Parks, Public Utilities and Technology Committee 6/11/25

Hey, good afternoon, everyone.

It's a great day to be a council member.

It is June 11th, 2025. The meeting of the Parks Public Utilities and Technology Committee will come to order, also known as PUT.

It is 2.01 PM.

I am Joy Hollingsworth, your favorite chair of the committee.

Will the clerk please call the roll?

Council member Kettle?

Here.

Council member Rivera?

Present.

Council member Strauss?

Council President Nelson.

Present.

Chair Hollingsworth.

I'm here.

There are four council members present.

Thank you so much, best clerk in the world.

So today the committee is going to hear and consider the approval of an application for current use of taxation.

We also are gonna hear an approval of Park's golf course management and operation agreement.

And we will end with a 2024 audit for the Seattle Public Utilities.

So we have a lot on the agenda today and we're gonna now consider that.

And if there's no objections, the agenda will be adopted.

We're going to now move to public comment, and I'm going to the public comment period, hybrid public comment period.

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

There is a public hearing for item number Council Bill 120997. will begin shortly after the public comment period.

If your comments relate to item number one, please hold your comments until we are open, until we open the public hearing.

Before we begin, let the record reflect.

We're joined by council member Strauss.

Welcome.

Clerk, how many speakers do we have today?

We have one in person and one signed up remotely.

Awesome.

Every speaker is going to get two minutes and I'll read the instructions.

The public comment period will be moderated in the following manner.

Speakers will be called in order in which they registered on the council's website and sign up sheet.

available here in the council chambers, starting with in-person speakers first.

If you have not registered to speak, but would like to, you can sign up before the end of the public comment period on council's website.

The link is listed on today's agenda, or you can sign up with the sign-in sheet.

When speaking, please begin by stating your name and the item you are addressing within the purview of the committee.

Speakers will hear a chime.

This is important.

You'll hear a chime.

That means you have 10 seconds left of the allotted time.

If speakers do not end their comments at the time allotted, the speaker's microphone will be muted so we can call on the next person.

The first person for public comment will now be called and you will get two minutes.

I'm assuming it's Ms. Malone?

Correct, Ms. Carolyn Malone.

Ms. Malone, welcome.

I'm Carolyn Malone, and my comments might be off the topic, but they are very important.

It's the malignant racism here at City Hall I experience each time I come in, because I protest against police brutality, from security to staff, people, to Sarah Nelson, the council president.

Whenever I go across the street, protest directly in front of the police department, Sarah finds a little niche to monitor me protesting, exercising my civil rights, my legal, constitutional rights.

On one side of City Hall is a large Ukrainian flag.

I support the Ukrainians.

On the other side is a poster stating, let it be no question.

Black Lives Matter, apparently mine does not here.

As soon as I walk into the building, I see the same people coming out to monitor, photograph me.

This security person is one of them, and it goes across different ethnicities of security, people monitoring, watching my behavior.

I'm not a violent person, but one person comes in, Alex Zimmerman, Well known here, he curses, he gives the German Hitler salute, he's told that's not appropriate, and he's treated like royalty.

I'm treated like a pariah.

And at some point, I look forward to talking to the mayor and the new chief of police, because there's no reason to treat me differently.

I have a constitutional right to protest police brutality in a non-violent manner.

Thank you, Ms. Malone.

We're now going to move to virtual public commenters.

Once your name is called, please press star six to unmute yourself.

And Mr. David Haynes, you are our only public comment speaker online.

Star six to unmute yourself, and you can go ahead with your public comment.

Why is it there's two...

management companies for the golf courses.

Are they making millions of dollars off of the public golf courses?

I mean, I like the idea that they would manage it better than the government who really can't manage anything proper.

You know, it's just like a question as to how many millions of dollars did they make off of the four golf courses?

Anyway, um, I'm kind of concerned about the fact that y'all are going to give like some sort of property tax value discount for one particular property.

And instead of giving a reprieve on everybody, you're just going to dump that responsibility of that property tax and just make others around the neighborhood pay for it.

I mean, that's kind of twisted, but anyway, um, I can't find my speech.

So I just wanted to bring up the fact that council still hasn't addressed the fact that you have a serious problem at Denny Blaine park about deviant, predatory perverted, like naked people that, you know, just because the state law isn't clear, city council and the city can be clear about, you're not allowed to do that anymore.

But it's obvious that council is afraid of the LBGQT community's voting block because they like to be abusive and mean spirited towards people.

And council is constantly pulling the punches, even when they just want to like persecute innocent Christians.

So, you know, I think the council needs to like sober up when it comes to appeasing devil's advocates who don't have the best interest of community and ban the nude and lewd acts at the park.

Thank you.

Thank you, Mr. Haynes.

So the public error, if there's no other person signed up to speak, then that will end our public comment period.

We are gonna move on to the items of business.

Agenda item number one, I'll read it into the record.

Council Bill 120997, an ordinance relating to current use taxation Approving an application for current use taxation of property located at 9666 51st Street Avenue South under the King County Public Benefits Rating System.

This is for public hearing, briefing, discussion, and possible vote.

So I need to, as presiding officer, I am now opening the public hearing on Council Bill 120997. Clerk, how many speakers do we have signed up?

Zero in person and zero remote speakers.

Okay, so there's no public commenters.

So we will now end the public comment period.

And so there's not anyone present on council bill 120997. And so the public hearing is now closed.

Thank you, Karina.

You are more than welcome to jump into your presentation and we will discuss what we are, the current taxation.

Thanks so much.

Good afternoon, committee members.

I'm Carina Bull with Council Central Staff, and today I'll be presenting information on Council Bill 120997, which would approve an application for the current use taxation program that reduces property taxes in exchange for long-term open space preservation.

This particular application is for a 1.4-acre property in District 2 that is owned by the Indigenous Creatives Collective, an indigenous-led nonprofit organization.

All right, as far as background on the current use taxation program, it is established by state law and provides an incentive for property owners to voluntarily maintain open space by taxing the property at a lower rate based on its current use rather than the potential market value for its most profitable use, such as residential or commercial purposes.

In recent years, the city has approved properties in Seattle for this program that include Pea Patches in Hillman City, Hazel Heights and near Judkins Park, and also the open space surrounding Anhalt Hall, a city landmark in the University District.

For all of these properties in Seattle, including this one that is subject to the council bill, applications are evaluated under a public benefits rating system that is administered and parks.

Properties with higher point total values for the open space resources, whether it be watershed protection area or urban open space or significant wildlife, receive larger reductions on property taxes.

This might be a good moment to see if Bill Bernstein is actually part of the presentation.

He is the representative from the King County Department of Natural

and hi bill i apologize i i forgot to acknowledge bill was on online my apologies go ahead bill oh no i'm happy to be here um if you have any additional questions after this presentation to clear up any uh questions you might have i'm happy to have some conversation and my bad i should have i should have acknowledged bill earlier also before launching in

All right, so after Bill, as representative of the DNRP issues a report on the application's point total, both King County Council and City Council must each separately hold a public hearing and take legislative action to approve the application.

An approval of the application results in lower property taxes for the applicant and shifts the tax savings to other property owners at a marginal rate of increase with no impact to the total tax collections.

This particular application that would be approved by this council bill is located at 51 Avenue South and it is north of the Kubota Garden in the Rainier Beach area.

The applicant acquired this property a couple of years ago with assistance from the city's equitable development initiative and is using it as a community garden and gathering space with walking paths and a greenhouse.

As you can see from this slide, it is large for that area.

It consists of nine different parcels.

It has a creek running through it.

There are invasive species in the buffer zone around the creek and the applicant has committed to removing those and restoring the area.

After reviewing the property, the DNRP recommended 38 points for assessing the property, which if approved would result in a 90% reduction in the taxable value for this property.

And to put this into context, using 2024 numbers, this reduction would decrease the total taxable value from 1.85 million to 185,000.

resulting in a property tax amount of about $1,500.

In comparison, the actual property tax amount in 2024 was a little over $17,000.

If approved for the program, the applicant would need to maintain the open space in the same or better condition of enrollment, submit required monitoring reports, and if it were ever disqualified from the program, there are incentives to keep it enrolled, which would be that disqualifying or being removed would result in needing to pay the tax that would have been due for up to a maximum period of seven years plus a possible 20% penalty.

Procedurally, this application has already had a public hearing by the King County Hearing Examiner, and on May 20th, it was approved by the King County Council, and if this council approves it, it would be eligible for the property tax reduction beginning in 2026.

Awesome.

Thank you so much for that overview, Karina.

And I don't know if, Bill, if you have any thoughts or anything to add.

um no not so much um other than just to say this is um a really unique piece of property it's got a lot of um great open space value associated with it hence the the points that i had been recommending uh you know to determine its tax reduction um i think the ownership is great they are very committed to really making this a a native diverse kind of open space oasis in the city and um I hope that you all see it the same way.

And I think it's wonderful that they've applied to the program.

Awesome, thank you so much for that.

The county and the city working together.

We'd love to see it.

Okay, so I will pause here to see if anyone has any questions, colleagues, Council Member Strauss.

Thank you, Chair.

Looking back at the slide with the map.

Just wanted to address some clarification questions here.

The parcels in yellow would be the parcels that receive the discounted tax assessment.

Is that correct?

That is correct.

And that is not necessarily those parcels coming into Parks Department control.

Rather, it is still privately controlled with the agreements that have been put in place.

Is that correct?

That is correct.

This will continue to be privately owned property.

I will add just by going to the next slide that King County did recommend additional points for unlimited public access.

You'll see that there are five points.

So it's not going to be part of the parks program, although close to Seattle parks adjacent to it, but it will be open to the public.

Okay, and let me ask some more clarifying questions and maybe I'll be getting over my skis and I'll need to come back and chat with you offline.

The area that is above the light dotted line that says Seattle Parks and Recreation property, is that different than Kabuta Gardens?

That is a question.

in which I will have to get back to you about.

Although we do have many parks people in the audience here.

And if I could interject, Council Member Strauss, would it be helpful if one of the parks staff came to the table to answer that?

Are we voting on this today?

if people feel comfortable, but if not...

I'm happy to vote on this today, and this is the type of thing that I would love to have a briefing about before the meeting.

I'll sing a little song.

Understood.

Because the issue here, I'm all for giving this tax break to keep open space preserved with the agreements in place.

My questions then become Kabuta Garden Day highly maintained that is very specific in particular is this open space that we are adding adjacent to that park in collaboration with what's going on there or is it is it in concert or is it next to and not coordinated and my worry becomes if we are not coordinating between one of our most specific parks in our city and open space, then what is that connection between those?

So I'm happy to follow up with those questions offline.

And I'm happy to vote on this today, Chair.

Thank you, council member Strauss.

No worries.

And if colleagues, if you all aren't comfortable voting and moving it, we're more than happy to kick it to the next meeting.

I wanna make sure that everyone is briefed and ready.

So thank you, council member Strauss.

I see council member Rivera followed by council member Kettle.

Thank you, Chair.

Karina, so this point on slide one shifts tax savings to other property owners with no impact to total tax collections.

Does that mean the surrounding property owners pay more to make up for the lower

Yeah, so the taxes that are owed are spread out across all property tax owners in Seattle.

So you could say it's the surrounding property owners, but the marginal rate of increase would be de minimis to them in particular because it's spread out across all of the property owners in the city.

So they're getting a lower tax break and everybody else pays a little more to make up the difference.

That's my understanding, yes.

is that who would know for certain how this works?

Sorry.

Well, that, that, that is, that is, that's a fact.

That is a fact.

Yeah.

It is right out.

You're like, that's my understanding.

I'm like, is that true?

Okay.

Um, okay.

That was my question.

Awesome.

Thank you.

Council member Rivera.

Council member Kettle followed by council president Nelson.

Thank you, Chair.

This is a relatively new program for me.

It's interesting.

It's very important for a number of reasons, particularly when we have adjacent properties, but also for canopy goals and the like.

What defines long-term open space preservation?

as I was looking at the map, I think it's great, you know, for the reasons I just mentioned, but for the canopy piece, to ensure, like, the health of the trees, for example, is this kind of like, you know, okay, we've done this, and it's basically just gonna lay follow, or is there active, management of the trees, like if there's diseased trees, are they taken down?

Are they replaced with additional plantings?

This kind of goes to the canopy piece.

Is that kind of the intent?

I guess it's the definition of long-term open space preservation, the preservation piece.

How active is that?

How in-depth is that aspect of it?

Yeah, I will start answering that question.

And Bill, if you want to also provide more context, since you are the subject matter expert on this, but the length or the term of the open space would be as long as the program is enrolled in it.

So for that program, the applicant is seeking a lower tax burden, lower tax payment.

And so the longer that they're in it, then that's going to incentivize them to stay enrolled.

And every year there is a required monitoring report.

I'm not exactly sure of the contents of that, but I do know for the restoration piece, that's for the ivy and the blackberries that are in that watershed buffer zone, the applicant is required to submit a restoration report for the first five years for that area.

So I would imagine that that could apply, and we'll find out from Bill to the rest of the property as well.

yeah so i can just jump in um and there there yeah there's two components with this property one of the criteria that it's qualifying for is that resource restoration piece and so that is already kind of a commitment that this owner is making to not only keep the property diverse and native throughout the long-term commitment of the property's participation but also to ensure that any areas of the property and there are some that are impacted by any kind of invasive non-native species are addressed and and replaced with native plantings and so there is kind of the category specific requirement to ensure native vegetation and then kind of the overarching program goals and requirements which basically require an owner or any owner that's participating in this program to and to maintain and ensure good stewardship practices to to make sure that property stays natively vegetated healthy long term in the many many years that they likely will participate okay thank you and thank you for that and um that's helpful and

I'm comfortable with this, and I could vote on it, Chair.

But I'm also, I'll just throw out a different kind of angle on this.

I think this is great.

I understand the point.

But I'm also understanding that preservation sometimes takes different types of challenges.

And I'm thinking about the West Queen Anne Greenbelt, which is a different topic.

But these are the kinds of things that we need to ensure as well.

But I appreciate the answers to this and the understanding.

So thank you.

And yes, Chair, I can vote today.

Awesome.

Thank you, Council Member Kettle.

Council President Nelson, and then followed back to Council Member Rivera.

Thank you.

This seems...

I was going to say, it seems like a no-brainer to me, but I won't say it like that.

But it looks like the county also had to sign off on this.

And so that is in part driving our schedule.

And they signed off, or they voted.

They approved this on May 20th.

And as I'm looking at the fiscal note, or your memo, the value of this property right now, of these nine parcels, is 1.85 million.

And that is undeveloped.

if it were to be developed into homes or anything else, then that property would be worth a lot more.

And so here we are getting open space that will preserve canopy, and there is ongoing maintenance of native species, et cetera.

So I see the public good as far overwhelming the decrease in the property tax that the city will receive from this, from the configuration of the 38 points equaling a 10%.

So I feel comfortable at this because it is in its proximity to Kabuta Gardens is another good reason to do this because any kind of impervious surface would add runoff into neighboring areas, etc.

So I just I really thank parks for working this out and I feel that this is a positive thing for us to do for the surrounding area.

Thank you, council president.

Council member Rivera.

Thank you, chair.

Sorry, one other question.

So point of clarification, just so for the public, the lower the tax benefit is in exchange for the public benefit of keeping the land open space.

And then at a certain point, if the land is no longer open space, then I imagine it comes back for re-evaluation of how it would move forward.

So it's for the some certain amount of time that they are caretaking the land.

Yes, and I will clarify that the tax exchange or what the city will collect is not going to be reduced.

That amount is going to be the same.

It's how it's spread out across the property taxpayers.

This particular property taxpayer will pay less.

Other property taxpayers will pay a marginal amount more.

And those taxpayers can utilize the space because it'll be open to the public, and that's the public benefit we're getting back.

So I just want to make it clear to the public that we're all getting a benefit back by way of having more open space.

So it's a mutually advantageous arrangement.

Chair, I believe there's someone online from Yeehaw who can speak to the relationship with Kubota.

gardens and I wanted to flag that because I see that in the chat and I, oh, sorry.

Can I just respond?

I just wanted to thank you for that clarification.

I had in my mind the relationship of MFTE, but thank you.

It's just spread out.

Thanks.

Thank you.

And I'd love to hear from the.

Yes.

So we have someone from creatives collect collective.

Um, thank you.

Council member Rivera.

Hello.

Aja Taylor- Everybody, my name is Asia tail I have met some of you before it's nice to see you again i'm a citizen of the Cherokee nation of Oklahoma born and raised here in Seattle.

Aja Taylor- And I am the director of the how indigenous creatives collective so don't want to interrupt your important discussion, but I did want to answer some of Council members strausses questions if I can i'm not the official perspective on this, of course, but.

My understanding is in that map of course there's Kubota garden and then the other green spaces marked as parks properties.

Those are what are termed the buffer properties, so they protect the views and Kubota garden they protect the creek.

They are not open or accessible to the public, and they are not part of Kubota gardens, they are stewarded by Green Seattle partnership.

And i'm also happy to just say that we've had lots of great meetings with the Kubota family foundation.

And the parks representatives at the gardens and we're talking even about having things like pathways that connect our sites.

collaborative events and stewardship opportunities, making sure that creek is flowing between all the properties in a good way, it is. salmon bearing habitat down at Lake Washington.

So we are really excited about all those opportunities for collaboration and good relationship building.

And I'm happy to answer any other questions if there are any.

Awesome.

Thank you so much.

I don't know if there's any other questions for any one of our panelists at all looking left, right.

Awesome.

Um, well, council member Rivera.

Yes.

I just really think, um, uh, uh, uh, creative collectives for joining and giving the perspective on the relationship because it was an important question.

So thank you, Council Member Strauss, for asking it and for getting that answer.

And also, Chair, is it appropriate to ask Parks if they have anything other to add to this conversation?

audience and I don't know if Parks has any other words and you can just come up if you if you want to you can come up to this microphone so you're not having to come up to the table if there's anything else I see a no from everyone okay I see I see I see a no so Thank you.

So yeah, a couple of things.

Thank you, Karina, for this and thank you everyone, Bill and Asia for joining us today and explaining the property.

I'm familiar with this.

I know this is in the south end and if I remember correctly, My parents live on 49th, so I know.

But you have the Chief South Trail that runs just on the other side of the street.

And then it's a beautiful garden.

So anytime there can be a collaboration to expand the jazz that comes from the park during the summer and do something there, that would be great.

So anyways, I want to put that plug in there.

Anywho, okay.

So...

Moving forward, if there's no objection, and I checked, everyone seems pretty comfortable about voting for this, but noted Councilmember Strauss briefing about this before, so you're comfortable.

I heard you there.

If there's no objection, the council rules will be suspended to allow the committee to vote on the bill on the same day the committee has held a public hearing.

Hearing no objections, the rules are suspended and we will proceed with a committee recommendation.

And so I'm gonna go ahead and move that the committee recommends passage of Council Bill 120997. Is there a second?

Second.

Thank you.

There was a second, third, fourth, fifth.

It has been moved in second to recommend the passage of Council Bill.

I will call the roll on recommending Council Bill 120997. I'm giving our clerk a break today.

She deserves it.

Council member Kettle.

Aye.

Council member Rivera.

Aye.

Council member Strauss.

Yes.

Council President Nelson.

Aye.

Chair Hollingsworth.

Yes.

We're all in favor.

Motion carries and the committee recommendation will be sent to Tuesday, June 17th city council meeting.

Thank you colleagues.

Really appreciate that.

And I'm looking forward to answering any other questions before it gets moved to full council.

So we feel comfortable as well.

Clerk, will you go ahead and read agenda item number two into the record?

Yes.

Agenda item two, council bill 120999, an ordinance relating to Seattle Parks and Recreation authorizing the superintendent of Seattle Parks and Recreation to enter into a golf course management agreement with Premier Golf Centers LLC for the operation of the city of Seattle's municipal golf courses located at Jackson Park Golf Course, Bill Wright Golf Complex at Jefferson Park, Inner Bay Golf Center, and West Seattle Golf Course and their related facilities for briefing, discussion, and possible vote.

So just a, thank you.

Just a clarification there.

We know we're not voting on this today.

I talked to some council members just wanting some more information.

So we will push a second meeting for this agenda item.

So we're all on the same page.

So I just wanted to let you all know that.

And we are so happy to have Parks here.

So thank you all for being here.

I've had a briefing and had a great discussion with you all.

And so just want to thank you.

And then thank you to central staff, the illustrious, amazing Tracy.

Same with you, Karina.

Okay, I would have gave you the same introduction.

So I don't want to show favorites here.

So thank you all for being here.

And then once you get your presentation up, we can go ahead and talk about my favorite golf course of all time, the Bill Wright Golf Complex, where I learned how to play golf with the amazing Mr. Fred Couples.

Shout out to Redbird golf clubs.

Some head nods.

Jay.

Sure.

Yes.

Was that an example of name dropping?

Look on my social media.

He knows me by my first name.

We are texting buddies.

I can text him right now.

I don't want to drop, you know, names, but, you know.

But yes, he was my favorite athlete growing up.

He was.

Love it.

And we will pause if we're having some IT issues.

That's fine, we can go ahead and roll with the punches.

We're gonna be at ease right now as council, so I'm gonna let Seattle Channel know we'll be at ease while we are trying to navigate our IT stuff.

And if not, I can go ahead and share it on my computer.

No, saying that will not help, that's fine.

Well, we love our golf courses here in Seattle.

Do any of my colleagues play golf?

Chair, yes until my shoulder surgery.

Understood.

No, Councilmember Strauss, Inner Bay.

I've played the nine holes once.

Nice.

One time.

The driving range more often.

Fun fact, it's on a landfill and there was once a proposal to turn it into a small airport before it became a golf course.

Also home of one of many pee patches in the city.

Wow.

That's a great, interesting fact.

Okay, good afternoon.

Good afternoon, we're ready.

We're gonna roll here and I'm gonna try to manage this PowerPoint and flip pages and present to you our management and golf operator agreement.

So council members, thank you so much for allowing Parks and Recreation to appear before you today to talk about our impending golf operator agreement.

I'm A.P. Diaz, I'm the superintendent of Seattle Parks and Recreation, joined by my colleagues Andy Scheffer, our deputy superintendent of planning and capital development, and Patrick Merriman, who's our golf manager.

And also in chambers is Corey Myers, who is our strategic advisor and has worked tirelessly on this golf RFP and then management agreement.

And so really want to thank those individuals.

And then later on, we have with us today representing the Troon Corporation, Scott Van Newkirk, Steven Outlaw, and Ryan Whitney.

And then from Premier Golf, Michael Fosnick.

So with that, I will start leading into our presentation today, which is gonna go over kind of our system overview of the city's golf program here in Seattle and the legislation that's before you for presentation.

Before we jump in, I will take a moment to contextualize both these items within the broader parks and recreation system.

You are familiar with our mission, which is to equip employees and the public for wellbeing and support through a variety of activities to create healthy people, a thriving environment and vibrant community.

As you'll hear more today, SPR's golf program is aligned with our organizational mission and also a well-beloved part of the Seattle lifestyle that we enjoy here.

The intent of this slide is just to give context of where golf falls within our portfolio and why it's important to have a focused operator for our golf program.

SPR School Program is a significant line of business for us and it is also one of many programs and services we provide to the community, which is why we are committed to finding and keeping the right golf program operator.

One that has both a deep expertise and is also aligned with our organizational affirmations and the things that you all as city council members require of our city.

So Seattle, some background and operating assumptions on how golf works today in Seattle.

Currently, SPR partners with Premier Golf to operate its four public golf courses, which are shown here.

I know you are familiar with these up in the Northeast, Jackson Park Golf Course.

We have the Inner Bay Golf Center over in West Seattle, West Seattle Golf Course, and then the Bill Wright Golf Course that Chair Hollingsworth just mentioned.

These facilities are geographically dispersed and are utilized for both active and passive recreation by community members.

These 500 acres of parkland also provide many environmental benefits to the city, ranging from stormwater retention to wildlife habitat, tree canopy maintenance, all of which we'll touch on more in slides to come.

Let's give you a little bit of a background of our municipal golf courses here in Seattle.

The recently renamed Bill Wright Golf Complex on Beacon Hill has been around for over 100 years, having opened its doors first in 1915. Then came the Jackson Park Golf Course at the northern edge of Seattle in 1930. 10 years later, West Seattle Golf Course opened in 1940. And our newbie is the Interbay Golf Center that's about to turn 30, having opened in 1997. Each location is unique and well-loved by the community it serves.

Some of our background that align with our strategic pillars.

So as highlighted earlier, the golf program is integral to SPR's mission and as to the team, as such, the team conducted an RFP process to determine the next operator.

They focused on certain strategic pillars to guide the process.

We wanted to ensure the courses and programs were accessible to golfers of all ages and abilities, and that the courses were viewed within the broader mission of the department by supporting non-golf uses as well, such as winter fun on snow days and high school cross-country meets, multi-use ability.

Next, we wanted to look for affordability because we are municipal golf and the team wanted to ensure we had an operator who was lined with our goals of providing sometimes free or low cost programs to youth that will have lower rates for seniors and adjust fees based on season demand to encourage access rather than sticking to a rigid pricing scheme you often see at private golf courses.

Another big part of accessibility is creating an atmosphere of inclusion by engaging in outreach activities and activities that invite people into these public spaces.

You'll hear a little bit later how Troon and Premier are aligned with those values and perhaps how they are leveraging that national resurgence of golf since the pandemic to bring new programs and people to Seattle's courses and to encourage the next generation of golfers through our youth.

And finally, as public stewards, the team also focused on ensuring our golf program prioritizes both environmental and financial sustainability.

Premier has a track record of financial accountability and communicates transparently when issues arise, such as the impact of hazardous air quality levels from forest fires to participation rates and revenues.

In fact, our collective approach to financial sustainability is built on the wise policy direction provided by your council predecessors when they adopted a resolution outlining golf financial policies in 2006. As we'll touch on in the next slide, SPR retains responsibility for course maintenance, so we are directly able to integrate our environmental values into our approach to land management.

In fact, Patrick Merriman, longtime SPR employee, golf manager, is one of our strongest subject matter experts in ground maintenance best practices.

As golf manager, his knowledge is combined with the expertise of a small but mighty team of golf course maintenance specialists at each location to deliver the highest quality products.

Golf courses that are fun to play while also supporting carbon sequestration and cooling nearby areas from extreme heat, mitigating urban flooding through stormwater retention, and supporting wildlife in our tree canopy and along our urban creeks.

As just mentioned, SPR provides course maintenance with a small but mighty team.

We have 23 full-time employees, most of whom are represented by Local 242. Premier provides full management of all other operations, including scheduling the tee times and driving ranges, operating the pro shops and restaurants, managing special events, and offering lessons and programs, and managing other amenities such as miniature golf.

or what some people call putt-putt.

Does anyone call that putt-putt here?

No, it's a putt committee.

We're talking about putt-putt in a subject matter that has putting in it.

So that's the word of the day.

Chair, Chair.

Point of order here.

We've got putt-putt golf at Green Lake.

The rest is not putt-putt golf.

Okay, understood.

And that's not one of these four golf courses.

Okay, and I may have taken golf down a whole level by referring to it.

Thank you for the clarification.

And then Council Member Kettle, you're recognized.

Chair, thank you.

I just think we should recognize the superintendent of Parks and Recreation's comedic effort there.

So I just wanted to note that.

Something that the team will probably can further expound on, but I just wanted to highlight that.

Thank you, Council Member Kettle.

Thank you.

So now we'll get into some more details of the current operating model for golf.

Summarizing the left side of this slide, the left side of this slide, you'll see that Premier collects all of the revenues from golf fees, food and beverage, pro shop sales, and so on.

Golf fees are set by Premier each year with approval from the superintendent.

In recent years, we've set a maximum rate and the Premier implements a dynamic pricing approach to encourage the access we discussed earlier.

The revenues earned for all services run through the city Coffers, Parks and Recreation Fund, and then SPR reimburses all golf-related expenses from both Premier and SPR.

This is somewhat sometimes referred to as an enterprise fund.

Because revenues flow through the city, the agreement now requires that Premier meet the city's Tier 1 PCI compliance requirements, which ensures safeguards in the unlikely event that Premier experiences any issue with credit card use.

Since we've already referenced the city staffing related to the golf program, on the right side of the slide, I'll simply highlight that Premier also has a small but mighty team of professional staff who coordinate and collaborate with the city through our golf manager.

Here's the proverbial money slide.

What all this means in terms of golf's financial performance.

Let's start with the chart on the right.

The yellow line at the top of the chart tracks total revenues from 2020 to 2024. You can see a steady increase since the pandemic.

The two green components of the bars represent the combined golf operating expenses with Premier in the dark green and SPR in the lighter green sections.

The small orange section represents the increment covering SPR's indirect costs to support the program, 3.5% consistent with the Gulf financial policies.

The orange crossed hatch top sections of each bar shows the excess amount of revenues over operating costs that is then transferred to support needed capital improvements directly at the golf courses.

And if you've been to our golf course facilities, you'll know they could use a little more of this kind of love, Happily transfers this to the Gulf CIP project, transfers to the Gulf CIP project have ranged between 1.3 million to 2 million since 2020. So using 2024 as an example, the total operating expense, including SPR overhead was about 17 million with revenues of about 19 million total, leaving $2 million directly to go into capital.

During the timeframe, golf revenues have continued to grow by about 12% on average, and therefore have managed to cover rising expenses, including their labor increases, as well as the city's significant wage increases most recently in 2024 and 2025, which we know as the AWI.

So that covers where we are now.

Let's move to where we are headed.

The legislation before you today would authorize SPR to enter into a new agreement with Premier to continue operating the golf courses on behalf of the city, in partnership with the city.

The agreement covers roles and responsibilities in terms of services and programs, describes financial and public benefit requirements, and sets the framework for reporting.

While we'll get a little more specific on the next slide, I want to acknowledge that the new agreement has minimal changes from the current but some added benefits.

As I just mentioned, the new agreement is substantially similar to the current agreement, but we've highlighted a few noteworthy modifications here in blue.

The gray summarizes the key financial terms, but they are either not changing or are more technical in nature.

We have negotiated a somewhat longer term in this current contract, recognizing Premier has made a capital commitment of $1.5 million over the course of the term, which is approximately $100,000 per year.

Payment card industry PCI best practice has changed significantly since we negotiated our last contract.

In the RFP for this contract, a minimum requirement was that the operator hold their own tier one attestation of compliance, AOC.

Under the current contract, Premier is under the city's attestation of compliance program.

This is not a small effort, but it follows best practices and reduces the city's liability on credit card transactions and fraud.

A central element of this new agreement with Premier is to formalize a public benefit report, which we'll cover in the next two slides.

Finally, we'd like to bring your attention to the capital investment Premier is making in this agreement.

Their $1.5 million capital commitment over the initial term of the agreement provides a much needed predictable investment in the city's golf courses and facilities with a potential for additional future investments.

The city's best practice related to public benefits has also changed since the last agreement.

And while this agreement outlines the terms and conditions for a program operator we sought, rather than a lease or concession agreement in which public benefits may offset a portion of annual expense, we still wanted this agreement to include clear expectations and requirements around public benefits and access.

Under this new proposed agreement, Premier agrees to continue providing public benefits in the areas of public access, events, discounted lessons, capital improvements, et cetera.

And a new section was added specifically to public benefit reporting.

The agreement now requires Premier to establish annual target metrics and provide a clear public benefit report within 60 days after the end of each fiscal year.

The report is to include a description of public benefits delivered as measured against the plan target.

It also requires annual revenue for potential adjustments to future public benefits and metrics.

This is important as the city's priorities will evolve, and this allows SPR to engage with Premier on opportunities to support evolving priorities, either now or in years to come.

An example of this during the current contract term, SPR's relationship with First T transitioned from them pursuing approval to construct a facility at Jefferson Park to requesting use of space at the Bill Wright College.

at Interbay Golf Complex Clubhouse.

Premier has collected, collaborated with First Tee to allow that use in 2025 and added program collaboration at Interbay.

Finally, before I ask our partners from Premier to speak, I want to recognize that we are requiring the operator to generate sufficient revenues to cover all associated costs, and we ask them to be mindful of this and honest with us as they plan for and propose their annual public benefits.

Premier has done this well over the years, and the new agreement formalizes and increases the transparency of this process.

So now I will turn over the baton to Premier to outline and be available for any questions about the public benefit details.

Well, actually, I'm going to walk you through those.

I think I had that right.

Are you ready?

Okay.

To do this slide?

Sure.

Okay.

Perfect.

Thank you.

I'm not sure if this is on.

Yeah, it's on.

You're all good.

Good afternoon, council.

My name is Michael Fosnick.

I'm the director of operations with Premier Golf.

Been with Seattle Parks as a partner for almost 10 years now.

This is the fun part of our job, is being able to give back.

As you know, golf is exploding in popularity, and it's exploding in areas that were never really seen as people playing golf before.

So it's youth, it's people of color, it's women that are taking up this game.

in greater numbers than ever before.

So our public benefit has always been in lockstep with Seattle Parks and Recreation, but this is a formalization of actually documenting and targeting public benefits so that we are actually reaching the right people.

One of the things that we are looking to do is late night, events, youth events at the bay, so to speak.

So we would provide no-cost opportunities for our youth and our community centers to experience golf for the first time.

We started that pilot program with the Jefferson Park Community Center two years ago.

First year we had seven participants, second year we had 35. So there's a tremendous demand and we are absolutely committed to providing access and opportunity for these youth and people without the economic means to take up golf.

One of the things we recently did was a Seattle Swing event, which was a community benefit.

We held that at all of our golf centers on April 29th.

We provided free golf lessons, free top tracer, free range balls, and discounted green fees at all four locations.

we calculated the public benefit for that one day alone at $17,000.

So we're excited and committed to providing more and more of these opportunities.

The slide that you see up there is an example of the things that we have been doing and we are going to continue to do.

With the formalized agreement, we will be reporting on those.

and we'll be working with SPR to come up with new ideas for public benefit as the game evolves and as our community evolves.

Our golf courses, our facilities are truly community centers, and we are so happy that golf is actually a method and a vehicle to bring safe recreational opportunities for our communities.

Any questions for the public benefit?

And council members, if you'd raise your hand, we can go ahead and ask Councilmember Kettle.

Thank you, Chair Hollingsworth.

Thank you very much for coming.

Thank you, Mr. Diaz, for the presentation as well.

One question, I'm in support generally of this, already made that known, but I'm curious in terms of you know, the partnership piece.

I was kind of thinking of the courses as kind of stand-alones, but, you know, the level of partnership.

And I'm thinking about like the Magnolia, for Interbay, for example, Magnolia and Queen Anne Community Centers.

And I went there regularly when my daughter was young with the play areas.

And now she's in the Parks and Rec Basketball League, going there for the basketball games.

I've not seen anything that would suggest the golf course being part of that.

So what's the level of integration with the community centers and really the advertising and kind of making it Like you just referred to it, it's a community center.

It's a golf course slash community center.

I think that's a great way to describe it.

And I could see a natural partnership with the Queen Anne and Magnolia ones.

Obviously, it's more than that.

Ballard, I don't want to leave out my D6 colleague.

So I just wanted to get a sense of that, because I've not seen it.

And I just want to check.

Sure, we started with Jefferson Community Center in that league as a pilot.

It's proven extremely successful and we're looking to expand that to the community centers around the other courses in the upcoming three to five, within the upcoming three to five years.

There's a tremendous opportunity to support our youth and give them a reprieve from the city in our golf courses, in the sport, in the environment, in the city.

This is kind of huge for mental wellness.

And frankly, that was our first conversation when we entered City Hall and met Troon was what can we offer to our teen life centers in the way of golf?

And we're immediately brainstorming.

It's top of mind.

It's top priority for us.

Everyone is, frankly, excited about it.

And we've been communicating throughout this week with our teen life centers to further that effort.

All right.

Well, excellent.

That would explain why I've not seen anything, A.

B, you're highlighting something.

It's beyond the physical exercise and the like, but also, keeping young minds and bodies engaged, which may have a very positive public safety impact, because obviously that's a challenge that we have, and so I appreciate that point, and we do have to have a diverse, multi-pronged approach on this, so I see this fitting into that, and I'll keep my eye out.

I think Interbay should be next.

For the record.

Thank you, Chair.

Thank you, Council Member Kettle.

And I think we have one more slide after this, or is it just say questions?

It's just the questions.

Oh, awesome.

Okay.

So we're at the end of the presentation.

My apologies.

I will pause here for other council members to see if they have any questions.

Council Member Rivera.

Thank you, Chair.

Just to thank Parks for this presentation, and I had received a briefing earlier last week, a very thorough briefing.

I really appreciate this program.

I remember a time not that long ago where we were considering, what do we do with these golf courses?

And I was really happy to see that there's been this renewed energy for maintaining and keeping these courses, and now folks are really utilizing them, and kids in particular.

And one piece of the conversation that's really important, and Councilmember Kettle, this dovetails into something you were saying, is just there's a mental health component to golf as well.

I know that folks that do golf express this.

It's not only just a physical health, but a mental health benefit that comes from playing this sport.

And so the importance of providing this access to kids and doing that.

And we talked with Parks about, you know, doing some outreach at Seattle Public Schools, et cetera, to get kids more interested in this particular sport because it does have that mental health component.

And I know that Parks is working on that.

So I very much appreciate that.

And thank you, Chair, for having this presentation today.

I'll pause.

Are there other council members that might have questions or comments?

I'll go after.

Okay.

I think that's an old hand.

Council President, did you have any comments?

Nope.

Okay, awesome.

Back to you, Council Member Strauss.

Oh, sure.

That's an old hand.

I think that's a new hand.

Oh, it's a new hand.

That's what I'm saying.

Oh, okay.

I apologize.

I did not hear.

That's for last.

I just wanted to follow up.

I WAS QUESTIONING ON, WAS ON THAT SPECIFIC SLIDE, BUT IN GENERAL, YOU KNOW, I COME FROM THE GENERATION, YOU KNOW, WHERE IT WAS THE, YOU KNOW, THE WHITE GUYS, YOU KNOW, SPORT AND, YOU KNOW, ALL THE THINGS THAT PLAYED IN THE CATTY SHACK AND ALL THE REST.

And I can quote like half to three quarters of that movie, but I won't.

Discretion.

But what's important is this transformation and understanding the different pieces in this to what we were just talking about, but also the environmental pieces.

I think that is massively important.

Sir, when you were here before, the points that you were making on that were very important.

And that shows that the evolution So we've moved away from that.

So there's the youth piece, there's the environmental piece, there's the multi-use, multi-seasonal aspects, which I think is all encompassed here.

And it's been, it's very positive in addition to tree canopy goals and the like.

And so I think that is something that we should be from a messaging and from, you know, that we should be highlighting those different aspects.

And so I support this.

And we should continue these, the environmental pieces too.

Like, Inner Bay is very important.

in terms of the south slope, where Wheeler is, where it connects is that basically a rail yard road that goes to BNSF, because that is so important to maintaining that south edge of Inner Bay, which then goes into the health of that general area, right, you know, just south and west of the Pea Patch.

And so this is where it makes a difference.

And so I just ask that, you know, we maintain those kind of additional environmental supports because that's really important, particularly in Inter Bay.

So thank you.

Thank you, Chair.

Can I add one thing?

Yeah, Patrick, please.

We have over 7,000 rounds of youth golf this year already.

The opposite is happening for us in golf where we can advertise community center programs for those kids because they're ages, you know, whatever, to 17, like the free lunch, the free swim.

We need brochures or kiosks to advertise what other opportunities in parks.

So we're working on that as well.

Thank you.

Patrick doesn't get enough credit.

He's phenomenal.

Seriously, phenomenal at your job and managing all this and all the programs and development that you've done.

So definitely want to give you your shout out as well.

And he did not pay me for that.

Councilmember Strauss.

Yeah, I know.

Councilmember Strauss.

Thank you, Chair.

And I have to echo those kudos of Patrick.

It was impressive to get to meet with you earlier this week and learn all about what you do.

on behalf of the City of Seattle for Seattle residents and those visiting Seattle.

It's truly impressive.

I did notice in the background of your office, did it say Patrick Merriman Complex?

No, my last name is Merriam.

Yeah.

Not Merriman.

Oh, excuse me.

It's Mickey Merriam Athletic Complex.

It's at Magnuson Park, and it's named after my brother, who was a large youth advocate for youth sports bringing sponsorships and low-income kids into baseball, select baseball, where they didn't have opportunity.

He was trying to create African-American youth leagues in baseball, because it's mostly young white folks, so they named that facility after him.

The sign is in my office.

Think about them every day.

Is there also a sign on the complex?

Oh, yeah.

Oh, okay.

There's a rock, a sign, and it was designed by the best landscape architect we ever had, Andy Sheffer.

So...

Andy, did you pay him to say that?

No.

We don't do that around here.

They're all jokes about that.

Just want to also correct the record.

Earlier, I said Green Lake was the putt-putt.

It is pitch and putt.

Excuse me.

I see the head shaking at me.

Yes, it is in D6.

And I've been passing it my entire life.

Real quick, though, for superintendent, and sorry to put you on the spot here, is that a concessionaire permit?

Is that why that is different than the golf course permits?

Correct.

Because it's a golf management contract.

So it's a little bit different.

Fantastic.

And it's impressive.

You said around 500 acres of parkland dedicated to golf.

Colleagues, that is about the size of Discovery Park, just for context.

And so thank you also for not putting this to a vote today.

We had the briefing within 48 hours ago and working with Tracy on potential some public benefit amendments here.

And what I don't want to do is put something on the table today without working with the Parks Department and Premier to make sure that it is working for everyone with over 500 acres of parkland dedicated to golf.

Two thumbs up.

I'm fine with that.

And golf doesn't go 24-7.

So how can we work around that?

So I'm not going to propose anything that isn't agreed upon.

And I'd also like to see what other public benefits we can work into this.

Thank you, Chair.

Thank you, Councilmember Strauss.

Just an interesting fact, if you play the short nine at Bill Wright Complex, you play next to people playing frisbee as well.

So there are a lot of awesome opportunities.

I always pray for the people playing next to me while I'm hitting a ball and they're throwing the frisbee.

So I'm like, I don't know if you want to be next to me, but anywho.

So yeah, looking forward to working with you, Councilmember Strauss and Also, and I apologize, I did not recognize Tracy who's at the table.

Did you have anything to add about any of this from central staff's perspective?

The only thing that I would add, and it gets to the pillars of this council about financial sustainability, this is the one recreation program that is operated by parks that is entirely self-sufficient.

It does not get a dime of general fund or MPD funds.

It generates the revenue it needs to support all of its operations to cover the maintenance costs of the city, the oversight that the city provides to the program.

So it is a program that generates a lot of good for the city at no cost to the general fund, which is important in these days where we're facing those constraints.

Absolutely.

Thank you for that.

Because I know that people always want to know about that when they're advocating for different uses of the golf course outside of maybe the athletic range and whatnot.

And so it's good to know that this is self-sustaining.

And then I also would like to add just real quick.

This is my last thing because I know we have to move along here.

But I also wanna add the public benefit of the kids piece is incredibly important.

South Seattle is 12% of our population, 30% of the gun violence, and there's a lot of kids that utilize the Bill Wright golf course, and you have to give kids resources, exposure, and opportunity.

and having the exposure to golf at a young age, at five years old, might I add, really put me in a different pathway in life.

And when you do that for kids, they get to be able to do something that they've never, that is just right there in their backyard and have that opportunity to play because when you are in these golf courses, you feel like you are in a forest, you're in another world, you are not in a city and you can create really magical memories.

And it's also very, intergenerational, which I think is incredibly important when kids are able to connect with older adults and have that environment, and we need more of that.

So those are spaces where you have old folks, young folks, they can come together and play a sport, even if they ride around in a golf cart like my dad, because he does not walk the golf course anymore.

Shout out, Dad.

All right, thank you.

I think that's the end of our presentation.

Thank you.

Thank you all so much.

And looking forward to y'all coming back.

We will now read agenda item number three into the record, what we all have been waiting for.

Agenda item three, Seattle Public Utilities report on 2024 audits for briefing and discussion.

Awesome.

Thank you all for being here.

Our favorite A word audit.

and want to thank Moss Adams for all their work.

We know that Seattle Public Utilities is such a big department and I've just been really impressed with our, with General Manager Lee and their staff on the transparency that they've had.

you know, since I've started working with them and I know my other colleagues have probably worked with them longer, but just been really impressed with the amount of audits that they have and just double checking and the checks and balances that they are, have been doing within their department and looking forward to hearing what are the findings that Moss Adams has found with their external audit.

And thank you, Nina, for all your help.

Appreciate you.

I know it's a lot with the IT.

Thank you.

Well, thank you.

And please state your name for the record.

You can jump right in.

This is Lori Tisch, and I am here with my colleagues Keith Simovic and Anna Waldron.

And our purpose today is to report back to you as the committee charged with governance over the Seattle Public Utilities and those audits, the results of the 2024 audits.

So first of all, let me describe the scope of services.

We do issue separate audits on each of the three utilities, water, drainage and wastewater, and solid waste.

And to be clear, our responsibility is to actually perform the audit and to ensure in our report to provide you to ensure that the financial results are in accordance with generally accepted accounting principles.

SPU management, however, is in charge of the preparation and the fair presentation of those financial statements, and they actually do provide a full set of drafted financial statements to us, in addition to all the audit schedules and supporting schedules that back up those financial statements themselves.

Keith and Anna are going to go in a little bit more detail, but I do want to explain that in addition to actually auditing each financial statement line item, there's a lot that goes behind that.

There's a set of internal controls that support those financial numbers, and part of our audit is to ensure that we test those internal controls.

Now, our reports do cover the...

Let me back up a little bit.

We do, and Keith will go into this a little bit more, but our reports are going to cover not only the fairness of presentation of those financial statements, but also the internal control.

We do issue an internal control report related to those as well.

Now, the purpose of our audits is several fold.

First of all, it is to inform your taxpayers and your rate payers and other interested stakeholders with respect to the financial status and financial position of the utilities.

We also make sure that there's no duplication of efforts with the state audit office.

The state auditor's office is in charge of auditing the city of Seattle.

These financial statements actually roll up into the city's set of financial statements, and the state auditor relies on our audits and there is no duplication of efforts.

In fact, we do help each other as far as they are auditing oftentimes the treasury and the cash systems that the Seattle Public Utilities share.

And so we rely on them to do that part of the audit, and they rely on us to do, of course, our audit opinion on the separate set of financial statements.

Another very important usage of our audit reports and these financial statements is for the bond offerings and the bond holders that each of the Seattle public utility entities have their own bonds.

So with that, Keith, I think you were going to cover the actual results of the audit reports.

All right, can you hear me okay?

Perfect.

All right, so there's some good news on here, although I have to tell you, I wish we had some golf pictures on here or something, that's all I've got on my mind right now.

But we've got some good news in terms of what our final audit reports say, so we always wanna kinda go through, now that we're done with the audit and we've finalized our reports, when we say we're giving an unmodified opinion, on the fairness and accuracy of the financial statements.

So through all the testing that we do over Seattle Public Utilities, including individually the water, drainage and wastewater, and then the solid waste funds, each one of those individual audit reports, we're giving a unmodified or clean opinion.

So exactly what you're looking for, any third party that is relying upon those, of course the city as a whole, the state auditor's office, they wanna know that you had that audit done.

It was done by an independent CPA firm that's licensed to do this work.

and that you got a unmodified opinion, right?

So they can place reliance on the work that we're doing and incorporate that into the city's financial statements as a whole.

So very good news, and through all the detailed testing that we're doing back to contracts, agreements, invoices, you name it, that underlying substantive documentation to kind of support what's being reported and captured all throughout the year, by the finance staff at SPU is reflected and captured together and reflected in your financial statements in a fair and accurate manner.

So that's exactly what you're looking for.

On top of that, our government auditing standards report, this is where we would note any significant findings.

So kind of the red flag language that you want to be on the lookout for always is, were there any material weaknesses or significant deficiencies in internal controls?

Meaning, hey, did we find anything where we feel like there's a significant lack of checks and balances in place, right?

Where something could slip through the cracks, whether a significant error or fraud, and not be caught by the current system in place.

So we did not have any material weaknesses when you read through that report that you'll see.

We did not have any significant deficiencies to note as well.

So exactly what you're looking for there.

We finalized our reports back at the tail end of April, which is what we typically aim for each and every year.

Go ahead and advance the slide.

Lots of words on here.

I understand that.

I'm not going to go through all those.

But this is to kind of summarize our different responsibilities.

Lori went through some of those and our kind of reporting responsibilities there in box one to give an opinion over the financial statements.

Box two has to do with following professional standards, right?

So we have certain professional standards we have to follow that dictate kind of how we go about our audit.

There are certain procedures that we have to perform each and every year as well.

So our final reports say that we're performing the audit in accordance with our professional standards.

Box three has to do with our evaluation of internal controls, and that's a very key part of our initial risk assessment.

So we actually separate that from kind of our final testing of the numbers for the year ended and get an idea of what are those systems of checks and balances?

Have they changed at all from last year?

We're able to do detailed testing of those and get a good idea of do we feel like there's a strong system of internal controls, and if we're finding that there's a lack of internal controls in certain areas, that might trigger additional testing so we can feel comfortable and give an unmodified opinion at the end of the day is the goal.

Box four, our responsibility there is to communicate any findings, right, and come before you as the responsible party for the SPU's financial statements and reporting out our findings here.

All right, next couple of slides just kind of summarize the different areas of audit emphasis.

This isn't everything that we're looking at.

We go through everything in those financial statements line by line and risk assess each one and come up with an individual audit plan for how we audit cash investments, for example, or accounts and other receivables.

Some of your bond and related accounts.

So a number of different areas.

These are just the ones where we spend the bulk of our time just depending on the level of complexity, the size of the balance that we're looking at there, the amount of activity going through those areas in a given year.

that can kind of raise the risk profile of a potential error or something like that, and require us to do additional testing there.

So this is where we spend kind of the bulk of our time.

And if you go to the next slide, you'll see a few more listed on there as well, including accrued liabilities, your overall operation statement, your revenues and expenses running through during the year, and your overall ending net position, or what you can think of as equity there.

All right, with that, I'm gonna turn it over to Anna, and she's gonna go through some of our additional required communications.

All right, so we do have some required communications that are outlined to be communicated to those charged with governance.

We spend a significant part of our time also focused on the accounting policies as well as management estimation that goes into creating the financial statements.

We will call your attention to that those are located in note one of the financial statements, so definitely a good place to read to get an understanding of just the overall accounting policies of SPU.

We do review those, look for any significant changes, any inconsistencies over time, no significant changes for this year.

As I mentioned, management estimation is an important part of our audit procedures.

That's not something you can necessarily tie to a contract or an invoice.

That requires a little bit of judgment, can change over time.

So we do spend a significant amount of time auditing management's estimates.

The significant ones from the list here I would call out is allowances related to accounts receivable, the depreciable lives of capital assets, definitely environmental liabilities, litigations, any ongoing contingencies, as well as obligations around closure care for a landfill.

Some good news here, just reporting back that we did not encounter any significant difficulties when working with management and being able to complete our audit procedures.

I'll just echo the team's notes that working with SPU is a wonderful experience.

It's a lot of requests and questions that we have, so really appreciate the smooth process in working with them.

No disagreements with management in terms of accounting conclusions that we would need to call out.

Continue the role of good news.

Did not have any uncorrected misstatements, as well as no identified corrected misstatements.

And then we do request certain representations be made by management as part of finalizing our audit engagement.

That's a letter that can be made available to the committee as needed.

And then a call out that there was one new GASB standard that was required to be adopted this year.

It was related to accounting for compensated absences.

That was implemented in 2024. Management prepared a memo analyzing the impact, ultimately concluded that they were already, their accounting policies were already very closely aligned with what was required under GASB 101, so very minimal impact.

And the accounting policy for compensated absences is also included in the financial statement disclosures.

No consultations with other accountants that we're aware of.

Do you want to call out that SPU is subject to potential legal proceedings?

We meet with different parties that have insight into some of those potentially ongoing legal claims to understand if there's any exposure that should be disclosed in the financial statements.

And then do you just want to call out again that we are independent of management.

That's why you as a governance are able to rely on our findings from the audit.

So with that, we're going to kind of wrap things up and always want to say thank you to all the staff here that played a big part in this.

You know, as Anna said, there's a lot of requests, probably hundreds if not thousands of pieces of documentation they pull together each and every year as part of this process so that we can get to this point and kind of right on time with previous years, which is pretty amazing.

So really appreciate all their efforts, not only during the audit process but throughout the year.

to have a good system of internal controls that they're following through on that we can rely on and get through our testing in a quick manner overall as far as audits go.

So I appreciate their help.

And one more thing that we wanted to go through just to discuss a little bit about what's going on with our firm, some news just briefly as Moss Adams is now becoming Baker Tilly, as we just merged with another similar-sized firm you may or may not have heard of.

But Baker Tilly is another firm headquartered out of Chicago, mainly located in the upper Midwest and then into the East and down into the South a little bit as well, whereas Moss Adams historically, of course, has been West Coast into the Southwest and Texas.

So very complementary in terms of the footprint that we share overall.

They're very industry-focused, just like we are.

So they also have a...

a energy and utilities practice as well.

So very excited to continue to kind of get to meet more of our colleagues over at Baker Tilly and tap into some of their expertise and some of the clients and experiences that they've had as well and bring that to our Heritage Moss Adams clients.

We don't expect there to be any impacts to any of our teams.

We're going to continue to work on this engagement, staffing this out of our same offices with our same people here locally.

No changes from that standpoint, but we did want to know or let you know that there is a bit of a change there from our standpoint.

All right.

Well, thank you all so much for your thorough presentation.

Obviously, I know that we had a briefing about this and you answered all my questions regarding SPU and any concerns that we had and just really appreciate that.

I will pause here to see if my colleagues have any questions regarding this.

Council Member Kettle.

Thank you, Chair Hollingsworth.

No questions.

I just wanted to say thank you for the oversight to assist in the good governance piece that we like to talk about.

So thank you very much.

I appreciate it.

And a great compliment to a golf discussion.

Awesome.

Thank you, Council Member Kettle.

The good governance that you talk about, I just want to, you know, I'm just playing.

Yeah, always.

Council President Nelson, anyone?

No?

Awesome.

Well, thank you.

That was pretty straightforward.

Really appreciate you all following up on that.

And also with good news that our Seattle Public Utilities Department is running healthy and all above board.

So thank you all.

Thank you all for being here.

And with that, you all, if there's no other further business to come before the committee, I just want to thank you all for today.

If there's no further business, this is going to conclude our June 11th meeting of the Park's Public Utilities and Technology Committee.

Our next meeting is going to be scheduled for Wednesday, June 25th at 2 p.m.

And hearing no further business, it is 3.24 p.m.

Thank you so much.

This meeting is adjourned.

Bye.