Seattle City Council Select Budget Committee 9/25/19

Good afternoon, everyone, and thank you so much for joining us.

It's September 25th, 2019. This is the first day of our budget process here.

I'm Sally Bagshaw, Chair of this committee, and I want to say thank you to Ms. Herbold, Ms. Mosqueda, Member Sawant, Council President Herold, Ms. Gonzalez, all of us here today.

Thank you for being here for the first day.

I want to recognize everybody who is here in the audience and to say thank you to our budget office, to CBO, to the mayor's office for putting this together.

I can only imagine how difficult and how many things you've been juggling.

So thank you to that and I just do want to acknowledge the hard work that you have gone to.

up to this point.

So I'm very honored to be budget chair once again.

This is my second year, and I look forward to the dialogue with the departments, with CBO in particular today.

We're also going to hear from Seattle Public Utilities and Seattle City Light.

Those will be our first two departments that we'll be listening to.

So for the next three days, we will be devoted to presentations from the departments about their proposed budget.

And we're going to have a special work section next week, Wednesday, October 2nd, where we're going to do a deeper dive into investments and strategies around homelessness, and also including the LEAD program.

And if Lisa Dugard is watching at this point, congratulations to her.

She received a MacArthur's Genius Grant for the work she has done on LEAD, which is pretty impressive.

We just learned about that today, so congratulations to Lisa Dugard.

Dan Satterberg also will be joining us on next Tuesday to discuss this.

One of the important things that I've talked about all year long is that intersection between the departments that are doing the work around addressing the needs of people who are homeless, the Human Services, the Office of Housing, and our criminal justice system.

We know that we've made a lot of good strides, a lot of good things have happened, yet there is much more to do and I really appreciate what we're going to hear around how our systems are working together.

We'll also be focusing more on our plans for the regional governance around our Office of Housing, our Human Services Department, and King County as well.

So, our first of the two public hearings is going to be on October 3rd.

I believe that is Thursday next week.

The second public hearing will be on October 22nd.

Both hearings will start at 5.30 p.m.

here in City Hall, and as we have advertised, everyone who comes will get two minutes.

If you want to speak as a group, it'll be five minutes, and I just ask my colleagues, if you can, Make sure that you've given yourself plenty of time that night so that we can hear from everyone.

So, starting on Wednesday, October 16th, we'll have a series of budget deliberations among us on the council issue identification sessions where the committee will review and discuss our priorities and central staff's analysis of mayor's proposed budget.

And I want to say thank you to our council central staff in advance.

I know these next eight weeks are really demanding on you and we appreciate all that you do and look forward to working with you.

So I will present the chair's initial budget proposal on November 6th, and the goal there is to take into consideration all of my council's priorities, my colleagues' thoughts and best ideas so that I can present back a budget proposal, and that's November 6th.

Committee members are going to have an opportunity to propose amendments to that chair's proposed budget on November 13th, and then the committee will vote on a revised budget proposal on November 19th, which will be presented right thereafter.

The council will then adopt the budget on Monday, November 25th, the Monday right before Thanksgiving.

So that's our goal is to streamline this.

And I urge my colleagues if you've got issues, if you've got priorities, if you have something that you would like to have funded this year in this year's budget, I really urge you to set aside some time so you and I can talk and figure out what those are in advance and to see if we can make sure that there's funding for them.

So, in addition to the two formal public hearings that I mentioned, we will receive public comment each day that we meet.

And the intention is on those days is to allow the public to also hear from the departments or to hear from council central staff.

So we will have public hearing at the end of those meetings where we're not voting.

But for the two meetings at which the committee will vote, that's November 19th and November 25th, we will receive public comment before then.

So before we begin our department presentations, I want to highlight for my colleagues and to all the legislative staff some key deadlines that we're going to, we have identified already on your calendars.

They are marked clearly in red.

The first is Thursday, October 10th at 10 a.m.

This is a cutoff for all council members to submit topics for inclusions in our issue identification.

papers and again that's marked red on your budget calendars.

The second is Tuesday October 23rd at 2 p.m.

and this is a cutoff for members to submit proposed council budget actions formerly known as green sheets and And the third deadline is Friday, November 8th at noon, the cutoff for submitting proposed changes to the chair's initial budget proposals.

And I have been asked, and I'm going to acknowledge Patty.

Patty's the guy who has to put together the agendas.

and to make sure that we meet these deadlines.

And he has to publish the agenda materials, and if we get them to him on time, he can do it the evening before, so it's in our in-baskets, rather than the morning of the meeting, which I know has become, in the past, some problematic for some.

So council members will still have the opportunity to amend the agenda if they fail to miss the deadlines.

But I just want to emphasize, we really wanna stick with these deadlines so we can get the agendas out so the rest of us can be prepared for the next morning.

So that's gonna be our process for the 2020 budget.

It is already been published and offered to each of your offices.

It's published on the website.

Are there any questions at this point?

So, seeing none here, before we proceed to the first presentation from the City Budget Office, I want to say thank you again to Ben and all those in CBO who are here today.

I think Dan, Dan Eder, do you have some kickoff comments?

I do.

Thank you very much.

Very good.

And you're our Deputy Director.

We're delighted to have you.

So, thank you very much.

Thank you.

For the record, Dan Eater, Central Staff Deputy Director.

By way of general table setting, I just want to introduce Lisa Kay and Tom Mikesell, who are here at the table with me.

They will be serving as co-budget coordinators this year, and they will remain at the table throughout your deliberations to ensure that you are consistently staffed and supported.

In addition, we'll also have individuals who are assigned from central staff with expertise in the workings of the departments and the offices and cross-cutting issues that are included in the proposed budget.

Today, you'll hear from Director Ben Noble from the city budget office.

He'll give the committee an overview of the mayor's proposed 2020 budget.

And then, as the chair mentioned in her opening remarks, you'll hear department presentations from the Seattle Public Utilities and from Seattle City Light.

You'll hear from other departments in the coming days as well.

Dr. Noble's presentation, and perhaps the City Budget Office staff may want to come to the table.

The presentation will include an updated revenue forecast.

Revenue forecasts, of course, fluctuate over time, and the City Budget Office regularly updates these forecasts in the spring and the fall of each year.

State law requires that the city adopt a balanced annual budget, which means that authorized spending must not exceed reasonably anticipated revenues each year.

And that's why the revenue forecast is so important.

The mayor has indeed submitted a proposed balanced budget for the council's consideration.

Her proposal is one vision for how to allocate the city's finite resources.

And now it's council's turn.

You will get to decide exactly how to address the city's competing priorities while maintaining a balanced budget.

The city council can certainly add spending that wasn't included in the mayor's proposed budget, but in order to maintain a balanced budget by the end, any spending would require one or both of the following strategies.

You may choose to reduce some of the spending priorities that were included in the proposed budget by the mayor and or you may elect to increase some revenue source that could either be an existing tax or fee or some new funding source.

You'll have no shortage of inputs as you go through your budget deliberations in the next couple of months.

Among other things, as the chair mentioned, you'll get public feedback.

That will include, but not be limited to, testimony at the upcoming budget hearings on the 3rd and the 22nd of October.

You'll hear about updated revenues, not only for existing taxes, but some significant new revenue sources that are identified in the proposed budget.

You'll hear an evaluation from CBO from the departments and from your central staff about an evaluation of spending trends over multiple years so you get a sense of where we've been and how the proposal fits in with historical arc of spending.

You'll be able to use your own discretion, but also hear from the mayor about evolving policy priorities and implementation choices.

And last but not least, you'll hear from central staff and from the departments a comparison of how the proposed budget aligns with or departs from spending that was included in the 2020 endorsed budget, which was adopted by resolution in November of 2018. So in a nutshell, that's what council is going to be working on the next couple of months.

And central staff is prepared to support your work by developing issue identification papers and then by preparing proposed council budget actions for potential incorporation into a final budget.

The entire central staff is looking forward to working with you and supporting your work.

Thank you, Dan, very much.

Anybody have any questions?

Dan, I would just like to emphasize that, as you said, this is the second year of a biennial budget that we passed last year.

And something came up today, and I would wonder if either you or Ben might like to address it.

Last year, for example, one of our budget items was to crisis connections and it's an organization, a non-profit that we're working very closely with and it ties in with the good work that we're looking at for our low acuity response health one and the question came up of Things like that, where we've specifically identified budget matters that are going to support an entity like that.

What do we do to acknowledge, first of all, that last year we passed a budget that included them?

And secondly, to make sure for their planning that they can count on that money going forward in January.

Well, I will defer to Ben for any specifics about what is or isn't included in the proposed budget.

But just generally speaking, when the council includes money in the endorsed budget, the council is announcing its expectation that there will be resources available for such purposes.

In the endorsed budget year, now they that's been translated into the proposed budget.

The proposed budget provides in a detailed way how, if, and when it happens, there are deviations from what was included in the endorsed budget.

Of course, the budget approval level is at quite a high level at the budget summary level and the budget control level, which is generally above the level of the specific programs that would be included there.

So that's why I would defer to the CBO to tell you whether the money that you added or included in the endorsed budget has been proposed for that same purpose this year.

Very good.

Thank you.

All right.

Well, would you like to dive in?

And welcome.

And again, I appreciate all the work that you've done leading up to this work.

Thank you.

Do some introductions real quick.

Ben Noble, City Budget Director.

Jeanette Blankenship, Deputy in Budget Office.

Dave Hennis, Lead Economics and Revenue.

And I'm going to walk you through the presentation but with assistance as needed from Jeanette and David.

Before I dive in, I do want to say...

At a high level, consistent with the update we gave you in early May, the budget for 2020 was built from the endorsed budget as our base.

And we'll go through this in more detail.

We do not see significant new ongoing revenues, particularly on the general fund side, so we didn't anticipate significant changes to the endorsed.

However, as you will see, there are a number of new revenue sources and a number of one-time revenue sources that have been made available that are going to provide an opportunity for some increased funding in 2020. But the 2020 endorsed was nonetheless our base, and the changes from it on an ongoing basis for the general fund, we have tried to keep to a minimum, because as you will see, we're not expecting a significant increase in revenues.

And to give you a frame for those revenues, we start, as we normally do, with an update on the economy, starting first at the national level.

We ultimately develop a forecast of the regional economy from which we develop estimates of city revenues.

working back in order to develop a forecast of the regional economy, we have to understand what's going on at the national level, and actually ever more as alluded to in this slide, the international level.

So to give you some context for the national forecasts that are an input to our regional forecast, this graph shows you the growth rates for the U.S. economy since the turn of this most recent century, so 2000. And what you see, and again, these are growth rates for GDP, gross domestic product.

So you can see the significant expansion in the early 2000s, the great recession of 2008, 2009, the growth since then, and particularly focusing on the right-hand side of the graph, you can see the effects of the fiscal stimulus at a national level in 17 and 18 as we saw significant growth.

You can see on a move shifting now to a forecast basis, the effects of that stimulus dissipating.

So in 2019, forecasts at a national level are for growth rates to slow.

And most significantly for our ongoing forecast for 2020 and beyond, expecting that growth rate to slow further, again, as the stimulus wears off, as the effects of the current trade conflict pick up.

And I would note that this is the forecaster growth, all of the consensus among forecasters is that we are seeing an ever increasing risk of recession.

So this is their forecast of what they expect on average.

But the probability of lower growth or in fact negative growth, so a recession, is increasing.

And in fact, just last week the Federal Reserve moved to lower interest rates in an effort to mitigate that risk, which is good news that they're mitigating the risk.

It's bad news that they have to mitigate the risk.

And every step they take to reduce the interest rates is one less tool they have if and when we actually get to a recession.

So I don't want, you know, the nature of this job to be a little bit dour, but that is what we see at the national level.

Yes, please.

Council Member Muscatia, first question.

Thank you, Madam Chair.

On the previous slide, given the comments that you just made about the pending recession and potential shortfall in the budget as compared to 2018, I'm interested to know how does our rainy day fund compare to other cities of similar size and budget, and how well is Seattle prepared for this potential recession?

I don't at finger tips have numbers to compare to other cities, but what I can tell you is this budget does increase funding for the two biggest reserves that we have for the general fund.

One is the rainy day fund, or technically the revenue stabilization account.

That is the reserve we keep on hand.

to address downturns in revenue, which is exactly what a recession might bring.

It will be north of $60 million with the contribution that's anticipated as part of this budget.

I don't know whether that feels to you like a lot of money or a little bit of money.

In the context of a $1.5 billion general fund, it's not a whole lot.

We have the tension there is every dollar we put in there now is a dollar that's not spent on other services.

In the context of the homelessness crisis and affordability issues, those are tough trade-offs.

We also have the emergency sub fund, funded to a comparable amount, about $60 million.

And it is designed to address unanticipated expenditures, so think a major storm or unanticipated damage to some physical asset in the city or something like that.

So those are the reserves.

On the general fund side, you'll see actually other funds, for instance, the utilities each have reserves of different forms of their own.

I think the key one for us is this rainy day fund, and it's $60 million large, but that's not that large in the overall context.

What it would likely allow us to do is to ease our way into the cuts that are needed to address a downfall in revenue.

So it would mitigate spending reductions, but it would not would not preclude, you know, we would still be forced to cut.

It would just give us a chance to smooth some of those reductions, if you will.

And we'd face difficult choices about how to pace the spend down, if you will, because we won't ever know when we will be at the bottom and when we'll be coming back up.

Yes, please, go ahead, follow-up.

So as a follow-up, will you let us know how the $60 million Rainy Day Fund compares to other cities of comparable size and population?

Yes.

When do you get that?

Okay, thank you.

So moving on to the regional economy, what we know in general is that the regional economy here has outpaced the U.S. economy considerably.

What you show are cumulative growth rates in employment since 2010, so over the current expansion.

And you can see that Washington State has outpaced the U.S., but in no small part that's because of what we're seeing here in our local region.

So we have really done tremendously well.

driven, as you know, by technology, online retail, and construction.

But I would note that key sectors there, technology and online retail, and aerospace, another important sector here, are heavily trade dependent.

So these are international companies.

So the slowing of the global economy generally, and particularly of trade, is a risk to us.

And construction is not, on the face of it, trade dependent.

Except that construction is all about building the office space and the housing for the people who are in these trade dependent roles.

So it too is effectively dependent on that reality as well.

So this again emphasizes the risk that we face in terms of where the national economy stands.

So looking to our forecast, so what do we expect going forward?

The graph here highlights job growth, absolute numbers here, and it shows, again, giving you the trends back to 2005 in this case.

I'm focusing here on employment because, again, our forecasts of revenue are driven by the local economy, and probably the single best measure of the strength of the local economy is, in fact, employment.

So if we had to wrap our forecast into a single number, these employment figures are probably exactly the best one of those.

And what you can see, again, is the growth in the early part of the century, if you will, the Great Recession, the considerable growth we had coming out of that from 2011 to 2016, And then you can arguably see a trend line from 2016 to 17 to 18 and certainly to our forecast for 19 of slowing growth in employment.

I would emphasize that this is still growth, right?

We're talking about more jobs.

The question is how many more jobs?

And obviously 2019 is still a forecast, but what we're seeing on the revenue front makes me think that we probably have this one right.

So our revenue forecasts, we'll show you in a minute, are pretty tight to actuals.

So every reason to think that our forecast, we're only about halfway through the year here, a little bit further, that those forecasts are right.

Looking forward to 2020, which is key for the proposed budget, we're expecting a more significant drop off in employment growth, essentially for all the reasons that I've just been describing, at the national level and then locally as well.

And I would note, so we're expecting Amazon's growth to slow some.

Construction, we have not predicting a dramatic fall off, but just again a gradual slowing there.

And then I noted that the 737 max issue for Boeing is one that could have a significant employment effect as well.

It certainly has probably had some already, but the dimensions of that are still not fully known either.

But again, you see that it is that declining forecast for employment that will underlie the revenue forecast that we're about to highlight.

Questions there?

Okay, so this is a pretty scary table full of lots of numbers.

So let me try to walk you through here.

This is again the table we traditionally show you that is updating our forecast.

It is updating our forecast from the numbers we gave you in April.

So we want to show you how things have changed since then.

And there are a number of anomalies here as well as some important trends to identify.

First of all, looking at 2019, you can see, I'm going to describe the table a little bit more as well.

The upper part of the table is the general fund, so the most flexible dollars in the overall city budget.

The stuff that is highlighted in green are what we described as other notable revenues.

These are revenues that have dedicated purposes, but many of which address items that are otherwise a focus of general fund support as well.

So you will note that we have not, although previously the sweetened beverage and short term rental tax were in the general fund.

They have now been set up as separate funds, so we have pulled those out.

The admissions tax has always been separate, real estate excise tax, commercial parking tax.

And then you'll note that we've added the transportation network company, the TNC tax here.

One of the proposals in the budget is to impose a tax on transportation network companies.

As we get there, I'll talk a little bit more about that revenue estimate as well.

So focusing first on the August update for 2019, what you'll see, again, the overall forecast is for revenues of $1.35 billion.

And since April, the change is very small, about $2.5 million.

And you can see we're up slightly in sales and B&O, which are driven by the down a little bit in the private utility taxes.

Parking meter revenue is down some, we were a little slower in installing the meters and there have been some changes in rates as well.

But again, a small, small change.

I don't want to confuse you here, but to explain further, when we showed you the same figures in April, relative to the forecast that was in the endorsed, we showed a slight, excuse me, that was in the adopted for 2019, we showed a comparable increase in revenue.

So overall for 2019, general fund revenues are up about 5 million over what we had built the budget around.

And that's a resource that we will have deployed as part of the 2020 proposed spending.

And the best way to think about it is a one-time resource.

It was 2019 money that we didn't expect.

We started the year, we have it now, and we'll deploy it in 2020. But it's not inherently ongoing.

The effects of what's ongoing are on the next set of numbers, the 2020 numbers.

And your first blush might be here that that's remarkably a bit of good news, because what we seem to be showing you is a $72 million increase in the general fund.

And we are, but the important caveat there is that almost every one of those dollars, if you look, is in the category of other general sub fund revenues.

And in this case, our one time.

They are in no small part the mega block dollars from the sale of that property, as well as some grant resources that have come in.

If you sum everything but the other general sub fund revenues, so the ones that are really being driven by the economy and local activity.

Again, everything in general fund but the last item.

The change from April is actually minus $20,000, so zero.

So we have not changed our forecast for 2020 revenues since April.

You can look, we're up in one area and down in another, but the net is all but zero.

Again, remind you that when we showed you these numbers in April, we did see a revenue increase relative to the endorsed, which again is the important base here, of about 3 million.

So it's not that there's no new general fund, it's that there's very little.

So again, you might well ask, and the rest of this presentation is about explaining to you how in that context we have been able to make some proposed additional adds to spending in the budget, and we'll get to that.

Just a little bit more about the other revenue sources, sweetened beverage forecast, again, largely unchanged.

Unchanged from April, but recall that in April we raised the forecast for sweetened beverages from about 21 million to about 24 million, the 24 you see here.

So there are some additional resources relative to the 2019 budget and relative to the endorsed, again about 3 million.

The short-term rental tax, there's a change here from April, but that's really a change in the accounting treatment.

The underlying forecast of $10.5 million a year is unchanged.

So we won't have a change in spending related to short-term rental.

And then other changes are largely modest.

There is a one-time increase in real estate excise tax that is deployed in the 2020 budget.

And then I would note, we'll come back and talk a little bit more today, and then actually we scheduled a separate briefing for you on the transportation network company tax as well.

Which shown here is an estimate of first year revenues of about $9.5 million.

We're proposing to spend relatively little of that just given the overall uncertainty of that proposal.

But the legislation to authorize that tax was delivered today, so it is part of the budget as we're proposing it.

As we move in, yeah, so Sorry, this is, no that's fine, I was forgetting we had this slide.

This is a high level summary of changes in the general fund.

As I was describing, and you can see the growth over time, as I described before, the 2020 proposed relative to the endorsed is somewhat deceptive because of the significant increase associated the mega block sales in some one time.

In addition, in 2020, the 2020 budget assumes and appropriates the dollars to implement the tentative agreement we have with the coalition of city unions.

The money to pay that had been held in reserve, so hadn't been shown as spending before in the endorsed budget, but now moves into that category.

I think probably the more, from a revenue perspective at least, probably important way to see the general fund, and let's go back a slide real quick.

Again, if you exclude the other general sub fund revenues, which tend to be grants or one time items and the like, and you look at the true economically dependent revenues, those that are above.

Relative to 2018, so the 2019 general fund is about 4% larger.

So we are getting growth and growth above inflation for 2019. The forecast for 2020 is again about 4% larger.

However, about 15 million or 1% of that is a policy change on the EMS levy.

So not an economy driven thing.

On an economic basis, general fund revenues for 2020, we're anticipating growing at 3%.

With inflation forecast at roughly two and a half, that's very little real growth that we're seeing at this point.

And again, we're still in a growth mode, but just kind of give you that overall context.

As we move now to talk about some of the spending, one thing I do want to highlight is I mentioned already that there are some, we're going to talk about affordable housing first, but let me make a few comments about one time general fund resources.

There are some one time general fund resources that are actually significant amount that are deployed.

And I just want to highlight some of the places where that comes from.

I mentioned that the revenue forecast for 2019 relative to the adopted budget is up about 5 million.

In addition, we made an error that I'm loathed, somewhat embarrassed to admit that we did.

However, it went in the right direction.

Overestimated the cost of the retro payments to Seattle Police Officers Guild.

And that's about $6 million of resource that we otherwise had expected to spend.

While we're talking about SPD, Challenges they've had in hiring police officers means that their salary spending this year will be slightly below, about $6 million below what they had anticipated.

That is again some one time resource that is available to us.

And as I go through and talk more, there's also some one time capital resources that are available.

So we have deployed those in 2020 where possible on one-time spending items, but not exclusively on one-time items.

The pressures for ongoing spending are real.

Some of the policy direction you have provided leans that way too.

So we have met the challenges, and we'll talk about sweetened beverage in a moment.

We have met the challenges of the council's policy direction, but some of it with one-time resource.

That does leave me pause about sustainability into 21. But we have the resources now, and making cuts while that's the case, I don't think is necessarily wise either.

But I do want to highlight that we could face challenges as we build the budget for 21 and 22. So, let's talk more specifics.

So, obviously affordable housing crisis in the city is a significant one, and the mayor's budget moves significant resources to try to address those issues.

Most significantly, the Mercer Mega Block, so a total of, as seen here, $78 million.

dedicated to affordable housing and to projects related to affordable housing.

And I do want to highlight several of these.

First, $15 million allocation for the Equitable Development Initiative, the EDI initiative.

Office of Planning and Community Development just made the round three awards to EDI applicants.

And as part of that process, the round three review process, we identified that a number of projects were in a, it's not a very technical term, but an odd chicken and egg situation.

They had advanced their projects to the stage that they were anxious to try to apply often for housing dollars, because they were going to be mixed use projects that would include a housing component.

And with all the dollars we have for affordable housing, there's a potential to leverage those resources.

But they didn't have site control, and in order to apply for those housing dollars, they needed site control.

But they couldn't get site control because they didn't have housing dollars, so hence this kind of catch-22 chicken and egg issue.

So the specific proposal here is to invest some additional dollars, essentially, in what will ideally be a revolving fund arrangement, We'll make allocations so that these projects can gain site control, they can make applications as appropriate for housing dollars, and then potentially repay this fund and we can do this again.

So it will become a way to move these projects past this hump, if you will, in their stages of development.

So it's actually some very exciting stuff to take the EDI projects that have been more conceptual and move them to implementation.

An additional $15 million for home ownership for those of moderate and low income.

So the idea here is a housing trust model where the underlying land would be held in trust, homeowners would be able to buy in at relatively affordable prices.

would accrue some but not full appreciation, and then potentially when they sell, they'll have accrued some equity and be able to move on potentially to a different location.

Targeting some of the smaller sound transit sites in the valley.

Smaller ones because they're not big enough to be ideal for the larger multifamily housing, but could be perfect for kind of, I think, more townhome or row house kind of arrangements that are both naturally affordable and would fit on the physical sites.

$6 million for low interest loans to help the development of affordable accessory dwelling units, ADUs.

We will give you more detail on this.

You'll get some more during the presentation from the Office of Housing.

But the notion here is low interest and for appropriate folks, zero interest loans for homeowners of moderate income who would to be able to take a low interest loan to build an adu unit with the condition that they then rent it at a rate that is affordable to 80% or below for ten years.

So it is potential to help moderate and low income homeowners by creating a revenue stream for them from the accessory dwelling unit and to provide affordable units for those who end up dwelling in the affordable dwelling units.

So I think an interesting move.

And then, as we discussed, $40 million, $42 million to make some strategic investments.

Again, property acquisitions or investments in projects.

that would lead with housing but could also include other important public benefits.

So for instance, affordable child care and other ground floor uses.

Chatting with each of you individually identified that there are some real tangible opportunities for us to be strategic in some of these moves.

Maybe not ideal to talk about immediately in public, but we are going to convene next week.

We've had a couple of internal meetings, but an overall meeting of city staff, including council staff, central staff, to initiate a process to review what those opportunities are, to identify the criteria and the principles we would use to select among them.

And we're also looking to identify a set of outside stakeholders and experts who would help us validate those criteria as well.

And ideally, there is a definite sense of urgency here given the affordable housing crisis.

So bringing forward proposals this year or early next at the latest.

So I think very interesting opportunity there.

Thank you, Madam Chair.

So I heard you say involvement of central staff.

I heard you say involvement of community partners and that a potential proposal for the $42 million for strategic investments and acquisition would be forthcoming either later this year or early next year.

What is the process by which the council under the proposal as conceived currently would go through to get council approval or council insight and input?

any so these dollars are currently allocated into finance general so because we don't have this full plan so any actual appropriation any move to spend the money would require council approval and so we would expect a robust discussion with you about that and I would add you know we would We expect both some public input at the stage of making the investments, but as importantly, that once we've identified and made the investments, a really robust engagement with the public about how we would what they would like to see in these projects, what are the appropriate public benefits to bring to the table.

One of the things, again, I want to be clear, we're leading with housing and affordable housing is the emphasis here.

But these dollars aren't, unlike the levy dollars, they're not restricted to housing.

So they do provide an opportunity for us to do things like subsidize a child care facility and ground floor or a public meeting space or something of that kind.

And our goal would be.

to again find what the balance is between the housing piece of this and these other amenities or benefits.

And that's really among the more exciting things about this is that it's a chance to really to bring those elements to this work as well and to those projects.

Thank you.

You know about this, but just to highlight the local option housing bill.

Again, this is new money, so this is as authorized by the state.

It's actually a portion of the state's part of the sales tax is redirected back to the city, 4.5 million, up to 4.5 million for the next 20 years.

The proposal we have is to take those dollars, build affordable units, and use the same stream to provide the necessary O&M costs.

So we'll both build the building, if you will, and provide the resources to operate it.

So it is a self-contained and self-funded proposal.

Real estate excise tax, this is actually not new money, but a reprioritization of existing resources that the city has.

So the state legislature, for the first time, authorized, and for a limited time, authorized the use of one of the two real estate excise tax.

the second one, to be used for affordable housing.

So with the budget and really the CIP, the six-year spending plan for capital resources proposes to allocate $5 million a year from 21 to 25 to affordable housing.

We think we can manage the cash flow on this such that we can put that into the NOFA this year and actually deploy those dollars, make an award of those dollars this year.

We'll probably spend them down over two or three and we'll have to manage cash flow over the latter part of that, but believe we can do that.

And the only significant trick here, if you will, is this is not, again, new money.

It's taking from the investments we'd otherwise plan for real estate excise tax.

And that money is generally used to do major maintenance on city facilities, also to do things like paving and sidewalk repair and the like.

So it is a repriorization and a sacrifice of those other investments.

But obviously given the priority of affordable housing, the mayor thought that was important.

And then the last item, again, we have a separate presentation set up for you on this, is the revenues from the Transportation Network Company, or the TNC tax.

And we'll bring your presentation, I believe next Wednesday, in greater detail on this piece and also the housing piece here.

Excuse me, the transportation piece, this is the housing piece.

Let me ask you a quick question on that, Ben.

So my understanding is since we didn't reach a signed agreement between the parties on this, that the proposed $52 million is not going to be included in this budget so that we can't spend it.

Let me explain that piece.

The proposal that has been sent down would have the tax going into effect at the beginning of July and generate just about $9 million next year, in 2020. What we're proposing is to spend a portion of that, just over a million or maybe a million and a half, I don't recall as I sit here, to do the initial implementation to actually collect the tax.

It's not a trivial effort to set up the systems to do that, and to do the rulemaking around it as well.

That's one of the reasons not to start until July.

The ongoing revenue stream is about $20 million a year, and then growing it at whatever rate that business grows.

We have an assumption about that, but it is an assumption.

And obviously, it's a dynamic business for a variety of reasons.

So the remaining resource would be left in finance general, because we want to be sure that we're able ultimately to collect the tax, and that our revenue forecasts are reasonably reliable about it.

To anticipate a question that hasn't been asked, I do not think this is a revenue source that we can bond against anytime soon for two primary reasons.

One is we don't know the tax base well enough.

We don't understand how it will grow.

And the other is that both the major transportation network companies are posting significant quarterly losses and their business viability.

Again, I'm not a progostigator, certainly not about stocks.

Usual joke, if I was, I wouldn't be here.

But I think we want to be cautious about what this revenue stream looks like going forward.

But that said, it is a significant source of revenue.

Right.

So just to quickly summarize, you're going to put a million, million and a half in just to help get the whatever software, whatever integration you need with our current system so it can be collected.

It will be effective the first of July.

But for the 2020 budget going forward, from our standpoint, we can't bond against the proposed $52 million, nor should we start spending it.

All right, and the legislation does, however, propose and allocate the available resources between, principally, three, well, four, the administration of the tax, affordable housing, transportation, in particular, the Center City Streetcar, and then also, let me make sure I get the name right.

Driver Resolution Center.

The Driver Resolution Center.

To be clear, Council Member Bagshaw, the budget includes the, besides the funding to set up the tax, all the rest is in Finance General.

We would expect that during 2020, we would be coming back to Council to transfer those funds from Finance General to the purposes that Ben just outlined.

At some point, you're going to feel better and reassured that that tax can be collected and we can keep it?

Yes.

Okay, thank you.

Okay.

Further questions about housing, we'll move on.

I don't see any questions.

Sweetened beverage, soda tax.

I'm going to end up slipping into soda tax here somewhere along the way, so I guess I'll start at the beginning.

So the first thing I want to highlight is that that we have, per the council ordinance, eliminated the use of sweetened beverage tax, soda tax revenues to backfill the general fund, if you will.

So that was to the tune of about $6 million.

In addition, the revenue forecast has added about $10 million in annual ongoing revenues, so we've increased the forecast in the way that is described.

And then further, there are some one-time resources, because again, that revenue forecast increase applies to 2019 as well.

So in total, there was about $10 million of ongoing revenues to be allocated.

And then about $4 million of one-time revenues.

Again, I just want to highlight, having undone the backfill, if you will, of general fund, that meant that there are resources available to be deployed to, and very clearly, to the restricted priorities that are eligible for the use of the soda tax.

So the mayor's budget deploys those resources as follows.

First, consistent with the use of soda tax for early learning, a $3 million ongoing investment expansion of the city's child care assistance program, or CCAP, which is a voucher program for child care.

So it provides a discount for low and moderate income families to access child care.

So in particular, as noted here, we would expand the eligibility to 350% of federal poverty.

Again, just to give you a flavor for that, it's about $90,000 for a family with two children.

We'd increase the minimum subsidy, particularly the top end of that range from 10 to 25%.

What we had seen was that not a whole lot of folks were accessing the resource.

We think that with a deeper discount or a deeper incentive, a deeper subsidy, that's really the word I'm looking for, they will.

We also, though, recognize that increasing the vouchers is, if you will, on the demand side, but a significant part of the challenge on child care is on the supply side.

So we're also looking to provide financial incentives to help expand supply.

And we had two elements there.

One would be on an ongoing basis to use a share of the soda tax revenues to provide financial incentives to that aren't currently eligible.

As an example of that, in order to use your voucher, the childcare facility has to be qualified.

And one of the requirements that the city has is for a liability insurance.

And for home-based care, not all providers have, if you will, an excess liability coverage.

It's expensive, more than $1,000 a year.

So one thought would be to provide some financial incentive assistance subsidy to the providers to take on that insurance that would make that facility then eligible for one of these vouchers.

So we could increase the pool of eligible users, excuse me, eligible facilities that way.

In addition, we're proposing, again, this is a one-time investment of about $2 million, just over, to be available to help make capital improvements to expand the supply of childcare.

So this would build on the The city has an existing source of revenue, the child care bonus program.

So some height bonuses that were awarded as part of downtown rezoning include payments into a fund that can be used to assist in the development of child care facilities.

What we're proposing here is to provide a one time bump in that resource.

There's a pretty long list.

There's a list of projects that are looking for funding from that source.

being replenished as quickly as it might, so this would provide an opportunity to do that.

And as you can see, we expect on the voucher side to provide up to 600 additional children access to child care.

Thank you, and I want to acknowledge in advance and say thank you to Deal.

We had a briefing on this yesterday and really appreciate all the hard work.

that office has gone into looking at what the strategies are.

We're talking about providing vouchers to 600 more kids.

We need to have space for those 600 kids.

My understanding is it's not like we're going to flip a switch and starting in September that we're going to have at least 10 other facilities ready to go.

I was just going to say, I've asked DO when they come to talk with us that they talk about the strategies on how and when they're going to implement that.

Because if you look at 600 kids, just think, you know, round numbers of 60 kids per facility if they're that large.

You know, that's 10 facilities and I know that we're going to be trying some of these short-term strategies to increase the numbers and help with things like, the liability insurance that you described, but I also recognize we need to speed this up if we're really going to be able to help the families.

I would just add, too, that it may be that what we'll be doing is getting vouchers to folks who already have placements, but maybe in a facility that's not eligible or they hadn't pursued the voucher before because the subsidy was relatively small and or they weren't aware of the program.

And I just point out that overall, this is a significant investment in affordability in general.

As it turns out, what we know about the current geographic distribution of the vouchers is that they are in fact being used by families who are disproportionately located in areas of high risk of displacement.

Helping them increase the affordability of child care will help increase the affordability of staying in the city.

Even if they already have a placement, but are just spending more on it than they might otherwise have to.

Thank you.

Council Member Mosqueda.

I have a question.

Okay, so Council Member Gonzales, Council Member Wuerz, Council Member Mosqueda.

Please go ahead, Council Member Gonzales.

Thank you, Chair.

So I think I have a lot of questions in the Child Care Assistance Program.

I'm appreciative of the fact that we are going in a direction towards increasing the number of subsidies available for the child care assistance program.

But I have a few questions based on, Ben, the conversation that you and I had.

In my office, I think last week, and then looking at this PowerPoint presentation.

So on the slide before us, it talks about providing financial incentives for providers.

Can you just explain a little bit more about what the mayor, how the mayor's proposed budget is defining providers?

I am not going to be expert here, but again, broadly would be the intent.

So, I'm not sure I'm getting your question, to be candid.

Are we talking about, I mean, do you have a sense of whether we're talking about daycare facilities only, or if we're talking about in-home child care providers, whether we're talking about all of the above, whether it's zero to three, whether it's just three and four year olds?

All of the above, and full range of ages.

Okay.

And then the slide also talks about investing $2 million from other sources, but doesn't identify what those other sources are.

Thank you.

Perhaps that's a more appropriate question for you.

Yeah, that is an absolutely appropriate question for me.

So I had mentioned in my, when I was first talking about some of the resources available and one-time resources, One of the one time resources that are available is a significant payment for an alley vacation associated with the Washington State Convention Center.

So there's an alley vacation that's projected to bring in just under $14 million.

in 2020. By statute, half of that will go to SDOT, and you'll see in their budget the investment of those dollars that leaves about the total figure of 6.8 coming to the general government, if you will.

These are not technically general fund.

They live in something called the cumulative reserve subfund, Which is probably neither here nor there.

But they are one time resources we generally deploy for capital purposes.

And this looks like one of those, and it is one of those.

These were actually resources that we initially identified as potentially for an investment in a child care facility here in the Civic Center campus.

But as we looked at that opportunity, discovered that it was going to be much more costly than we had thought.

And see this as a better way to use those same resources.

to achieve the same general goal of increasing the supply of child care here in the city writ large, if you will.

But that's the source.

Okay.

And the $2 million for a one-time capital funding, how many projects do we expect that to be able to cover?

I'll need to get back to you on that.

I don't know the exact, the kind of typical average award.

What we'll do is piggyback on the program that we already have operational with the height bonus dollars that are coming in.

And we have figures on that, I just don't have them in front of me.

Okay, yeah, I think those, getting a better understanding of the financing model would be helpful to, I think, ultimately get to the line of questioning or comment that Chair Bagshaw was pursuing as it relates to the reality that we don't have a lot of space available.

And that presents a real challenge for being able to rise to the occasion of addressing the child care desert that exists here in the city of Seattle and so it's going to be important for us to look at those components.

The other thing that I wanted to get a better understanding of from you in terms of this three million dollar per year expansion to the CCAP program is that In the council's consideration of the Families Education Preschool and Promise Levy, we also passed a resolution, Resolution 31821, that spoke a little bit about CCAP and our interest in terms of future work to be done by DEEL and the executive on looking at childcare needs in particular.

And one of the things that we requested or directed the executive to look at as it relates specifically to the child care assistance program is for an exploration to modifications to CCAP to A, ensure that no participating family pays more than 10% of its income on child care.

and B, broaden the income eligibility requirements to cover more families.

So it seems that B, the broaden the income eligibility requirements to cover more families has been incorporated into this proposed financial model, but I don't have a sense of whether the mayor's proposal includes A, which is to ensure that no participating family pays more than 10% of its income in childcare.

Can you speak to that?

I cannot give you a precise answer, but as we were evaluating how broad to make the income eligibility and what the appropriate levels of subsidy were, the question of the share of income that is left to go to child care was among the considerations, as was the question of the breadth, how many folks could we reach, and then obviously the depth, what level of subsidy.

I can't recall as I sit here exactly how that that balance was struck.

But when education, Department of Education and Early Learning comes back, we will, I think they'll be able to speak to that more directly and give you more specifics.

So it's, it was, so bottom line, it was absolutely a consideration.

I can't tell you exactly where we ended up on the balance of that.

So, so I know that Deal is in the audience now and I see Mr. Goodnight in the audience as well from our Council Central staff who's feverishly and diligently taking notes about all of these things that I'm asking right now.

And so I just wanted to take opportunity now during this department overview or the presentation overview of the overall budget that these are going to be questions that I'm going to want to dig into.

during deals presentation, which I believe is later this week, possibly tomorrow.

So I think on the CCAP thing, I want to get a better understanding of, because the proposal here from the mayor's office is that we will be able to serve 600 additional children, and I want to understand the formula for how we got to that expansion number, which fundamentally requires us to understand what the eligibility criteria was before, how it's being modified now in this proposal.

Is it an income eligibility criteria modification only?

If that's not the only eligibility criteria that has been modified, then I think it's important for us to understand that.

I have, for example, had an interest in making sure that we modify and take a more holistic view of the eligibility criteria for CCAP because, for example, if you are a grad student right now, you don't qualify for our program.

And I want to get an understanding of if we modify the eligibility criteria through this budget process.

How would that impact?

Your projection or the mayor's office projection that this would You know serve 600 additional Children, so I just want to get a better sense of that and then ultimately at the end of the day if we're really talking about affordable childcare we need to get an understanding of what this subsidy means at the end of the day in terms of out-of-pocket cost to families who are participating in CCAP.

So those are just previews of where I'm headed that would be helpful for you all to sort of consider and think about this evening as you prepare for presentations tomorrow.

Well taken and actually that's perfect use of the structure of this because I'm not going to be able to answer all of anyone's questions but with that preview and that I'm not sure that we'll be able to get to that full level of detail in tomorrow's presentations either but working with your staff and central staff obviously you're asking all you know really pertinent policy questions and we're happy to work with you on those.

Thank you I appreciate it.

Thank you.

Council Member Worth.

Thank you.

Thank you, Madam Chair.

I know, Ben, this is just a general overview, and we went through your PowerPoint.

And Council Member Gonzalez touched on some of the issues that I wanted to raise about the additional 600 children, the expectation.

I want to go back to the one-time capital funding to further help expand.

This is my concern about one-time capital funding in light of if you have $4.3 million that's unspent, you're expecting $6.8 from the Washington State Convention street vacation, which comes around around $11 million.

What we've been seeing, particularly in the north end, with light rail coming on at Northgate and then at 130th, is we've been really pushing with having the commitment and the policy that we invest in child care transit-oriented child care in those areas.

So let me just give a quick example.

This is just kind of like what Councilmember Gonzalez was saying.

This is kind of where I'm headed.

When we have these major infrastructure investments to the tune of 53, 52 billion for sound transit, and we're pouring a ton of money right now into Northgate to open in 2021, 130th, hopefully to open seven years earlier in 2024, I believe.

My point is, if you're looking at ridership between 40 and 50,000, and we are also pushing for grocery stores to be at these places and a walk shed of 10 minutes, we are really going to be pushing for the infrastructure for childcare.

So families, working families who are not going to be in cars will use light rail, can go to light rail, pick up groceries, pick up their kids, get to work, come home.

That's my point.

So I know this is kind of a new term that we've kind of coined in the last two years, but that's really where I'm going to be looking at on unspent funds.

I think hopefully it will be a policy consideration and more of a commitment and a discussion from the executive that we make that a priority.

Just a personal note and then a policy one.

I currently have a toddler in daycare that's located a half a block from an express bus line, so I believe in transit-oriented childcare like nobody else.

Thank you.

More broadly, and I know this is going to be a little bit odd because I don't want to get into specifics, but one of the opportunities that we're exploring for the $42 million strategic investment would be And housing opportunity in north transit oriented.

And again, the opportunity to put with these somewhat flexible dollars to steer the city's money towards something like a child care facility in such development could meet all of those needs.

I think that the policy trade off that you'll face collectively is the timing here.

That we have this resource today, we have the demands for child care and the timeline for Sound Transit is always frustratingly long in my experience.

But hear you and again, and see some other opportunities in some of these strategic investments.

Madam Chair if I can just do a quick follow-up because I don't want to let Ben off the hook on this one.

This is my concern where we're at right now in this juncture with our discussions with a particular developer in the north end at Northgate with all the issues that are going on there.

Is their discussions and meetings back to me are their frustrations with the executive and the city departments about who do they talk to about capital and private public partnerships to create a footprint at transit, where that becomes one of the boxes you check that when we do these charrettes, if you will, that when we look at transit-oriented development, transfer of work, you know, how we go on and on about that, we slap transit-oriented in front of everything.

Well, now I'm slapping it in front of child care.

So I need the executive in the city departments who are in charge of that to start working with elected council members who have to be not more than our citywide, but our district where people are laser focused on potholes and crosswalks and sidewalks, all those things.

I need to be able to respond to that.

I'm having a difficult time with who's going to be in charge of that.

So for me, that's going to be a priority.

Absolutely, and let's talk so that we can help.

I personally can help overcome some of that, make a connection.

If I could, I'd love to.

Great.

Thank you.

Council Member Mosqueda.

Thank you, Madam Chair.

So some of the questions that I had Council Member Gonzalez and Council Member Juarez have asked, one was about where the $2 million was coming from for the capital funds.

But my other question is, can you remind me where are they going?

I don't know if I heard that specifically.

$2 million specifically for which capital construction projects?

So there is an existing program now that is funded through the height bonus dollars, I'm going to call them, for lack of a better technical term, that came from some of the downtown up zones.

Which we amended the legislation and included.

Yeah, so there's a program that is distributing those dollars and And there are a set of projects that have applied for those dollars.

We don't just sit passively and wait for those projects, we actually have staff who are reaching out and identifying.

So there's a pipeline there, and so the idea is we would take those dollars and roll them.

But at the same time, there's a pipeline of projects, the funding stream is comes in chunks as individual projects are developed.

And of late, there hasn't been a steady flow in, so not recently.

So we think that there are more projects lined up than there will be dollars in the very near term.

So that would be the connection that we would be making.

So piggybacking on this existing program and the existing pipeline, but making sure that there are resources to follow through.

Okay, and just to clarify, the amendment that we more recently did was to include a bonus for the creation of child care on-site with the citywide up zone.

Are you projecting funding already for child care as it relates to the citywide amendments that we made for child care?

I don't have an answer for you on that one, but we'll get back to you.

Okay, and then Madam Chair, one more question.

Please, go ahead.

So, looking at the bullet that said financial incentives for providers to participate, I understand the example you gave today and when we met was related to liability insurance as one example.

Are there other types of financial incentives that you're considering and are those for current providers or will you be looking at using those as an incentive for future providers?

I think the idea is potentially for both, and I'm going to defer to Deal's presentation tomorrow to give you some other potential examples.

Okay.

You're waiting for tomorrow?

Okay, very good.

Any other questions, Council Member Gonzalez?

Okay.

Tell them to buckle their seatbelts.

So that was the first page of sweetened beverage.

I will go as fast as you want.

So, again, continued proposals on the ongoing side.

So $2.5 million ongoing for a healthy food grant program.

This, again, consistent with the recommendations of the advisory board.

Notion of the year to have Department of Neighborhoods, again, working with potentially the OSC and or the advisory board.

We're looking for community-led proposals to increase food access.

These could be things like food banks or others.

I don't, you know, a range of things.

Two plus million dollars ongoing to expand the city's FreshBucks program, which provides access to low-income families to fresh food.

Then, again, directly a little over a million for food bank support.

And then some critical staff needed at HSD to administer some of the dollars that are coming through the, And then lastly, on an ongoing basis, a modest amount of funding to increase recreational programming, so exercise at the other side of, and other side of healthy living, if you will.

Chair Baxter, please.

On that last point, the $150,000 to expand summer recreational program for youth at the Parks Department, I'm looking at the enabling ordinance on the sweetened beverage tax and I'm not seeing capital improvement projects for parks department as one of the eligible areas of expenditure.

Can you direct me to the language in the code that makes this expenditure fit within the contours of the first five years of spending?

It's not capitalists operating, but I don't know that I still can answer your questions, but let me get back to you.

Oh, I'm sorry.

I thought I had read capital.

That was my mistake.

But again, I'm not seeing that in the language.

There was some existing recreational programming, which I think is why we built on this.

But your point is taken, and I don't want to answer on the fly.

If we can just get some follow-up to that, that'd be great.

Thanks.

Then in addition, as I described, there's some one-time resources.

So the 2019 increment that we didn't otherwise anticipate is really a one-time use.

And there was some fund balance as well.

And two proposals here.

One is a one-time grant fund.

So again, these are one-time resources of $3 million for capital investments in peat patches and community gardens.

The nexus we see here is on healthy food production, both for those who are actively.

feeding themselves from the garden, but also many of the gardens make donations to food banks and other food distribution networks.

So we see that as a way to expand access to healthy food and a ground up community direction, if you will.

And there haven't been significant capital investments in the community gardens really since the the parks levy of 2008. And we're aware of several specific needs, but anticipate that if we put out a request for applications, we'll get others.

And the Department of Neighborhoods and Parks may well be able to identify some as well.

And we'll work on an evaluation process to prioritize those and bring them forward.

And then lastly, recognizing now that we have these dollars in a separate fund rather than in a general fund, we want to provide a financial reserve.

If and when there's a decline in these revenues, we will then have a little bit of cushion to be able to maintain programming while we, again, develop a longer term plan to address any ongoing shortfall in revenue.

Great.

I'm going to ask us to be able to move on here.

Go ahead, one last question.

I would really appreciate the opportunity to ask a question.

I think that's what this is intended for.

No, I'm going to say, yes, please ask your question and then I would just like to alert my colleagues that I would like to keep moving because we still have one, two, three, four, five, six slides left of this presentation.

Please go ahead.

Okay.

This is where I saw the capital investments coming from the sweetened beverage tax and if you could just as a follow-up point, to the language in the Sweetened Beverage Tax Ordinance that permits these expenditures in the first five years, that would be greatly appreciated.

Because again, I'm looking at the language and I'm having a hard time extrapolating capital investments.

For us, it's access to food, just to be clear.

And very specifically as such, both again for the participants sort of directly and for the donations they could be making.

That's where I would point, but I want all the legislation in front of me when I next get back to you as well.

But to give you the overall sense.

Yeah.

I mean, I'm not contesting the fact that some of these programs should be funded by the city.

I just think we went through the process of making sure that there is full compliance with the underlying ordinance in terms of the expenditures for the sweetened beverage tax.

And I want to make sure that we're not having for lack of a better term, mission creep in this space again.

So let's, it would be helpful to me to get a better understanding of the executive's perspective and evaluation of the ordinance as it relates to these proposed expenditures.

Happy to do.

So.

Are we good for now, Council Member Gonzalez?

I have concluded my questions on that slide.

Yeah, okay, thank you.

So new funding for homelessness, again, the overall arc of the presentation, explaining how we have additional resources when the general fund itself is not growing significantly.

So with respect to homelessness, Mercer Megablock, so in addition to the $138.5 million purchase price, Alexandria Real Estate also made a $5 million donation for homelessness as part of the Megablock transaction.

identified here primary uses of those dollars.

I think probably the two first are probably the most significant ones.

So we are the new King County Regional Homelessness Authority.

Anticipation is that it will face some significant startup costs over the course of 2020. We're working on this with King County, so there's $2 million one time allocated for those costs.

hiring an executive director, setting up HR functions, computer systems, and the like.

In addition, $1.2 million to address potential resiting of tiny home villages, as described here, or to make other investments in the tiny home villages.

Several of them are reaching their existing permits are coming to a close.

We're looking at the opportunities to renew, but potentially to relocate or alternatively to expand One of the existing sites to provide capacity for residents of a different location.

So looking for some resource here to address those potential transitions.

Then I, just for sake of time, I'm going to move on.

But if there are other questions, happy to answer them.

There's another significant donation in the homelessness space.

It's actually not in the budget.

I'm very clear about that.

But knowing that it was going to happen informed the overall decisions that were made by the mayor.

So there's a contribution from Microsoft that will help replenish the Central Diversion Fund.

This was originally set up with some monies from the Pearl Jam home shows.

Again, and what they do is provide some financial assistance to those who are potentially face the risk of becoming homeless, so things like a little bit of money for rent or for a car payment to ensure access to employment or the like.

They've proven a very effective method to prevent folks falling into homelessness, and the existing resources is running dry.

So this will provide potentially resource for a couple of years to keep that program going.

And then just mentioning some additional investments in the human services more generally, so it doesn't quite fit the slide to be candid.

Ongoing funding for the navigation team, so there was funding to expand that as part of a supplemental.

What's proposed in the budget is to continue that expansion, not more.

Inflationary adjustment for provider wages as directed by council ordinance, city ordinance.

And then a small funding addition for a King County-wide domestic violence hotline that came forward from a number of directions.

Great.

Question down there?

Yes, thank you.

Just very briefly, overall, when I look at this slide, I see the headline that says funding to address homelessness emergency.

But among the bullets here, I don't see any funding for housing.

I don't know through these donations if they were tied specifically to emergency services, which we should distinguish from addressing homelessness by getting at the root of it, which is lack of housing.

But if there was specific caveats associated with the donations, That would be helpful to know.

And then just again for the council's consideration and for the discussion and dialogue we hope to have with the CBO, my understanding from the presentation provided at the Select Committee on Housing and Homelessness was that the continued funding for the navigation team was totaled at $7 million when you look at HSD plus other city agencies.

And I think that's an important thing for us to note as the council considers priorities as we look to create more efficiencies with our emergency services program under the new regional governance, that the continuation of 7 million through the navigation team that is expected to stay at the city is a deviation from our efforts to try to coordinate dollars.

So I just want to call out the dollar amount there, because it was something that was shared by Tess.

Any other comments, though, about how those dollars were supposed to be allocated from our donating partners?

Just backing up, I want to identify that there were, per this slide, significant investments in affordable housing.

So the affordable housing investments aren't on that slide, because they were on this slide.

And in total here, more than $100 million.

But the Microsoft monies, we had some discussion with them about it, but we didn't control per se the uses of those.

The Mercer Mega Block, it was a relatively broad donation for homelessness.

Could we have talked them into affordable housing?

I suspect yes, but we recognize that these important needs existed as well.

And then just the last comment on the navigation team, I expect a robust discussion about that.

One thing to know is that a share, a significant share of that $7 million is for SPD wages.

So it's police officers who are engaged in that activity.

If they weren't engaged in that activity, they could be engaged in another.

And in the abstract, you could reduce the overall funding to SPD.

But I do want to understand that that's not, some of that is, Pulling we've given you the cost of what is taken to draw in resources from other city departments to support that overall effort That's really what I was trying to explain.

That'd be helpful to see that breakout of the spd I've seen a table that we're preparing and I think in response to a central staff question, but we but we have the information last week Okay.

Thank you.

Yep Just a quick follow-up.

Yeah um, so so, um, I know that uh you pointed Council Member Mosqueda back to the slide 7 and we were on slide 10 as sort of a response or a retort to her point that the investments around addressing homelessness emergencies seem to be disconnected from housing strategies.

So because you pointed back to slide 7, could you please provide us an identification of which one of How much of those dollars are being spent specifically for the population experiencing homelessness?

We will get you that.

I mean, the most obvious one is the local option housing bill.

It was targeted particularly for permanent supportive housing, but- So that's $4.5 million?

Yeah, and then- But depending on the nature of the Equal Development Initiative project, some of them may include a range, so it will depend a little bit there.

But let me get you- But certainly the ADU dollars aren't allocated for people who are currently experiencing homelessness.

the affordability range to target there is 80% and below.

I mean, it depends where they are, you know.

Okay.

Yeah.

So I think my point is that I don't think it's fair to sort of lob back at a reasonable question around how many, you know, how the mayor's proposed budget ties this budget with addressing the realities that people who are experiencing homelessness needs homes.

back to this particular slide.

If there are investments within the new resources for affordable housing that are designed specifically to address the zero to 30% AMI population, it would be helpful to us to get that granular detail as we continue to debate and consider and weigh our choices in this budget process.

And we can do that, and it wasn't intended as a retort, if you will.

I just wanted to emphasize that we had tried to make the point that there were significant investments in housing and that they were largely summarized here, but points understood.

Okay, Council Member Herbold.

Thank you.

I just want to say a couple words about the bullet related to the navigation team funding.

Whereas I recognize there has been reported that there's not an expansion of funding for the navigation team, it continues the existing funding.

I want to highlight the fact that I think as everybody knows I've been working hard to try and make sure that the activities of the navigation team are guided by a theory of change.

In the recent oversight of the work of the navigation team has revealed that the navigation team is doing a fair amount of sort of what I refer to as non-72-hour advance notice removal.

So the obstruction hazard removals that don't require advance notice.

And I've asked whether this allows the navigation team to go out and immediately remove encampments in some locations.

And I've asked HSD whether or not the theory of change that they've developed includes not only the 72-hour advance notice navigation team removals, but also the immediate hazard obstruction removals.

And it has been confirmed for me that no, the theory of change does not cover those immediate removals.

And I've asked HSD to develop a theory of change for that activity so we can have a way of measuring whether or not that activity is fulfilling our goals beyond simply moving people from locations.

And the response I received from HSD is that there are not current plans for updating or creating a theory of change that includes obstruction hazard accessibility work.

They go on to say that the work will need to be done once regional governance is a bit further down the road.

And of course, as we have learned through our discussions around regional governance in the select committee, that the funds and the policy work around the navigation team is going to stay within So that's within our purview to direct.

So I just want to flag that given that more of the navigation team's work is being directed in these areas where there's no requirement to give prior notice, link people to services, no expectation that there be available beds open, that I think we need to have some policy framework for directing this work.

Duly noted, I have neither the time nor the expertise, but I think there's a robust period of time scheduled next Wednesday to talk about overall homelessness investments.

And I anticipate that that will be appropriate time and consistent with earlier observations.

Really helpful actually for you to be raising these issues so when we come back we know what to explain and what to bring.

So thank you.

Thank you.

Great.

Thank you for raising that, Council Member Herbold.

Go ahead, Ben, please.

Okay, public safety.

So as I identified, there are savings in 2019 due to the challenges that SPD has had in hiring.

And even though we are going to work hard on bringing new officers, and I'm going to talk about some of those efforts, We realistically are also anticipating some salary savings associated with having fewer officers in 2020, and that's provided an opportunity to redirect some of those resources into public safety as well.

So, again, at a high clip here, focusing specifically on SPD and the challenges they've had In bringing on staffing and then meeting needs at lower staffing levels, a number of proposals.

So one is over a million and a half dollars to invest in recruitment and retention strategies.

There's been a work group, again, including a variety of folks from around the city, including council staff, that have developed a series of recommendations.

I could tell you something about them, but for lack of time I will not.

You'll hear about them more at the police department.

Continuing practices started this year to providing hiring incentives, $15,000 one time for folks who come over lateral, seven and a half thousand, so half that for new recruits.

The new recruits being something that's unique to Seattle, at least for now.

$850,000, it's a competitive market.

$850,000 to continue emphasis patrols and force augmentation that is both a direct response to particular areas of public safety concern and then also the general reality about.

using overtime when we have fewer officers as a way to provide police presence.

Significant shift here of resource to expand the community service officer program.

So the endorsed budget called for a CSO program of 12 officers.

And to clarify, they are civilians, although they wear that name, if you will.

But increase from 12 to 18. We, in the hiring for the 12, got many, many applications.

So I think we'll be able to use that same pool to expand before we get started almost, if you will.

Additional mental health providers to expand the crisis response unit.

So I believe this is five additional.

It's enough to have one in each precinct, I know that.

And then a dedicated position as a liaison to the Native American community.

Further, I know a couple of you have been working with the High Barrier Work Group, which is designed to take on the challenge of addressing the needs of a relatively small group of individuals who are facing significant issues of their own and putting stress on our Currently on our public safety and judicial system, the thought here is about how to relieve that stress and to provide them the assistance they need.

So three separate pilots here that are potentially complementary.

One is to develop a new residential treatment facility.

It happens to be at an unused portion of King County Jail, but It's not a jail facility, it's just using the space.

So the proposal is to share the funding for that for both capital and operating 50-50 with the county.

This is another place where we would use some of the resources from that street vacation that I described previously.

This is a government facility, but it's not a city-owned facility, so we can't use our real estate excise tax dollars, but a useful way to invest some one-time resource.

And then there's some ongoing O&M there as well.

A targeted re-entry pilot, so here the issue to be addressed is that currently there are some re-entry services available from those exiting King County Jail, but only for those who've been there for 72 hours or longer.

And some of the folks in this group are actually cycled through the system faster than that, so try to get resources to them.

And then a proposal from the musical court to develop a probation pilot that would provide lower caseloads and more targeted assistance to this population as well.

We'll have time on Friday to give you additional detail on these programs.

Another significant investment here is on low, technically called low acuity calls, sort of non-emergency calls.

So we know that both SPD and SFD are expending significant resource responding to calls that come into 911 that are probably not best responded to in a standard emergency way.

So a couple of thoughts, a couple of investments here.

One, some resource to expand the HealthONE mobile response unit that was just launched.

And this is a significant change, in addition, to add on-site nurses at five locations, the highest call volume locations, if you will, to help address the calls before they come in.

And then also a nurse call line.

They would be there largely in a swing shift kind of arrangement.

This would be nurse call line for other hours and for other providers as well.

Great.

Thank you.

And I'd want to acknowledge the work that's been done by our fire department and by you, your budget office, and the mayor's office for doing this.

We've identified this, I think, the last couple of years as being an investment that would really show a great return for the individuals involved, plus save us money overall.

So, appreciate that being included.

Council Member Suant, did you have a question?

Thank you, Chair Baggio.

I'm happy to, you know, save this question for the departmental report, but I was just wondering if you had anything to say about the first two bullet points, the 1.6 million plus for recruitment and retention, and then the second one says 800,000 for hiring incentives.

What's actually the difference between recruitment strategy and hiring incentives seems to me synonymous, and so why is it

And I'm probably not going to do full justice to the recruitment and retention strategies, but the working group, we're looking for some creative ways.

So as an example, identifying pathways for civilians, potentially existing city employees who may have an interest in public safety.

Compared to other city roles, it's actually pretty well paying, depending on your background.

And we haven't actually targeted in a focused way existing city staff potentially, so a pathway from civilians into that force.

In addition, there are a number of youth that we're engaging through internships and other things who aren't properly city employees, but we might also be targeting them.

So it's some dollars to invest in those kind of recruitment strategies.

No one of these items is a big dollar item, but But there's, I think there are as many as 10 recommendations.

Another couple that I happen to remember, changing the testing protocol.

Currently we do an all call test of like thousands of people, like once a year or twice a year.

Other folks use testing centers where you can go in and take a test on a computer.

And then it's lowering the barrier there.

We actually have, there's a cost to us of doing that, in part because we don't want to charge the applicants because we want to get over that RSGI issue, if you will, or address that RSGI issue is a better way to explain that.

So those are just a couple examples.

And thank you, and we'll follow up with the department as well.

Is there any highlight in the mayor's budget for specific funds allocated for training police officers for de-escalation and non-excessive use or non-fatal use of force in a specific dollars for, I mean, I think it's like a circular problem.

the police department will be viewed differently and more positively if they actually take on board.

And there's a huge shift in how they approach their work.

And so it seems like there should be significant investment there if the goal is to address retention.

So in their base budget for training, there are those dollars.

I can't, as I sit here, tell you how many.

I do know, and Janet is helping me, remind me, there is a specific line item, a small one, for a hundred, in this, $100,000 for anti-bias training to be added as a training element.

We've been trying to get that training to all the police officers.

It seems like, to me, like a very small amount for something extremely important.

I would just say that off the top of my head.

And I can't tell you enough about what that increment is buying us.

But the goal was to get it to as many officers as quickly as we can.

But I think what would probably be more useful for us to provide you is a sense of the overall training regimen in this space, if you will.

And I think it's significant, kind of both the overall investment and from an officer perspective the individual trainings that each of them receive.

So I know that's a quick follow-up on that.

I want to acknowledge Council Member Sawant's question is a good one.

We're interested in this.

We're also interested in the outcomes.

Council Member Herbold talks about theory of change and around homelessness.

And how we're spending our money.

I also want to see this with our police department.

How we, what are the outcomes that we're setting up?

And then how are we achieving them?

And are we achieving them?

Because we've spent a lot of money over the last few years to accomplish that goal.

So maybe when they come on Friday, they could be prepared to answer that question.

Anything else Councilmember Gonzalez?

Since this is my committee I have a lot of information in this space and I appreciate Councilmember Sawant's line of questioning because it's an important one.

So in my last special committee for the gender equity, safe communities, new Americans and education committee we actually heard a very lengthy report out from the workforce that has been taking a look at that recruitment and retention strategies line item which is the 1.6 million dollars.

There is a 59 page report that is currently on legistar that outlines all of the different initiatives and includes a timeline for implementation and dollar amount for those proposals and I think that is really sort of the underlying policy proposal and funding proposal that we are now considering as part of our budget process from the mayor's office.

That was a collaborative approach between my office, Council of Central Staff and the executive and the department that resulted in the development of 12 initiatives that I'm sure are going to be part of the presentation that we're going to hear on Friday, so don't need to belabor the point, but I'm happy to recirculate those agenda materials to interested council members to make sure that you all have that granular detail should you wish to dig into the recruitment and retention issues.

And then on the question related to training, I think that is an important question.

De-escalation obviously is something that statewide through initiative 940. Voters have said they want to see more investments made in de-escalation that's good for making sure officers get home safely but also making sure that officers are trained well enough to keep us safe as well who are civilians and just people moving about in the world.

To that end, we heard a very large, very long report from the Community Police Commission and their serious and deadly task force report that made several recommendations about primarily policy changes that need to occur both at the city level and the state level in order to effectively get at the issues related to de-escalation.

So happy to circulate those documents as well.

But I think the underlying question around how much are we actually spending on de-escalation training in conjunction with our expectation of implementation of I-940s new standards is an important piece of information for us to make sure that we highlight as part of our budget deliberations.

And then lastly, Council Member Bagshaw, I just wanted to address your point about making sure that we sort of know what we're getting in return for this.

We heard the staffing report out from the Seattle Police Department in my last committee as well.

and happy to report that we are trending in the right direction.

We are now down one officer from the forecasted approach.

We are still having retention issues, but we are a little bit closer, much closer to the estimated projections that The Seattle Police Department initially gave us in terms of their desire of the number of people they wanted to hire as patrol officers That's a trend in the right direction.

We still have work to do in that space but Feel positive about the direction that we're headed as it relates to seeing outcomes.

We're still evaluating whether The hiring bonus is the cause for that or if there are other causes for for for what appears to be a trend in the correct direction, so just wanted to save Ben's bacon on that one.

Thank you.

Well, also, you've done a tremendous amount of work in that area.

Council Member Herbold, did you have a question?

I want to just speak to the fact that, yes, this is tremendous work.

It's moving us in the right direction.

The one officer down is as it relates to the last year's projections, but I do want to just, you know, not be all doom and gloom, but we have a 200 new officer hiring goal and the fact that we're turning the trend more in a direction where we're replacing what we're losing doesn't mean that we're on track for meeting that goal.

So more work to be done and I really appreciate your leadership in the retention and recruitment area.

It's something we flagged during budget last year.

Councilmember Mosqueda.

Thank you.

So I'm just trying to do the math here the Subject again redirecting available funds earlier.

You said I believe that we have six million from over calculation of how much money could potentially be spent on the recruitment and then a six million dollars savings in Dollars that didn't go out the door because we didn't have as many hires.

So is the total universe that is reflected in the slide around 12 million and

It is not.

It wasn't dollar for dollar, and I didn't want to imply that it was.

It was just I was giving a sense, again, in the context of how we had an endorsed budget and no new revenues, how did we do some additional things?

This is, at a broad level, this is one of the places where there are actually ongoing operational savings, ongoing until we succeed on the recruiting front, and allowed us to redirect some of that money in this direction.

It is not obviously, per the multiple slides, not the only place where there are some ongoing investments.

Can I do a follow-up question on that, Madam Chair?

So, am I correct, though, that there was a $6 million over-calculation and a $6 million underspend because of hiring giving us $12 million potential additional dollars that come from a safety, a public safety bucket?

Yes, you could argue that, yeah.

Okay.

But that this slide and the public safety investments that are new don't reflect 12 million, you've used some of those dollars in other ways.

Correct.

Okay.

All right.

I think that's it, Madam Chair.

Okay.

So we talked about everything on the slide, great.

Transportation, again, I'm going to go at a high clip.

Mercer Mega Block, over $50 million once we've paid the transaction costs.

I think we've largely talked about in other forums, but just over 12 for the Mercer West constructions, actual original underlying project, operating loan that had accumulated for South Lake Union Streetcar, council just about a month ago authorized $9 million for Center City Streetcar in anticipation of these revenues.

We have seen a decline in the rate of growth of the commercial parking tax.

Those resources were dedicated in the CIP for a number of capital investments, so this makes up for that loss.

And then there is a net new $16.7 million invested in a number of Vision Zero projects, so bike, ped, and other projects.

Somewhere on this computer I have a list of them, but I think when SDOT comes forward with their presentation, they can give you more detail on those.

The Seattle Transportation Benefit District, STBD, 2020 will be its final year and then subject to reauthorization by vote of the people going into 2021. There are some resources there, and we are deploying the last of those.

On the operation side, some additional transit service, and then including some first and last mile service, so these kind of shuttles that we're using to bring access to some of the rapid ride lines and light rail.

And then on the capital side, investments in transit resources, transit lanes, then shelters, as you can read here.

I would note, and I'm going to be careful because I'm I'm not advocating a position one way or the other, but statewide initiative 976, which would eliminate vehicle license fees, would take a chunk of the revenues that would flow into the STBD, the Transportation Benefit District, as well as into the base budget of SDOT for 2020. And if that were to pass, we would need to reprioritize and reallocate resources overall, and we would bring you such a plan if that happens.

And then lastly, the transportation network tax that we have mentioned previously.

So again, those are significant new resources flowing into transportation, even though we don't have significant new general fund resources.

Okay.

Please continue.

Just lest we forget, the voters of Seattle generously supported the 2019 library levy this past August.

As you can see here, that allows for a number of ongoing investments in the library system.

Those are reflected in the proposed budget.

We talked about these when that measure was put forward.

So again, for given time, I'm not going to read the slide to you, but just to remind you that that's where those resources are coming from.

And then lastly, I do want to talk about some of the one-time resources.

I mentioned the Washington State Convention Center street vacations.

We'd also done some scrubbing of the Community Development Block Grant Fund and identified a couple million dollars in previous resources that were otherwise unallocated.

And so we've directed those to a couple of significant projects.

And then one particular project identified here is actually eligible for the city's, it's a city facility that we're going to redevelop in partnership with a non-profit.

So just to name the entities that these resources are being directed to, the Chief Seattle Club, both being awarded equitable the development initiative dollars and in addition a line item from these resources.

Lambert House providing services to LGBTQ youth, half a million dollars.

They're working to acquire ownership of the facility that they've been housed in for some time.

International Community Health Services is looking to develop a clinic on Beacon Hill.

Outdoors for All provides recreation services for the otherwise abled, and they're looking to redevelop the fire station at Magnuson Park.

This is a project where we can use our REIT dollars because the city will still own the underlying asset.

We talked about the King County Jail facility.

As part of the equitable development round three, ran out of money before we ran out of deserving projects.

We had some available resources, about a half a million, a little bit more than a half a million dollars directed there.

And I have some additional information that I'll share with you.

I'm not here about where those awards will be targeted.

And then we'd mentioned the child care facility.

So some of these things got mentioned earlier.

I just wanted you to see them all together.

Great, well, thank you for that.

I've got one question I'd like to follow up with.

On the International Community Health Services, is that the same project that DESC is working on, on Rainier and Plum?

And there's, I don't know.

Don't believe so.

Do you know whether there's money in the mayor's budget identified for that project?

I think it's over 100 very low income units above a health clinic down below.

I do not know the answer, so I will find out the answer.

Okay, very good.

I believe, and maybe my colleagues know this, that Daniel Malone and his board and outreach that they have raised most of the money for the capital, for the building, for the residential units, but they're needing money for the clinic.

And that integrated clinic and low-income housing is something we've been advocating for for much of the decade that I've been here anyway.

So I'd love to know whether or not it's folded into the mayor's budget.

Very good.

Any other questions, colleagues, for Ben at this point?

Thank you for coming.

This is an excellent first introduction.

I appreciate it.

And then all of the queries that my colleagues have made, I'm sure the departments have heard them, and it'll be great to have them.

Multiple people scribbling notes.

Very good.

Thanks a lot.

Okay.

Thank you, CBO, for coming.

I appreciate it very much.

And Mommy Hera, are you going to join us?

Please do.

We are looking forward to hearing from Seattle Public Utilities.

What are you doing, Ben, just scooting down a chair?

And welcome to the table, Molly, Molly, Mommy, and Paula.

Thank you so much for coming, and if you do your introductions officially, and then we'll move right in.

Paula Nash, over CFO of Seattle Public Utilities.

Mami Hara, General Manager of Seattle Public Utilities.

Great.

Thank you both for coming and for being here.

Council Member Herbold, this is your area.

Do you have any introduction that you'd like to make?

No introductory remarks, but I will have some questions to pepper throughout.

Thank you.

Very good.

Thank you.

All right.

Mami, please proceed.

Unless, excuse me, unless Council Central staff has an intro.

Do you, Brian, first?

Sure, I have a brief introduction.

Thank you.

Okay, very good.

Thank you.

So, Brian Goodnight, Council Central staff.

I just want to say Seattle Public Utilities, or SPU, is obviously the first of the departments to come present their department-specific overviews to Council.

Similar to previous years, their presentation will focus on their priorities for 2020, and then we'll describe the kind of highlights or overview of the proposed 2020 budget.

Just very briefly, SPU is one of the city's largest departments, and it's responsible for operating three distinct utilities, drainage and wastewater, solid waste, and water.

Each of the utilities has separate revenue sources and capital projects, but they do share many of the same operational and administrative functions.

SPU's revenue consists primarily of customer charges, and we know of those as rates, and they can only be used for utility purposes.

And then specifically along with this year's budget, the council will be considering legislation to set the solid waste rates for the next three years.

So that concludes my remarks.

Unless there's any questions, I'm happy to turn it over.

Thank you.

All right.

Please proceed.

And welcome.

Thank you for the introduction.

I'm just going to go proceed straight to the content then.

Our strategic business plan contains the guiding strategic approaches that shape our future plans and budgets.

Our accountability and affordability strategic plan and risk and resiliency management assessment are foundational to our strategic business plan.

So the first, the accountability and affordability plan is a department wide set of strategies and actions focused on lowering our costs and increasing our accountability for results.

And the second, the risk and resiliency assessment, is intended to guide our work and future investments in order to minimize risk and build resiliency of our system and our community.

And our consent decree with the Environmental Protection Agency, the Department of Justice, and the Washington State Department of Ecology has resulted in a number of investments.

designed to reduce sewer overflows into Seattle's receiving water bodies.

And you will be most familiar with the largest one, the Ship Canal Water Quality Project.

So those are the kind of guiding legislative and policy elements that influence our budget.

With respect to our strategic priorities for 2020, our customer experience and clean city priorities within the 2020 proposed budget include increased resources to maintain service levels at our solid waste transfer stations and increasing and serving the increased demands related to clean city homeless response programs.

Our capital project delivery priorities for 2020 entail adjusting our capital program to prioritize regulatory requirements, such as the Ship Canal Water Quality Project, accommodating partner timelines, and cost-effectively increasing the benefits of our projects.

Our accountability and affordability program covers a range of recommendations, including improvements to the utility discount, emergency assistance, and shutoff prevention programs.

And we also have a number of line of business and workforce development plans underway or recently completed.

which include integrated planning for our drainage and wastewater system, seismic planning and investments to improve our water system, and workforce planning and investments made even more necessary during this peak period of the silver tsunami.

So I'm going to ask Paula, or sorry, Ben, to go to the next element.

This is...

Okay.

Paula, do you want to just cover it?

All right.

So appropriations, general fund one encompasses the clean city programs, but also our project delivery and energy and then project delivery and engineering branch work done on behalf of the city around engineering standards and specs and maintaining monumentations in the virtual vault programs.

Appropriation other, which is O&M, this reflects only enterprise SPU funds, which are the Water Fund, the Drainage and Wastewater Fund, and the Solid Waste Fund.

And for O&M, That covers it for the appropriation for CIP.

This reflects only enterprise SPU funds for CIP.

And we want to note that the FTEs displayed for all years are budgeted numbers, not actuals.

So Paula, maybe you could help us through this last column.

I'm still trying to catch up here.

So under the 2020, can you talk a little bit more about the changes?

on each one of these columns and what we're looking at here.

Because I just.

I think maybe the next slide covers the changes.

That's what you're thinking about?

Yeah, maybe.

Are they like one spreadsheet that I'm looking across page to page?

Because I'm seeing three and four to be read together.

To be understood together, yeah.

Okay.

So we have the 2019 adopted, the 2020 proposed, and then in the next page, we're going to show you what the changes are and explain how actually the proposed is a little bit lower than the endorsed.

Okay.

Maybe I'm the only one that missed this, but on this page three, that slide, we've got appropriation general fund change.

And then we've got appropriation other change and the capital change and employment.

What is the other?

Oh, that's the O&M.

I'm sorry, it's the what?

O&M.

Oh, okay.

To clarify a little bit.

The lingo of the budget world is general fund and other.

So at SPU, other is all of their other revenues.

So principally their rate revenues and from the core utilities, solid waste, waste water, waste water drainage, and water.

there is a small amount, small relative to the billion plus dollars otherwise, but about $10 million of general fund that flows into SPU as they operate the Clean Cities Program, and that is not operated from rate dollars, because it's not a rate-based function.

It's operated with general fund dollars.

Okay.

Thank you.

Please proceed, Paula.

Okay, let's look at page four.

So where you see clean city programmatic increases, you see the 2020 proposed budget adds approximately 1.6 million from the 2019 adopted budget to reflecting increasing costs and volume related to disposal and operations for garbage and neighborhood cleanup programs, and adds temporary support for the recreational vehicle remediation pilot program.

under the operating costs.

Before we move on, please go ahead Council Member Herbold.

Thank you very much.

Appreciate the highlighting the fact that there is increased funding for the Clean City Program as you mentioned.

The Clean City Program covers a lot of different sort of sub-program elements in addition to the two that you mentioned, the RV remediation program, the unsanctioned encampments cleanup program that I often refer to as the purple bag pilot.

There are other elements of clean cities.

There's a litter program.

I can't remember them all.

Needle collection, needle drop boxes, litter.

So I am most, at this particular time, interested in the RV remediation program as well as the Purple Bag Pilot.

In 2018, well, we started the Purple Bag Pilot in 2017. At that point, it was 10 locations.

When I say locations, I mean unsanctioned encampment locations of which we have hundreds in the city.

In 2018, SPU expanded it to 20 locations.

And so, well, actually, no, I'm incorrect.

It started at eight and went to 10 at any given time in 2018, but which included getting to 20 throughout the entire year in 2020. I'm sorry, in 2018. In their annual report, they have some recommendations as it relates to the purple bag pilot.

And one of the recommendations is to expand the program from 10 unsanctioned encampments at any given time to an additional, I believe it's an additional three new locations.

And they're also recommending doing, expanding the existing consultant contracts with nonprofit outreach and public health providers.

I would like to see more than an additional three.

I don't know if the additional three made it.

into this year's budget.

I've been asking HSD in their capacity as managing the navigation team work, whether or not their navigation team could be doing more to distribute the purple bags, coordinating with SPU in such a way that might minimize the number of encampment locations that have to actually get to that point where they have to be removed because of the sanitation issues.

So this is an issue that I'm keenly interested in.

SPU should be really proud of its purple bag program and we should do everything we can to support it.

replicated in other cities actually, and they're actually using the color purple in other cities, just like we do here in Seattle because of the, there's a long and interesting story about how we arrived at purple.

But nevertheless, I want to flag that this is something I'm very interested in doing more of.

And we appreciate all of your help finding partners, non-profit partners, for distribution of purple bags.

Thank you very much.

So we're going to have some more conversations about that.

OK.

Good.

Thank you.

Is there a question down there?

Madam Chair, if I could.

Sure.

And then after you, Council Member Mosqueda.

Thank you.

I just wanted to point out for the October 2 discussion, the special meeting dealing with homelessness from in the morning.

SVU is one of the invited attendees, and so this topic could be explored more at that time.

Excellent.

And thank you, Council Member Herbold, for all your work on this.

Absolutely.

And can I ask, finish my question?

Sure.

And then Council Member Muscata.

The RV remediation program.

So the proposed budget is intending to double the number of sites being serviced each month by the RV remediation program from eight sites per month to 16. It looks like this doubling is happening with about $100,000 in added costs for SPU.

I'm just wondering if we could flag as a question whether or not there are other costs in other departments necessary to accomplish this program increase because, as we know, SPU, this is a partnership with SPD and it's not fully, the work isn't fully done by only SPU alone.

Also, I just want to flag that last year we included a green sheet that reprioritized funding in SPU to increase the RV program to serve seven sites per month.

And the cost cited at that time for one additional site was $24,000 for SPU.

So the math just isn't quite working out with what we were told last year in expansion with costs and what we're providing this year to double the number of locations.

We'll have to get back to you on that because I was under the impression that it was an exact mirroring.

So we'll look into that data.

Thank you.

Thank you.

Council Member Mosqueda.

Thank you, Madam Chair.

So my question, I have two questions.

One is related to the RV remediation pilot.

Could you talk about the activities specifically related to the increase in these dollar amounts and how those dollars will support either ongoing issues or the potential bill that was passed out of committee yesterday and also if there is Data that we can pull it would be helpful for me to see a map of where the RV towing has taken place So far and if it's a twice if it's two times the investment where we may project for there to be future towing It'd be helpful for me to see that citywide

We will absolutely get you a map of all of the activities and some additional information on the increased activities and number of RVs that we anticipate serving.

We anticipate that there would be just a dollar to dollar match that's related to an increase in number of vehicles served.

Okay, and then a last question on the sharps collection pilot project Which has been a place since 2016 correct though, excuse me the sharps collection.

Yes Are there pan are there plans to expand this pilot?

Are we because it's now year three and we're still calling it a pilot Are we looking at a long-term sharps collection program because I know For myself, and I believe the chair parks and Councilmember Bagshaw you've read this as well from a public safety perspective Continue to hear the need in public places for there to be sharps collection facilities and want to underscore for anybody That's watching in the viewing public these are for folks like my sister for example who has Ms. Who needs a sharps collection container?

to manage her chronic condition.

So this is a public health asset and it's not just for a certain segment of the population that people like to demonize.

This is for our entire population that needs access to public health facilities and it's better for the public's health when people can put these needles into sharps containers.

So are we still talking about a pilot and what do we need to do to scale this up to actually meet the community's needs?

So just for the public's clarification, you're talking about the Sharpe's collection box system that we have been piloting, as you noted, for the past couple of years, but there's also the needle collection work that we're doing, which is to pick up needles within 24 hours of notification of the presence of needles, and that both of those efforts have been incredibly impactful in people's quality of life.

And so the box system, the SHARPS box system, has been very well-participated in in many areas.

There are definitely some that have higher rates of participation or use, but we are intending to expand that program.

And as our partners, you know, there are other city departments that are also looking at provision of sharps boxes within their own facilities.

And so that's been part of the discussions that we've been having and part of why we still call it a pilot because we're trying to really understand, you know, who are the potential participants, you know, where we can get the best service to folks who need needle drop-offs.

I appreciate that and that to me means that the program has been shown to be successful so far and that community partners want to see this.

But why are we still calling it a pilot and why haven't we brought this to scale both the cleanup and the boxes if that's the case?

Those are great questions.

Looking at it as a pilot has allowed us to experiment and to try different locations and, you know, different approaches.

But we welcome the discussion, you know, about turning this into something that is more than a pilot.

Okay.

Could you just follow up with us on if that is not semantics?

in terms of just changing the words that we're using and if you do need additional funding to bring it to scale, will you let us know what that looks like and what the difference would be between the investments that are being proposed here and a potential full program?

Yes, we will work with CBO to develop a proposal.

Chair, thank you.

I understand from prior discussions that part of the issue is even though we get regular reports from Seattle Public Utilities on these pilots, and I'm happy to share them with you.

They're really interesting.

I think there's an interest in actually doing an evaluation before going from pilot phase to program phase.

And so I think that would be a really useful thing to use this budget cycle to talk about is what would an evaluation cost?

What would it look like?

because I share your interest.

These have been pilots for three years now.

Thank you very much.

And you have brought this up as well in discussions with us.

And we have been trying to figure out the best way to evaluate all of the data because it is, if you look at it, it's incredibly variable in terms of the rate of use depending on the location.

And that's been something that's been both interesting but also creates some unpredictability in terms of what the results really are.

Thank you for that reminder.

I want to thank you for that and also to acknowledge my colleagues Councilmember Herbold and Councilmember Mosqueda for your work in this and also Councilmember Juarez you've been deeply involved with parks to say we think that these are really the the sharps containers are really important to have in available to people in our parks simply for the reasons Council Member Mosqueda had raised.

It isn't just for behavior that may not be acceptable to everyone.

It's for public health and individuals' health.

So thank you.

I think you've got another...

a category or two here that you want to go through, Paula.

And then I want to come back to a couple of these questions.

Okay.

So on the O&M cost side or the operating cost, the 2020 proposed budget is about $30 million over the 2019 adopted budget.

And this is mainly due to expected increases in the drainage and wastewater King County sewer contract in water and drainage and wastewater taxes, and the expected adjusted wage increase, which includes cost of living and benefit updates.

I want to also point out that this budget is $23 million less overall compared to the approved 2020 endorsed O&M budget.

And that was $946 million.

And this- Where do I see that number, Paula?

Reduction, pardon me?

Where's 96?

I just, yeah, on this chart, where am I looking?

On operating costs, the second line.

And the $923,000?

It's $923 million because these are in thousands.

Thank you, $923 million, yes.

Yes.

And then you said it was- It's actually $23 million less than the endorsed budget was.

Okay.

The endorsed budget is not listed on this table.

Thank you.

It just includes the proposed.

Thank you.

It's on the prior slide.

Anyway, that updated projection is due to savings in debt issuance and solid waste contracts.

Does this point out where it comes from?

Go ahead, Council Member Mosqueda.

Thank you, and to the Chair as well, if you guys have already covered this in your committee, I apologize, but given this is a reduced increase, right, in the future, so it's $23 million less than you anticipated, but still a 3% increase.

Were you already planning any contracts, any programs that you now have to potentially cut because of this reduced increase of $23 million?

No.

Okay.

We already negotiated great solid waste contracts.

Well done.

Chair, please.

Council Member Herbold.

Just a moment, Paula.

Council Member Herbold.

Before we move on, please.

It's related.

It's, I guess, not a cost.

It's more related to revenue, but it's a cost.

It's a revenue associated with our contracts.

So we have been talking somewhat about the changes in the recycling markets that have taken place over the last few years.

And as we know, it's becoming harder to find markets for the recycling that gets generated in our city.

We have great contracts that require us to recycle, so we're not doing some of the things that other cities are doing and making a decision to not recycle products that are hard to recycle.

So that is fantastic.

But I understand that the revenues expected to be generated from recyclables have been reduced by about 69% percent in the proposed budget relative to the 2020 endorsed budget last year.

And so we're just wondering what sort of impact were those lower recyclable revenues have on SPU and the solid waste fund?

If you recall, when we talked about the solid waste rates, we mentioned that the reduction in recycling revenues was about $15 million.

But that has been offset by, for example, $5 million improvement or savings in collection contracts per year.

about $8 million in relooking at our single family, multifamily mix and what it costs us to collect from multifamily.

It's less.

So we found ways to offset the $15 million, which actually allowed us to project a lower rate increase than we initially thought also.

OK, so thank you.

It's, I think, just a little bit more flushed out answer to the same question, but really focused on the recycling revenues.

So thank you.

Great.

Thank you.

Please continue.

OK, one more thing, capital projects.

So the 2020 proposed CIP budget is $56 million greater than the 2019 adopted budget.

The increase over 2019 is primarily due to the Ship Canal Water Quality Project.

The Ship Canal Project has filed a notice of intent to award the tunnel construction contract to the lowest bidder, which is Lane Construction.

And once the contract is finalized, the project will be revised to better reflect the actual timing of the construction.

And here also I want to point out that the 2020 proposed CIP is a $24 million decrease compared to the 2020 endorsed budget.

And this is due to updated projections and project shifts to future years, mainly transportation-related projects like the city streetcar, South Transfer Recycling Center, and South Park conveyance.

Okay.

Thank you.

I've got a quick question.

Can you talk a little bit, and mommy, thank you for the walk.

I think it's now been two years you and I took around Bell Street, the parkway and the potential park on that bell block between Battery Bell.

first and western.

Can you talk a little bit about the runoff?

I think there was some stormwater runoff plans that you had that was looking at using some of the investments to grab the water and perhaps make it available if a park goes in there.

For that particular site, I will have to make sure that we get something to you later because I don't know the exact status of the plans, but we have been engaging with all of the neighborhood advocates and folks who are very interested in trying to make sure that we use as green an approach as possible in helping to enhance the use of the site and manage stormwater.

Great, thank you.

And I know that that the Belltown is a committed group and one of the things that one of the design charrettes that was in I think two years ago was called focus was greener Belltown, bluer sound.

And to the extent that something that SPU can invest in appropriately, it would be a great addition to what we're trying to do in that neighborhood.

So thank you for just remembering it, and we'll get back to it on specifics.

And thank you for your advocacy for that very important site.

Yeah, you bet.

I think there's really something we can do there, especially now that Nature Conservancy also has stepped up, encouraging us to have a green space there.

you know, increasing the canopy, making a park available.

So I think people are really looking at that seriously, and I know it's not going to be done by Christmas, but hopefully we'll make sure it's included in the budget.

Great.

Thank you so much.

Any other questions?

Council Member Herbold?

On the deferrals piece, so there's nearly $22 million deferrals in costs associated with the Ship Canal water quality project, another $17.5 million in costs associated with construction operational facilities projects, and another nearly $9 million in costs associated with move levy projects.

Are they going to impact the city's ability to deliver these projects on time, and specifically as it relates to the Ship Canal Water Quality Project, impact our ability to meet our federal requirements for that project?

The project is anticipated right now, this is a lot of detail, but it's anticipated that if we don't make some adjustments, it might be 10 weeks off schedule, which is a very small increment that we feel that we can make up, so the schedule is not being impacted.

The overage in terms of the difference between lane constructions estimate for the tunneling bid relative to our estimate does represent, I don't know the exact amount, it was like 255 was there.

was their bid, and then the estimate for the tunnel was around $225,000, $220,000.

But we've found other savings in the project that we have been apprising your committee of on a regular basis.

And so we fully expect that the project right now is still within the zone of 70% confidence around the $570 million budget.

Yeah, I was focused more specifically on the issue of the deferral, the deferral of $21.7 million and whether or not that had any impact on our ability to meet our federal requirements on timing.

Not that I know of, no.

Okay, thank you.

Thanks.

Okay, anything else?

Anything else from SBU?

All right.

Well, thank you so much.

I appreciate you both being here.

And thank you, Bob Hennessey, for all your hard work.

Very good.

Well, we'll move on to Seattle City Light.

Deborah Smith, thank you for being here and waiting.

Good.

Thank you, Molly.

Thank you very much.

Welcome to the table.

Seattle City Light, we're happy to see you.

Do you want to start with introductions, Debra?

Yeah, sure.

So Eric, did you want to?

Hi, I'm Eric McConaghy.

I'm the Council Central Staff.

And I'm Debra Smith, General Manager of Seattle City Light.

Hi, Kirstie Granger, Interim CFO, Seattle City Light.

Great, thank you.

Well, thanks for having us today.

This is my first time through this rodeo, so bear with me.

I was looking over at Kirstie saying, ooh, I hope they don't ask me about that.

So we will do our very best today.

this.

So legislative and policy framework.

So there's really three kind of new things guiding us as well as the strategic plan and rates that were set for 2020. So as you know we do a four-year, a six-year plan and so the plan for 2019 to 2024 was adopted by resolution during the summer of 2018. In addition, rates for 2020 were set by ordinance last fall.

So our budget that we've prepared and that we'll be talking to you about today fall within that framework.

In addition to that, we were fortunate in this last legislative session, HB 1512 that was passed in Olympia provides the authority to incentivize transportation electrification.

It will allow us to add programs to support electrification and not new monies, Council Member O'Brien, but monies for us potentially over time I think is maybe what you were referring to.

So we'll be shifting surplus budget out of the conservation area and in fact You'll see later in our presentation we've actually set up, we are setting up a new division within City Light and that is at this point all with repurposed FTE that we have moved to really create a group that is focused on making the most out of these new opportunities.

In addition, Senate Bill 5116 transitions the state of Washington to 100% carbon neutral electricity by 2030. There's no near term impact for City Light, thanks to the foresight of people that came before, certainly me.

We've been carbon neutral since 2006, so there'll be no financial impact to this utility for a number of years.

And I suspect that as we move towards 2030 and then the next stage gate after that, that even the small piece of resource that we receive from power that isn't tagged as carbon-free most likely will be.

So we know that Bonneville is aware, as they're working within various state statutes, that they have work to do to be able to support the various states' clean carbon or carbon-free mandates.

Lastly, we have a pending ordinance which would allow us to provide pilot programs.

Thank you, Councilmember Mosqueda and Bankshaw and Juarez.

We spoke with you yesterday.

Our hope, and as you'll see, is that we'll be able to offer different rate structures beginning January of 2021. And an important piece in being able to do that is to run these very small pilots.

So in this case, these are truly research opportunities that will allow us to learn about what works for our customers and what we need to do in order to meet their needs well.

So those are the legislative and policy framework.

Madam Chair.

I thought I would touch very briefly.

I think Council Member Mosqueda's got a question.

Just real quick for our council colleagues, the four pilots that CEO Deborah Smith just referred to are coming to our committee, are coming to our full council discussion on Monday the 30th.

And I think that what you'll see there is a rate, pilots, to inform future rate design work not just for residential but also for various sizes of commercial customers as well.

So one of the things that I'd love for the council to recognize as those pilots come forward is that many of these will help us make sure that the 2020 policy framework that you see outlined here really helps us fulfill those affordability and accessibility goals.

And I appreciate you taking those pilots so that we can get those scaled up and then potentially have something to implement in 2021. So thank you for that.

I just want to put that on your radar.

It's on its way.

Yeah, it's truly kind of a something for everyone approach.

The pilot, in fact, that we're closest to rolling out is really targeted towards customers who are at about the 25% AMI level, I believe.

So folks that are really struggling with financial resources.

We've got one there.

We've got a time of use rate pilot.

We've got a pilot that's really meant to help electrification of public transportation and public fleets or fleets.

And then lastly, something for some of our industrial customers that would be an interruptible rate.

So you'll see more about that soon.

But I think we have a lot of opportunity there.

So as I said, I inherited a strategic plan that you all approved last summer.

And so what I did as I came into the utility was I really went into that and pulled out four areas that I have been focused on with the utility for this last almost year.

So I've got three weeks, and I'll be a year in.

So number one, creating a customer-centric culture, which is really trying to improve our customers' experience, creating journeys that deliver what they should expect from their community-owned utility.

It includes things like the digital roadmap that I think you're familiar with, AMI full integration.

That includes, of course, the portal project that we are working on collaboratively with Seattle Public Utilities.

And so in 2020, we'll be implementing the plan that should help us to improve, that will help us to deliver an improved customer experience for the people that look to us for critical products and services.

And of course, including new self-service options, which is really, really important in this community.

Number two is enhancing the employee experience.

One of the things I talked to you about last year during my confirmation process was I made a commitment to you that that would be one of the first things that we focused on, and we are doing that, and we are doing lots of good things.

So we have a new employee experience team that we're standing up, and again, these are not new FTE.

These are us repurposing resources that we have today and really trying to focus folks on The notion that you can't provide an excellent, outstanding customer experience without employees who feel safe and supported in doing their best every day.

So we're doing a lot around that.

We're doing training.

And we're working closely with our people leaders so that they are providing that supportive environment for the people that look to them.

Number three is revenue stabilization through rate design.

And that, again, that's the path, and we literally think of it as a path or a map to January of 2021. So the pilot programs that we already discussed are the principal part of that.

And then we will be looking, as we are learning from that process, we will be looking at how do we develop rate pilots, rate programs that will give customers choice, control, and an opportunity to manage both their energy consumption, but also their bills.

So we know both here, but really across the industry, that that's what customers want and expect today from their utilities.

Lastly, innovation is electrification, and we are really focused on deep decarbonization and increased retail sales.

So I often say that electrification is not only the path to deep decarbonization, but is also the path to long-term affordability as we find ways to help our customers make good energy choices and increase our sales to offset what we continue to support through our progressive energy efficiency and conservation programs, which is, again, smart use of resource.

So new program or new division that I mentioned, new programs and incentives, many that will be tied to the House Bill 1512. So those are the priorities and I will take questions or then turn that over to Kirstie to talk about the numbers.

Okay, Kirstie, why don't you go ahead?

Okay.

So for City Light, we only have the one fund, the Light Fund.

So you'll see there that all of our appropriations fall under the other category.

There's no general fund dollars here.

You'll see that our 2020 proposed budget 1.43 billion This is 58 million higher than our 2019 adopted and the bulk of this was a part of the 2020 and endorsed, which is not pictured here, but since that is the basis of what came from our strategic plan and is balanced by our rates, that's sort of the starting point for us.

So of that $58.5 million, almost 50 of it was a part of our endorsed 2020 budget.

And the components of that are $22 million for increased debt service on bonds to support our capital program, $6 million for taxes, $13.5 million associated with cost of living increases, labor benefits, and other non-labor inflation.

And then $7.4 million increase for capital projects associated with just a small increase there.

So most of what you see here was a part of our 2020 endorsed budget.

And as Deborah mentioned, all of the strategic priorities that she just discussed and the strategic plan, those are all being achieved within the endorsed budget from 2020. Oh, any questions on that?

Not seeing any.

Great, okay.

On the FTEs, you'll see there just a small net change of one and a half FTEs going to 2020. We are increasing a few positions to support, we're converting contract in positions, supporting pole attachments.

This is for telecom related work attaching to city light poles.

And this work is increasing, and so we're converting existing three-year temporary positions into permanent FTEs.

And this is being offset by a decline in the number of meter readers, and this is associated with our advanced metering program, which is almost finished now.

So the net impact of that is a very small increase of 1 1⁄2 FTEs.

And the 1 1⁄2 FTEs are really doing work that's customer-funded as well, so that's largely small-cell.

pole attachment work where our carriers are paying for that work.

So we took a lot in discussion with our CBO and with Eric, with our CBO staff and council central staff.

We focused this table here on material changes as compared to our 2020 endorsed budget.

So there's really only two things that are happening here.

First, that reallocation of surplus budget from conservation incentives to incentives for transportation electrification, and Deborah mentioned that earlier.

And then the second one is an increase in capital budget to support pole attachment work.

And again, this is related to the 5G deployment.

And so to note that this increase here is all reimbursable work.

And so there's no net rate impact.

This is all work that would be reimbursed by telecom companies and those requesting to attach things to the poles.

And if I were you, I would be looking at that going 587%.

So if I could just say one thing about that, because I was literally figuring it out in the hall before we came in here today, thanks to Greg Shiring.

So the 2019 of 166, the 2020 endorsed that you already approved last year had a significant increase.

We were ramping up our transportation electrification, knowing that was ahead of the game.

And those were, again, funds that were included partially offset from other areas in which you already approved.

The difference there that you would see if this table included 2020 endorsed is $600,000, or $600 million, is that right?

$600,000, and those are monies that are moving from the energy efficiency or conservation customer energy solutions budget into electrification.

And those are the funds that we talked about in terms of.

setting up this new division and preparing ourselves to do that work.

Thank you for that.

The funds also fund the six new direct fast chargers.

Say that again, please.

The additional increase under transportation electrification is for new fast chargers.

Oh, OK.

Very good.

Thank you.

Anything else?

Council Member Mosqueda.

Thank you very much.

And thanks to Seattle City Light.

I know we've spent a lot of time talking about the 2020 framework, specifically how we can ensure that the next iteration of rate design really is geared towards ensuring affordability, especially for our lowest income customers.

And I'm looking forward to that work with you.

I am interested in how I sort of reconcile the Dollar amounts with the presentation that we saw on plate pages two and three for items one through four Will we be seeing more in terms of the specific budget reflections on the policies associated with?

Gearing up for the future rate redesign, especially some of the pilot programs that we're talking about passing on monday It'd be helpful to see what those dollar amounts are and how you know, we as a city are investing in those efforts so that's the first question and then the second question is Obviously you you spoke very eloquently at our committee.

Was that just yesterday?

Tuesday about the importance of committing our internal efforts to the 2020 strategic plan priority of working with our lowest income customers and customers in general, communication to various customers about options around customer service, billing, enrollment assistance, and the UDP program.

Where would we be able to see the investments in that effort reflected in the budget?

Would that be a line item in the documents we've already received?

Since I don't see it as a line item in the PowerPoint presentation, I just wanted to ask where we would see those dollar amounts and if you have Sense of how those dollars compare year over year are we increasing our efforts to try to get money into that?

Strategic goal as well around communication and customer service Those are great questions I can I can answer I think one of them and then and then maybe others will help me or we can get back to you so on a your question around in particular so on the rate pilots as you'll see next week they are meant to be very again very small and because they are we there for learning purposes what we've actually said is their revenue neutral so we're not expecting there to be any significant cost to the utility for the pilots themselves and then and then what we learn from them is would be incorporated into the next strategic plan that we'll be working with the review panel.

We've actually already started that process and that we would be bringing to you next summer.

So the takeaway there is that the pilots themselves have very little impact on revenues.

And in fact because you are the rate setting body for this utility The way the ordinance is written that you'll see is is that they need to be revenue neutral because we can't set rates Specifically as we move along only you can do that.

So that means that the customers are held harmless from any change in with respect to the established rates today.

And then as we bring you the strategic plan for review and then ultimately your approval next summer, that's where we will incorporate any impacts of new rate structures into what we bring you.

Does that answer your one question, Councilmember?

So thank you on that.

With respect to customer communication, I don't know that you would see that as a specific line item.

A lot of what you've seen or that we've presented that's in more detailed form has to do with the technology lifts of our customer service work.

I already mentioned the portal project, other things.

You know, we have a communications team, and what we're doing is we're using those resources, Councilmember, to really refocus those folks and working, again, within the resources we have to find new ways of communicating with our customers, particularly our most vulnerable populations and the people that really need the most help, and that's where those dollars will come from.

And then my last comment, and then these guys can step in and and correct me, which I'm sure I've said something wrong, but the last thing I'll do is connect those two, because there was actually, we've had conversations in the past about new rate design, and you know, I'm an energy geek, so I find that stuff super interesting, and I actually read an article today, Council Member Mosqueda, that talked about how customers do want new rate designs, but they need to be presented in ways that are easy to understand, and where they can clearly see how they benefit from them.

and that that is an educational and a communications piece of work.

So that is going to be a big part of what we will be doing next year, but we'll be using existing resources to do that.

Yes, Councilmember, specifically about the utility discount program and we are adding two new staff in the Human Services Department to help with that increased caseload as we ramp from 14,000 to 34,000 people that that is supporting and that's backed by existing rate revenue from SPU and SCL.

Great.

And then just lastly on that, thank you, Madam Chair.

No, please, go ahead.

On the UDP program, I know this is something that we've been talking about over the last year and a half, two years, so really appreciate the allocation of two FTEs to help get folks in that door.

Is there anything that we need to be aware of as it relates to your budget for reduced revenue if more people get enrolled?

And if my memory serves me correct, I believe it was at the beginning of 2018 that we heard that there's about 75% of the population that's eligible for UDP that's not currently enrolled.

So if we're successful at getting more folks in, do we need to see that reflected in your budget in some way?

I know that the Human Services Department is in ongoing conversations with utilities about demand and capacity.

So I think they would be working together on that.

But nothing we need to worry about here.

Not that I'm aware of.

Thank you.

Okay, anything else?

That's it?

All right, well thank you and it's not quite it.

We have public comment and there's one person but thank you very much Seattle City Light.

I appreciate it and I especially want to thank you again for the long discussion yesterday.

I thought it was really good to have the three of us at the table working with all of you and your people that have done the work, so many thanks.

Good.

Well, we will excuse you just for my colleagues.

Tomorrow, be sure that you're here at 930. We have actually six departments, three in the morning, OED, Office of Economic Development.

We have parks.

We have labor standards, so if any of you who are overseeing those departments have any comments you'd like to bring up first thing, make sure you've got that chance.

We also, in the afternoon, have Human Services Department, Office of Housing, and then DLR, Education and Early Learning.

So be sure to eat your Wheaties.

It'll be a long day.

Thank you for that.

And with that, we have Mr. Perkins, Mr. John Perkins.

Glad you're here.

Thank you for coming.

Hello, hello.

We didn't get our transfers.

We didn't get what?

We didn't get our transfers.

You put in resolution.

You put in resolution 31856 last year offering to collaborate with the executive and the executive has dragged out that process this entire year, finishing up to this budget process without any of the three organizations receiving their transfers.

This has included a loss of an opportunity of $1.5 million, almost, for Byrd Bar Place, they had to expand considerable goodwill again in the state legislature to get it renewed one more time.

Are we in a government that cannot seem to do anything?

I think not.

But I think at this point, we do the second clause in your resolution, which is you take back the power.

which you always had, it's like Wizard of Oz, 80 years.

Take back the power you always had and do it yourselves.

Do the deed, get us those three properties.

We're talking about Greenwood Senior Center, thank you.

Do this before you're out, please.

We're also talking about Bird Bar Place in the Central District and the Central Area Senior Center.

So far, as far as I know, all of the criteria that they've dragged out and muddled through and complicated in different ways, Eventually, some criteria that we finally let, they let themselves settle on, all the three organizations have met that.

We were expecting to see it in the budget.

I've searched the budget several times, I've searched all the relevant departments, and I've also asked the Department of Neighborhoods lead, that is the lead of the interdepartmental team, to point it out to us.

I asked him that yesterday.

That's an easy answer.

It's on page X.

I didn't get that answer.

That's my two minutes.

All right.

Thank you very much, John.

Yeah.

All right.

I have two for staff.

The colored ones are for the...

All right, thank you very much.

And colleagues?

Is it appropriate if I ask a quick question?

Yeah, sure.

Go ahead.

Thank you for being here this whole time.

I know you were at the beginning.

The last time we had a chance to check in in community at the Senior Center, there was that like six-page list of criteria that hadn't been generated.

Just so that we're aware, What was the last conversation that you and the three organizations have had with the executive about what conditionalities may need to be associated with the transfer?

Just so that we're caught up to speed, if you can-.

If you're caught up, I would invite you to get in touch with the departmental team for that statistic, because they supposedly are in charge of this.

Each of the three organizations were met with jointly at the beginning of the process, March 13th.

The original deadline was March 31st.

They didn't have our first meeting with us until two weeks before the first deadline.

That is serious or not serious on the executive's part.

You make your call.

We felt that was pretty I'll pass, I'll put a blank there.

So they've met with us separately.

My own organization, Century Area Senior Center, is meeting with them tomorrow.

But we have no further faith that they're serious about this, particularly because it's not in the budget.

So what I'd suggest, Chair, is perhaps Senator Staff, I think it's at FAS that this would fall under?

No, it's D.O.N. is coordinating the interdepartmental team.

Our last, we've been pinging D.O.N. on a regular basis.

Our last response was on January 5th.

We then asked for a follow-up on August 9th and did not hear back.

But the process is being accurately described in that there are criteria that many of these organizations met under the prior administration.

And the new administration, in their interest to do their due diligence, wanted to confirm that that had happened.

And that is what is basically dragging this out.

Thank you, Councilor Hurwitz.

So the question I was getting ready to ask is, when?

Are they presenting to us?

Are they a large enough department?

They're not.

I'm getting some no's over there from the experts.

So they're not presenting.

But I was going to suggest if they were presenting, we could just get a status report on there.

But if they're not presenting, we'll work offline and see how we can get the information to get to the bottom of your concerns.

I've talked to, as you well know, a lot of community members on this.

Causing a lot of angst and so thank you councilmember for your leadership on this so we'll get to the bottom of it Okay, thank you.

Thank you.

Okay.

No further questions.

No further public comment the meetings adjourned for today