank goodness for online.

All right.

Our proposed budget legislation.

SDOT's proposed budget also includes three proposed legislative actions.

A commercial parking tax rate increase.

Commercial parking tax revenues are collected from parking in paid lots and garages.

The tax is an important and flexible revenue source for SDOT, funding many basic transportation services including Vision Zero, emergency services, signal maintenance, maintenance on bridges and other roadway structures, urban forestry field operations, and debt service on our bonds.

As other revenues have lagged, the importance of commercial parking tax revenue to SDOT has increased.

The city last increased this tax rate in July 2022 to 14.5%.

We propose raising the tax to 17%.

so additional revenues can provide SDOT with more growth in one of the two fully flexible funding streams we have and we can use those funds for core services while also supporting the city's goals to reduce congestion and encourage multimodal and transit ridership.

This translates to someone paying 50 cents more on a base $20 parking fee from a total of $22.90 currently to $23.40.

Without this rate update, SDOT would need to identify an additional $9 million in annual program reductions from the transportation fund through cuts to CIP projects and maintenance.

Increasing street use rates.

Per the municipal code, street use operations are to be funded with permit and inspection and review fees.

The idea here is that private sector use of public space shouldn't be paid by general taxpayers since the benefits aren't broadly shared by all.

Currently, street use permit and inspection operating costs exceed revenues by policy design.

The proposal increases the cost recovery percentage from those services from about 70% fee funded, as it is now, to about 80% fee funded.

increases to permit fees beyond the consumer price index last took place depending upon the particular fee in 2016, 17, 18, 19, or 22. meaning some of these fees have not been adjusted beyond CPI since 2016, and so on.

Without full cost recovery, this work has traditionally been subsidized through street use and occupation fees which are collected from long-term or temporary private use of the right-of-way, for example, lane closures for construction, which can also be used to fund other transportation priorities.

Shifting permit costs to the private applicants who benefit directly from their street use permits is consistent with the department's equity goals.

Our proposal would increase permit fees by roughly 30% and per hour staff reimbursement by roughly 5%.

At the same time, The Street Use Division has started process improvement work to find efficiencies, reduce costs, and continue working to turn permits around as fast as possible.

To reduce funding for this part of SDOT would assumedly result in longer permit times and frustration from the developer and small business community who we serve.

We came to this proposal after serious internal discussions around the trade-offs of increasing fees versus having other programs subsidize these services versus reduce resources available to permittees.

Adjusting rates will prevent an increased drain of SDOT resources away from other transportation services.

And finally, an Interfund loan for the transportation fund.

City policy requires funds to not maintain a negative cash status for more than 90 days.

The transportation fund has been in a negative balance for the better part of last year, of the last year.

This loan will allow SDOT to comply with city policy while addressing the issues creating the negative cash balance.

The loan itself is handled through cash transfer and does not have a budgetary impact, but the interest payments will be part of the budget and this is shown in our financial plans.

I want to thank you very much for your attention, for putting up with my slight bit of nervousness, because it's been a while, as I said.

And as I've walked through what is a difficult storyline and complex information, I'm now going to hand the presentation back to Director Brady to share some of the important policy and community service commitments SDOT and our proposed budget actions continue to support.

Thank you very much.

In recent months, we've seen an uptick in fatalities and serious injuries from traffic crashes.

I want to be clear that street safety and Vision Zero as a program remain fully funded in this budget.

We know how important this program is to Seattle citizens, our mayor, and our council members.

I'd like to highlight that Executive Order 2026-05 was signed by Mayor Wilson on August 21st.

The Executive Order reaffirms SDOT's focus on established effective Vision Zero policies and our safe system approach.

It outlines directives to expedite safety projects, install speed reducing cameras and arterials, and push a legislative agenda that would empower SDOT through Boulder state laws and policies.

I know Councilmember Saka has proposed complimentary legislation focused on Vision Zero as well.

Thank you, Councilmember.

Our Vision Zero related funding levels are maintained above the 2026 to 2031 adopted CIP and result in a $42.4 million budget for the three years.

Next slide.

We want to again thank City Council for supporting and recognizing the importance of the Seattle Transit measure.

This budget assumes continuance of this funding.

With it, we will continue to fund Seattle-focused bus service from Metro, including new investments in South Lake Union and Lake City.

And the Free Orca Pass program would also continue, as well as funding for Estat streetcar operations, Sound Transit 3 support, and targeted construction projects to relieve bus congestion.

Next slide.

We want to make sure that as we talk about budget adjustments and the reductions to specific programs, we don't lose sight of the rest of our work.

Here we outline key priorities SDOT is implementing based on what voters supported and the direction set by past and present city councils and executive administrations.

We also want to note that today's updates about reductions, limited reserves, and uncertain funding make our overall position to handle new requests less flexible.

New priorities, projects, programs, and policies that are unfunded can present a zero-sum game in this financial environment.

So as we engage with communities, businesses, and our elected leadership, folks are likely to hear even more from SDOT about trade-offs.

Outlined on this slide is a sampling of recent work we see as aligned with shared priorities.

Better transit service through better bus streets, rider safety, and responsible management of the Seattle transit measure.

Sidewalks and accessibility projects are getting a major influx of spending thanks to the 2024 transportation levy.

It provides for pedestrian safety and new sidewalks, walkways, and curb ramps that provide critical access for people with disabilities and children.

Street and bridge preservation remains one of our highest spending areas and the key to keeping our overall transportation system functional and well-maintained.

We do that with major paving projects, bridge rehabilitation, and smart interventions along the way.

Traffic safety and Vision Zero are ultimately our top priority and show up in every program and project that we deliver.

This school year, families are seeing a surge of projects including new traffic signals, neighborhood and arterial traffic calming, crosswalks, and inventive ways to address long-standing trouble spots.

Major projects are proceeding.

Our projects are reshaping Seattle with a focus on improving transportation access in business districts.

The Rapid Ride J-Line projects in Eastlake and the U District are just over the halfway completion mark.

The Route 40 corridor project in Westlake, Fremont, and Ballard is a month away from a ribbon cutting.

Projects to support walking, biking, and bus access to Sound Transit's new Pinehurst Station are underway.

By the way, that is opening this Wednesday, so hopefully we'll see you all out there and join us in celebration with Sound Transit.

and we've launched major safety and maintenance projects to invest in the reshaping of Aurora Avenue, Rainier Avenue, Beacon Avenue, and 14th Avenue in South Park.

Next.

As we close, we want to underscore that our budget approach is grounded in making sure our plans match our resources, not just for this year, but for the long run.

Overall, we're thankful for our diversified funding model and the public is experiencing those investments firsthand.

For a flexible funding shortfall and need for adequate reserves, we believe in this approach.

It aims to institute cuts broadly, not deeply.

No single program or constituency will see their vision unfunded.

We managed to balance in a sustainable way.

We've completed our work closely with CBO Director Ali Panucci and her team, with the Mayor's Office, and here today with City Council.

We appreciate these partnerships and support as we navigate a challenging financial environment together.

Thank you all so much.

Even with the real constraints, we remain focused on delivering a safe, reliable, and well-maintained transportation system for our city.

Thank you for your time, your engagement, and your continued support.

Thank you.

Anything else from Director Panucci?

Nothing further right now.

I will get into my comments and I'll share short ones from a budget perspective, but I'll let Councilmember Saka as the chair of the committee overseeing this department, you are recognized.

Thank you, Chair, and thank you, Acting Director Brady and the entire SDOT team for your work in developing this proposal under exceptionally challenging financial constraints.

And so I know a lot of work went into this.

I want to thank you all, the entire SDOT team, from the planners to the executors, and noting that Mr. Rodney Maxey from the SDOT team is in the background.

Appreciate you and your team and their leadership and all the terrific work you all do in the department.

As we look forward to this proposed budget, it's also a natural opportunity to look back as well.

And so when we look back at this past year, few cool things to celebrate from the department, including a very well-planned, organized, and ultimately executed Seahawks Super Bowl victory parade.

and that's an event that championship cities do regularly for various major championships won.

We're excited to host our own here in connection with the Lombardi Trophy celebration for the Seahawks.

But that's kind of an event that's held across major cities in the country, so we still did great for that.

But the biggest sort of marquee event was FIFA, as you alluded to, acting director.

FIFA World Cup, well run, well planned, and again, well implemented strategy.

nationally and internationally renowned and recognized.

And we're either the top or the top two or three rankings across multiple different ranking sets.

And a huge reason for that was because of our world-class transit and transportation systems.

And when we talk about transit, SDOT, manages and owns, doesn't necessarily operate, but two transit agencies themselves, Seattle Monorail and the streetcar.

And of course, a huge factor for our success was the waterfront, which we know the relationship between the department and the Office of the Waterfront.

So kudos there.

And in fact, today, from there was an article in today's Seattle Times from Gene Balk showing that the Oxford Economics Global Cities Index showed Seattle is ranked number four city globally based off of a variety of factors, including governance, I should say.

But in any event, a lot to be proud of, a lot to celebrate and also a lot to consider as we head into next year's proposed budget and beyond.

And I'll also just remind that transportation safety remains my highest priority as chair of the council committee that oversees your department.

At the same time, safety commitments only matter if SDOT has the stable funding, staffing, engineering capacity, and maintenance resources necessary to deliver them.

noting that in my own council district, for example, in District 1, residents are already asking for safer streets, better pavement, pavement management, reliable bridges, and roadway maintenance, and longer overdue improvements along corridors like Roxbury and Fauntleroy.

The transportation fund shortfall, therefore, raises concerns that go beyond balancing columns on a spreadsheet, Council needs to better understand which services and projects residents will actually experience as delayed, reduced, or even less visible, and whether the proposed tax increases, there are some here, fees or fund shifts, and borrowing mechanisms provide a sustainable solution.

Finally, I'll note that we also need a transparent accounting of what this budget funds for the mayor's recent Vision Zero executive order that was mentioned versus what was already planned, et cetera.

And against this backdrop, I have a few questions.

So we've heard that the transportation fund supports roughly 42% of SDOT's budget can you please confirm the correct percentage or denominator and quantify the underlying 2027 and 2028 funding gap before the proposed revenue increases?

And related question, if the commercial parking tax or street use revenues underperform again, which specific revenues or excuse me, which specific services or projects would likely be reduced first?

Committee table.

Council Member, would you please restate your first question concerning the transportation fund relative to the budget as a whole?

Absolutely.

42% figure.

So we've heard that the transportation fund supports roughly 42% of SDOT's budget.

Can you please confirm the correct number, the denominator, and quantify the underlying 2027 and 2028 funding gap before the associated proposed revenue increases that you talked about in your presentation.

All right, so Kyle is going to pull up his magic spreadsheet.

And I just wanna reiterate, I understand you're asking to identify the amount of the transportation fund that is in the 27-28 baseline budget relative to the whole budget for the department.

So prior to any proposed reductions that we are recommending for the current year and for the upcoming biennium, what would be the percentage of the transportation fund's contribution to SDOT's whole budget?

and we can get back to your office with the specifics on it.

In general, the 42% was looking at 2026, this year's revised budget.

So that includes all of the changes that you've made as a council to the budget, including the carry forward from the prior year.

So the overall budget for this year was a little over a billion dollars once you've included all those carry forwards.

The adopted budget was around 600 million.

Those ratios hold pretty closely for still about 42% of that adopted budget, but we can get the specifics for each year and break that out to you in a follow-up.

So does that get at the question you're looking for?

Yeah, it's good for now.

Would appreciate more follow-up.

Yeah, and the transportation fund, the other thing about it, it includes grants that we've won for projects with federal, state grants, those sorts of things.

So they often end up falling in that carry-forward category.

There are often large projects where we apply for them and win them while we're in design, and then the money's for construction so that might lag for a year or two, but we can break that out for you.

And then the second question, I've brought us back to this slide where we show the reductions we are planning.

Transportation fund in this case, about 20 million in 27, and I gotta move that out of the way, 21 million in 28, If we did not increase the rate of the CPT tax, then that number would be another 9 million higher.

We would need to go find another 9 million in projects to reduce.

And again, it's in your most flexible sources, so we can't touch a levy project.

Those are funded by levy.

We'd have to be looking at the things like day-to-day maintenance, day-to-day paving, specific CIP programs.

We'd often look there so we wouldn't be canceling a project that's already in design, in flight, and promised.

We can get back with your office on more specifics about what those would look like in that hypothetical situation.

And then also the street use fees.

Off the top of my head, I don't know the exact amount.

I think we're on the order of four to five million dollars of additional fees.

We can double check that and get back.

I believe that ballpark is correct.

And both the nine million dollars that Kyle referred to for commercial parking tax and the street use proposed additional street use fee revenue are annual amounts.

Got it.

Thank you.

On the addressing the shortfall, part of that, I'll just point you to slide 10, some of the reduction spotlight slide, those items there, along with I think some of the items listed on a prior slide, in any event, The signals, the maintenance, and the other sort of bucket that was listed on the prior slide.

On this slide 10, it notes that the 72-hour pothole response standard might be impacted by a 10% reduction in that line item.

My understanding is that And of course, when you said pothole repair, my ear naturally perked up, colleagues.

But in any event, my understanding is that 72-hour response standard was a specific voter commitment that we made in the 2024 transportation levy.

So why would that be impacted by the proposed reductions?

Why or how, I guess?

Well, so just obviously the pothole repair is just one example of an SDOP program taking a reduction necessary to rebalance the transportation fund.

All the programs that you're seeing on that slide before this one took a 4% overall reduction that was required to keep SDOT's budget imbalance.

And we know they're all valued by Seattle taxpayers.

Right now we're hitting about 90% of pothole repairs within 72 hours.

So the cut we're showing here might bring us closer to the 80% levy commitment.

That's what we had committed to in the levy.

and that just solely dependent on the scope and the number of pothole repairs that we have received.

But we are currently, as of right now, we're hitting about 90% of potholes at that 72-hour level.

Got it, yes.

No, that makes sense.

Overperforming.

Yes.

So the minimum floor set forth in the levy was 80% of reported potholes within 72 hours.

And currently, over the last couple years, the department has performing above that minimum threshold, most recently 90%, so you're saying it'd go back closer to 80%.

Okay, okay.

And I'll just add that the levy is not the only funding source for that program.

It supplements our base funding, but the majority of the funding is in the transportation fund.

Got it.

So when we talk about the proposed reductions of approximately 2.4 million from strategic planning and development, 3.1 million from operations and maintenance, and 14.2 million from capital infrastructure.

Just curious to better understand which specific functions, projects, or delivery schedules will residents actually experience as either delayed or diminished, including on the high-injury network.

if revenue suddenly improves for any number of reasons, what would SDOT recommend restoring first?

That's a trick question, just kidding.

The majority of the capital changes, so the budget changes on the capital side really are about realigning capital project delivery.

There are, in terms of the timing, there are no capital projects that are in our portfolio, especially those that relate to the high injury network or to any policy area that we know that this body and the mayor and the community are interested in.

So really it's about putting the budget appropriations on the capitals' side into the correct year or years where the project will be delivered.

On the operating side, as we've indicated, there's a variety of service areas in our budget that will be affected by the proposed reductions.

However, by distributing the reductions across the portfolio in the manner that we have, this 48% that you can see here on the slide that is still up, we sought to reduce the severity of reductions in any one given area.

so that we can manage service expectations without too much of a noticeable impact to the community, however impacts will occur.

I can't pretend to say that there won't be service slowdowns.

There may be and really on the service side, it's falling predominantly on our maintenance programs because that's where our flexible funding sources really help to target the department on the O&M side, primarily in maintenance.

We can certainly give you a full list of all of the projects that will be affected by the proposed reductions.

I believe that your staff have that as part of the submittal, but we could certainly provide additional material to guide you to that information in a clear and concise way.

I mean, we could go through and list all of the projects, but I don't know that that would be, not knowing the other questions that you or your colleagues have, if that would be the best use of our time right now.

It's up to you.

So thank you.

do follow up offline with that, because we have the CIP budget, but yeah, do follow up line to supplement.

Let's see, I wanna talk about some of the assumptions for some of the revenue, specifically what assumptions underpin the projected revenue recovery for the automatic traffic safety cameras, the Seattle Transportation Benefit District, and commercial parking tax.

Actually, those are three kind of buckets.

Let's focus in on just the automatic traffic safety cameras.

So what specific assumptions underpin the projected revenue recovery for the automated traffic safety cameras?

Would you characterize these as liberal or conservative assumptions?

And again, what went into those?

Councilmember Saka, we'll follow up with you via the SharePoint site.

Those revenues are projected by my forecasting team and the office, and we're not prepared to give you all the details.

What I would say is, in general, we are trying to be somewhat conservative for the new cameras that we don't yet have as much implementation experience on, and we'll monitor that closely, but we can follow up with more details.

Yes, curious to better understand that in particular, because my understanding is that it makes certain assumptions about certain revenue received from that, from those cameras, and we've known that the department has struggled to deploy those for any number of reasons, despite prior funding from the council, and spanning multiple years now, and so just want to make sure that the appropriate We have realistic assumptions baked into the projections here for the revenue.

Let's see here.

Let's talk about REIT for a moment.

So given the REIT shortfall, and this might pertain to some of the follow-up, but at least at a high level, what kind of category of capital maintenance projects are the most at risk given that REIT shortfall?

And more importantly, what criteria guided those decisions?

The REIT shortfall was from the August forecast and given the late We looked at the programs that are already funded by REIT and they shared shallow cuts across about 10 programs.

We can follow up with the specifics on those.

But these are capital projects.

REIT has to be spent on capital.

In our case, transportation is how it's eligible.

So capital, transportation projects, this did not affect any maintenance operations programs.

Got it.

And finally, I'll ask some other questions that I'll save for the share site.

But I understand that funding for the district project fund projects that were already in the pipeline have not been proposed to be cut.

and so district project fund is a critical traffic safety initiative.

One of it establishes a new program, new mechanism to fund neighborhood scale kind of traffic safety projects within neighborhoods to supplement other programs, whether it's safe routes to schools, neighborhood initiated safety fund.

There's almost a dozen or more of those kind of safety programs.

So this is just another one that we established in this council.

Is there funding in the mayor's proposed budget to allow this program to continue?

Basically meaning that council members would have the opportunity to fund additional traffic safety treatments for the districts in 27 and beyond.

Thank you, Councilmember Saka.

The mayor's proposed budget contains the continuation of the existing funding that was identified in the 25 and 2026 budget.

As I'm sure many of you are aware, a lot of those projects came to SDOT earlier this year and are in the process of design and engineering.

A few are actually beginning in delivery.

And so those projects will continue into 2027 and the funds will follow them.

The Mayor's proposed budget and SDOT's proposed budget does not include any new funding allocations for the Council District Fund beyond what was originally appropriated out of the Street Use Fund by this Council.

Thank you for clarifying there.

Excuse me, there is $4 million in the transportation levy that matched the $10 million that was appropriated out of street use for the total amount.

And I believe that the levy proposal that was passed by voters had just the one-time $4 million allocation.

And Council Member I see Director Panucci.

Yeah, and maybe just repeating some of what Chris just said, but there was one-time funds identified primarily from fund balance to fund that, and so there was not an ongoing fund source identified when that was created.

Councilmember, you still have a floor.

Yeah.

Thank you for the explanation there.

No further questions.

Thank you, Council Member Saka.

I've got Council Member Kettle followed by Council President Hollingsworth, but I will just take a moment here to share the information that you're presenting to us.

I'm glad that you are presenting it to us.

Director Panucci, I am grateful for your strict adherence to transparency.

And the reason that I'm grateful for that is, Council Members, this is not normal.

what we are seeing right now is not standard and requires a fix.

I say that because I have been aware that something is not right with SDOT's finances for years.

I have continued, and I didn't quite understand what I was seeing until we had Director Panucci here pulling the curtain back a bit.

And the reason I say that is a number of years ago, we were doing changes to Ballard Avenue to meet the new street cafe requirements.

And we've provided a little bit of like $250,000.

Maybe it was $500,000.

and I was told that the meetings that I had with SDOT staff would be billed to that account and so by the time we got to implementation of the work that we had been meeting on, there was supposedly no money left.

That was a first flag because that's not how this works.

If you wanna bill me for the hours that I'm meeting with staff to talk about project that we're partnering on.

That's not how this works.

I then, from there, we passed an Interfund loan to support the department during the COVID pandemic.

It was a one-year Interfund loan that we got to the end of that year.

Zero dollars had been repaid.

It was almost to a point of the department had either forgotten about it or not attended to it.

and we extended that loan for another year with a repayment schedule.

And then this year, coming to this year, I was checking in about Greenway's funding in the district and I was told that the project on Sixth Avenue from 58th to 70th-ish was the only Greenway's funding that we had in the district for the entire term of the levy.

That's eight years.

That doesn't square with my understanding of, and maybe there's other priorities, and that's fine.

But what this tells me, and I've been very clear since 2020, the goal is to get that Greenway all the way up to Holman Road, right?

And there's other Greenway priorities in the district.

So those three things, really are alarm bells for me, like four fire alarm bells, which is why colleagues, I'm stepping out of the norm.

I usually speak last.

I just want you all to know what you are looking at is not standard.

And I appreciate the transparency in which you are presenting this information because The moments that I've just explained over the course of the last few years has challenged me in understanding how the department is doing their work in very critical ways.

I understand that there's another Interfund loan that is being proposed as a way to balance your budget.

I can tell you right now a 10-year Interfund loan is not gonna work.

When I look at the seven-year look back, we've had five directors at SDOT.

Again, this is not coming down on any SDOT employee.

This is not coming down on any one person in the department.

but what the theme of this budget has been is momentum gain or momentum loss, leadership churn or leadership stability.

We just had human services department in here who has had stable leadership and council member Saka said it's the best presentation he's ever seen.

Sorry, I didn't mean to take words out of your mouth, sir.

You can clarify in a minute.

But I just share that because a 10 year Interfund loan from here is another five to six department directors and who is gonna know at the end of that term whether it's started to be repaid.

I know that with Director Panucci that we've got better safeguards at least proposed in this and I really appreciate this.

So I'm not here in this moment of speechifying, putting blame at anyone's feet.

I'm not here saying anyone did anything right or wrong, although this is the only department that in my annual review with the state auditor, SDOT is the only department that I've reported concern with in those audits and that was due to the Interfund loan lack of repayment.

and so I'm not here to blame or cast shame or anything like that.

I'm here just to recognize that this moment is different than in all other presentations and especially for council members who is their first, second or even third or fourth budget.

In all of my time, this one stands out like others don't.

Sorry for going on long.

With that, I see Councilmember Kettle and Council President Hollingsworth.

Thank you, Chair.

Just quickly to that, that's why I and my team say, what would Ali Panucci do?

And two, you bring up SDOT directors.

It sounds like police chiefs or mayors.

How many mayors?

Last time, two-time mayor.

This governance issue is, since you raised it, it is an issue for our city.

The constant churn of SDOT directors, police chiefs, mayors, all of the above, it's not helpful to our city.

Thank you, Chair.

So, you know, looking at transportation, I still use my three strategic priorities, public safety, port maritime, and of course, most importantly, D7 constituents in their neighborhoods.

On public safety, I do wanna say first, because I've had reporters say, well, you don't care about, no.

In our system with committees, traffic pedestrian safety is with my colleague who I serve with on the Transportation Committee.

and public safety looks at those other areas.

But I do believe transportation, pedestrian safety is public safety for those reporters who didn't seem to understand that.

Starting off with Vision Zero, all my district projects, by the way, are all based on Vision Zero.

and we should keep them because we have a different look into the districts than SDOT in terms of outreach and the things we hear.

I think it's important to have essentially a double check or augment and I think it's helpful to the districts and I think it will be moving forward too.

So that is a key piece that's so important for us and we've seen the benefits in our district.

Public Safety 2, I noted, you know, in the briefing, bridge rehab and replacement phase 2. Can you speak to that a little bit more?

Like, for example, Magnolia Bridge.

In the levee, I believe it was levee's transportation plan, you know, we had a Magnolia Bridge specifically listed in there.

and it seemed to be early years that was supposed to be looked at.

And on top of that, we're supposed to have a first responder emergency access road that runs from the marina or West Marina Place up through what looks to be an alley, which technically is West Gaylor, to 32nd Street in Magnolia to connect lower Magnolia in the event that the bridge drops.

Because it could happen any time.

and that is definitely a public safety threat, but it's also transportation.

Can you speak to Magnolia Bridge and the points about seismic retrofits and the emergency first responder piece?

Councilmember Kettle, you're referring to the reductions that are proposed in the bridge rehab and replacement phase three as part of our year in supplemental, is that correct?

Well, yeah, as listed in the briefing.

Pardon?

as you noted in the briefing.

And then specifically, obviously I care about, you can use Magnolia Bridge as a case study or an example.

The Magnolia Bridge is unaffected by those proposals.

Primarily, as I indicated, it had to do with reducing program contingency and at this time what we're contemplating is because we are still in the process of completing the Fourth Avenue South over Argo Railroad Bridge rehab project, that closeout, excuse me, final closeout costs may increased pressure on structures' major maintenance, CIP, but we firmly believe that we have appropriately accounted for all contingencies, but the Magnolia Bridge, as I understand, it's not affected.

We are advancing the seismic repairs for Magnolia right now.

On the access road, we'll have to go back and double check that council member.

We'll get you more detail on where that project is.

Okay.

That would be very important.

I'm just going to take the opportunity in the briefing was mentioned, the automatic traffic safety cameras.

Once again, you know, we can have the various pieces of it, but if the Seattle Municipal Court can't do its piece, then we're in trouble.

So I'm taking the opportunity to foot stomp on that and to make sure that we're good long-term and not being, not to put them in the situation that we have, like with SDCI that's related to, you know, the various revenues coming in.

And the last thing I note from a public safety perspective, and this kind of goes to the questions or worries, might be a better way of saying, related to the unified care team.

Every time we see a little thing like, oh, there's supposed to be two FTEs with the UCT, oh, but they're not there.

And then we wonder why it seems like we're backsliding a bit, particularly over the last six months.

These are the reasons why we note that, so I just wanted to highlight that, the fact that and the fact that two FTEs, which are supposed to support the UCT, Unified Care Team, haven't been filled, and that's a decision that's been made.

And my next priority area, Port Maritime, I thank you to everyone involved, at least the East Marginal Way project, I think that's great, and I've been along there many times, checking it out, going past the Coast Guard station, and so forth, and I think it's beautiful, and I think it's great for the port and for our, with those transportation needs.

I would add, can you give an update to where we are with the freight program?

I'm thinking about the heavy haul network, the truck streets, all those kinds of things that really will allow Soto, Duwamish, or Ben Mic, those are maritime industrial areas to really function properly.

So as Chair Strauss says, You know, to have that 15-minute city, we have to have the logistics.

And it's all about logistics.

Because otherwise, if the grocery stores can't get their shelves restocked, it's just another form of a food desert, grocery desert.

Can you speak to the freight program coming up, particularly those areas?

Council Member, I just want to clarify, are you asking us to speak to any potential reductions to the freight program or more on upcoming services and deliverables from the program?

Yeah, basically the status overall of the program to include, is there any expectation that there'd be a reduction on that area, but given how it's important for our OED partners out there,

There are reductions proposed for the freight spot improvement program.

Those are expected to result in the deferral of two derelict rail removal projects.

We can get back to you on the specifics of that.

And then also provide an update on the overall program.

Yes, I'd like to get, you know, follow up in terms of the impacts.

Thank you.

Again, we have to ensure that, you know, for long term, we have to ensure that we're a viable port 100 years from now.

And we're seeing that right now.

Everybody talks about tech, but the maritime piece is so important.

It's so important for revenue to bring it back to Director Panucci's side of the house.

And, you know, we can cut our nose or spite our face if we want, but, you know, we should be looking at that area for that stability that it can bring.

Granted, a little bit unstable in the era of Trump, but generally, historically, a very stable piece for us, and we have to ensure that we're good on there.

Particularly when I see these other areas, you're saying, hey, the revenues are down, you know, REITs and so forth.

That's important to ensure that those areas that we do bring revenue and that are supported In terms of D7 constituents and neighborhoods piece, I know, and I've not seen this specifically, but, you know, there's the major arterial changes like with Western, Elliott, that area, which is very important for Belltown, Uptown, Inner Bay, and so forth, and by extension, Queen Anne.

Is everything set for that project?

That project is moving forward, yep.

Okay, good.

And I already mentioned Magnolia Bridge.

I just want to give a little love, because I do have a little bit of Eastlake in my district.

I know most of the Rapid Ride J's in Council President's district, but that also is very important in terms of what is happening with Eastlake.

So the sooner that's set, trust me, the entire neighborhood, even the parts that are in D7, but particularly D3 will be there.

Two quick points, Chair.

One is on the transportation fund challenges, you know, the declining revenue.

Again, you know, there's a direct line to this to, you know, what's happening in terms of our public safety challenges and the conditions that tie into economic development in terms of setting ourselves up economically, and that's particularly in downtown.

These things are you know, all connected in terms of declining revenue and how it impacts, in this case, the transportation funds challenges.

And the last thing I'll say, because I'm just going to keep this piece too, because it's really important, is the affordability.

Earlier this morning I talked about the federal piece, particularly with inflationary kind of policies and so forth, but the state and the county with property tax, sales tax in pieces, and we have those too.

but then also, you know, utility rates, but then there's also street use fees and rates and parking and permit use fees and each department looks at it in itself but we also have to keep the bigger picture because all these little pieces that can be explained away in the cumulative can have a major impact on affordability and particularly in terms of government actions that impact affordability.

And I just wanted to highlight that.

Thank you, Chair.

Thank you, Council Member Kettle.

Does the committee table have anything to share at this time?

Nothing.

Council President followed by Council Member Rivera.

Thank you, Chair.

Thank you, S-DOT, for being here and Acting Director Brady, all your work.

I will say this, I've been very impressed with a lot of the work that the small projects that have been going around the, I know personally my district, but just all over Seattle, you know, sidewalks.

There's been flashing beacons in places.

you know stop signs that have popped up that I know that have kind of been on that maintenance list and those projects and the crews that have been out there filling potholes and just like restoring you know just the bulbs that are on the corners the bump outs and just creating safer streets.

I've seen a improvement in that response and then also execution.

So just big thank you for that piece.

The one area of improvement, and I've voiced this concern for the last two and a half years, are a lot of the major projects that are just crippling small businesses and neighborhoods particularly the J-Line and so you know Eastlake is just getting hammered right now and then obviously you all know about the signs that popped up that said SDOC kills small businesses that has been circling the internet which is you know not something I like to see on the internet obviously but you know I'm not necessarily you know, obviously disappointed and there's always two sides to every story and any type of construction is going to be painful, but to reach a part where businesses or people feel like they have to put these signs up because they're not being heard is troubling.

And so, you know, an improvement on communication and just out just outside thinking out the box.

For example, the projects in our district J line with Eastlake, we also have the big Pike Pine piece, which is SPU.

And then obviously they coordinate with SDOT to do street closures.

And then we have the Marina Project in Leschi, that is Seattle Parks Department, who has to coordinate with Seattle City Light and SDOT and all these people.

So there's all these pieces in place.

And the one thing that remains consistent with businesses, and I heard it during the G-Line construction, are just communication efforts and thinking outside the box.

One example is in Eastlake.

My thought would have been, okay, we're going to do this project.

We've got to shut down this neighborhood.

We're going to have incredible impacts.

What are some upgrades that we can ask the federal government for, can we partner with OED on some things, and we had a budget amendment last year, thank you council, thank you the budget chair as well, that got voted on, that put money, a small amount, in OED, Office of Economic Development, for Eastlake.

But those are like after the facts.

And as a council member, it's really difficult to help juggle a lot of the impacts from neighborhoods when city departments are executing stuff without us knowing.

and it's just difficult.

And so the communication really has to be there once disruption has happened, because we're able to help with a lot of the communication to the district.

And so that's my only feedback, like the budget is the budget, okay?

When I see stuff like, hey, we're going to have less potential pothole, you know, improvements.

It might, you know, do the hours might be longer than 72 hours or we'll have less responses to certain things.

Okay.

But communication, we can all control.

And that's been my pain point for not just SDOT, but for parks, for Seattle Public Utilities, anything that's front facing.

And I just think there can be a way better job for communication with SDOT dedicated in this budget to do some type of outreach, point persons, people that are, you know, really engaged and embedded in the community.

So they're taking a lot of the, you know, the heat when it comes to projects.

Okay.

So that's my thing.

And here's the thing.

I don't know if it's a legislative piece where all the departments like Bellevue's trying to figure out where all the departments have a checklist when they're doing these massive construction projects to be able to check the box on things that they have to do.

So we're not in these these really painful issues when it comes to projects.

Another prime example is when SDOT wanted to randomly do some major construction in Pike Pine during Christmas.

and just no forward thinking about, you know, how does this impact businesses?

How does it impact the community?

How long it's going to be?

you know, just those things, they just need to be handled a lot better than what I've seen before for major projects.

The small projects are different, they're weekend stuff, but stuff that's gonna be closed down for a month and for years, I think just needs to have a better attention to detail.

Thank you, Chair Strauss.

Thank you, Council President.

Does the committee table have anything to share at this time?

Can I just quickly respond and just say, Councilmember Hollingsworth, I completely agree, and thank you for highlighting that as a major concern.

Some of our major projects, I feel like, you know, coming from a place of capital project delivery myself, I think there are some ways that we can actually look to mitigate some of the construction impacts that we're seeing out there, especially on projects like J-Line and some of these bigger projects where we can start looking more at sequencing and really have a sit-down conversation around how we how we plan to build those projects over the years so that we're minimizing the overall impact.

I will say construction is hard, especially when there are underground utilities and unknowns involved, but I think there are some ways that we can and should improve our construction communications and also just taking a look at our overall sequencing and trying to mitigate those impacts.

Thank you for highlighting that as a concern.

Thank you, acting director.

Can I have one more word, chair?

Totally, you got the floor until you're done.

Thank you.

Okay, so if our city departments at SPU, SDOT, Parks, Seattle City Light started treating small businesses like the Liquor and Cannabis Board does for retail stores because the retail stores collect all the revenue for the state for cannabis and they treat those stores like they're tax revenue pieces.

And I look at every small business as they create jobs, they create taxes, they generate public safety, they generate all these different pieces that are essential to our city.

If our city department started treating those businesses like they are essential to our city, and construction is definitely hard, I get it.

But there's no reason why I should be thinking after the fact, sending a letter to Senator Murray asking her for money for help for small businesses in Eastlake because they're dying.

That should have been on the front end.

of the conversation as they're delivering a check to us from the federal government for J-Line and thinking about, hey, how does this impact our small business?

Can we get a new park at Eastlake?

Can we for at Rogers Field that hasn't been renovated in like 40, 50 years, that same field I played on as a kid is still needing help.

you know thinking about oh do they need a new wall or a paint job are there things that we can do to uplift the neighborhood so it's like that painful construction process and project we can have improvement and enhancement on the neighborhood so it doesn't feel like a corridor but it feels like we actually beautified the neighborhood the g-line the sidewalks are still the same width as they were before the project started after and everyone's like, oh, but we got brand new water main.

Like, okay, that's wonderful.

But just the improvement of the neighborhood.

There's no reason why the hospital for Swedish is complaining about not being able to do a left turn on Madison to get to their brand new emergency room.

that they're going to put on First Hill, which is a major hospital, because we wanted to make sure that the bus line ran at a certain time and there was just no coordination with some of these hospitals and signage.

These are just prime examples where I just feel like we've been so stuck within our own ways and not thinking outside the box.

And so it makes that construction impact a lot harder.

I'll stop there.

I'll follow up offline.

but I wanted to bring these to SDOT's attention because as we're talking about budget reductions these issues are going to continue to permeate in our community regarding the impacts of construction especially if our budget's lower are we dropping communication budget for people like you know just making sure we're staying on top of things so that's it thank you chair

Thank you, Council President.

And if I recall the G-Line emergency room conversation, SDOT's response was people trying to get to the emergency room can take a right, a right, a right, go straight to get to the new ER.

Is that correct?

That was before my time, so I'm not exactly sure what the response was, but we will definitely look into it.

So for somebody going to the ER, going there directly is important instead of having to take four rights around the corner.

I can also say that I had a similar experience when I first came into office.

The Birkenland Trail missing link was under construction from the locks to 24th.

Businesses asked for a brief pause during Thanksgiving for their commercial activity.

and that construction was not restarted until mid-January when we did a walking tour a senior person at the department told me it was just easier for us to pause until January rather than restarting in December and then getting it done in January.

These types of answers show me that small businesses are not in the thought process during these construction moments and just needing to highlight this.

I see we've got Council Member Rivera and Council Member Rink.

Thank you, Chair, and thank you all for being here.

I just have a couple questions.

Last year's budget, I put money in the budget to do some traffic mitigation along Sandpoint Way, and we still don't have that.

And my understanding is there's some conversations that need to happen with WSDOT.

I have no idea if those conversations have taken place.

or not, but here it is a year later and constituents along that corridor are so concerned and they were so pleased to have this included in the budget last year.

And then of course, when there's no movement, they start to feel like we're all lying to them.

So this is really important.

I need to understand, is this moving forward?

Is it not and why not?

and then this goes back to that outreach or lack thereof that happens out of SDOT to constituents.

It's just really hard to get constituents information from SDOT and that is really difficult because they start, I mean, they just then have a hard time trusting the department and that's not good for any of us and you all as well.

I'm going to do a plus one to Council President's piece about doing the outreach to constituents and to small businesses when SDOT is doing construction and then when they're not doing the work that constituents think that is going to happen.

need information about in particular Sandpoint Way and the traffic mitigation.

Would like to know, I'm going to do a plus one to my colleague Councilmember Kettle on the UCT team.

This is the second department where I see we're cutting positions from UCT.

I understand their vacancy piece of it, but I don't know why they're vacant and I don't know what impacts this will have on this particular reduction.

then on page 11 there's 37 school speed zone cameras at 19 locations would love to know where those are because if again this goes back to communication back to the constituents I don't know whether where those are and then I will ask about an issue that is has really bubbled up and that is transit safety around the sound transit stations.

So I know my colleague, Councilmember Saka and chair of our transportation committee has brought up transit safety on the metro buses, etc.

And I know that part of the levy we put, I believe, funding.

So I'll let him talk about that at the end there, but I do want to raise this issue about the activity that we're seeing around the sound transit stations on the right-of-way.

So I understand that sound transit is on deck if it's happening on their grounds, but if it's happening right outside of the sound transit stations, on the right of way, that is SDOT.

And so we're seeing this both in my district, I know I'm seeing it in the U district and Roosevelt, where there's a lot of activity, there's a lot of fentanyl use.

And I've been talking to various folks about trying to address this, but I do see SDOT having a part of this.

And so I wanna know how we are working together with Sound Transit to solve for this, because it's heating up.

And I want us to be working on this before it really gets to a level where it will be hard for us to address.

And again, we want people out of their cars and taking light rail and buses.

For that to happen, we need to provide safety.

So really want to talk about that, Director Brady.

I'll say that in terms of the light rail stations.

That is really imperative.

I will say on the district fund, it's really important.

I'm disappointed to hear that's not continuing because there are very few areas within SDOT's budget where constituents, if they need a project, whether that be a roundabout for traffic mitigation or a pothole or something of that nature, there are very few areas we can point to to try to help them.

And I really appreciate Councilmember Saka's leadership on this fund because it would allow us to be able to do a project, maybe one, maybe two in the district.

And now we're not going to have that ability.

And toward that end, some of these projects are taking a really long time.

So to have more communication with constituents on why they're taking so long to do, I'd put in a roundabout with that fund, but we're still waiting for that to happen.

And again, here it is over a year later and that particular the constituents in that area have been waiting 10 years for some response, 10 years.

And again, this is traffic mitigation.

It goes to the Vision Zero priority.

And here it is 10 years later, hasn't happened.

So want to know how we're going to make that happen for those constituents there.

I have other questions, but sure, I'll put them in the tracker so that we can move on to other folks.

Thank you.

Thank you, Councilmember Rivera.

I'm going to let the committee table have a moment.

If you've got something to follow up after they go, the floor is still yours.

Committee table.

Okay, that was a lot.

I'm probably not gonna answer all of those questions here, but Council Member Rivera will definitely answer those behind the scenes here for you.

On the standpoint way work, I know that we have implemented some traffic calming interventions there in both the D4 and the D5 segments over the last year, and we have recently shared with your office, we have upcoming additional traffic calming elements that'll be installed in the next several months.

Beyond that, I have a long list of other improvements that we are making in the next few months and into 2027. I'm happy to sit with you and have my staff sit with you and walk you through those as well.

That would be great because more recently I inquired about, at Sandpoint Way in front of Magnuson Park, and there was no information given from MESDOT on updates, so thank you.

And I know we have a camera plan for that location as well.

Transit safety around sound transit stations, totally hear you on that.

That is a partnership between us.SPD and Sound Transit, and I know we're working really hard together, as well as with Metro, who actually implements some of our bus safety and traffic safety issues, so more discussion on that.

I definitely hear you on that, and we are really focused on that as well.

I don't know what the other questions were.

I can take a couple of them, although I was trying to do active listening, and so I wasn't writing everything down.

Since both you and Councilmember Kettle, and I think maybe even Councilmember Saka brought up the UCT positions, I want to share with you that we knew that the city's general fund resources would be very tight in 2026. That was apparent with the revenue forecasts that were coming through last year.

It was apparent when we had the April forecast and it's been consistent.

SDOT's general fund allocation has reduced over time.

If you look at the actual dollars, you might not see that because we've also received general fund for very particular purposes.

And meanwhile, other areas that traditionally, historically received general fund, again, primarily in our basic operations and maintenance, have slowly, those amounts of investments have decreased year over year over year.

Meaning, relatively speaking, general fund is very tight in SDOT, and we knew that we needed to have a savings plan for 2026, not just on the general fund side, but for the transportation fund as well.

and those two positions in UCT are funded by General Fund.

They had not yet been filled by the time that the April forecast came out and it made sense to us because we looked at position vacancies throughout the department to hold on filling, not just those, but others.

We have a good number of vacant positions currently in our department, and that is intentional because we knew that we were in a difficult financial position with the majority of our revenues, and so we held them vacant.

And now as we continue into looking at general fund reductions in 27 and 28, those two positions that are still vacant are proposed for abrogation does not mean that we couldn't recreate them or refund them in future years as the program continues to serve the community and as the Mayor and the City Council grow that program and the services that it provides.

Thank you, Chris.

I think the bottom line is here, and this is more for the mayor's office in general, is the importance of the UCT team and being able to do that work.

Every day we get emails from constituents about encampments throughout the city, and without that team, we're not able to do that work.

And I'm going to point out that one really valuable piece that so many valuable pieces to that team but the outreach component of that team, when they go out to clear an encampment, they provide services, they don't just go, they take time and they talk to all the folks that are at that encampment, that is so important.

So when I hear about all these positions being cut, while they may be vacant, I don't know if they were, they're things that we need and if we need more folks, to do the outreach and to help folks along.

That is important.

So, you know, that's not just an SDOT issue because the UCT team is an interdepartmental team, but it's more for the mayor's office to know that this, I have concerns about the UCT team and not funding that in a way that we're able to address what our constituents are experiencing in all the neighborhoods.

and what our folks who are unhoused need.

So thank you.

Thank you for addressing that, Chris, and I'll follow up with the other pieces.

Please.

And I'll also speak to the Council District Fund briefly.

Yes.

Director Panucci.

Thank you.

Just on the unified care team, you're going to get so tired of me, but I'm going to keep hitting the same drum.

One, the outreach positions that are in the Human Services Department are not eliminated in this budget proposal.

And again, I will say, there were proposed expansions and positions being added without a sustainable way to fund them.

So I hear you on a need and desire for more and continue to just reiterate that we would need a sustainable way to maintain that and really appreciate SDOT's work this year to move cautiously, knowing that we were in a tight budget situation.

And I will just say, Allie, that I hear what you're saying and You know, I hear what you're saying.

You keep saying these vacancies were basically not needed, quote unquote.

And what I'm saying is we're experiencing more on the ground with our constituents in terms of these encampments and not these encampments not getting addressed timely.

And so I wonder if we're making all these cuts to the UCT team, whether that's not going to have an impact.

So whether these particular positions were helpful or where we're being utilized or not, something is happening because we have more encampments we're seeing on the ground that are taking longer to address.

That's what I'm trying to say.

Thank you.

Thank you, Chair.

Thank you.

I'm gonna keep us moving because we are at 317 and I'm gonna put a hard stop to SDOT at four because we have another department who has been patiently waiting.

With that, I've got Council Member Rink followed by Council Member Foster.

Thank you, Chair Strauss.

I want to start, before getting into questions, I just want to start with a little bit of gratitude because I've appreciated Estat's focus on Vision Zero efforts, and I want to take this moment again to commend the mayor's office for their leadership on advancing Vision Zero efforts.

It's tremendously important for so many reasons, and I'm glad we've had opportunity as well in the Transportation Committee to take up discussions on the Vision Zero program and how we can further bolster that work.

So I wanted to recognize that, as well as recognize and take this opportunity to celebrate SDOT's focus on greater transit access, as well as improving speed and reliability for riders.

So notably adding those bus only lanes to Deddy Way to speed up the Route 8, and since the addition of those bus lanes, we've certainly seen immediate impacts, buses on time, more frequency from King County Metro, overall improved traffic flow for those driving as well.

So looking forward to what comes next and excited to put more red paint on our roads.

With that note, digging into some questions, and you've covered many of my questions just with the presentation, particularly in recognition of the sudden deficit of 113 million and a little bit how we got there.

I appreciated you unpacking that.

And to deal with this steep deficit, I'm noting on slide six, the graph shows the transportation fund being cut in half between 2026 and 2027. seems like a significant challenge.

I'm wondering if you can speak to how this will impact our ability to meet just our city's transportation needs and how the average Seattle resident will feel this impact.

So there's a little more nuance to this one that we could follow up with detail.

All of the prior years up to 2025, that is the actual spend, actual revenue data coming out of those years.

So when you move into 26, that includes our budget appropriations.

including those carry forwards.

So those are capital projects that have the money set aside or maybe they've received a grant.

They have a revenue budget that goes along with them.

And you've re-appropriated that in the carry forward process.

That usually happens early in the year.

So that represents a bump there to the fund.

So we could follow up with something that maps that out for you and also compares to the annual new budget appropriation.

So our new budget appropriation is about, at our normal level, maybe 10% lower, 4% overall over the two years.

So that's the change.

The carry forward is something we can break out for you.

It does make this drop look a little bit steeper, but we did think it was important to show, in theory, what's been appropriated.

The maximum we're allowed to spend under what's been adopted in the budget is that number there.

Definitely had a lot of conversations internally how best to show it, but we can follow up with you with that detail that breaks it out more.

We even have a nifty little bar chart that we can pull out and send your way.

Love a chart.

Thank you.

I'd appreciate that additional follow up.

I appreciate also the explanation here and understanding that there's a bit more nuance to this.

And that's just to the first part of the question.

I'm wondering, speaking more just to impact to our residents.

I would just, a quick answer to that.

I think what you've heard is generally we tried to kind of take a haircut across 48 of our programs so that we weren't deeply cutting in any one area.

But what that means, and a lot of the work that we have reduced funding for is maintenance.

And so what that means is generally a little bit longer response times in certain areas.

And that's unfortunate, but we just don't have the funding that it takes to cover all of those maintenance items right now.

In good news, we do have the Transportation Fund Task Force, which Chair Saka has been working with us on.

We just kicked off a big meeting with a first meeting with that group really to hone in and focus in on our maintenance needs of our assets over time and really try to tackle that question together.

So really encouraged and looking forward to working with that group and with you all on some potential creative funding sources to help solve this gap.

Certainly, very excited about the work of that work group as well.

And thank you for unpacking a little bit more what impacts will mean for residents.

I'm gonna shift gears a little bit and talk about Aurora Ave.

Particularly, it's my understanding that the state has allocated $50 million towards redesign of most of Aurora Ave in Seattle.

However, that funding is potentially in question as the state is also grappling with their own budget deficit.

and seeing minimal progress from the city on Aurora.

So I'm asking this just because I know I hear from residents are real hungry to get us moving on advancing major changes to Aurora for safety improvements, for better livability, for so many reasons.

And so I'm wondering what we need to do to just start moving on this.

Why is this project taking so long, and can you provide more background as to why we are where we are?

I will remind Council I've been here for nine months in this particular seat, but I have spent quite a bit of time with the design team and the planning team asking questions around Aurora and specifically trying to understand whether or not we have really focused in on what areas to utilize that funding on.

I think that's part of the issue, frankly, is that There are so many improvements to be had along Aurora that the city has not honed in on any one particular location.

We have stakeholders who are looking all across the board at all seven miles of improvements, and we don't have money that's going to stretch that far.

So one of the key strategies that we're taking right now is that we want to work with the team, with our planning team, and with the state, and with WSDOT specifically, who own the right of way, to really hone in on the location, some key locations where we can provide some transformational change there in efforts to be able to pilot something that we could extend the entire corridor at some point when we get additional funding.

We also have, Seattle Public Utilities has a significant amount of money that they have set aside for drainage improvements at the north end of Aurora, so north of Green Lake.

and I'm looking at partnering with Director Lee and SPU on utilization of some of the SPU funding along with the state funding and some SDOT levy funding as well so that we can get the biggest bang for our buck on Aurora.

But I agree, we can deliver faster and we can be more efficient on Aurora and we will be.

Thank you.

Thank you for that response, Director Brady.

I appreciate that and understand there's a lot of cooks in the kitchen on the project, a lot of required entities that we need to work with in order to see progress, and we want to see progress.

And so I appreciate that response and look forward to a follow-up.

And my last question, and hopefully it's a brief answer.

Thank you, Chair, for allowing me the time.

I'm wondering if you can elaborate more on the Collision Evaluation Program, what it does and what we should expect with an increase in funding.

That is a program that is run by our Chief Traffic Engineer, who is also our Chief Safety Officer.

And I know that we are rolling out new policies that allow us to more rapidly consider potential design and engineering changes where collisions involving and crashes involving vulnerable people have resulted in death or severe injury.

I know that we can provide to you and to the rest of the Council a thorough description of that position.

or excuse me, that program.

I don't believe we're ready to do that at this time, however, at the table.

Understood.

Looking forward to the follow-up on that.

Thank you so much for the time.

Thank you, Chair.

Thank you, Council Member Rink, Council Member Foster, followed by Council Member Lin.

All right.

Thank you so much, Chair, and again, my appreciation to the SDOT team for being with us all day.

I appreciate you all.

I want to start with some questions around street use fees.

So in the proposed budget, I think I'm on page 424, and this may be follow-up, so just bear with me here, but I appreciate the commentary on the slide deck in terms of the increase in the street use fees.

What I see here is a 5% increase in SDOT's hourly rate for review and inspection, and then a 30% increase to permit issuance, renewal, and modification fees.

And I just wanted to ask a couple questions here.

So do we anticipate that this will add capacity in terms of reviewers inside the department with this fee increase?

Thank you, Councilmember.

That is not the primary objective with these proposals.

It is instead to get us inching closer to better cost recovery.

By policy, we currently have had a 70% cost recovery approach to the way that we set those fees and we are realizing that we can no longer afford to do that and so these get us to an 80% cost recovery for the existing program and the existing staff.

However, as I noted earlier, we are committed to continual business process improvements in that service portfolio and in doing everything we can both with existing staff and potentially new if we can bring them on to improve review time and permit issuance.

Thank you for clarifying, that's really helpful.

And it's helpful to compare that 80% that I heard you mention in your slides within what I'm seeing here.

And I think something I'm curious about as I'm reading this, one, I just wanna first clarify something.

So I think this says, these fees were last adjusted beyond the CPI in 2018. So that's not referencing it's been since 2018 since they've been adjusted, it's just that it's been since 2018 since we went beyond CPI for that adjustment.

Is that correct?

That is correct, although I'd like to clarify that that statement in the budget book is a bit of a generalization.

As I said earlier, some of the fees that we're proposing to increase now were last increased beyond CPI in 2016, some in 2017, some in 2018, some in 2019, and then a smaller subset in 2020. It's been a while since we have done a wholesale, at least not in my time with the department, which has been since the fall of 2018, a wholesale look at trying to raise our cost recovery rates for the service portfolio across the board.

That's very helpful, thank you.

And that's like the perfect leeway into where I'm heading with this which is, you know, it's helpful to understand sort of there's been this tiered or structured, you know, you said 2016, 17, 18, 19. I guess what I'm curious about and something I care about is the predictability here.

And so what I'm trying to get towards is sort of how does the department think about the future after this proposed increase, right?

So as you've stated, this proposed increase would bring us to 80% cost recovery.

Is there work happening to sort of determine and create on a predictable scale?

We're gonna wanna revisit this again in two years to get to 85%.

I'm not sure what that looks like, but I would love to understand that sort of forward-facing approach.

And if I may, Chair, I see Director Panucci wanting to respond there.

Thank you.

I think those are...

I love this line of questioning, although I probably will give you not a fully satisfying answer, but I do know this is not a priority just for SDOT, but it is a priority for the mayor's office.

The work of an interdepartmental team continues in this area, and SDOT is one of a few departments where we both want to look at cost recovery long-term, but how we achieve more efficiency.

in a perfect world, we would figure out the throughput issue on some of these permit things within existing resources.

If there are tools we can use to get those permits out the door faster, perhaps we don't have to grow and we can bring our costs down a little bit.

That would be the ideal situation.

So I just wanted to highlight that there is an ongoing body of work.

SDOT permits in particular around development are one of the key focus areas to work on improvements, and I know Director Brady and her team are very committed to this.

And then also the work, at least in the housing permitting, the housing ombud will help coordinate where we're finding sticking points with some of these types of permits moving forward.

Thank you so much for that, Director Panucci.

And I will just take this as an opportunity.

I appreciate you mentioning the housing ombudsman.

And I know we have OH coming in tomorrow, but I really think that's a fantastic add and leadership from the mayor's office on having that there to help our affordable housing community navigate the permitting process.

So thanks for that mention.

And I look forward to seeing the work of the I think it's in the IDT where this is happening.

And thank you for foreshadowing, because I know this is something we hear a lot about.

I know it's a shared concern.

to create that predictability for folks as we work on the cost recovery.

Zooming out a little bit, something I heard during the presentation and in terms of the balance of the fund that was the focus of a lot of the presentation today was that it's our typical city practice to not allow a negative balance to run beyond 60 days, Director Panucci?

Yeah, and there are two things going on in this budget, so this might be a good point of clarification.

There is the cash balance of a fund, and that's really what that policy is talking about, is we have financial policies in place that we shouldn't have a negative cash balance for more than 60 days.

That's what the Interfund...

90, excuse me, 90 days.

That's what the Interfund loan will help address is the cash flow issue.

And then there are the...

budget issues, and so part of what, the way these two issues come together and why you see in the proposal a reserve being built up is that we need to budget to build up a reserve so that SDOT has a healthier cash that also helps address their cash balance so they can cash flow their spending throughout the year.

So that's where those two things kind of come together.

Thank you for that clarification, which then leads into my next question.

Thank you for updating, I'm sorry, 90 days, not 60 days.

What I was wanting to get at was I heard that, and then I also believe I heard commentary that this has been building for the for the better part of a year.

And so just in terms of this most recent sort of forecast and outlook on this fund, what I'm curious to hear more of is how we identified this, how you identified this.

And obviously we have the work that's happening in the proposed reductions and then the proposal to build up that reserve.

So I certainly see that as a large part of prevention.

But just in terms of making sure that there's a, how do I want to say this, a shorter window on catching these kinds of lapses, what work is happening to ensure that?

Or please tell me if there's something wrong in my preamble.

So I think there's a lot of work happening.

A big part of the effective government executive order that was issued now a couple weeks ago is looking at making sure we have strong systems and controls in place that are citywide to be really monitoring our cash balances, our fund balances, and that sort of thing.

I would say with the transportation fund, This has been building for several years.

There have been budgets adopted, like the general fund, that were projecting a deficit in the out years.

It wasn't as acute, and I will say, as a city, we have been hyper-focused on the general fund deficit, and there's been less, I would say, public conversation about the projected deficit in the transportation fund that was not ideal, but was present in the financial plan that was part of the adopted budget last year, and then the combination of actual expenses, actual revenues, and the automatic carry forward in the capital budget kind of all came to a head.

We started working on this very early in the year.

I'm looking for some of my teams behind, and with Director Dively, Acting Director Brady, myself, and our teams.

So I would say we identified it very early on and have been looking for the best path forward, and it's been challenging because it hasn't been as many years in the making of some of the budget strategies with the general fund that many of you have been talking about for years.

I might just add a little bit to that, and thank you very much, Director Panucci.

The Transportation Fund is unique for us.

It is, as I said before, our largest fund.

It's where most of our fund sources are.

It also serves as the repository, initially, for all of the costs of the Department.

so all of payroll, all of our central cost manual costs that we pay.

Every expense that SDOT pays out is done through, initially hits the transportation fund.

Ultimately, those costs are distributed if they need to go outside of the transportation fund, they go to the fund that they belong to, like the Seattle Transportation Benefit District Fund, the Transportation Levy Fund, etc.

And so it becomes a bit of a kind of daily challenge when payroll is hitting every two weeks and all of our other expenses are coming to the transportation fund first before distributing out to keep our cash reserves in a positive and this is something that we're taking very seriously.

We very much appreciate the partnership with Director Dively and Director Panucci and their teams and we do have an interdepartmental team that has been active for some time exploring all of the more systemic issues that are going on for the Transportation Fund.

and so we will be addressing those as well as looking forward to some of the budgetary remedies that the proposed budget and the year-end supplemental put forward.

Thank you for that.

I appreciate that.

And thanks for the correction in terms of it's been building for several years, not just the better part of the year.

I appreciate that, Director Panucci.

And I will just say I think I know this is a hard ship to turn with the proposal that you're putting forward and some of the challenging reductions, but I do appreciate the focus on writing that and trying to figure out ways to correct it for the long haul.

I do want to hear more in terms of any of the practices that are being put in place on that sort of prevention side.

And that's something I can use.

We can use SharePoint to do that follow-up.

And I certainly understand the explanation in terms of what's happening with that fund.

And I want to make sure that in future budget years, whether we are so lucky to have the leadership at this table or different leadership, that we are sort of getting at whatever that core piece is that's contributed to this happening.

So thank you for that.

Okay, trees.

So I wanted, there was a comment that you made earlier in your presentation and it just was a little bit unclear to me and what I heard was in 27 and 28 you were making specific dedicated revenue to urban forestry.

Can I get you to just speak a little bit more to that?

That revenue is coming from the additional sales tax that will be coming to Seattle from the King County Transportation District that so many of you helped to bring to Seattle.

The comment was made in reference to, we're using that funding in 27 and 28, I specifically said, to stave off what would otherwise be very significant reductions to urban forestry and to one other program.

That is because, as we've been talking about, as we approached our budgetary, the necessary budgetary reductions that we see we need to make, We looked across our portfolio at those programs that have funding sources, such as urban forestry, that are heavily supported by our more flexible funding sources, commercial parking tax, the general fund, and so on, that are heavily constrained.

and so in sort of our initial rounds of planning, urban forestry, field operations also received a significant, or received a reduction in their budget, is what we were planning and then when we received that great phone call that told us, guess what?

$4.7 million in 27 and 28 is what we've calculated for you, SDOT.

We immediately began to think about where we could put that funding, and we essentially bought back our own reductions that we were thinking we would have to put forward for urban forestry field operations.

Thank you so much for that clarification and I'll just take this as an opportunity to thank Councilmember Lin for his leadership as you spoke about the ability for the city to lobby and advocate.

I think you were just a really incredible voice and making sure that we have a little bit more of an equitable fund share.

I know many other council members weighed in, but your leadership on that really stuck with me.

So thank you for that, Council Member Lynn.

And it's great to get to hear the impact of that.

And thank you to S-DOT for prioritizing our urban forestry.

We all share this goal of growing in a livable way, so I appreciate the decision to prioritize that.

Thank you so much, Chair.

Thank you, Council Member Foster.

Before jumping to Council Member Lynn, I wanna add a little bit, you had a really good question of how didn't we catch this sooner when we've been able to catch other things sooner?

Please correct me if I'm wrong here.

The transportation fund is a, you have direct deposit from taxes and from fees, is that correct?

On the street use and commercial parking tax, yes.

Gas tax, yes.

But there are- Hang on.

Thank you.

Yes.

So they have direct deposit of tax revenue, and they are paying their payroll and all of their other projects.

and they are generating interest off of all of this money that they are then using in their projects again.

So when it was originally set up, it was a way of saying, look, it's taking all in other revenues.

We either get tax revenue into the general fund account or into the Jumpstart account.

And then it is redistributed from either finance general or from Jumpstart into their appropriate places.

The transportation fund acts in a very similar way.

It acts as their general fund.

And so with and they're making interest.

And it reduces oversight because we don't have as much insight as we do when we look through the rest of the budget book.

So I'm just highlighting for you that it was set up as a way to make it easier to just rather than us having to move the gas tax and commercial parking tax into their appropriate accounts, we just put it into this one transportation general fund.

So that's also created a more difficult way of providing oversight.

With that, we're gonna go on to Council Member Lynn.

Council Member Lynn, you've got the floor.

Thank you, Chair.

Thank you to the presenters.

And thank you, Council Member Foster.

And just wanna say thanks to all the colleagues who fought behind the scenes for some of that funding.

Council Member Rank for helping with that letter that we all signed.

Council Member Saka, I know that we chatted.

And I know the mayor's office was also very instrumental in fighting for that.

And very glad to hear how that money is gonna be spent.

You know, reiterate Council Member Foster's point about tree canopy is so essential especially in South Seattle also other parts of the district of our city that are lacking in tree canopy places like South Park and so on and just you know our in terms of where the trees exist in our city neighborhood residential number one number two right-of-way and we have so much work to do to ensure that we can continue to support that tree canopy.

Went on a wonderful walk recently to learn.

There's someone named Taha who does and has done an incredible job of documenting the history of trees, urban trees.

And it's a wonderful walk, and there's just so much more to do there.

I'm also excited to thank you for getting creative with the commercial parking tax revenues.

And it sounds like some of that will also support this tree canopy, which I think is great.

And I also just want to give some feedback from at least constituents I hear from are very supportive of the traffic cameras, especially around schools, just because of the very unsafe conditions and wanting to.

And the one sort of caveat to that is I've heard that the amounts of the fines are not as important, that it actually could be lower and still be effective.

So that's something that I'm still interested in exploring.

But one kind of question is, when hearing about the King County when they were doing their sales tax, it was clear as part of that discussion that transportation funding, I mean, this is nothing new, obviously, is a regional issue, statewide issue.

As part of the task force, anything you can provide in terms of the upcoming legislative session that you anticipate might be coming, any other early indications of things that you are looking at as a more reliable fund source for transportation.

I think we're gonna have to get back to you on that one, Council Member Lynn.

I understand.

Thank you very much for the question.

Yeah.

Okay.

Thank you.

That's all, Chair.

Thank you, Council Member Lynn.

Record time, three minutes.

No one's counting.

I'm counting myself, no one else.

Council Member Foster's old hand, new hand.

I'll come back to Council Member Foster in a minute if she needs to.

I'll try to be brief.

And then I'm gonna pass it over to Council Member Sokka for closing us out.

In our seven year look back, I love all city employees.

and I know that because literally I can't get anything done without our city employees, the folks that are filling the potholes, the folks that are fixing all of our ADA ramps who I see on a regular basis.

I literally saw them on the hottest day of the year in August working on a Sunday.

Nothing more said.

Thank you to everyone who does our work.

as I'm looking at our seven year look back for your department, you have had a 98% change in labor costs and a 39% increase in staff.

So it went from $103 million of labor costs to $204 million, rising from 932 employees to 1,291.

These are just facts.

I'm just gonna lay that out there.

One of the questions that I've had sitting through this conversation that I'm gonna try to get through in three minutes to leave Council Member Saka some time is, I am being challenged with the amount of dollars that are getting onto our streets compared to the amount of dollars that we are spending in the department.

I've been challenged about that this whole time.

So I'm gonna just ask a couple general questions.

Do you provide street calming measures on residential streets, non arterial streets?

I thought we did and yes, we have it on good authority that we do.

Then how have all of my requests for six years been denied?

I was gonna say we do, but they are limited because we really try to focus in on our high impact collision streets first, which are for the most part arterials.

So in terms of you ask about priority, we're prioritizing those really high collision locations, which are typically arterials over residential streets.

So we have spaces for 24th Avenue this year, it was prioritized as a street for projects, but the corners that were prioritized for the most significant safety increases were the safest on the streets.

Meanwhile, I have the neighbors asking for speed humps on their side streets, on their residential streets and the department states to me, that that is not possible.

We have requested traffic circles.

The department states to me that that is not possible.

I am 100% with you.

Don't spend money on streets in my district that nobody's being killed at and spend that money on the streets where people are dying.

Just very directly, right?

But what I'm hearing from you is that you do not...

What is your preferred terminology?

Roundabout or traffic circle?

I'm going to defer to my subject matter experts for that.

We can get back to you on it.

No, sorry.

This is a direct question of, I find people to try to get out of this question on a regular basis by using, like, we didn't use the terminology correctly.

So whatever the round thing is in a residential street intersection, what do you want me to call that?

Oh, traffic circles.

Great.

In residential areas.

Yeah.

Residential traffic circle.

Does SDOT do this project any longer these days?

I believe we do.

Then how have all of my requests been denied over the last six years to the point where I've had to use the council district funds to get the only two in?

Council members, I'll have to go back and look.

I'll ask the team.

And for the general viewing public, I have asked all of these questions in private multiple times over the course of the last two months.

And so this is not intended to be gotcha because I never want to get, there's never any gotcha or catch you off guard on the dais with me.

Let's roll in.

So I just want to check in on this.

So just to round that all out, I have many requests from many people in the district to slow down residential speed, residential street speeds, The department is unresponsive.

I am more than happy of putting in Vision Zero any place where people are dying.

The one place that a person has died recently on 24th Avenue, no safety improvements were scheduled for that place.

But the safety improvements were in the intersections that are already the most safe.

And for the intersections that are the highest crossing, they have no safety improvement, but no crossing improvements scheduled.

So this is where not only am I being challenged by how are we spending our money, I'm being challenged by how are we doing our work.

Moving on, and the reason I ask you those questions is because residents hammer me all the time of why can't we get a traffic roundabout circle, whatever it is on the residential street?

Why are we getting speed humps on all of these other streets?

Why can't we get speed humps on the residential streets?

I understand that we're focusing on preventing people from dying, but what these residents are sharing with me is that when cars get hit and they're toppled over, teenagers are speeding through streets near community centers and elementary schools, that they are also in fear of really dangerous things happening there as well.

Street use fees, are you increasing the fees to small businesses for the use of things like street cafes or retail space in the right of way?

I will have to go back and look at our attachment A to the proposed legislation, but I believe that, generally speaking, the 30% rate increase that we refer to on street permitting is across the board.

I don't recall off the top of my head what we're doing with regard to public use and occupancy, however.

Okay, thank you for that because when we restructured these fees in 2020, it is because the fees were so prohibitively expensive for the restaurateurs that that is why we were not seeing uptake.

The rules were prohibitively restrictive.

on where they could place their outdoor seating.

These two things in combination is why people did not take this program up at greater rate.

We have made these changes to be supportive of our smallest businesses, our owner-operated businesses that have very slim margins, and so I'm very worried about this.

We've got some Seattle Transportation measure questions in here.

Levy realignment on the Third Avenue revitalization on page 430. Can you share with me what's going on here?

Did Greg Spotts Culture Connector not work?

Well, the Center City streetcar segment, as you know, council removed that from our budget and CIP a year or two ago.

Third Avenue, I have to, my computer is frozen, so I can't pull up page which in the budget?

430. 430.

We have a long budget.

Here we are.

You are referring to levy realignment and 3rd Ave revitalization, a million dollars.

I believe, yes, so in this case, this funding is moving out of that particular master project, the technical term that we use, and how we actually set our budget appropriations within every BSL, and it's moving into the new construction coordination and mobility division to support work in the downtown.

it is staying within the intent of the original appropriation to the first master project.

So we should take this as you believe that Third Avenue is in the state that it should be at this time.

We're not going to be investing in there further.

No, what I'm saying is that it's going to, it's being realigned into a different part of our budget out of one master project and into another to continue the work.

I see Director Panucci.

This is a plain language.

We're transferring how this gets paid in the budget.

So while it looks like a reduction, it is kind of a technical budget change.

I hear you.

My focus is on making 3rd Avenue a better place to catch the bus, to walk, to do business.

And my concern is that you are taking money that was dedicated to making 3rd Avenue a better place regionally, and putting in other parts of the city budget.

I'm gonna have to keep us ticking right now.

Some of these you can respond to on the SharePoint as well.

Magnolia Bridge on page 445, $33,000 was spent last year and there was 424,000 for the 26 budget.

How was this money spent?

Is this the seismic work that you discussed?

Is there any additional work?

Was that seismic work solely on the bridge that when we passed the levy, I believe we were talking about what Council Member Kettle was talking about, that emergency access.

Has the emergency access just not been followed up on and are all funds spent at this time?

Councilmember Strauss, we will need to get back to you on that particular project.

Okay, looking at page 447, neighborhood enhancements within your mobility capital.

It says the purpose of no neighborhood enhancements program is to plan and forecast the needs of specific neighborhoods, including corridor planning, development of transportation plans, spot improvement, travel forecasting, also constructs minor improvement in neighborhoods based on these assessments.

But as we've already gone over, the department is not putting forward with traffic circles or traffic roundabouts, however you want to call it, you're not putting forward speed reduction devices on residential streets.

Can you tell me what this program does?

What the program does or how it's represented in our proposed budget.

What do the people who make things work for Seattleites do?

I am not intimately familiar with the ins and out of this program.

And I think we're gonna need to follow up with you with a written response.

Page 449, we still have waterfront and civic projects allocated within the budget with 21 FTE, and next year spending $13 million, the following year $13.5 million, this year $9.6 million.

Can you share with me?

I love the waterfront.

I'll spend lots of money on the waterfront.

I thought SDOT was out of the waterfront business.

Is that not the case?

We are in closeout on a lot of our contracts, so we will be spending some of that money on the closeout, paying off final change orders, completion of all the documentation, all of that.

We also have one particular project that is in the court system right now, so we anticipate a settlement there or some sort of payment, a payout for that as well.

So maintaining funding in that bucket of funds to cover those expenses.

And that requires 21 FTE?

Well, we have actually transferred a lot of those folks out of the Waterfront program and into the ST3 program, so I've restructured the Sound Transit support staff within SDOT, and so when I talked about Barbara Lee earlier handling Waterfront, she also has been transitioned, along with her team, into leading and supporting the Sound Transit's project delivery work, the permitting work, and so we have a solid structure in place to support SD3 over the next couple of decades.

So these 21 FTE are misrepresented in the budget?

We have not updated the name of the master project in the budget.

So the program itself, internally, we refer to, it's a lot of words, Office of Waterfront and Civic Projects and Sound Transit III programs.

That's right.

So the budget has not been updated at this time?

The budget has been updated.

The Sound Transit 3 master projects do roll up under that, but we can't rename the BSL, so SDOT-BOTR 16,000 waterfront and civic projects.

If we want to make that amendment with council, we could put that comma on there.

It takes an act of council to change the BSL.

So we could do that.

But the master projects in there do reflect, when your staff goes and looks at them, they reflect the Sound Transit 3 projects in there as well.

Okay, thank you.

I'm asking these questions about staffing because out of all nine of us, we have about 31 FTE.

That's not including central staff and a lot of other folks.

And so what I'm seeing is that you've got a team that is almost as large as city council.

that is doing work and it's unclear what they're doing.

I'm going to just keep on ticking because I promised Rob I'd be done 10 minutes ago.

Operation, engineering, operation support, we're now on page 450, structures, engineering, structures, maintenance.

Is this your entire bridge team or do we have other folks working on bridges?

Or do these employees work on things other than bridges?

Bridges primarily also retaining walls and stairways and seawalls.

And areaways.

And areaways.

Okay.

And then we're coming back to the mobility, the neighborhoods.

You said that you would get back to me.

Transit operations.

This is to implement STM.

Is that correct?

Yes.

The proposed budget assumes the passage or the renewal, the passage of November's STM measure.

And I'd received promises during this last round of STM because the Metro cycle is they had to make their decisions by July for any springtime changes.

Do we know has the 17, the only direct bus to Ballard from downtown or light rail?

Is this going to see increases beyond the two additional routes in the morning and afternoon that Metro promised?

I am not familiar with Metro's planned route schedule for 2027, if that's what you're asking.

We can certainly follow up with you.

It was a city-side promise that we would increase that amount of funding.

Oh, with the STM?

That's correct.

Yes.

So, I mean, it is our intent to continue to support every element of the STM proposal, if it passes, in collaboration with our King County partners.

Yes.

And my problem was those promises made had to be delivered last July.

So if we don't know if those promises made were delivered or not- I see.

All right.

We will follow up with you, certainly.

Councilmember Saka, I will end here.

Well, I've got two more.

Route 40 only because you brought it up.

Is it going to be a freight and bus lane or have you kicked freight off?

Route 40, as it is constructed right now, is a transit-only lane.

OK, so we are not going to be adding freight in as originally advertised?

Well, let me go back and check on that.

There might be part of that route that might be dedicated toward freight, but I have to confirm.

Okay, and judgment and claims, 8 million last year, 9 million this year, 14 million next year, 15 million the following year.

You've received, you've heard a lot of what I've had to say today.

It's feedback that I've provided time and time again.

For instance, this year SDOT has asphalted a section where the water main needs to be redone and it got re-asphalted before the water main was done.

Meanwhile, a mile away, less than a mile away, of the building.

There was another section at Golden Gardens where asphalt was repaved without addressing the spring that erodes the asphalt on a really regular basis.

These are these types of conversations that I'm challenged by, you know, not breaking executive executive session privilege, which is why I'm talking about different types of projects, but anyone who's been in executive session knows that I have these same concerns about the projects that we are getting, that Seattleites are getting heard on.

Is there anything that the department, is there a focused structure that the department is implementing right now to reduce our judgment and claims?

Yes, I will say that our judgment and claims allocation is, we are part of a citywide formula, I'm sure you're familiar, Chair Strauss, on how the city budget office and city attorney's office determine future year judgment and claim allocations for departments.

SDOT certainly is one of the highest.

We have sat in several executive sessions together to talk about some of the cases coming before us in the past, and we are actively working on risk management strategies in the department, both on what I like to call, because my team is the one that does this, loss prevention exercise where we review every occurrence that comes through in a claim, even if it doesn't become litigation, to look at what's happening in the right of way, whether it's a road defect, it's design and engineering, it's construction, et cetera.

And then we're also, of course, as we talked about before, looking at our high injury network and taking a more proactive approach at certain crash sites throughout the city and really rethinking how there may be similarities with, let's say it is a design situation that might have been a part of the event that occurred, where those circumstances exist elsewhere in the city, and taking a proactive look at those.

so we are very committed to what might be broadly called risk management strategies, more accelerated, more frequent, with just a greater focus throughout by many teams in the department.

And it's not so much about reducing the financial liability that comes with the judgment and claims cost allocation, but rather making sure that our community members can experience our right of way without personal injury or property damage.

Let me be more blunt, is that the design of the infrastructure that SDOT is putting on our street is dangerous for some people on our street.

and I say that because when externalities such as wet leaves, garbage cans, a car that's parked too close or a bike that's riding too fast, when these elements are designed without real world implementation taken into account, dangerous situations are created on our streets where Seattleites get hurt.

and that's why we have a high judgment in claims.

My ask has been that we need to be thoughtful about how we design and that when we as the city, I'm no farther away from the city than you are, when we as the city make a mistake in design, how do we adjust that in the future?

And that's my concern about the judgment and claims.

is that we are designing things that are not safe, and we're not making that change once it is brought to our attention.

I see Director Panucci to take us home.

Yeah, I just wanna like note that, thank you, Chris, but this is kind of far afield from the budget conversation today, so just wanna give our...

I don't think we have the right people at the table to have all of this conversation.

I will say that risk management is something that is high on my list and Director DiVle's list, including identifying areas where we see consistent issues and working with departments to look at a number of things, including how we deploy resources or design streets and that sort of thing.

But I don't think that our finance and budget team are necessarily the right people to be having this conversation with in a budget presentation.

save for Third Avenue.

All of this I've brought up more than twice in private meetings in the last two months.

With that, Council Member Sockes, Chair of the Committee, 20 minutes later, that's my fault, take us home.

All good.

Thank you, Chair.

And thank you.

Just want to close by saying thank you to the department.

Appreciate the overview and the work that went into it, all the work that you all do and your respective teams do every day.

And I want to thank my colleagues, every last one of them, who asks very thoughtful and probing questions.

and I heard a lot of great questions and information directly from the department in response and I think one of the themes that I heard from my colleagues at the highest level pertains to this notion of responsiveness and the need, frankly, the imperative for for the department to do the work to be as responsive as it can.

And by the way, this isn't a challenge born solely by the Seattle Department of Transportation.

All the 30-plus city departments have an opportunity to do this every day.

But I did hear some concern around level of responsiveness, whether in the context of being responsive to small businesses and being proactive and communicative and collaborative with them and factoring their input into certain planning decisions, our responsiveness to to make sure we're able to prioritize the various competing needs and projects from a citywide perspective.

I didn't hear any one person disagree with the notion that we should, as a city, as a policy matter, prioritize safety projects on the high injury network.

Bless you.

That said, that doesn't mean we shouldn't completely avoid prioritizing safety projects in our own neighborhoods, in our own, you know, where people live in residential areas.

And so one avenue to do that is the council district fund.

And again, it supplements other safety projects and funds.

And, you know, I would have loved to see continued funding for that, and maybe even at a slightly lowered amount, but expanded to all nine council members' offices, because we all have a unique, we saw some interest in some of the citywide colleagues on this, and they have a unique perspective into this as well.

And the department's views in addressing these various safety projects and programs from the department's perspective, you know, respect that and we all have our own unique perspective as well on it.

And so when we bring those things together, I think, to address the responsiveness issue, it helps with responsiveness.

So, in any event, but I really appreciate the work here and just echoing the themes of transportation safety.

Transit safety, the importance of bridges and maintaining our bridges.

Accessibility capital and new sidewalks.

Intentionally didn't ask questions around some of those things, but we'll be following up offline with you all.

Pothole repair.

Pothole repair is an essential government service, and I think, well, I know, it's what the public rightfully expects us as a local government to focus our investments on, at least as a starting place, and then sort of branch on from there.

And I do worry that, and I am not concerned that we're gonna deviate from our 80% of reported potholes within 72 hours voter commitment, but if we're already performing today at essentially a 90% rate, it's one thing to go from 90% to 85% of reported potholes.

That's one level of concern, but I am concerned if we allowed the proposal to effectively make us hover right at the 80% threshold and what that would mean, because it would definitely take, I think more residents would understand that and see that impact every day.

So in any event, important service.

I didn't mention anything about the unified care team, intentionally so, but that's in this particular briefing, but I do support the comments expressed by my colleagues who did choose to mention that.

Finally, I'll just share, so a lot of challenges and opportunities and, you know, also a lot to be proud of and a lot to celebrate too.

And I wanna close by emphasizing or close on a more positive and optimistic note, echoing some of the comments from my colleague, Council Member Rank earlier, noting the mayor's executive order and the investments in the proposed budget to address Vision Zero and traffic safety and bring to life her executive order.

I will have some questions about that offline, but that's a great thing.

That I see a lot of alignment from my perspective and across many of us here at this dais, and that's something to celebrate, and I want to specifically applaud and thank the mayor for her leadership in that, because I think that's terrific.

More work to do, more work to go here.

And also want to recognize shared leadership on the King County Transportation District funds.

That was, frankly, all of us, but three people in particular outside of, well, two people in particular outside of me and my office really led the charge on that, and I really want to thank them, and that is Council Member Rink.

and for organizing a letter and you spent a lot of time outside of that and doing all kinds of stuff.

And then also Council Member Lynn did a lot.

Tim and I were on constant speed dial with each other that very critical last week of the King County Council vote.

I know I canceled a lot of meetings to and make direct calls and conversations with the people actually voting and set up conversations with them.

And I think Council Member Lynn did the same, but seeing some good results with that, at least as it relates to this proposed budget in terms of the forestry budget and the like.

Thank you again.

Look forward to partnering with you ahead to bring to life to some of these ideas.

Thank you, Chair.

Thank you, Council Member Sacca.

We are now gonna transfer into the next item.

And if the clerk can read item number two and three into the record so we can cover our previous base and our upcoming base.

And then y'all just start coming up now, please.

All right, that was agenda item two, Seattle Department of Transportation for briefing and discussion.

Next is agenda item three, Office of Economic Development for briefing and discussion.

Thank you.

As we're making this transition, I'm just gonna ask my questions now so that they go in SharePoint, which is what is the current funding on our security assessments and our window replacement fund, as well as ambassadors.

I can see that the Office of Economic Development might not be hearing these questions, so we will make sure to follow up.

Yeah, gentlemen.

Come, come, come.

No, no, no.

Thank you for being patient and waiting for us with 43 minutes until 5 p.m.

As I said, the questions I'm going to be asking over SharePoint, so I don't do any more talking today, are about the security replacement program, the security program, broken window replacement program, and the ambassadors.

That's all the talking I'm going to do for this one today.

With that, are you ready?

And please jump in.

Yes, we are.

Thank you.

Well, thank you for having us today to discuss the proposed 2027 budget.

Councilmember Donald Strauss, Budget Committee Chair, Vice Chair Rivera, Councilmember Rivera for your work on this important work to set up our CDS for success.

And to all Councilmembers for your great work and leadership in supporting our Office of Economic Development.

I also want to thank OED's finance team under the leadership of our director Regis for his leadership, for supporting all this great work.

Thank you, Joe.

And to all my team because we are here today because they do an amazing job every day to support small business in our community.

With that, I want to focus on our office, focus on leading projects and making investments that open us for success economic opportunities, reduce racial wealth gap, and encourage innovation and growth, consistent with the future of the Seattle Economic Framework adopted to the City Policy and Resolution 32099. A streaking balance supporting our local economy, competing in the global economy, advancing city priorities, affordability, economic, and this is OED in action.

So some of the photos that we would like to share with all of you are how we show up in the community.

As you know, we're a very faith community, and this is very important that we just show up and support community or small businesses.

a business climate assessment, seawall.

Seattle growth model delivered, however, the current model lasts much longer.

The path forward is to retain a recovery.

We need to keep our companies and our industries, and we have to reconfigure them across, encourage collaboration and growth of mid-sized businesses.

Competiveness and affordability are linked.

The cost is squeeze large businesses, small businesses, mid-sized businesses, and then also squeeze families.

An active strategy is required, and that's my commitment as Director of the Office of Economic Development to create a strategic planning to kind of really support all this work.

what this moment called for.

Make intentional choices, diversify our economy across industries and business sizes, working key industries, pillars of future of Seattle Economic Framework, actively partnering, thinking creatively about city assets, examine what drives economic problems, looking to listen for accurate sense of problems, take prices, precise actions to unlock solutions.

deploy tools with focus of outcomes, policy like such as streamlined permitting, continue working on technical assistance and improvement programs, the Seattle Restore, partnerships such as Seattle Climate Innovation Hub and AI House.

Priorities for OED 2027 budget.

Maintain a flexibility to execute the building resilient Seattle economy.

Partner with the Resilient Seattle Economic Task Force to review recent business climate.

Identify coordinated opportunities for action across business labor, community, and other stakeholders.

Grow and retain industry innovation and creative industries with strong wages.

and economic opportunities.

Explore additional ways to deploy flexible capital funding, make it easier to operate and grow business in Seattle.

Deliver a high impact program supporting a small business while maintain operational capacity and staffing for these programs.

Strengthen neighborhood business districts to reduce vacancies and support activist business mix and maintain OED proactive approach special events office aligned with the special events vision.

With that, I will pass it to Director of Finance, Gerald Regis.

Great.

Thank you all for having us today.

It's my one time per year.

I get to see you all, so always great.

Over the remaining few slides, I'll walk through the significant changes that shaped OED's 2027 budget proposal.

So on this slide, you'll see here a high-level summary of our proposed budget.

Overall, that budget decreases by about $11.7 million compared to 2026, dropping from $40 million in 2026 to about $29 million in 2027, which is a 29% reduction from last year's adopted.

While that is significant, it's important to note that's driven almost entirely by a technical adjustment to remove $12 million in one-time funding that was added in the 26 budget to address some specific one-time needs that we'll get into in more detail in the next slide.

While those one-time ads are expiring in 2027, it's important to note that our baseline budget for core program funding is fully maintained.

So the takeaway is effectively that we don't have any reduction to our baseline programs in the 27-28 proposed.

You'll also see here that our proposal includes the elimination of two positions, which brings our FTE count from 63 currently to 61 full-time equivalents in 2027. That'll be covered in more detail in our last slide.

The slides detailing that removal of the one-time funding added in the budget that I mentioned earlier in 2026. And this really is that major driver behind the change in our 2027 proposal.

So in total, this is removing $12 million in those one-time resources, which you can see is pretty evenly split between General Fund and Jumpstart.

These are investments that were intended for short-term, very project-specific needs that aren't gonna be renewed in 2027. The slide itself calls out the Maritime Invention Center, Innovation Center as one example, but Another good one would be a sale funding that was added as a one-time ad in 2026. Another even better example is the back to business program.

So we're maintaining that core funding, our baseline funding ongoing, but the amplification that was added specifically for 2026 is sunsetting into 2027. This slide's highlighting our only programmatic addition in our proposed budget.

So what you see here is a transfer of funding for small business supports in the Duwamish Valley to OED from the Office of Sustainability and Environment.

This is kind of a broader citywide alignment to shift work with departmental expertise by consolidating, in this case, small business support under OED.

That funding itself currently is supporting about 70 small businesses through things like technical assistance, marketing help, navigation of public health requirements, and in this case also connections to existing OED grant programs like Back to Business.

So this is sort of a natural fit within the city for that line of work.

And we'll continue to partner with OSCE to ensure that work is advancing the original goals of that Duwamish Valley Action Plan.

Next slide.

So this is our last slide and unfortunately reflects the abrogation of two positions in 2027. One is the vacant community development specialist position on our neighborhood team and the other is a strategic advisor to position on our permit team which is currently filled.

I'll just say at a high level, those reductions are aligning our staffing structure with the way our programs are evolving and trying to avoid duplicative work as we move forward in 2027 and 28. And we're not anticipating any significant service reductions due to those abrogations.

That concludes our slides.

So we will open it up to any questions you may have.

Thank you.

Anything else from director Panucci?

Council member Rink is chair of the committee overseeing this department.

You are recognized.

Thank you, Chair Strauss.

Colleagues in my role as Chair over Human Services, Labor and Economic Development, I have the tremendous honor to work with Director Garce over Office of Economic Development, especially as he and his team are taking on the biggest challenges facing our local business community.

really working towards revitalizing our local economy.

And I've really appreciated the opportunity to have he and his team in committee this year.

I want to take this opportunity to thank he and his team also for just being a champion for small businesses, particularly on our partnership on the commercial lease transparency legislation we've been working on still currently in committee.

and I want to highlight just a few ways that OED has delivered for our community and to date and note that these programs are ongoing in the proposed budget.

So streamlining city permits and processes to make things easier, the expansion of the small business handbook to seven languages, English, Spanish, Chinese, Vietnamese, Somali, Tagalog, Korean, and Amharic, the expansion of back to business, in particular the storefront repair fund, accounting business and consulting program, also known as the ABC program, and of course Seattle Restored.

and I'll take this moment to mourn Panda Silva leaving the building.

I miss you.

And wherever you are, I hope you're doing great.

The culmination of OED's work this year in the development of then the report that was just released, Seawall Building a Resilient Seattle Economy Report and the initial actions taken by the executive on its recommendations.

So looking forward to the year ahead, the Office of Economic Development will be leading that task force.

to support this resilient Seattle economy task force and strategic initiatives fund.

And the investments in our business ecosystem are critical to ensuring the long-term viability of our local economy.

So, more importantly, to working across livability for every neighborhood across our region.

So with that, I do want to note in the budget, as was discussed in the overview presentation, there is a removing of a series of one-time supports for a number of high priority areas, particularly in Little Saigon and Lake City.

I want to note that budget actions last year to secure SAIL funding has enabled the community to invest up to $300,000 in small business and business district revitalization, up to $400,000 for safety improvements in Lake City, up to $600,000 in community building and public activation projects.

And in Little Saigon, this fund was able to fund neighborhood outreach staff to support service navigation, mobile overdose treatment and prevention teams, community activations to support our neighbors in Little Saigon, and activations to support our small businesses.

So with that in mind, I'm wondering if we can walk through a little bit the decision behind the changes for funding these programs, and particularly how OED will continue to support just Little Saigon and Lake City neighborhoods moving forward.

Would you like to get into the overall decision behind the removal of the one-time items first?

I don't know if CBO has anything you want to add on that?

It's just the same thing I've been saying, well, not all week, but it feels like we've been here all week.

When we talk about deeply unsustainable budgeting, a $12 million amount of one-time ads is really really difficult.

It's not really a decision.

It is a technical exercise that happens when all the one-time ads get automatically backed out.

It shows up in the budget book as a reduction, but that is like we start the budget process by resetting departments back to their base.

I'll also just flag on the sale funding.

Some of that work has been under development all year and expected.

and we expect some of that to carry forward into 2027 as it all won't be expended, including Council Member Lynn added some additional funding in the mid-year supplemental that was added with an intention, I believe, and correct me if I'm wrong, Council Member, to stretch over like an 18-month period, but a scenario we'll be continuing to look at.

As I mentioned earlier as well, we have a number of programs that continue just without the amplification.

So again, back to business, back to that example, I think is a good one.

We have core funding that's maintained going forward.

The general split of the approach of the program will be maintained as well between security and the other like storefront repair grants.

So we are hoping to do the same or maintain services without just that one-time amplification sale is another great example.

We're not able to be as place-specific, but the efforts to still maintain and stabilize.

Understood.

Thank you for unpacking just the technical piece of that.

Of course, it's a change so worth bringing up in this discussion, particularly with the department.

Is there anything else you'd like to expand to?

I'm hearing that future work won't be as place-specific, but I'm wondering if there's anything else the department can speak to related to just work in Little Saigon or Lake City.

Our commitment is to continue supporting those neighborhoods as we are investing on those organizations to be more sustainable and long-term sustainability.

And that's how we are working towards that commitment to those two specific neighborhoods.

Awesome.

Thank you.

And when we're taking a look at the Resilient Seattle Economy Task Force, I wanted to ask about making it easier to open, operate, and grow a business in Seattle.

So are the budget investments in programs like the one we've seen with SDCI for small business permitting assistance?

How is that work proceeding and how does this budget support those investments?

That's a great question so definitely is working really well that partnership that we have with STCI and then the budget is to continue supporting us we've been sharing this the baseline of our work so that we will continue in support because our commitment is to continue having that streamlining make it faster this year is open for business and on top of all that as we are putting together the task force is identifying how do we streamline and even beyond of that specific approach that we have today.

So my commitment is really making sure that it's faster, easier for not only small businesses but also mid-sized businesses as we are going into that direction of growing our economy and the diversification.

Thank you so much.

And building on some of the programs within the department, I'm wondering if we could get an understanding of our measures of success right now for the Back to Business program.

I'd love to know how many grants have been issued so far, if we could get the number of SEPTED improvements through the Security Fund grants in particular.

I know getting that these grants out really makes an impact for business vacancies in supporting our small businesses that keep our city thriving.

Yeah I mean we actually have up to date as of last Friday numbers on those so currently we've done about 350 direct awards businesses for the repairs, 65 for the security upgrades as well.

That program is actually going to be largely fully spent this year so we don't anticipate much carry forward.

There's some direct investments in neighborhoods as well but that funding is anticipated to be almost fully expended with about, currently we're projecting about less than $130,000 of the original $3.3 million being spent this year.

Thank you for that update.

And my last question for now is, what are the next steps with the life at night strategy to reducing operating barriers for nighttime businesses and workers?

And what sustained or expanded investments to support this are reflected in the proposed budget?

I don't have the answer for that question, but we will follow up with the specific answer.

Wonderful.

Thank you.

I appreciate that.

I would just note again that all of our core programming baseline had been maintained, and I think we're still deciding how that's going to be allocated out into 2027, but we'll have to get back with the specifics on how we anticipate that work plan being fleshed out in 2027.

Great.

We'd love to continue the conversation.

Revitalizing our nightlife scene and supporting those businesses is so important.

And I will just say that it's part of our creative economy and our commitment, and that's one of the pillars.

So the work will continue.

We just need to give you more specifics on how that will continue forward for 2027. Great.

I appreciate that, Director Garce.

Thank you, Chair.

I appreciate it.

Thank you, Councilmember Wing.

We have Councilmember Lynn followed by Councilmember Rivera and Councilmember Kettle.

Thank you, Chair.

Thank you, dear presenters.

Following up on Councilmember Wing's question about SAIL Fund, Little Saigon funding, You know, I think small businesses are struggling across the city, but certain areas in particular are being hit harder.

You know, we kind of had a similar dialogue earlier about impacts to small businesses from transportation projects.

You know, in this case, it's an impact to small businesses because of our failure to meet the mental health and other sort of needs of our community, resulting in street disorder.

But in certain neighborhoods, it's been going on a decade now.

Transportation projects, oftentimes, sometimes they can go that long, but usually they don't go quite that long.

In any case, these funds have been critical.

Obviously, hopefully we can do better on the public safety side of things.

But in the meantime, you know, the sale funds, the back to business fund, another fund that has been very helpful is only in Seattle for some of our small businesses.

So just, you know, in terms of prioritizing whatever resources we have, I understand the budget environment we're in.

I just think we have to be very mindful of, you know, how these impacts to small businesses are not felt equally around the city and that we need to prioritize what we have to those most impacted.

So more of a comment than a question.

I do have a question on page 219 of the budget.

It says small business development is being reduced from approximately 9.3 million to about 2.6.

Could you, I'm not sure if you can do this offline, describe what that's, what that reduction is.

Is that part of the one-time funding or is that something different?

Yes.

Yes.

It's specifically looking at the impacts of sales, again, the amplification back to business, et cetera.

Once those one-time funds are expired, it kind of resets us to the baseline.

So it looks like a pretty significant drop-off.

It's part of that 30%, $12 million that we're reducing.

Thank you.

Thank you, Chair.

Thank you, Councilmember Lin.

Record time again.

Councilmember Rivera followed by Councilmember Kettle.

Thank you, Chair.

Thank you for being here.

And I so appreciate your leadership and just the work of OED in general, particularly as regards, you know, the impacts that so many of our small businesses across the city and I know for sure in the D4 have had a lot of public safety issues and, you know, needing storefront repair multiple times.

which really takes a toll on businesses and, of course, impacts their insurance and things of that nature.

So really appreciate all the work OED has done.

And I know that you understand, having been a small business owner yourself, the impacts.

I wanted to ask about the 11 million reduction.

$3 million for the stabilize, activate and invest locally fund.

I just want more information about what these things did.

$2.6 million for the downtown activation plan, $2.5 million for the back to business fund, $1.7 million for incentives related to grocery store and food access, $700,000 for the key industries and workforce development, $500,000 for the waterfront shuttle.

Incidentally, I know that is very well used on our new waterfront.

$400,000 for case management IT project, $300,000 for enhanced cleaning and neighborhood business districts, and $200,000 for small business supports, the FODEP initiative, and $50,000 for the business district support on Capitol Hill.

And so can you tell us a little bit about those and how will we possibly be able to provide these supports if we're cutting this funding and what the plan is?

That was a pretty detailed question, Council Member, so I think some of that will be followed up with online, and I think some of the information is already in the Q&A.

I will say that what you're talking about is one-time expansion, so one, no one should be surprised when one-time ads are not sustained in the budget.

I know you're tired of me saying it, but that is like, you shouldn't be surprised if something was added one time that it is not made ongoing.

We did that in some places, but it was difficult and wasn't everywhere.

And then most of these programs have base budgets that are sustained.

And so I think what is important in the follow-up is that we are talking about some of that.

I will also say with the increase in funding that's gone to the Office of Economic Development over the years, there have been several, my words, programs created that are that are hard to distinguish from each other in some cases that are supporting small businesses in different ways.

So I think part of the work that the department is doing as they refocus is really thinking about how do we best deploy these resources and serve serve small businesses and our business community generally in the most efficient way, which might mean instead of having one, two, three, four, maybe five different programs within their community wealth areas of investment, consolidating that and allowing businesses to apply for the funding they need depending on what their specific situation is.

Please.

Thank you, Director.

I understand what one-time ad means.

I also know that the situation post-COVID that small businesses have encountered is the reason why we did the one-time ads, because what small businesses encountered post-COVID was not what was happening pre-COVID.

So while I understand your concerns about the one-time ads, they are important to our small business community.

And I want to know, given that we're still in a situation where small businesses are having these huge impacts, as I said earlier, some of our small businesses have had to tap into the storefront repair program multiple times because we are not able to provide public safety to a level where we can respond.

so that they don't have to come reach out to the city and ask for hey my door got broken again or my window and I can't afford to fix that on my own again for the however many time.

They can come I think up to three times to the city but they've they some of these businesses have had more than three times to have to repair so that's coming out of pocket for them.

So I want to know how we're going to be able to respond to these small businesses since we are taking this funding away.

Well, as we are mentioning, the baseline of this program will continue and we will use a streamlining process on how we will serve these businesses.

I totally agree with you that businesses have been impacted.

It's something that is very important for me as we are building our diversification of our economy and we bring more mid-sized businesses, we are bringing more activities, more vibrancy.

The commitment of our budget is that we will continue serving businesses because the baseline our cover is just not as it was a one-time extension of the funding.

But the commitment is to continue serving those businesses with the programs that we have in place.

Yeah, thank you, Director.

but I guess I want more information on, for instance, the 300 front hands cleaning and neighborhood in the BIAs.

I have a BIA in the district that's relying on this funding.

I know there are other BIAs.

I know that executive directors of those are relying on this funding.

So are you going to be able to provide that with the baseline budget?

Is that what you mean?

That's the intention.

That's the intention that we had that we were able to support and then making sure that those organizations are long-term sustainable.

As it was one-time investment, that was the conversation that we had with that one-time investment.

What was the sustainability for those organizations to continue having the work?

That was previous my time, but my commitment going forward is really helping those organizations to be long-term sustainable.

and what does that look like and what is the role of the city to help them to be long-term sustainable in that way?

It's just to respond of the needs of our small business, which 100% agree with what you're saying, council member, but also what is the long-term sustainability for those BIAs and organizations to be driving into the work that they do.

and things like the downtown activation plan because we're we still have huge vacancy rates downtown, which means we're seeing, you know, we continue to see the same issues, which was the reason why we put, you know, the the downtown activation plan dollars into the budget.

So just if you would Moving forward and then the tracker add how you're going to address each of these programs.

I'm reading from the budget book, by the way, and the budget book has these are the things that were being funded with the 11 million.

So I wanted to, for the record, state what these things were that we're losing, maybe, or maybe you have the ability to backfill it with baseline budget.

So you'll let us know which of these you're able to do.

Thank you, director.

And then the last thing I will point out is have concerns about this vacant community development specialist position, because I know these folks are the ones that work directly with the businesses on the ground.

And so I don't know how long this position has been vacant, but I know that we, again, small businesses across the city really rely on the community development specialists.

So are you able to take up the work of this position with the other folks that are, will still be there?

Yes, when we were making these decisions, we didn't do anything likely, so we were doing a really good assessment of what are the opportunities that we have in our department to streamlining, duplication, and we are gonna continue being able to do our work based on that assessment.

So that's my also commitment of what we are making these recommendations and these decisions is the work will continue.

and we will just be more efficient and streamlining the processes for our departments, specifically for the vacant and the one that was already, the other position that was eliminated, we also kind of restructuring and kind of like it was underutilized and then it would be on the initiatives of a new position that we're hiring for.

Thank you, Director Ansari.

One last question.

The strategic initiatives, looks like, was also one time.

It was $4.2 million, and it didn't look like it was part of the $11 million, unless I'm wrong.

So what are we foregoing there?

I don't know what the strategic initiatives was funding.

Those were largely a lot of the DAP dollars as well, so that actually was part of that $11.7 million.

Oh, it was?

Yeah.

Okay, thank you.

And we are maintaining some funds within there as well for Liberty Projects and other key programs.

Thank you.

Thank you.

Thank you, Chair.

Thank you, Councilmember Rivera.

Councilmember Kettle.

Thank you, Chair.

Welcome, Director Garcia, and appreciate you being here.

And of course, Mr. Regis as well, and Director Mr. Panucci, still holding strong at 446 in the afternoon and along with Mr. Cha, our Deputy Director of Central Staff.

You know, one of the things that you highlighted in your briefing, affordability, we tend to default to affordability for your average person, individual constituent.

Can you speak to the affordability challenges within the business community?

Yes, so one, as we launch over executive order, one of the challenges that we see in the report, the Seattle resilient economy, is how do we create more productivity, how do we create more streamlining processes for those businesses to be more affordable in terms of how do they choose to be in Seattle and how we are sending a message that they are welcome to be here.

That is one piece that we are working with the task force as well as we are convening and we're about to launch that.

As I mentioned in my early presentation, affordability is squeezing families, but at the same time also squeezing businesses, small business and all size businesses.

So that's how we're defining how we are gonna make it faster for businesses and also what are the resources that we can identify in our city to attract and make it more incentives here in Seattle.

Thank you.

I appreciate including it because I think we need to raise the level of understanding of business affordability, too, because I don't think it really is thought of first.

I've been trying to push it over a number of months in terms of what we were doing with different things legislatively that we've done related to transit measure or anything else in terms of the impacts on business.

just for consideration.

I did vote, but to raise the awareness and make sure that it's considered and accounted for I think is super important.

Quick curiosity question, by the way, Seawall.

What drove Seawall to be the name of the assessment?

That was the decision that the economist, Ryan Donahue, wanted to kind of create that concept of seawall, the resilient economy of the seawall, so how the seawall is very strong and how it's created.

The seawall was created, if you know how a seawall was that's kind of the concept of how we're building a more resilient economy with the multiple elements of what a seawall is.

So that was kind of like the behind the scenes.

He might probably articulate it better than me because he's the one who kind of really identify with that kind of branding.

I like it.

It's interesting because it invokes certain things, but obviously in the business world we also have to broaden and expand as well in addition to protect and so forth.

So I just found it interesting.

Just a general question.

Which is a great lead-in to the idea of diversity of and the idea of ensuring a broadened economic base, resilient base.

Everybody thinks we're tech, which is really far from the truth because, well, A, there's different types of tech.

Biotech is huge here.

Nobody really talks about that either.

But we're also a maritime place and we're the economic hub with everything that goes with that.

And I think that's important as somebody who represents downtown.

in terms of what we're doing.

Can you speak to, since it is one of my priorities, strategic priorities, the maritime piece and what you're doing?

You mentioned in there the Maritime Innovation Hub and some of the work that's being done on maritime.

Can you speak to your interaction with that community as an example?

Yeah, thank you for that question as part of the diversification of the economy.

Maritime is one of the industries that we identify as the importance of the blue economy and how much contributed to a region.

So yes, we are prioritizing and that's part of the task force and the task force has representation in that industry that will help us to kind of, on February 2027, they will give us our first recommendations of what they find out and then by June 2027, they will give us a full recommendation of what is what we need to do in order to diversify our economy.

And maritime is one of them, but also clean tech, manufacture, and we really want to and then how do we build those industries?

And when we say mid-sized business companies, we are talking about 50 to 250 employees, which according to the federal government, that's considered a small business as well.

So it's kind of like we just need to find the sweet spot on how we're going to continue supporting those mid-sized companies.

Thank you, and I just note all these things are super important.

Addressing the underlying public safety pieces because that goes to, you know, like the shift in property taxes off to the residents because the, you know, the commercial real estate in downtown, for example, is just collapsed.

Not collapsed, might be a little bit too strong, but severely impacted.

And then you throw in REIT and some of these other pieces, we're not getting the revenue and we're basically presented with a, a budget, this is the, you know, the design of our CBO director, where, you know, if we're looking to add, like on public safety, it's basically where we're going to rob Peter to pay Paul because these revenue pieces are not going to increase overnight to give us different things.

So, unless the the forecast comes in beautifully and all these other things, we're gonna be in a very difficult state.

And we're gonna be in that Rob, Peter, pay, Paul situation.

And once you're Rob and Peter, that's gonna be a very difficult budget piece.

I'm saying this in a very generic way.

and it's gonna be difficult for us as council members and with some potential no votes because of that simple fact.

So anyways, thank you, Chair.

Thank you.

Council Member Foster followed by Council Member Saka.

Thank you so much for that, Chair, and as always, appreciate you, Director Yarse.

I'm going to be really brief with my questions.

I wanted to ask, I know obviously that these reductions are removing one-time items, and obviously they were funded as one-time items, but I want to just ask, in terms of the SAIL fund, will we still be able to get the report back in terms of the expenditures there?

Earlier this year, I got the chance to sit down with some of the small businesses in Lake City to just be a part of the conversation.

Director Yarsa, you were there, I think prior to even being confirmed.

And certainly, I think we got to hear a lot of things from folks in terms of gaps in the community and gaps in the businesses in the neighborhood.

And even though we won't have the ability to carry over and continue these one-time ads permanently into the future.

I'm curious to see if there's things we need to learn from those one-time investments that maybe we, you know, we put into other resources, or if we have the ability in future years to continue investing.

Okay, that was a long question, but a short answer.

No, that's a wonderful question, and we are actually on the process to do presentations to council members about where we are with sale, so how those investments, So stay tuned because we're going to come and present of what are those investments, how we're deploying the funds, what are we asking for those organizations to achieve, and what are the data that we are requesting for those investments in that way we not only learn but also how do we support these organizations to be more sustainable long-term because that's kind of like the main vision and the main goal, a long-term sustainability and helping them to kind of continue the work forward even if the city is not making an investment.

So that's part of this deploy.

Specifically with Lake City, we just finished all that, but also with CID.

So stay tuned because we will come soon to present to council members about this specific investment.

Thank you, I look forward to that, and I think this is already kind of encompassed in what you were saying, Director Yarsa, but to the extent, if I remember what I heard from folks, some of the things were sort of financial and some were non-financial changes that I think some of the businesses were hoping the city could address, or maybe they, I shouldn't say they're non-financial, but they're things like our sign code, right, and other things that impact the ability for those businesses to operate with ease and to navigate the city.

So as you plan that report back, I hope we get an opportunity to hear both about the financial investments, but also some of the changes just in our existing business practices or engagement that we can do to continue making it easier to operate a small business here in the city.

Another question I just wanted to ask, you know, maybe you can just share with us and this is, I'd love to learn more just about how the budget reflects the executive order recently in terms of the ability for us to try to attract a diverse set of businesses, small, mid-sized businesses, and where you can sort of foresee that future work.

Again, knowing you're doing this within limited circumstances, but I do think that report that recently came out of OED and the executive order feel like really important steps forward in terms of trying to have the kind of economy we want to have for the long term.

So if there's any bright spots that you can point out for us, I think that would be helpful.

Yeah, that will be concentrated on key industries.

So you see the line of key industries as a word that is going to be kind of lifting this report and the executive order.

Of course, will be small navigation department and they're building wealth as well as we are building the finance element of this report.

But yeah, it's mostly concentrated on key industries and that's kind of like the purpose of how do we leverage or work from that specific division under my department.

Thank you so much.

Thank you, Chair.

Thank you, Council Member Foster.

Council Member Sacco.

Thank you, Chair.

Thank you, Director Arce for the overview of the presentation today.

And yes, another very difficult challenging budget, or prepared under challenging circumstances, rather.

And speaking of which, just want to get a little more clarity around the Back to Business program and the proposed reductions there.

First off, I'll note that many of my constituents have leveraged that program, including the expansion to more than just The reactive side of things, the original, I think, was it broken windows program or storefront repair fund.

The original storefront repair fund was just really for a limited class of repairs after crime or damage has occurred to a business.

The most canonical example there is like repairing a broken storefront.

But I think last year, maybe it was end of 24, expanded that to include proactive measures, including, you know, security equipment, hardened doors, hardened facilities, security camera equipment potentially, just whatever to better make sure we don't have to be reactive.

And so that's what the back to business program effectively helps accomplish and solve.

And many of my constituents in District 1, small businesses, rather, have relied heavily on that vital programming to help offset some of the costs in connection with security, crime issues at their store, whether that's in the Alaska Junction, small businesses in the Alaska Junction, Restaurant Row along Elki, but throughout District 1. And again, small businesses have come to rely on that and really appreciate that.

And even the ones that have not relied on that or leveraged that program have always appreciated that it exists.

And so I just really want to I want to start by thanking you and the team that have administered and will continue to administer, I hope, that program on and going forward, because I know my office has worked closely with the department to make sure after a particular crime or incident happened at a small business in District 1 to support them.

And I appreciate all the work that went into that, and I want to make sure we are able to continue to invest in those kind of things at appropriate levels.

But is the proposal to retire and cut the program entirely going forward, or instead reduce it at specified levels, specifically $2.5 million as indicated on page 213 of the budget?

Director Penucci.

The proposed budget maintained the ongoing funding that was in the budget last year.

It isn't really a cut when you don't make ongoing the one-time reduction.

So I just want to be really clear for the viewing public.

This is a technical adjustment to reset the budget to the base.

It is not a cut because there was only one-time funding added.

So again, no one should have expected it to be made ongoing without a sustainable way to pay for it.

I would also just note, and also just more for the viewing public, when we were talking about how did this budget get balanced, and when I talked about over $40 million in general fund reductions and all other changes to Jumpstart, that number did not include these one-time reductions because it's not actually a reduction.

It is just resetting the budget to the base based on what was adopted last month.

last year.

I'll let the OED folks answer on sort of what is left in the base, but the program still exists.

It is just not...

it is set back to the ongoing funding that has been in the budget.

Which is at what amount?

$800,000 for the ongoing program.

So $800,000, the new baseline, so cutting that from the $2.5 million from the amount that was put in there last year and businesses have come to rely on.

So totaling $3.3 million.

So basically just preserving again $800,000 of that.

assuming that proposed figure and new baseline stands, how have you all thought about prioritizing, we can't have this, or maybe we can, curious to hear how you think so, but that expanded back to business program, how are you all thinking about administering that much more limited set of resources citywide?

Well, as we've been sharing, it's kind of like with this strategy of what are our neighborhoods of priority, what are the needs, first place, and how we're responding with the limited resources that we have at that point.

So again, it was a one-time expansion, and now we have this, the baseline will continue, will continue supporting those businesses, and it's just prioritizing what are the needs, the most needs in our city to respond to those businesses who are struggling the most.

Thank you.

If that level holds, I do think the small business community is owed more clarity in terms of objective evaluation criteria used to spend significantly less resources in how those decisions would be made.

I think at a bare minimum, that would be helpful.

But I appreciate the initial comments here.

Thank you.

I'll follow up with more details on strategy, if that's what I'm hearing.

Thank you, Council Member Saka.

I'm gonna send it over to Council Member Rink to take us home.

I'm just gonna pay you the compliments that are due, having seen you in public meeting with businesses.

Out of all of the department directors that have come on board in the last nine months, you're the one that didn't need any ground to have a learning curve.

I see you running.

I see you working on behalf of Seattleites.

That's what we love to see on behalf of department directors and departments.

Thank you, Director Yarse for being really good at your job.

Council Member Rink, take us home.

Thank you, Chair Strauss.

Thank you, Director Yarse, Mr. Regis, Director Panucci, and Deputy Director of Central Staff, Cal, thank you so much for being here.

Thanks for all the work into this presentation for OED's ongoing efforts to build a resilient economy.

Really appreciate your continued work and your partnership.

That's all I have, Chair.

Thank you.

Thank you.

Director Panucci, any last words for the day?

I'm just gonna bring us up.

We've got Office of Housing at 9.31 tomorrow morning, followed by SDCI, OPCD.

Yes, there are only three departments on the agenda for tomorrow, just like today, but Lord help me, I hope we're not here till 5.05 because we do have a light rail station opening at 4.45 that Sound Transit doesn't care about our schedule.

Or to continue working with you on building a resilient economy, so thank you for your partnership.

Well done, well done.

With that, if there's no further business, the September 28th, 2026 Select Budget Committee will come to a close.

I should pull up my script so I say this correctly.

Seeing as we have no further business, we are adjourned.