Good afternoon.
Thank you all for coming back to the reconvene meeting of the Seattle City Council select budget committee meeting.
The time is Let me know if I'm okay to proceed with our deliberations or do we need to call the roll again?
I think we'll call roll to be sure we have our quorum.
Okay, wonderful.
Thank you very much, Madam Clerk.
Please go ahead and call the roll.
Council Member Nelson.
Present.
Council Member Peterson.
Present.
Council Member Strauss.
Present.
Council Member Sawant.
Present.
Council Member Herbold.
Here.
Councilmember Morales.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
Councilmember Juarez.
Here.
and I will keep my mask on when I'm not speaking, but I want to let folks know how appreciative I am of the ongoing conversation that we're having in this hybrid format.
And again, if you have not already seen this in the budget memos, all of our presentations, including the department presentations tomorrow and the central staff presentations, everyone will continue to be at a remote table, if you will.
We are not going to have anybody sit within chambers at the table here, and this will all be a remote conversation Tuesday, Wednesday, Thursday, Friday for all of our guests in the Select Budget Committee meeting.
All right.
I want to thank Allie Panucci, Esther Handy, our Deputy Director and Director of Central Staff, and especially thank Tom Mikesell for walking us through the first 25 slides of today's presentation.
We are going to pick up the presentation on revenue streams that are general fund revenue adjacent.
I hope I'm not tripping over my words here, and we're going to pick back up on slide number 2026. Just to orient us as well, we just wrapped up with the discussion on the first six sections.
The last section was fiscal reserves.
We've had a brief conversation on fiscal reserves, and we're going to get into related fund policies.
If colleagues did have any questions about the fiscal reserves slide, that was slide number 25. Of course, you're welcome as well to follow up on those.
I'm not seeing any hands raised at this moment, so I'm going to turn it back over to Tom Mikesell, Ali Panucci, and Esther Handy, our director of central staff, to walk us through the rest of the presentation.
And I see some of our friends from central staff, including Lish Whitson.
And thank you as well, Lish, for being part of this presentation.
Please go ahead, central staff.
Thank you, Chair Mosqueda, council members.
Just for the record again, I'm Allie Pannucci of your Council Central staff.
As Chair Mosqueda described, we're starting on slide 26 of the presentation and page 20 of the memo.
The 2023 to 2024 proposed budget is balanced, assuming that the Council will accept changes to existing policies for three of the city's dedicated revenues or funds.
These sources of revenue and funds were established to support investments in specific areas across multiple departments and city programs.
This includes revenues from the short term rental tax transportation network company tax and jumpstart payroll expense tax.
So we are going to spend the rest of the afternoon walking through the proposed changes to policies.
that outline the current authorized use of these funds, what is assumed in the proposed budget, and then some of the options available for the council's consideration.
So we're going to start first with the short-term rental fund, and I'm going to turn it over to my colleague, Lish Whitson, to walk you through those changes.
Thank you so much, and welcome to the table.
Lish also want to let folks know that in the central staff memo, we're on page 20.
Thank you, good afternoon.
Rich Woodson, Council Central staff.
The short-term rental tax is a portion of the state sales tax on lodging that is received from short-term rentals, such as lodging from Airbnb.
For Seattle, the tax is collected by the Convention Center and then passed on to the city.
State law requires that the city's funds be used for community-initiated equitable development and affordable housing programs at the city's sole discretion.
The council adopted Ordinance 125-872 in 2019, which lays out the priorities for the use of the short-term rental tax proceeds.
The first $5 million are to be used for equitable development initiative projects, or EDI.
EDI funds community-initiated anti-displacement projects in high-displacement risk neighborhoods with an emphasis on serving BIPOC communities that have been targeted by systemic and institutional racism.
Funds are available for capacity building, property acquisition, and development costs.
The next $2.2 million raised through the short-term rental tax are allocated to debt service on 30-year bonds that were issued in 2017 to raise $29 million for affordable housing projects.
The next $3.3 million, which is indexed to inflation, is allocated towards permanent supportive housing operations.
If additional funds are available, approximately $1 million can be used for EDI operations.
and any funds above that first $11.5 million are to be used for EDI projects.
When drafted, the city anticipated at least $10.5 million a year would be received through the short-term rental tax.
The city has not received more than $10 million a year from the short-term rental tax and has used general fund to backfill for the short-term rental tax deficits.
Let's go to the next slide, please.
The executive has proposed legislation that would restructure the priorities and ordinance 125 a 72 to address this lower than anticipated revenue.
Under the proposed legislation the first $2.2 million would be used to pay off the housing bonds.
The second $3.3 million index to inflation would be used for permanent supportive housing operations, and any money over that would go to EDI grants.
Following these policies, the 2022 year-end supplemental budget reduces funding from the short-term rental tax to the EDI by approximately $700,000.
In 2023 and 2024, the proposed budget would allocate $4 million from the short-term rental tax to EDI for grants.
Short-term rental tax is not the only funding source for EDI.
The EDI program is also called out in the Jumpstart Fund policies and will receive approximately $20 million a year for grants from Jumpstart.
Next slide, please.
The EDI is one of the few city programs directly focused on supporting BIPOC communities in their efforts to address displacement and increase opportunity.
Council members in the past have expressed a desire to maintain the city's commitment to providing $5 million a year from the short-term rental tax to EDI projects.
You have a few options in response to the legislation proposed by the executive.
The first is to accept the proposed change to the short-term rental tax fund policies and pass the legislation as proposed.
The second is to reject $1 million of other expenditures in the 2023 and 2024 budget and use those funds to maintain the $5 million commitment.
Amend the bill to remove the debt service payments or supportive housing as permitted uses of the short-term rental tax and pass as amended.
This would require finding another ongoing source of funding for those uses or do not pass.
Without other changes, this would require finding another ongoing source of funding to backfill for the short-term rental tax.
And any questions?
Yeah, thank you so much.
Um, you know, I just want to pause for a second.
There are some that are on council right now who maybe would like to comment on this.
But I think it would be helpful to just reorient us to why the equitable development initiative exists in the first place.
I only have a small understanding of how it came to fruition.
And I know that Councilmember Morales, this is, I believe, within your committee right now.
I think it's important for us to remind ourselves why EDI is prioritized.
that we're not going to be able to have a comprehensive plan.
Given that it was especially areas that had seen historic disinvestment and high rates of displacement.
We're not even included in earlier iterations of the comprehensive plan so do you mind does anybody mind weighing in on that councilor Morales would you like to
Sure.
So, this goes back several years, I believe it was 2014 2015, when community organizations that were.
You may have heard of South core communities organizing for racial equity, mostly immigrant and people of color lead organizations realized that they needed some kind of tool mechanism for.
accessing capital for operating support, for capacity building, and for actually building, developing community-led projects, and they had been left out of the typical city processes because they aren't developers per se, but they do have community needs.
For example, senior housing, child care facilities, and access to health care facilities, all the things that we have since funded.
But we're really looking for a steady stream, a dedicated stream of revenue so that these communities that had typically been left out of these processes were included.
So this is not just about affordable housing.
It's not just about senior housing.
It really is about intentionally building space for the essential services that any healthy neighborhood needs and to have the opportunity to do it in a culturally appropriate way for Black and Brown neighbors who have finally been able to participate in those processes.
I'm sure I will have much more to say about this tomorrow, but that is just a little bit of background on why this is so important.
Thank you, Councilman Morales, and I see your hand still raised.
I'll call you on you in just a second if you have additional questions or comments.
Lish, I think I may have read about this for the first time in one of your central staff memos in terms of especially the south end areas with high numbers of communities of color, high rates of displacement not being contemplated in earlier iterations of the comp plan.
Do you have anything else for historical context for us on why EDI exists?
Um, yeah.
So in addition to, um, providing funding to develop projects, CDI also, um, is intended to provide capacity building for these organizations so they can build and manage, um, their facilities so that they can actually own and run them and be successful in that.
Um, I'll give you a couple of examples of projects that are being funded through the EDI or have been funded recently.
Um, chief Seattle clubs, I'll project and Pioneer square.
A lot of affordable housing funding went to that project, but it wouldn't be successful without the EDI funding that helped to create the community spaces and space for Indigenous-run businesses on the ground floor of that building.
The Black and Tan Hall in Columbia City is renovating a historic theater in that neighborhood.
The Ethiopian village and Rainier Beach is using EDI funds as part of a affordable housing mix use project that and the EDI funds, unlike affordable housing funds can be used for the community spaces that will be part of that project.
Africatown's Midtown Center, again, provided funding to allow Africatown to acquire commercial space in that building for African American-run businesses and community-based organizations that are located in that facility.
The William Groves Center for Cultural Innovation is another Africatown project that is providing training for members of the community that, and technical expertise in the central district.
So those are some of the types of projects that are being funded through the EDI often, but not always.
Funds are paired with affordable housing dollars to create sort of a holistic mixed use project.
Thank you so much.
And Council Member Morales, did you have additional comments or questions you'd like to ask?
Well, just to reiterate Lucius point which is that the sort of catalyst for this idea was as Lish said that we don't really have great funding sources for ground floor construction.
And very often what happens is that there's a lot of office of housing money for the floors above that are for housing.
But it's hard to figure out how to finish a project if there aren't resources available for those essential services that people are also trying to include in a project like childcare or health clinic.
And so EDI is a tool for being able to.
to complete the financing for some of these projects that are really, really essential for anchoring communities that have been pushed out of the city for allowing a way for them to stay in the city and really contribute to community cohesion and keep people from from getting pushed out.
Thank you very much, excuse me, thank you very much Councilmember Morales.
Thank you as well, Lish.
I'll just summarize some of my initial thinking here and then I'll turn it over to Councilmember Herbold.
I too am very concerned about we're going to continue to work with our partners to make sure that we're protecting the initial intent of the equitable development initiative investments.
I'm going to remain concerned as we have discussions throughout this afternoon and in the that were supposed to be additive.
So for example, a jump start in this case is being used as a example of where there's additional investments in equitable development initiative and thus why the short-term rental tax could be used to deprioritize investments in EDI.
This is not the intended use of Jump Start, as we discussed this morning and we'll discuss later.
Jump Start is not intended to supplant existing revenue, including from the short-term rental tax.
And I think as has been outlined in the memo and in the council members comments this afternoon, there's additional funding needed for projects to help root community in place, invest in anti-displacement efforts, especially in high-displacement risk neighborhoods, with an emphasis on serving BIPOC communities.
especially communities that have systematically or by program been divested in, including because of institutional racism.
We need to continue to center our investments in EDI to try to address past historic wrongs as we try to catch up with the need for investments in communities.
And I also want to lift up the language from page 21 of the central staff memo, which underscores the need out there in the community for equitable development initiative to be additive and to see maintained investments in equitable development initiative programs.
On page 21 at the bottom, it says in 2022, 106 community-led projects requested funding for a total of $107 million of funds.
but only 19.3 million was available and just 23 projects were at least partially funded.
And the executive's description of the proposed changes are noted in the memo.
I think what's really important is for us to be able to continue to rise to meet the need of the community who is stepping up in many ways to become to become developers in some case because they're developing community resources in the mold and in the vision of the community that they're rooted in.
They have stepped up and so do we.
We need to continue to step up to maintain these services and grow investments in EDI.
So obviously I'm concerned about the proposed changes here and want to see what we can do to continue to maintain a priority for EDI.
Vice Chair Herbold, I see your hand.
Please go ahead.
Thank you.
I'm just trying to get the context of which we're having this discussion about the policy and what is proposed.
And I'm having a little bit of a hard time without knowing what the anticipated number of dollars from the revenue source.
The financial plan assumes $9.5 to $10 million over the next three or four years from the short-term revenue tax, the short-term rental tax.
But I thought I read that there's an anticipated reduction.
We're expecting less.
Well, we are expecting less than has been allocated under the fund policies.
So if you go back two slides, Patty.
So, you know, we, we owe the $2.2 million a year for the housing bonds, we have supportive housing projects that are relying on that $3.3 million to continue operating.
But if we're only getting $9.5 million, then we are not covering the costs for the EDI grants plus these other two sources, uses of the short-term rental tax funds.
which means that we are backfilling those funds with general fund every year.
All right.
Thank you.
Appreciate that.
Helpful.
Did you have something to add, Deputy Director?
Okay.
Thank you for clarifying that, and thanks for your question, Vice Chair.
All right.
Lish, I'm not seeing additional hands at this point.
Shall we continue?
Thank you, Lish.
We are going to move on to talk about the proposed changes related to the city's TNC tax revenues.
And I will just note that my colleague Lisa Kay is on the line.
If you have more detailed questions, I may turn to her for an assist.
So currently the city collects a per ride tax for TNC rides and has a regulatory fee that is also calculated on a per ride basis.
And the regulatory fee covers the administrative enforcement and other regular regulatory costs for the city.
And the tax was implemented to help To for investments in specific areas around labor standards for TNC workers as well as investments in transportation and housing and to cover the cost of administering the tax.
So, when the city 1st adopted the tax, they also, you also.
Created a spending plan that was adopted for resolution 31914. that outlined the intended use of the funds.
It is somewhat simplified on this slide, but it generally hits the high notes.
There were some nuances to the resolution that would happen in the seventh year in terms of the split between spending on transportation and housing.
But for the purposes of this discussion, I don't think those details are really critical.
In general, the spending plan would outline that up to $2 million can be used to administer the tax, and regulations up to 3.5 million for a driver resolution center and administering driver protections.
And then after funding those first two items, up to 50% of any remaining tax proceeds were intended to be used for investments in affordable housing, near frequent transit as well.
And then anything remaining would be invested in transportation.
And so for purposes of this discussion, I'm going to primarily focus on the proposed changes to the spending plan We could move to the next slide.
The proposed budget would institute several changes to the city's regulations of TNCs, including lowering the tax rate on a per trip basis to $0.42.
There was a state law change, and the city is not authorized to collect more than $0.42 per trip tax rate.
So that is consistent with state law.
The proposed budget also balances assuming an increase in the city's TNC fee from eight cents to 18 cents per ride.
That is consistent with current policy that directs the FAS director to adjust fees as necessary to ensure that we're achieving full cost recovery.
Then the proposed budget would revise the spending plan for the use of TNC tax revenues and there was a resolution transmitted with the budget that would repeal the existing spending plan that established council's original intent and would broaden the use of TNC tax revenues really for any general fund investment, noting a priority for using it to administer the tax and the TNC.
regulations and then for transportation projects.
I will just know, unlike the other two sources of revenue that we're discussing today that have their own dedicated fund with adopted fund policies, TNC has been a revenue source that is deposited into the general fund.
There's been spending guidance, but there is not a fund that is specifically restricting the use of the funds on specific things.
I will just note that the resolution as transmitted doesn't prohibit the use of funds for affordable housing.
It remains a permissible use, but not a prioritized use of TNC tax revenues within the general fund.
With the state law change, the amount of money that the TNC tax will generate will make up about less than 1% of all general fund revenues.
So providing greater flexibility to backfill decreases in other general fund or transportation revenues doesn't appear to have a significant fiscal impact, but there is a shift in policy here.
So if we could move to the next slide.
So really the options before the committee are to accept the proposed changes to the TNC tax spending plan to broaden those uses and allow it to be used for just general fund items in the 23 and 24 proposed budget.
The funds are used to support transportation investments and to help cover the loss of other transportation revenues like the commercial parking tax.
You could amend the resolution to reincorporate other spending priorities.
If you actually wanted to reprogram the money in the 23 and 24 budget, you would need to find other funding sources or make reductions to SDOT's proposed budget, or you could reject it entirely.
Similarly, that would require finding other funds to support SDOT's proposed budget.
Okay, colleagues, questions on the TNC tax spending proposal from the mayor that accompanies the budget.
Yes, please go ahead Council Member Herbold.
Thanks.
Do we have numbers, the chart we have on the revenue side, I think starts in 2020. Do we have numbers?
I just don't know if that's the right baseline given COVID and everything.
I don't have those numbers, but I can look for them and find them if they exist.
I appreciate that.
Thank you.
Vice Chair, I'm not sure if this is a similar question or related, but on page 23 of the memo, I noted midway through that it says that there is that this proposed change is partially in response to the anticipated revenue reduction stemming from the state mandate.
Obviously, we can't do anything about the preemption that's been imposed, but it says also due to increased program costs.
What increased program costs are we referring to as it relates to the application of the TNC policy?
Excuse me.
I think we would have to look into that in more detail.
But generally speaking, I think that it is not uncommon when implementing new regulations and implementing taxes that the original initial estimates of what it will cost to administer those funds and provide the oversight is an underestimate.
You're seeing that in the jumpstart proposal this year.
And so I think some of it is FAS getting more detailed in what their costs are to support the program.
And Lisa, did you have anything to add?
I don't.
Thank you.
I would also just note that the table 13 on page 23 of the memo shows that the expectation is that ridership will rebound more.
But by 2024, it will go from 8.4 million rides in 21 to 16.1 million in 2024 is what the current revenue projections are.
So they are, I think, projecting that ridership will rebound a little bit, and we'll get you those numbers on, you know, previous estimates prior to 2020.
And the proposed changes to the TNC tax, this is in perpetuity, is that correct?
Or is this for two years only?
This is ongoing.
This is ongoing.
Is that the answer?
Okay.
A question that I had about Office of Labor Standards.
Obviously, they're not going to be managing the Dispute Resolution Center per the preemption that advocates had included in the state legislation.
But what does OLS maintain in terms of funding or supportive services to help do education and outreach about existing laws and is there anything that OLS is now not receiving funding for that they ostensibly will continue to do as it relates to making sure people are aware of their rights?
Not to my knowledge.
To my knowledge, this funding really was the money that they're losing was directly because of the dispute resolution center.
So I think they will continue to do any related functions that they were already doing.
Okay.
And in the chart, we see an over 30% reduction to Office of Labor Standards.
Is that solely due to this change in policy that preempts us from having the dispute resolution center?
or is OLS also experiencing additional cuts?
Chair Mosqueda, I think that level of detail on OLS's proposed budget is something we're prepared to address today, but the OLS paper will be available It might be available already.
I don't actually know.
It will be published to the agenda for tomorrow's meeting sometime today.
Okay, great.
I think I failed to remember that OLS is gonna be covered specifically.
Is it under miscellaneous or?
Yeah, every department has a paper prepared even if they're not having a formal presentation.
Thanks so much.
It's been a long year since last year when we did this.
Okay, that's great.
I'll look for that answer in that paper.
Any additional questions on the TNC proposed changes to the spending or the tax itself?
Okay.
I do want to raise that I think there's a parallel here between the various revenue sources that came together because of broad community support, large coalitions.
That is true of JumpStart.
That is true here of the TNC tax.
There was a broad coalition of advocates, transportation.
folks who are concerned about affordable housing and transit-oriented development and labor and people representing and working within the TNC industry.
I'm concerned that this proposed spending plan change in perpetuity does not align with the transit-oriented affordable housing, transportation, and transit investments, including the streetcar, And I am very interested in continuing to hear from the folks who originally worked on the spend plan, their thoughts about the reconfigured priorities.
in TNC's proposed use right now.
I understand that the executive can send down a proposal, a proposed budget that does not conform with existing and settled law.
I also think that it is not just about changing that law if that's what they're proposing, but we need to make sure that we're keeping commitments to communities that had fought for these provisions, revenue streams, and spend plans in the first place.
And again, I think that that applies to all of the revenue streams we're talking about.
We all recognize that we're really in a tough situation right now.
I want to underscore that this is not a value statement for those who are trying to send us a proposed budget, but we have to balance the short-term requirements for a balanced budget in the biennium with the longer-term investments and trust and needs that the community has identified and the process in which they went through to set up these spend plans.
So just generally concerned about us not either adhering to the statute or also to the coalitions that had built the trust to come up with the spend plans to begin with and look forward to future conversations with folks who help develop these pieces of legislation in the future.
I did also want to just do a quick check on the math associated with the TNC tax and not the math.
I don't question your math.
I want to check my math regarding the TNC tax and the short-term rental tax.
I think it was noted that both of these changes would go to the full cost for administration.
So the back of the envelope is about, I'm looking at page 11 here.
The back of the envelope is about 1.4 million plus about 8.87 million.
So 2.3 million is going directly back into systems programming costs.
Is that correct?
That aligns with midway through on page 10 for the regulatory fee increases.
That's code for the TMC and short-term rental tax increases.
So all of the increased dollars are directly going to the dedicated spending outline, there's nothing going back into the general fund for use for re-appropriation.
Is that correct?
I think the answer is yes to that question.
For the TNC tax fee that is collected in order to pay for the cost of administering it, generally fees are available to support the cost of implementing the program and are not a revenue generating option.
So it is to make the program cost neutral, but isn't a source of revenue.
But I have to confirm that on this particular fee.
But for example, the short-term rental fee and the TNC fee is calculated based on just covering the cost of regulating um, regulating versus a tax, which is a, often a general fund source of revenue or a dedicated, you know, for specific uses.
So, so I'm not sure I'm answering your question, but typically fees are, can only be used to cover the cost of administering and implementing the program.
Okay.
Thank you.
Any additional questions?
All right, let's continue on.
Okay, so we will now move into a discussion of the Jumpstart Payroll Expense Tax Fund.
If you can give me a few liberties here, I'm just going to provide a little background on how we got to today before diving into this table.
In July of 2020, the council authorized the new payroll expense tax for the city that would begin in 2021. At that time, the payroll tax was estimated to generate about $214 million annually with increases in future years.
At the same time the council passed the tax, they also codified a high-level spending plan for these new tax revenues by ordinance and provided additional details via Resolution 31957. This was all on July 20th, 2020. After the first year of the tax being in place to provide for more accountability and transparent use of the new tax in accordance with the original spending plan, last July, the City Council passed Ordinance 126393. This created the Jumpstart Fund and codified in the SMC the spending plan.
So this table on the screen right now is how the jump start funds.
would be allocated if the existing policies were implemented based on the current budget situation we're in.
So as shown on this table, the existing policies would not have allowed for any use of Jumpstart to support general fund expenditures in the 23 and 24 proposed budget.
So the first column lists the spending categories and then how the proceeds were to be allocated to each of the existing categories.
The second column shows what would have been the allocation.
If the existing policies were implemented, and then the column to the right outlines what is actually in the proposed budget for each of the the proposed categories.
So as Tom walked you through this morning, the city continues to face a projected long term operating deficit in the general fund.
There are increasing costs to maintain core city services and increasing economic uncertainty, as well as, you know, the city needing to respond to the growing population.
and increasing needs in the community.
Without a transfer from the Jumpstart Fund, as Director Handy pointed to this morning, the proposed general fund budget would not be balanced or would have been proposed with more reductions in existing services and programs.
We can move on to the next slide.
This is slide 35 and I'm on about page 26 of the memo.
So the proposed budget as transmitted assumes passage of a council bill that would amend the Seattle Municipal Code.
And it also assumes adoption of a resolution that would amend the jumpstart fund policies that together in several ways were used to balance the general fund in the in the proposed budget.
This includes proposal to Modify the current law about how the calculation is made when a transfer from the jumpstart fund to the general fund is authorized.
Adopting by separate resolution non codified financial policies that would provide additional guidance beyond what's in the SMC to create a reserve for the fund and to outline some debt policies.
It would amend the jumpstart policies that are in the Seattle Municipal Code to remove the restriction that prohibits jumpstart funds to supplant appropriations from other funding sources.
As transmitted, it would also modify the requirement in the existing jumpstart fund policies under the affordable housing category.
That requires that those funds are used to develop and acquire affordable housing that prioritize serving households with incomes at or below 30% of area median income, and they would increase that to 60% of area, area median income.
However, upon further discussion with the executive.
We understand that that requested policy change is not necessary once we got into the details of what the existing policies actually say.
And therefore, this will not be discussed further in this presentation, but just wanted to flag that because it came up during Director Dingley's presentation on September 28th.
And then it would also, the proposed budget expands the spending framework to allow some spending from the jumpstart fund that may not align with the original policy intent.
So we're gonna walk through each of those four items in a little bit more detail.
If we can move on to the next slide.
So this is one piece of information that wasn't included in the memo, but I wanted to return to a conversation that we had in August with the Finance and Housing Committee Knowing that the city was continuing to face a deficit in the general fund through discussions with the budget chair, other members of the finance and housing committee, as well as the city budget office in August, we on central staff prepared and presented a policy option for the finance and housing committee's consideration on an approach that would allow some support for the general fund from the jumpstart fund in 23 and 24. The approach discussed is displayed on the screen.
And what the general intent was, is that it would maintain the spending commitments in the jumpstart spending plan for 2023 and 24 that were assumed when the council first authorized the jumpstart tax in 2020. So that is to say what was contemplated at the committee during that discussion was that if we look at what we were projecting the revenues would be in 23, at the time of adoption and then look at what the current forecast is, the difference between those numbers would be the maximum amount that the council would authorize transferring from the Jumpstart Fund to the General Fund to balance.
The table on the screen shows, for example, in 2023, in 2020, we estimated that about $223 million of revenue would come to the city from the payroll tax.
Current revenue estimates are $294 million.
So that would have, if the policy had been changed exactly in this way, 71 million could have been transferred in 23 and 84 million in 2024. So if we could move to the next slide.
So while the actual use of jumpstart funds in the proposed budget does not deviate significantly in terms of the amount of jumpstart funds that will be transferred to the general fund, as discussed in August, the proposed change to the policy would authorize a larger transfer than what is proposed in the budget.
So this table illustrates the maximum transfer amount that would be allowed based on the proposed policy change.
which as noted already, this would allow a higher amount of funds to be transferred.
This approach will allow greater flexibility to use the jumpstart fund for general fund activities in the future if other strategies are not enacted to address the structural budget deficit.
But it also would allow, for example, If the projected revenues get worse, looking into 2024, that the 24 proposed budget could include a transfer of up to $176 million.
And we couldn't say it wasn't compliant with the policies if the council accepted this proposal.
So if implemented as the policy would allow, this would have allowed about an additional $20 million to be transferred from the jumpstart fund to the general fund in 2023 and over $92 million more in 2024 and would continue in 25 and 26. So again, this would mean absent a new funding source or reductions in general fund spending or a rebound of existing general fund revenues, the jumpstart transfer would be allowed to permanently solve the stability issues in the general fund.
Pause there.
Chair Herbold, please go ahead.
I'm just having a hard time tracking here.
My apologies.
This slide is what is in the mayor's proposed budget, not what we discussed in August.
Is that correct?
Yes.
Thank you for that clarifying question, Council Member Herbold.
The previous slide showed what was discussed in August, which would have allowed the 71 million in 2023 and four million in 2024. The proposed budget only includes a transfer of 80, about 85 million in each year.
But the change in policy that would be enacted if you accepted the legislation as transmitted would change the formula as calculated on this table.
So it would be basically taking what is a static floor currently in the code.
So right now the policy says that if general fund revenues come in below $1.5 billion, the difference between that projection and $1.5 billion is the amount that can be transferred to the general fund.
Currently general fund revenues are projected to come in above that.
So the proposal is to just adjust that floor annually for inflation.
So you start by multiplying the 1.5 billion by 7.6, which is the current inflationary adjustment that the city is using.
And that would mean a maximum transfer of 105.6 million.
Thank you.
Please go ahead.
Great.
So move on to the next slide.
Oh, and I had created a slide to show that more clearly for you, but I got ahead of myself in my notes.
But the point of that table overall was to highlight really the difference between what was contemplated in August and what is actually in the proposed budget versus the maximum amount the policies would allow.
So this just highlights the most critical pieces.
What would be the maximum transfer amount?
and if the maximum amount was transferred to the general fund, what would remain for the jumpstart spending categories?
Next slide.
The question really before the council is whether to accept, reject, or modify this proposed change to the policies.
Given the higher levels of uncertainty expressed by CBO, and the forecast office at the August forecast update and that the 23 to 24 proposed budget increases the ongoing general fund deficit, it's likely that we're going to continue to return to this conversation.
However, as Chair Mosqueda noted this morning, there is work to establish or the work is underway to get the revenue stabilization group going with recommendations potentially coming early to mid next year on potential new sources of progressive revenue.
But if this permanent policy change as proposed by the executive is not accepted and is modified to only be a temporary measure, it's possible that those things are not completed in time that we'll be returning it to it again in 2025 or next year if economic conditions worsen.
And the challenge is, of course, if you rejected the proposal entirely, there would need to be a $84 million of offsetting cuts.
Lauren Silberman, ACBP): identified in the budget, so there are some choices available to the Council, as I noted, rejecting the proposed policy, you could modify the proposed formula that could include.
Lauren Silberman, ACBP): Just putting in exactly what was contemplated in the August meeting, I will just note that the proposed budget transfers 85 million of jumpstart funds.
but they are only proposing to use 71 million of the 23 revenues consistent with that discussion and then use $14 million of 2022 revenues that are projected to come in over what was budgeted in the adopted budget.
Could also add additional criteria about exactly when the Jumpstart Fund can be used and how it gets paid.
That should be saying how it gets paid back.
Um, this could include, uh, imposing the sunset date to only allow this to be authorized in 23 and 24. Um, providing more specific specificity about the use of the funds.
Um, and then requiring that if general fund revenues at year end come in above projections of the jumpstart fund.
Gets paid back.
So that is, you know, early next year when we have the books closed for 2022, If general fund revenues came in above 2022 projections, we would pay the jumpstart fund back or some combination of all of those options.
Okay.
Thank you, Deputy Director Panucci.
Ooh, that sunshine is hitting me now.
For folks on the Seattle Channel, if you need to lower that shade, feel free to.
We have about an hour and 10 minutes left if needed for the remainder of the presentation.
So I do want to take a few seconds to pause here and chat about Jumpstart Progressive Payroll Tax.
No surprise to anybody.
There is a sign on letter that I referenced in August in conjunction with the discussion that the finance and housing committee had with the members of the public broadly, but also with a signal towards our future participation in wanting to solve this revenue situation in partnership with the mayor's office.
In August, we outlined the proposal that we're going to be able to do that.
The other thing that.
Deputy director panucci just outlined which was only if you would hear to every single dollar and every single percent that we originally envisioned in the codified spend plan for jump start only if that were Then would there be potential interest from a broad coalition that had supported jumpstart to use the higher than anticipated revenue to prevent cuts and prevent austerity.
So the two questions that we need to ask ourselves are.
Is the higher than anticipated revenue going into solely preventing cuts and preventing austerity?
And as we outlined in the September 28th meeting, I think arguably having a human service provider wage inflationary adjustment cut from 7.6%, which is where it was supposed to be at, to a new amount of just 4%, which is less than I will note even the inflationary adjustment for jumpstart is baked in for the mayor's proposed budget.
That is a cut, a cut to those human service providers' wages.
That is a reduction in what their take-home pay is.
And it is austerity.
These folks are anticipating in January, in less than two and a half months from now, that they would be able to have a certain wage that they could rely on.
And so that is a cut.
We have a lot of work to do with all of you and central staff to further analyze what the higher than anticipated revenue is going into.
Some dissection of funding is going to the general fund and then the general fund relies on it for new investments.
That is also not contemplated in our early conversations about preventing austerity investments in new programs or new programming is not what one would anticipate in these really tough budget times, though I'm sure that there's increased need, we have to weigh that as a council in terms of where the priorities lie.
And lastly, the amount that was contemplated.
I want to make sure that I fully understand and get a chance to dig into the amount that's especially being proposed for 2023. What we talked about in August was just using the higher than anticipated revenue amount, 71 million in the year 2023, not 95 million, not 85 million.
Finally, The proposed changes to the inflation adjustment to bring more funding from Jumpstart to backfill the general fund is not something that I expressed interest in, that the coalition expressed support for.
And I think making these changes in perpetuity is very problematic to the sustainability of Jumpstart.
And as you've heard central staff describe today, it's concerning for the sustainability for the budget overall.
To rely more and more on Jumpstart It creates greater instability for our overall budget going forward, and I want to make sure that we're not creating cliffs or ebbs and flow and programming that are intended to serve our most vulnerable and that need to be relied on year after year, like in housing, to make sure that we can continue to create investments in capital infrastructure.
So I bring up the coalition and the sign-on letter that had been circulating, because there was really two things.
to the spend plan and make sure that all dollars are going into the spend plan as codified and then use any higher than anticipated revenue to go into preventing cuts.
Those 2 questions are what we will continue to dive into, but at first blush, it is concerning to see that there might be some misalignment with where the investments are going within the categories within jumpstart and also how funding is being used in the general fund to fund either new programs or programs that might not align with what's already codified in statute from the council and previous actions.
Again, I want to be very clear that the coalition says in their letter, let us be clear, only if the full promise and funding of the commitments to Jump Start as intended, as codified are adhered to, then would they consider using are being supportive of the additional funding going into preventing austerity.
We all want to prevent austerity.
We all want to prevent cuts, and that is the charge in front of us, I think, over the next six weeks to make sure that we can have a budget that invests in our most vulnerable, creates a resilient local economy by investing in frontline workers and small businesses, invests in the health and safety of our community while making sure we are creating more housing and providing services to those who are unstably housed right now.
I look forward to hearing from others about any questions or comments they have, but again, the Revenue Stabilization Work Group is just beginning to form this month.
Thanks again to Senior Deputy Mayor Harreld and her team for their work to convene that group based on the City Council's statement of legislative intent last year that created the new Revenue Task Force, but that effort is just underway.
And on page 29 of the central staff memo, it notes that given the work to identify resources or sources of progressive revenue and the work that that CBO is undertaking to identify efficiencies and better budget oversight that we described earlier is just beginning.
The decision may not be right to make this policy change in jumpstart permanent.
So that's what I'm going to continue to look into.
Additional comments or questions?
Okay, Ali, I think you can continue.
Thank you.
I'm moving to page 30 of the memo.
So in addition to transmitting legislation that would amend the jumpstart fund policies in terms of that calculation we just discussed on the general fund transfer, The executive also transmitted a resolution that would provide additional guidance on the use and management of the Jumpstart Fund.
This includes referencing existing policies codified in the Seattle Municipal Code that were included in the original spending plan ordinance in 2020, as well as new financial policies that would create a fund balance reserve of no less than 10% of the payroll expense tax revenues, It would add some specific debt policies that explicitly allow use of payroll expense tax revenues for the payment of debt service for projects funded with bonds that are consistent with the spending plan.
For example, if you were using debt financing for affordable housing investments, something like that.
Central staff identified two issues for the committee's consideration.
The first is related to the fund balance reserve.
Adopting policies around creating a reserve in a fund is not uncommon and given fluctuations in the economy, the newness of this revenue source, it is probably advisable to have some reserve.
The appropriate level is somewhat of a judgment call, so 10 percent may or may not be the appropriate amount.
As a comparison, the city's revenue stabilization fund for the general fund is capped based on a calculation that it does not exceed 5% of general fund tax revenues.
So it doesn't even apply to all the revenues deposited into the general fund.
However, again, I would just note that the forecast office has signaled a significant uncertainty about this specific revenue source.
And so having a fund balance would help smooth out fluctuations.
If, for example, in April, the forecast update suggested that we were going to collect less than what was assumed in the adopted budget for the payroll tax.
It would allow the expenditures included in the adopted budget to proceed, assuming that the revenue estimate didn't drop so significantly that it was beyond 10 percent of the overall revenues.
The council could consider a lower reserve amount or a higher reserve amount for that matter.
or just adopt as transmitted.
The second is broader and it would apply to this as well.
That could be a policy in the code or it could be a policy adopted by a separate resolution.
It is current practice in many cases to have adopted financial policies by resolution, like via a non-codified resolution for some of our funds, many including our general fund.
While it's consistent with past practice, it can sometimes be difficult for staff and the public to track what policies apply to any one given revenue source, if some are included in the code and others are adopted by resolution.
So one option available if the council accepts these proposed policies to incorporate the policies into the SMC rather than adopting them by a separate resolution.
Madam Chair.
Please go ahead, Council President.
I just have a quick follow-up wonky question here.
I'm trying to track with the printout of the PowerPoint, the memo, and then the attachments.
So attachment F, 11 pages are dedicated to Jump Start and kind of putting together what Esther and Ali had put together on these PowerPoints.
So I had a few other more technical ones, but I can ask those offline.
But please remind me on on here, it says on eight resolution to adopt additional financial policies for the jumpstart fund.
When did we pass SMC five thirty eight zero five five and have we modified or done anything with it since?
And what is the title of it?
Let's see, you, you created the you pass the legislation creating the jumpstart fund in July of 2021. Right.
I thought it was 2020 2020 was when the council.
implemented the tax and you adopted a spending plan, but it wasn't a codified plan or fund.
In 2020, you adopted by resolution a detailed spending plan, but the revenues were just getting deposited into the general fund.
In 2021, all the payroll tax revenues were just one of the sources of funds for the general fund.
However, budget proposals coming through were not consistent with the spending plan.
At that time, the council codified the spending plan, created a fund to make it easier to track the jumpstart funds and provide oversight on compliance with that intent.
I don't recall the title of the bill, but I can say in the code there is Section 5.38.055 is where you find the current law that guides the use of jumpstart fund policies and the calculation for when or if jumpstart funds can be transferred to the general fund.
Okay.
I thought that we had passed the two ordinances in July of 2020. You did.
You did pass two ordinances.
You passed a Okay.
So you passed an ordinance.
To implement the tax.
And then the spending.
You pass an ordinance that outlined a high level spending plan, but it wasn't in your codified section of the SMC.
Okay.
You, you adopted a resolution that provide deep.
Provided a detailed spending plan.
But that was really like.
past legislation to create the jumpstart fund.
So all started beginning in 2022, all jumpstart payroll expense tax revenues are deposited into the jumpstart fund.
And they are to be used in the way described in SMC 5.38.055.
So the one change you made at that time was in 2020, the council had authorized use of the jumpstart fund to provide continuity of service and COVID relief.
So it was to avoid general fund cuts and to support COVID relief efforts.
But after that, the funds were all to be used entirely with the Jumpstart Fund.
In 2021, knowing that we were still in the midst of a pandemic and that the general fund continued to show revenues coming in below pre-pandemic estimates, when creating the fund, you all created a new policy that allowed some amount of funds to be transferred to the general fund.
So that allowed for this year's, excuse me, for the 2022 adopted budget, $85 million could be transferred from the jumpstart fund to the general fund.
So I guess it's fair to say from the beginning of this, when we passed the first two ordinances in 2020, and then codified it in 2021, and then looking at your attachment F, where you kind of allocate where the money goes on, like the Department of Neighborhoods, OED, Office of Housing, that has obviously changed, obviously, correct?
Sorry, say that again.
So from its original intent in 2020 to codifying it in 2021, where the funds would go, Obviously, that has changed or has adapted to whatever the economic landscape is like now.
Yeah, the piece that has changed is allowing some ongoing use of jumpstart fund for the general fund.
Okay.
Okay, so I guess my point is that it has changed.
It's not set in amber.
So we know that, under the leadership of Councilor Mosqueda and yourself, and Esther, your guys' office, meeting those needs and working with the executive.
So if we were to look at rejecting the proposed resolution and incorporating the proposed financial policies into a bill to amend Seattle Municipal Code, that would be the first time it would be done.
If we were to look at option A8, A, yeah, A, 8A.
Sorry, I think I've created more confusion.
Right now, the policies are already in the code.
What was transmitted with the budget is two pieces of legislation.
One bill that would amend the code, the current policies in the SMC to allow ongoing transfer of Jumpstart to the general fund and some other changes, and then would also separately adopt other financial policies that would help guide the use of jumpstart funds, but it would be adopted by non-binding resolution.
And so really what I'm getting at with issue eight is it's kind of confusing to have some policies in the code and some policies adopted by resolution that aren't in the code.
And so this is really just a, do you want to just have every, all the policy guiding the use of jumpstart funds in one place?
or not.
That's what issue eight is about.
It's not about how you use the funds or not.
It's just where do we find the policies?
Right.
And part of the, again, I don't want to get into, I know council, the chairwoman has said, well, I'm not trying to debate the issue.
I'm just trying to make sure that we err on the side where we have the flexibility for this newly formed group and the mayor's office as we move forward, because I don't know if we're always going to be, I don't know if we're always going to have the money that we're going to have from the jumpstart tax.
That's all.
We have room to be flexible and nimble and accountable because we may meet some of the needs in our original intent and may want to use the jumpstart funds.
If everyone agrees, for some other stuff.
That's all I'm getting at.
So that's all I'm trying to say here.
So thank you.
Thank you, Council President.
I think I will speak to some of the issues that you raised maybe from a slightly different angle to get there.
I think one of the ways to make sure that we are flexible and creating space for the new Revenue Stabilization Task Force is by making sure that whatever we're talking about here in terms of flexibility for this biennial budget is confined to this biennium.
that we don't have policies that change in perpetuity that allow for these revenue streams to be used in ways that they were not intended.
So that really helps, and I think that that is actually in line with where the mayor's office and the CBO were intending to go.
If you look at the six-year financial outlook, they don't use Jump Start for six, for, you know, years four, five, and six.
we're going to be able to do that.
We're going to be able to do that.
And Tom feel free to correct me but right they really only focus on using a higher than anticipated revenue for 2 years so the concept of sun setting the application of jump start in a temporary manner is something that we can help codify in statute by saying that this is only for 2 years which then really we're going to be able to do that.
So that's the first goal will be to identify new progressive revenue that is deployable meaning in our hands in 2025 and beyond.
The 2nd thing that I would add and maybe it's an alley I don't mean to contradict you but we have not changed where the jumpstart spending categories go in statute that we really did stick to the that we had a jump start fund policy last year in 2020, excuse me, in 2021 last year.
And we also identified, though, in extreme circumstances, where revenue continues to decline, some flexibility could be achieved.
I think that it's still consistent with the original vision we're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going to be able to do that.
We're not going
No, Madam Chair, I get that.
Yeah, please go ahead.
We've heard it a lot.
And there's no doubt that we are trying to remain true and loyal to the intent of what this council passed in 2020 and then codified in 2021. So let me just ask a quick follow up question.
I had a chance to look at the task force members.
So are those terms going to be for just one year or two years?
Is it going to change?
I can answer that if you'd like, Madam President.
As someone who's been working with Senior Deputy Mayor Harreld and as the, I think, sponsor of the slide with some support from my colleagues last year in the budget for the creation of this task force, we are going to have to be able to.
Basically between now and March the task force is going to be coming up with recommendations ideally for recommendations to be finalized in April and then for us to be able to as a council to receive those recommendations in May I don't I'm not sure if that's the right way to put it.
I'm not sure if that's the right way to put it.
I'm not sure if that's the right way to put it.
I'm not sure if that's the right way to put it.
I'm not sure if that's the right way to put it.
I'm not sure if that's the right way to put it.
and we can start receiving returns in 2025. I think what's clear from the mayor's communication is that it doesn't have to be necessarily one large revenue stream.
It could be a series of ways to bring in additional revenue, but it also needs to help us identify ways to shore up existing revenue streams that are not producing at the rates originally anticipated, like parking taxes, for example.
So it could be a combination of both new progressive revenue streams, plural, and helping to offset where we see decreased returns from traditional streams.
So basically, Madam President, over the course of the next six to eight months.
Oh, OK.
So what I was getting at, thank you for that.
But what I was getting at, I apologize if I wasn't clear.
I was looking at the task force members, and I just want to be honest and candid.
Maybe we can talk offline about maybe some additional voices on the task force, because I don't know how long this task force that you're putting together is for.
Is it for six months?
Is it for a year?
It's certainly up to you, Madam Chair, to decide with the executive who those members are.
But I'd like to see maybe a little bit more representation on some other areas, but we can talk about that offline.
Absolutely.
Thank you, Madam President.
Thank you.
Thank you.
So let's keep going.
Allie.
Okay, so we can move on to the next slide.
Slide 40. And I think we are moving to pages 31 through 32 of the memo.
So included in the council bill transmitted with the proposed budget is a proposal to amend some of the, how the jumpstart funds within the categories can be used.
So overall, the 2023 to 24 proposed budget would authorize in 23, $220 million of jumpstart funds for the specific categories and 225.4 million in 2024 as Council President Wuorra has mentioned attachment F provides a more detailed description of the proposed spending from each of the categories.
But overall, the policy choices before the Council related to the proposals are not unique to any one spending category, so we're going to remain at a relatively high level for this discussion.
Although I do have other analysts on the line if you have specific questions on some of these items.
And then the main policy considers that apply across the proposed spending are described in issues nine and 10 in the memo.
So the first change in terms of use of funds within the categories is the legislation would amend the policies to remove the restriction that prohibits jumpstart funds from supplanting appropriations from other funding sources.
To date, central staff identified the expenditures listed on the screen here, totaling I think just over $2 million, where we have identified places that Previously last year's budget, for example, other funds were used to support these efforts and the jumpstart fund is being used to supplant them.
I will just note that it isn't really explicit in the current policies about what the time horizon is.
We're looking at it when something is supplanting and when is not.
So my understanding is that the executive's interpretation was it applied only to expenditures that were part of the city's base budget prior to adoption of the tax in 2020. I think central staff's interpretation is that if something was funded in any previous budget with other funds, then it wouldn't if in the next year's budget it's proposed to be funded with Jumpstart Fund, it is supplanting.
We went through the list.
What is on the screen today is what we have identified to date as clearly supplanting expenditures that were previously supported by other funds.
The options available to the council are to reject the proposal to amend the policies to allow supplanting other funds, And then you would either have to find an alternative source of funds for these proposed appropriations or reject this proposed spending and cut the programs or staff or reduce or eliminate other proposed spending in order to swap general fund for the jumpstart fund.
Questions, comments?
All right, I think you can keep going, Ali.
OK.
And so I'm moving now to pages 32 through 34 of the memo, and this really isn't as much there isn't a specific policy change proposed in the budget as transmitted from the mayor, but there are some areas where there may be not clear alignment with the proposed spending with the jumpstart fund policies.
I would say generally that the proposed spending appears to meet the broad intent of the Jumpstart Fund Spending Plan codified in Ordinance 126393 and the details in Resolution 31957. In a lot of cases, whether or not you think it aligns with the policy is really subjective.
For example, many of the proposed expenditures under the economic revitalization category could easily be argued either way, and in many cases, you will see that it meets the broad intent of the policy.
I think the question is really whether or not that's the specific program or service you want to prioritize for use of those funds.
So on the screen today is a handful of items.
we offer for your consideration where there's not a clear alignment between the proposed use of funds and the proposed spending and the existing spending plan.
But I would note that really the only one on this list that is very obviously not aligned with the existing policies is the proposed use of funds in the Seattle Department of Construction and Inspection.
This is both a it would supplant existing general fund used to support eviction legal defense services that the council has increased over many years from the general fund in an ongoing way.
And the policies around the housing and services is really clearly about investing in the development and acquisition of affordable rental and homeownership opportunities, as well as providing services for those units and doesn't speak to tenant-related services at all in terms of eviction defense or other tenant-related services that are typically supported through programs and services offered through the Department of Constructions and Inspections.
So you see a theme in all the options offered to you today because really the choices are if you don't agree or accept these proposals, you have limited choices in terms of what you can do.
You need to either find an alternative fund source or cut this proposed spending.
And that could be done in terms of finding an alternative source by cutting something else in the proposed budget or identifying a new new revenue source.
Any questions?
I'm not seeing any questions.
All right.
That concludes our presentation for today.
I'm happy to answer additional questions.
Wonderful.
Thank you.
Council Member Nelson, please go ahead.
So the spending plan in Resolution 31957 from 2020, when Jumpstart passed, anticipated $219 million in revenues in 2022. And they're now projected to be $279 million by year's end, and $294 in 2023, and then $311 million in 2024. I'm just trying to get my history, because I wasn't here last year before the, the actual checks started coming in this year, last fall Council passed a slide that we're talking about right now.
Committing to looking at additional sources of revenue and that's that is concerning to me because.
Now that revenues are back to pre pandemic levels, I think that we should commit to some restraint in spending, but one thing that we haven't talked about is I.
Have we looked at the underspend for Jumpstart in 2021 and 2022 to see if we're actually getting the money out the door according to the spending plan buckets?
Council Member Nelson, in various ways, we have looked at some of that.
The 2021 funds were used to balance the general fund and to provide COVID relief efforts.
2022 was the first year that they were dedicated to the spending categories.
And so we can follow up with more details on where some of the offices are.
I will just note, given that it was the first year of implementing the spending plan, I would expect to see some slow rollout of some of those funds.
For example, just in September, the council released $6 million of funding that was allocated for the Green New Deal that was held in Finance General intentionally so that the Green New Deal Oversight Board had time to be stood up and provide recommendations on how to allocate those funds.
So I would expect that those appropriations will be expended throughout next year and will carry forward.
And then similarly, the Office of Economic Development received a significant increase in funding last year, is still developing their strategic plan.
I don't know where they are exactly on spending actuals to date, but we can look into that more.
And then typically, office of housing funds are committed but don't necessarily roll out the door very quickly.
They are committed to a project, but it may take some time before the project is actually picking up checks to pay for the cost of developing or purchasing the building.
That was a long answer of saying, I think they are making progress.
We can get you actual numbers offline.
Thank you.
Thank you.
Are there any additional comments or questions on the materials that we've reviewed today?
Okay, colleagues, I am not seeing any comments or questions.
Please do note that this is a marathon, not a sprint, so we look forward to having full days worth of deliberations.
we're going to have a break from 1 to 2 for lunch.
Tuesday.
That's today.
Wednesday, Thursday and Friday all day again.
We will make sure to get folks out of.
Their chairs by 05.00PM and we will have a break from 1 to 2 for a lunch.
I want to thank central staff for all of this analysis that the departments do an overview of the proposed budget additions, changes, shifts, reductions, and any programmatic or policy changes you'd like to ask.
Of course, they will be there to help answer those questions.
But then we're going to have central staff immediately follow the panel from each of the departments to walk through their issue identification.
That's our chance to really identify concerns or comments, lift up we're going to be working with the city to make sure that we have the appropriate.
Issues you'd like central staff to look into as you consider possible amendments for next Monday.
That will be our process over the next 3 days and so we greatly appreciate and I think we've made sure to note in every meeting again want to appreciate the city budgets office director Julie Dingley and her team for working in conjunction with us that we're going to have a chance to walk through each of these items.
As outlined in the central staff memo in the upcoming days.
I do really appreciate all of the hard work that central staff has taken to unpack the budget much easier this time to unpack it and it was the last 2 we've had a lot of.
You know we've had a lot of.
Base.
Base level assumptions and in the budget and so that's been helpful As you can tell, I think that I'm going to continue to highlight the dual feelings that I just expressed.
Really strong appreciation for all of the work that's been done, both from the executive and the legislative branch.
We are all rolling up our sleeves to try to work through these very challenging times.
The budget deficit that we've discussed today, whether you slice it by looking at how the existing deficit is calculated that CBO uses, or the really transparent and helpful way that central staff is slicing it, we have the same underlying budget constraints, and we have to not only create a balanced budget for the next two years, but really try to continue to write our investments in the next six years to create a stable six-year outlook.
So we will do this together.
We're going to roll up our sleeves.
We're going to have some tough conversations.
I'm sure we will have not only discussion, but healthy debate.
And I'm going to continue to raise some of the concerns that I have.
I'm surprised by some of the decisions that were made in the proposed budget.
I'm surprised by the investment of over $50 million in new investments as we see restraints being placed on most departments and holds on especially council priorities in the last year.
I'm going to continue to looking at how we adhere to the law that's in statute and where we need to insert some flexibility for a short term, i.e. for the next two years, that we do so with specific restraints and constraints on how that funding can be used so that we're investing in preventing austerity, preventing cuts, investing in our most vulnerable.
And that includes small businesses and also vulnerable individuals like workers, survivors of domestic violence, seniors, and I'll say it, kiddos, Council President.
we've got a lot of people who need food and additional security so we got it we got a lot in front of us to accomplish in a very short amount of time and we have to walk out of the upcoming 6 weeks with not just a balanced budget, but a larger long-term strategy to address this gap in overall funding recognizing that there's a create a more stable projection for the next six years.
So I look forward to working with you.
We'll continue to raise up issues around new investments, the IOUs, the changes in underlying revenue streams.
And with you, I look forward to making sure that the coalitions, the broad stakeholders who help develop those really critical revenue strategies, get the chance to provide their feedback on whether and if any of these underlying spend policies should be changed because keeping their trust and the public's trust, as has been outlined by the Seattle Times numerous times over the last few years, keeping that trust and maintaining our commitments is also as important as creating a stable budget so that we can maintain and build trust with the community in the years out.
I want to make sure that we lift up all of the work that we've done so far, but so much work is yet to be done.
And I guess citing the Seattle Times who said, prove me wrong again, please, and do and continue to make investments in revenue streams that adhere to the investments that we originally stuck to.
I want to make sure that we continue to invest in where we need the most revenues for our vulnerable community, but also that we are preventing against cuts and sticking true to our promises as codified in statute.
with that, I don't see any other hands.
Looking twice, okay.
Let's go ahead and plan to see you all again tomorrow, 9.30 a.m.
We're gonna jump right into it with Office of Planning, Community Development, Department of Neighborhoods, and Office of Economic Development.
Public comment will be accepted by written comments only, and that is either in person, you can write a note and drop it off at the front, but probably the easiest way is to email us at council at seattle.gov.
Thanks again for all of your feedback.
We'll see you here this evening for those who are participating in our upcoming public hearing.
The website is live, so do sign up online to provide your virtual public comments.
And if you'd like to provide comments in person, the sign-in sheets for that will be available at 4.30 outside of the council chambers.
Please do bring your masks if you're coming in person.
Thank you all.
This meeting is adjourned.
We'll see you at 9.30 a.m.
tomorrow for the next Select Budget Committee meeting.
Have a good evening.