Finance & Housing Committee 7/9/21

The time is 9.33 a.m.

Will the clerk please call the roll?

Thank you very much.

We have a quorum, so we will begin the meeting.

And when we have other council members that join us, we are expecting other council members, including Council Member Lewis for sure.

I'll make sure to announce them when they join.

Colleagues, we do have a number of items on today's agenda.

Thank you for being flexible on a holiday week to join us on a Friday morning.

I really appreciate your time.

Today we're going to be looking at the South Park acquisition legislation for developing affordable housing.

This is very exciting and also very timely, so we'll talk about the urgency around that.

We will then consider the multi-family housing property tax exemption program COVID-19 specific legislation.

This is legislation that's been made possible from some actions in the state legislature this year.

We will then have a continuation of our hazard pay ordinance specific to grocery employees.

And lastly, we will consider the Jumpstart Seattle Payroll Tax Jumpstart Fund.

If there's no objection, today's agenda will be adopted.

Hearing no objection, today's agenda is adopted.

Let's go ahead and start with public comment.

As always, we like to have public comment at the beginning of our meeting and to make sure that folks have the chance to dial in remotely.

We have continued to make these remote public comment periods possible.

We're going to go ahead and move through the public comment in the following manner.

Folks will be given two minutes to speak.

I'll call on the speakers three at a time in the order in which they are registered to speak.

If you haven't had a chance to sign up and you'd still like to speak, you are welcome to.

Please go to Seattle.gov backslash council.

And the public comment link is also listed on today's agenda.

Once I call your name, you will be prompted by hearing a message that says you are unmuted.

But that's actually your indication that you need to hit star six on your line.

And make sure your phone is also off mute.

Then you can go ahead and start speaking.

Please start with your name and the item that you're interested in addressing today.

Once you've completed your public comment, we ask that you please disconnect from the line if you plan to continue following the meeting, which we hope you do.

You can watch us on Seattle Channel or the other listen-in options on today's agenda.

The public comment period is now open, and we will go to the public comment.

And before I do, I just wanted to welcome Councilmember Lewis.

I really appreciate you joining us this good morning.

Good morning.

Thanks so much for being here.

We're just about to start public comment, and with that, we have two folks signed up to speak.

We'll have Teresa Clark, and then we will have Tammy Hetrick.

Good morning, Teresa.

Good morning.

Thank you for the opportunity to speak.

My name is Teresa Clark.

I'm the deputy director of the Washington Low Income Housing Alliance, and I'm speaking today in support of Council Bill 120118. We support this legislation and think it's necessary because the investments outlined in the spend plan are critical to further the city's work to prevent and end homelessness.

Investments in these services need to be reliable and predictable.

Providers need to be able to depend on the funds and know that they won't be pulled out from under their feet.

And we know that cuts or reductions are extremely disruptive and damaging and can drive inefficiencies that set us back in our efforts to prevent and end homelessness.

Additionally, Jump Start is an intervention that addresses the staggering income inequality in Seattle and in our region.

This income inequality is one of the biggest drivers of housing insecurity and homelessness.

Rents are pinned to middle and higher income earners.

Those earning less face out of reach housing costs And we know many Seattle renters are facing a stark reality right now as they struggle to dig themselves out of pandemic related debt.

So many will need the safety net services and affordable housing funded by Jumpstart in order to move forward.

So Seattle needs to stay the course on investments into these programs and this ordinance holds us to that commitment.

So we urge support.

Thank you.

Excellent.

Thank you very much, Teresa.

And we have also with us Tammy Hetrick.

Good morning, Tammy.

Good morning.

Thank you for the opportunity.

My name is Tammy Hetrick.

I'm the president and CEO for the Washington Food Industry Association.

I represent the independent grocers, convenience stores, and suppliers in the city of Seattle.

I'm here to address CB120119, My concerns are with the extended duration of the hazard pay that's kind of focused on one industry.

This has been an extreme hardship for my independent grocers and I want to express my frustration with this arbitrary and capricious mandate that's been on one industry.

First and foremost these are not minimum wage jobs.

They have not been.

Second this was a based on a Brookings study that indicated the top 12 retailers had record profits.

The first 10 were not even included in this mandate.

Nor were they grocery stores or definitely not independent grocers.

We were not even close to being in the same financial windfall yet we were included in this mandate.

When the pandemic began I tried to work with the city so my members could be included in the fresh fresh bucks program that the city had to help families.

My members were not included in that because the city didn't feel they had the technology to provide the coupons.

This contract was given to a large grocery retailer which resulted in increased sales for them and less opportunity for those consumers to shop at their local independent grocery store.

Yet my members have been included in the higher wage standard and slowly forcing these stores into the red when there's been nothing to help support these grocers and invest in the communities that they have over the years.

These are members who care deeply about their employees and made significant investments in their safety and the safety of customers.

This is why COVID exposures were very low in grocery stores and especially in independent grocery stores.

The impact of the hazard pay for many stores has been an increase in a volatile supply chain and cost of goods.

So we're already seeing increases.

We're concerned.

We want to make sure we can provide affordable groceries and I would ask that we please just stop the mandate and not extend it for another 30 days after it's voted on.

Thank you for your time.

I appreciate it.

Thank you very much for your time.

Appreciate the public comment today.

That is all the folks that I have signed up for public comment.

Again, thanks as well to folks who've sent us in messages from Washington Low Income Housing Alliance, also from Budget and Policy Center and Tenants Rights Union in relation to the Jumpstart Fund today.

We are gonna go ahead and close out public comment and go and move on to items on our agenda.

Madam Clerk, will you please read item one on the agenda?

Agenda item number one, Council Bill 120114, an ordinance relating to the Office of Housing for briefing, discussion, and possible vote.

Okay, we are really excited about this legislation, so just bear with me for a quick second as I introduce our friends from the Office of Housing and Tracy Raskler from Central Staff.

We do have the chance today to talk about legislation that is the implementation of legislation that we are able to use for the first time.

Office of Housing is using the acquisition authority that we increased in last year's administration and finance plan.

In 2019, we made the decision to give Office of Housing more authority to acquire properties, to act on properties so that we could do exactly what's happening right now, acquire properties that we can then turn into affordable housing and truly create opportunities, especially in communities that have been largely facing displacement and have been priced out of the market.

So I will stop there, but Emily, I wanted to welcome you and your team, Jessica Gomez, Director Alvarado, welcome from the Office of Housing and Trace Raskovic.

Did you want to start us off with any opening comments?

So I think I will let Emily and Jessica carry on since it's exact request legislation.

Thank you so much.

Thank you, Chair Mosqueda.

Thank you, council members for the opportunity to Jessica, are you going to share your screen to get us started?

As she's doing that, I'm Emily Alvarado.

I'm Director of the Office of Housing, and I'm here with Jessica Gomez from the Office of Housing and Alberto Rodriguez from the Office of Sustainability and the Environment, who can help to talk about how this is a real interdepartmental and collaborative effort.

Welcome, Alberto.

Sorry, I didn't see you on the screen there right away.

I appreciate you being here and also the Office of Sustainability and the Environment for your partnership in this.

Yeah, we are excited.

I appreciate your excitement, Chair Mosqueda.

We are excited, too, to present this legislation that will act to acquire property in South Park for affordable family rental housing and community uses.

And I should say, first and foremost, that the vision for this investment comes from community.

Community was driving to address displacement in their neighborhood and really advocated and sought to achieve more affordable housing in the community.

I should also say that this vision is supported strongly by the mayor and the mission to jointly address affordable housing, and to advance climate resilience is a shared goal across departments, OH, OSC, OPCD, and I know also by many of you.

Next slide, please, Jessica.

As Council Member Mosqueda mentioned, this is the first time we are taking action on a new piece of authority given to the Office of Housing to allow for direct acquisition of land that's then used as affordable housing.

Typically, what we do is we support acquisitions that are generated from community organizations that come to us and seek investment.

But in this case, we are taking action to acquire property directly as the city place it into our care and then use processes and community outreach to ensure that it moves into affordable housing development.

This effort is really consistent with broader city planning around the Duwamish Valley Action Plan.

We'll hear more about that and how this is our effort to respond to the anti-displacement goals that were set out in that action plan and also to demonstrate the city's ability to make aligned investments that achieve multiple public policy benefits.

As I mentioned, this is a community-driven vision, and it has been driven by South Park community-based organizations, specifically the Duwamish Valley Affordable Housing Coalition, who we thank for their constant advocacy and partnership, and the Duwamish River Cleanup Coalition, who has also been involved in this effort.

I'm going to turn it over now to Jessica to talk about some of the particulars of this acquisition.

Great.

Thank you so much, Emily.

Thank you so much for having me attend today.

So I'll go through a couple of the details.

And as Emily mentioned, this is about the authorization to purchase two parcels in the heart of South Park.

The combined acquisition price is $3.6 million.

Combined parcel size is approximately 18,000 square feet, located at the corner of 14th Avenue South and South Henderson Street.

On this slide, this map shows that the parcels are adjacent to each other.

Currently, there are two commercial tenants, one residential occupant on the parcels, all of which are projected to continue their occupancy when the city takes ownership.

The vision for development.

I'd like to take a quick data point from the Duwamish Valley Action Plan.

The median household income in South Park in 2018 was a little over $34,000.

55% of South Park residents are renters and almost 55% of those are rent burdened.

The acquisition and development of a mixed use building in a neighborhood with sizable inequities would create a positive impact on South Park.

This building will provide safe, healthy and affordable housing to households who have been displaced or are at risk of displacement, as well as provide community space on the ground floor in the heart of the community.

It will create equitable access to the Duwamish River, community supportive services, newly developed green spaces, and other community amenities, along with activating the 14th Avenue Corridor.

We're projecting this development will have 70 to 120 family-sized units.

And as many of you know, the community has advocated for housing and climate justice for a long time.

and we aim to bring these two goals together with this project.

Community preference will be utilized, which is really exciting.

With strong community partnerships with local organizations like the Duwamish Valley Affordable Housing Coalition and the Duwamish River Cleanup Coalition, this project will target those most impacted.

We want to share gratitude with all the work the community has done and excited to continue collaborating sending you all a big virtual hug.

This project is significant and meets the racial equity outcomes outlined in the Duwamish Valley Action Plan.

I'll hand it over to my colleague Alberto Rodriguez to give this project context within the larger frame of the Duwamish Valley Program.

Thank you all.

Thank you so much, Jessica.

I'll try to keep it brief.

My name is Alberto Rodriguez.

I work for OSC, and I'm the city's Duwamish Valley advisor and co-lead the city's Duwamish Valley program.

And I will give you some quick context for this work.

Since 2016, the city family has come together to advance environmental justice and equitable development in Seattle's Duwamish Valley.

This is an effort that's led by OAC and OPCD, but it's supported by 16 other city departments, such as our beautiful and amazing colleagues at OAH.

In 2018, we released the Duwamish Valley Action Plan, which is a city-community shared vision that will guide our work and investment in the Duwamish Valley for years to come.

You know, priority areas include environment, parks, transportation, public safety, and affordable housing, among a couple of other things.

And the work is aligned to six racial equity outcomes, which serve as the north stars that we want to achieve through everything we do in the Duwamish Valley, no matter how small or big of an investment it is.

And the action plan includes 15 near-term actions that we were able to implement from 2016 through mid-2018, 37 projects, including approximately 140 actions that we are to implement from mid-2018 through 2022, and five long-term strategies that needed a little bit more work and additional partners to actually figure out.

the acquisition of these properties aligned with the anti-displacement goals and commitments we made as a city family in the Duwamish Alley Action Plan.

Next slide, please.

This next slide will just give you a quick visual on the diversity.

It highlights and gives you an idea of the ecosystem of investments, right, and the diversity of work and projects in the South Park neighborhood that we are doing as a city family.

As we continued implementing many of these projects related to new trails or new parks and open spaces, river access, drainage and conveyance, river cleanup, community members expressed concern at how we could be exacerbating existing displacement pressures and asked us to make parallel investments in affordable housing, both in preservation and acquisition and development of new affordable housing.

Thanks to our partnership with and the leadership of the Office of Housing, we are on track to delivering on the biggest community priority.

And next slide, Jessica, thank you.

And then this slide, very quickly, here are the five long-term strategies I mentioned a few seconds ago.

Today, you're hearing about some of our work related to anti-displacement led by OH.

But in the next couple of weeks, some of you will hear from some of our colleagues from Seattle Parks and Recreation on some of our efforts related to parks and open space.

And in the next few months, the Duwamish Valley team would like to come to some of you and share more details on some of our work related to our climate change adaptation and health long-term strategies.

But now I'll give it back to Director Alvarado to share more details on the timeline and next steps for the acquisition of the properties.

Thank you so much.

So a little bit of brass tacks here, just to ensure that council members are aware of where we have been and where we are going.

We have entered into a purchase and sale agreements for these two parcels, and that was initiated in March.

I do want to acknowledge the incredible work of our city attorney's office, who has been helping us to navigate this acquisition.

Thank you to Eddie Lynn.

We have also completed a phase one and phase two environmental work.

While there are some things that were revealed as part of that environmental work, given the neighborhood that it's in, the community, these are to be expected and we believe they can all be ameliorated through our investment and pre-development work.

At this point, the projected closing date is on August 15, 2021. What we need from you and what we're seeking, and I'll talk more on the next slide, is authorization to effectuate this acquisition in order to close on project financing.

We need to come to council per city charter in order to do that.

Following that, there are other steps that we will move forward on.

First of all, we're going to continue to do community engagement in order to inform the design of the request for proposal that we intend to develop.

And so that's going to be work with community.

It might also include some complementary work, including working with an architectural firm to do massings to ensure the readiness of the project design so that we can move more quickly.

That might, for example, be something that we could do in combination with the Home and Hope Initiative and our contract through Enterprise Community Partners.

Following that, we will create the RFP and release that.

We expect that to be released next year.

And we'll be using Office of Housing Resources in order to invest in this RFP.

We also, as Jessica mentioned, intend for this to be a project that's really showcasing building-level sustainability goals.

And in order to achieve those really high levels of sustainability goals, We'll be seeking to build new partnerships across city departments and also with private investors and others to ensure that we can make this a building that's really top-notch as it relates to affordable family housing and climate resilience.

We'll be releasing that RFP.

We'll be doing our typical selection process in order to select a qualified developer and owner-operator.

And then, as you know, per city charter also, we will return to council prior to any property disposition and inform you of who has been selected and receive your feedback before we move forward.

Next slide, please.

So the legislative action here today is to approve the acquisition of the two parcels, which would give the Office of Housing, in combination with our attorneys, the opportunity to close on the purchase and sale agreement, close on the transaction, and move forward and bring these properties into Office of Housing Jurisdiction, where we will serve as a caretaker of these properties in order to then go through the community process to ensure that they're developed into affordable housing.

This satisfies, as I mentioned earlier, the requirements set out in the city charter, which requires city council to take action prior to any acceptance of property.

And I think that concludes our presentation.

I'll stop there, and if there are any questions.

Thank you.

Council Member Herbold, please go ahead.

Thank you so much.

I'm also very excited about this project.

This is really a long time coming, and I think just really is fantastic that the Office of Housing is using is piloting really this different approach for South Park.

They often say in South Park, because it is a small community, that if you really want to figure out how to address displacement, it's a An issue that you can actually do a that the community believes that they could do a by name list of people who are at risk of displacement and develop a strategy around helping those that by name list of people maintain housing.

And I think A project like this has the capacity to serve that function of housing people in that community who the community knows is at risk of displacement.

So this is just really exciting.

A lot of credit to everybody.

the Duwamish Valley Affordable Housing Coalition, who for years has been developing this vision.

A special shout out to Maria Ramirez, as well as the other folks who have been doing this work, not just in South Park, but in Georgetown and the communities of the Duwamish Valley.

Really appreciate the emphasis on community engagement.

the development of the RFP and there's a lot of energy in South Park for partnering with the city in the next steps of this vision.

Because of the the concern and the real experiences that South Park has with displacement.

I was wondering if you could talk a little bit more about Office of Housing's approach around community preference and implementation of goals associated with addressing displacement.

Yeah, absolutely.

So I think First of all, this is one opportunity to help address displacement in the neighborhood, but it's neither the only thing that we think is necessary, nor is it the only thing that the Office of Housing has worked on.

The action plan, in fact, lays out a series of investments and strategies, some of which we've already been engaged in, including our Healthy Homes Initiative.

where we sought to work w and renters and single fa that they had access to t indoor air quality and m can live healthy in thei are other investments.

Th And we're committed to continuing those other strategies and learning more from community of what those other strategies could be.

We also, for example, another another action is we are partnering as part of our rental assistance program with the Comunitario to be one of the community based organizations delivering rent assistance in the neighborhood, because we know that those localized rent assistance pathways are going to be really critical to preventing displacement for this project.

We seek to implement community preference.

Community preference has been used several times already in our neighborhood, in our city, in our investments.

And what we know is that allows for up to 50% of the units to be prioritized for folks who have experienced displacement or have longstanding roots in the community.

Typically what happens with community preference is the policy is not dictated by the office, but we work with the owner operator of the housing to define it in a way that will maximize those anti-displacement outcomes for the neighborhood.

So we'll continue to do that in partnership and support them.

And it does allow Council Member Herbold for folks who, for really affirmative marketing and outreach to folks who have been impacted to get information first so that they have the best opportunity to apply for housing if that's what they choose.

It's also something that we're doing with our affordable homeownership investment in South Park, which we did in partnership with Habitat for Humanity.

And they're using community preference in a different way in partnership with community-based organizations to find homebuyers.

Sorry, just a quick follow-up.

So does that mean that the community preference, the expectation that the provider will use community preference, does that mean that that's gonna be embedded in the RFP itself?

Yeah, we can expect to do that.

It is set out as a community vision and would anticipate that it would be placed inside the RFP.

Wonderful, thank you very much.

Are there any additional questions on this item?

Additional questions, okay.

I have my hand raised, sorry.

Oh, please go ahead.

I'm going to turn on that chat function so I can see it.

Thank you.

Oh, no, that's all right.

Sorry about that.

So I also wanted to say thanks to the Office of Housing and the Office of Sustainable Environment for good work on this.

I actually wanted to dig in a little bit more about some of these environmental concerns that Emily, you just sort of mentioned in passing.

I mean, we know what the air quality and water quality situation is in the Duwamish Valley, in particular, the South Park neighborhood.

Having been a resident of South Park neighborhood myself, I'm all too familiar with those particular realities and the consequences of climate change and the impact on those communities.

And so I wanted to get a sense of what those environmental concerns are and how they will be addressed in the project development, and in particular, I'd like to get an understanding of how the city might be able to leverage this project to really model some green building, green stormwater infrastructure that can really help to promote a healthier community for South Park.

Thank you, Council President, for those questions.

I think there are two pieces to answer there.

One is the environmental conditions of the site.

And then two is ensuring that our development advances resilience and also makes sure that it's built at a standard that's protecting the residents.

So first, Jessica, do you want to talk about the outcomes of the environmental work done to date?

Sure.

As Emily mentioned earlier, I'm not sure if you caught this.

but there was a phase one done and a phase two.

Nothing major, no red, major red flags came out of that except for some contamination on the gravel site of the tow truck company, which is the 8914 site right on the corner.

That seems to be typical par for the course type of cleanup that we would, we anticipated to have on the site.

No external seepage coming in from the adjacent sites.

So groundwater was not impacted by any other chemicals coming in from the other site or from this site specifically.

And then the sea level rise does not, the map of the sea level rise that is impacting South Park and the Duwamish Valley does not cover this site.

So we're not really anticipating that type of risk.

On the building level, we're in the conversation phase here, but we have had really good conversations with OSC.

I've had great discussions with Mami Hara about how we can not only showcase some green infrastructure technology, but really look at some water retention and water management systems as well at the building.

Full transparency, those things have costs.

We think they're worthwhile costs, But as the Office of Housing, we'll be seeking to create some partnerships to ensure that we can put those showcase and really important technologies in place.

I'll also say that the level of building standards that we do already is to be built to evergreen standards.

And through those, we have in many other parts of the city used features that mitigate any issues around air pollution, and noise, for example, we have developments near highways that have worked really hard to ensure high quality internal systems are in place to keep people safe and healthy.

Thank you for that, Emily and Jessica.

Really looking forward to learning more about and tracking some of those opportunities to, you know, to identify ways to partner with others.

I realize that there are costs to Um, moving in this direction, but.

The, the cost is pennies on the dollar in comparison to the gravity of climate change that we are all facing.

So I think, you know, I think anything we can do on the council to be supportive of creating or identifying partnerships or building those bridges or identifying additional revenue sources to.

to achieve that ultimate shared goal.

I stand at the ready to be a partner with you all on that effort.

So looking forward to learning more about those details.

I think this is a really exciting opportunity we've been hearing from South Park residents for years about the need to really aggressively tackle anti-displacement.

And this is a small step in the right direction and look forward to seeing it have great success to see how we can bring this potential really innovative model to scale across the city.

So thanks to all of you for your really important work here.

Well said, Council President.

Any additional comments?

Okay, I am not seeing any.

I just want to echo a few of the comments made by my colleagues here this morning, thanking Office of Housing and Office of Sustainability and the Environment for your work on this effort.

And again, echoing what Council President said, hoping to see more of this type of policy replicated across the city.

We know that the acquisition authority right now is ever important given the we are moving forward on this and appreciate the work of the council in partnership with the office of housing to remove the cap on the acquisition authority in the ANF plan earlier this year.

That is going to be extremely important as we seek to recover from COVID-19 and find additional opportunities around our community.

We also know this is being led by community.

This is an opportunity for us to follow the leadership of community to create more affordable housing.

and community space specifically here in South Park.

And I'm really excited that this acquisition authority is meeting what the community is asking for in this moment.

And looking forward to doing more of that with the release of the cap on acquisition authority that we authorized.

Also appreciate the connection to addressing displacement that you've talked about.

Often I think that there's a misperception that when we talk about development, it equals displacement.

and this is a great example of where when we do development done right, when we listen to community and follow their lead, we can address displacement by embedding into these policy strategies that you and Council Member Herbold have discussed this morning, which we've been excited to expand as well in the last four years, making sure that we're using the community preference strategies to make sure that we're addressing displacement and that we simultaneously address the disproportionate environmental justice impacts on our community here.

And I think this is another reminder that when we build housing, affordable housing within our city, it also helps to address the disproportionate impact, especially in BIPOC communities who've been to be able to move quickly on this legislation.

We do want to be able to act to be able to move this forward as well to meet the community's moving this forward relatively quickly, given that it is a Friday meeting, we would need to consider this sooner than the week-long wait next week.

So with your support today, colleagues, we will be voting on this legislation, and then after we vote on it, we would move to suspend the rules.

And thank you again, Council President, for your work on making that possible.

Anything else before we go into voting?

Okay.

I'm not seeing any.

Let's go ahead and move this forward.

I want to thank Office of Housing, OSC, Tracy, thank you for walking us through this, and Council Member Herbold, I know you've been working on this in your district for a very long time, along with the Council President's interest in seeing these efforts move forward, and mine.

We're really excited about this.

Council Member Lewis, I didn't want to leave you out, but we'll make sure that we get you counted in for your support as we vote here.

Madam Clerk, will you please, excuse me, I move the committee recommend passage of Council Bill 120114. Is there a second?

Second.

Wonderful.

Thank you, Council Member Lewis.

It's been moved and seconded.

Is there any additional comments?

Thank you very much.

Madam Clerk, will you please call the roll on the recommendation that the bill pass?

Chair Mosqueda?

Aye.

Vice Chair Humboldt?

Yes.

Council President Gonzalez?

Aye.

Councilmember Lewis?

Yes.

Madam Chair, there is a four in favor, none opposed.

Thank you very much.

It is unanimous.

The recommendation that the bill as a pass will be, a due pass will be sent to the full council.

And colleagues, if there's no objection, the council rule relating to referring legislation to a city council meeting when the committee meeting is after Thursday at noon, will be suspended to allow for the referral of Council Bill 120114 to this upcoming Monday, July 12th meeting for the Seattle City Council consideration at full council.

Is there any objection?

Hearing no objection.

The rules are suspended and the bill will be referred to Monday, July 12th, full Seattle City Council meeting for final consideration.

Congratulations, everyone, and congratulations to the community in South Park.

Wonderful.

Thanks all.

Appreciate your time.

Let's move on to item number two.

agenda item number two, council bill 120113, an ordinance relating to the multifamily housing property tax exemption program.

For briefing, discussion, and possible vote.

Thank you very much, and that is why we saw some of the tiles remain the same.

This is a continuation of our housing conversation with Director Alvarado.

Tracer Ratzliff from Central Staff and we are also going to be joined by Jennifer.

Good morning, Jennifer.

Jennifer Lebeck from the Office of Housing.

Colleagues, this legislation in front of us is also very exciting.

This is the MFTE COVID extension legislation that narrowly relates to protections to projects with timelines that have been impacted by the pandemic.

I'm going to turn it over to Central South for a technical walkthrough, and then I'll add some additional context as we consider the legislation.

And if that is Tracy or Emily, I'll turn it over to you.

I will actually let Emily and Jennifer go through the technical aspects, but just to let folks know, this legislation and then another piece of legislation that you will hear in August are in response to changes that were made at the state legislature that gave us authority to do a couple of things.

One, to deal with the impacts on the construction industry of COVID, as we know that there were some delays in terms of the ability for projects to move forward with construction.

So this first piece that we deal with today will address that issue.

And then the one coming up in August will deal with the ability to actually extend projects that have expiring tax exemptions and to hopefully allow for the continuation of the tax exemption for those projects that will be expiring in the next couple of years.

All of these pieces of legislation in response to authority that we get from the state to operate the multifamily tax exemption.

And we'll now let Emily and Jennifer walk through today's piece of legislation.

I'm going to let Jennifer is our manager of policy and planning and oversees the implementation of the multifamily tax exemption program.

I'm going to let her walk through.

But really, as Tracy mentioned, this is narrow legislation.

It is technical, and it is really more tightly tied to COVID, and it is time sensitive.

As Tracy mentioned, we are coming to council with more legislation on MFTE, and this piece had time sensitivity, which pushed for us to move more quickly on its introduction to you.

Jen, I'll turn it over to you.

Great.

Thank you.

I'm going to share my screen now.

Excuse me, I need to go back to the beginning.

All right, thank you.

As Emily mentioned, my name is Jennifer Labreck.

I'm the planning and programs manager for the Office of Housing.

Good morning, council members, and thank you for having us here this morning to talk about the first piece of MFTE legislation that you will be seeing this summer.

We'll be back in August, as Tracy and Emily mentioned, to discuss a second piece.

So this piece, a very brief overview, which I actually don't think anybody at this table needs.

MFTE is an incentive program that provides a tax exemption and return for income and rent restricting percentage of units.

And it's currently one of the city's largest tools for creating income and rent restricted housing.

We normally come to you every three to four years when the program is up for renewal to talk about changes to the MFTE program.

We're here earlier.

The program was last updated in 2019 and up for renewal in 2023. We're here a little bit earlier because some changes were made at the state level during the 2021 legislative session that made some changes.

So there were changes made to the RCW that authorizes the MMFTE program.

And we're here to accommodate, specifically today, some of the time-sensitive changes that were made.

We have, and I think we have a bifurcated strategy to accommodate the changes that were made to the RCW.

We're here today to talk about the first piece of legislation that is needed on an expedited schedule to accommodate some project needs, timing needs, projects that were delayed by COVID.

We will be back in August to talk about accommodating other time-sensitive and required changes, including an extension option for projects that are expiring over the next couple years, along with an accompanying resolution to address other issues, including things like labor equity.

So let's talk specifically about the ordinance that is before council today.

This ordinance provides additional time for some projects to complete.

As a reminder, MFTE projects currently have five years from the time of application to receive a certificate of occupancy.

That is a hard deadline.

that is currently in the SMC.

So projects cannot receive additional time as currently written.

Because of COVID-19, the RCW was changed.

Both the RCW and the SMC used to have this five-year requirement.

During the 2021 legislative session, really due to COVID-19, the RCW was changed to allow for an additional five years for some projects to complete.

As a reminder, the RCW authorizes the MFTE program.

In general, it creates a framework and then local jurisdictions have the discretion to set additional conditions if they so choose.

So the RCW now allows projects an additional five years to complete.

And locally, we want to implement that additional time in a narrow way.

So under the proposed ordinance, we have proposed that some projects can remain vested under older MFTE programs while receiving an additional five years to complete.

I think the key here is that there is, of course, an MFTE program in existence right now.

It's MFTE program six.

Projects can always choose to apply under that new program should they choose to do so.

These projects will be able to essentially remain vested under older versions of programs of MFT programs and those older versions have higher affordability limits.

Because as you all know, affordability limits for MFTE have generally gone down over time as the program has been renewed.

So these projects can remain vested under older versions of the program with higher affordability limits and will have an additional five years to complete.

As also previously mentioned, under this ordinance, the extension option, this particular this additional time to complete is narrowly structured so projects have to meet certain conditions to be able to get it.

They have to demonstrate that the project was delayed due to coded.

We've also set other timing provisions and those timing provisions are intended again to help ensure that these are projects who really were impacted by COVID.

So the project, you know, had to have expired after COVID begun.

but before February 2022, thinking that that two-year period of time is really the time in which projects would be most likely to have actually been impacted by COVID and be able to demonstrate that impact.

Projects need to contact us by September 30th, need to contact the Office of Housing by September 30th to request that additional five years, again, with the intent that if a project has been impacted by COVID, that it's reasonable that they would contact the Office of Housing this year to let us know that they need additional time to complete.

And looking at our pipeline and the status of projects, we believe that at most a handful of projects will take advantage of this additional five years.

And that's it.

Thank you very much.

Colleagues, are there questions?

Council Member Herbold.

Thanks.

I'm just trying to understand why we wouldn't just ask the proponents of these projects to just apply under the current program.

It's a good question.

It's something that is a policy decision.

What we hear from developers who are seeking this extension and who advocated very strongly at the state for the extension is that they are very far into the process of building a building and they have set up financing.

and other factors around the expectations that are already included in the initial contract from their first application.

And that it was actions that were produced as a result of government action, including a stoppage of construction work, that have changed the environment for their ability to fulfill that on the timeline that was initially requested.

I do not have not spent time inquiring into each project that we've heard from, how much their financing has changed or how much construction stoppage impacted.

But it is reasonable to assume that what was happening during the pandemic has impacted these projects that were already well underway.

It's not that they have just started thinking about how to build the building.

And finally, I would say that it's my understanding that during the last recession, there were steps taken to ensure that MFTE at that time also adapted to help protect or accommodate developments that were currently underway.

in order to ensure that things were not harmed by the ability to use MFT was not harmed by what was happening in the recession.

Thank you.

It's really helpful.

Thank you, Vice Chair Hurdle.

That is the same question that I had as well.

I think that when it came down to the policy questions and there was sort of two motivational factors for me in wanting to support this legislation and being sympathetic to the need to move relatively quickly.

One was it follows in alignment with what the state has put as a possibility to expedite these projects, projects that have been impacted.

We know that it's gonna be narrow, relatively few.

And we also, I think, want to make sure that we're not creating any additional barriers for building the housing that we so desperately need post-pandemic, given the cost of labor and materials right now.

It felt like one additional tool in the tool belt to try to expedite the creation of housing, recognizing a much longer conversation is to come around the MFTE changes in the upcoming fall.

Okay.

Any additional comments?

Okay, again, I appreciate the walkthrough.

Jennifer, thank you for being here today, recognizing that this follows the state legislative changes, the narrow focus on projects that have only been impacted by COVID, and that there will be ongoing conversations later this summer and fall about MFTE changes that the state legislature has also authorized to make programmatic updates, including consideration for authorizing extensions for MFTE units, that are expiring in the next couple of years.

It's gonna be a really interesting opportunity for us to figure out how this tool and the tool belt helps yield additional housing.

Specific to the legislation today and the handful of projects that have been impacted by COVID, I'm comfortable with moving forward with this legislation and do hope that this helps to spur and finalize the creation of those specific projects.

And we look forward to additional conversations on MFT to come soon.

Tracy, is there any additional context that you'd like to add?

Seeing a head shake of no for folks in the audience online watching.

Okay, I am not seeing.

Okay, great.

I am not seeing any additional comments and appreciate the questions that were asked.

Colleagues, I move the committee recommend passage of Council Bill 120113. Is there a second?

Second.

Thank you, Vice Chair.

It's been moved and seconded.

Is there any additional comments or questions?

Hearing none, will the clerk please call the roll on the recommendation that the bill pass?

Madam Chair?

Aye.

Vice Chair Herbold?

Yes.

Council President Gonzalez?

Aye.

Council Member Lewis?

Aye.

Madam Chair, that is four in favor, none opposed.

Thank you very much.

It is unanimous.

The motion carries and the recommendation that the bill pass will be sent to the July 19th, 2021 Seattle City Council full meeting for final consideration.

Thank you again, Office of Housing Friends and Tracy for all of your work on this.

I want to also thank Erin House for her work on the first and second bill today.

Very much appreciate her being back in our office and all of the good work that she's done to get up to speed on these important bills, as well as the larger pieces of legislation that we will be discussing later this summer.

Wonderful to have Aaron back as well.

Thanks all.

Thanks for your work on this and good to see you, Jennifer.

Okay, let's go ahead and move on to item number three on our agenda.

We are moving right along, folks.

Agenda item number three, Council Bill 120119, an ordinance relating to employment in Seattle for briefing and discussion.

Wonderful.

Thank you very much.

And I see our friend Karina Bull, who is lead on labor policy within central staff.

I also see Ali Panucci, who's with us here for a later piece of legislation, but welcome to our central staff team.

Colleagues, this is a follow up to a conversation that we started in our last committee meeting, but really is a a conversation that we began earlier this year.

I just want to offer a few remarks for background as we head into the discussion about this specific bill.

You'll remember at the beginning of this year, we passed emergency legislation on hazard pay for grocery workers requiring grocery stores to pay employees an additional $4 an hour to compensate them for the risk to their health and to the health and safety of their families.

This is something that many cities considered up and down the West Coast, and I'm really proud of Seattle.

I'm proud of the city council and the mayor.

for being the first in.

Washington State to pass hazard pay legislation for grocery store workers.

We saw this be taken up by a number of cities in our region as well after the passage here at the city.

We did this because we saw at the beginning of the pandemic that many industries who were able to go remote reduced hours, reduced exposure, and were allowing folks to be able to work from home.

But this was not the case for essential workers, especially those in grocery store, who helped to keep our families fed and safe and really had no choice but to report to work.

We heard story after story about individuals who were concerned about their health and safety and knew that they needed to continue to go to work in order to be able to put food on their own family's table.

Many of these workers were represented by unions and are paid the minimum wage and some have benefits through their employers and through negotiations with their union.

But still the risks that they were taking were severe to our community and wanting to make sure that we compensated for them for this risk.

We followed their testimony.

We followed the guidance from data that we received from public health.

We looked at the health and safety risks that they were facing.

and we acted with urgency.

We followed through on recommendations that came from national studies and looked at the rates of exposure to COVID and the number of folks who were infected and ultimately lost their lives due to COVID and saw that grocery store workers were five times more likely than those in the general community to interact with customers and also then potentially get exposed to COVID.

We know that hazard pay couldn't fix the extreme risk of COVID, but it was certainly a measure to provide an additional boost to workers who were already taking extreme risk.

And I am very proud of the city for being able to advance this important labor standards.

But this is not a long-term measure.

We know that it's important to follow up with other measures to make sure that especially our essential workers in the wake of COVID have additional protections.

But this legislation was not intended to be permanent.

It wasn't a permanent wage replacement.

And in the passage of the bill initially, we noted our intent to consider modifying or eliminating the hazard pay requirements after four months of implementation.

pending review of current health, safety, and economic risks for frontline workers during COVID.

To help us with this consideration, on June 15th, we had a panel discussion with representatives from the grocery industry, grocery workers and their representatives, as well as interim director from Public Health Seattle-King County, who celebrated the progresses that we've made so far post-COVID-19 and acknowledged some of the real disparities that still exist and the ongoing measures that are needed to make sure that we can continue to have access to PPE, health and safety protocols, and clear mask guidelines.

During the panel and afterwards, we've received a number of data points as well that indicate that we are still on a strong trajectory towards vaccinating, especially our frontline workers and our community in general in King County.

King County has hosted several grocery store worker vaccination sites in partnership with employers as well.

And I did have the opportunity to volunteer at one of those clinics and greatly appreciate the work of UFCW Local 21 in helping to expedite the vaccination of their members.

Based on the data, the panel presentation that we received, the amendment in front of us is an amendment to that original legislation that passed to consider eliminating the hazard pay portion, the requirement that required hazard pay.

But we are going to be able to keep intact the record keeping components and additional provisions in the legislation.

I wanted to note from Public Health King County some important statistics.

We do know that as of July 6, Public Health Seattle King County has reported 72.9 of King County residents 12 and over have been fully vaccinated and at least 79.1 have been completely vaccinated, excuse me, have completed at least one dose.

In talking to King County Public Health yesterday, they note that we have made significant improvements in vaccinations for the Latino and black populations.

with both hovering around 60% of full vaccination.

Overall, we anticipate that there is going to be growth in that vaccination rate, and they are doing targeted vaccination efforts.

I asked them if they needed any additional support from King County, and they said that they've received sufficient support from the federal government and are doing targeted pop-up clinics and vaccinations, especially for diverse populations, including Latino and Black populations.

Overall, they noted that we anticipate that the fully vaccinated population receiving the two doses required, we anticipate that our community will be 80% fully vaccinated within the next two to three weeks.

So with this information, I asked if there's any concerns, if they had any red flags with us moving forward on the legislation and given the trajectory, there's no red flags at this moment.

I would like to turn it over to Karina to provide any additional information on what this legislation does, but I wanted to root our conversation in these public health statistics and also note that even when this legislation potentially goes away specific to hazard pay, there is much more that we will continue to do to make sure that we're lifting up protections and health and safety concerns, especially for frontline workers, and we'll be strong partners with public health as we work to address any disparities that continue to exist.

Corinne, I'll turn it over to you.

Thank you.

Your presentation on the legislation was very comprehensive, so the only thing that I would add is that this is not emergency legislation.

like the legislation was to establish the requirements.

So these amendments would take effect 30 days after the mayor's signature, depending on when that signature would happen.

It would be somewhere between mid to late August, end of August, that the hazard pay requirements would end.

And so Office of Labor Standards could work with the mayor to make sure that that exact date is given in advance to businesses and to workers so that they have more information about these changes.

Excellent.

Are there any additional questions?

Council Member Herbold, Vice Chair, please go ahead.

Thanks.

Before I get into my question about the policy itself, is the intent to vote on this today?

Yes, Council Member Herbold, it is.

So the current legislation that we would be amending What does it currently say about the end of hazard pay?

So right now the legislation says that hazard pay requirements would end when the COVID emergency and the mayor's civil emergency and the mayor's declaration of emergency would end.

When that would end, then the hazard pay requirements would end.

The rest of the legislation record keeping enforcement would end three years later.

That's similar to the terms that we have created for other COVID-related legislation.

Sometimes we have sort of created a buffer, like, you know, three, six months after with some of the rental legislation.

I'm thinking also of the hazard pay legislation that we enacted for food delivery drivers.

And I just, I don't understand why, given that, you know, knock on wood, I think we're hopefully coming close to the end of the state of emergency, why we wouldn't just maintain the end date for this benefit that was necessary, that we, when we passed the legislation, thought would be necessary through the end of the state of emergency, why we wouldn't just maintain that date.

I can chime in here a little bit.

Regarding the legislation that we have in front of us, we did put in a four-month look back and wanted to have the conversation four months after it was enacted to keep that promise.

I think based on the information that we received in the meeting and both from represented workers through CW 21 and the industry given the work that has been done specific to these workers specific to the grocery worker industry the targeted vaccination clinics that have happened and the work that's been done to try to make sure that that community specifically those workers specifically had access to vaccines.

It felt like there had been concentrated effort to try to make sure that those folks were actually fully vaccinated and given that.

cooperation, the collaboration both between the represented union and the employers in trying to vaccinate those frontline workers specifically.

I think that that's why I felt comfortable moving forward with the request here to lift the hazard pay only because that had been such a concentrated effort to try to make sure that those workers were vaccinated.

I don't know that that same type of concentrated effort to vaccinate other frontline workers has taken place to that level.

At least I am not aware of it.

And so I can't speak to whether or not the time is right for those other pieces.

But specific to this one, that's where I felt like the four-month look back was an appropriate time for us to take that assessment.

And then given the information we received about vaccinations that have taken place for these workers, that's where the difference, in my opinion, comes in.

I appreciate that and hope that in conceptualizing the termination of hazard pay in this way, we can argue that we aren't sort of creating a precedent for other COVID-related turned benefits, whether or not we're talking about obviously the eviction moratorium or hazard pay for food service workers.

So that's really helpful.

But again, I still have the same question, given that it seems like maybe this is a little bit of a a distinction without a difference, because if it's not going to go into effect until 30 days after signing, and again, I'm knocking on wood here.

I'm hoping that we will be seeing the end of a state of emergency in early fall.

I just, I'm not quite sure I understand why we need to do this now.

I appreciate that.

I think that part of the calculation on the timing is also aligning with beginning of September, going back to school.

In fact, what I was going to ask you all for with your support of this legislation today and in conversation both with the mayor's office and with the OK of the council president, I was going to ask for us to actually wait to have this taken up on the Monday 26 meeting, Monday, July 26, which then actually puts us into the September return to school timeframe.

I think that gives us the cushion that you're talking about for it to go into effect.

In terms of why on our committee, quite frankly, I think it's a matter of the amount of work on our committee workload coming up.

Both that and sort of the commitment to come back and look at this within a four-month period.

We had the meeting mid-June.

This was the subsequent follow-up meeting to put it on the agenda and to move forward with our data-backed rationale for why this population specifically can move forward felt like both the policy aligned and the timing aligned for our committee today.

We do have a number of things that are coming up for the July 20th meeting.

And so I wanted to see if this was possible to move forward today, recognizing we still have the 30 days until the mayor signs it.

That does align more with the timing that you're talking about, I believe, for when return to school happens for kiddos and sort of more activity anticipated as September opens things up even more.

And just one last thing, I do want to note that the legislation, I mean, yeah, the agenda notes for briefing and discussion does not note that we're intending to vote today.

Sorry for that.

I am sorry for that as well.

That is my mistake.

Do I have, is there a procedural step that's needed, Madam Clerk or Council President, Central Staff?

I think if you didn't note it for vote today, we cannot take a vote on it.

Council member, this is Amelia.

I just wanted to note that the council rules stipulate that if a agenda does not list possible vote, the committee can still vote on the legislation if they suspend the rule with regards to it having to be listed on the agenda.

So if you would like to suspend the council rule, then you can do that and then vote on the bill.

So I would be interested in doing that, colleagues.

I apologize for the agenda not including possible vote.

I think the intention, as we described in June, was to bring this back for your consideration and possible vote.

I know that in internal briefings and at the Monday briefings, we've been talking about that as well.

And I also hope that if we were to do that, if you're comfortable with suspending the rules, recognizing that we would not be bringing this forward to the full council until the 26th with the blessing of the council president.

that would give us a little bit extra time to consider the legislation before final vote.

So if you're comfortable with us suspending the rules today and then knowing that there would be that two-week period before it came to full council, that would be my preference today.

Any thoughts about that?

Okay.

Council Vice Chair Herbold, I apologize for not having the agenda reflect that, and I didn't, definitely not my intention to catch anybody by surprise, so thank you for flagging that.

Yeah.

I'm sorry to be the one to have flagged it, but I appreciate you taking it in stride.

I'm not prepared to vote on this today, so the committee can take up the waiving of the rule.

I'm still struggling with the ordinance as it expires at the end of the state of emergency.

I don't understand, given that the state of emergency is likely to expire soon, I don't know why we need to take action.

So I wasn't thinking that we were going to be voting on this today, and I just need some more time to consider the policy implications.

I'm not trying to stand in the way of the procedural efforts to suspend the rule, just letting you know that my intent is to abstain today.

If there's no concerns, then I believe I will go ahead and suspend the rules.

I'm looking to just make sure that I'm reading the room here right and appreciate the position you have noted, Council Member Herbold, absolutely understand.

And I hope that with the two weeks as well, we'll have a chance to consider any additional possible issues that may come up.

Okay, I'm not hearing any objections or concerns.

I'm gonna go ahead and move this forward, and then I'll see if I can, in the appropriate manner, suspend the rules.

Amelia, could you help me out?

We do have to suspend the rules first, and then we can make a motion on the first bill.

You should have some suspension language, because you just used it on the previous bill, so you just have to say that with this new council bill.

Let me give this a shot.

If there's no objection.

I'm here to help you out.

I appreciate it.

Thank you.

If there's no objection, the council rule relating to voting on legislation listed on today's agenda will be suspended to allow for the Finance and Housing Committee to vote on Council Bill 120119 in the same day that it was considered, though not noted for possible vote.

Is there any objection?

I'm satisfied by that motion if the clerk is as well.

Thank you, Madam President, and I'm not seeing the clerk come off the mute there.

So, hearing no objection, the rules are suspended again.

Apologies for that colleagues.

I would like to consider.

The Council Bill in front of us now Council Bill 120119 colleagues with the rule suspended.

I move the committee recommend passage of Council Bill 120119. Is there a second?

May I make a friendly amendment to that motion?

Yes, please.

Okay, so.

I would like to second that motion with a friendly amendment of making it clear for the record that the bill will be considered on Monday, July 26th.

Absolutely.

Friendly amendment accepted.

Committee recommends passage of Council 120119 with the possibility of the bill being sent to the July 26th full council meeting for final consideration.

I will second that motion.

It's been moved and seconded.

Any additional comments?

Okay.

I will just say thanks to Karina for your work on this, as well as Sejal Parikh for her ongoing research on this and work with both industry and workers.

And again, my apologies for any of the confusion today and completely understand the positions that have been raised by our council colleagues.

Madam Clerk, will you please call the roll on the recommendation?

Vice chair Herbold.

Thank you very much, Madam Clerk, and the recommendation that the bill pass will be sent to the July 26th full council meeting for final consideration.

Thank you so much, and we have one more item for your consideration.

I think that we have listed this as briefing, discussion, and possible vote.

I'm going to double check.

Great, okay, it's listed, and appreciate, Madam Clerk, all of your work on this.

We will move on to item number four.

agenda item number four, council bill 120118, an ordinance related to creating a fund for payroll expense tax revenues for briefing discussion and possible vote.

Thank you so much.

And we have with us Ali Panucci from Central Staff.

Thank you so much for being here, Ali.

Good to see you, as always.

And colleagues, I want to just start with a huge note of congratulations.

We talked about this a little bit at council briefing, but we have received great news within the last month, and that is the court had upheld the legal validity of of our jumpstart bill, the progressive revenue that you all passed last year.

Thank you again for the co-sponsorship of the members in this committee.

You all were co-sponsors and greatly appreciate your leadership on this as we crafted that legislation with hundreds of community members.

I think it's been widely acknowledged and very eloquently said by Council President in the last few weeks that the Passage of Jump Start really has helped Seattle be different from other cities right now who are trying to plug budget holes.

Jump Start helped prevent us from having to lay folks off.

It helped continue essential community services, and the city remains economically resilient.

It is, I think, an important court victory that we had, and it's important recognition of the foresight from this council to pass progressive revenue.

We also had the foresight to include a spend plan, a detailed spend plan that really begins in essence in 2022 to focus on permanent housing solutions, equitable development initiative funding, investments in Green New Deal priorities, and economic resilience.

economic resilience for things like making sure that we can attract more visitors and tourists and create a downtown that's thriving, that has folks coming to our hotels.

And that's good work for the hotel workers as well.

I know that this has been widely applauded by a diverse set of stakeholders, including folks from large and small businesses, labor and community partners.

And this is a really exciting opportunity for us to reflect back both on the hard work that we all did almost exactly a year ago to the week here.

We passed this legislation and we want to make sure that we're moving forward, moving forward with the commitments of the community put in place, moving forward on some of the investments that we made via the Seattle rescue plan that we just passed two weeks ago.

That really helped to create the on road on ramp into some of the investments that we're talking about here in terms of housing and economic resilience.

Importantly, I want to note two things from this legislation.

Number one, this legislation, by creating a jumpstart fund, helps us identify how much is coming in from the jumpstart tax specifically, so we have greater accountability and transparency over how much the tax is raising.

And number two, it helps us make good on our commitments that we made to the large coalition of stakeholders who helped craft the spend plan in front of us.

both of these goals are critical for us to make sure that we're making investments, especially into vulnerable communities and our BIPOC community specifically, making sure that the jumpstart dollars are additive to additional investments that our city has committed to.

We want to make sure that we are investing in areas that are often put on the back burner, equitable development, housing dollars, Green New Deal priorities, These are priority dollars for jumpstart and our city budget should be additive to these funds.

That's what we committed to when we passed jumpstart and the concept of having a jumpstart fund helps to create additional transparency and accountability for how we spend those dollars.

I really want to thank the folks who have been working with us in the creation of jumpstart since last spring.

the years of momentum from community partners calling for addressing the regressive tax system, both in the state and in our city, recognizing we can act and we have act to create additional dollars, which will, the majority of which will be going into housing to address our most pressing crises in the city.

And also with the funding going into equitable development and economic resilience, really making sure that we're creating that more equitable local economy.

I will turn it over to Ali to walk us through what the legislation does today.

And in addition to creating the fund, there's two other very important components.

One is a reiteration of the oversight board that we have.

And the second is a valve for smart budgeting strategies to make sure that we're prepared if there is ever another downturn like what we saw coming our way due to COVID.

We've written in some legislation to make sure that we have a budgeting valve as well.

But I think that this is a really great opportunity for us to move forward on those commitments and to see these dollars coming in soon will be something that the entire community can be really proud of.

Ali, I'll turn it over to you.

Thank you, Chair Mosqueda.

Good morning, council members.

I'm Ali Panucci of your council central staff.

Council Bill 120118 would create a new jumpstart payroll expense tax fund, as Chair Mosqueda described, in the city's treasury.

The purpose of creating this new fund is to provide greater accountability and transparency in the budget for the use of the revenues raised from the payroll expense tax authorized by Ordinance 126108 about a year ago.

The Council provided clear direction on the authorized uses of these funds in the Jumpstart Spending Plan passed by the Council on July 6, 2020, through Ordinance 126109, and further detailed through adoption of Resolution 31957, those spending priorities on July 20, 2020. Information available to the council to date doesn't make clear how the payroll tax revenues will be proposed by the mayor for allocation in the 2022 proposed budget, which is why, at least in part, the chair has proposed creating this fund, as this is a strategy available to the council to codify in the municipal code the authorized uses of the payroll tax revenues and to ensure that their legislative intent is clear and increase transparency as we head into the fall budget process.

However, I'll just note that the executive could still present a proposed budget inconsistent with these fund policies and spending priority.

They could do that by transmitting a proposed budget with legislation that would amend these policies to agree with their spending proposals.

However, creating this fund will make it easier for us to track and make clear where there are inconsistencies or points of departure.

In creating this new fund, the payroll expense tax revenues would be deposited into the Jumpstart Fund with the fund policies directing spending consistent with the previously approved spending plan.

As Councilmember, or excuse me, Chair Mosqueda described, that includes 60% of the funds for affordable housing, 15% for economic revitalization, 9% to support the equitable development initiative investments, 9% for Green New Deal investments.

And I'll just note there that that is consistent with when creating the Green New Deal advisory board as well as the implementation strategies.

It was requested that there be a dedicated funding source that would fulfill that commitment previously approved by the council.

And then up to 5% of the revenues could be used for administering the tax and the associated investments as well as doing evaluation work on the investments.

So while the spending plan directed spending of all of the payroll expense tax revenues to be used for these purposes in 2022 and beyond, recent revenue forecasts indicate that in the near term, some amount of support for continuity of general fund services may be necessary to avoid reductions in base services in 2022 and perhaps in future years.

So the fund policies proposed in this legislation deviate from the spending plan previously approved by the council in one way.

Acknowledging that either in 2022 or in future years, base general fund revenues may not have fully recovered to pre-pandemic projections, the proposed fund policies allow for a portion of the revenues to be used to provide that continuity of services.

That is allowed until the base revenues rebound to pre-pandemic levels.

is described in more detail in the staff memo.

Based on the most recent revenue forecast presented in April by the City Budget Office, we would anticipate that about half of the payroll tax revenues anticipated in 2022 will be needed to provide continuity of Bay City services.

If future revenue forecasts indicate that base revenues are rebounding to pre-pandemic levels, reliance on the payroll tax revenues to support those base services will decrease.

And then on the other hand, if we see a greater decrease in those base revenues, more of the payroll tax revenue would be needed.

to support those base services.

So similar to what was permitted in 2021, the payroll tax would help ward against cuts to base city services and city staff layoffs that would impact programs that the city manages.

So one thing I will just note for the committee's consideration, creating a new fund does introduce some administrative complexities, such as managing and monitoring the cash balances for this new fund and additional reporting and monitoring.

I will note that the fund that, excuse me, this introduces the administrative work for the budget office, FAS, as well as the departments that will receive funds from the payroll tax.

So I will also just note that up to 5% of the payroll tax revenues can be used for administering the tax and the proposed investments.

This could include supporting the additional administrative burden of implementing the jumpstart fund, and if this bill is passed and departments determine that additional resources are needed to manage this new fund, the council could consider modifying the amount of of the revenues that can be allocated to the administrative costs.

So some of this will be, you know, learning as we go and amending the fund policies may be necessary in the future.

I will also just note that you may be hearing from the city budget office at some point, we will be discussing at a future finance and housing committee meeting legislation to authorize an inner fund loan.

This is to address some cashflow issues the city is facing in the general fund in 2021 and 2022. due in part to when payments for the payroll tax for 2021 will be remitted, because we are not expecting payments until the end of the first quarter of 2022, as well as other obligations on the city's budget, such as expenditures related to the emergency, where we may be awaiting FEMA reimbursement, and those types of situations.

Creating this new fund may create some complexities in implementing and how that inner fund loan is structured.

and may require more than one piece of legislation in the next six months to a year that the council will have to consider in terms of inner fund loans.

But if we are able to work closely with the budget office, we believe we can address those complexities.

The Budget Office did offer one suggested modification to the proposal to mitigate some of the administrative burden, which is described in Amendment 1 proposed by Chair Mosqueda and posted to the agenda.

Chair Mosqueda, would you like me to describe that amendment now, or would you like to first move the amendment or pause for questions?

Let's pause first for questions and then we can talk about the amendment, but Ali, thank you for walking us through that.

And as a reminder to folks, the 2021 payroll tax.

Yes, does not get paid until the first quarter of 2022. So that's where some of that lab comes in and appreciate all you flagging the upcoming Interfund loan bill that's already been in discussion.

We're going to have a DMACC meeting coming up next week.

We do have opportunities to, I think, address the cash flow issue.

And again, I think having this fund helps us to make sure that there is transparency and how those dollars both flow to the Jump Start Fund and to the General Fund so that we can continue to make the necessary investments and additive investments where promised.

Are there any additional questions?

Okay.

Allie, thank you for your summary there.

And again, thanks to the city budget's office for their suggested amendment to make sure that the administrative portion, again, when we passed Jump Start Seattle revenue proposal last year, we included a 5% could go to administrative costs.

Happy to make this accommodation to make sure that that funding remains in the general fund for the request to streamline the management of these dollars.

That's no problem here.

So Ali, do you want to describe amendment number one?

Thank you.

I'm going to go ahead and share my screen so everyone can see the amendment.

The amendment would modify section one of the proposed bill.

Let me see.

Can you see that?

Okay.

Yeah, we can.

And if you could just scroll slightly below so that we can see the effect statement.

I thought that that was helpful.

Great.

Oh, one more back.

Yeah, perfect.

Okay.

So this amends section one of the proposed legislation that would allow the 5% allocated for administrative costs to be deposited directly into the general fund.

Because the other 95% of the funds will be distributed to multiple departments, Having to track separately and allocate that 5% of the payroll tax from the fund to those various departments just creates a lot of administrative work that I don't think will add a lot of value to our oversight of the expenditures.

And so this would just simplify that piece of the proposal by allowing those dollars to go into the general fund and then to be used to support the administrative evaluation oversight of this fund.

And then the remaining 95% would go directly into the fund.

And that's all I have.

Are there any questions about this amendment?

I'm not seeing any questions.

Okay, Ali, thanks again.

So appreciate the opportunity to bring forth this amendment for the 5% funds to go directly to administration remaining in the general fund.

I appreciate the response that we've heard from CBO about how to make it easier to administer this tax and happy to advance that today.

Colleagues, I move consideration of the bill so that it will be in front of us so that we can then consider the amendment if that sounds appropriate.

Okay.

Thank you.

It's been moved and seconded that the committee consider recommendation to pass Council Bill 120118. It's been seconded.

Excuse me.

Now is when I move the amendment, correct?

Okay.

Thank you.

It's been a while here.

I would like to move to amend Council Bill 120118 as presented on amendment number one and described by Allie.

Is there a second?

Second.

Thank you, Vice Chair Herbold.

It's been moved and seconded.

Are there any additional comments or questions on the amendment?

Hearing none, Madam Clerk, will you please call the roll on the passage of amendment number one?

Yes.

Council President Gonzalez?

Aye.

Council Member Lewis?

Aye.

Madam Chair, that is four in favor, none opposed.

It is unanimous.

The motion carries and the amendment is adopted.

The bill as amended is now before the committee.

Are there any additional further comments on the amended bill?

Madam President, please go ahead.

Oh, thank you.

Chair Mosqueda.

I just wanted to say on the record how supportive I am of this particular council bill.

We, the City Council, have a history of passing this kind of legislation on these you know, significant progressive revenue sources to make sure that we can have that level of transparency and accountability to particularly the stakeholders who we made commitments to about what this this funding would be utilized for.

It's unfortunate, however, that we're in a situation that we have to do this.

And and I just appreciate, nonetheless, the opportunity to be able to put in some of those guardrails to be able to ensure That the intent of a super majority of the city council is going to be implemented and followed through on by by the executive.

So, thank you for for your wisdom and replicating this model that we have used in other contexts to ensure.

that accountability and that the council's budget appropriation authority is going to be respected in this space.

And look forward to working with Allie and other folks on council central staff when we do receive the mayor's proposed budget to ensure that there is compliance with this particular ordinance and the several other ones we have also passed that are similar to this one.

So thanks so much, Chair Mosqueda.

Looking forward to voting in support.

Thank you very much Council President.

Thank you also for the context about how this type of fund strategy has been used in the past.

It's also something that we see used often at the state level.

I can think about the tobacco cessation fund that was used, championed by Governor Gregoire at the time, wanting to make sure that funds are going to what the intended purpose was.

So from the state to the local level, I think that this is an important opportunity for those commitments to be kept when we create funds and that create greater transparency and accountability.

I appreciate that.

And you're right.

There was a super majority that passed the taxes to begin with, and then it was unanimous, the spend plan.

So this is really an opportunity for us to put the unanimous agreement from council into statute here and also incorporating the important oversight components that we included in the legislation to begin with, recognizing that is to come.

And the valve that Allie described, for lack of a better term, I call it the valve, in case we ever need it, I think is a smart budgeting tool as well.

Hopefully we will not need it and we will continue to see these funds grow as anticipated year over year.

and that means additional investments for housing, equitable development, greening deal priorities, and economic resilience, all having a disproportionate positive impact on our smallest businesses and our BIPOC community.

Thank you for your comments, Council President, and again, your leadership and support on Jump Start.

Thank you as well, Vice Chair and Council Member Lewis.

You have been strong champions of the legislation and co-sponsors of Jump Start in the past, so thanks for your additional support.

I do also want to thank Ali Panucci for your work on this, along with Tom Mikesell, and really want to thank Sigil Parikh, as well as Aaron House, who's done some work in the last few weeks on this legislation with us, and the community partners that have continued to write in.

Again, we heard from Washington Low-Income Housing Alliance today, Budget and Policy Center, We know that many advocates within the Green New Deal community and economic resilience communities have also written in with a desire to see this fund created.

So thank you all for your support.

And with that, we'll consider the amended bill in front of us.

Colleagues, we have the amended bill in front of us.

And if there's no additional questions, Madam Clerk, will you please call the roll on the passage of Council Bill 120118 as amended?

Chair Mosqueda?

Aye.

Vice Chair Herbold?

Yes.

Council President Gonzalez?

Aye.

Council Member Lewis?

Yes.

Madam Chair, that is a four in favor, none opposed.

Thank you very much.

And I did hear Council President say aye.

Just for the record, it got cut off there a little bit at the beginning, but I did hear it.

So we have four in favor and none opposed, and it is unanimous.

The motion carries on the committee recommendation that the bill passed as amended will be sent to the June 19th Seattle City Council meeting for a final vote.

We have a record time today.

Thank you all for your support on an early Friday morning on a holiday week as well.

We do have our next Finance and Housing Committee meeting on July 20th.

We will be still with a full agenda in front of us, including Domestic Worker Standards Board appointees, Equitable Communities Initiative update.

We have a recommendation coming down from them, I believe, midweek next week.

So we'll have the opportunity to hear from the task force at that point.

we will have the domestic worker standards board a letter for discussion and the mid-year supplemental and grant acceptance ordinance along with the possibility of the inter-fund loan that Allie mentioned.

So another packed agenda and we'll hopefully be talking more about some of those items during council briefings in the interim.

Thanks for joining us today.

Anything else for the good of the order colleagues?

a great weekend.

I hope you enjoy a weekend and get a lot of rest and relaxation given all the news about burnout and how hard it's been over the last year.

I hope folks do take some time for rest and recovery.

We'll see you again on Monday.

Thanks so much.

Today's meeting is adjourned.

Thank you.

Bye.