Seattle City Council Select Budget Committee 9/27/2023

Good morning, everyone.

Thank you so much for joining the Select Budget Committee meeting of the Seattle City Council.

Today is September 21, 2023, and the time is 9.32 AM.

I'm Teresa Mosqueda, Chair of the Budget Committee.

Will the Clerk please call the roll?

Council Member Herbold.

Here.

Council President Juarez.

Here.

Council Member Lewis.

Present.

Council Member Morales.

Council Member Nelson.

Present.

Council Member Peterson.

Here.

Council Member Sawant.

Present.

And Chair Mosqueda.

Present.

Eight present.

Thank you very much.

And if Council Member Strauss joins us, we will make sure to announce his presence as well.

I want to thank all of my colleagues for joining us again.

Oh, hello, Council Member Strauss.

Council Member Strauss is present.

We have all nine Council Members.

Good morning.

Thank you, Chair Muscate.

I was stuck in the waiting room while you were calling roll.

I understand that.

We're happy that you're here and thanks for joining us live from your district.

I want to thank all of you for joining us again for the Select Budget Committee meetings.

This is our chance to jump into the proposed budget that we have just received yesterday.

So thank you.

Thanks to the council members, to your staff.

Thanks to the clerks and central staff, the IT and comms department, as well as Seattle Channel.

We are grateful for all of your work and thank you for helping to get us through these next eight to 10 weeks in front of us.

We really appreciate all of your work to come.

I wanna thank the mayor's office and Mayor Harreld for transmitting the proposed budget yesterday.

And this is our chance now.

The legislative department receives the proposal and we take the opportunity to dive into the proposal and ensure in this year's case that it aligns with the 2024 proposed supplemental, the second part of our biennial budget process here.

So we will, from now on, be referring to the 12 months in front of us that we will be considering as part of our biennial budget adjustment process.

Today's agenda includes a budget committee meeting that will provide as an overview of this year's mid-biennial Budget adjustment process, we will hear from central staff.

We will hear a presentation from the city budgets office and the mayor's proposed and the mayor's office on their proposed adjustments.

We will also try to hone in on any specific questions that council members may have.

and the biggest questions that I think we will all be looking at is any significant program or staffing changes as it relates to our endorsed 2024 12-year calendar budget.

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

Hearing no objection, today's agenda is adopted.

Colleagues, I want to just provide a few opening comments before we head into public comment.

As your budget chair, now going into our fourth year together working on budget, transparency, accountability, and lifting up investments for working families and small businesses, our community at large, investing in community health, I wanted to outline some of the priorities that I will be looking at this year.

This year, I'll be prioritizing accountability, sustainability, and equity as we undertake the process of finalizing the 2024 mid-pianum adjustments.

Last year, in the wake of continuing dire economic forecast, and the ongoing pandemic, this council passed the 2023 2024 by annual budget that rejected austerity.

Thanks to the use of jumpstart higher than anticipated revenue to prevent deep cuts.

We did that for a short two-year temporary process to ensure that core government services and programs and people were served during this really tough time.

Many of the hardship that our community was experiencing 12 months ago continue today, and in some cases, instability has worsened.

As we're optimistic about the opportunity to recover, we want to continue to think about recovering equitably.

And I want to remind us all that we continue to see the ongoing pandemic both impact our physical health, get your vaccinations, get updated on your immunizations against COVID and the flu.

And we also see the impacts on our local economy and housing instability and the crises that continue to compound the shadow pandemic.

Last year, this council prioritized a budget that advanced three concepts.

We wanted a budget that invested in a community that was both cared for and housed, second, connected and resilient, third, healthy and safe.

We included a historic $500 million investment into affordable housing across the biennium.

Half a million dollars in affordable housing made possible due largely to jumpstart progressive payroll tax.

We invested in public safety and community health by investing in early intervention and upstream solutions that create greater self-determination, economic stability, and address the rising trauma and income inequality over the last few years.

In this year's efforts, we must keep our word and maintain those commitments in public safety and community health by rejecting austerity, denying attempts to raid Jumpstart or attempts to rebrand existing programs under new names or start new programs when we have evidence of existing programs being effective and efficient and trust already being built in community.

On the topic of accountability, I wanna note that we've set up a budget process that creates greater transparency and continuity with an eye towards sustainability for the future years.

In large part, I wanna thank the council's communications office who have offered new tools for allowing the public and our colleagues to have access to information that's being proposed.

And when council members are suggesting changes, we can quickly use the tools that the council communication office have set up To ensure greater access and transparency on the budget, we are continuing to work on that transparency with legislation that I teed up and foreshadowed earlier this year to build on the good work of the city budgets office and central staff and the work group that they created to allow for greater consistency and stability for the budget.

We are also folding in the information that we receive quarterly from the Budget Forecast Office.

And because of that transparency and daylighting the information that we've received in the six-year financial plan, we know the consequences of dwindling revenue streams, and we know the importance of investing additional revenue to ensure that there's greater stability for our community.

I look forward to working with you all on the accountability concepts that we are holding close to this budget process.

As we need to continue to do this, not just for the council and our deliberative process, but so that there's greater opportunity for the community to provide engagement into our budget on sustainability.

We review the mid-year biennial budget for calendar year 2024 with an eye towards any new proposals or any new pilots.

If there's any initiatives or new departments or new programming, we need to look carefully at whether or not those new dollars are taking the place of existing programming and, in my opinion, prioritize ongoing and underfunded services in our city to increase investments in core city services and the people they serve.

We need to make sure that we do this so that there's greater stability in the out years because investing in new FTEs or programming at this moment without the commitment to additional new revenue just increases the revenue instability in the out years.

With an eye towards equity, in these times of limited resources and with the use of Jumpstart already backfilling our revenue coffers, I believe the priority must be on maintaining investments and promoting greater equity for Seattleites through critical investments in upstream solutions that actually make our community safer and healthier.

That means priorities in housing and residential services for vulnerable neighbors.

It means investments in climate resilience and our infrastructure.

It means investments in people and wage equity for our city workers and frontline contractors who make our local economy run and serve our most vulnerable community members.

That, colleagues, are the three pillars that I will be looking at as we receive this budget.

And as chair, I will focus on the basics as well by maintaining the investments we committed to in this biennial approach and by protecting investments for housing and human services, community cohesion and health, economic resilience, and revenue stability.

There is no way to realign our city priorities to the tune of $214 million in cuts each year for the next six years if we don't address revenue as well.

Our city priorities do not align with a budget that assumes this level of cuts coming or this amount of austerity in the out years.

The future of our city residents and the sustainability of our community is too important to gamble on.

I look forward to aligning our prior commitments and priorities and to ensure that the completion of our 2024 mid year mid biennium adjustments align with those initial commitments and of course look forward to working with you.

Given the changes in the 2024 endorsed budget, some of which were flagged yesterday, the budget that we received will be going through a rigorous process with central staff.

Thank you in advance to CBO and all the team at the mayor's office who will be providing feedback and answering questions over the coming month.

We will have a conversation about how the chair's proposed budget will be presented and the process for that at a future meeting.

Given that there is not revenue in the proposed budget, but we know that colleagues, many of our colleagues here on council have proposed both revenue strategies and fee legislation, teeing those up for our consideration during the project process.

And given that the revenue stabilization work group report was completed and presented last month, this is a process that was two years in the making.

And I wanna thank the revenue stabilization work group who began their work almost exactly a year ago, last October, We know that there are conversations that council members want to have about revenue, and we see the dire need for revenue in the out years.

And when I say out years, that means 2025 and beyond.

I did ask central staff last month to begin analyzing and drafting possible legislation based on what is legally a viable path.

And we can possibly take a look at any revenue and fee legislation that council members are interested in at future meetings as well.

We will take those up before the close of the budget process.

If there's interest from council members in continuing to work on additional ideas, please do get in touch with central staff.

Again, a summary of the budget processes as follows at today's budget committee meeting will have an overview of the mid biennial budget adjustment process from central staff, followed by a presentation from CBO on the mayor's proposed adjustments.

Including any significant program or staffing and changes additions or reductions from the 2024 endorsed budget.

October 11 12th and 13th in addition to the 16th and 18th.

we have those dates held for budget hearings on proposed adjustments.

We will look by department to discuss any substantive changes from the 2024 endorsed budget.

These conversations will be led by central staff.

CBO and the selected departments will be invited to answer questions about their proposed budget adjustments as well.

On October 17th, The office of economic and revenue forecasts will present an updated forecast to the forecast council and October 19th central staff will brief the budget committee on how that forecast impacts our 2024 proposed budget.

It's very timely to receive this.

That is why we baked in these quarterly report outs to the general public so that council and the executive could be informed both the executive informed by the August forecast and the council informed by the October forecast.

As a reminder.

Self balancing council member amendments proposals are due to central staff on October 23rd.

October 27th, the committee will have initial discussion with the council member proposed concepts.

And again, as I noted, we'll have more information forthcoming on how the process for the chair's proposed budget will be revealed.

the committee will discuss and vote on council member proposed mid biennial budget adjustments on november 13th 14th and 15th you should have all of these dates held on your calendar and the final vote will take place on november 20th with the goal to move it to full council on november 21st just in time for a short recess for the holidays If there are no questions on the process, I would like to turn it over to full council, excuse me, to public comment for full committee consideration here.

At this point, we will hear from everybody that has signed up for public comment.

I do see that there's three, four people present and interested in providing comment online.

And we'll go to those four people first online.

And then Madam Clerk, if I could turn it to you to facilitate anybody who may have signed up in person.

Madam Chair, we currently do not have anyone in person.

First person is BJ Lass.

Good morning, BJ.

We could do a two-minute timer, please.

Just one second, BJ.

Could we do a two-minute timer, please?

Thank you.

Good morning, BJ.

Sorry about that.

Good morning.

My name is BJ Last.

One second.

Let me get you to the right time.

Okay, BJ, you can go ahead.

Thanks for being our first out of the gate.

Sorry for the glitches there.

No worries.

Thank you.

My name is BJ Last.

I'm a Ballard resident.

I support the solidarity budget.

When calling on council to defund SPD, SPD's budget has become so bloated that defunding SPD is a matter of basic fiscal responsibility and restoring basic budget practices at this point.

SPD has over 210 ghost cops.

These are positions SPD has no plan or intention to fill, but still receives funding for every budget cycle.

This funding turns into a massive slush fund that allows SPD to claim new expenditures are budget neutral.

We are seeing this in this current budget where it's claiming new positions are budget neutral because it's being funded by positions that are currently being held empty.

SPD has previously also done this with technology and overtime.

This is a massive.

I mean, the slush fund really removes council's essential process role of budget oversight of the department.

Council needs to treat SPD like every other department and abrogate all positions in excess of a tiring plan.

SPD is also asking for 6.5 new FTE that are all being funded with one time grant funds.

or one-time salary savings.

New positions should never be funded with one-time funds because the costs for new positions are ongoing after the one-time funding stops.

We just saw this with the six new FTE Council gave SPD in the mid-year supplemental budget.

These six positions are now requiring additional funding in the adjusted adjustments to the 2024 biennium whatever the name of this is.

Council should reject these new positions because they have no funding attached to them long-term.

If SPD wants these new positions, then we should have to be abrogating additional positions or finding long-term sustained funding.

Additionally, Council should reject the $1.8 million for ShotSpotter and CCTV cameras SPD is asking for.

Surveillance makes us not safe.

We just had this conversation about this exact same program

last budget community came around to rejected it uh to rally against it thank you the next person on the list is alice lockhart followed by latonya severe and then we'll have haley willis and that's all we have signed up for public comment if you'd still like to provide public comment you're welcome to call it good morning alice good morning council can you hear me

We can.

Thank you.

Good morning.

I'm Alice Lockhart speaking from Licton Springs, and I also support the solidarity budget.

I've had a moment to look at part of the mayor's proposed budget, but I find the top-level numbers deeply concerning.

The mayor gives his own office a more than 19% raise relative to the 2024 budget that council endorsed last fall, and at the same time cuts the budget of the Office of Sustainability and the Environment by 2%.

I know there are apparent reasons for these things, but this is just not okay.

OSC needs every last dollar.

I'm also concerned with the whopping 30% raise the mayor gives the Office of Economic Development.

I urge council when looking at the mayor's sudden injection of big bundles of cash into OED to carefully distinguish between funding that will disproportionately benefit wealthy owners of downtown big buildings as opposed to funding in other departments that meets human needs, maintains function across departments and across neighborhoods, and honors the values, the great values that Chair Mosqueda expressed at the beginning of this meeting.

Thank you so much.

Thank you.

And LaTanya, followed by Haley.

LaTanya, can you hear me?

Yes.

Can you hear me?

Yeah, please go ahead.

All right.

My name is LeTanya Sevier.

I'm a black non-binary renter in D2.

I support the solidarity budgets, non-budget guarantees, and this committee should too.

The committee needs to find space in the budget to fund a guaranteed basic income program, affordable permanent housing for all, a network of supportive and culturally competent adults engaging young people using non-punitive, non-carceral approaches to help them address mental health issues, We need fast, frequent, reliable, free mass transit, safe, accessible sidewalks on every street, digital equity and high-speed municipal Internet access for all, fully funding all the Green New Deal Oversight Board priorities, raising the wage for all nonprofit human service workers by 37%, and paying all city workers a living wage.

City workers were just at City Hall last Tuesday rallying for fair contracts.

I'm also calling to tell you again, like I did last year, to stop growing the SPD's budget.

Cops don't keep us safe.

In fact, all research shows that police make communities less safe.

And in the case of Seattle Police Department, we know that they are very focused on targeting Native and Black communities the most for harassment and violence.

You need to remove ShotSpotter, now branded as sound thinking from the budget.

The Chicago campaign against ShotSpotter started in May of 2021 when the Chicago Police Department chased, shot, and killed a 13-year-old boy named Adam Toledo in response to a ShotSpotter alert.

Why would we welcome more police violence into our communities when research shows increased rates of police use of force in neighborhoods once ShotSpotter is deployed?

Also in Chicago, Michael Williams was arrested and spent 11 months in jail after the Chicago Police Department asked shot spotters to relocate data points to charge him with murder.

I also am asking for you to remove the funding for the 210 ghost cops.

Okay, thank you, please send in the rest of your comments to Council at seattle.gov and Haley, you are the last person remotely signed up to provide public comment please go ahead.

Star six.

Haley Willis, and I'm the community policy manager at the Seattle King County Coalition on homelessness and I live in district six.

I'm happy to see that the mayor included the required inflation adjustment and a modest wage increase for human services providers in his proposed budget.

However, I'm here to urge you to apply inflation adjustments to all human services contracts across the entire continuum of care.

In addition to inflation adjustments, I urge the council to apply additional wage increases for human services providers.

A recent UW study found that many human services workers are leaving the sector for higher paying jobs and recommended raising human services wages by 7% over the next two years to stabilize the sector.

We need these essential workers now more than ever to help people experiencing homelessness to survive and get housing.

We are continuing to review the mayor's proposal and will review the county executive's proposal to ensure that we don't lose any capacity in shelter, housing, services, and operations across the whole homelessness crisis response and housing system.

I want to thank all of you who supported Resolution 32094 that you passed earlier this year that indicated the Council's support for increasing human services wages.

I hope that you take these important steps towards realizing that goal.

Thank you for your support of our essential workers.

Thank you so much everybody for dialing in today.

Thanks for providing us with some concrete examples of where to look at in the budget and any concerns that you might have that allow for us to really begin our process of analyzing the budget i want to move on to items for our consideration today but just a reminder to folks if you did want to provide public comment and you didn't get a chance to sign up today you are still able to provide public comment written public comment to council seattle.gov that provides us with information in real time directly to our inboxes so council seattle.gov and as a reminder on all of the upcoming committee meetings that we have you will have the chance to provide public comment at the beginning of each meeting in addition to our excuse me In addition to our public comment periods at the beginning of each meeting, we are going to encourage people to dial in remotely like we did today.

If you want to provide in-person public comment, that's also welcomed.

Public comment is scheduled for the first part of the meetings on the following day, September 27th, that's today, October 11th, October 27th, and November 13th.

There will also be two committee hearings solely dedicated to a public hearing on the budget.

That allows for us to make sure that people will be able to provide us real-time information as we consider possible amendments and impact or influence on the chair's proposed realignment.

So if you want to provide public comment at a public hearing on October 18th in the evening, I believe those start at 5 p.m., and we will have full public hearing in the evening on October 18th.

Again, on November 13th is our opportunity to provide additional public comments starting at 5. P.

M. And that will give you the chance to respond to the amendments that we've seen and the realignment that we will be able to put forward for the committee and the community's consideration.

On all of these meetings, remote participation is still encouraged.

As you can hear, I'm dealing with a little bit of cold.

So far, not COVID, but you never know right now, given all the transmission that's occurring in our community and wanting to keep both our teams, our staff, and the general public healthy, as well as those with compromised immune systems, we are going to continue to encourage remote participation.

Written public comment, again, can be accepted at any time at council at seattle.gov.

At this point, we're going to go on to our first item on the agenda.

If the clerk could please read the first item into the agenda, that would be great.

Agenda item one, introduction and budget process overview for briefing and discussion.

OK, wonderful.

Well, again, thanks to our very esteemed, capable team that I've had the pleasure of working on for budget.

Well, more than four budgets, given that we did four Seattle rescue plans, if not more in one year.

The team that has been really.

on the line and in meetings with us on a regular basis over these last four years.

It's really been a pleasure to be able to work with you.

So I want to thank you in advance for all of the work on this 2024 supplemental biennial process.

I do agree with BJ.

I'm going to try and hone it down to one word.

I just want to say supplemental since it's a biennial process, so I might just default to that.

Thank you for your work in advance on this supplemental budget for 2024. I want to welcome to the dais here our Director of Central Staff, Esther Handy, our lead on all budget items from Central Staff Deputy Director, Ali Panucci.

And we do have other Central Staff at the ready if necessary.

But what we're going to do right now is a quick overview of the process.

The central staff have provided us a PowerPoint to walk us through both an introduction and budget process overview, and we will take your questions.

Let's say after we complete the PowerPoint presentation, colleagues, I'll come back to you for any questions that you have.

Okay, thanks for being here, Director Handy and Deputy Director Panucci.

Please go ahead.

Thank you, Chair Mesquita.

And good morning, council members.

Esther Handy, director of your council central staff.

Happy to be with you as the council begins its review of the mayor's proposed mid-biannual budget adjustments.

Yes, those are some new words.

They acknowledge that some of our process ahead will look and feel different as the city recommits to a biennial budgeting process and uses this second year to make adjustments rather than start from whole cloth.

I WANT TO THANK CITY BUDGET OFFICE DIRECTOR JULIE DINGLEY FOR HER PARTNERSHIP WITH CHAIR MOSQUEDA AND WITH ME TO INSTITUTE NEW PRACTICES FOR THIS MID BIENNIAL REVIEW, INCLUDING ASKING DEPARTMENTS TO BALANCE NEW SPENDING WITHIN THEIR ENDORSED BUDGETS.

DIRECTOR DINGLEY, WE SEE YOU.

WE APPRECIATE YOU.

WE LOOK FORWARD TO HEARING FROM YOU TODAY.

I also want to take a moment to thank members of our incredible central staff team who will be with you in deliberation over the next month.

Patty, you can go to our next slide.

That includes our excellent deputy director, Ali Panucci, who leads our budget process and will be guiding us.

She is joined by two dedicated fiscal staff, Tom Mikesell and Edan Sisic, who will be preparing some of the big memos and technical data that underpin our work.

They are joined by a team of 16 legislative analysts who will bring subject matter expertise to the table.

Our new legal counsel in her first budget, thank you, Lauren, and our executive assistant, Patty Wigren, who helps us keep it all organized.

Patty is driving the slides today.

If you would like to see a different slide, please let them know, offer your patience, and they will help us get there.

Thank you, Patty.

I ALSO WANT TO NOTE THAT WE ARE WORKING IN PARTNERSHIP WITH OUR TEAM, OUR OTHER TEAMS IN THE DEPARTMENT, INCLUDING THE COUNCIL'S AWARD-WINNING COMMUNICATIONS TEAM, LED BY DIRECTOR DANA ROBINSON-SLOTE, JESSE FRANZ, AND JOSEPHIA PIHAT.

IF YOU HAVEN'T SEEN THE BUDGET PROCESS INFORMATION THEY HAVE PUT TOGETHER ON THE COUNCIL'S WEBSITE, PLEASE TAKE A MINUTE TO DO SO.

IT IS EXCELLENT, AND THANK YOU, COMPS, FOR HELPING US TRANSLATE THIS COMPLEX STORY TO THE PUBLIC IN SUCH AN ENGAGING WAY.

And my final thank you before I move to some content is to our partners in the Office of the City Clerk.

The $7.8 billion budget that was transmitted came as 24 pieces of legislation today.

The deputy city clerks and their partner help us move each of these through the legislative process smoothly.

So thank you so much.

Next slide.

We enter these budget deliberations at a really interesting economic time for Seattle.

Nearly a decade leading up to the pandemic, Seattle experienced a boom.

We had high population growth, low inflation.

We saw property values skyrocket.

Of course, it wasn't booming for everyone.

And the city was able to expand investments to respond to growing need, to a settlement agreement with the Department of Justice in 2012, to a homelessness emergency declared in 2015, a growing low-wage service sector, an emerging gig economy, and in response to the overall growing inequality in our city.

Then in March 2020, everything stopped.

And you council members faced some of the hardest budget choices elected officials have to do.

And you chose to consistently maintain city services and retain our city workforce.

You repeatedly found one-time resources to make this possible.

And you adopted the transformational new revenue source, the jumpstart payroll expense tax.

dedicated to a strategy of an equitable recovery for the city out of the pandemic, focused on affordable housing, equitable development, a Green New Deal, and economic resilience.

In the fall of 2022, as we emerged from the kind of quote-unquote peak pandemic, you created this 23-24 biennial budget that was similarly balanced using one-time strategies.

You made choices about what to prioritize in the near term while we take some time to see where the economy goes in the longer term.

As Director Dingley will walk through in more detail, I know in her presentation, the current economic context is mixed.

We're emerging from record high inflation, looking for that soft landing that the Fed describes.

Some revenue sources like sales tax and B&O are tracking with inflation and are strong, and others lag.

Some sectors like construction, travel, hospitality remain below those kind of peak boom years pre-pandemic.

So over the next two months, you will be asked to look at adjustments to the 24 budget and your near term tools will again be one time resources, knowing that the decisions about how the city will solve the structural budget deficit will really be tackled in the development of the 2526 budget.

So to inform your decisions, I'll move to this next slide.

I offer a couple of questions for reflection as you listen to the executive's overview presentation.

The first set of questions are about how things are balanced.

So what strategies did the executive use to end imbalance?

Where are staffing new programs coming from a unprogrammed reserve that you set aside for that purpose last year?

Where has the executive rebalanced spending and department?

WHERE IS THERE NET NEW SPENDING AND WHY HAS THE EXECUTIVE CHOSEN TO MAKE THAT A PRIORITY?

SORT OF WHAT'S THE COMMUNITY NEED THAT THAT PROPOSAL RESPONDS TO?

DOES THE EXECUTIVE PROPOSE NEW REVENUE SOURCES?

AND HOW DO THESE CHANGES IMPACT THE SIX-YEAR FINANCIAL OUTLOOK?

IN ADDITION TO HOW IS THIS BUDGET BALANCED, ON THE NEXT SLIDE I INVITE YOU TO THINK ABOUT THE WHAT.

REALLY LISTENING FOR HOW DOES THE BUDGET ADDRESS COUNCIL'S KEY PRIORITIES AND THE INITIATIVES YOU HAVE BEEN ADVANCING?

Go ahead to the next slide, Patty.

Those include using a regional solution to serve houseless individuals and families, addressing addiction and public drug use through treatment, service, and diversion models wherever possible, establishing and enforcing labor standards for our app-based workers, maintaining a clean city with accessible parks and open space, running a public safety that can recruit and retain our public safety workforce, and expand a civilian response network with new alternative responses.

Truly advancing our zero vision zero transportation strategy, supporting small businesses and re energizing a vibrant downtown and asking does this budget reflect a city that partners with our tribes supports our native communities and that cares for both our most vulnerable residents and those that offer frontline services to them.

I'm going to hand it over to Deputy Director Panucci to walk through the process by which we'll go through.

And I look forward to being in dialogue with all of you as we dig into the substance and the mechanics of how these budget adjustments have come together.

Thank you, Director Handy.

Good morning, Chair Moschetta, committee members.

I'm Allie Panucci of your Council Central staff.

And I'm just going to spend a few minutes refreshing everyone on the process that we will be working through together.

I'll be relatively brief, as Chair Moschetta highlighted, at many of the steps in the process.

If we could move to the next slide, Patty.

Thank you.

So this slide summarizes the different roles that the executive and legislative branches have in the budget process.

Pursuant to state law, it's the mayor's job to prepare and submit to the council a proposed annual budget that is balanced in September each year.

The $7.8 billion proposed budget adjustments that was transmitted yesterday is just that.

It's a proposal from the executive.

Today begins the council's role.

It's the council's job to review those proposals, determine where you would like to modify or accept or reject portions of that proposal, and ultimately to adopt a final balanced city budget, which must be done no later than 30 days prior to the next fiscal year.

And this year is scheduled for the Tuesday before Thanksgiving.

With 2024 being the second year of a biennium that was approved by the City Council in November of 22, we worked in partnership with Chair Mesquita and the City Budget Office to establish new direction for the second year.

As you'll hear, Dingley described, and as Chair Mosqueda highlighted, departments were asked to balance new requests and needs within the budgets that were endorsed last year.

And the Council's process is set up this year to review the proposal against the endorsed budget.

So, it is really an adjustment process or a supplemental process, as Chair Mosqueda described.

If we could move to the next slide.

So this year, there are four steps in the Council's budget process compared to the six steps used in last year's budget.

I won't describe each step, but I'll just note that what is different about this year is that the process really built in more time to work with all of you to prepare those self-balanced budget amendments between budget hearings and the budget deliberations discussions.

We can move to the next slide.

So today we are on step one of the budget process.

In just a few minutes, you will hear a summary of the mayor's proposed mid-biannual budget adjustments from Director Dingley, followed by an update on the Seattle Rescue Plan spending.

I'll just reiterate some of the points that Director Handy and Chair Mosqueda made, just highlighting that as you're listening to this presentation, knowing that next year the new council will need to consider how to address the projected ongoing deficit, really think about if any new spending is meeting a critical need that should be funded in this moment before we have decisions about those longer-term strategies to address the ongoing projected structural budget issues.

If we can move to the next slide.

Next up in the budget process is step two, budget hearings.

After completing step one, we will dig in, review the mayor's budget and prepare materials for the committee's consideration where we will, central staff, will present our analysis of the proposed budget and council members will consider options and begin to identify areas where you may want to modify the proposal.

In addition, this step includes the first of two public hearings scheduled during the budget process this year.

And we will receive a revenue forecast update, which this year we will get prior to budget amendments being due.

So as you think about your proposed budget amendments, you will have the full context under which the council needs to balance their budget.

So unless there are questions about the process, I think we're ready to hear about the mayor's proposal.

Thank you.

JoAnne Hanrahan, Okay, great well, thank you and right before director dingley jumps in I want to thank central staff once again for all of your support, I wanted to add to the context slide.

JoAnne Hanrahan, Excuse me, Esther director handy I think it was.

JoAnne Hanrahan, context for all of the moving one more please.

JoAnne Hanrahan, One more.

Well.

title slide.

You talked about the revenue forecast coming, the situation that we have with the 214 or so average annual gap in revenue versus expenditures starting in 2025 for at least six years and some of the other issues that continue to affect our revenue forecasts locally and nationally.

Again, we will get more information mid-October from the revenue forecast, as you heard, that will be summarized and presented two days later to the city council.

So we'll have an analysis of what that could potentially mean for us.

I also just wanted to flag, and you may have done this, but maybe just to underscore the ongoing conversation that's occurring in Washington, D.C., and the possible government shutdown that is looming and the impact that that could have on core government services, our ability to deliver care and continue contracting.

We have a number of individuals that are currently both employed by the city of Seattle and do work side by side with people who have HUD contracts, for example.

So there's various ways that the government funding and decisions that are being made in D.C.

could have impacts to us locally, not to mention the impact that a government shutdown could have to our national and global economy.

At 8.30 p.m.

last night from the National League of Cities, I'm on the board of the National League of Cities.

We received an email basically summarizing that this remains a very difficult conversation in Washington, D.C. And the president of the National League of Cities, Clarence Anthony, communicated out to the National League of Cities board members that if Congress is unable to send a short-term continuing resolution to the president this week, spending authority for most federal agencies will expire on Saturday this week.

The federal government will be, quote, shut down at that point.

The Senate is using this week to assemble and pass a short-term bipartisan continuing resolution that is likely to exclude any policy provisions that don't already have broad bipartisan support among the senators.

In the House, on the other hand, It is using this week to try to advance a handful of year-long spending bills with Republican support alone.

At this late point, without dramatic change in direction, a shutdown appears inevitable.

so i wanted to just remind us of that national context as well and um clearly we all hope that this will be a short-term short-term impact on our local economy and ability to deliver services but the ramifications are still something that i think we need to be cognizant of and to the degree that it is ongoing um could impact our revenue situation and economic stability for our nation and impact our region as well.

The email is very lengthy and provides additional information.

And just as a reminder, the National League of Cities is very much an a-partisan group.

It includes membership from blue and red cities and towns and villages.

And it also includes individuals who are not partisan and as well individuals who run both as Republicans and Democrats.

So This is not a political statement I just read it is the facts and dire situation clearly for our partners in Washington DC as well so I assume we will stay in close touch with them on this process as well.

I'll send that full summary that the National League of Cities sent to me last night to the council members right now so you and your team members have that summary as well.

And, excuse me, I know that our Office of Intergovernmental Relations will be tracking that closely and providing information to us, as we saw as well an email from Elsa Brown yesterday.

One more note just on process before we dive in, Director Dingley.

Colleagues, given that we have some long days ahead of us for some of our meetings, I have just notified the clerks and communications team as well as central staff that my intent is to try to have a 10 a.m.

start time for all of our committee meetings coming up, 10 a.m.

start time.

that will allow for people to take care of business in the morning and then jump right into our committee meetings at 10 a.m.

The only exception to that will be November 20th, drum roll, where we have our final committee vote on the package before it goes to full council on November 21st.

So please be on the lookout for an updated memo that will be circulated and we will just toggle the time on the communications material that you've received and we'll make sure to publish that If you show up at 930, that's okay.

You'll be early.

And we'll start at 10 o'clock going forward.

I do want to just ask if there's any questions for Director Handy, Deputy Director Panucci.

Seeing none, let's go ahead and turn it over to our partner in the City Budgets Office, Director Julie Dinkley from the City Budgets Office.

It's been a pleasure to work with you over the last few years.

Thank you for the ongoing support.

And I again, I want to note, this is the product for a year for the upcoming year for the 12 months and in front of us, but there's much more work that the city budgets office with the leadership of director Daly has been doing with our central staff with the leadership of director handy and deputy.

Director Panucci on how we continue to evolve our processes and increase transparency and sustainability.

So we have joint legislation or I should say joint recommendations that resulted in some legislation that I will be bringing forward later this year as well as part of our budget process to really try to codify some of those components that were that grew from that discussion that CBO had with central staff and appreciate that this product of a biennial budget and the hope to adhere to a supplemental for 2024 is something that we all have joint interest in moving towards true biennial budgeting is the gold standard here.

So we are working together on all of that.

And your team has been very accessible.

And I don't want to speak on behalf of central staff, but we have a great appreciation for the conversations that we've been able to have with your staff and them having discussions and getting feedback from departments so that we can quickly analyze information and get clarity on items over the last few years.

And I have no doubt that this year will be the same.

So thank you for the accessibility and for your work that you put into the proposed budget that we have now received yesterday.

I'll turn it over to Director Julie Daly from the City Budgets Office.

Welcome.

Thank you so much, Chair Mosqueda.

It is just an absolute pleasure to be here with you this morning.

I really appreciate your comments on the partnership that our offices have formed.

It has truly been incredibly collaborative, and that started during the pandemic, and really just appreciate it every day.

I also appreciate you saying something about the potential looming federal government shutdown.

I want to assure the council members that in addition to the Office of Intergovernmental Relations, the City Budget Office, as well as the Office for City Finance, are all closely monitoring the situation.

I personally lived through the record shutdown in D.C.

I was in the Office of Management and Budget at the time, and it was 35 days.

It was a long time.

Hopefully this is resolved much sooner than that.

The city's in a good position to withstand a shorter-term shutdown, but we will absolutely keep you updated if this seems like it's something that's going to be an extended period of time and if those impacts are a little bit more magnified.

So we'll be in touch with more details there.

With that said, morning council members this is uh one of the happiest days of my year because i get to share with you the work of the city budget office and the city at large in preparing the mayor's proposed budget adjustments so this is the 2023-2024 proposed mid-biennial budget adjustments it's a very long title for frankly a much shorter budget this budget book is 33 percent shorter than you saw and have seen in prior years which is a fact i am mighty proud of and worked very hard to achieve This is the second year of the city's biennial budget process.

The city council endorsed departmental funding amounts for 2024 as part of the 2023 adopted budget, and that endorsed budget served as the starting point for the 2024 budget process.

And apologies, I forgot to introduce myself.

Hi, everyone.

I'm Julie Dingley.

I have the honor of serving as the director of the city budget office.

Okay, I'm going to go ahead and jump right in.

If you can go to the next slide, please, Patty.

Great.

So today I want to talk to you about this proposed these proposed budget adjustments.

We're going to look first at a mid biennial snapshot.

So looking at all the funds in total and how they come together.

Then we're going to talk a little bit more about the economy and the revenue context that we were working within to create this budget.

Then we're going to talk about the steps we took to develop that budget, looking at the mid biennial view, looking at changes from the 2024 endorsed to this budget, look a little bit at changes in the payroll expense tax, as well as unanticipated or significant cost pressures.

We're going to have a little bit of conversation about looking ahead to 2025, 2026 biennium, as you have heard in the prior two sets of comments, that that is a really big concern for us down the road that we want to keep an eye on.

And then we'll get into the real meat of the proposed changes.

So the mayor has made several strategic investments in key areas, and those four key areas are sustaining critical services, bolstering public safety and public health, investing in workers, and furthering economic recovery.

And last but never least, we'll have a discussion about the fiscal reserves and the contributions that we're making to those reserves in this budget.

Great, thank you.

So we'll go to the next slide.

So the budget is $7.8 billion this year.

You see here that that is split.

These are by investment area of the budget, not necessarily by department.

So you can see that there is a huge chunk on the left here, utilities, transportation, environment, 50% of that $7.8 billion budget.

What's important to remember when you look at this slice of the pie is many of these funding sources that make up the full budget are restricted.

They are restricted either by state law, by local statute, by voter approval.

There could be any number of reasons why they are restricted for specific uses.

But it is important that we don't have full control necessarily on, we couldn't spend all 7.8 to solve any one problem.

So we have to respect those different colors of money as we call them.

On the next slide, you'll see a breakdown in the same way by investment area of the city's general fund.

This is our most flexible pot of money that funds the basic services for the city.

You'll see that public safety on the right hand side in this yellow color takes up about 47% of the overall budget.

That level, is something you would expect to see for a municipality.

One of our primary core charter responsibilities as a city is to ensure public safety of our residents, much in the same way that King County is in charge of public health and the feds and the state have education requirements that they need to meet.

Every level of government has a different set of core charter responsibilities that they need to take care of.

And so that's why you see this sort of the way that this pie is structured.

So going to the next slide, we're gonna go, this is another zooming out, a look at the full budget and just giving you another way of dicing up the numbers.

There are any number of ways to cut this up.

This is by fund.

So here you'll see that the general fund is at the bottom in that blue.

And then you see Seattle City Light and Seattle Public Utility Dollars.

Those are rate payer dollars that are restricted funds.

as I mentioned previously.

And then we have transportation and payroll expense tax, FAS, et cetera, et cetera.

So I'm not gonna spend too much time on this one.

I wanna go on to the next one, please.

I was just gonna note, Director Dingley, colleagues, if you do have questions throughout this presentation, I would prefer to take those as we go instead of having those held to the end so that we can ask them in real time.

Thank you so much.

And obviously, CBO is aware every time payroll expense tax or PET is put up, I remind folks that that is Jumpstart.

Yes, thank you.

It didn't quite fit on the side of the slide.

Perfect.

Thank you.

Yeah.

Great.

So I want to get into a little bit on the overall budget context.

So looking at our local economy and our revenue picture.

You heard Director Handy allude to this in her opening comments.

What we're looking at right now, the key takeaways that we saw in the August revenue forecast and update Office of Economic and Revenue Forecasts is that the Federal Reserve or the Feds actions are working to bring inflation under control.

They have been systematically increasing interest rates over the last year plus.

With the goal of driving down inflation toward what they consider more much, much lower between two and 3% is really their target goal.

Overall, That effort is working.

It is, if we have all known, it's more expensive to borrow money.

And that impact is felt because what happens is it slows consumer spending down.

The savings that folks have built up depletes somewhat.

And those higher interest rates slow down purchases of major items.

So we have seen slowdowns in the housing market, in the automobile industries, et cetera, et cetera, because it's more expensive to borrow that money.

What we have seen and what we were concerned about originally was that that rapid rate increase of interest rates from the Fed would cause a recession.

What we are seeing is that the economy is a lot stronger than expected.

And so we're expecting what the Fed now refers to as a soft landing, which means they will effectively cool the economy down without bringing about a recession.

And when they're talking about a recession, they're talking about a loss of jobs.

What we know about our region is that our job growth continues.

What's really important to note here and something that we're keeping a close eye on is that the composition of the job growth is changing in very significant ways.

So prior job growth in the city had been driven not exclusively, but pretty near exclusively by the tech sector.

And what we're seeing now is that the job growth is shifting away from the tech sector and instead toward leisure and hospitality.

So you might ask yourself, why is that important?

That's important because of the disparity in pay between those two sectors.

The tech sector is often much higher compensated than leisure and hospitality.

And what that means is that workers from the jobs that are created have less money to spend in the overall economy.

So there's less economic activity generated by that job growth.

So that's something that we're keeping a very close eye on.

On the next slide, we're going to talk a little bit more about the August revenue forecast and what we saw there.

Based on stronger than expected 2023 performance of the regional economy, our overall general fund revenues are projected to increase relative to the 2023 adopted and 24 endorsed budget expectations.

The mayor's proposed mid-biennial adjustments assume a higher level of revenue for general fund at about $1.7 billion.

That's about $76 million over the adopted budget and $1.68 billion in 2024, or about nearly $50 million above.

What's really important between those two points is that revenue is actually decreasing between 2023 and 2024. So although it's an increase relative to the endorsed budget, The total revenue coming into the general fund is going down by about 2.8% between 23 and 24. There are other significant revenues that support general government operations and capital expenditures that have not fared as well in the near term as the general fund.

Those include the jumpstart payroll expense tax.

And what we have seen there, as I mentioned previously, a slowing of the technology sector and lower valued stock grant compensation has resulted in lower forecasts.

So relative to the 23 adopted and 24 endorsed budgets, the proposed adjustments reduced revenues by about 20 million in 2023 and about 21 and a half million in 2024. It's about 41 million across those two years that we had to adjust to with this budget.

On real estate.

I'm just on that note, Julie.

Director Dingley, it is important to put that into context with the expenses that Jump Start requires.

The revenue that's coming in is still higher than the Jump Start expenses as required by statute.

So I appreciate the note that it is down and that that's been adjusted for.

But it is still coming in higher than the jumpstart specific spend plan directed expenses.

And thus, I think we're having to toggle with that delta between what the jumpstart spending is and the received revenue and comparing that to the projected revenue.

Still important to note, though, that jumpstart funding is at this point being fully sustained.

Given that the revenues coming in higher than expenses.

Absolutely, and we'll dig into that in a little bit more detail in a couple of slides.

Thanks for raising that.

we also are looking at the real estate excise tax here if you all will recall last year during your consideration of the mayor's proposed biennial budget there was a significant late year decrease in our REIT revenue projections what we are seeing is a continuation of that trend so we are only seeing forecasts of about 50 million in 2023 and 54 million in 2024 which is significantly reduced from the 23 and 24 endorsed projections of 68 million in each year and that's reflecting the reduced commercial and residential increased borrowing rates and uncertainty around the value of commercial office in a work from home environment a more where that's more predominant Really importantly, on real estate excise tax, this is a funding source that is often more of a canary in a coal mine.

So it's something that tells us that on the development spectrum, a transaction of real estate is really at the beginning.

And then from there, you're talking about renovating that space or developing that space.

That action creates sales tax from that construction activity.

The availability of that space means that new businesses could begin or move or relocate to the city, and that could result in additional B&O tax.

When we see decreased REIT coming in the door, we know that in a couple, we will see in the coming months and over the next year or so, that we will potentially see a ripple effect through the rest of the city's revenues.

So again, something we have to track really closely as we're going into 2025 and beyond.

All right, next slide, please.

A note here, this is something that we have talked about previously, but I wanted to bring it up once more that the city's general fund does not, grow at a one for one rate in a high inflation environment.

So the direct impacts of high inflation systematically weaken the purchasing power of general fund revenues.

So while you might assume that revenues would generally grow as the price of goods and services increase, it's just not true for all of the city's revenue streams.

For example, property tax revenues are statutorily constrained to grow at just 1% plus the value of new construction.

That's 24% of the city's general fund revenues.

And that's a state level restriction.

We saw a big move at the county last year because they also have the same restriction to ask the state for additional flexibility there.

I think there's a major opportunity for the state to reconsider that restriction.

So that's something that we'll want to be looking towards the future on.

furthermore policy choices around public utility rates and fees charged for city services could also constrain overall revenue growth it might be the case that from a policy perspective the council or the mayor decide to not fully pass on the increased cost of inflation onto consumers of whatever service the city is providing and at the same time inflation drives up the costs of goods and services the city purchases you'll see that show up in a very big way in a slide that I have that's called unanticipated cost challenges that's coming up where we've seen a lot of that.

All right, next we're gonna get into a little bit more on how we developed this budget.

So this visual at the top is a representation of our year.

It takes almost a full year to create what it is that I am presenting to you today.

And it takes an incredible team of brilliant analysts and people from across the city to do it.

So importantly, the mid biennial budget process was conducted within the context of funding and service levels that were already in the 24 endorsed budgets.

As I mentioned at the top, 2024 is the second year of the of the city's mid by a city's biennial budget process.

And you all endorsed a budget in 2024 that served as our starting point.

Departments were not asked for target reductions this year, as they have in prior years.

But the guidance was to operate within their If departments had changes that they wanted to make, they needed to offer up an offsetting reduction in order to pay for that.

Decisions for 2024 were made in the context of the looming $251 million general fund deficit that's projected for 2025. And as I mentioned at the top, the book is shorter.

So you'll see that the department chapters themselves are shorter, and we have relocated some summary tables to an appendix, really in an effort to focus the book exclusively on the changes to the endorsed.

On the next slide, please.

Oh, I am so sorry.

This was an out of order slide.

This should have come earlier.

That's my fault.

A little bit more on real estate excise tax.

This chart shows you real estate excise tax receipts all the way back to 2000. The reason to show you this long time horizon is the city hasn't seen this precipitous of a decrease in REIT revenues since the Great Recession.

Now, of course, during the Great Recession, the situation, the contextual factors that led to that decrease were different.

It was a housing crisis.

We had subprime mortgage.

There were a lot of things going on that are different than today.

Nonetheless, It's a magnitude shift that is something that is is cause for concern.

And we should a lot of the investments that you'll see in the budget are really trying to make sure that the city doesn't fall into the same pattern that would take us multiple years to get out of and instead recovers much more quickly than we did after the Great Recession.

All right.

There we go now.

Sorry.

Again, that was very out of order.

Sorry about that.

Also on developing the budget.

We considered racial equity impacts throughout budget deliberations.

So each individual proposal that we received has the departments have the opportunity to note how the change impacts race and social justice initiative goals.

Departments also used a new tool this year that CBO and OCR developed in partnership to assess to sort of self assess their price, their budget process based on five categories.

and set a goal for next year's budget process in one category.

And so that was really a spectrum from they have a closed process where it's only a couple people in a room to they have an open and transformative process.

So it's really a spectrum that they looked at to self-assess.

So they looked at equity leads and or change team engagement, workforce equity, data and analysis, staff and community engagement.

as well.

So we're really, we're really excited about this work that we have begun with departments.

And it's important that in this first year, we are meeting departments where they are, and that their self assessment is treated with with the fact that it's just that it's their self assessment.

And it's, there's no right or wrong answer.

At this point, we really just want to see where folks are and just strive for improvement because everyone's at a different place.

The CBO's change team has been just absolutely incredible over the last year and has led efforts along three main areas.

They have worked to collect and analyze data to measure equity impacts.

They're collectively reviewing impacts of the reductions as a whole, as well as implementing a tool to assess growth and racial equity focus in budget development.

So lots of stuff in the works that we're going to be excited to share in the coming year or so, but some good work already begun.

Chair, may I ask a question?

Thank you.

Director Dingley, can you go back to the previous slide?

Oh, yeah, thank you.

So can you, I'm interested to understand this a little bit more and appreciate the areas for self-assessment.

I wonder if you can talk about, maybe it's in the community engagement piece, but I'm interested in understanding whether any of the assessment measures look at impact in community in terms of service delivery for our community members?

Or is this all really looking more internally?

The department self-assessment tool was really developed for the departments to look internally at their process.

But the additional work we have underway in the budget office to look at collecting and analyzing data that measure equity impacts.

That's where we're really trying to sync up the data, the performance data that we have for programs, or maybe we could develop for programs, and the actual impacts we're seeing on the ground.

So working closely with the city's demographer, as well as with OPCD and OCR on the existing data that we have in OPCD.

on equity impacts in the city.

So it's underway.

I don't have anything to report on that today, but it's definitely a goal that we have.

Right.

Very exciting.

Thank you.

Yeah.

Great.

All right, so we're next going to talk a little bit more about how this proposed set of adjustments compares to the 2024 endorsed budget.

So overall, what you will see are fewer changes compared to the 2023 budget process.

Again, as I mentioned, the book is significantly shorter, and that's not an optical illusion.

It's because there is just less changing there than there was last year.

Over half of the city's departments have no changes at all outside of citywide central cost changes.

Those are changes to our information technology, our facilities and vehicle maintenance or HR, or they have budget neutral changes that are more or less paid for either because they had an offsetting reduction.

So they added money, but they cut something else in the budget to pay for it within their own department.

or they used a planning reserve that had been established in anticipation of that spending need so we already had it built into the overall balance looking at the actual changes in general fund only compared to the 24 endorsed it's changing by about 51 million dollars and i wanted to break down that figure because it seems quite big but i wanted to break down what's what's making that up So what you'll see is about $3 million of proper new spending that wasn't anticipated by a reserve or otherwise revenue backed.

You'll see $10.8 million in increases for central service costs.

Again, as I mentioned, a lot of those related to inflationary cost adjustments, fleet replacement or maintenance costs and some replacements there, investments in IT infrastructure and security, as well as HR.

And we'll talk about some of those specific changes in a little bit.

We also continue to see huge amounts needed for our judgment and claims fund, which I'll also discuss a little bit more.

We are taking the opportunity with higher than expected general fund revenue to replenish the emergency fund.

We have about $8 million worth of grants coming in, so those expenditures are revenue backed, and so they don't add to the deficit overall.

About $6 million in new spending has revenue backing or is backed from a planning reserve that we had established previously.

And then we have 4.9 million representing ongoing costs from legislation passed this calendar year in 2023. So mid-year changes that the council has adopted that result in ongoing costs.

OK.

I have a question on the slide.

Yeah, go ahead.

On slide 12. Regarding the $2.9 million in general fund for, quote, net new program spending, can you describe what that's going to be used for?

I can.

If it's all right with you, Chair Mosqueda, I call those out specifically in the different programmatic slides to come, so would love to cover those during that content if that works for you.

That's fine.

And then do you have a short answer to the $6 million of revenue or reserve back general fund proposed?

Does any of this spending relate to ongoing needs or is this all one time?

Um,

Those primarily stem from the changes for the new care department, as well as for our accountability offices.

And both of those have ongoing, had ongoing reserves established in anticipation of those needs.

The care department also has an ongoing source of revenue that we'll be able to help support in an ongoing way.

And we'll get into that a little bit more.

Great.

If no other questions, we'll get into some changes around payroll expense tax, jumpstart payroll expense tax, forgive me.

So there are two primary changes that I wanted to call out.

FOR THE PAYROLL EXPENSE TAX.

WHAT YOU SEE HERE ON THE LEFT IS THE ENDORSED BUDGET, SORRY, IN THE CENTER, 2024 ENDORSED BUDGET AND HOW ALL THE DIFFERENT AREAS OF THE JUMP START SPENDING PLAN WERE HANDLED IN THAT BUDGET.

ON THE RIGHT-HAND SIDE COLUMN, YOU'LL SEE 2024 MID BIENNIUM PROPOSED BUDGET CHANGES.

SO THE FIRST PRIMARY CHANGE IS THAT WE ARE PROPOSING TO REDUCE by $10 million the transfer to general fund that was originally supporting general fund operations.

So in the 24 endorsed budget, that was $84 million.

In the proposed budget, it's $74 million.

And again, that was to make sure that we didn't have to have major cuts in the general fund so that we could continue current operations.

Instead of transferring that funding to general fund, what we're doing is investing in human service provider pay and child care supports, and then there's a little bit additional to that that's helping to balance the fund overall.

We're going to talk more about those specific investments in a little bit.

The way that those show up are as exception exceptions to the overall spending plan, and I will also show you that in a subsequent slide.

You'll see in the middle, a whole bunch of check marks, meaning that the 2024 endorsed budget levels left virtually unchanged and left the 24 endorsed budget rather virtually unchanged and consistent with the underlying spending ordinance.

The final change at the bottom is that we are tapping the jumpstart payroll expense tax specific revenue stabilization reserve.

So we had established a reserve within this fund because it's a new revenue source and we weren't certain how the revenues were going to behave because we just didn't have the data, the historical data to have a lot of confidence in the predictions.

So facing the revenue decrease, we tapped the revenue stabilization reserve pretty significantly to keep it in balance.

So it takes it from $14.7 million in 2024 endorsed down to $1.9 million in 2024 proposed.

Go on to the next slide, please.

This is a visual view of how the payroll expense tax spending is allocated in the 24 proposed.

So on the left-hand side, you'll see the whole pie of all the revenues.

You'll see there that the transfer to the general fund is that reduced level, again, reduced by 10 million at 74. We have the 1.9 million I just mentioned in reserves.

And then the payroll tax spending that's going according to the ordinance and some special exemptions is at 226.8 million.

Part of the pie expands to the right, and you see there how the spending plan is represented.

So we have special items at 11.2, and again, I'll talk about those.

Administration and evaluation, which is up to 5%.

Here we're tapping just 3%.

Housing and services at 62%.

Equitable development initiative at 9%.

Economic revitalization at 15. And Green New Deal at 9. The next slide is going to show you Oh, I'm sorry, Councilmember Herbold, I see your hand up.

Thank you.

Can we go back to the previous slide?

Sure.

Yeah, thank you.

So the special flexibility items are the human services provider pay and child care support, is that correct?

That totals the between the 2.8 million and the 11.2 million?

So the human service provider pay and child care support totals 7.4 million.

We also are using some of the reduction of the transfer to help balance the fund overall.

There are two additional items in the exceptions, the special exemptions bucket, in addition to the provider pay and child care supports.

Again, those two are paid for by the reduced transfer.

On the slide that comes next, I showed you that we're only using 3% of the 5% admin bucket.

So that additional 2% that we're not using is supporting two additional investments.

One of those is the startup costs for the social housing PDA, and another is on economic development relocation assistance and SDCI.

And we have a little bit more on those as well in subsequent slides.

So just a follow-up question.

Thank you for that.

So four special flexibility items comprising $2.8 million in the 2024 endorsed budget column.

But there's some complexity here that I'm not getting on making the charges on the chart, the changes on the chart add up.

I see there's like the arrow pointing from the general fund transfer to the special flexibility items.

But if you add the $10 million transfer to the pre-existing $2.8 million, it doesn't add up to the $11.2 million.

Yeah, it's not an exact.

yeah i was trying to simplify the chart and perhaps oversimplified it councilmember herbal thanks for calling that out that doesn't add up because we're not using the full amount of that reduction towards spending um well that's we are we're using part of that reduction to maintain currently budgeted spending that was in the endorsed budget to keep the fund in balance overall so we're not assigning new spending there so i i do have in two slides if you go to a head um a potentially more useful yeah this one potentially more useful view so here what i wanted to show you here is on the sort of left hand side the first three columns toward the left these are the uh when the uh payroll tax was being considered back in 2020 these were the amounts that were that were estimated at the time for these different spending categories for 2022 and beyond again based on the revenue estimates at the time and this is something that councilmember mosqueda mentioned and what you see next so that's that that column adding to 219 million the column immediately to the right of that is what was in the 2024 endorsed budget And then if you go two columns over to the 24 proposed budget updates, you'll see going down the line, they're virtually unchanged.

There are a couple of minor tweaks to keep the fund in balance overall.

But despite the $41 million revenue decrease between 23 and 24, the payroll expense tax investments are virtually unchanged from the 24 endorsed levels.

And we have that $7.4 million going to support human service provider pay and child care supports.

So hopefully this helps a little bit more, Councilmember Herbold, in seeing how all those numbers shake out.

Thank you.

Great.

I'll just note for my colleagues here and also for the viewing public, this is not a proposal or a change that was suggested to Jumpstart in consultation with my office or with me as the author of Jumpstart and with more than half of the council members on council co-sponsoring that.

We will have a lot more questions on the concept here, but what's not in question is clearly support for human service pay, childcare pay, et cetera.

There is various budget strategies that I think we will continue to work on, I'm sure in partnership with CBO, as we consider how we maintain what's been teed up here as an investment for 2024. But the mechanism that's being proposed here was not something that was drafted with our input or consultation.

Clearly, we're separate branches of government.

That's not unheard of to have different offices working on different proposals.

But I just wanted to be really clear, given the partnership that we had in the past about how to allocate higher than anticipated revenue and that being a joint effort.

We do have a different frame on how we've approached using higher than anticipated revenue.

Oh, it's okay to keep showing that.

we're we're still going um and i wanted to ask central staff to actually um comment on the the slides that we were just looking at and the the previous one as well because uh this will be a topic of conversation i'm sure that will continue given my interest and other council members interest in maintaining those commitments and the dollar amounts appreciate the transparency that's been offered here by cbo on that final column that you know you see a reduction of two million dollars for example in economic resilience And we're going to continue to look at various ways to ensure that the percentages are aligning with the program allocation.

But I do think that there is important distinction in the framing.

And I wondered if.

Ali, Panucci, I see you off camera.

If you could also comment on how the council framed the exceptions when we endorsed the 2024 budget, and that might give us a sense of how the conversation will be teed up over the next few months and more work, of course, to do with CBO here.

Thank you, Chair Mesquita.

So you may all recall that last year, as part of the Council's budget discussions, you passed Ordinance 126719 that we often refer to as the Fund Flexibility Ordinance that provided some short-term flexibility on the use of Jumpstart funds just in the 23 and 24. That included allowing transfer from Jumpstart to the general fund and up to amount.

So what Director Dingley showed as, you know, about 84 million going to 74. I might have that number slightly wrong.

That one of the flexibility was allowing up to about 84 million or 85 million to be transferred in 2024, but wasn't required.

The other piece was there were some exceptions that didn't fit any spending category.

that Council approved coming out of the Jump Start Spending Plan.

Specifically, Council authorized exceptions to provide funding in just this biennium for staffing and SDOT for Sound Transit 3, some funding for eviction legal defense, to backfill reduction in a revenue shortfall in the Sweetened Beverage Tax Fund, and to expand mental health services.

So that was the $2.8 million of exceptions that Director Dingley showed on her slide.

What is different about the framing, what the executive is proposing here is consistent with the fund flexibility ordinance in terms of how it's outlined.

it does allow for these exceptions how council though considered it was you only allowed exceptions if you were spending dollars that would otherwise have been part of the administrative administration and evaluation bucket so in total what the council approved for the 2020 and four four endorsed for administration and exceptions made up five percent of the jumpstart funds so i will just say again what the executive proposed is consistent with the the letter of the law it is not consistent with how council framed and made their decisions about how to provide those exceptions in 2024.

Great.

Thank you for that conversation and back and forth.

Are there any other comments on this slide from Director Hingley or from our colleagues?

Yes.

Council Member Herbold and then Council Member Nelson.

Thank you.

Just a clarifying question, Ali.

I'm sorry to have to have my memory and my understanding of what our expectations for revenue jumpstart, revenue over and above projected for 2024. I appreciate that you just tried to explain that, but I didn't quite.

How does programming these funds to support human service provider pay and childcare supports not align with what council's expectations were for 2024 jumpstart revenues above and beyond what was projected.

I can clarify and I will just say we will have more tables and charts to walk through this in more detail when we get to budget hearings that I've not yet prepared.

So I'll try to say this a different way.

If we were presenting this slide last year, there wouldn't be a separate row for the exceptions.

The exceptions in the administrative category made up 5% of the funds spent out of the Jumpstart Fund.

So after you subtracted the $84 million that was authorized to be transferred, I think it was $84 million, or yeah, 84 million that could have been transferred to the general fund when we applied the jump to spending plan, 5% of the funds were allocated for administrative purposes and to those four items I noted as exceptions.

However, the ordinance, as it's written, says you can transfer up to this amount, then it says you can make exceptions, and then it says the funds might be allocated by these percentages.

So, the literal reading of the code allows them to basically subtract from the total amount of jumpstart revenue work, anticipating the amount that they are transferring to the general fund, then the amount that they are spending on these short-term exemptions, and then they apply the percentages.

So, we're basically calculating what is 62 percent of Jumpstart funding using a different base.

um and so that was just it's just a different uh approach while while the literal reading of the code reads that way um the council last year chose to only spend on things outside the spending plan that were within the total amount allowed for administration and evaluation and if i can jump in um to add to what deputy director panucci just said the only piece that is above the admin percentage in the exceptions category that we have proposed

is the provider pay and child care supports.

The other items are well within the 5% for admin that we are not fully using for admin.

Thank you.

I'll just confirm.

I think in total, if you subtract out all the exceptions, I think the executive's proposal would only actually spend about 2.5% or 3% on admin, and the council programmed a full 5%, which was inclusive of those exceptions.

Great.

More to come on that.

Council Member Nelson.

Hey, Director Dingley, how the line at the bottom, despite 41 million revenue decrease, the investments stay virtually the same.

So where is that coming from if we're keeping the investments constant?

Great question.

Thank you, Council Member Nelson.

So the payroll tax was able to remain more or less whole in 2023 and in 2024, thanks to a reduction in the support to general fund.

So we actually contributed more than the ordinance called for, for 2023, about $5 million more.

So the council reduced the transfer in 2023 in the mid-year supplemental by about $35 million.

in that neighborhood don't quote me on that um and we increased that in our year-end supplemental uh so we we further decrease the transfer if you will sorry that's signed there make it a little weird but uh it's able to remain whole in short the short answer is thanks to the general fund contributions thank you yay i think we can keep going great all right next slide please All right, this is a look at the general fund revenue and expense long range picture.

This is a slide you've seen from me before, and you've seen other versions of it from your Council Central staff colleagues here.

This is showing you revenue and expenditure comparisons back from 2018 through projected 2026. What you'll see toward the right are the proposed budget adjustments.

The revenues, they are indicated by the dashed black line surrounding it, and then the expenditures in the green line.

So we have a proposed balanced budget in front of you.

Making current law assumptions and assuming that you accept this budget as proposed, we are projecting a 2025 deficit of $251 million and a 2026 projected deficit, which with a cumulative total of about $498 million.

So it's roughly $250 million per year between those two years.

You'll see in particular that the use of one time revenues and fund balance and of course, the transfer of jumpstart payroll expense tax decrease.

It goes the payroll expense tax transfer goes away entirely after this year.

As the I think it was Deputy Director, maybe Chair Mosqueda mentioned, we are operating under a two year flexibility ordinance that allows us to continue to transfer payroll tax to general fund so that we can support ongoing operations for the city.

And that per current law goes away starting in 2025. So that's that sort of golden rod, yellow color on the box overall.

So this is something we wanted to absolutely, this is at the forefront of all making.

And I think you've heard from Director Handy as well as Chair Mosqueda that this big question remains important to them as well as we consider the budget this year.

Onto the next slide, please.

So as we're looking ahead to that 25-26 biennium, have to own that this budget, this 2024 proposed updates, it was not designed to solve the 2025 deficit.

That was not the purpose of these updates.

2023 and 2024 budget, the biennial budget that we developed last year, closed a $140 million general fund revenue gap.

purpose of developing that biennial budget the first since the onset of the pandemic was to buy us additional time to consider how to approach 2025 and what changes needed to come what levers we should consider so again these adjustments do not aim to solve the 25 deficit but we do aim wherever possible to mitigate the impacts the second big thing that i want to highlight is that difficult decisions are coming next year the city's elected leaders will absolutely face difficult decisions in the upcoming year about how to reduce expenses and or increase revenues in order to keep the city's budget in balance, which is a requirement for us.

Some other contextual factors that are important to keep in mind when you're considering the 2024 budget are that the city's labor contracts remain under negotiation.

And we'll talk a little bit more about that.

The out-year general fund revenue growth is slowing considerably, which I mentioned at the top of the presentation as well.

The general fund revenue growth is restricted and does not keep pace in a high inflation environment.

So the longer we see inflation that persists higher than 3 to 4%, the more we see that imbalance grow.

Jumpstart payroll expense tax transfer ends after 2024 under current law, which is what we saw in the chart immediately preceding this slide.

As well, the new spending under restricted revenue sources is growing considerably, and that's by design and policy choice, but it's something to be aware of.

All right, going into the next slide, please.

Julie, let me just offer some additional context here as well.

Thank you for teeing these up.

On the Jumpstart last bullet, Sarah, that you noted, I wanted to also note the importance of Jumpstart.

We talked about this at the beginning.

Jumpstart, higher than anticipated payroll tax, backfilling much of the general fund reductions or gap that we saw from last year.

And in yesterday's announcement of the budget, many of the highlights that were noted in the budget do come largely funded by Jumpstart.

This includes affordable housing investments, investments in climate resilience and electrification, the workforce stabilization for supportive housing, and so much more.

I'm excited about these investments.

I know that it's hard sometimes to see public policy having a direct impact on community.

We don't get to count the widgets from policymaking.

But yesterday's location and the types of services that were described there, it's a good example of when we are able to celebrate investments and see direct impact on community, it all makes the policy conversations that we're having much more meaningful and tangible.

it makes sense that we would be highlighting these because these are upstream investments so i think it's great that they were noted and we're going to continue to try to decipher what amount came from jumpstart so people really see those investments playing out given that we're trying to really have this ongoing ongoing and improved dialogue with the public about how those types of resources, especially when it relates to taxation, how we could see a direct improvement into public safety and community health through things like housing and economic resilience and investments.

I'm excited to dive deeper into the budget as we just see that in the last few slides, especially looking at the proposed changes to jumpstart.

But we know without these upstream investments, the inequities that we've seen pre-COVID are only exacerbated.

And that's the importance of investments in small businesses, housing, Green New Deal, and Equitable Development Initiative.

On the mid-bullet there, the difficult decisions in the upcoming year, I just wanted to offer some context as well.

I think it's not a foregone conclusion that those aren't conversations that we can help mitigate this year.

This council still has the ability to act prior to the end of the year to help the future councils and the future deliberation in 2024 and beyond to help mitigate the declining revenue.

The declining revenue sources and the increased community needs have been discussed in detail in this committee.

The Revenue Stabilization Workgroup was privy to all of the data and information that CBO and central staff have about declining revenue streams and the increased population and increased population need.

The Seattle Times, for example, has commented numerous times about how Seattle's population growth grew by 21% in the last decade.

And according to the Seattle Times, last year in 2022, Seattle was the fastest growing large city in the nation.

We know that it's not just population size, it's also complex needs that have grown.

In our city's population, the ongoing pandemic and economic instability and uncertainty, these are compounding crises that yield the need for additional city revenue and resources.

I just want to offer to our colleagues and tee up a discussion for the future to put number 2 into context.

I don't think that that's a discussion that only has to happen next year and is not.

a predetermined discussion that has to happen in 2025 because there is a way for us to address revenue prior to the end of the year.

I posit that there is no way to quote realign our city priorities to the tune of $214 million in cuts each year for the next six years after next year.

if we don't have new revenue.

Our city priorities and our community needs will not align with the future budget that assumes that level of cuts and coming austerity in the out years.

So I want to really underscore the importance of the facts that are there, that those will be difficult decisions if not addressed this year.

and the future of our city residents and the sustainability of our community is just far too important and fragile to gamble on.

So look forward to future conversations.

Again, some of my colleagues have already teed up revenue and fee legislation for our consideration and that again will be taken up prior to the conclusion of the budget deliberations.

Vice Chair Herbal, please go ahead.

Thank you so much.

In line with your statement, Madam Chair, that recognizing that this budget is not designed to solve the 2025 deficit, recognizing your potential interest in setting up the next council to be better equipped with those difficult decisions and mitigate those difficult decisions.

I would like to know with sort of within the context of preparing myself, preparing my colleagues, preparing the public for those conversations on how the council might consider doing so.

I'd really like to know, again, I'm not debating the understanding that the 2025 budget is not designed to solve the structural issues, but I really want to understand what it is the executive is planning to do to set up city leaders to address these issues in 2025. know without without having the expectation again that we're solving the problem in in in the 2024 budget um you know we know that the uh revenue stabilization work group identified a lot of progressive uh revenue options and many of them um take a long time to uh to implement they're not they're not things that you can pass legislation and they go into effect you start collecting um you know, in 30 days after the legislation was into effect.

Some of these revenue sources have infrastructure requirements that are that are necessary to begin to to collect the revenue and have a long lead time.

And so given that, I'm just wondering how the mayor plans to move forward through the end of this year and next year to address that issue.

And again, this is important for us to know because we're probably going to be talking about how to address that issue.

So knowing what the mayor is planning can help inform our discussions.

Thanks Councilmember Herbold for the question.

I think so we have been hard at work within the budget office this year thinking about that very question.

What does that look like?

So we are in the sort of early discovery and design phase.

We're accelerating the 2025 budget process to give more time to each of our phases.

So that chart that I showed you a couple of slides ago that laid out the calendar, we're really bumping that up so that we can give more time for departments to consider potential changes, more time for the executive to consider potential changes, and then think about how they would be implemented.

As far as engaging my future colleagues, you know, in the next council, Those are going to be conversations that we're going to have to have once they're on board.

So to say, hey, this is coming, and we want to understand overall principles that the executive should consider as we move through this work.

But much of that hasn't happened at this point.

Thus far, we've worked with departments on establishing the known existing lines of business that they have and getting a better understanding for how those are aligned or the degree to which those are aligned with their sort of core mission, if you will.

And we're going to continue to work with them over the coming months to think about what does that process look like to come up with those ideas on the spending side.

So a lot more to come in this space, but most of it will happen in early next year.

So much of what you described, Director Dingley, really sounded like preparation for cuts.

It didn't sound like a plan for how to discuss additional revenue.

Am I hearing you correctly?

Did I mishear you?

And if so, can you explain a little bit more about specifically how to move forward the conversation, how the mayor intends to move forward the conversation about additional revenue?

no it's a great question so we have to look at all sides of the equation and uh so you're right the process i was just describing is more focused on the spending side we have at this point all options are on the table until they're not it's very similar to how the mayor approached the 2023-2024 deficit he was he wanted to see all the options on the table and that would include what would happen if you actually closed it all through spending cuts and that doesn't mean that that's what we would choose to do but he wants to see those as options as we go through in the same way that he wants to see what revenue options there are to potentially pursue and then make a judgment call on on what um where do those values align or not with where we want to move forward and how importantly how the city um how we're framing things in what's important that remains for the city to do, right?

Like what are the things that we have to protect rather than focusing too much on the things that we need to ramp down or make sure that other levels of government are taken care of.

And so lots and lots of conversations to come.

We don't know what the next council is going to look like.

and what their priorities are going to be in the revenue space.

And so I think we have to keep ourselves open to future conversations.

I'll say that this proposed budget adjustment does not include a proposal for a new revenue to balance the general fund.

We had a path to get to balance without proposing such a revenue.

So I think, yeah, additional conversations to come.

I guess the only other question I would ask is, is there a I mean, again, I included in my preface to the question, the reality that almost every new revenue stores requires a long advance startup time.

So is there in this sort of world of all options on the table, is there a um anticipated uh sort of drop dead date for when some conclusions will be made about um this this mix of approaches on the uh on the spending side and the new revenue side to in order to make it possible for the new revenue to mitigate cuts yeah

That's another, you've got the great questions this morning, Council Member Herbold, thank you.

So no drop dead date at this point.

I'll just remind you all that we, you all passed the Jumpstart Payroll Expense Tax in 2020. We didn't collect actual revenues from that tax until 2022. So what we did was we used an Interfund loan to back what would be the revenues that will come in, that were for 2021. that came in in 2022, but we use an Interfund loan temporarily.

And that's always a tool the city can turn to.

So we, you know, in that instance, had well over a year covered by that Interfund loan.

So it's another option available to us to extend that that timeline.

Reminder.

Thank you.

Just some clarification, though, because my eyeballs just popped out of my head when you said extend an Interfund loan.

I just want to Be clear, though, that the Interfund loan was approved for two years because we had projections that showed that the revenue that was passed in 2020 would far exceed the amount that we were planning to use from an Interfund loan.

So to Councilmember Herbold's point, mean if we were to use an inter-fund loan i think we would have to have some assurances that there was something there to back it up and the only reason that the council had excuse me the only reason that there was the revenue source as you said to balance for 2024 so you did not include funding for a new revenue source in this year's budget is because the council gave the authority to use higher than anticipated jumpstart revenue for 2023 and 2024 with the understanding and expectation that a joint effort would come forth to allow for us to identify new additional revenue and i just say additional revenue because it was about revenue stabilization and so not even tipping the scale on which types of streams i would prefer for us to use but just new revenue was was clearly necessary and identified in 2023 as a need I say that just to offer additional clarity about the process of using an inter fund loan, because I don't want people to take a deep breath and assume that we could use an inter fund loan if we don't have a sure way to pay that back.

And, of course, you know, would would offer the central staff or the opportunity to comment on that as well.

And I want to say, you know, Director Dingley is in a difficult position here because you're representing the entire administration in your office, though, your CBO office, and you as an individual were very involved in the revenue stabilization conversation.

And put a lot of time and effort into coming up with recommendations.

So I appreciate that and also recognize you're representing the broader decisions that have been made by the executive office and the mayor's team now.

So it's not as if these were individual decisions that you or CBO as a department came up with.

I appreciate that you're reflecting where the executive team is at at this point and do want to note the deep Amy Dabbs, engagement that the executive team and Cbo specifically had in those revenue stabilization workgroup discussions, and and not minimize that, because that was a lot of work.

I think what Councilmember Herbold and I are just trying to lift up is the importance of of having additional revenue to help mitigate for item number two on this slide, which is those difficult decisions that would be forthcoming that we know are forthcoming in 2025 and beyond.

And the importance of having a lead time for having finance administrative services or other departments do rulemaking, engage with any payors of a future revenue stream.

and to help do education and outreach so that we can be really inclusive about how we roll out new proposed regulations.

Finance and administrative services, for example, was very hands-on throughout 2021 and in the second half of 2020 as we developed rules and regulations and they worked with prospective payors and actually thought through strategies to improve the receipt of funds to make it better to align with what with what payers were saying would be a more streamlined process for them and also responding to the changing nature of employment during the pandemic so kudos to fas and to the departments for all of the work they've done on jumpstart for example we know that that type of lead time is incredibly important to ensure a successful rollout and so i think that the points that are being made and not directed at director dingley but just being made in general is in order for us to have sustainable revenue that does not yield a cliff in 2025. Having conversations now that allow for the lead time for implementation is really critical.

And also just reiterating a point generally that my concern about using an inter-fund loan without a new sustainable source to backfill those funds would would be potentially um concerning for me as well without additional revenue and um you know we will have more conversations about this and i know that after introduction uh and referral calendar for the november 7th date is published that's when we really get into the heart of proposed budgetary legislation that corresponds with the budget so much more to come i'm sure as we see that introduction referral calendar come up but no no need to put you on the spot to respond to that i just wanted to put some of that so feel free if you have something and then i'll go to councilman

just two quick points i want to make sure that there's not a misunderstanding here i was suggesting the use of an inter-fund loan only only in the event that the council passed and the mayor signed and the courts upheld a new uh source of revenue okay great that would have that would require time to implement much in the same way that the jump start tax was passed we assumed because we had those projected revenues we were able to assume balanced based on that and used that Interfund loan as a temporary tool until the actual collections happened.

That is the only- Okay, we're saying the same thing then.

Yeah, we're exactly on the same page.

The only other thing I wanted to highlight and just remind council members that the revenue stabilization work group work, the revenue sources that were identified there, there's no one revenue source that would close the gap in its entirety.

So we really do have to have these comprehensive conversations to look at both sides of the ledger and those are going to be tough and we're going to continue to talk about it and figure out what the best path forward is i did remember mosqueda real quick if i could just ask you for a time check i have some pretty meaty slides and then we also have the rescue plan next i wanted to see how we're doing overall on time

I think we have all day held with the goal to have a recess or adjournment by 1pm, so I think if if we need how much time for the revenue are sorry for the arpa report out 4045 minutes.

It shouldn't be that long probably more like 20. Okay.

So if we plan for another hour, hour and 10 minutes for this presentation, that gives us a half an hour to discuss the American Rescue Plan Act final report out, I believe.

And we will then have the ability to recess at one and give the gift of time back to our colleagues and the general community.

if we want to recess at one.

So that would be my desired timeframe.

And just a reminder to our colleagues, every time we have a meeting, recess will probably be from one to two if they're all day meetings, but I think we can probably get through it all today.

Sound good?

Okay.

Council Member Nelson, go ahead, please.

I just wanted to chime in as the council member who will be here in 2025 that I do appreciate that all options are on the table.

We do have to talk about measures that have the potential of growing revenue in through economic activity and also considering that we don't want to increase our spending beyond a point where we cannot sustainably pay for it even if we choose multiple sources of additional revenue so i just want to say that this is a worthy exercise to consider all options because YOU KNOW, THE PAYROLL EXPENSE TAX WAS APPROVED IN 2020 AND THEN THE FOLLOWING YEAR THERE WAS A CALL FOR ADDITIONAL REVENUE.

SO WE HAVE TO IT MAKES ME NERVOUS TO THINK ABOUT BLITHELY JUST CALLING FOR AN ADDITIONAL SOURCE AND THEN WHERE WILL WE BE IN 2026. SO JUST A NOTE TO DIRECTOR DINGLEY THAT I DO APPRECIATE THAT YOU'RE THINKING ABOUT IN OUT YEARS THAT WE DO HAVE TO KEEP EVERYTHING ON THE TABLE.

All right, let's keep going.

Reminds me of the conversation we had yesterday about the importance of having sustainability and reduced turnover on council.

We need more assurances than that one or two people will be on council going forward.

So look forward to having that conversation as well, but just wanted to offer that as an example of the sustainability that we were talking about just the other day.

Go ahead, Director Dingley.

Great.

Next slide, please.

So these are some unanticipated or significant cost pressures that the city's facing that came to light after the 2024 endorsed was adopted and were unexpected in some way or otherwise just significant and impacted balancing.

So what we saw were citywide central costs to the tune of about 19 and a half million total.

That's all funding sources, including City Light and SPU rate payer dollars.

And 10.8 of that is general fund.

Those increased costs for central services, again, including changes to information technology, IT, facilities and administration, looking at vehicle maintenance costs was one of the big drivers, increased fuel costs as well, as well as human resources.

And I'll talk about one specific investment in that space in a couple of slides.

We continue to see absolutely enormous amounts in judgment and claims.

So we're having to add 9.3 million in general fund, and that provides for the payment of legal claims and suits brought against the city's government.

Per council resolution, the budget level for the judgment and claims fund must be set at the 90% confidence interval, a confidence level rather, of meeting actual expenditures as estimated by the city's actuaries every year.

This increase in funding in recent years has been primarily driven by large settlements and outside council costs in very few but very large cases.

The 20 we saw this is in addition to increases that came in the 23 adopted and 24 endorsed as well.

We also have the majority of cities labor contracts are open and currently up for renewal.

This adds considerable uncertainty to the overall budget planning process.

Reserves are maintained for this purpose, of course, but the exact details around future settlements remain in negotiation.

So we don't know what those settlements will look like.

We have done our best in planning, but we will see how closely we align with those ultimate settlement amounts.

Another significant cost pressure was startup costs for the new Social Housing Public Development Authority.

So in early 2023, Seattle voters approved Initiative 135, which created the Seattle Social Housing Public Development Authority, or PDA.

The initiative did not include an independent revenue source, and it required that the city provide 18 months of startup costs.

The amount you see here of 850,000 is the first 12 months of that 18 month requirement, and that's paid for again.

That was one of the special exemptions paid for by the administrative bucket under payroll tax.

Next slide, please.

These are the.

critical strategic investment areas that I mentioned at the top that Mayor Harold's making in this proposed these proposed budget adjustment.

So you'll see investments across all funding sources, and I've done my best to identify which came from what color of money, as well as whether it came from a reserve or not, or it has new revenue backing it.

So we'll talk about investments in sustaining critical services in bolstering public health and public safety, investing in workers and in furthering economic recovery.

So if we go to the next slide, we can jump right in to sustaining critical services.

So as you all know, 2023 is the final year of the 2016 housing levy, and we have a new levy that is out for voter consideration this fall.

The 2024 proposed budget adjustments assume that that levy passes, and so those revenues are included in our estimates here.

With those assumed, we have a historic $334 million available for housing.

That's a 32% increase above 2023 adopted levels.

Allison McWilliams' In that we assume about 88 million from the housing levy 137 million from the payroll tax housing and services category and 73 million from a sort of.

Allison McWilliams' amalgamation a whole bunch of other sources that's multifamily tax exemption MHA grants other other sources.

We are further providing $106 million to King County Regional Homelessness Authority.

This is about $6 million above last year's budget.

What we're seeing are changes here to relocate a tiny home village that needs to be moved in order for housing development to take place on that site.

We also have contract inflation that is required by current SMC to reflect actual CPI.

We had an estimate in the budget and actual CPI was higher.

We also have additional payroll tax for provider wages.

As I described previously, that's coming from the the 10 million that's no longer being transferred to support the general fund.

And that's discussed in more detail in the investing in workers section.

We're also using existing funds with KCRH to maintain 300 shelter beds.

They identified that they have a significant federal funding that is expiring that came in under the pandemic that had been used to support additional shelter beds.

And a big priority of the mayor was to ensure that no additional shelter beds closed.

And so worked with the RHA to better understand their underspend for this year.

And we figured out that they have enough to sustain those beds for 2024. So that was really great news there.

We're also expanding, extending rather, the Third Avenue and We Deliver Care program.

So in fall of 2022, the city launched the Third Avenue project in partnership with We Deliver Care to address and improve public safety and order concerns in the Third Avenue community.

The We Deliver Care outreach workers establish relationships and earn trust of individuals while offering care and treatment services to individuals suffering from substance use disorder and using drugs in public places along Third Avenue.

This amount supports one additional year of funding for this program, and it comes from the city's general fund.

So Council Member Mosqueda, this is one of those new investments that I had highlighted before.

We go to the next slide, please.

Maybe I well, let's go through one, two and three here and then we can come back.

That sounds fine.

Great.

Thanks.

So next in sustaining critical services, talking a bit about transportation.

So 24 um the 24 updates maintain nearly all of the 24 endorsed budget investments in transportation with a continued focus on safety and equity we do have continued adverse economic impacts of declining revenues and historically high inflation levels that have caused a lot of constraints for the seattle department of transportation or sdot that really limit uh this is kind of a pun the delivery of transportation priorities for the city so um wanted to highlight some here that are really critical bread and butter investments for the department so the increased severity of winter storms and ice and other emergency incidents have caused a significant impact on the city's roads and created a need for additional pothole repair and emergency response so pothole repair is one of the core functions of the department as i mentioned in responding to conditions to secure safe passage for city and county services including but not only first responders transit and other high priority transport So that's 1.5 million there.

That's funded with vehicle license fees.

We also have $2 million funded by General Fund for additional emergency response.

We increased SDOT's budget last year for emergency response and continue to see those the severity and duration of storms being maintained year after year.

So they were no longer sort of blip events, but it became have now become something that are more reliable, unfortunately.

And so we need to increase SDOT's budget in order to handle those so they don't overspend their budget by the end of the year.

We also have some investments here in bridge maintenance.

We've got $500,000 to expand SDOT's ability to plan bridge maintenance and deliver more work with SDOT crews.

That's funded with vehicle license fees and similarly adding positions to support bridge maintenance for $300,000 for about three FTEs in SDOT to continue to do that work.

An example, but not the only source of grant funding as federal highway administration grants that are accepted as part of the 2023 year and supplemental budget legislation.

Those are going to work toward projects, including the South Spokane Street Viaduct Bridge Repair.

We are reaching for any and all grants in this space through that are available from the federal government through the Inflation Reduction Act and the bipartisan infrastructure law.

So hopefully we will be seeing a lot more coming in this space, especially as we are dealing with this contraction of our transportation revenues.

We also have a proposal to change SDOT parking rates in this budget.

So the legislation that we have transmitted with the budget will increase the minimum and maximum parking charges to reflect city parking policies and climate goals.

The increases are supported by parking data that shows an increase in demand for parking throughout the city.

The paid parking program at SDOT includes paid parking maintenance that pays for expenses associated with the pay stations and the pay by phone services.

that application allows uh paying parking fees with a cell phone rather than at the station the increased costs associated with that convenience of paying by phone we need to increase the floor of the um the overall rates that we charge from 50 cents to one dollar to cost recover for the program and then the top end of the program currently is at a five dollar maximum that'll be raised to an eight dollar maximum And again, this is not a change that happens overnight.

We are leaving completely intact the methodology SDOT uses to calculate whether a location should have an increased rate or a decrease in the rate.

And SDOT would be limited to increasing the rate by 50 cents at a time.

So in order to reach this full increase, it would take multiple years for any one place to get to that high of a level.

But nonetheless, providing that ability for the department to have a wider range to use in assessing those rates.

All right, next slide, please.

This is the final slide in sustaining critical services.

We are making a change to how we calculate the budget for the general fund floor in parks.

This change, importantly, just saying from the jump, doesn't change the parks department's budget in 2024. In fact, the budget for parks is increasing by $2 million above the 2023 adopted budget.

We instead, so right now, the general fund floor for parks grows directly with inflation tied one to one and that's really unique in the city with how we assess those general fund floors that are often associated with voter past revenue sources so the seattle department of transportation's levy for example grows the general fund floor grows at three percent or cpi whichever is lower So for 2024 only, we're capping the increase of the floor for parks at 3%.

And as I mentioned, that doesn't impact their current year budget or their proposed budget for 24 in so much as it creates a more sustainable path to ensure that we can make good on that commitment of funding the general fund floor for parks in the out years.

The next two items, these last two in this category, are making sure that we can continue critical services in HSD and the Office of Immigrant and Refugee Affairs, sorry that I didn't spell those out here, for grants that are expiring.

So these are two more examples of new general fund that is coming to bear.

So the first is in HSD.

We had grant funding from the federal government to support a victim advocate in HSD.

This amount would support continuing that FTE beyond the expiration of that grant.

And that's in support of executive order that was issued last year, which requires all eligible backlogged sexual assault cases to be assigned to SPD detectives for investigation.

In the Immigrant and Refugee Affairs Department, we have the Immigrant and Safety Access Network.

Um, we are continuing funding from an expiring grant from King County to support immigrant and refugee families who experienced disproportionate harm from violence.

We have a base of funding of 70,000 of general fund in this program.

The grant from the county added to that.

And so this investment of general fund of 150,000 is sustaining that higher level of investment.

So the total available for this program will be 220,000 of general fund if this is included in the ultimate adopted budget.

That's the end of this section if we wanted to pause.

Chair Mosqueda.

Great.

Let's go to Councilmember Petersen first for questions on the last actually four slides since there was an opening slide on context for increased costs.

Thank you, Chair Mosqueda.

Yes, if we could go back to slide 21, which talks about the Seattle Department of Transportation.

Thank you.

Really appreciate the Harrell administration focusing on the basics here, which impact all modes of transportation, the pothole repair and the emergency response.

And so on the bridge maintenance, obviously my office is very interested in that.

So we'll be taking the budget proposal and then comparing it to what the city auditor had recommended in terms of the level of bridge maintenance.

I'm not seeing us get to that minimum, even the minimum amount recommended by the auditor again.

And then one of the things I'm not seeing and I know you can't have everything here in the in the PowerPoint, but it was also hard to figure out from the budget document itself, which is how.

the administration is proposing to spend the Seattle Transportation Benefit District monies, which the bulk of which is through the Seattle Transit Measure sales tax.

So just to let you know, we'll be again asking for what the spend plan is we had asked to see it even for 2023 we haven't had the transparency and exactly how that money is being spent there are some old categories like emerging needs which was about west seattle bridge restoration and covid response and there's a lot of money sitting in the reserves so just wanted to signal that that's an important

investment um and we want to make sure that we're optimizing how we spend those dollars thank you thanks councilmember peterson absolutely we'll get back to you with additional details on the stpd revenues and happy to talk more about uh bridges and and really all your concerns in that space so thank you for raising are there any other questions yes council member uh excuse me just one second councilmember peterson did you have any other follow-up questions okay great uh vice chair herbal please go ahead

SECOND, WE'RE ONLY DO WE GET PAST THAT?

WE DID 22. THAT WAS THE LAST ONE OF THE SECTION OF INVESTMENTS.

ANYTHING IN THIS CATEGORY?

I WILL HOLD MY QUESTIONS TO THE NEXT SECTION.

THANK YOU.

NICELY COLOR COORDINATED.

THANK YOU FOR THAT.

THANK YOU.

I HAVE A FEW QUESTIONS IF THERE'S NOT ADDITIONAL QUESTIONS FOR MY COLLEAGUES ON THIS SECTION.

So just going back, if we could, to maybe slide 20 even.

One more back.

Yeah, here.

So sorry, 2019. Okay, well, it might have been the slide before that.

Yes, thank you.

When it comes to some of the...

New costs or unanticipated significant cost pressures.

Thank you for calling out judgment and claims.

We had done some work early.

Or I should say, last year on the issue around judgment and claims, we put a slide request, then a statement of legislative intent that required that there be a report to counsel prior to the mid year on any increase.

I think that's a good sort of foothold to make sure that we're constantly tracking for judgment and claims increases given the high payouts that have been.

made in large part due to the prior administration and the use of force and the deleted text messages, et cetera.

So I do want to see if there is a way for us to continue to ensure that there's regular report outlets on judgment and claims to counsel so that that can be accounted for in future budgets.

I think you were doing an excellent job of calling it out here.

And part of our statement of legislative intent last year was to really try to prepare ourselves for that instead of having these sort of surprise large sums that were being requested given the grievances that were being levied against the city.

Um, and my interest as well is to figure out if there is a strategy, a legislative strategy to have.

more transparency for council and the executive on the impact that these payouts are having on our insurance costs.

So I didn't see insurance listed here, but that is something that I'm continuing to want to track to see how our insurance costs are increasing given some of the national coverage that other jurisdictions are having to pay a significant amount more for their insurance given many of the claims that those cities are experiencing.

And also just being prepared for that cost in future budgets is that if you have any comments on insurance, of course, happy to take those now.

But just want to flag for you that we will be interested in trying to tee up some legislation to have greater transparency around that as well.

Thanks, Council or Budget Chair.

I think we look forward to having additional conversations in this space.

This is a major drag on the city's budget right now.

You're absolutely right that insurance costs are skyrocketing.

Um, cities have become a lot more expensive to ensure it's not just a city of Seattle problem.

It is being felt nationally.

And in addition, you know, cybersecurity insurance and a whole bunch of those insurance costs are are.

Exponentially increasing with far less coverage, so it is something that we are monitoring and and and have built into the budget.

We did increase the insurance assumption in the endorsed budget already, and so we have some of that already built in.

This particular line item is exclusively for the Judgment and Claims Fund and doesn't cover additional increases in insurance, but we do have those elsewhere.

Okay, great.

And then on the next slide, on slide 20, sorry, going to housing.

I too am very excited about the historic investments in housing that we've been able to make possible over the last few years.

I think if our calculations are correct, starting my comparison year is 2017, and compared to 2017, we've increased affordable housing investments fourfold in the time that I've been here at least, and in large part, colleagues, that's due to your work and your support for jumpstart and the progressive payroll tax.

And then we know that it's not just about housing, it's about the individuals inside.

So ongoing support for not just the cost of living increase, but the base wage is something that we know is incredibly important for the folks who are trying to stabilize the workforce inside.

I do want to tee up that we are going to have a work session or a committee meeting dedicated to hearing the impacts of jumpstart investments, including some of the workforce stabilization efforts.

I know Councilmember Herbold and Lewis put out a statement about their ongoing work in that realm as well.

And what we just heard yesterday from excuse me, last week from DESC was that their ability to apply the workforce stabilization wages and the increased funding that we put in from last year's budget, in addition to the cost of living increase, allowed for their turnover rate to go from 39% to 9%.

And they've seen dramatic change, both in the tenor and the feel within the buildings, as well as improved health outcomes for their clients.

So we will have more conversation coming about ways for us to show the impact of some of the work that council has done in partnership with the mayor over the last few years so that we do have those tangible examples that we can lift up.

Again, it's hard to count.

widgets in this policy work, but that will be forthcoming as a work session for this budget committee.

And a question about the $1 million of Jump Start proposed funding for the tiny house village reallocation.

Is this one-time funding for that $1 million?

It is one-time funding, yes.

And then for the $2.1 million of Jump Start funds for provider wages, is that How does that relate to the 10 million that we were discussing in response to Council Member Herbold's questions?

So that is a portion of what is $7.4 million total that covers the 2% increase for provider pay, as well as $2.9 million for child care worker bonuses in that space.

So I do have another slide that has the details on that.

This is just KCRHA's portion of that funding that applies to those providers.

OK, I see.

um and then on slide 21 uh in transportation does this budget include funding for the city street car oh sorry you're on mute sorry about that um let's see so on streetcar um the budget um let me see

We don't have funding in the budget for streetcar.

Right now we are.

So the cultural connector and what it would mean for cities downtown is important to this administration and in the mayor's budget proposal, he is investing in a vibrant downtown and you'll see some of those investments reflected there.

It's unfortunate earlier this year we had to read the council decided to reduce funding for the delivery assessment that would have updated the cost estimate timelines for that project.

Some of the delivery assessment work has been completed, some of it with existing budget, and SDOT's currently working to identify other sources to complete the study overall.

So that delivery assessment will not be completed until later this fall, which was after when the mayor would have had his budget submitted to you all.

So the timing didn't work out for the completion of that study because we weren't able to identify the additional funds needed to complete the study.

But we are looking forward to seeing the completed delivery assessment.

It's important that we fully understand those updated costs, the timeline, and implications of this project before determining what the appropriate next steps are on that project moving forward.

Okay, thanks.

Let's go to the next section.

Great.

Okay, next up we have public safety and health.

Sorry, I just accidentally clicked out of my notes.

Sorry about that.

And we're going to take all three slides and then we'll come back for questions, folks.

Great.

Okay.

Thanks, budget chair.

So the first investment here is establishing the new Community Assisted Response and Engagement Department or Care Department.

This is something you heard from the mayor last week as well in the budget speech yesterday.

This is currently known as the Community Safety and Communications Center or CSCC, and that will serve as the city's third public safety department.

The budget for CSCC is growing by 30% over 2023, and that's supported by new revenues and reserves.

The new revenues that we have in that space they were underutilized and they are now being recognized in a different way.

So they come from the King County's E911 excise tax.

Those funds come in at a regular cadence, but were previously only tapped for special projects.

We've made a decision in this budget that those instead should go toward current call taker salaries, and that is an eligible use of those funds.

What that does is free up general fund that was previously backing those call taker salaries and allows us to reinvest it in the items that you see on the screen.

So we have the dual dispatch pilot, which incorporates ongoing funds for the new pilot that will launch next month.

And that team consists of, it consists of teams of behavioral health professionals that respond to low acuity calls with a mental and behavioral health nexus.

Again, you heard that conversation roll out last week at the, there was a press conference on Thursday We have additional planning resources for the department to consider how the city delivers community focused services that are unrelated to the criminal justice system.

So what should that look like in the future?

We also have funding here for some additional call takers that will improve the department's ability to answer the city's 911 emergency line.

Right now, we meet all regulations on call time answering from the time it begins to the time it's answered.

But what we are doing right now is we're having to rely a lot on overtime staff, and so we want to add call takers so that we can reduce that reliance on overtime for the department.

In the fire department last year, Councilmember Herbold provided funding for the continuation of the West Seattle fire department.

that were established during the closure of the West Seattle Bridge under COVID.

Last year, the funding was provided for overtime, and this item is adding the FTEs needed in the department, the full-time equivalent employees needed for those operations to be ongoing.

And so instead of relying on overtime to operate that department, we'd be relying on full-time firefighters in that space to help the department out overall with their staffing models.

Going on to the next slide.

Actually, just want to recognize Councilmember Herbold for a minute and Director Dingley, if you want to go off screen, that's okay too, because it might take a minute for us to...

I wanted to just offer Councilmember Herbold the chance to provide additional context on the concepts here.

I know that this...

I said, please hold your questions till the end.

of the three slides but given that you are at the press conference and possibly with others um might be helpful to hear more from you on what you heard at the vision there anything else that you'd like to offer regarding the care department i know that's something you've been working on for a while um and then i might ask central staff a quick question about the sequencing of some of these things

Thank you, Madam Chair.

Yes, I was at the announcement around the care department and have a lot of positive reactions to the direction that this is moving in.

Even though we talk about dual dispatch, the vision is really to make sure that the behavioral health professional that responds, that the police department is aware of the dispatch, In some cases, in the initial stages of the pilot, might go out with the behavioral health professional in a separate vehicle.

In some cases, they might stage nearby in case they're needed.

And in some cases, they may not go at all and just be aware of the call for situational awareness.

Although many of these community response programs their experiences has been to not need police backup.

Many of these programs started with this kind of approach with having the police department aware of the dispatch in the early stages of their pilots.

and realized through through the experience of the pilots that the the dispatch of police, either for situational awareness or going on site was unnecessary.

So really, really happy to to see the funding here.

Really happy to see the use of the the i i can't remember the name of the funding source but it was a funding source that central staffer ann gorman helped identify the revenue associated with with phone calls, it's a small fee or tax that is being used to help supplement some of these costs.

We'll be interested to look at the funding for the dual dispatch pilot in the 2024 budget as compared to what council put aside in in the budget last year for 2024 the mayor in yesterday's budget announcement said the dual dispatch was uh fully funded and uh wasn't wasn't sure if he meant fully funded consistent with the funding that the council provided for the 2024 um or if there's if this is added added funds above and beyond that um and then as it relates to the additional call takers um you know this is also incredibly important that CSCC is able, the Care Department is able to answer 911 calls in a timely manner.

This is something, again, that we've been tracking for several years.

We were disappointed that last year's budget removed some unfunded vacant positions that we had put in as placeholders because of a previous study that showed where the 911 call center needed to get to with staffing, because we were drastically understaffing.

So this is an example of unfunded vacant positions having an important role to be the marker of the staffing that we're trying to get the department to get to and so many of the positions that the council had added in previous years last year were um were removed so really interested to know um how these three additional call takers will will meet the need we recently received um a response just i think Boy, just yesterday that council requested as part of a sly get a get a sense of how the current staffing levels are impacting staff well being and morale and whether or not they staff are have sufficient paid time to engage in training and professional development.

And then basically just whether or not the staffing levels include, are able to address the need for appropriate FTE level for each job classification.

So really looking forward to seeing how the SLI response addressed the concerns that this council has had in the past about staffing at the 901 Center.

And yeah, look forward to more conversation there.

I did want to just say a couple words about the fire department funding.

And of course, I was so glad to be able to have the opportunity to work with my colleagues last year on the additional funding for the staffing and the new ladder truck in West Seattle and the medic unit in South Park.

we've learned that um as the fire department through our pre-budget q a that the fire department was directed by the executive to not purchase the new order for a ladder truck um and the council had identified a million dollars for a lot of trips because we were told that was what was needed And the description for why that purchase wasn't made was that there was not funding provided to cover the additional costs.

So I don't know what that means, what the additional costs means.

I was never notified of this decision to not put the order in for the ladder truck.

Don't understand why, as in the past, when funding provided by the council was is not being expended in a way that was consistent with the intent.

There was no notification of the plan to do that.

And again, we were told that the new ladder truck was necessary to maintain these services and just would love to hear more about how you, not you in particular, Julie, the executive in general, came to the conclusion that it was not needed, why the decision was made to not notify council and what the additional costs are.

And then also what happened to the $2 million that the council provided for this?

Was that just dumped back into the budget or is that being held somewhere until we come up with the additional costs?

I hope the answer is the second thing.

Thank you.

Thanks, Councilmember Herbold.

You had several questions in there.

I fully did not capture all of them, so we will absolutely look forward to connecting with you on on the concerns that you have here.

A couple of quick things on the fire department.

We don't have the full.

We don't have the resources to purchase the truck and it's not good financial practice to enter into contracts without the resources identified to pay for them.

And so we did hold on that until we had the resources available.

So we can talk further about that and what that looks like and what the planning horizon looks like for that.

We are maintaining an anticipation in our planning reserves and out years of additional costs as a risk.

But we don't specify those amounts because any future purchase of that would be a subject to negotiation with a vendor and so not something that we really want to, you know, daylight the exact details around but happy to talk to you further in additional detail about that.

I think you also You know what?

I'll get back to you on the other questions.

I know my team's taking notes.

So thank you so much.

Not a lot of other questions.

Mostly, yeah, just interested to know how the $1.8 million compares to what the council budgeted last year for 2024. And we'll be looking at the slide to see on the call takers to see how it addresses the need.

But I did.

So that can definitely hold.

But I did want to understand.

Is the two million that the council provided, that was the I believe that was the amount that was identified as the cost, the estimated cost for the ladder truck.

Is that two million still being held?

We have a reserve in 2025 that we're anticipating.

Oh, because not in 2024. Um, I don't, I think we'll have to connect because I think that we have some different information.

So let's connect offline.

If that's right with you, council member on what the council provided in the adopted budget and endorsed budget compared to, um, cause I think you provided resources for the EMS vehicle, but not for the ladder truck.

And I think that's maybe what you're referring to.

We did move forward with the EMS vehicle purchase, uh, that, uh, so that one is that one's covered.

but it's the latter that's not funded, and so that's what we have not purchased yet.

Yeah, okay.

I can send you the information that I have here, but yeah, absolutely.

Appreciate that.

Sounds good.

Thank you for that.

And thanks for your leadership on that.

My memory is as well that we definitely funded both.

So let's get clarification on that.

That was a big priority for the health and safety of West Seattle.

Let's move on.

We have about seven more full slides and we have a half hour, so I know we can do it.

So we will continue with public health and safety and we'll take some questions after we get to slide 25.

Great.

Thank you, budget chair.

So we have a lot of really critical investments in our accountability infrastructure.

This is something you heard the mayor feature in his speech yesterday as well.

We have in the Office of Police Accountability.

We have a deputy director to provide internal staffing management and day to day investigative capacity that will really allow the OPA director to instead focus on high level investigation responsibilities.

and external relationships.

And that's going to be paid for by department vacancy savings.

So the department, you know, routinely doesn't have 100% staffing, and so we're going to capture some of those savings to support a deputy director.

For the CPC, or Community Police Commission, we are also adding a deputy in that space to assist in managing the operations of the office, facilitate strategic planning, and ensure the ongoing structural integrity of the CPC Commission administration and operations.

and that's paid for with a reserve.

We also have three new positions added to the Office for Inspector General for Public Safety for assuming the federal monitor's oversight and assessment related to the 2012 consent decree entered into between the city and the Department of Justice, as well as a halftime communication and engagement specialist to provide racial equity expertise in scoping work projects, as well as strategic management within the community.

that's also paid for with the reserve those were positions that we created mid-year in 2023 so the budget's making them ongoing last on this particular slide as you all know crime in seattle has is concentrated and anchored at specific locations across the city which is a reality that has existed for many years with the extreme shortage in police officers it's essential that spd is the police department sorry not spd the Seattle Police Department, or SPD, is able to deploy technology tools to prevent and suppress crime.

So what we're doing in this budget is reinvesting 1.8 million of Seattle Police Department's salary savings into new crime prevention pilot to leverage technology in areas hardest hit by gun violence.

So the funding is for implementation of automatic license plate readers, CCTV cameras, and acoustic gunshot locator systems to determine or sorry, rather, to deter criminal behavior and hold offenders accountable.

Next slide, please.

The final slide here in bolstering public safety and public health is one that you all have been actively talking about in the last couple of days even.

So in June of this year, the mayor announced a $27 million investment in efforts to improve addiction treatment.

So the first investment is something you talked about just yesterday.

In new treatment facilities, $7 million that would be for an investment for a request for proposals or RFP to support capital costs for drug treatment facilities.

This is backed by Community Development Block Grant funds or CDBG funds from prior years that were unused.

Further, the budget includes $2.2 million for funds for several purposes supporting the opioid response in general, including drug user health and harm reduction services that were previously funded with one-time funds, to also expand HealthONE's post-delivery, post-overdose delivery response team, and for a post-overdose facility services for the two treatment facilities that are listed above with those capital expenditures.

This is funded from the Opioid Settlement Fund.

These are resources that the city is receiving as part of the state's settlement with opioid distributors.

We received these funds for I think about 17 years, so we have a long runway to continue making these investments.

Of this $2.2 million that is in the budget, about $580,000 is one time and $1.6 million is ongoing.

Also included in the budget, it's not a new incremental change, but it's assumed within the endorsed levels, of $17 million in diversion.

So this includes about $15 million for the PDA's or Purpose Dignity Actions suite of programs, including LEAD.

That funding is included in the base with general fund.

And also, as I mentioned previously, the we deliver care outreach workers working to establish relationships and building trust with folks that are suffering from substance use disorder and using drugs in public spaces along Third Avenue is also extended in this budget for an additional year.

So that's the end of this section, so I can pause there.

Thank you, Councilmember Nelson.

How much is allocated to the we deliver care item?

That's $1.9 million, and it's general fund.

And who is the primary contract holder?

I believe that's run out of the Human Services Department.

So no external?

I mean, what is the external service provider?

The We Deliver Care.

Good.

The name of the group, yeah.

okay does that answer your question council member well if it's if it's hsd um who's the other side of that contract what is the uh organization that we are contracting with to for who are the people employed by that are actually implementing the program it's a group called we deliver care i know that's a little confusing because it's yeah the name's a little bit confusing there Okay, thank you.

Yep.

Council Member Herbal.

Thank you so much.

I just want to flag in, again, some very helpful early back and forth with HSD on high priority community violence initiative areas.

They note that the highest priority programmatic activity that is currently unfunded is mental health resources for frontline community-based crisis responders as mentioned repeatedly by the leaders of community-based organization so i think that's really important to uplift in the conversation about new investments to address crime prevention efforts um that's a that's a high priority programmatic activity that is not not funded there's also a high priority geographic um uh activity uh that is unfunded and uh hsd identifies it as a high priority and that's uh the fact that our um fantastic and uh generally resourced seattle community safety initiative has hubs in different parts of the city, but there is no hub in the Northgate area.

And further in Southwest, there is a hub, and thank you, our friends at Alive and Free, but there is a real need for Spanish-speaking staff and Spanish language resources to assist those health activities.

So I want to lift up that those are the highest priority unfunded community violence investment that the Human Services Department has identified.

And then, so that was just a statement.

I do have a couple questions.

I just want to confirm slide 27, the investing in workers piece.

Just want to confirm.

I think that's the next section.

Just want to double check, 27. I'm so sorry.

Is that okay?

I'm losing my way here.

I know the color coding helps, but it is all interconnected.

But any other questions on public health and safety?

Okay.

No.

Thanks for teaching that there's more to come.

Council Member Lewis.

Council Member Lewis, you're still on mute if you had a question.

Oh, thank you so much, Council Member Mosqueda.

I just want to jump in because before Council Member Herbold's exchange, there was a little bit of back and forth regarding we deliver care.

And this is either either could be information for the committee or flagging for issue identification when we get the deeper briefing on this this topic later in our process.

But Councilmember Nelson's confusion may stem from the fact that We Deliver Care is a portion of the Third Avenue project, which is a collaboration between the Downtown Seattle Association, the Public Defender Association, and We Deliver Care.

The portion from the Human Services Department, as I understand it, and as Director Dingley indicated, supports the We Deliver Care team.

And the Public Defender Association's role is funded within their existing resources.

And I don't believe we give them a supplemental amount of money for their participation in the project.

But that may have been the area of confusion.

But also flagging that for issue ID purposes for I'm sure HSD is watching for when we come together and dive into that a little bit more to delineate all the different partners who are involved in that work.

and how we can work together to strengthen that really critical partnership that the merchants on Third Avenue have been so supportive of and really glad to be moving this priority forward in collaboration with the Downtown Seattle Association and Mayor Harrell's office.

So thank you.

Thank you for that clarification.

I did know it was a consortium of entities, and I appreciate the clarification.

Great, and then, excuse me, on that, is this one-year funding, one-year extended funding for the Weed of Liver Claire Third Avenue project?

I only see it in one time.

Yeah, it's a one-year extension of that project.

Okay.

I'm not seeing any new hands.

I do have a few questions of my own.

I wanted to go to slide 24. um and again director dean ladies if there's questions here that you can answer fantastic if we need to take them up later with the department um i understand that because um you are a conduit at this point uh i wanted to raise some of the obvious concerns here that i have about some of the new technology that's been outlined here You know, specifically, I need additional information as I've asked Central staff for and in my briefing with CBO and the Mayor's team to understand more about how these technologies align with our surveillance ordinance authorization, whether or not there's been any racial analysis or racial equity analysis completed on the technology that's being proposed here.

I think it's clear from anyone who was following the budget deliberations last year that the council made a final decision and it was signed into statute as we finalized the legislation last year of dealing with the budget that we were not going to be advancing the use of technology such as shot spotter.

And we removed it from the 2023 budget.

And our anticipation was that the biennial budget that we have in front of us would comport with the changes that were proposed and the alignment of the 2024 endorsed budget.

The issues that I'm raising are to understand more about why the technology that's outlined here is coming back to a technology that very similarly, if not exactly aligns with what we saw from ShotSpotter in the previous year as well.

Just to remind us, the data shows that the devices that are being outlined for hearing potential shots are not effective at preventing gun violence or assisting the collection of evidence from incidences of gun violence.

They aren't very reliable in distinguishing gunfire from similar sounds, but do put police more on guard when so-called, quote, high crime neighborhoods happen to have noises detected by those devices.

And it heightens the tension and the interaction that communities have with armed officers who live in those neighborhoods.

Forensic reports prepared by ShotSpotters employees have been used in court to improperly claim that a defendant shot at police or provide questionable counts of the number of shots allegedly fired by defendants.

And judges in a number of cases have thrown out that evidence.

This is according to the Associated Press, who's done an investigation on that technology.

So seeing the increased security video surveillance that is being proposed in the budget connected to audio gunfire detection devices exponentially heightens concerns that I have that we already addressed last year about how hyper surveillance and decreased privacy expectations can be concentrated, especially and disproportionately in communities of color around Seattle.

So for me, and again, Director Dingley, this is not a question directed at you, but for me, this is going to be a specific area that I am interested in looking at because it does not align with what we had comported with or the expectation that we would be comporting with a biennial budget that largely aligns with previous policies and directives, given the conversation from last year.

I am very interested in knowing if the racial equity analysis has been completed, if there is any new technology that's being analyzed in an effort to put this forward and how this comports with or aligns with the biennial proposed budget changes that we had in last year's budget.

And specifically, if the $1.8 million is being used here from the salary savings that we freed up in the mid-year supplemental budget, otherwise, how is the proposal for this budget able to allocate money that's already been provisoed?

Any thoughts on that last component about freed up funds?

I think you're raising really good questions, and I will just say that Deputy Mayor Burgess has offered to make himself available for any questions and briefings that you might want to have around the use of what really anything in the public safety portfolio, but in particular for this proposal here.

These funds are projected to be available based on lower than.

expected hiring numbers so we had assumed a set of uh hiring levels in the 2024 endorsed budget and spd is not going to meet those levels to the tune of about overall there's about eight million that we project will be for salary will accrue salary savings in 2024. so there's 1.8 here that you see that's reinvested in this technology crime prevention pilot and the remainder of those resources are remaining within the department to be used for overtime expenses And what we know is when SPD is down officers, they have to they still have to meet the needs of community.

And so they have to fill those hours with overtime.

And so there's a direct one to one there that those will be needed.

Just they'll be used instead of backing a full time equivalent officer.

It will be for overtime.

And so that those funds are in the budget, but they're just from reduced hiring levels.

And they're from 2024, not from 2023. Oh, sorry, Councilmember, you're on mute.

Thank you.

I know there will be more to come on that, especially, I'm sure, some additional conversation that I'm sure our Public Safety Chair will be heavily involved in, too, given the Council has repeatedly fully funded the hiring plan.

And in addition to that, funded the incentives and the strategies asked for in last year's budget, some of which were built back in after the chair's proposed budget and even then it doesn't seem like we're fully utilized so i know that there will be more discussion about that appreciate the transparency on sharing where the fund source is from and the technology concerns the privacy concerns the surveillance concerns remain on slide 25 A question about the funding that's been identified for diversion funding.

Is the diversion funding identified here a increase in the proposal over what we had in the endorsed 2024 budget?

Or are we maintaining the amount and just adding inflation?

the latter.

So this is maintaining the amount and adding contract inflation and really the difference in contract inflation that just wasn't included already in the endorsed.

So it's a small increase relative to the endorsed, but these are based resources that the beauty of a biennial mid biennium budget update is that we really want to lift up those base resources that we have available to tackle various problems.

Yeah, I appreciate that.

And adjusting for inflation means that there is not a reduction, and that's important given the cost of inflation right now, but it's really maintenance.

And colleagues, I'll be coming back to this as well, given the ongoing requirements that we've added.

and interest in diversion strategies.

I just wanted to understand more about whether or not this was an increase in the funding or if it was a maintenance plus inflation.

Those are some of my questions in this section.

And we do have about four more slides, but I wanted to see if there was a new hands.

I think Council Member Lewis, you have an old hand if I am reading this slide deck correctly, but let me know if that's wrong.

That is an old hand.

okay great um and councilmember herbal why don't you close oh okay okay councilmember why don't you close this out on this section thank you um i just wanted to um speak to uh the issue of the maintenance of the uh funding levels for uh for diversion in the uh proposed 2024 budget.

Appreciate that we are maintaining the funding that the council offered.

Do appreciate Council Member Mosqueda's concerns about an increased leaning into reliance on diversion, both pre-arrest diversion and pre-booking diversion, and the impact on PDA's suite of programs, perhaps an increased impact.

There are approaches that are discussed in the lead coordinating uh council meetings um about how to adjust priorities but um if lead is going to take more referrals associated with addressing diversion requests associated with the recent passage of the public use and possession drug law, there will have to be some adjustments to who PDA serves.

So said differently, if they are going to be taking more requests from diversion from SPD or the city attorney, it means they will need to be less responsive to community stakeholders who are identifying needs.

um they right right now um take a lot of their referrals from community stakeholders neighborhood business districts community councils council members who get inquiries from our constituents about particular locations and individuals in need and to if we're maintaining the current level of funding we are gonna have to continue to have conversations at the lead coordinating council about how to reduce service in one area to meet the greater need in this new area.

So appreciate Madam Chair raising that issue.

Thank you.

Okay, let's go through the next two sections and then we will come back and we will take questions on the remaining two sections there and then we'll do the final slide.

Great.

To my favorite color that I was wearing yesterday, we have investments in workers.

So these are internally facing investments that we are planning for 2024. This is one of those central costs that I alluded to earlier in the presentation.

The city's classification and compensation system or their program rather, ensures fair and equitable compensation for employees for work being performed.

The industry standard for updating classifications and compensation is every three to five years.

This program has not been reviewed since the 1990s.

And that is an unacceptable amount of time that has transpired without a look at this system.

The funds here are for a two-year comprehensive review, ultimately to inform the scope, process, timeline, and estimated costs for an update to the system.

Anyone who spends any time in the city on hiring recruitment retention spends time in the labor space knows that we have so many operational problems that stem from having such an outdated classification compensation system.

So while this is not the most exciting budget proposal that you may have heard from me today, it certainly is incredibly important.

So it's so much so that this is 1.1 million of general fund that is is not otherwise offset in the department.

So this is an area of new spending in that in that citywide central costs and is incredibly vital to the work that affects the entire city.

We also have the majority of the city's labor contracts that are currently up for renewal.

This adds considerable uncertainty, as I mentioned earlier in the presentation, to our overall budget planning process.

We, of course, have reserves for this purpose.

The exact details won't be known until those negotiations conclude, hopefully in the coming months.

Just a reminder to anybody listening that the Seattle Municipal Code requires the city to maintain confidentiality toward ongoing negotiations.

So the amount that I'm able to speak to those negotiations or reserves or anything in that space is really limited to the words on the page right now.

So I appreciate anyone who has questions in this space and look forward to talking with you offline so that we can maintain that confidentiality for those negotiations.

All right, next slide.

So these are more externally facing investments, and these are these are quite quite exciting for for what the city is for the city's work for the city's contracted workforce here.

We have this first section is human service contract inflation.

So as as you May know we are the only government entity in the state with a mandate in code to provide inflationary increases at CPI W CPI W is a government measure of local inflation.

To our human service provider contracts.

So in the 23 adopted in 24 endorsed budgets, the base contracts for human services were inflated at 7.6% and 6.7% respectively between those two years.

The 2024 CPIW measure was 7.5%.

And so we had to come up with the difference between the 6.7 that was in the endorsed and the 7.5 actual.

That amounts to an increment of about 2.6 million, which comes from the city's general fund.

And that's a total increase of about 15.8 million above 2023 for just contract inflation.

The next item here is human service provider pay and childcare supports.

You've heard me allude to this a little bit, so these are some details here.

You all, the city council, added $600,000 to HSD's 2022 budget for a wage equity study.

In 2023, the University of Washington completed that study and the council adopted resolution 32094 stating the council's intent to consider increases to HSD administered contracts in addition to inflationary adjustments required under the SMC.

In response to this study, Mayor Harrell is providing 2% or 4.3 million to support increasing pay for human service providers on top of that contract inflation.

The proposed budget also includes 2.9 million to support one-time retention bonuses for childcare workers.

The funding for this, as I mentioned before, comes from payroll expense tax exemptions, and this is paid for by reducing the payroll expense tax transfer to support general fund operating expenses.

So taken together, Investments in human service providers are $23.2 million above the 2023 adopted budget and $10 million above the endorsed levels.

I want to be really clear on this, and it bears repeating.

I know that the council members have also said this, but the city is the only game in town providing these increases to these workers, and we can't have that be the case in perpetuity.

We really need our partners in the county, in the state, and the federal government to step up to the plate here and provide some increases.

Taken together, investments in 2023 and 2024 in these workers amount to an 18% increase across the two years.

Many of our human service provider organizations are funded with funding from a whole bunch of different sources, and so only one source increasing causes problems for them.

We really need to raise all boats in this situation to make sure that these underpaid workers are earning a livable wage.

and so this is a massive investment and demonstration of values in this in this budget so um again 23 million above the 2023 adopted budget I think Councilmember did you want to keep going to the next section we might as well pause here okay it's a lot of hands yeah thank you so much uh Councilmember Morales please go ahead thank you uh thanks for that last point Julie I think it's really important for us to acknowledge that um both ends

You know, we need to make sure that we are supporting our workers who are doing this important frontline work and as one of several funders we need to be working with our partners.

I just wanted to go back to the previous slide and acknowledge the classification program and really appreciate having this included.

You may not think it's sexy.

I think it's very sexy for us to be talking about how we look at our employees across the city.

I will say that I'm glad to see this.

This was a recommendation from our city auditor who made the recommendation based on some work that my office commissioned looking at what our retention and promotion practices are in the city, particularly for women of color.

And one of the findings from that report that we just highlighted in my committee last week is that our classification system is very outdated.

And while it will be a couple of years for us to analyze, assess, and decide what what the next steps are to bring us up to par in terms of how we classify our city workers.

I think it's really important that we begin this work.

So I just want to appreciate that this recommendation is actually in the mayor's budget and that it's actually funded to get us started down that path.

So thank you.

Thank you, Councilmember Nelson.

Going to the second page of investing in workers, please advance.

Thank you.

So the decision to tie the contract adjustments to inflation, the discussion that we had last year, I raised the question about the report that was mandated when this law was voted on in 2019, I believe it was, maybe 2020, I can't remember.

And so it was due last year in March.

And I'm wondering what the update is on that, because that was supposed to track, I believe, worker retention in our service providers, because that was the reason for the for well, it was one of the reasons to tie the adjustment to inflation was to try to keep workers in those positions.

So Any update on on that, and then I have a my second question is an update on the roundtable discussion when we were discussing the resolution to for pay equity, it was discussed in you alluded to this directly.

was discussed that yes there there's a roundtable discussion going with our partners who are also funding these service providers, and so I would like an update on that process.

Thanks, Councilmember Nelson.

To the first question, HSD is doing work right now on that and has a survey either out or it will soon be out, and they will have results of that later this year for Council's consumption.

I don't have an exact timeline on that at this moment, but I know that that work is underway.

And to the second, we'll definitely have to get back to you on an update of those conversations, but they are also ongoing.

Well, I would hope that whatever the Human Services Department's schedule is, that the work on the first item, the report that was due in March of 2022, it would be ideal if we could have that during this budget discussion.

I just got an update.

Of course.

Thank you.

I just got an update from my team that the survey is scheduled to be released to partner agencies this month.

And HSD will review the responses as they come in and provide preliminary results to decision makers.

And we anticipate a final report being transmitted to the council in late November.

So we should get some preliminary results that could inform deliberations and then final report after the budget's adopted.

Thank you.

Council Member Herbold, I know you had some questions you had teed up earlier.

Sure.

Thank you.

I think actually my original question, just confirming the CPI adjustment is fully funded and separate from the wage penalty gap adjustment.

i think that question was answered so thank you um i share uh councilmember nelson's uh desire and interest to get hsd study i understand there was some delay in getting the survey out and had a lot of concern about that delay.

It was not HSD's fault.

And do agree that we need this information so that we can confirm that increases that we are including to address wage equity are being used for that purpose.

So that's I think a really important work product that we need to both confirm that the funds are being used in a way that's consistent with council intent, but also to inform a piece of budget legislation that I've been working on with council central staff moving forward about how to use hsd's uh contract monitoring um functions to just basically monitor and ensure that wage equity adjustments are being used for the purpose intended so more on that later uh but i do i do share customer nelson's uh interests and and concerns there I do want to confirm what you said, Director Dingley, the roundtable conversations are ongoing and we are going to be getting in, I believe in early October, some indication from other funders that are participating in that roundtable, what they intend to do in this space moving forward.

And as we asked in the council resolution, I do want to flag though, maybe not a correction because I don't want to underestimate the importance of making sure that we are all rowing forward in the same direction to address wage equity.

But I don't think it's quite clear the full picture to say that we're going it alone.

The Best Starts for Kids levy includes $5 million per year through 2027 to fund a child care workforce development project to specifically increase the wages for 1,400 low-wage child care workers.

The proposed Veterans, Seniors, and Human Services levy requires the implementation plan describe levy strategies to stabilize nonprofit regional health and human services workforce.

The crisis care levy also assumes that the staff operating the crisis care centers will be funded at 20% over their current wages.

Let's see.

Some might say that this is primarily the city's money, but the county is contributing this space as well.

There is a wage equity effort for agencies funded through the RHA, the King County RHA.

Again, a lot of that is Seattle dollars, but a lot of it is also King County dollars.

Housing levy includes...

taxpayer dollars to address wage issues, and also the state operating budget increased homeless service provider contracts by $45 million.

That's a 6.5 percent increase, and prioritized the funds for stabilization of the homeless service provider workforce.

um and provided a 15 medicaid rate increase for behavioral health providers to help address the workforce issues in the the the state's investments for behavioral health health i just wanted to paint that larger picture, but we will be having more information from funders, both governmental funders and private philanthropy in early October about how they plan to continue their work in this area.

Thank you.

Thanks, Councilmember Herbold.

You the end of that was exactly what I was going to say is that what we're seeing are small punctuations here and there, but not a continued commitment.

And that's that's really what's missing in this space that we're the only entity that has this level.

of commitment in an ongoing way.

And so we really need for that to be a consistent support from all those groups that you just mentioned, as well as not just for those narrow slices, but really for the full spectrum of services.

So absolutely.

Thank you for raising those.

Thank you.

I think Council Member Morales, that hand is an old hand.

I'm going to jump in just as I'm confirming that.

Excuse me, I'm old here.

I appreciate that you raised that.

We actually went through some similar exercise when discussing the housing levy to show how important it was to put workforce investments directly into fund sources.

And we've done that as well in direct investments through Jumpstart and I'm looking forward to hopefully the housing levy passing.

But those are good examples of where other especially King County has stepped in to provide some additional support there.

I have a few questions here on the last slide on page 27. Let me just pull up my notes here.

And Director Dienle, I might be taking this up more for future discussion and also for central staff.

back and forth with CBO too.

As my colleagues have noted, last year we worked very hard to ensure that we had the full inflationary adjustment included in the 2023-2024 proposed budget.

As folks remember, the proposed budget that we received from the mayor's office last year had a 4% increase in the 23 and 24 proposed budgets for the human service provider cost of living adjustments.

We worked to restore it to the full amount as codified in statute, which would have been 7.6% inflationary increase in 2023 and 6.7% in 2024. We allocated child care payments using Jumpstart Progressive Payroll Tax and CLFR funds, the Coronavirus Local Relief Funds.

and we allocated workforce stabilization dollars for supportive housing efforts, both for PSH and residential services.

We have an ongoing commitment through the legislation passed in 2018 to meet this cost of living investment, and I appreciate that this budget makes end roads to try to increase the base wages for frontline workers who are caring for our most vulnerable.

I think there is Another area where information provided here, though, does not make it clear to the viewing public or to colleagues or reporters the funding source being used to fund these various investments.

So what I will be asking for at a future meeting is to be able to look at some of these key components of the budget that's been transmitted and better delineate the fund sources to align fund revenue streams with the policy intent.

So we can be looking at the long-term implications of which funding source is being used.

So for central staff or future discussions, and I'm sure will involve CBO as well, I'll be looking at, or I would like to have an analysis that looks at how Jumpstart is being proposed to fund wage increases.

What are other fund sources being proposed?

What are the implications for the long-term needs if we use different revenue sources?

and how the proposals align with current policy.

I don't see any additional questions here.

And I know we have two more slides, one more section and a summary slide.

And it sounds like Adam is still thinking he can do it within a 15-minute window.

So I think we can get through this period.

Is that right?

Or should we conclude here, Director Dingley, and move on to ARPA funds?

It's up to you.

I think it might be best to wrap this presentation, and we might need to bump the ARPA funds to the afternoon just to be able to get through it, unless there are no questions in the next three slides, and then we have enough time.

Because I think it's probably about 10 or 11 minutes of content from us.

So we could really go either way.

on the arpa funds on the arpa funds yeah okay great well i think that in order for us to get through the arpa presentation given that it's already been delayed once um i would love for colleagues if you could um could uh summarize any of the questions that you have for director dingley and we can come back to that but i'd love to transition over to have adam do a presentation on ARPA funds to round us out for the ARPA presentation.

And then when we close out, we can ask any final questions.

I recognize there's one section on just sort of miscellaneous items that we haven't gotten to, but you have those slides in front of you for furthering economic recovery.

And we can come back to that as well, just because Director Dingley, I'm not sure how many people we might have this afternoon.

So perhaps we should wrap the presentations and if folks can take a look at those last three slides and let Director Dingley know if you have any questions, if we can't get back to it.

Does that sound okay?

Sounds great.

Let's do it.

And we have William Chin from the Budget Office.

Make sure that he's on the line.

Great, I see him in here and please pass on our appreciation, William, to your entire team.

I know that this has been something that we've been in conversation with Adam about for a number of months too.

So thank you for providing this presentation.

Oh, William, we can't hear you.

I was going to say it might be a shorter presentation than we thought.

William, you're also welcome to join in my office if you can't get yours working.

Director Dingley, we could also, if there's audio concerns, we could also add ARPA to a future meeting.

I just didn't want to bump again.

Allie, did you have thoughts?

William, why don't you come down to my office real quick?

Okay.

Okay.

So as we're doing that, Director Dingley, did you have any summary comments that you'd like to make on your presentation?

Yeah, thank you so much, Chair Mosqueda.

We have spent, as I mentioned, you know, we spent the better part of a year preparing these updates for for all of you and for the public to consume over these the last 24 hours or so.

We really look forward to engaging with you.

The content we didn't get to just yet were the investments in economic revitalization that we have that we had talked about last year.

We knew that we had the Future of Seattle Economy report from the Office of Economic Development underway, and we wanted to give them the space to think about what that report should look like.

And you all had a lot of conversations about that earlier, I think last month, and passed a resolution in support.

And so the investments you see on those slides really reflect the pillars that were in that report.

And then the final slide just includes a mention of our fiscal reserves.

Our rainy day fund is fully subscribed and we're just making minor adjustments there.

And then our emergency fund, we are accelerating contributions to that with the 23 year end supplemental and the 24 proposed budget.

So with that, William Chen is here.

I'm going to let him take my physical seat to to present to you on the final presentation of Seattle's ARPA spending.

This is the end of an era that we are very proud of and really so grateful to William and his team.

Before I do give up the chair, I just want to say a huge thank you to the city budget office team.

This is an incredible group of public servants who are so dedicated and brilliant and thoughtful and passionate.

And I am just honored to represent their work here today.

So thank you so much.

With that, I'll turn it over to William.

Sounds good.

And thank you for your presentation as well.

Thank you, Patty, for teeing up all those slides that we quickly ran through.

And we now have the last item on our agenda, which is the Seattle Rescue Plan final report out.

We do these quarterly usually.

And at this point in the year, we've actually rolled up a number of reports into one final presentation.

Thank you very much, William.

Great, and you can hear me now?

We can hear you now.

Awesome.

Let me try and pull up my notes really quickly here so that I'm not just going off the cuff.

So, all right, I think I'm just having technical difficulties today.

Well, we'll just go from memory then.

So for the overview of the presentation today, I'm going to be starting off with some key takeaways about what the Seattle Rescue Plan has accomplished, and then going over a summary about what it was, where it came from, how we allocated it.

And then touching on what the current status of the spending is of these funds before diving into more depth on what the Seattle Rescue Plan accomplished for the city residents.

So let's do next slide, please.

And so Seattle received about $300 million in federal recovery funding from the American Rescue Plan Act.

and those funds provided critical support to individuals to families to workers and businesses during this difficult time in our history and seattle thought to distribute that funding equitably and we succeeded in reaching an ethnically diverse population around seattle we also leveraged a small part of this funding to scale up evaluation capacity in the city and that's been instrumental to producing the information that's shared in this presentation and also the annual reports And for more, you can see this year's performance report and the Seattle Rescue Plan web portal.

Both of those are linked on the slides.

Next slide, please.

So this slide shows all the different grants that comprise the Seattle Rescue Plan.

The largest by far is at $232 million was the Coronavirus Local Fiscal Recovery Fund, and we call that CLFR here in Seattle.

Other places sometimes call it different things.

And then all those other pieces, which were for different uses, these all came to Seattle in different ways and had to be handled differently.

Next slide.

So first, looking at that box on the left with the Clifford funds, Clifford was allocated to Seattle by formula, and that grant had many uses, but it's also subject to many rules, as federal grants tend to be.

Back in 2021, the executive and legislative branches collaborated to allocate that first half, the first package of Clifford funds.

And to do so, taking into account public priorities, council held public hearings and the mayor held roundtable discussions with community groups.

And then there's a second half of it, the second package, which was allocated by the 2023 budget process.

Then looking over at that box on the right with the rest of the Seattle Rescue Plan grants, these grants had specific uses on them, and they came to Seattle in different ways.

Some of them were allocated by formula, and then some of them departments won by applications.

Next slide.

The total of the ARPA funds can be categorized into five different buckets.

And those are listed on this slide.

There were housing and homelessness, community well being and reopening services, community and small business recovery, community safety and mental health, and then supporting city workers and services.

Next slide.

And this is the latest information that we have on the status of our spending.

So as of last month, August, departments have now spent over 80% of the Clifford funds.

And we're really in the final stretch now.

Next slide.

okay so next uh the second part of the presentation we'll get into what the funds accomplished and uh on the following slides which will be by category oh excuse me um that's fine um so you know it's is a large amount of funding uh it spanned about 80 programs and 15 so it's hard to kind of put things together in a nutshell so what we've got here in this presentation is some key findings that look across all these different programs And then in the following sections, we've got program highlights.

So that'll give you a sense of the scale and the depth and the breadth of the things that this funding has accomplished for Seattle.

So on this slide with key findings looking across programs, kind of aggregating them, um seattle rescue plan has been able to provide 28.6 million dollars in flexible emergency funding and this went to individuals and families in some programs and to child care workers and then also to businesses we also provided services to over 3 500 small businesses and grants to over 50 business associations who also then further granted out to small businesses um provided free child care to 690 kids and also have ordered funding to projects that will create 311 new child care slots in the city the funding supported over 300 000 meals during the pandemic and an additional 1 million food bank visits it's also supported the collection of over 3.2 million pounds of litter and cleaned up a hundred thousand square feet of graffiti and finally the funds also supported nearly 400 city workers during the pandemic and that included 328 firefighters next slide uh so as noted we tried to do this equitably and Of the programs reporting demographic data, just over 60% of clients identified as Black, Indigenous, or people of color.

You can see in that donut chart on this slide the distribution across different racial and ethnic groups.

That's a pretty wide mix.

Furthermore, 100% of the programs reporting geographic data provided their services in equity priority neighborhoods.

And that's based on OPCD's racial and social equity index.

And just under 85% of programs served most of their clients in these equity priority areas.

So what I wanted to note here is that IP's measurement and evaluation team did a lot of capacity building with department staff.

And one of the things that we tried to do was increase the quality of demographic data collection.

And we're able to increase the number of programs collecting quality demographic data from 52% last year to 71% this year.

And this is great because, you know, we're getting a more comprehensive picture, are able to actually look at programs together to see how we're doing more comprehensively.

When programs are doing things kind of on their own, then you can't really put them together.

You can't really compare them and see how we're doing as a whole.

Next slide.

Okay, so we're getting into the categories now.

On this slide and on subsequent slides, we'll have some notable metrics from programs and then also quotes from residents or the city's partners in providing these programs, talking about what these funds have done for them.

I'm not going to read the quotes, but I just wanted to flag for you that they're there on these slides.

So in community well being the civic form program, which is this unified application portal for different city benefit programs.

At this point, residents who are going on that platform to apply for programs can see up to $25,000 in possible total savings.

um the healthy streets program which has made it so that some streets are designated for people who are walking or rolling or biking or playing and uh off limits for passenger traffic um it's made some of those streets permanent around the city and what it's seen is a near tripling of the number of people walking and biking per day on those streets compared to a standard neighborhood greenway I think you mentioned the childcare one earlier.

So we also invested in digital equity.

The digital bridge program has helped just under 300 participants who are low-income job seekers and provided them digital access and skill building with a laptop and also digital literacy training.

And then the digital equity program saw almost 2000 additional participants thanks to this funding across 11 community organizations and they were informed about low-income internet programs and also given digital literacy training next slide in community and small business recovery so the cultural organization reopening grants program awarded funding to 154 cultural organizations.

And this allowed them to handle the financial and operational impacts of the pandemic and to reopen safely and sustainably.

The Seattle Restored Program was an innovative idea, creatively kind of boosting our economic recovery by activating empty storefronts.

And it put 33 businesses into pop-up locations around.

And the Neighborhood Economic Recovery Grants Program supported nearly 2,000 businesses via neighborhood associations around the city.

And it also supported public events that attracted about 200,000 attendees.

Next slide.

In housing and homelessness, the Multifamily Housing Acquisition Program has created about 160 units of affordable housing so far.

And there's another 285 units that are on the way.

And the capacity building for housing providers program, similarly to that other arts organization program I just mentioned, helped affordable housing providers to deal with the financial and operational impacts of the pandemic.

And so by stabilizing them, supported 1,600 households that are served by those providers.

And then the emergency rental assistance program served over 500,000, excuse me, 5,000 households in the entire city, 5,000 households with financial assistance through the first phase.

And there's another second phase that is nearing completion.

But of those recipients, 69% of households identified as BIPOC.

and 69% also identified as having incomes less than 50% of the area median income.

And next slide.

In community safety and mental health, 2,300 youth were served with behavioral health resources, and these included the teen helpline, suicide prevention training, and crisis counseling.

and also 8 600 services were provided in response to reports of gender-based violence this is a whole range of things but for things like advocacy and legal services and temporary housing next slide okay so uh just calling back over 80 spent at this point uh we're definitely in that final stretch and departments are expecting to spend on the remainder next year and next slide which i think is the last So I wanted to wrap up this presentation just reflecting on one aspect of the Seattle Resi plan that's really exciting, which is that the Clifford Grant in particular came with performance reporting requirements.

So Seattle added that small team in innovation and performance to lead that performance work around the city.

We did a lot of capacity building with department staff, and that's that measurement and evaluation team I mentioned earlier.

who did that work to improve the demographic data collection, for example.

So much of the content in this presentation and in the annual reports wouldn't have been produced without this team.

And that includes the data showing what many of these programs accomplished, and also the quotes from residents and partner organizations showing what the programs did for them.

And we don't want to let this experience that the city's gained doing this performance work for the Seattle Rescue Plan just fade away after the program's won.

And instead, we've got an opportunity to keep growing this culture around the city and apply what we've learned with the Seattle Rescue Plan to other efforts like the Jump Start programs, which are also coming with an expectation to do evaluation about how effective those program investments are.

So we're looking forward to continuing to help show and tell what the city's programs are doing for people and also understanding how we can continually improve on our programs.

And that's the last slide for my presentation.

Excellent.

Well, in perfect timing, too.

So thank you so much.

And thanks for your willingness to do this at the end.

I might have decided to put you at the beginning if I knew that it would be this succinct.

So sorry about that.

Are there any additional questions that folks have?

I wanted to summarize with just a thank you for all of the report outs that we received from City Budget Office.

The biggest note of appreciation probably came in the form of your national award that the office received for the way that it's been tracking the federal ARPA funds.

So congratulations again on that.

And just wanted to double check, is there any way that the national conversation around a government shutdown is going to affect any of this?

I got that question and I said no, because the money has already been received, allocated or encumbered at this point for your presentation, but just wanted to double check any of that.

I believe that's correct for this particular piece of federal funding.

Yeah.

for this particular round.

Okay, great.

Well, thank you.

And if Julie Dingley is there, please note, Julie, our appreciation for your leadership.

Oh, she's back.

Hello.

Thank you.

Thank you all for your presentations today.

I do encourage my colleagues to take a look at those final two slides that we didn't get the chance to spend a lot of time on and do let Director Dingley know if you have any questions.

Some really great investments noted in there, especially in arts and culture and small business activation.

So I'm excited to dive into this more with you as we continue this discussion over the next two and a half months.

While we might not have you as an official presenter at some of the upcoming meetings, there might be the chance for departments, as we noted, to be there to provide feedback on issue identification.

And I assume that you will probably be there as well.

So we'll see you again in the budget committee.

And there's no further business to come before the committee.

The time is 103 p.m.

And we will see you again on October 11th.

At 10 a.m., we will issue another memo so that everybody has that information, and we will be putting it on our social media.

And again, we'll start with public comment.

But this is hopefully a way for us to ensure that we can have two sessions.

Please do reserve the full day, and the breaks will occur between 1 p.m.

and 2 p.m., and we will plan to stick to that timeframe to get through all items on the agenda.

Please do let us know if you have any significant questions.

Central staff is trying to hone in on that list of questions so that each department does not get bombarded with a whole host of questions that might be similar to what central staff has already asked or what other council members have asked.

So please go through your central staff lead on those policy questions.

They will field those with CBO and the various departments just so that we ensure we have a more streamlined process for the departments who've already been in the throes of the budget making over the last six months or so.

So we appreciate that.

Thanks for the handing off of the proposed budget for our 2024 supplemental discussion here.

And we will see you again October 11th at 10 a.m.

Thank you so much all.

The meeting's adjourned.