Seattle City Council Select Budget Committee 10/13/21 Session II

Everyone.

and welcome back to session two of the Select Budget Committee at Seattle City Council.

The time is 2 p.m.

and the date is October 13th, 2021. The Select Budget Committee will come back into order and proceed with items of business on our agenda.

We will start with item number four in this second session today.

Madam Clerk, before we begin the afternoon session, will you please call the roll?

Present.

Morales.

Here.

Peterson.

Here.

Sawant.

Present.

Strauss.

Present.

Gonzales.

Presente.

Herveld.

Here.

Enchika Musqueda.

Present.

Nye-Present.

Thank you all.

We have a full house here today.

Thanks for your participation in these three days of issue identification from central staff.

We did an overview this morning of the revenue assumptions baked into the mayor's proposed budget and a grounding of the 2022 budget with a high level overview.

And now we dive into specific departments, some of which have been requested directly by council members here today.

This is an opportunity again for central staff to identify any issues you know, large departures from where we were in past years or departures from council priorities and policies that we have passed, and an opportunity for you to hear how budgets are aligning with those values that we have in certain departments.

We're going to start with the Department of Education and Early Learning.

I'm going to ask that we get an opportunity to walk through the full presentation here and then Council President Gonzalez as the chair of the committee that has the Department of Education and Early Learning that reports to you.

You'll have the first opportunity to say any comments and ask any questions, and then we'll open it up to the full council.

Wonderful.

Madam Clerk, could you please read agenda item number four into the record?

Agenda item four, Department of Education and Early Learning for briefing and discussion.

Thank you, Madam Clerk.

I want to welcome to the forum here Brian Goodnight and Allie Panucci from Central Staff.

Thank you very much for the opportunity to dive into the details of the proposed budget as it relates to the Department of Education and Early Learning.

Great to see you, and Brian and Allie, I'll turn it right over to you.

Okay, thank you very much, Council Member Mosqueda, Council Members.

Just for the record, Brian Goodnight, Council Central Staff.

So as you indicated this issue ID session is related to the Department of Education and Early Learning or DEEL as it's generally known.

I'll move on to the budget summary slide.

As can be seen in this summary table DEEL's 2022 proposed budget is approximately $123.3 million an increase of about 18 percent relative to the 2021 adopted budget.

The increase is largely attributable to a few significant additions most of which you heard about and discussed at the September 29th Select Budget Committee meeting when DEO provided its department presentation.

But as a quick recap the first of the significant proposed additions is 6.7 million dollars of Coronavirus Local Fiscal Recovery or CLFR funding to continue investing in a set of enhancements to the Seattle Promise Program.

I'll discuss that proposed addition in more detail in the issue identification section of the presentation.

The second significant increase is $4 million to continue funding for an equity and cultural education fund that originated from the equitable communities initiative task force recommendations.

This is a joint project between deal and the office of arts and culture.

And I know that there was a lot of discussion about this category of investments at this morning session.

And so I'll just quickly note that in August of this year, the council provided $4 million to deal and $2 million to arts for this effort.

and the departments intend to issue the funding opportunity for 2021 allocation at the end of the first quarter next year.

The third notable increase in DEEL's proposed budget is $2.4 million for another round of child care stabilization grants.

There have been two previous rounds of stabilization grants for licensed child care providers and family, friend, and neighbor caregivers, and this is intended as a continuation of that type of support.

And lastly, the proposed budget includes one and a half million dollars of sweetened beverage tax funding to continue a prenatal to three grant program that was started in 2021, but was added last year as a one time investment.

The sweetened beverage tax community advisory board has recommended that this program become permanent and ongoing, and these funds are added for that purpose.

And then the last thing that I'd like to mention while we're still on the slide is that the 2022 proposed budget also continues to fund approximately $1.4 million of early learning personnel costs and $676,000 of parent-child plus costs with fund balance from the 2011 families and education levy.

The 2021 adopted budget made a similar fund swap and these costs would typically be funded by the general fund.

And the city budget office has indicated that it intends to restore these expenses to the general fund in 2023. Now during DEEL's department presentation a couple of weeks ago council members requested additional information regarding the undesignated fund balance for the Families Education Preschool and Promise or FEPP levy.

For context I thought that it would be helpful to show what the FEPP levy's implementation and evaluation plan says about undesignated fund balance which is often referred to as underspend.

The plan says that the priority for unspent and unencumbered funds at the end of each fiscal year will be to supplement the Seattle Preschool Program with the goal of increasing the number of available preschool slots for three and four-year-old children.

Any other proposed use of the annual underspend will be reviewed and recommended by the Levy Oversight Committee and approved by the Council through the annual budget process or other legislation.

Now, by the end of 2021, DL estimates that the levy will have an undesignated fund balance of about $14.4 million.

This comes from significant pandemic-related underspending in 2020, which accounts for about $10 million of the total, And DEEL also projects that the levy will underspend its budget for 2021 by an additional $4.4 million.

The 2022 proposed budget does not use any of these funds in 2022. Rather, DEEL's recommendation is to reserve these funds to address two areas that the Department sees as potential risks in future years, early learning and Seattle Promise.

Now, in light of a letter that the Levy Oversight Committee sent to Council with a recommendation to set aside the $10 million of 2020 underspend as a reserve for future years, Council members at the last meeting asked for the information that was provided to the Oversight Committee.

So in a presentation to the Oversight Committee on August 26, the deal described that between 2023 and 2026, the projected funding gap for early learning is between $3 and $6 million and is being impacted by increasing provider costs, provider staff shortages, and high inflationary growth for providers' maintenance and operations.

They also cited declining tuition revenue at that time but they've since clarified with me that their latest projections show that that trend is reversing.

With respect to Seattle Promise the projected funding gap is between 8 and 12 million dollars and the impacts cited were increasing enrollment racial equity toolkit recommendations and federally funded equity program enhancements.

Now the next slide will move us on to the issue identification section so I believe that now might be the right time to pause and see if there's any questions on the background.

Thank you very much, Brian.

Very efficient presentation.

Council President Gonzalez, would you like to start with any comments or questions from your purview?

I think we should go through the issue identification portion and I will have comments there, but I think we should just go ahead and allow Brian to go through the issue identification.

Appreciate it.

Thank you very much.

Please go ahead, Brian.

Okay, thank you very much.

So this issue identification section of the paper begins on page four of the memo in case anyone's looking at the memo.

And there's only one issue that's identified in the paper and that relates to the proposed $6.7 million of CLFR funding to continue investing in a set of enhancements to the Seattle Promise Program.

DEO received a $4 million allocation from the first tranche of CLFR funding in June of this year as part of Seattle Rescue Plan 1 and there are 10 enhancements being pursued by DEO with that funding.

If you're interested in seeing a short description of each of the program enhancements, they are provided in an attachment, attachment one to the memorandum.

But this table, which appears on page five of the memo, shows the plan spending by enhancement for the full $10.7 million of CLFR funding, both the $4 million allocation that was provided in June and the $6.7 million included in the proposed budget that would be spent across 2022 and 2023. As of late September DO had approximately $500,000 of the initial CLFR funding under contract with Seattle Colleges and the department expects that the entire $4 million will be under contract with the Seattle Colleges or other partners by the end of the year.

Additionally DO has started the process of filling two new positions to support the program both of which were included in the 2021 Mid-Year Supplemental Budget Ordinance.

And the cost for those approved positions shows up in the final row of this table under the program staffing support item.

So of the 10 program enhancements being pursued, DEO considers five of them to be limited term or pilot programs and five of them to be ongoing enhancements that will last beyond 2023 and the depletion of the one-time CLFR funds.

In response to questions raised at the previous Budget Committee meeting, DEO provided additional information with respect to the projected funding gaps for Seattle Promise.

The table on this slide shows the five ongoing enhancements along with their projected funding gaps.

As you can see DL estimates that sustaining these 5 enhancements beyond the depletion of the CLIFR funds would cost an additional 9.4 million dollars between 2023 and 2026. These projections also assume some level of support from Seattle Colleges which is still being negotiated but obviously without that support the funding gap could be larger than what's shown in the table.

I also want to note that these projections could also change significantly depending upon student interest in the Seattle Promise Program and individual student needs.

For example enrollment for the 2021-2022 school year exceeded projected enrollment by about 145 students.

And DEEL continues to expect that enrollment in the next couple of years will exceed initial projections by between 250 and 350 students per year.

The FEPP implementation and evaluation plan does contemplate the possibility that interest in Seattle Promise might exceed projections.

So I won't read this whole list to you but you can see that the plan provides priority for student certain students such as those that are low income or first-generation college attendees.

The plan goes on to say that DEEL and Seattle Colleges will work together to collect and analyze student enrollment persistence and completion trends to better understand how FEP funds are being utilized and that they should use this analysis to inform and refine a student prioritization mechanism.

In addition to sustainability, another way to evaluate the program enhancements is by comparing them against the recommendations from the Racial Equity Toolkit Analysis Report for Seattle Promise that was released in December of 2020. The members of the RET team analyzed 14 program elements and then provided recommendations and priority groupings for each of the elements.

Of the 14 elements, the RET team ranked six as a high priority, two as a medium priority, and six as a low priority.

The promise enhancements that DEEL has pursued with CLIFR funding include three of the team's high priority items and the two medium priority items.

So the table on this slide which appears on page 7 of the memo attempts to show the Seattle promise enhancements that the RET team evaluated directly or where they evaluated a closely related topic.

For example in the first row the enhanced support for student item students item The RET team recommended continued monitoring for this element but also stated that designing staff support as a ratio does not seem equitable as some students may have a need for more support than others.

Therefore Seattle Colleges should have some flexibility in moving staff to meet student needs.

The program enhancement that DEEL is pursuing would do just that by providing additional funding to Seattle Colleges so they can differentiate student supports which could include more staff support or new support programs.

The enhancement in the last row of the table sustained increased enrollment is a little different.

The RET team evaluated how tuition support should be prioritized if enrollment exceeds available funding.

The team acknowledged the guidance contained in the implementation and evaluation plan and indicated that a decision may need to be based on applications received in a prior year because the eligibility requirements would of course need to be set before the applications were received.

So in this case the RET team explored a closely related topic to the enhancement that's being pursued by DEEL which is to ensure that the Promise Program is accessible to all graduates of Seattle Public Schools.

But they didn't specifically make a recommendation related to that enhancement.

The three program elements of the RET team ranked as a high priority but that are not reflected in DL's program enhancements are all related to expanding Seattle Promise eligibility to additional students specifically to opportunity youth to charter school students and to students who pass their general education development or GED test.

In terms of options, there are a few laid out in the memo, and these are, of course, by no means an exhaustive list.

Option A would be to prioritize CLFR funding toward the enhancements that are limited in duration in recognition of the one-time funding source.

Option B might be to prioritize funding toward the enhancements that have been evaluated and prioritized by the RET team, thereby potentially extending the amount of time those efforts could be supported.

And I also just want to note that both of these options would need to address any contractual commitments that DEEL has already made, as well as progress the department is making in the waning part of this year to fill the two positions that are supporting the expanded program.

In addition, DEEL has been planning for some of the proposed 2022 funds to support students that are already enrolled in the 2021-2022 school year.

So that should be a consideration as well.

And then the last two options, option C would be to approve the Clifford allocation as proposed, but in recognition of the expected funding gap to request that deal begin working on a legislative proposal for council consideration that would prioritize enrollment to the program consistent with the priorities established in the implementation and evaluation plan.

And then lastly, of course, is the no action option.

And that concludes my remarks.

Thank you very much, Brian.

Council President Gonzalez.

Thank you, Madam Chair.

Thanks, Brian, for the good work, as always.

Very thorough, very efficient, very succinct.

Really appreciate it.

So colleagues, I'm still digging into these various options.

I will say that option C rises to the top for me.

Can we go back to the previous slide?

And then can you go back to the one before this one?

Thanks, Patty.

And you know with sort of with sort of the potential of exploring option B as well.

But I do I do you know sort of there's a lot of granular detail here and I just want to share with colleagues and members of the viewing public that really ultimately what we need to solve for is is the the the ongoing increasing demand of our student population to access Seattle Promise which all of us support, all of us have been fervent supporters of Seattle promise, but we need to reconcile that demand with the fact that the mayor's proposed budget has proposed enhancing Seattle promise with one time dollars.

That's going to create some instability.

in our budget, which I've heard the chair say multiple times, that she is working hard to stabilize our budget and to utilize one-time dollars for one-time purposes.

And this is an example of where Clifford dollars, which are one-time funding source, are being dedicated to ongoing programming at the city.

That is going to result in a fiscal cliff.

Eventually, Brian has done a good job of identifying where those funding gaps are.

And so.

Because of those funding gaps that are that are part of this proposal.

You know I think I think it's incumbent upon us through this budget process to identify a way in which we can continue to support the growth of Seattle Promise but be really honest and transparent about the fact that that is not sustainable without exploring some kind of student prioritization or a a a permanent ongoing funding source for Seattle Promise that doesn't create the dilemma of choosing between early learning and Seattle Promise investments.

And so that's part of the reason why I'm signaling my interest in pursuing option C, but invite colleagues who might be interested in a different option or who are similarly interested in that option to certainly let me and my office know so that we can work together on finding the right balance and the right solution to move us forward on this particular issue.

Thank you very much, Council President.

Colleagues, are there any additional comments or other items that you'd like to flag, questions you may have about the presentation?

Please go ahead, Vice Chair.

I'm sorry, I'm going to apologize in advance.

This is not my area of focus and my, you know, where some of my work touches this work is I would like to start with my participation as a member on I know that in developing the Best Starts for Kids levy, we've been really careful to make sure that we have access to the subsidy in all geographic areas, including Seattle, including areas that already have a levy program with the idea that it would be additive to our existing program and targeting funds to families most impacted by the lack of adequate child care.

And so I'm just, I'm a little uncertain what DEEL's recommendations are as it relates to the needed future funding for the Seattle Preschool Program.

It sounds like they are sort of assuming that the Best Starts for Kids levy will help fund a gap that exists, that will exist in our levy.

But I don't think that that's what is intended by the Best Starts for Kids levy.

And it also seems like it is a little bit in conflict as it relates to how undesignated balances are supposed to be spent and that it's intended to be spent to invest in early learning.

So I don't know if I have a question there, but I guess if I were to try to boil that down to a question, it would be what are DEEL's recommendations to address future gaps in the Seattle Preschool Program?

And if I could add to that, Vice Chair, your question is similar to mine.

If we can just elaborate a little bit more on what the Levy Oversight Committee's recommendation is in regards to the spending that FEPP underspend.

Sure, I can try to take a chance here and jump in.

So let me flip back a couple slides here.

If I can do that, just a moment.

Let me go this way.

So I'm not certain where the question is coming from Council Member Herbold about The best starts for kids levy.

So what deal was presenting to the levy oversight committee was that so we have this fund balance, right?

There's this unspent funding that is left over deal is advocating or recommending and recommended to the levy oversight committee that we should hold on to it and not spend it in the next fiscal year because they see that due to higher provider costs and out years.

the program will need more funding to sustain itself.

So that probably includes more than just Seattle Preschool Program, because they grouped it as early learning.

So it's possible that it goes beyond just SPP, Seattle Preschool Program.

And so they've estimated that that gap is three to six million.

So DOI, if I were to speak for them, I would think we would say of this $14.4 million, we should hold somewhere, right?

You know, it's all a guess, but somewhere between three and $6 million, we should keep in the bank.

So when those costs in future years start to exceed, are available funding, we have a fund to cover it.

So I'm not sure if that gets at your question, but happy to follow up.

There's not an expectation that Best Starts is going to backfill future gaps in early learning.

I have never heard Diehl talk about Best Starts being backfilling at all, yeah.

Thank you.

I think that's my, that's the answer to my question.

Thanks.

Thank you so much for Herbold, Best Starts for Seattle.

We do participate to some level in that, but it's not a backfilling funding source.

No, it's not intended to be.

I'm referring to the renewal that RPC recently approved and the conversations were that it was intended to be additive.

I just thought that I had heard or read somewhere that DEEL was projecting that in future years that Best Starts could backfill some early learning gaps.

um i'm hearing you brian loud and clear that that is not um something that is being proposed um and and brian if i can ask for you to follow up with deal on the out years because what we see here is 2020 and what we see here is 2020 2021 um undesignated fund balance being recommended to be banked um but i don't I don't think that the proposal is that this would be unbanked for 2024, 2025, for example.

And so if we could get some parity around that, that'd be helpful.

Sure, yeah, I'm happy to follow up with Deal to ask the question.

I think, right, the idea is so the period of time that we're talking about is the current FEPP levy, which goes through, it makes collections through 2025, and it funds the 2025-2026 school year.

So I think the expectation of Deal, or at least what they're, you know, planning for risk-wise is to say, let's keep this money now in 2022. That way, in the remaining years of the levy, we'll be able to spend that down and fund services.

But I'm happy to follow up with Deal if

Yeah.

I think, I think what we're trying to get clarity on is when will the, when does, when is deal intending to spend the banked fund balance and then to council member Herbold's question, do any of those plans or any of those plans, uh, relying on an assumption, that they will receive, uh, dollars from the, or, or, or some sort of financial, um, support from the best starts, um, levy renewal.

Got it.

I'm happy to ask those questions.

And then, and then, um, can you talk a little bit more Brian about the, the levy oversight committee recommendations?

Sure, I guess the I mean, I'll just restate what I said and happy to go further.

So in that August meeting deal presented this information to the levy oversight committee and made a recommendation that so at the time, just to be clear, they were talking just about the 2020 money.

So they were talking about just $10 million.

That's how much they do the $4.4 million of 2021. I had asked deal that during our budget process.

So that information is kind of more late breaking than the 10 million.

So the deal had made the recommendation to the Levee Oversight Committee that those funds be held in reserve for future years.

The Levee Oversight Committee did discuss them and then took a positive vote and then subsequently sent a letter, I believe it came out on the 27th of September, to the Council.

Thank you both very much for those questions.

Colleagues, are there any other questions?

Please go ahead.

Thank you, Council Member Herbold.

Thanks, and I had expressed some interest.

This is moving now to the school-based investments that are funded by the FEPP levy.

You had some research for me on the level of spending for mental health services and I am interested in making mental health-related investments across a bunch of different spending areas in the city, and the school-based health care centers is one such area.

There's also the interlocal agreement that the city has with the county to buy mental health services community-based health centers.

You know, there are investments in domestic violence prevention and elder abuse.

And so I have this interest sort of across a bunch of different investment areas of the city and I'm very interested in trying to tie something together around a mental health initiative in the wake of the COVID-19 social isolation that folks have been experiencing and the impacts.

And what you have informed me, Brian, is that there's about 7.1 million proposed for school-based health centers for 2022. And what I think I hear you saying that it's like for the other items that we've already discussed, promise program and the Seattle preschool program.

If we wanted to, um, have a larger investment in, um, mental health service in school based mental health services that we would, um, need to, uh, bring that to the levy oversight committee, uh, for their, um, for, their input, and we would actually need to amend the I&E plan to remove, or we would amend the, which I don't want to do, obviously, but we would have to bring it to the levy oversight committee for their concurrent.

Is that correct?

That's correct.

Let me I'll do the same thing.

I'll bring up the slide.

So the way that I understand the levy implementation and evaluation plan.

So like you said you could one you could amend the plan right to do something else.

Council always has that ability.

The second way is it does say that unless it's for preschool the Seattle Preschool Program that it will go to the levy oversight committee for their recommendation and then council would approve it after that.

So what you described is correct.

It would it would go to the LOC first.

Sorry levy oversight committee.

Thank you Brian.

And again, sorry, Madam Chair, may I ask a question?

Of course, please go ahead.

And again, doing something like that would...

Okay, let me see if I can queue this up in a different way.

So Brian, the...

The other sort of impact here is that if we've gotten a recommendation from DEEL to create this reserve, the council could modify the amount of the reserve, for example, to fund other priorities that exist for 2022. So the DEEL's proposal is reserving, what is it?

$10 million or 14, the entire 14 million?

10 million is what the letter says, but I think deal.

I think if I spoke for them, I would say they'd probably say to reserve the whole amount.

Yeah.

Right.

Um, so the, so the issue is sort of how do we, uh, in other words, I'm identifying that there might be sort of a scalable reserve option.

that could allow us to address some of the appropriate expenditures in the K through 12 investment space that Council Member Herbold is identifying, but that would still nonetheless need to be considered by the Levy Oversight Committee.

That is my understanding, yes.

Great.

Okay, colleagues, I'm not seeing any additional questions or comments at this point.

Any parting words on Department of Education and Early Learning that folks would like to share with us?

Please go ahead, Council Member Morales.

Okay.

Well, I do thank you, Brian, for presenting this and for helping us understand.

I did just want to signal a couple of well, a few provisos that we are sorry, amendments.

I didn't sleep much last night.

I don't know about you guys that we are considering two will be very familiar because we presented them last year.

One is around funding for culturally responsive programming for Black girls and trans youth.

We did just have this conversation with DEEL when they presented last week or the week before.

So that included $550,000 to support a landscape study to understand how we can target investments for this group of young people.

As we heard, there was $395,000 left, so That funding, as I understand it, is going to go out by the end of the year.

But we are interested in continuing that funding and possibly increasing it.

So we are looking into how we would be able to do that.

Another CBA we had from last year is funding for restorative justice in schools.

I understand that the Seattle School District just hired a new restorative justice coordinator to work at the district, but that is one-time funding.

And so I'm hoping we can figure out how to work, the city and the district work together to really invest in these sort of holistic systems level changes and in the way the culture of our schools operates.

So we're interested in, again, trying to renew this and possibly expand it.

And I'm sure you all know there's also a request in the solidarity budget for this kind of funding.

And then a couple of things, I think we all heard yesterday in public hearing from folks who are interested in supporting culturally responsive programming for middle and high school-aged young people, and programs like El Centro de las Razas that provide really important after-school programming, academic enrichment, language-specific programming, not just for the young people, but they also provide family education, financial literacy, financial education for the families of these young people.

And so we are interested in making sure that programs like that continue to get supported.

I think I'll stop there, but I would be very happy to talk to any colleagues who are interested in supporting these ideas.

Thank you very much Council Member Morales.

Okay, Brian, I am not seeing any additional hands.

I too want to thank you and all of the members of the Department of Education and Early Learning.

I did have the chance to see Director Chappelle out in community the other day, and it was wonderful to see him and his family, and just want to send our note of appreciation, as the Council President did as well, to all of the workers who are helping to provide educational opportunities from birth on through.

So thanks for all the work that you do, especially in these tough times, and look forward to these continued conversations.

All right, Madam Clerk, I think we're ready to read into the record the last item on today's agenda.

Please read item number five into the record.

Office of Economic Development for briefing and discussion.

Excellent.

Thank you so much.

And Yolanda, it is wonderful to see you.

Thank you for joining us here today.

We will ask colleagues again to hold your questions until the end of the presentation.

After we get through the first part of the presentation, before we get to issue identification, Council Member Morales, as chair of the committee that has purview over the Office of Economic Development, will have you open up with some comments or questions, and then we'll get into issue identification if you have any.

Council Central staff, Yolanda, please go ahead.

Thanks for joining us.

She's saying one second.

Sorry, can you find my mute button?

It moved.

All right.

Yolanda Ho, Council Central staff.

So we are going to be discussing the Office of Economic Development, and I will be presenting a brief overview of their I want to highlight a couple of key issues.

Just as a reminder, we did present a couple of weeks ago, but I wanted to highlight the main lines of business.

supporting the creative economy, partnering with key industry sectors that drive innovation growth, upgrowth, and global competitiveness, and investing in the local workforce, focusing on youth and low-income adults who are under or unemployed.

In immediate response to the pandemic, OED led the city's efforts to address the needs of small businesses by awarding emergency support grants of $10,000 through its Small Business Stabilization Fund, and has distributed over $10 million in grants to date, with the next application period for grants opening up next month.

OED also provided and continues to provide a wide range of technical assistance to aid businesses, including support with renegotiating leases and converting to online sales platforms.

Recently, OED has pivoted its efforts to begin supporting Seattle's economic recovery using its allocation of federal the Seattle rescue plan.

The Seattle rescue plan is part of the Seattle rescue plan for additional small business stabilization fund grants, neighborhood recovery grants, downtown revitalization grants and investments in workforce development, digital equity.

So, OED's total appropriations would more than double in 2022. The changes reflect the removal of various one-time additions and restores full funding to the Creative Industry Policy Advisor position, which was partially cut in the 2021 adopted budget, and adds the standard cost and personnel adjustments, language service stipends for staff, and removes all admissions tax appropriations for the special events position that was added in the 2020 adopted budget.

so that that position is fully supported by general funds.

A large portion of the new spending would continue investments in programs recommended by the equitable communities initiative task force, the ECI task force.

This $9.7 million of ongoing funding is supported by payroll expense tax revenues as was discussed earlier this morning.

And it primarily funds support for to increase the number of BIPOC workers in the local healthcare industry.

To support this body of work, OED would also be adding position authority for four FTEs in the year-end supplemental budget legislation.

Additionally, to manage the short-term immediate influx of federal funding, OED would be adding 13 temporary positions to assist with internal operations related to finances, grants, and contracts.

Others will support communications, performance, and data analysis and small businesses as they navigate the city's myriad forms of economic recovery resources.

Finally, there were two other notable programmatic ads which were enabled by Clifford dollars.

There's $7.6 million for a new small business ownership fund that will allow small businesses to acquire ground floor commercial space in affordable housing developments, prioritizing those located in neighborhoods with the highest risk of displacement.

$500,000 for maritime manufacturing and logistics workforce development, following on the recommendations from the Industrial and Maritime Strategy Council, which were released earlier this year.

So with that, I am done with my overview.

If anyone has any questions before I dive into Issue ID, please let me know.

Thank you very much, Yolanda.

Council Member Morales, do you have any comments or questions at this point you'd like to share?

Sure.

Thank you very much, Yolanda.

I know Yolanda will be going over two specific issues that she wanted to cover.

I wanted to start by talking about a third that isn't really highlighted.

And so I first want to thank Yolanda for all the help she's given our office over the year, especially as we're trying to understand some.

Some pretty big changes at OED, policy changes and staffing changes.

And I do again want to acknowledge the work of the OED staff.

As I've said before, they really stepped up during the COVID response to move quickly, as we said, to offer support to small businesses.

And they really just deserve a lot of kudos for the work that they've done over the last year, last 18 months.

Our office has really been diving into workforce development.

So we've spoken with community members to really ask the question about what's the role of the city in an equitable economy and in workforce development.

So we've talked with Brian Surratt, who's the former OED director We've talked with a consultant to the Workforce Development Council and former ED of One America, Rich Stoltz.

We've talked to Film Task Force Commissioners, Port Commissioner, PSRC Consultant and Brookings Institute Fellow, Ryan Donoghue, Crest, SouthCore, the People's Economy Lab.

We're really trying to get a handle from lots of different perspectives on what workforce development could look like here.

And the thing that we hear, three things we hear over and over again are that as a city, we're really not working as a regional partner.

on economic development and workforce development strategies.

And so, you know, as an example here, we've got five different departments engaging in workforce development without a real cohesive strategy, and we're duplicating regional efforts.

A second thing is that we're really ignoring valuable sectors of the economy.

um our our arts and creative industry is not just you know a mural here and there or a concert here and there it really is a key economic driver for the city um and we want the the creative industries and and the film task force members to uh have their work they've been doing a lot of work over the last couple years we want to we want to honor that work and really um uh deliberately consider the recommendations that they have proposed.

And then the last thing is that the department really lacks clarity and focus right now to sort of critically engage with our regional partners on key economic development strategies.

And the fact that there's been some real inconsistency in staffing means that we're left without any real alignment with either internally or with external partners, and it's created a sense of alienation among some of our key economic development partners and really led to a lack of confidence that Seattle has a cohesive equitable recovery strategy.

And so I say all that because after Yolanda talks about her issue areas, I'll address those specifically.

But the one thing I do want to share right now is that we will be working on a slide that assesses the landscape of the city's current workforce development investments and to really develop a better strategy that allows us to partner with our regional partners and create a real shared vision and agenda for what our city's workforce development efforts should be.

I will say that an idea that we've heard is that in the next administration, maybe we actually have a cabinet-level member who is really guiding the strategy and helping – once we have a clear strategy and plan, really guiding that process and working with regional partners.

So I'll stop there and let Yolanda get to her issue areas, and then I also do have just a couple of questions.

I'm happy to hear what my colleagues have to say.

Great, thank you very much.

Thanks Yolanda.

Please go ahead with issue identification.

Slide issues here.

On slide.

There is another slide.

Sorry.

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We are okay.

Sorry about that.

So first issue is regard.

This was touched on in the OEDs presentation regarding changes to film and special events permit fees.

OEDs serves as the city's one-stop shop for applicants seeking film and special events permits.

coordinating permit application reviews of various departments including Seattle Parks and Recreation, Seattle Fire Department, Department of Finance and Administrative Services, Seattle Public Utilities, the Seattle Police Department, and the Seattle Department of Transportation.

Until recently, city departments have covered the cost of their staff's time engaged in this permit review and also for attending coordination meetings.

But SDOT, the Seattle Department of Transportation, has recently begun shifting to a cost recovery model for its street use permits, which includes those for film and special events in the public right-of-way.

Currently, the city offers a low permit cost of $25 a day for film shoots that use the right-of-way, and this is one of the only incentives the city can offer the industry.

So changes to SDOT's practices could result in increased permit costs for film and special events starting in 2023. SDOT has agreed to continue covering these costs through 2022, which are estimated to be somewhere in the area of $283,000.

The proposal would be finalized in 2022 and with council approval would take effect at the beginning of 2023. To help gather feedback from key stakeholders, OED's proposed budget includes $50,000 to support outreach for a racial equity toolkit analysis.

Not included in the proposed budget was OED's additional proposal to fund a consultant study of the economic impacts of the film and special events.

in the local economy, these industries in the local economy.

So while the outreach will help, while the racial equity toolkit related outreach will help OED incorporate racial equity considerations into its forthcoming fee proposal, the lack of a complimentary quantitative analysis may result in the city adopting a fee structure that is not fully informed by these industries' respective economic contributions to Seattle's economy.

So the options would be to add funding in the budget to support an economic impact study of these industries, or of course, to take no action.

Any questions about that?

Questions or comments?

Council Member Morales, any thoughts you'd like to share?

Thank you.

Only that I think Given what I've said feels like over and over again about the need for us to be very mindful and honor the work that has been done to try to support this industry, I do think it makes sense for us to choose option A here and provide the support to do a real analysis of how to best create a fee structure that best supports the industry here.

Thank you very much.

I'm not seeing additional hands on this one.

Okay, I will go on to the next two.

So I'm going to flip to the next slide here because this is relating to the OED's proposed organizational shifts and staffing changes.

So I would just note that With this budget, OED is proposing to make some substantial changes to its organization kind of in the waning days of the current mayoral administration.

While it is appropriately staffing up to support COVID relief and recovery, other changes are being proposed that may be better led by a new mayor and or a permanent director.

So this org chart, there's a lot going on here.

So I will just note that the positions in green are the 13 temporary employees that I referred to in regards to the department staffing up to kind of get the federal funding and other funding out the door.

to community.

The four new positions to support the equitable communities initiative task force recommendations are highlighted in yellow.

So for the purposes of this issue identification, we are going to be focusing on the positions that are highlighted in purple and kind of shaded as well.

So those are the, so you'll note some of them are shaded, some of them have a strikethrough.

So beginning with the deputy director.

So they are proposing to reclassify this position from a manager three to an executive two.

I would note that OED has not had this position filled for a couple of years.

And so it's recently moved to fill that position.

The next position that is being impacted here is the creative industry director.

This would be reclassified from a strategic advisor three to an executive one and be repurposed to serve as the division director that would report to the deputy director and oversee these main lines of business.

Next position that is impacted is the creative industry policy advisor.

This would be reclassified from a strategic advisor two to a manager two, retitled to creative industry manager, whose responsibilities will include policy development, implementation, and management of the creative industries team, which includes five FTE.

And finally, there is a youth employment development advisor.

They are repurposing this vacant position for a small business advocate who had been underfilling the deputy director position.

So the shifts here would reduce OED's dedicated workforce development staff from two to one.

The OED's explanation is that the youth employment development advisor position is no longer needed in OED as the city has consolidated this work in the human services department and jointly with parts, I believe.

But the diminished workforce development capacity in OED would, to Council Member Morales' point that she raised prior to me diving into this, will limit its ability to coordinate with regional workforce development efforts and other related initiatives that may be of interest to the council.

Also, I would note that these moves also impact staffing for the creative industries.

A brief history of these positions just for context.

In the 2020 adopted budget, the position that used to serve as the Office of Film and Music Director was repurposed to serve as OED's Creative Industry Director.

All other positions that were associated with the Office of Film and Music, also known as OFM, were also integrated into OED's Creative Industry Key Industry Sector team, and OED also added a Creative Industry Policy Advisor position to this team.

While OFM was never officially established as a separate office, it did operate within OED with some degree of autonomy.

And after OFM staff were moved into larger OED organizations to support the creative industry cluster strategy, OED maintained that OFM still had some presence within the city, but as of the committee meeting a couple of weeks ago has indicated that they will no longer be this, they will not, that will no longer be the approach moving forward.

So just noting that repurposing the creative industry director to serve as a division director will diminish the number of city staff dedicated to the creative industry sector.

Additionally, OED is in the process of reassessing its creative industry strategy under the direction of new leadership and in light of the impacts of the pandemic.

All told, these moves could result in impacts to how OED serves a larger community and the industries it seeks to support.

OED may need additional resources in the future to provide support for the creative industries and workforce development, but this may be a decision that is better made early next year in coordination with the new mayor and their OED director.

So now I actually want to go back.

Here we go.

So, and here are the options regarding that issue is potentially considering imposing a proviso on the position of the division director of creative industry manager pending an appointment of a permanent director.

funding for either of these positions to essentially delay their hire until earlier next year after the new administration is settled in, or no action.

Also, options A and B are not mutually exclusive, so it could be combined in some way.

And with that, I'll open it up for questions.

Thank you very much.

Council Member Morales, please go ahead.

Thank you.

I think this reorganization is what I'm struggling with the most, just trying to get a sense of where things are going.

I know we have, as we've been talking about all day, there's new staffing being proposed, new programs being created, new contracts being signed, all before we've passed a budget for any of this.

And so I really worry that we are setting ourselves up for the cliff that we keep talking about if the funding changes.

With regard to this RE-ORG in particular, I just have a couple questions, Yolanda.

Can you tell me if it's normal to have three layers of executive management in departments?

Because if I'm understanding this right, there is an executive director with a deputy director and a division director before we get to management of the different teams.

I kind of looked at other offices and departments of similarly sized.

Everyone kind of does something differently, and I think each department would have an argument, and OED has an argument for why they feel like this is necessary.

I can't say what their internal organization, it does seem like, you know, a number of directors or such a relatively small office, typically you'd see more, you know, kind of this division and maybe a larger department, but, you know, the leadership has determined this is what is needed for their operations.

So what's the difference between an executive classification and a management classification?

I'm not as familiar with our human resources terms, but I, in my mind, an executive is like more, like closer to, you know, the executive classification is a director level classification, right?

So a major kind of leadership, you know, big, you know, picture thinking, leadership, that, that those types of things I associate with that executive level classification.

Okay.

Council Member Morales, I could just add a little to that description in terms of like the classification of positions.

Having recently gone through it myself, the Human Resources Department looks carefully at the specific duties and sort of determining where to fit that.

So for this reclassification to go forward, it would have to be a determination that the sort of responsibility of this position has risen to the level of an executive.

And it's not like a bright line of it's either this or that.

There is some nuance as it varies by department.

And I would just note here in this particular position in previous budgets, it was several years ago when I was the analyst assigned to the Office of Economic Development, the council chose to cut the funding for the deputy director position because at the time there was some lack of clarity about the need and all of that.

And so I think this is getting at the issue that Yolanda is raising for all of you to consider of whether or not there is a need for these positions and the and the reclassification at this time and is it right for a decision as we're about to have a new um administration and then i will just also clarify with some of the options we'll have to look at the specific details some of these positions may have people in them.

And so the restriction may be on limiting the reclassification or filling all of their vacancies this year, even though there may be a deputy that was retained at the manager of three level or something like that.

So we will be continuing to sort through those details should a council member wish to pursue some of these amendments.

Okay.

Thank you, Allie.

That's helpful.

I have questions about the health care, but I'm not sure that this is the appropriate place for them.

Maybe I will ask.

Well, maybe I'll just ask.

So one of the things that I'm a little bit concerned about, in addition to the fact that we have regional partners who are doing health care related workforce development, is that very often the jobs that are open are not necessarily living wage jobs.

And so I just want to be mindful that we aren't targeting public resources.

to an end of the healthcare industry and sector that doesn't provide family wage jobs.

Do we have any idea what specifically these positions might be targeting?

I would have to ask the department for more detail on that, but I'm happy to follow up.

Okay.

um chair if i can just indicate two things around the provisos and then i and then we'll go to council member herbold sure um so i i appreciate the work that yolanda's doing here to try to help us understand what's going on i do think that it would be important to put a proviso on the creative industries and division director position until we have a better sense of what the strategies are for how we implement the recommendations that the industry has already provided.

And then as it relates to a new line of business around the Small Business Ownership Fund, I think it's really important that we align our anti-racist work in the city with the community wealth building strategies that we've been talking about.

And I think that the idea of creating an acquisition fund for small business ownership is a really important idea that I support.

That sort of work is why EDI was created to help finance the construction and create space for ground floor businesses, community centers, cultural space.

And so I would be interested in shifting the funding for that and that program over to EDI.

who has a strong relationship with Office of Housing, who knows how to do that sort of granting and programming already, and just want to signal that that's something that we will also be looking at.

Thank you, everybody.

Thank you, Council Member Morales.

Council Member Hurdle, please go ahead.

Thanks, I'm just going back to the conversation around the creative industry theme.

Proposed reorg, I want to for purposes of.

historical awareness in the Q&A on the budget questions about this.

The executive points to the fact that in the past, the former Office of Film and Music Director has been seen as an independent director of a standalone office that reports to the mayor, although the Creative Industries team formerly known as the Office of Film and Music, has been a part of the Office of Economic Development.

Whereas that's accurate, the history behind that is that there was a Mayor's Office of Film and Music.

And so, There has been over the years sort of the subordination of this role and I am concerned we are further doing so with this proposed reorg.

I guess a question that I would have for Yolanda is that there is a concern that changing the creative industries director from a level three policy director to a level two staff manager means would no longer be leadership to develop policies that support these industries that are, as we know, important to our economy.

Do you agree with that concern, that a manager's role would be primarily to oversee the work?

of the creative industry workers and their efforts as opposed to more of a policy development role.

I think that's a pretty accurate description.

You know, as you can see from this org chart, the division director is essentially seeing all those main lines of business right that I described earlier in my intro.

So while they may be able to kind of dive in a little bit on some, you know, strategic direction, they will have many asks of their time versus having that dedicated space to be concentrating on the creative industries.

And so that creative industry policy advisor that is being reclassed to the manager, too, as a creative industry manager, will be really the only individual staff who will be you know 100% dedicated to thinking kind of strategically around creative industry issues and policy development.

Thank you Yolanda and I know I use this stat a lot and I'm afraid I'm not going to get it right this time because I don't have my notes in front of me but I just want to remind everybody that the contribution to our city's GDP from arts and culture is, I believe, it's five times the average GDP nationally.

So this is a really important component of our economy.

And I am, again, whether or not it's film and music or more broadly, creative industry, I am really concerned by our continued subordination of this particular focus.

Thanks.

Thank you, Council Member Herbold, and thanks for your leadership on that area as well.

Is there any additional comments or questions?

Council Member Morales, did you have any last comments that you'd like to make?

Council President Gonzalez, was there comments from you?

Okay, great.

I'm seeing heads.

Good, thank you very much.

Okay, thank you.

Well, I do think that that does bring us to the end of this presentation.

Yolanda, did you have anything else you'd like to share?

Oh, no, well, we did get some information that executive level is usually someone who manages managers, so that is additional clarification for the purposes.

Thank you very much.

With that, Yolanda, if there are additional questions specific to OED, we know where to find you.

Colleagues, do reach out if you have questions for Yolanda or Allie, who is on the screen here.

We're going to have another long day tomorrow, so I'm happy to give you the gift of time back this afternoon.

We will have the opportunity to go through Office of Planning and Community Development, Human Services, Human Services and Community-Led Investments, and in the afternoon really get into Homelessness and Homelessness Services.

I also will flag for folks if there's questions or comments that you didn't have the chance to ask about other departments that are not featured today and tomorrow or on Friday.

If we have extra time at the end of tomorrow's meeting, we of course would love to hear any ideas that you'd like to put out there at this early stage, recognizing it is early and you do not have to share all of the ideas that may be in the hopper.

But if you'd like to use some time at the end of tomorrow's meeting, assuming that we have a little bit extra time like we did today, you're welcome to do that.

So I wanted to give you a heads up about that possibility at the end of tomorrow's meeting.

Friday, we do have another long day.

We will be concluding with public safety and wrapping up our afternoon with the department overview in Seattle Police Department.

So I appreciate your generous time today.

And Ali, if there's nothing else from you, we will see you tomorrow along with all of our colleagues here.

Today's meeting is adjourned.

See you tomorrow morning at 9.30 a.m.

Have a great afternoon, colleagues.

Bye-bye.