Seattle City Council Select Budget Committee 10/12/23 Session I

Well, good morning, everyone.

Thank you so much for coming back to the Select Budget Committee meeting of the Seattle City Council.

Today is October 12th, 2023. It's a Thursday and I'm Teresa Mosqueda, the chair of the Budget Committee.

Madam Clerk, will you please call the roll and let's convene the meeting.

Council Member Herbold.

Here.

Council President Juarez.

Here.

Council Member Lewis.

Present.

Council Member Morales.

Here.

Council Member Nelson.

Present.

Council Member Peterson.

Present.

Council Member Sawant.

Council Member Strauss.

Present.

Chair Mosqueda.

Present.

Eight present.

Okay, great.

Well, that gives us quorum.

Thank you all very much for joining us once again for day 2 of the issue identification discussion.

In today's meeting, we will continue our discussion that we started yesterday by looking into specific departments to see what the baseline changes are in the proposed budget that we received in late September.

We'll have an opportunity to dive right into the Office of Housing proposed changes with presenters, including Tracy Raskliff and Ali Panucci, our Deputy Director of Central Staff and Tracy, whose lead on housing will have Michael Winkler chin and Rebecca.

Um, from the office of housing and director Julie Dingley from the city budgets office on for questions.

The human services department presenters include general Breck and Gorman and Ali all from the central staff and on for questions and additional context if needed is director Tanya Kim from the human services department.

D.

The, the harmony from and Julie Dingley as well from the city budget's office.

We will aim to adjourn at least by 1 PM.

So folks have an hour for lunch and session 2 of the agenda.

We'll start with.

Arts and culture at 2 PM and the arts and culture presentation.

We'll have Jasmine and Ali from central staff along with.

Common, who's our new director and 1st, time for me to be able to meet them and Alexandra McGee from the arts department along with Julie Dingley as well.

Our city budget office director, and the office of economic development will round us out for today.

That includes presenters Jasmine from central staff and director, Marco McIntyre.

Along with Joe from office of economic development and office of city budgets office, Julie Dingley, our director as well there for questions.

If there's no objection, today's agenda is adopted.

Hearing no objection today's agenda is adopted.

We're going to move on into items on our agenda here for discussion and deliberation.

If there's no questions from our team about the proposed agenda, we have taken public comment from folks yesterday and we don't have public comment listed on our agenda for today or for.

Friday, but we have at our council members request, added it back in for Monday and that agenda is being finalized.

Now, we'll get that sent around to you and thanks for your suggestion to add that back in on Monday.

I look forward to hearing more from you all about questions that you have for all of the departments in front of us, starting with the office of housing.

So, madam, could you please read item number 1 into the record?

Chair Mosqueda, I just want to let you know I'm here.

Oh, excellent.

Thank you, Council Member Sawant.

Council Member Sawant is present, and that brings us to nine council members.

Thank you.

All right.

Item number one.

Thanks.

Agenda item one, office of housing for briefing and discussion.

Great.

And welcome, Tracy Ratcliffe.

I will tell you, Tracy, this is very odd.

I was wondering if I was going to mention it on the air, but My nightmare last night was that you and I were waiting for the C line and we couldn't make it and we were 20 minutes late for this committee meeting.

So don't know.

that will ever play out, but we were trying to let people know we were on the line and we were going to be joining as soon as we could get back to the house to get on Wi-Fi.

Welcome to the gadget briefing, Tracy.

I'm going to try not to get too exercised about my presentation council member.

I'm already having nightmares about budget and not making it on time to committee.

Exactly, exactly.

Good morning Council Members, Tracy Ratzlaff for your Council Central Staff.

Jumping right into the OH's proposed 2024 budget.

As you heard sprinkled throughout the presentations by my Central Staff colleagues yesterday and as you can see in the first slide Patty, we'll move it forward.

You will see that OH's budget has increased by $81 million compared to the 2024 endorsed budget.

This increase is entirely driven by the inclusion of the 2023 housing levy appropriations in anticipation that that levy will pass when it goes to the voters in November.

As also noted yesterday, that might have gotten folks a little peaked, OHN's budget does include a reduction in Jumpstart funding compared to the 2024 endorsed budget.

And that reduction consists of $4.8 million in program funding, and then $2.3 million in administrative funding from the general fund that is actually Jumpstart revenue supported.

The total reduction then of Jumpstart to the Office of Housing is $7 million.

Are there any questions about the summary information?

If not, we can move to the next slide.

We will move to issue identification.

So the 2024 proposed budget includes a transfer of $916,000 of Jump Start funding to the Human Services Department to support the cost for relocating Rosie's Tiny Home Village from a sound transit site on which affordable housing will be developed in the future to another location.

As my memo indicates, this proposal is not consistent with existing JumpStart housing funding policies, which dictates that funding is to be used for the development or acquisition of housing serving people under 30% of AMI.

So the options as it relates to this proposed expenditure is one, to reduce the proposed transfer of $916,000 to HSD from OH, to swap the source of funds for this expenditure from Jumpstart to General Fund, allowing the use of Jumpstart for other housing programs.

And that would require actually a cut to another General Fund appropriation to support this proposed expenditure.

And the final option is no change.

Any questions about this issue and options?

Thank you so much.

Councilmember Peterson, I'll come to you in just one second.

I did want to just echo my appreciation and the need to support the relocation of Rosie's Village and to make way for housing development in coming years.

My team has been in touch with the folks from Sound Transit about the possibility of extending the timeline assumed in the budget.

If action is not needed to move the tiny house village at the beginning of the year, and we have additional time to keep the tiny house village there in anticipation of housing coming.

Then it seems like a win win.

There's not the need for additional revenue right now to move folks.

Folks could also stay there until housings or until the project is about to be.

Completed and we're going to continue the conversation about possibly extending the timeline for the tiny house village to relocate it pending any additional information we can get prior to the conclusion of our budget here, because we want to make sure that.

Any project that's awarded and any environmental work that's needed for the site can continue, but that we try to keep the tiny house village as long as we can there and that's also delay the need for payment for relocation for the tiny house village as long as we can get assurances that the timeline works out for future construction.

So I wanted to flag for you our support, obviously, of creating the new affordable permanent housing, which will go on site there.

But the ongoing conversations that we're having with sound transit about extending the timeline so that we don't necessarily need to move folks as soon as that budget assumes.

And if we can work that out, that would be fantastic.

And I think a win win for the residents there and a win for the development that's to come.

Councilor, just to add on to that, Sound Transit indicated that they would be absolutely willing to have ongoing conversations about that, but probably would not be able to make a decision about that until they selected the actual developer for the site.

And that actually won't happen until January.

They have issued the RFP.

Contrary to what my memo said, they did that on the 29th of September.

But they are not selecting a developer until the 1st of January.

So they indicated that they would be hesitant to try to make any decision about extending the tiny home village on that site until they had a chance to talk with the developer and look at their timeline for, as you said, cleanup and then consistency on that site.

OK.

Well, thank you for sharing that information.

And I think the point that you raise in your issue identification is still valid.

This is not a appropriate use for Jump Start affordable housing dollars intended to support the creation of new affordable housing.

And so we want to, of course, support the efforts necessary to move if the timeline can't be aligned before our budget concludes.

But thank you for flagging that this is not a codified use of Jump Start.

Go ahead, Council Member Peterson.

Thank you, chairman, just to remind the council, all the good work that they did on this project.

So, in 2020, during the height of the pandemic, my office identified this site and led efforts to secure the capital operating and case management funding for this new tiny home village.

You know, my number 1 goal is a district council member where this project is located is to make sure everyone at the tiny village in the heart of the University district is taken care of.

So, but, but it is a complicated issue with multiple agencies.

So, in 2021, there was a legal log jam with the lease.

We helped to break that.

There were several agencies, OH, HSD, Sound Transit, City Attorney's Office.

We were able to celebrate the opening of the Tiny Home Village in the fall of 2021. I want to thank our Council President for her longstanding service on the Board of Sound Transit, and former City Council Member Abel Pacheco, who then worked at Sound Transit, for their help in making this possible.

And since the fall of 2021, Rosie's Village has been home to more than 35 people.

On September 9, the council approved clerk file 314496 to reconfigure the alleyway to pave the way for a larger loan from housing project at the site.

Centrally located will become permanent home for at least 5 times as many people experiencing.

Homelessness who are on the site right now.

And as central staff updated what was in their memo on September, 29 sound transit, the city's office, housing issue to request for proposals.

For nonprofit developers for this transit oriented development.

So, again, my number 1 goal is to make sure everyone's taking care of at the tiny village.

The mayor's budget accomplishes this goal.

And due to the complex interplay between those multiple government agencies, different levels of government.

And all their attorneys on the months it took together to put together the lease sticking with what the.

Executive proposes is most likely the most prudent course.

because they've generously taken responsibility for a well-coordinated and ultimately successful transition for the people living there.

I'm a little bit concerned about second-guessing or tinkering with the proposal, quibbling about the pots of money could end up being counterproductive for the people who live there.

I know nobody wants to do that.

I just want to encourage caution on this, and maybe this is a mid-year budget supplemental situation for next year when there's more information available.

I think it's important for us to make sure that we have the best possible outcome from all parties.

Thank you.

option A is the same in both to reduce the proposed transfer to HSD.

So I'd like to understand that a little bit more.

And then also in the HSD issue ID, there's another option proposed, which is a slide encouraging negotiations with Sound Transit on the discussions around when they're going to need the Uh, property and appreciate Madam chair that you've already begun those discussions, but would like to understand that a little bit more.

So this is one of those unusual budget issues which cut across a couple of different departments.

As you note, Council Member, Office of Housing, but also the Human Services Department, and also, frankly, the Jump Start overview paper that Ali presented yesterday.

And so we tried to kind of keep our issues specific to our department, focused on what those issues and options were.

And so what you see for me, it really relates to the $916,000 and the appropriate or inappropriate use of that, of the Jump Start fund source for that expenditure.

and then looking at an option that basically addresses that issue, Jen will more fundamentally deal with the issue of that timing and what issues might go along with the question about timing.

So that was how we approached it.

Thank you, Tracy.

You bet.

Thank you, Council Member Nelson.

It's reading your memo, I'm just trying to understand the jumpstart policies for housing.

You say that the policies require funds to be used for, and then it talks about permanent rental housing services.

And then it says, or housing services serving those under 30% of AMI.

So wouldn't that qualify?

No, because the intent, though it may not be explicit, and I may have shortened the language, is that those housing services are for permanent housing, not for a tiny home village.

Okay, thank you.

Thanks for the clarification.

We often talk about the services within affordable housing being the permanent supportive housing or residential services.

And that's what it's in reference to.

So, again, I wanted to emphasize that there is.

There is very much interest in making sure that we don't do anything that compromises the village.

Though, though, the timeline that has been expressed by San transit and shared by Tracy today doesn't align exactly with the existing.

Proposed budget, I think it is an opportunity for us to continue to the discussion because the conversations we had.

It is clear that sound transit has expressed an openness and that's good news.

So more conversations to come.

And if that timeline can be expedited, of course, that would be great.

But if there's any wiggle room there.

I think there is an opportunity for us to both look at the fund source, but also the overall cost needs for 2024 as we look at every dollar needed in order to put funding directly into community needs in 2024.

Director Dingley, did you have a clarification that you'd like to offer on this?

I did.

Thank you, Chair Mosqueda.

Good morning, Council Members.

Julie Dingley, Director of the City Budget Office.

Just wanted to jump in real quick to clarify and perhaps It's implicit here and that we have this in the budget, but the executive's perspective on this is quite closely aligned with what I hear a general state articulating here.

In that we have the shared interest of making sure that we're caring for those currently on the site.

So, in order to get the site ready for affordable housing, we have to.

Make sure that there is not currently a tiny home village there as an example, among other.

potential pre-development items.

I am not the end-all be-all expert on pre-development, what it takes to get that site ready, but that was the spirit with which we are approaching this.

Again, I hear the conversation this morning.

I understand we are not in alignment on that definition, but I wanted to just for the record, so you understood the executive's perspective on that.

I don't know if Director Winkler-Chin would like to add anything if I've misspoken there, Director, but that was just a little bit about our perspective.

Oh, Director Dingley, I believe that is the case.

We can't build on the site.

And so this would be considered part of the pre-development work, just as some of the other site scoping work would be from our perspective.

And we have, you have to have a developable site in order to develop.

So that would make sense from our perspective.

And I don't want to debate this any further.

But as we got the breakdown on what the funds would be used for, this is predominantly about finding a new site and setting that new site up for the tiny home village and some transitional operational funding.

I think $80,000 was about demoing what's on the site.

So I just quarrel with the idea of this as being pre-development given what the executives provided us in terms of the specific uses of those funds.

So I will say no more about that.

You are welcome to say that this is an opportunity for central staff to provide a presentation on the issues they've identified and appreciate the analysis there.

I definitely don't want to have a discussion all day long that tries to redefine over and over what qualifies as certain categories of.

Funding sources, and I think that there's joint interest in having the environmental work needed on the site.

That's not in question.

What's in question is what the definition of Pre development work is and obviously the timeline that would be needed to ensure that a site is ready for development later.

But that is not.

Traditionally classified as pre development work as defined in the statue.

Okay, thank you.

Tracy council member Nelson.

Did you have a clarifying question or should we just.

Maybe it would be helpful just to know what the 916,000 dollars would be used for because we're throwing around words like pre development and move.

And so just knowing offline.

How did you come up with that number and what does it pay for might help clarify this question.

We'll send you the information council member.

Yeah, but very fine.

If there's no more questions, we can move to the next slide.

I'm sorry.

I have a quick question for the Madam chair.

Yeah, so I guess.

Maybe it's dispositive at some point.

If ever, pre development costs are within the spending or the intent of jumpstart.

I have a feeling this is going to be a perennial issue.

We're going to keep coming back to this.

Is it in the spending pan, the intent of jumpstart.

Pre development, I mean, I know we can't answer what we don't have to answer today, but I have a feeling this is going to keep coming back.

Unless we're very clear about what that means and I know, I know your position council member mosquito and the spending plan and I get all that, but this is where.

Now that we're having a balancing package, some of us, you know, we just weren't prepared for some of these discussions because, as you know, and I agreed.

That we now have a different, the same system, but 1 that we were not anticipating.

So, I'm hoping that some of these.

We can have some consensus on some of this because it's not going to go away.

I mean, just going through each issue identification is.

We keep coming back to, and then it's going to be subjective and not objective about what exactly is just supposed to be paying for besides the 4 issues we've outlined and then some of the adjacent issues.

So, I just, I think that's important to note.

So we don't get bogged down in this and I'm not trying to be negative or or point fingers.

I'm kind of just pointing the obvious.

Yeah, no, thank you.

And I really appreciate the clarification.

It's good that it's not up to my subjective analysis and that it is codified in various places.

And I see deputy director panucci's hand up as well.

But Tracy has worked on the definition of Pre development for a number of years and in a number of places.

So, maybe Tracy and then Allie.

So I'll very quickly just say the Jump Start funding policies do say that policies overall that reside in the housing funding policies and ANF plan will drive the ultimate use of funds.

I know that I've had, because of this issue and other issues that have arisen, that I have had conversations with the Office of Housing and they are actually intending to better define pre-development costs in those funding policies and ANF plan policies.

I think Allie's going to suggest that there's another route here as it relates specific to the jumpstart policies, and I will let her speak to that.

But I just want to let you know, we've had conversations with the Office of Housing about the need for a better definition of pre-development explicitly in our policies.

And thank you, Tracy.

I was just going to add since we do have a breakdown of these specific spending that when you share the additional details with council members, you could highlight which of those costs have typically been considered pre development and which would be unusual for pre development, like the actual citing of the new.

tiny home village, just so they understand your framing of why, when you look at this proposal, that most of it is not meeting what we understand the definition of pre-development cost has historically been.

And just so that you understand, we understand that distinction.

So, we'll provide that additional detail to the president.

Thank you.

Of course.

If no other questions about this, we can move on to the contextual budget issue.

And there is the very one that I started the presentation about, which is to note that there are additional reductions of $3.7 million in Jump Start program funding and $2.3 million in administrative funding supported by Jump Start revenues.

And these are in addition, again, to the $916,000 that would be transferred to OH.

This proposal results in reductions to the multi-family housing program, which is the program that funds the development of low-income housing.

Ali discussed with you yesterday some options as it relates to this proposed reduction in OH, as well as other departments that have seen a reduction.

Happy to answer any questions you might have about this.

Thank you.

Well, I mentioned yesterday that I was going to hold some of my comments as we started going through the issues that have been identified in each department.

And here I'll add a little bit of additional context for the question that I have.

I guess the 1st question that I have is, does the combination of reducing the office of housing jumpstart program funding and reducing jumpstart funded administration dollars.

at equal $6 million in reductions to Jump Start funds going into that we're going into Office of Housing?

Yes, plus the $916 gets you to about another million, which gets you to that approximate $7 million reduction overall, yes.

And with the reduction of administration dollars, how will the Office of Housing fund administrative costs?

So the housing has done a really good job in part due to the to the levy being in front of us as well as the jumpstart ongoing funding.

of looking at these different fund sources and what percent they contribute in terms of their capital to the office of housing.

And they have then said that each funding source needs to cover their proportional share of the cost.

So for example, the levy, I think, contributes somewhere around 40. Michael can correct me on this.

But anyway, they figured out the percentages.

And so now what they are saying, because they are removing $2.3 million of admin support that they had gotten in 2023, They are saying, oh, H, you have to use your existing jumpstart program allocation to cover those administrative costs.

So what that has meant for the office of housing is that they have had to take some existing capital funding from their multifamily housing program and support the admin costs that are typical to the jumpstart program.

So it has resulted in a net reduction in the capital available to go out for low income loans in the multifamily housing program.

Okay, you trailed off there at the end, but it sounds like this will have an impact on program funding available to build affordable housing.

Director Dingley, I see your hand.

Did you have a clarification?

I did.

Thank you.

Tracy did a great job of explaining the capital side of this, but I just want to make really clear, this proposal is not cutting administrative funding available to the Office of Housing to do these programs the way that What we're doing here is treating them like all the other programs in jumpstart where we should have done this from the jump, but we didn't and we missed it.

And so this is a correction for us to make sure that we are aligning the program cost in the appropriate.

Area of jumpstart, but the actual dollars available to do administration aren't being reduced.

So I just wanted to make sure that that piece was.

But I'm not sure what what to do here, because we actually have a difference of opinion on that.

It sounds like and again.

This is not a debate that we're trying to have between the executive branch and the legislative branch today.

We really just want to understand the impact of programs.

Tracy, can you offer any additional information?

I know there is this bigger conversation about the allocation of JumpStart, and I'm going to really defer to Ali to talk about that.

What I can tell you, the net difference between the 2024 endorsed and adopted is that OH is getting $2.3 million less JumpStart funding that had been provided to them in 2023 for admin.

That is the case, and they are having to cover the cost of that admin than with their existing jumpstart program funding.

Julie, I'm sorry, you can argue with me all day long, but that's the net result.

No, I would, I would, as long as, as long as you're not, what I'm trying to correct on is just the, um, that the, um, that the total for admin is the same for 20, for all, for all programs, for the, for the program, the admin bucket has not changed.

What I'm trying to articulate is we had previously transferred that money to the GF for administration.

It's no longer coming out of the admin bucket instead that amount is not changed and it's instead coming out of the bucket.

So that's the piece I was trying to correct.

I think we may be saying the same thing now.

If I could just clarify, there are a couple of things, like the language in the original spending plan was to administer the programs and services was supposed to come out of the up to 5% allocated for jump start.

And I think it was in, it might have been 21 or 22, there was a specific ordinance just about OH's administrative costs that was approved by the council that came out of the administrative pocket.

And so if you look at the 24 endorsed last year, it was assumed that the administrative costs were covered from the administrative pocket.

So this shift is reducing overall the money available to go out to build affordable housing and in the simplest form, and instead is being used for admin.

So it is overall a reduction in the housing category for money available to build and provide services at affordable housing.

Okay, I'm saying heads nod.

Yes, we're in agreement.

Thank you.

I'm going to continue with my line of questioning for central staff.

It's my understanding that 5% administrative costs were allocated to all of the buckets in the 1st, few years of jumpstart.

There was great news from office of housing that the administrative costs were coming in much lower than the 5% anticipated coming in around 2 and a half percent.

At that point, we were able to free up the additional administrative dollars and put it in directly to building additional housing and the other categories that were classified in the admin category here.

That's clearly not what's in front of us here today.

So, is there a way for us to articulate 1 more time for the viewing public?

How.

Configuration here is resulting in a reduction of funds available to support affordable housing.

What's the total amount that's affected here?

So, the total amount, including the transfer of the 916,000 dollars, it's just rounded to a 1Million.

The 3.7Million dollars in the jumpstart program funding reduction.

And the 2.3Million dollar reduction administrative funding.

in totals to $7 million in terms of reduction of Jump Start funding to OH compared to the endorsed 2024 budget.

And that $7 million is all going to be coming out of the multifamily housing program.

That's where the reduction has been taken by the Office of Housing.

Thank you.

Council Member Nelson, question please.

Wasn't there an amendment to the housing levy that transferred there was there's traditionally an underspend of about, I think it was about 50Million in administrative costs and it was decided to move that over to the office of housing for to support projects that are facilitated by the bucket of money of jumpstart for more community based organizations that aren't in a position to compete for larger grants.

So isn't that going to be providing a lot of other funding?

I'm looking puzzled, Council Member, because I'm not sure what you're referring to.

Now, I know it just happened in April, but...

Director Winkler-Chin, do you remember what I'm talking about?

Honestly, no.

Okay, well, to be continued.

Let's circle back after after the meeting council member Nelson and maybe we can figure out what you're referring to.

Thank you so much and yeah, I would love that clarification too.

You know, there is another aspect of the housing levy though, and we talked about this during the passage of the housing levy and that is. that the way that JumpStart funds were being parallel, that's not the best word, let me think about this, were being combined or put together.

Thank you to Council Member Herbold and President Mora is doing the same thing.

Together, those two resource columns then allowed for us to do more creation of units, especially three and four bedrooms and additional personnel, the workers inside.

The housing units to provide services, and it would be helpful and Tracy, I don't anticipate that you have this information right now, but I'd be interested in knowing more about any, any impact on the assumed production and assumed work hours that we were planning for with the full jumpstart investments.

If that's being reduced by 7Million, then is there an impact on overall production when the housing levy.

Council Member, I can answer that question for you now.

There is not, because OH had actually done a calculation where they expected that the jumpstart revenues were going to be lower than what they actually are getting in this 2024 endorsed budget.

So it actually turned out, and they were just, because we just didn't have any history with the jumpstart fund, they just didn't want to be overly optimistic about what they might get.

And so they did a calculation that was under what they, We'll end up getting in the endorse budget.

Okay, great.

Well, I, I don't see any additional hands.

I want to just add a few examples yesterday.

We talked about the need to show how public dollars are being used and the importance of that with maintaining.

on trust and engagement from the community when especially new taxes are passed or people are being asked to support a levy.

I wanted to offer some examples of the production that we've been able to see with the full investments of Jumpstart, even when we made the compromise with the executive's office about using higher than anticipated revenue.

Last year, we authorized a number of new positions at the Office of Housing and very much appreciate Director Winkler-Chin and her entire team And their hard work to get the funding out the door with with efforts supported by jumpstart administrative dollars and supporting team members and the team that is working directly with community partners.

We were able to directly fund more projects for building more affordable housing.

We were able to directly support acquisition opportunities that were on the table that the city was able to take advantage of.

And my concern, obviously, is that taking funding out of the office of housing will have a direct impact on our ability to do this going forward.

We need to be able to make as many investments as we possibly can in affordable housing, especially in multifamily housing construction.

Many of the highlights from the mayor's proposed budget announcement that were included in the press release and at the speech are really exciting.

And I'm glad that they got some airtime and many of those highlights were funded by jumpstart includes, including large, affordable housing investments.

Investments in climate resilience and electrification as well as workforce stabilization efforts that is all supportive of our overall visions and goals.

But I'm excited that we have the opportunity to have this discussion today to highlight the investments that were made in past budgets.

And the investments that we want to also make in this budget, but the concern that I have around reducing jumpstart direct multifamily investments to the tune of millions of dollars, because any investments that we can make upstream actually improve community health and stability.

And in terms of the impact where we can show proof and proof in the pudding, or put, I don't know what the saying is the, uh, the proof of how these dollars are making an impact in our community is that between 2022 and 2023, there were over 20 affordable housing projects that have been funded with jumpstart.

And that is before more words were made in the 2023 fall.

Again, thank you to director Dingley and the mayor's office for the release of the 14Million that was on hold from jumpstart.

We were able they were able to add 9Million back into fall opportunities and fund the full amount that we all had hoped for.

And that's great news.

The amazing community serving affordable housing projects that we're highlighting include projects like El Centro's Columbia City Project, the Skipton North Lot, which is coming together and you can see it under development right now, Chief Seattle's Sacred Medicine House, CMR's Beacon Hill Housing.

These are housing opportunities paired with services like child care and community space and small business opportunities, senior services, and more.

There are 35 community projects that have receive funding through Jump Start Equitable Development Initiative dollars.

This includes organizations like Somali Health Board, Friends of Little Saigon, Estelita's Library, and Black Start Farmers, and so many more.

I'm excited that these projects are moving forward and they are helping to root community in place and create greater community cohesion and lift up community entrepreneur opportunities by investing in small business space And community driven development, all of this by displacement, right?

Both displacement that's housing displacement and economic displacement, and it does help us create greater shared prosperity.

And we all talk about wanting a more resilient and equitable recovery for our community in the wake of covet.

This is part of how we do that.

So, thank you for helping us understand the impact here.

very excited that we have tangible ways to show the public dollars being put to use.

And I see Councilmember Peterson's hand up, and I'll call on you next.

But our friend on Council who always talks about audits and making sure that we can measure impact, Councilmember Peterson, your hand raised just at the moment I was making the point that we are able to see the proof of those dollars going directly into community.

And what we'll hear as well is about the question that I think we were getting at earlier, the.

Residential services, the permanent supportive housing service dollars for individuals within these buildings, right?

Because it's not just just about building the units about, it's about making sure that there's workers inside these affordable housing.

I see two hands.

Let me just call on

I'm going back to Councilmember Nelson's question.

Thank you, Jen, my co-team member on the levy.

You are correct.

There was, in fact, a provision that we included in the housing levy that said that any investment earnings that are generated from the various programs, actually not the various programs, the rental production program, would actually be allocated support pre-development costs for projects developed by small community-based non-profit housing developers who have barriers to accessing that source of pre-development funding.

So we don't know how much that's going to be.

It could be millions of dollars every year, especially as the capital monies are allocated or committed and make their way out the door.

But you were correct, Council Member Nelson, and I'm sorry that I could not remember that, and thanks again for helping me.

Thank you, Jen.

Jennifer Labreck, Central Staff's other lead on housing and our housing.

Okay, thank you.

Okay, Council Member Peterson.

Thank you, Chair Mosqueda, and apologies.

I didn't realize this was the last slide, so when you were starting your concluding remarks, I was like, those are eloquent concluding remarks.

We are moving today.

Sorry about that.

That's okay.

And I concur with what you're saying.

I mean, a lot of what's exciting about the Office of Housing is that they create Tangible investments that we can see and that are in our communities that are housing people, which is 1 of our major priorities.

So, an issue that wasn't identified, because it's just the update to the endorsed budget just wanted to ask follow up questions from last year.

Regarding asset management at the office of housing, we know you've got a portfolio of practically 14,000 units across the city.

And we talked about, is there anything that we can do as a council to help reduce the vacancy rate in those in those units?

Do you need additional asset managers to do that?

Just wanted to know, do you know what the average vacancy rate is right now and how can we help to get that lower?

Okay, thank you.

Um, and I know that, uh, office of housing has done some hard work on those questions from, I think, last year as well.

Um, and Tracy, I see you off mute.

Of course, director, I see you off mute as well.

I know you've done some analysis with your team, but that's not directly related to the budget necessarily, but I see the nexus because.

you know, if we're asking to build more, if we're putting more funding in, of course, we want to know what the vacancy rate is.

And of course, we want to fill those.

And I think Council Member Peterson, if I can read your mind a little bit, it's also to wonder, do you need additional resources to help fill those units as a big opportunity to get people into housing?

Please go ahead, Director or Tracy.

I think Director Winkler-Kinn might be the best answer.

You want me to go?

Okay, I will go.

So, Council Member Peterson, thank you very much for that question.

And I think last year's budget deliberations, we've, you've added some staff to the asset management side.

And as we are, we're getting ready to hire for some data analytics staff, we've hired one, we'll be hiring another that will look at that as well as the other questions really about the operations of the housing, which are very, very important to us.

If you can't operate it, why build it?

And right now we are going through a series of conversations with our investees as to what is the data that we need in order to make our decisions very much, especially as we are looking forward to, as we are planning for just the increased investment opportunities that we have going forward with this, dare I say, historic budget size coming up to the Office of Housing for Capital Investments.

Thank you.

I'll follow up with central staff, some other related questions, but thank you for that high-level answer.

I appreciate it.

Great.

I appreciate you asking the question especially about what additional resources might be needed.

Short but intense.

Thank you so much.

Are there any additional questions on the Office of Housing Budget here?

Nope.

The proof is in the pudding.

Thank you.

Oh, my gosh.

I'm going to write it down.

I'm like putting it.

Burn the saddle and be in the bonnet.

I don't get where those things come from.

Maybe it's a cultural thing, but I'm learning.

Counselor Pierce is helping me out.

I'm going to have to make some sticky notes and put them on my computer.

Here's I don't forget these things.

Okay, well, with that, I just wanted to say, thank you.

I know director Dingley will be with us all day if you can stomach it and thank you and to office of housing really want to underscore our appreciation for the work that you're doing obviously much more to come.

Uh, in terms of how we can support your efforts to get the funding directly out the door.

But 1 of the thing that we know that's the most important from the community that we've been working with in the creation of both jumpstart funding on the office of housing.

Um, uh, administration and finance plan changes over the years and now with the housing levy, that's going to be in front of voters.

In November, 1 of the things that's most exciting to our community members is the ability to have kind of self determination and to be able to see housing being built through the vision of what community who's often most at risk of displacement to have their ideas, be able to get the green light from housing and now to not have the city be the lender of last resort, but often the lender of 1st resort so that we can.

have proof of concept as they go to other lenders to show how important it is to make the invest in the community.

So your team has been working around the clock, literally around the clock throughout the calendar year, as you've developed the affordable housing levy, and very happy that we have you at the helm.

So thank you very much, Director Winkler-Shin.

All righty.

I think we're ready to go on to agenda item number two.

Adam Clerk, could you please read agenda item number two into the record?

Agenda item two, Human Services Department for briefing and discussion.

Okay, wonderful.

Well, thank you very much.

Jennifer.

We were singing your praises earlier and and Gorman central staff are here with us to walk us through the presentation.

And as you saw, we have the director of human services department and director of city budget office on for technical questions if needed.

Welcome to the diet and I'll turn it over to central staff to walk us through the presentation.

Great.

Good morning.

I'll be doing the 1st, section of this presentation, handing it over.

I'm sorry, Jennifer.

I'm rusty here and office of housing is within my committee.

So I didn't make some opening comments, but traditionally I offer the, the chair of the committee that has the department within their purview a chance to make some comments as well as things that they're looking at, or things they've seen anything that they'd like to flag for us as.

Colleagues, as we start to hear the overview, so let me, let me just interrupt you real quick since we're on slide 1, and I'll turn over to our vice chair who has human services department within her purview to see if you'd have anything that you'd like to add.

Thank you so much.

Madam chair.

I don't have anything in particular other than.

Thank you.

Thank you very much.

I just wanted to say thank you for that.

not making commitments to any particular amount of funds to address the wage equity gap, but we did recognize the recommendations of the study that the council funded to work to close what is called the pay penalty.

It's the sort of the increase in wages that the average person experiences when they leave the care field for another occupation.

And that is about 7 percent, and the recommendations of the study were to work to close that pay penalty gap over two years, which would have been a 3.5% increase over in 2024 and again in 2025. Really appreciate the executive and the mayor's office and HSD working with us.

And seriously, I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

I think it's a good step forward.

Excellent, well, thank you so much for that and colleagues, please consider this a heads up.

If you have the departments within your committee, we'll love to hear from you before we turn it over to departments as we go forward for the next day and a half here.

All right, Jennifer, sorry to cut you off.

Please go ahead.

No worries.

Okay.

Next slide please.

All right, so the 2024 proposed budget adjustment for the Human Services Department, which I'll refer to HSD from here on in, is higher than the 2024 endorsed budget by about $15 million, an increase of 4.7%.

And that increase is largely due to the following items.

There was $2.6 million for contract inflation because actual inflation was higher than projected inflation in the endorsed budget.

as well as inflation for contracts that were added in 2023. There is, just as Council Member Herbold mentioned, $4.2 million for a 2% increase to HSD administered contracts for purpose of increasing human services provider pay, $1.9 million in one-time funding for the continuation of the Third Avenue Project at its current service level, $2.2 million in opioid settlement proceed funds, 916Million for the relocation of Rosie's village, which we have already discussed and then 123,000 for continued funding for a crime victim advocate that was previously grant supported.

Stop there any questions.

I have a quick question.

Yes, Council President.

I may have been a mistake on my side.

So it's not 1.9 in the opioid settlement.

It's 2.2.

Is that what you said, 2.2?

I did say 2.2.

Anne, do you have that off the top of your head?

Do you want to confirm?

I have 1.9.

Hello.

Good morning.

Anne Gorman, Council Central staff.

There is a total of $2.2 million programmed in the 2024 budget adjustments.

That includes some revenue that was received previously and not spent.

Okay, so it's 2.2, then not 1.9.

Yes, I got 1. what was the number you said before you said 2.2.

There is 1.9Million for the 3rd Avenue project.

That's what I got it mixed up with.

I apologize.

I knew.

Okay.

That's my part.

I'm sorry.

So that was the 1.9 for 3rd Avenue.

That's right.

I had my numbers flipped.

Sorry.

Thank you.

No problem.

I'm seeing nods from the city budget's office and I think that sums up.

So we're all clear on the numbers now.

All right.

Great.

Next slide please.

So before I start talking about issues and options I did just want to provide a couple minutes of background about human services contracts including both the inflationary adjustment and some background on wage equity.

I think this will just be helpful for informing the conversation, the next couple of issues that we talk about.

As a reminder, the city is required to provide inflationary adjustments to human services contracts that are administered by the Human Services Department.

And that adjustment must be equal to the growth in the Consumer Price Index, Urban Wage Earners and Clerical Workers Index, CPI-W for short.

The inflationary adjustment that was provided in the 2023 budget was 6%, 7.6%.

As a reminder, the mayor's initial budget in 2023 or proposed budget in 2023 had proposed 4%, but council had rejected that proposal and provided the full amount of the inflationary adjustment.

And that history will be important as we talk about some of the complexity with continuum of care, inflationary increases in a couple slides.

The 2024 endorsed budget utilized a projected inflationary rate of 6.7%.

However, actual inflation was higher at 7.5%.

So that's part of why this proposed budget has an increase for inflation.

It's to cover that difference between what was projected and what the actual inflation was.

As noted in the prior slide, Sorry about that.

Okay, so now I just want to provide that background on the inflationary adjustment and we may come back to the slide as we talk about a couple of issues as I think the context is helpful.

I did want to touch briefly on some background as well related to wage equity.

In June of 2023, so this year, City Council approved Resolution 32094, which stated City Council's intent to consider a 7% wage equity increase to contracts administered by the Human Services Department by 2025, just as Council Member Herbold discussed.

That resolution was based in part on a February 2023 study published by the University of Washington School of Social Work, which found a 37% wage gap between nonprofit human services workers and workers in other industries, despite evidence that human services work is not easier, less skilled, or less demanding than other jobs.

Pause there for any questions.

Seeing none, I will move on to the next slide.

The first issue identification here is around provider pay for increases for purposes of wage equity.

Just as we've discussed, the 2024 proposed budget includes $4.6 million of jumpstart payroll expense tax revenue to provide a 2% increase to contracts administered by three different departments, the Human Services Department, the Department of Neighborhoods, and the Department of Education and Early Learning.

The bulk of that amount is for the Human Services Department, $4.2 million out of the $4.6 million.

So in terms of who's covered by this provider pay increase, any HSD administered contract that is receiving an inflationary adjustment under Section 3.20.060 of the Seattle Municipal Code is also receiving this provider pay increase of 2%.

This does include funding provided by the King County Regional Homelessness Authority through HSD.

It does not include continuum of care contracts, which are no longer administered by the Human Services Department, and which we will talk about in the next slide.

Do you want to note that a provider pay increase creates an ongoing obligation for the city?

Because providers will rely on continued annual funding to be able to maintain pay increases that they have given staff.

So if a provider increases pay for a staff person 2% in 2024, they will want to be able to maintain that increase in ongoing years and not have to decrease that staff person salary.

Currently, the 2% provider pay increase at all three departments is funded with a one-time resource, creating a mismatch between an ongoing obligation and a one-time source of funds.

Council Member Herbold, do you want me to pause here?

Finish last slide, okay.

So there are currently several options for this particular issue, and my apologies, option A is actually an error.

Option A should read, confirm, Confirm counsel's intent that this spending should not be funded from the Jumpstart Fund in future years.

Again, that should read, confirm counsel's intent that this spending should not be funded from the Jumpstart Fund in future years.

The other options are correct as listed here.

We can reduce funding for provider pay to fund other priorities, increase funding for provider pay, or make no change.

I'll pause here for questions.

Oh, yeah.

That's okay, Council President.

I'm going to call on you next.

Council Member Herbold, go for it.

This is her committee.

I realized I was off mute.

I apologize.

Okay.

I was liking that.

Okay.

It just shows we're all paying attention.

Council Member Herbold, I'll go to you first.

Thank you.

A couple of things.

I think, are you highlighting the $4.2 million instead of $4.6 because we're only talking about HSD in this particular discussion?

Thank you for pointing that out.

That should really read, it's a little confusing, but that should probably read $4.6 because it would make sense to think about wage equity as a whole.

Thank you for pointing that out.

Of course.

my suggestion of whether or not there might be an additional option here.

Well, first of all, I just want to say before I suggest another option, I do, Madam Chair, has identified an interest and really a need, as you have, Jen, to ensure that the fund source is a fund source that is So, I'm really supportive of working with the chair to identify an appropriate fund source.

For this investment, I did want to ask Jen.

Is my recollection correct that they are calculating the.

Uh, wage equity increased differently than was recommended by the study.

My recollection was that this, the, the study recommended that.

we do the CPI adjustment first and then layer the 2% on top of that.

And if that is, if that's correct, I would love to understand why the executive did it differently as question one.

And secondly, if what the additional cost would be to do it the way that my recollection is the study recommended.

Thank you for those questions.

I would say that the study itself was silent on the exact methodology for calculating wage equity increases.

It did state an overall recommendation that any wage equity increase should be on top of an inflationary adjustment.

So there was an intent and kind of an overarching goal that was stated.

When central staff did our analysis for the resolution, we had stated that the approach that seemed most consistent with the intent of the study was to take the base contract amount, multiply it by the inflationary adjustment, so then you have a higher base contract amount, and then multiply that higher base contract amount by the wage equity piece.

That is not the approach that the executive took.

The executive's approach was to take the base contract amount, multiply it by the inflationary adjustment, take the same base contract amount, multiply it by the 2% increase for provider pay, and then add those things together.

I would have to get back to you to tell you what the difference is between those two.

I will say after more reflection about it, ultimately that 2% increase will be added to the base contract amount.

So it won't increase the way the executive did it.

It does not increase the base contract amount for 2024, but it will be added in 2025 when we go to calculate both the inflationary adjustment or potentially any future wage equity amount.

So it will be included.

It will just be one year later.

So there's some legitimacy to that approach as well that I'm happy to talk more through.

Thank you.

We'd love to know more about the actual impacts of the different approaches on the goal of getting some wage equity increases into workers' hands this year.

Agreed.

Thank you, Council Member Herbold.

Council Member Nelson.

So, I probably shouldn't remind people of this, but I was the lone no vote on this resolution because I just didn't see where that money was going to be coming from to get to 37% eventually that goal or in the in the next couple of years.

And so I, I want to remind people that during that discussion, there was talk about the fact that.

These organizations that will be getting this, the inflationary.

Adjustment and also the 2% also get funding from other entities, like the county or the state and private philanthropy and the attachment.

And so it's the implication being, it's not all going to be on us.

There's a discussion ongoing in.

Attachment A of the resolution says since the Seattle Human Services Coalition has convened a funding roundtable with the goal of bringing public and private human service funders together collaboratively to chart a path toward wage equity and includes representatives from the Human Services Department, et cetera.

So there was, so Has there been any progress on that discussion because that was mentioned as a as a project that would figure out whether or not getting to 30% is only the city 37% and the increments getting there is only on the cities is only the city's responsibility.

So, could I'm just asking right now for an update on those discussions.

May I?

Yeah, please.

And I know Jen probably has more to add.

I did want to, and this is Jen's work actually, she pulled together a lot of the different And I think it's important for us to recognize that there's a lot of different commitments that other jurisdictions have made.

Other jurisdictions, other programs have made.

There's also another, as you mentioned Council Member Nelson, there's also a funders roundtable where they're working to identify additional pledges towards this goal.

Before I go through this list that Jen helpfully pulled together for me when Director Dingley was presenting the budget, I did want to first say very clearly, although the University of Washington study identified a I think I think 37 percent wage gap.

We are focused right now this year.

and next year on a 7% pay penalty.

So just put aside that 37% number.

What we're focused on right now is addressing the 7% pay penalty.

So I don't want to conflate goals.

That is not the goal that we're focused on at this stage, and the council resolution really I think, narrowed on the near-term goal to address the 7% pay penalty.

As it relates to other jurisdictions, we know that King County's Best Starts for Kids levy is providing $5 million through year 27 to fund a child care workforce demonstration project to increase wages for 1,400 low-wage workers.

County levy requires that the implementation plan identify and describe levy strategies to stabilize the nonprofit, regional health and human services workforce crisis care levy.

The assumed operating staff wages would be funded at 20 percent above the current average staff wage at King County's only comparable crisis facility.

It also assumes an additional $20 million to invest in strategies such as subsidizing staff insurance costs, funding their certifications, and subsidizing caregiver costs like child care or elder care for staff.

The Office of Housing's investment includes a $25 million request for interest for 2023 to pay for workforce stabilization.

The proposed housing levy includes $122 million to pay for operating maintenance and services expenses, including workforce stabilization.

The executive has proposed another $282 million in Jump Start funding for the same purpose.

The state operating budget increased homeless service provider contracts by $45 million, which is a 6.5% increase, and prioritized the funds for stabilization of the homeless service provider workforce.

And also provided a 15% Medicaid rate increase for behavioral health providers to help address many of the state's current behavioral health workforce issues.

And then.

As mentioned, since 2022 – sorry, since 2002, the Human Services Coalition has convened a funding roundtable, bringing not just the institutional governmental funders that I've referenced, but also the private philanthropic giving community as well to collaboratively chart this path forward towards wage equity.

We do have participation on this roundtable by HSD Director Kim, as well as representatives from King County Departments and, again, large philanthropic organizations such as the Balmer Group, Gates Foundation, Seattle Foundation, United Way, and a bunch of small and mid-sized foundations.

And the Human Services Coalition has a pledge that they've been working on since Christina in my office has moved on.

I've lost track already in just a couple short days of where that is, but I know they're working really hard to get it to us, and I think maybe Jen might have an update.

Thank you.

I'm on to that list.

Okay, go ahead.

Sorry.

No, let me provide just a brief update because I think it might help address part of your question to Council Member Nelson.

So, the Seattle Human Services Coalition has been working with the Statewide Capacity Collaborative, And they did issue what they call the wage equity call to action.

And I'm happy to send a copy of that after this meeting.

And, you know, really stating funders' understanding of the importance of wage equity.

And that call to action is signed by several foundations.

I'm going to read through them here.

The Bernie Macaw Foundation, the Cedermer Foundation, Magic Cabinet, Medina Foundation, Satterberg Foundation, Sherwood Trust, and Social Venture Partners.

And then I know that the Seattle Human Services Coalition is also still working on getting some additional signatures as well.

So that has been the work I think that they have done to try to be responsive to that component of the resolution.

Thanks, that is a great update and I'd love to know how that call to action is going and what kinds of pledges they've gotten so far because what this list is, the items that you listed council member herbal are.

The, the taxpayers are paying for a lot of that because you're talking about the veterans levy, the crisis care center, levy, et cetera, and the housing levy, et cetera.

And the 282Million in jumpstart funding is looks like it's consistent with what this budget item is trying to do in addition to.

You know, the, the call to action as well, because.

We should all be concerned about making sure that people are paid enough and I just want to make sure that our partner.

Jurisdictions are also helping in this effort for government funding, regardless of what.

What jurisdiction it is a city.

state, federal, is taxpayer money.

And I understood the request is to ensure that our other government funders, taxpayer dollars, that our other government funders are also engaged in the goal of wage equity.

So, again, so that it's not just Seattle going it alone.

I'm pretty happy with the with the progress that we're making sort of rowing all together in the same direction, and we've already heard some incredible results coming out of Councilmember Mosqueda's objective of focusing on the inflationary increases, incredible results on closing vacancies at scores of human services agencies, as well as reducing turnover.

And so I think we all want to continue going in that direction.

Great, and Director Dingley, I'm looking forward to the study.

I think that you said that it was in progress on the first day of our budget discussions for how the 2019 law that is pegging adjustments to inflation is resulting in better retention.

That was the goal of increasing provider pay.

Great.

Well, I'm going to tee this up as a preview charts and graphs.

Okay.

More to come.

This is just a preview of what we're going to see on Monday regarding that specific topic of provider.

Um, stability and retention improvements.

and turnover reductions.

Nice graphs for us to look at on Monday from example organizations that are dealing with this exact issue of how do we create greater stability and wage equity being.

That's from DESC, I think.

Yes.

More to come on Monday to show that with the general public.

I do want to keep us moving, but Council Member Pooble, do you have one more thing on this?

Excuse me.

My office, Council Central staff, and Human Services Department, and HSD have been working on the survey that you referenced, Council Member Nelson.

This is a work product that we are all engaged and eager to receive.

The results from the survey has gone out to the providers, and we'll hope to have some more information soon.

Thank you.

Okay, excellent.

So we're going to actually be able to continue this discussion on the next slide because we want to talk about other entities helping us create stability across contracts.

So let's go to your next issue as we talk about the continuum of care contracts.

Great.

Thank you.

This is going to get us right into the weeds.

This one's pretty detailed.

So this issue is around the continuum of care or what I'll call COC inflationary adjustment.

So up until 2021 HSD received and administered continuum of care funding directly from the Department of Housing and Urban Development or HUD and that money was for homeless services in Seattle starting in 2022. The King County Regional Homelessness Authority began receiving and administering the COC funding directly, so it no longer flowed from HUD to HSD to KCRHA.

It went directly from HUD to KCRHA.

The Executive's 2023 proposed budget contained a one-time inflationary increase equal to 4% of the COC contracts.

The increase was one time to provide a transition year for KCRHA, and service providers without creating an ongoing obligation by the city for federal dollars that the city no longer had a role in administering.

As you'll remember from the context slide, Council in 2023 also adopted a CBA to provide an additional 3.6 inflationary adjustment for all HSD administered contracts covered under SMC 3.20.060, which is what requires that inflationary adjustment.

That 3.6% increase also covered the COC contracts.

So this created an inconsistency where 3.6 of the inflationary adjustment provided to COC contracts in 2023 is ongoing, while 4% of that inflationary adjustment is one time.

And those inconsistencies mean that council's intent is unclear.

And so this issue is really about options to help try to clarify what the council's intent is, both for the 2023 inflationary adjustment and the 2024 inflationary adjustment.

KCRHA currently administers $17 million in COC contracts.

Of that, 1.2 million is for the 2023 inflationary adjustments.

Because of the inconsistency we just talked about, the 2024 endorsed budget sustains $623,000 for inflationary adjustments for COC contracts, while also at the same time reducing funding for COC contracts by $600,000.

The options here are around clarifying council's intent for the 2023 inflationary adjustment and also whether or not to provide another 2024 ongoing inflationary adjustment.

So reading through the options, A, if council wants to make all of the 2023 inflationary adjustments one time, it could reduce HSD's annual appropriation by $623,000.

If it wants to make all of the 2023 inflationary adjustment ongoing, it could add $600,000 of ongoing funding.

And if Council wants to both sustain the 2023 increase and provide an inflationary increase for 2024 of 7.5%, same thing that HSD administered contracts are getting, it could add another $1.9 million of ongoing funds in 2024. And then, of course, the fourth option is no change.

I will stop there for questions.

Thanks.

I look forward to hearing what Council Member Herbold has to say on this too.

But just to clarify, option C, is that basically including A and B in that total amount?

Or if we wanted to, sorry, not A.

Is option C including B in that total amount?

Yes, that's correct.

You would do B plus the funds it would take to provide an inflationary adjustment in 2024. That's correct.

And the total dollar then would be 1.9?

Yep.

And that addresses the gap, the 600 plus gap at Delta and HSD currently that addresses the COC HUD funded contracts across all COC providers.

Okay, I thought slightly more so 1.9 is the total to make the adjustment and to include that in 2024's full contract list.

Similar to wage equity, I just want to note this is, it creates an ongoing obligation for the city, right?

Providers, when they get an inflationary adjustment that is added to their contract, and if that inflationary adjustment ends the following year, then their contract will be reduced.

So option C is intended, both option B and option C would are intended to be ongoing funds for this purpose.

Okay, but just again, the 1.9 includes the 600K.

It does.

Thank you.

Sorry for the confusion on my part there.

Council Member Herbold, please go ahead.

Thank you.

A question, and your memo says that the executives 2023 proposed budget contained a one-time increase equal to 4% of the contracts, and it goes on to say that the increase was One time to provide a transition year for King County RHA and service providers without making it an ongoing obligation for federal dollars that the city no longer has a role in administering.

So that that is a description of.

The executive's intent executive's intent.

was that this be a one-time transition year.

What you're identifying as being unclear is what the council's intent was in providing an additional 3.6% adjustment above the 2023 transition year in the mayor's proposed budget.

Is that more or less, right?

That is generally right.

I will be honest that I think that this may have been a place where everyone got a little chipped up on semantics.

So I'm not entirely sure.

I'm not sure if the intent, when we say one time, that could have meant two things.

It could have meant we'll do this for 2023 and we'll sustain that, but we don't want to do it for any future years.

Or it can mean we'll do it for 2023. But it's just going to be one time because the expectation is that KCRA and HUD will step in in the future and cover that 2023 inflationary gap.

I'm not sure we really know ultimately what the intent was because I think that one time word might have meant different things to different people.

So that's my honest answer.

And you have your hand raised if you want to add something.

I was just going to note that, you know, last year, the council was grappling with having to fill like, find the funds for the 3.6% for the entire base of contracts.

And frankly, I think this.

Detail I, you know, like, I recall Amy Gore and I talking about this as.

Being consistent with what the mayor did, but it's not like we, it was all in 1 CBA.

It was all 1 lump sum to to address the.

To increase the inflationary adjustment to meet current law.

And so I don't know, as Jen said that, honestly, that there was a clear decision by the council about this to be 1 time or ongoing.

I can say that we included the council's portion as an ongoing.

as an ongoing expenditure, and the CBA is silent on whether that was intentional or not, excuse me, the council budget action.

And so, again, to maintain the council's portion as ongoing, that would be option B, is that right?

Actually, the council's portion is already ongoing, that 3.6%, but the executive's portion, the 4%, is not ongoing.

So, the 600,000 is what it would essentially take to sustain the 4% into future years.

Okay, I'll just I'll just add again.

I think my recollection is along the ladder option that Jen outlined that we all were hopeful that there would be sustained funding from our federal partners.

And so.

I don't think that there was any malintent to not include it as ongoing.

We really thought that there would be additional entities stepping in or support freed up from RHA.

I appreciate that this level of detail has been unearthed and I think that we all were optimistic last year, including, and I'm looking at Director Dingley, I think we all thought that there would be additional support coming in on that.

Director Dingley, did you have anything you wanted to add on assumptions around that?

Thank you for outlining the options here.

I think we all have the shared goals and it's unfortunate that the COC contracts funded by HUD don't include this.

But as a city, us looking to step in and make workers whole and create harmony, I think remains the goal.

Council Member Herbold, please conclude.

If we had that expectation that HUD would provide the increased funding for 2024, what were the steps that we took to make that request?

That would be helpful.

to understand both for purposes of what did we do to make to try to confirm that our assumptions or our hopes would be realized for this year or well for 2024 and if we were to provide the full amount the full 7.5%, what could we do for future years to better make it likely that it does not have to be an ongoing investment of the City of Seattle to make up for what the federal government should be paying?

Sort of in the spirit of the earlier conversation about wage equity, even more so with inflationary adjustments, the federal government should be providing adequate funds to make sure that the workforce is not falling behind as inflation grows at a rate that is higher than our contracts with the federal government.

that is completely unsustainable.

Right.

Thank you for illustrating that point so pointedly.

Director Kim, welcome.

Thanks for being here with us.

I see you have a hand up for clarification.

If I may, I'm happy to take that question back to RHA.

I think when we collectively stood up RHA and they were receiving this responsibility.

We did make it clear to them about their responsibility in the space now.

So we can ask them again, how are they communicating and what are their expectations and what the progress has been in their communications with HUD.

And so I would love to have the opportunity to take it back to KCRHA.

That would be excellent.

Council Member Herbold, anything else on that?

Yeah, no, that's very, very appreciative.

Not just the question of, you know, what has happened in the last year, but given whatever was attempted in the last year was not effective in meeting the goal, what could we do differently in the upcoming year?

Appreciate that.

Okay, great.

Let's continue on.

Next slide, please.

The next issue is around potential one-time salary savings from HSD vacancies.

As of early September, HSD had 50 vacant positions and about 60% of those were not yet in the interview process.

In fact, a portion of them, I think if I'm remembering correctly, about 30% were still in the process of being reclassified, so going through the process of a reclassification.

HSD has stated that they intend to fill all 50 positions in 2024. However, that expectation does not seem entirely consistent with the city's typical timelines for reclassification and hiring.

Additionally, even if all positions were to be hired in 2024, conceivably some would be filled later in the year, resulting in some salary savings.

I do want to note that HSD receives a large amount of restricted grants.

So that is federal or state grant funding, and that that funding is not available for other uses.

So it can't be repurposed in the same way that general funds could.

HSD has indicated that at least I'm sorry, I have some outdated information here.

Director Kim might be able to update it.

At least 19 out of 50 positions are grant funded, but I think that's actually as high as 27 positions.

And then there's another 10 that are a combination of both grant funded and general fund.

So while there might be a sprinkle of salary savings, I just want to be clear that and set reasonable expectations that only a portion of the salary savings would be general fund and available for other uses, and that we could, if interested, do further analysis on that.

Thank you for that.

And the options.

Yeah.

Oh, sorry.

Let me just go through the options very quickly.

Reduce the HSD budget and use one-time salary savings for council priorities or no changes.

Any questions?

Thank you so much a sprinkle of salary savings here and there, huh?

But no guarantees.

All right.

I'll, I'll remember that term council members.

Please go ahead.

Thank you.

Yeah, Jennifer for the positions that are.

Grant funded if we don't hire, does that mean we have to return that grant funding or can we keep it until such time as we are able to hire for those positions?

That is a great question, and I would actually turn that over to director Kim or D, if you know the answer.

Go ahead.

Some of the grants that we receive, particularly for case management, it's reimbursable.

And so, you know, but I, I will tell you that we are.

I don't know, any department or organization that that 100% capacity, and we are human services.

So we'll just take the opportunity to clarify that this is a point in time.

And we've got lots of postings.

So this is free advertising to say that HSD is hiring.

But I just wanted to clarify that we've got lots of case managers and other opportunities to serve our vulnerable populations.

Thank you.

And I have one question, maybe it's quick, so I'm jumping Councilmember Herbold.

What is the vacancy rate at HSD currently?

Each department has like a percentage where they're allowed to have a vacancy rate, right?

What what is that rate currently?

Do we know?

I can get back to you on that.

I do not know that off the top of my head.

And if CBO or the department have that, that's welcome, too.

Councilmember Herbold, please jump in.

Thank you.

So my understanding of This presentation in your supporting memo, there are 50 positions where there are vacancies.

40% of them are doing interviews.

And so that only leaves 60% that we're not really at a stage of offering a job to somebody.

And so of that 60%, You know, that's probably about 30 positions.

and only 10 of the 50 are general fund.

As I understand it, the only slowdown of positions would be those positions that are supported by the general fund.

Any others wouldn't result in any actual savings to the city for resources to be used elsewhere.

And so it doesn't seem like, you know, Madam Chair, you.

referred to a dribble of salary savings, that might be where we end up.

I just want to caution, though, and maybe HSD has fully hired, but there are a number of positions that are related to the financial stability recommendations coming out of a couple of years of work of the department.

I don't know if those are any of the ten positions.

Jen, you're shaking your head no, so that's hopefully good news, but I wouldn't want to touch those unless we had some pretty solid intelligence that it was more about the timing of when those positions, as opposed to reducing the department's ability to hire for them entirely next year.

And I'll let Allie speak to this, but definitely the assumption around the salary savings is very modest, right, because of all the points that you make.

There may be something there, but it would be modest, and I'll let Ali speak more to that.

Yeah, thanks, Jen.

I was just going to reiterate that there is a reason why there is no number for a reduction in the central staff analysis, and we'll just acknowledge that, you know, we get the budget, we get a lot of information, we start seeing what looks like big vacancies, and frankly, the analysis has narrowed as Jen has moved on, but it still seemed worth flagging because that's a significant vacancy rate, but ultimately we might suggest that there's no there there in the end.

But I will just also highlight, because Council Member Herbold, you and I have been in this conversation for many years, it is one of the frustrating things about the lack of precision about how positions are funded, are they vacant, are they fully funded, how departments are using vacancy savings, and it's something that Director Dingley and I have been in conversation with for over a year about getting better monitoring on that so I just want to flag this is an area where the city needs better and more specific information about how positions are funded and vacant and all of that.

Based on our prior conversations I was amazed that we even had that information that there we uh from one department that there are 50 vacant positions so that's progress right there.

Director Dingley did you have something you want to add?

It did, thanks budget chair.

You had just asked a question a few moments ago about whether we had a vacancy assumption in the budget and I have that detail.

We do have a vacancy assumption for HSD in 2024 and that amount is about 1.2 million that we assume will remain vacant.

That's the equivalent of about a 2.2% or 9 FTE equivalent across that.

But that is also across the entire department across all Funding types, so I wanted to just provide that answer for you.

Thank you and if I might, I know I'm not using the appropriate portal channel to make the request, but it would be helpful and we put this in the portal for our staff analysis too.

I'd love to see the vacancy percentage assumptions across departments.

Okay, thank you.

Great, so I'm going to move us along and recognize the limitations that option a offers here.

Thanks to central staff and the chair of human services for.

For really making sure that that was explicit, but appreciate that.

It was flagged here as we're looking at all under thing, all options.

Hi, please.

This issue is around Rosie's Village, which I know we already had some discussion about earlier this morning.

This particular issue, as Tracy noted, Tracy focused on the fund source, the use of Jump Start funding to pay for Rosie's Village and whether or not that could be considered a pre-development cost.

My issue, or the issue here is focused on sort of this issue of timing and options around whether or not this is an expense that could be delayed until 2025. I don't think I need to provide much more background on this given that we've already discussed it.

I'll just go through the options.

It could be to reduce the proposed transfer of 916,000 to HSD, and that's the same one that Tracy had.

and her presentation, option B would be to adopt a slide to request that the executive pursue discussions with Sound Transit to delay movement of Rosie's Village until 2025, and the third would be no change.

I'm not seeing any comments on here.

I think we talked about this in the previous presentation, so I'm not seeing any additional comments.

Next slide, please.

Right.

This issue has to do with a CBA that was part of the 2023 adopted budget, which provided a total of $2 million in funding, $1 million in 2023, and $1 million in 2024 for an RV storage program.

This was, and I should mention this was one-time funding.

The intent here was to try a new approach to help people who are living in RVs.

It had been identified as a barrier that some RV residents were reluctant to move into shelter or housing because it meant that they had to give up their RV.

And if the shelter and housing did not work out, they would no longer have the option available to them.

And so the concept here was that RVs could be placed into storage for up to a year, while the former RV residents went into shelter into housing as a way to try to mitigate that particular barrier.

HSD contracted with KCRHA to administer this funding, and KCRHA had intended to issue a request for proposals for all $2 million in 2023. And that funding would be used in part to lease one or more sites for RV storage, and the remaining portion would be used for short-term rental assistance for the former RV residents.

In mid-2023, the executive notified KCRHA that RV storage is only an allowable use under the Land Use Code if the storage site is directly adjacent to a site with non-congregate housing.

And that definitely made it more complicated to be able to find a site for this particular program.

At this current point in time, QCRHA has issued, I think they issued it today, a letter of interest to all non-congregate shelter providers that it funds to determine if any of the providers have interest in available lots for the purpose of RV storage.

Given that the lot must be directly adjacent to the non-congregate shelter, it is unlikely that a substantial number of sites will be identified.

Additionally, the cost to lease such a site for the rest of the year would be significantly less than $1 million.

Therefore, it is likely that some or most or all of the $1 million in 2023 funds will not be utilized.

And if there are no sites identified, then the $1 million of one-time 2024 funds would also likely not be utilized.

And I'll stop there.

Let me go through options.

I always forget the options.

So the options here are A, maintain $1 million in general fund in 2023, but impose a proviso to direct funding for another purpose that continues to support people experiencing homelessness.

Second option is maintain a million dollars in general fund in 2023, reduce a million dollars in 2024 and use the one-time savings for council priorities or no change.

And I'll stop there for questions.

Council Member Herbold.

Based on the description of the land use code, I think there's a pretty significant misunderstanding.

I mean, there are I don't know if there's a sort of a presumption that this is like an accessory use to housing for formerly homeless people, but, you know, there are.

It just, like, let's pretend for a second that the RVs aren't RVs that were occupied by homeless people.

It wouldn't make sense that in order to store RVs, it has to be next to a non-congregate housing facility.

So if there's a belief that we're expecting people to be able to go to and from their housing to the RV, then that might be a misunderstanding.

The idea is that this is a lot, much like a tow lot, where people voluntarily allow their vehicles to be towed into a fenced-in area.

So I really need to see because there are tow lots all over the city and they don't all have to be next to housing for formerly homeless people.

So I think there might be a misunderstanding about what the purpose is of this funding.

And I would really like to see the land use code interpretation that we're referencing here.

I will tell you that there was extensive conversations with law, which I don't want to go into, obviously, in this setting, but there was extensive conversations.

There is not a misunderstanding of what the intent of the program was, even with a full understanding.

This is the guidance that was received, but I'm happy to follow up with you offline and provide more context about that decision.

Sure.

I would love to get that additional information.

It just isn't logical, because where can RVs that aren't occupied by homeless people be stored in places that aren't next to?

It seems like it's a special code based on who is the former occupant of the vehicle.

And I can't imagine a discretionary land use decision based on who formally occupied the vehicle, a homeless person or a person living housed.

Great, I see a few hands probably for clarification.

Let's do central staff and then we'll go to Chris and you can introduce yourself, Chris.

Go ahead, Ali.

Thank you.

And, you know, Chris likely has more on sort of this interpretation of the challenges.

I would just say that's a sort of policy discussion that we should have and understand and it might inform whether.

whenever funding remains in the budget for next year, might be subject to a proviso to get that certainty.

But from a budgeting perspective, regardless, it's unlikely that the 23 money is going to be fully needed this year.

And so there are resources available for council to potentially reprioritize.

So I'll just try to pull us back to the, to the budget issue and we'll absolutely follow up.

But I, and Chris, if you have more to offer on the interpretation, I would be helpful.

Yeah, I think I just want to echo what Allie, you and Jen have said.

We've had a number of conversations regarding the land use code, and unfortunately, that is has been fairly definitive about this use.

I will say we're happy to see that KCRHA did release the LOI this week, at least for an immediate potential solution here, given the critical need for RV storage for unsheltered individuals.

But really just want to echo what has been said about the land use code.

Yeah, I agree with the Vice Chair.

This seems like a very strange interpretation of what the land use code ought to say.

I mean, the intent here, and I appreciate having been able to work with Council Member Herbold on this, was to be able to offer some place for the near 50% of the homeless population who is living in vehicles to have some place to store their vehicles if they are going inside and can no longer keep their vehicle.

For example, it's specifically RVs if they are going into some form of housing.

This just seems like a bureaucratic nightmare that we can't find a solution when we know this is just about storing a vehicle, not about the proximity of that vehicle to housing.

Council Member Herbold and let's close this out and then I see Council Member Strauss as well.

I put my hand down, but thank you.

This is funding that we provided a while ago.

I certainly would have preferred learning about this complexity earlier this year.

Thank you.

If I recall, it was 30 years ago, I think, that we put this funding in.

Frustrating.

Let's find a solution.

Council Member Strauss, please go ahead.

Thank you, Chair Mosqueda, and my apologies if I am jumping in after a lot of this has already been discussed.

I can tell you that there are a fair amount of complexities with finding an adjacent parking lot with non-congregate shelter.

While no RV storage sites have yet been officially identified, I can tell you that we're working through a list right now and that we are getting closer and closer every day.

And so much like with the RV safe lot that was located in Inner Bay that took a number of years just to figure out where that was and set up, I can tell you that this is still an important line item to keep within the budget.

Okay great thank you.

Let's move on.

All right I'm going to hand over the next couple issues to my colleague Anne.

Thank you very much Jen.

Committee members, the next issue for your consideration is going to be HSD's proposal for the use of revenues in 2024 that the city is projected to receive from state-level opioid settlements.

And I'd just like to tee up that conversation by providing some background on both the settlements and the anticipated revenues from them.

This information is also included in attachment one to the HSD overview memo.

This chart shows HSD's projected spending plan from these revenues.

The orange line is projected spending on programs and the blue line is projected administrative costs.

Where do these revenues come from?

The State Attorney General has so far finalized two large settlement agreements with companies who were found culpable in some way for Washington's opioid public health crisis.

for a total of almost $900 million across those two settlements.

This amount will be paid out over a total of 17 years, with the last anticipated payment in 2039, as you see here.

And different companies that will be paying settlements agree to different payout periods, which is why these lines go up and down.

Of the settlement amount, the state will keep a little more than half of it.

to fund various opioid remediation programs, including treatment and recovery.

The other almost half will be distributed to counties, each of which will also keep a little more than half to fund their own programs and distribute the other portion to cities within those counties on the basis of population.

For the first seven years that cities are receiving settlement payments they will also be making payments to the state attorney general's office to cover that body's cost to litigate the settlements.

So $900 million, $900 million, it's a lot of money.

But when you take less than half of it, then less than half of that, parcel it out over 17 years and across a group of cities, It is not a spectacular amount of money.

The total that Seattle expects to receive at this point is twenty five point seven million dollars sprinkled if you will across the 17 year payout period.

You can see on this chart the most that we are expected to receive in any one year is a little over two million dollars that will come in 2029 and 2030. And out of that amount.

10% is required to be set aside to support the King County Opioid Abatement Council, which is a new administrative body that will track and report on these revenues and evaluate the efficacy of their use across the county.

Additionally, HSD anticipates having administrative costs of its own, and those two amounts together are the blue line on the chart.

Any questions about this?

Next slide please.

I guess I just I guess I just want to note.

The importance, like, the historical importance of these investments, just before we talk about policy spent the weekend watching some documentaries about the opioid crisis, the beginnings of the fentanyl crisis.

And if folks haven't seen some of the documentaries that are available to illustrate the.

Corporate malicious intent to hook communities.

Family members workers on opioids and then fentanyl as a very.

You know, above board legal corporate.

Strategy to make money, it would be worth watching that again and to put that into context of us now receiving these dollars and having this be a really historic moment to try to write some of those wrongs.

This in no way is sufficient funding and there's no way able to compensate families for the loss of their.

Children and their loved ones and the last time that they had with people who might still be recovering from that level of addiction.

The documentaries are extremely gut wrenching and I would say.

Important for us to put into context how we use those dollars.

if we are not using these dollars every single penny to help get people into treatment and care, and instead are re-traumatizing people by criminalizing and prosecuting.

the addiction that's been imposed upon our country and the globe through these corporations, then we're missing a huge opportunity to use this windfall of funding to right those historic wrongs.

So it's an important moment for us to recognize that this is not just a opportunity to plug a budget hole, but the decades that have gone into trying to get some sort of reparation to repair the harm That has been imposed on families that have had individuals who've been targeted by big pharma and the companies that we're pushing and continue to.

Get a pass with with actual.

prosecution of both the corporations and the individuals responsible for that type of marketing.

So I'm grateful for Attorney General for helping to be part of this settlement and grateful that we have these dollars coming in and really just want to underscore the importance of us using these to help directly help prevent the type of harm that's been done in the past and continue to help the families that have been suffering from being on the receiving end of the targeted addiction that the corporations imposed on our country.

Okay you can go to the next slide.

Next slide.

And I just I just like to echo what what the chair just said.

The 2024 proposed budget is the first one that sets out a plan for the use of these revenues and a lot of the proposed uses are ongoing.

So this really is the time to you know, have a conversation about priorities and what policies are behind this spending proposal and to ensure that the council supports what HSD has proposed here or would like to go in a different direction.

As we mentioned earlier, there is a total of $2.2 million in opioid settlement revenues programmed in 2024, including some that was received previously and not yet spent.

HSD has proposed spreading out these revenues over a couple different investments as shown here.

First, there is a $470,000 ongoing investment in existing drug user health and harm reduction programs.

As an example, this funding could support ongoing work of three organizations that made a presentation in May to the Public Health and Human Services Committee.

These are the Hepatitis Education Project, the People's Harm Reduction Alliance, and Evergreen Treatment Services REACH Program.

There's also an ongoing investment of $325,000 that would add to FTE social service aids to support the work of the Seattle Fire Department's Health 99 overdose response team.

These staff ads would essentially serve as peer navigators who can maintain contact with people after the immediate SFD response.

and connect them to post overdose resources and treatment options.

There's also a both a one time and an ongoing funding increment totaling $1.1 million to support the startup and ongoing costs of a post overdose stabilization facility that is expected to open in 2024. And as I mentioned funding is also allocated for the required costs of the Opioid Abatement Council and for HSD's own anticipated administrative costs.

HSD would add two new positions associated with this body of work and the total for administrative costs that's in the budget is $328,000.

There may be questions.

Excellent.

Council Member Herbold.

I just want to lift up that first bullet there and the three programs that Anne mentioned, one at the People's Harm Reduction Alliance, the other at the Evergreen Treatment Services, and the last at the HEP program.

These programs were funded and as mentioned, there was a panel presentation at my committee in May often I.

when people ask, what happened to the $1.5 million that the council provided for a safe consumption site?

I point to the funding of these three programs as a decision that the city of Seattle, in collaboration with Seattle King County Public Health and specifically advocacy group, yes, To S. C. S.

yes, to safe consumption sites made together when a collective decision was made to not pursue a bricks and mortar safe consumption site and instead.

We use those resources to show our commitment to, and I'm quoting from the SES letter, for responding to drug user health and engagement, regulated supplies of drug alternatives, an end to stigmatization, accessible healthcare, and intensive outreach services.

And so these funds are being used in a way that meets many of the goals of a safe consumption site, addressing specifically the health care needs of users.

at locations where they go for help.

And so, just want to lift up that I really appreciate the Human Services Department and the Executive continuing to fund these services.

The funding that the Council provided was one-time funding.

and so they're using this ongoing funding as a way to maintain the commitment to these services is incredibly helpful and appreciated by the recipients of the funding.

I would just like to I recall that after some other funding decisions associated with the 1.5, it was looking more like about 1.1, and I think that was multiyear funding.

I just want to confirm that the funding, this $470,000, is consistent with the annualized funding that these agencies have been receiving.

Thank you very much.

And Director Kim, did you have a clarification you'd like to add?

Yes, I can follow up with council member.

I do believe that that's the annualized that 1 time was spread over longer than a 12 month period.

But we can get back to you on that because our intention was just to maintain the annualized and then just a quick point of clarification.

And it's absolutely right about the administrative cost, but.

Just as it stated on the slide, just wanted to make sure that the public understands that is not requesting for three hundred and twenty eight thousand to come to for administrative costs.

Again, that's coupled with the portion for the county and the portion for the county administrator costs are a requirement.

And so just wanted to make sure that folks do that.

We're trying to be lean as well.

I'm sorry.

I'm sorry.

Excuse me.

Councilmember Nelson.

So, as you can imagine, I do have some questions about this budget item because there wasn't much information in the, in the CR 126 about the, about the, the, these expenses.

So, first of all, the footnote on page, let's see, it is, 8 or so, but page.

I can get that to you in a second.

Oh, yeah, it's page 6 in the memo regarding the 470,000 dollars.

The footnote 3 says these organizations, drug user health and overdose prevention programs received 2022 funding through public health.

Seattle King County's Community-Based Overdose Prevention Program.

And beginning in 2024, HSD intends to fund these programs on an ongoing basis with opioid settlement revenues.

So why did HSD decide to take over funding from public health given that drug user health and harm reduction as a behavioral health, public health issue is not the purview of HSD.

So what was the thinking behind assuming this this expense that was paid for by public health and that line item and also ongoing.

As a council member who was there at the time, it was money that the council championed and passed through to King County and allowed them to administer.

We buy, the City of Seattle buys enhanced public health services through an interlocal agreement with Seattle King County Public Health.

And this is one example where the council championed this $1.5 million funding.

I think Councilmember Johnson at the time was the prime sponsor for this funding.

We did not administer the funding.

The funding went from HSD to Public Health Department for them to administer along with King County's own funds.

And that's our intention with the opioid supplement dollars is we would pass it through to Public Health because that is their role in this space.

Yeah, I'm just confused because you mentioned 1 source of funding, which was what you talked about council member herbal.

But now we're using opioid settlement amounts and based on what and just said, if we get about 2Million dollars every year, this is 25% of our every year of our disbursements.

And so what is the theory of change that is that we are getting at here?

And I. Do you understand my confusion about, um, we're basically switching the funding source.

So, what's happening to that other funding source.

It was 1 time money.

It was 1 time money.

It was 1 time money that the council identified originally for a safe consumption site.

It went unspent for a couple of years.

And the council and public health and HSD worked with the advocates to get their agreement to use it on safe consumption services rather than a safe consumption site.

So this is one-time money.

It was the services would go away if we didn't identify another funding source.

And the executive has identified opioid settlement funds as a funding source to keep these life-saving services maintained.

Council Member Nelson, we worked earlier this year on some narrative around that original $1.5 million funding increment and how its intended use has changed over a period of a couple years.

I will follow up with you and provide that information.

Thank you so much.

Yeah, this is a good follow ups.

Okay.

Yeah, I am still interested in, in, in hearing from the executive because again, this is about 25% of our opioid settlement funding that we are committing ongoing basis until that runs out for these organizations that were not chosen by by RFP as King County on page 7 of the memo says King County intends to award it settlement money.

through a competitive grant program process for community-based overdose prevention services.

So my thinking is, why aren't we doing the same?

And in 2022, those organizations were paid from the community-based overdose prevention services program at Public Health.

But again, I will ask the same question that I asked in the committee meeting is what is the harm that is being reduced by the use of this money?

And what is the, how do we measure the performance of that investment?

So, because I, you know, people know that I prefer that our scarce dollars should be used for treatment.

And so I just need more information about the thinking of allocating this on an ongoing basis for that.

Director Kim, would you like to add additional clarification or any immediate answers you have?

Oh, the only clarification I wanted to add is that the origin of those providers that were identified was through an RFP.

So again, we passed through the dollars to public health.

Public health did issue an RFP in order to identify those programs that they were going to fund.

So I just wanted to add that.

Okay, well, this is a different funding source, the settlement money, and it's also not one time, but ongoing.

So, I think that that is that does bear some interrogation.

And do you have, who holds the, these are, I would like to see offline or whatever, the contracts to know what the performance measures are and the reporting requirements.

We can get that information for you, Council Member Nelson, with respect to the funding that was already awarded through public health.

But I think that if HSD establishes new and ongoing contracts with these organizations, there may be new performance metrics, new reporting requirements, and that's a conversation that we're happy to keep engaging in with HSD.

Yeah, because this seems like a completely different item.

I mean, it was for a safe consumption site, so it was used on a one-time basis for these organizations through a contract.

And this is not safe consumption, it is for ongoing and it's opioid settlement.

So it does seem to merit another RFP process if we're actually going to have this as a line item.

I think the intent is to continue to purchase the safe consumption services at the organizations.

I agree with central staff and Gorman that adjustments to the contract can be made to the outcomes.

But I think the intent, as I understand it, is to continue buying the safe consumption services that we all agreed that the funds that were originally for a safe consumption site would instead be used for.

We didn't all agree that because I was not there.

The council agreed to spend together with the executive, King County Public Health and the advocates to spend the 1.5 that the council at that time, before you were on the council, agreed to allocate for safe consumption services.

All right.

Andy, do you want to say anything?

Because I have a question for Director Kim.

I just wanted to clarify that we're having a conversation about policy differences regarding the optimal use of these funds.

But there are a couple different places where legal restrictions are placed on the use of these funds.

And everything in HSD's proposal with respect to programming is consistent with requirements that have been established.

The things that I see here, they are also consistent with a community engagement process that public health engaged in this summer.

And there's a report that came out of that process that I would be happy to share with your office.

Just want everybody to understand that HS, this proposal is coloring within the lines.

And the King County Board of Health also a couple weeks ago passed a resolution, and myself and Council Member Mosqueda representing the city on the King County Board of Health.

The resolution was passed unanimously by the Board of Health, endorsing the recommendations of what's referred to as the redo report, which identifies the outcomes of the community engagement process.

that is legally required as a requirement of the settlement funds and the community engagement process that identifies the priorities for the use of the funds.

The jurisdictions that are represented on King County Board of Health endorsed those recommendations and said that they would consider them as part that we would collectively Each of our jurisdictions and the King County board help would consider the recommendations for prioritizing those funds as part of our own funding decisions.

I read that reminding me of that.

Yeah, and I, I did read that report and there were several items and 1 of them was substance use disorder treatment.

And so.

And another recommendation was don't criminalize drug use.

But anyway, the.

I, I do feel that it is necessary that treatment is is something that is is also lacking and this does not fall into a treatment bucket.

And so, and Madam chair, may I just remind us all that we did in the.

supplemental mid-year budget.

We approved $1 million for the treatment in motion program run by Evergreen Treatment Services.

And we also just this week at full council approved a portion of $7 million for a low barrier treatment program that will be run out of a facility in, I believe, Georgetown.

I understand we're talking about settlement funds in a very small amount.

We're getting every year.

That was a community development block grant.

I was talking about much, much larger sums of dollars to try to reassure you.

You know, I want us to get through the rest of this line.

I feel like we are all very interested in all of these topics.

It does feel like there's a bigger conversations to have here and and maybe we would all benefit from a little lunch so that we can have a robust discussion on the rest of this presentation after our break.

I'm getting the sense that it would be helpful for us to do that.

So I'm going to ask for final comments on issue identification number 6, and then I want to flag for folks that I will go ahead and call us into recess early.

So we can come back at 2 PM.

The presentations this afternoon are shorter.

I know that the discussion about lead, for example, will probably be long.

We all want to make sure that we get our questions answered there.

Anne, I see your hand up.

Is there additional context that you'd like to add to the slide?

And then I have something I'd like to add to what Council Member Nelson said and additional comments as well.

Just one more potential opportunity for central staff to follow up regarding funding for treatment.

It's my understanding that funding for treatment and recovery services is a priority for the state.

with its much larger increment of funding that it will receive from these revenues.

I don't have any specific information right now about what programs will be funded and in which city and counties they will be funded.

But Council Member Nelson, I would be happy to look for that information for you so that we can understand to what extent treatment and recovery is being funded with a different allocation of revenues.

I can look into that.

Um, that's that's the last the last comment I have, uh, regarding the discussion that we've been having.

Um, I'll just roll into options for council members to consider.

Um, 1 would be to answer.

Can I just see something really quick before we roll into options real fast?

Yeah, absolutely.

Just because to follow up with customer her molds.

Um, historic history here and customer Nelson to bring you kind of more into focus.

Um.

I was on the key county board of health.

When we were looking at safe consumption sites as a long story there about policy, it turns into safe consumption services, but our understanding as and just shared as well is that it's been the state.

To the county board of health on the focus on treatment money.

So, that's kind of how the line.

The historical line works there and you can have both, you can have treatment and services.

So, I understand your question about putting on out an RFP, but.

Both things can be true, but I think what counselor was trying to say, which we were all a part of back in 16 and 17, when we were exploring safe consumption sites.

Um, based on the model and the history in Vancouver, and some of the council members visiting those sites, mainly customer backdrop.

Um.

It came down to a policy issue and a welcoming neighborhood, which did not happen, but that's another story.

But the point is.

Evergreen and other folks stepped up to say, look, we can do both.

We can do treatment via the county via the state, and we can do services via the city and we can do services also through our city budget.

So, I just, I hope that.

Provide some context of that conversation and what.

This prior councils had done not, you know, I think when customer was saying this council, she meant.

the council body elect in the years have gone by, not the specific council.

So I understand your concern.

It is 2.2 million.

Obviously that's not enough to address what we're dealing with with the opioid.

And we certainly take the good chair's comments and looking and knowing what the opioid and big pharma has done to this country.

So that has not gone unnoticed.

So thank you for that.

Well, thank you very much for mentioning this.

None of this background, Was included in the CR or in the central staff memo and I've asked questions about this funding source and what's behind it.

And so this is helpful information and I look forward to learning more about that history going forward.

And 1 quick note, this, this litigation on the opioid.

Um, wasn't just Mr. Ferguson, it was like the cigarette litigation.

Every state jumped in.

I mean, there's a ton of money there.

It wasn't like someone thought it up.

So every, every state was in on that.

So, and then some.

So, it was a national, obviously, but that doesn't take away from our leadership and also our city attorney's leadership and making sure that those funds are secured for services and treatment.

So, thank you.

Thank you.

Um.

And did you, uh, let's go through the options here.

Nothing, nothing, nothing to add.

I will continue with the options.

Option A would be to reprogram some or all settlement revenues not reserved for county level administration.

Echoing what Director Kim said, we are required to set aside funding for the Opioid Abatement Council.

And the memo that council members have is a little more specific about the settlement revenues that could potentially be reprogrammed.

The staff costs associated with the addition to the Health 99 overdose response program are only about $185,000.

There's a lot of funding in that allocation.

that we would be interested to have some more information from HSD about.

Also, $17,000 was mistakenly allocated by HSD to ongoing administrative costs.

This is an uninteresting technical error, but it is $17,000 a year.

Council could choose to proviso funding for the post-overdose stabilization facility.

requiring council approval of its operating and funding plans.

Just to summarize briefly, this facility is not in operation.

We don't know where it is going to be.

We don't know who it is going to run it.

We don't know when it is going to open.

And we don't know what its operating costs annually are going to be or who is going to fund them.

Option C, reduce some position authority and funding for HSD administration.

Option D, no change.

Okay, well, thanks and for the summary here, and before I go to other council members, you just spoke to some of the questions and concerns we were raising.

I think the number 1 issue that I want to ensure is that we do have staff that are ready to provide services in the 2 facilities that receive the 7Million in CDBG funds.

And you just said that we don't have any indication of where those facilities will be housed.

What the operating costs will be.

Whether or not there's.

a total known dollar for treatment services because we don't know what the opening date will be for those, is that correct?

Yes, that's correct.

More information about what facility or facilities receive the CDBG funding will be available.

It's my understanding in early 2024. So any planning for, you know, the use of those funds to establish facilities would take place after that point.

So then how do we have such specific dollar amounts included in the budget?

$581,652 for one-time funding for the overdose facility services operating.

A central staff does not have that information.

We don't have the basis for the establishment of these placeholder costs.

So I would ask for HSD to answer that question.

Okay, and if you know, hello, director Kim, I know you've received this question, but we are going to need to have the, the, the assumptions behind such specific numbers, you know, 1Million, 636,000.

$45 for ongoing costs and $163,807 for opioid abatement.

Council some of these things are very specific dollars, so appreciate that.

Maybe there's an earmark, but I think the biggest question that we're getting from.

Organizations who likely will be providing that similar services and hopefully will be within these facilities.

They just want to make sure that there's personnel ready to stand up the services inside the building.

I'm going to turn, if you don't have any additional feedback on that right now, just to follow up to say, we definitely would like to have assumptions on when the facility or facilities will open and what the projected costs would be.

And my real interest would be to ensure that we are proportioning it to the open date so that there's not money sitting on a shelf if we're really not going to open until September or June of next year.

I'm seeing nods from Director Kim.

Okay.

Councilmember Nelson, I'm going to turn it to you, but I'm also going to flag for our vice chair.

I would like to recess after this series of questions, and I do have an appointment I have to go to relatively soon.

So, if you don't mind taking the reins, if we don't conclude in the next 6 minutes here, I may ask you to do that vice chair.

And then we, again, colleagues will recess and reconvene at 2 PM.

Councilmember Nelson, please go ahead.

Well, this will be quick given our discussion about staffing and difficulty filling vacancies.

Is it likely that these can be hired in 2024 and is this considered more.

because this is funding source that is outside the city, not general fund, it's opioid settlement dollars, would that be considered more grant funding?

Would that fall into the bucket of, would that add to the 40 or so people that are positions that are grant funded that have not been hired yet?

And we can, I can get those answers later, I suppose.

Thanks.

I think the quick answer, correct me if I'm wrong, is that most of the people working in the facilities would be outsourced to our community partners.

Is that correct?

Director Kim.

Go ahead, Director Kim.

That is correct.

Okay, great.

Thank you.

And we'll follow up with more information about that hopefully with the questions I asked.

Council Member Herbold.

Thank you.

Just we've been focused on the operating cost for the post overdose stabilization facility.

Again, as I mentioned earlier to in response to council member Nelson, there's also the.

CDBG funded capital facilities, approximately $5 million for the low barrier treatment, $5 million for low barrier treatment facility that we have not discussed whether or not there are operating costs associated with that.

I did have a conversation with Andrew Meyerberg in the mayor's office yesterday about that.

He said he believes that the operating costs can be absorbed by the likely recipient of funds for that low barrier treatment facility, but I would just like to confirm that and know for certain that that is not something that we should be tending to in this budget, funding for operating costs associated with that facility as well.

Thank you.

Any additional comments on that?

Okay.

Seeing none, colleagues, I think we're going to go ahead and take a recess.

It seems like a good place to pause.

We'll come back at 2 p.m.

and continue the discussion midway here on HSD's presentation.

Thank you to HSD, CBO, central staff, everybody.

Have a good break.

If there's no objection, we will be in recess until 2 p.m.

Seeing no objection, see you at 2 p.m., we are in recess.

Bye-bye.