Seattle City Council Select Budget Committee 10/15/20

Well, good morning, everyone.

Today is October 15th, 2020, and the Select Budget Committee will come to order.

Today is Thursday, October 15th, 2020. My name is Teresa Mosqueda, and I am the chair of the Select Budget Committee.

Will the clerk please call the roll?

Council Member Peterson?

Here.

Council Member Strauss?

Here.

Council Member Strauss?

Present.

Council Member Sawant.

Here.

Council Member Herbold.

Council Member Juarez.

Here.

Council Member Lewis.

Present.

Council Member Morales.

Here.

Council Member Gonzalez.

Here.

And Chair Mosqueda.

Here.

Eight present.

Thank you all very much.

I want to thank central staff for their presentations in advance.

Today is the first day of a four-day series of presentations you will hear.

This gives us a chance to get into the issues.

Our issue identification meetings are a chance for council members to really signal areas that they will be diving more into as we conduct our efforts to try to analyze, add to, ask questions, and dissect the mayor's proposed budget.

This is week three of the budget committee of an eight-week series.

This week and moving into next, again, we'll be focused on issue identification.

Central staff, through their memos and their presentations, will be going through some of the issues they have identified in the mayor's proposed budget.

We will hear from council members regarding some of your priorities as well.

We will begin exploring changes to the proposed budget.

And today, as you saw with the robust memo and presentation that was sent around and published with today's agenda, We will kick off our deliberations today by having central staff walk through the big questions many of us have had.

How did the mayor propose to create a proposed balanced budget?

And with what revenue streams and with what mechanisms is the proposed budget in front of us?

We will look at the general fund overview today.

Tomorrow, we will move into identified issues in the budget related to the Office of Sustainability and the Environment and the Department of Neighborhoods, the library.

And then in the afternoon, we will focus on miscellaneous sections within the budget that are not specific to any one department, but are a combination of various issues that central staff has not proposed a central staff memo specifically on that department.

We will lump those together.

Central staff will present issues and options that they have identified through their own independent analysis first.

And then we will go to the form A's submitted by council offices that will be presented by central staff.

As a reminder, we have a lot of form A's this year.

A higher than average number of form A's have been submitted.

And thanks to all of you who did get your form A's turned in on time.

We greatly appreciate that.

I know central staff does as well.

There are some that were not turned in on time.

So I'm going to ask council members for you to be very, very brief in your remarks and reserve this time in our meetings for really council members to ask questions and get a better understanding of the forms that have presented.

have been presented.

As a reminder, this stage is not for debating the merits of various proposals that council members have brought forward, but really in listening and absorbing to hear what council members areas of interest are.

We will get to the debate and deliberation phase as we talk more about form B's and form C's going forward.

But today and tomorrow, Tuesday and Wednesday next week, are really our chance to absorb where various council members are indicating areas of interest and the priority being hearing from central staff their independent analysis.

To support expediency this year, I will be asking for a council members to try to reserve their comments towards the end of the presentations.

I will make sure that I take a list of all of the council members who have indicated that they are interested in speaking on various issues.

But this will allow for central staff to get through their presentations and then we will get into questions.

I also want to remind folks this year we are not going to be raising our hands and showing a show of support for various form A's.

This is again just our chance for us to receive information and potentially ask questions.

And then we will ask for council members to show support when we get to form B's instead.

There's a lot of information that is going to be presented to us.

I want to thank you in advance for all of the information that you've already digested.

I know many of you have gone through the robust presentation and the memo that was provided.

This is a very important presentation today that helps set the ground for how the council wants to respond to the proposed budget in front of us.

A lot of really tough decisions are in front of us to make in the next few weeks, and the central staff presentation today helps set that foundation.

for what the proposed budget is balanced on, where there are some key holes, and where there are some key opportunities for the council to ask important questions to plug those holes and to really identify priorities for us moving forward.

Thanks again to central staff, to our communications team, and to the central staff budget team, Allie Panucci, Dan Eder, Tom Mikesell, Lisa Kay.

The budget is always especially a time consuming process.

So I want to thank Patty as well for all of the information that they put out for us on a weekly basis and daily basis.

It's been around the clock as we know from early this year until the end of this year.

Our central staff team has been working around the clock and all the folks that support us in making these meetings possible, Seattle Channel, our IT folks, communications, and clerk's office greatly appreciate all of your work.

We do have a link to public comment that I will open up here in a minute.

Before I do, I want to acknowledge that Councilmember Herbold has joined us.

Thank you very much, Councilmember Herbold.

Glad to be here.

Appreciate you being here.

And folks from IT, if you could do me a quick favor and let me know if we have folks signed up for public comment.

The link here is not working.

Yes, we have three public commenters signed up.

Son, would you be so kind as to read those names into the record for me as I cannot get this link to open on my end?

Oh, I got them here.

I'll go for it, son.

Thanks for your willingness to pitch in.

Thank you.

Karen, Glennon, Howard, Gail, David Hines, and then the fourth person who is not present, but if you're listening, we would love to hear from you as well.

Aline Fortin and gang, we have you four signed up.

So just a quick heads up, we will do two minutes of public testimony.

At this moment, public testimony is open.

We will hear from folks in the order that they have been called.

You will hear a 10 second timer at the end of your two-minute allotted time period, and we ask for you to keep your comments directed to today's agenda items, including any items on the proposed budget in front of us.

If you have not yet registered to sign up for public testimony but would like to, you are still eligible to sign up before this public comment period is ended by going to the Seattle's public testimony website, and that is at seattle.gov backslash council.

The public comment link is also on today's agenda.

Once you hear that you have been unmuted, that's your prompt to also push star six on your end to make sure that you are unmuted.

Then you can go ahead and introduce yourself.

When you're done speaking, please do hang up on this public testimony line and listen in on the other listen in options listed on the agenda, including at Seattle Channel.

Appreciate everybody for calling in today.

And for those who are not able to join, please do note that we will have the first 30 minutes of our public meetings reserved for public comment every time we meet.

And as a reminder, we have a longer public hearing scheduled for the 27th at 5.30 p.m.

Public comment period sign up starts at 3.30 that day on the 27th.

So if you can't join for any of these meetings over the next four days, we encourage you to sign up for the 27th.

You're always welcome to send public comment as well to my office, and we will distribute it to council members at Teresa.Mosqueda at Seattle.gov or to all council members directly at council at Seattle.gov.

Okay.

Thanks so much, everybody, for calling in.

Karen, you are up next.

Good afternoon.

Thank you.

My name is Karen Gillen.

I'm in District 7. I'd like to bring your attention to a possible revenue opportunity.

In 2019, the council approved the waterfront lid to create a massive structure to connect the downtown retail core with the waterfront and add street amenities along the waterfront, Pioneer Square, and in the Pike Pine Corridor.

This action committed $185 million of Seattle taxpayer funds.

It also assessed $176 million on property owners in the downtown core and required $100 million of philanthropic contributions.

A lot can change in the space of a year.

Our city is now facing a huge economic reversal with B&O and sales taxes dwindling.

Essential needs of the city's homeless population are not being met, our bridges are crumbling, and we must fund initiatives to overcome systemic racism.

Downtown has been abandoned by both locals and tourists.

Even before the pandemic, the cost of doing business downtown was causing stores to close at an alarming rate.

It is unclear when tourism will recover.

How can we justify a costly remodeling project when we cannot afford to house the thousands of people who are on the streets?

As you know, once the city begins collecting taxpayer assessments, you are legally obligated to fund the entire project, including any cost overruns and any shortfall in the philanthropic contribution.

The viaduct is gone and Alaskan Way is being restored.

When it is completed, we will have a beautiful city amenity with open space, water, and mountain views that can be enjoyed by all.

Now is not the time to add embellishments.

I urge you to reprioritize the $185 million minimum of taxpayer money committed to this project to help our city regain its health and prosperity.

Thank you.

Thank you so much for calling in today.

Appreciate your time.

The next person that we have is Howard.

Welcome back, Howard.

Hi.

Good afternoon, this is Howard Gale from Lower Queen Anne District 7 addressing police budget.

In this historic moment when we are re-evaluating police, we cannot fail to address all the aspects of policing.

What tasks are appropriate for officers who all too often answer a cry for help with a gun, but also how we hold them accountable when they inappropriately use that gun as they did against Terry Caver in May as he cried for help.

Half the police beating half as many people, depriving half as many people of their constitutional rights, and killing half as many people, I don't think is the outcome that you all desire.

As you look at the public safety budget, you must not just consider the failures of policing, but also consider the near-complete failures of our accountability system that spends almost $9 million each year.

You must ask yourselves, what accountability have those millions purchased for the 27 killed by SPD since John T. Williams in 2010?

What accountability has that purchased for Terry Caver?

What accountability has those millions purchased for the now hundreds of folks beaten and injured, some very seriously, by our police?

Please, in order to reimagine policing, we must also reimagine accountability and develop a system led by and accountable to the public.

I recognize that a lot of people on the council are very defensive about having set up that system three years ago, but again, the data is simply not there as evidenced by the last four months to show that accountability is working.

So please, reimagine accountability along with policing and reimagine how we can do that in a way that engages the community.

Please don't forget this important aspect in your ongoing issue identification in the coming budget.

Thank you.

Thank you so much, and we appreciate you calling in again today.

The last person that we have signed up for a public comment is going to be David Hines, and then I want to do a quick announcement for Aline Fortgang.

We have you signed up and would be happy to hear from you, but we don't see you listed on the line yet.

So if you're still listening, you can have a few minutes to call in.

And just to give you a few more seconds, I need to do something very procedural, very quickly, David.

Council colleagues, I want to make sure that our agenda gets adopted for today.

So I skipped over that piece.

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

No objection, it is adopted.

David, please go ahead.

Thanks for waiting.

Hi, thank you.

David Haynes, stuck in Seattle, still owed back pay from a boss that keeps coercing the cops to have me jailed for holding a sign that says back pay still owed.

It's not fair city council is censoring our participation in democracy, closing off council chambers while making life-changing decisions without allowing the voice of the people, especially when bars are open, yet not one government office is open for phones or computer.

It's always the same politically connected who are paid contractors saturating the phone lines, drowning out independent voices.

I'm calling today to demand that City Council redirect all the earmarked money for renters who are protected by an eviction moratorium and get innocent houseless citizens off the street.

It's obvious City Council cares more for renters who vote and volunteer for their campaign than you care to solve a six-year crisis.

In fact, the new city council is stepping back and allowing older council who've already been around the proverbial budget block to intercept millions of dollars needed for actual homeless crisis and being wrongly used to welfare subsidize renters credit score rating.

at the expense of innocent houseless, forsaken by a passive-aggressive council filled with racist policies that guarantee innocent homeless will never be helped by getting them into a rental while subjecting them to subhuman shelters.

Yet only thing council and mayor cares about is buying off the organizers and activists hiding within the non-profits who intimidate council with protests guaranteed never to be investigated.

Shame on the city council for refusing to help 12,000 homeless used by 20,000 people in nonprofits who make their living off the poor while using the tax dollars to kick back to council who pays their salaries and a trade of integrity for reelection support.

all while the same council complains about banks, while actually making banks happy, redirecting homeless money to banks who own all the rundown dilapidated rentals, while homeless guests compete with COVID-19.

Don't be surprised if you see me pitching a kit in front of your comfy home.

Thank you.

And the last person that we had signed up, Alina, we do not see you signed up still.

Aline Fortgang.

If you are listening, apologies that we did not get to you today, but we will look for any public comment that you send our way.

At this point, that concludes all of the folks that we have signed up for public testimony today.

Our public comment period is ended.

Let's move on to other items on today's agenda.

Will the clerk please read agenda item number one into the record?

Madam Clerk, you may be on mute.

Well, we're looking for our clerk.

I'm gonna ask for our presenters.

Oh, please go ahead.

I apologize.

Agenda item one, introduction and issue identification overview for briefing and discussion.

Thank you very much, Madam Clerk.

We have presenters already joined us here on Zoom.

Thank you so much for being with us.

If you could introduce yourselves, Dan Eder, Interim Director, Ali Panucci, Central Staff, and Tom Meisel, that would be wonderful.

Good afternoon, Chair Mosqueda, committee members.

I'm Ali Panucci with Council Central staff.

I'm joined by Interim Director Dan Eder and Tom Mikesell.

I'm just going to do a really brief introduction for where we are in the budget process, much of which was covered in your opening remarks.

So I will be quick, and then we can move on to the main presentation for the day.

So I am happy to say we're moving now on to step two of six in the Council's budget process.

As the Chair described in her opening remarks, this week in committee and next week Council Central staff will present issues and options they have identified.

in the 2021 proposed budget through their independent analysis.

And there'll be an opportunity to discuss council member proposals submitted via form A by the October 8th deadline.

If you could please move to the next slide.

So coming up after today's presentation on the general fund balancing analysis and the discussion by the committee on that information.

Tomorrow, you will hear presentations on the Office of Sustainability and Environment, Department of Neighborhoods, and Libraries.

And in the afternoon, you'll hear a number of council member proposals that affect a number of departments for which central staff did not prepare a standalone issue identification paper.

Next week, you will hear presentations on the Parks Department, Department of Transportation, and the Seattle Police Department on the 20th and on the 21st, a discussion of community safety, the Human Services Department budget, the citywide homelessness response, and COVID response.

Next slide, please.

Following the issue identification discussions, we'll move on to step three in the process where council member proposals are further refined.

into proposed council budget actions and statements of legislative intent, as well as budget legislation discussions.

And this is all in preparation for the chair's balancing package that is step four.

As a reminder, please submit requests to central staff to prepare materials for the committee discussions on October 28th through the 30th by 5 p.m.

on October 22nd.

And with that, we can move on to the item number two on the agenda, unless council members have questions on process.

Thank you very much, Allie.

I really love the way that you've presented this information.

Council colleagues, you'll see at the bottom of each slide in the PowerPoint presentations to come, there's a reminder for where we are at in that timeframe.

So that's a very helpful reminder, not just for us, but also for members of the public and the press.

Council member Sawant, did you have a question?

Okay, please go ahead.

Thank you.

My question is not so much about the timetable, but more about the Form A's and Form B's.

Form B requires three co-sponsors, so I'm just wondering how should council members indicate that they want to co-sponsor in open meetings if they are not raising hands during Form A, which is something you alluded to earlier.

Thank you.

Thank you for that question.

Allie, do you have thoughts about that?

Yeah, thank you, Council Member Sawant.

So as committee members, you can speak to each other about your proposals, provided you're not, you know, you're not violating OPMA, Open Public Meetings Act rules.

And so it should be a discussion request of sponsorship if you're talking directly to each other with not more than three other council members, because five makes up a quorum.

It is, the chair will not be asking for a show of hands.

But you can indicate, you can verbally say your support if you are asking a question or that type of thing.

And then in addition, if you are unable to obtain co-sponsorships, giving those OPMA limitations, there is an option to still submit the request to central staff.

And we will work with you on the options for presentation of those ideas offline.

If I might just ask quickly, and this is a question to Council Member Mosqueda, I'm just curious as to why the decision was made to change that process, because I thought it was a good, to whatever extent it was, it was a good way to really ask the question publicly to council members, you know, do you support a given a budget amendment because I think that it's helpful for the public to see what position council members are taking.

So just the asking of the question I thought was a useful process in favor of democracy.

So I'm just curious.

Absolutely, and I think that that process is still going to be remaining in place for Form B's when the official amendments come forward or official concepts with dollar amounts come forward.

We will definitely be asking folks to show indications of support at that point because many of the Form A's are more narrative or conceptual in nature.

A lot of folks in the past, as you might remember, would just say, yeah, that sounds great, that sounds great.

And I think that in order for us to get through this long list of Form A's, just really being in absorbing mode and then we'll get into the sort of where council members are weighing in on various supportive pieces that will come in form bs absolutely if you want to weigh in as we walk through various pieces and if folks want to say i'm really interested in this piece I'm not discouraging people from doing that.

I just want to make sure we had a streamlined process, given the fact that we have 150 some for maize at this point, but encourage that type of dialogue.

I just want to make sure that we get through it quickly so that we're not taking a hands on each one.

And again, as a reminder, and if central staff want to chime in on this, I think that prior to the last few years, we did have the process similar to what I'm describing, but I could be wrong.

Council Member Sawant, any follow-up on that?

Just to, just, you know, in the interests of the public who might be watching, just to register my opinion that I didn't feel that it, that process in any way didn't, in any way prevented the committees from being streamlined or timely in manner.

And I did think it injected a little bit of transparency just sort of by asking the question in public.

And I'm not so much concerned about me expressing agreement or disagreement, which I will, and as I have, but I just thought that asking the question actually puts pressure on council members to give a certain position or stay silent.

In any case, that's also staying silent is also a position.

So I just want to register that.

Anne, please go ahead.

I just want to own that some some of the considerations that went into this year's decision are the limitations on the availability of central staff to work on the council budget actions and statements of legislative intent.

We have, as the chair indicated in the past, done this sometimes where only one council member needed to be the sponsor in order to launch a level of effort that was sometimes considerable to put together a potential council budget action.

And in other years, we have set a bar that required three co-sponsors to warrant that level of effort from central staff.

This year, for Form A's ideas that council members wanted to insert into issue ID papers, there was on the order of 150 ideas that council members had.

And in anticipation of that level of interest, staff suggested that we may not be able to accommodate the attendant workload of putting together council budget actions for all of those.

So it was our suggestion that we move, consider moving, and the chair obviously had to make a decision about how to allocate scarce staffing resources.

Thank you so much.

Thanks for raising the question Council Member Solano.

I know we'll have robust discussions over the next four days and We'll have the chance to have that democratic process as well baked in throughout the rest of the budget deliberations, especially as we get to form Bs.

So thank you for that and look forward to the discussion today.

All right.

With that, let's have the clerk read into the record item number two.

Agenda item two.

General fund balancing analysis for briefing and discussion.

Thank you so much.

And we already have Tom Mikesell with us.

We will also be joined by Lisa Kay, I believe, as part of the budget team here.

Thanks again to Allie and to Dan for continuing to be present on this agenda item.

I'll just take a quick second to say thanks to Tom and the team for providing the memo.

I hope folks had a chance to read through that 14, 15-page memo.

That was really a helpful description of the slides that you will see.

And to Lisa and Tom for your presentations today, we greatly appreciate your time.

Lisa, I believe you'll be covering quarter three, and Tom will be covering this overall funding stream.

And I'll turn it over to Allie for introductions.

Thank you.

Thank you, Chairman Skater.

Before I turn it over to Tom, I just wanted to give a quick introduction and just note that Lisa Kay on the budget team prepared a memo on the third quarter supplemental as you or the proposed third quarter supplemental ordinance that informs the analysis and the discussion that Tom will tee up today and she is available to answer questions, but it will primarily be Tom you are hearing from with other, Dan, Lisa, and I will chime in as appropriate.

But so starting with the discussion today, Tom will walk through a high level review of the mayor's 2021 proposed general fund budget.

The framing of this analysis laid out in the slides ahead considers What was the city facing before the council adopted the payroll expense tax in July in terms of general fund balancing?

How did that change after the adoption of the tax?

How did things change after incorporating the mayor's proposed $100 million investment for the equitable communities initiatives.

There are, of course, other ways the ordering of these changes could be presented in the analysis.

This uses the frame of the council's adopted policy that was adopted through ordinance and resolution for the jumpstart spending plan.

But regardless of the ordering, the bottom line that will be presented towards the end of Tom's presentation will remain the same.

And with that, I'll turn it over to Tom.

Thank you, Ali.

Good afternoon, Chair Mosqueda, members of the Select Budget Committee.

So I hope you've all had a chance to see and read the 14-page memo that Chair Mosqueda referenced.

I will be giving a highlighted overview through this presentation and reference back to the higher level of detail that's covered in the memo.

as a guide as we walk through, because there's a lot to cover.

And I'm going to hit the key points, though, always able to welcome questions as they may arise.

So the first thing I would like to cover on this slide in particular is why the general fund.

And this is a key distinction because The general fund is the one fund of the city that almost all departments that provide services have some participation in.

Some are completely funded by the general fund and some receive a share of their monies from the general fund and the share from some other funds.

So it's significant in that nearly all of the services have some general fund.

participation.

And let me pause here and ask if folks can hear me clearly just to check.

Okay, excellent.

So another reason to think about the general fund and why it's important is that it is characterized by having a, by being funded largely through tax revenues.

And so when I say taxes, I mean the property taxes that are paid, sales taxes that are paid when people make purchases, and payroll expense tax, the new payroll expense tax that was adopted by the council in the summer, and utility taxes that are also paid by businesses.

So those are the reasons why we focus on the general fund uniquely.

Some of the other larger funds, the transportation fund, Utilities funds, those have their own special funding streams and unique characteristics, but the general fund by its very description is important because it generally affects most city services.

Next slide, please.

So this is a broad outline of the topics we'll cover.

I'll touch fairly briefly on the status of 2020. We spent a significant amount of time this summer looking, addressing the revenue problem caused by the COVID crisis and also providing, Council providing additional support for the community.

So there's important things to point out with regards to the status of that balancing exercise and where we are right now.

There are implications for that that carry over into 2021, which will be the bulk of the presentation, talking about the different elements of the mayor's proposal and how it both interplays with the payroll expense tax that was recently adopted, as well as some key funding issues that will be before you as you dive into deeper budget deliberation in the ensuing meetings.

And then finally, as wrap up, the memo pauses at different sections and raises issues for identification.

This presentation will keep those towards the end.

So we'll raise the issues and pose the different options that we've identified for the resolution.

Next slide, please.

So this is a very high level view.

This is drawing from pages two through six of the memo.

The first row of this table is the adopted budget.

So this is the level of revenue.

So that's the sources column.

and the expenditures from those revenues, the uses column that was adopted last fall.

So that was the plan that we went into this year with until the COVID crisis hit and adjustments were necessary.

Technical and supplemental changes.

These are just standard adjustments that are made in every fiscal year.

It's basically determining how the prior year transpired, making adjustments like carry forwards, things of that nature, and adjusting the budget to account for those things.

So if you look at the far right column, you can see there is a tracking total as you go down through these rows that show the impact that each one of these broad items have on the general fund balance for 2020. So those technical and supplemental adjustments largely had a very small impact to the balance.

However, the COVID relief and recovery had a fairly substantial impact on the balance.

This was largely funding that was provided through the CARES Act, funding that was provided by council for small business relief and community investments to help the community cope with the crisis.

That had a net impact of $57 million to the general fund, largely because of the recharacterization of our workforce into doing substantially different functions, some amounts of federal monies were able to support existing appropriations that were originally intended for one thing, and then instead were directed towards COVID relief measures.

The third to the last column, revised forecast and summer rebalancing.

So this is largely the August forecast that was presented by CBO to the city council, demonstrating the losses in sales tax, property tax, sales tax and B&O tax largely with some property tax loss, essentially a 15% cut in the financing plan for the general fund that was intended at the start of the year.

On the uses side, it actually, that represents predominantly the Council Bill 119825, the summer budget revisions ordinance.

And so this piece is key to the overall analysis because part of the investment that was adopted in the summer rebalancing was a $14 million community investments for community safety.

And the intent in that bill, which was vetoed by the mayor, but overridden by the council was to provide $14 million in community investments funded from an inner fund loan in council bill 1019-863.

Subsequent to that, the override letter was presented by the mayor's office to council, indicating that the investments from that bill would be made, though the inner fund loan would not be processed by the budget office.

So that essentially left a $13 million hole, which was the amount of the Interfund loan, which was intended to come from the construction and inspections fund and to be repaid in 2021 through either reductions to the police department budget or the payroll expense tax.

That did not occur.

There are proposed future rebalancing measures.

These are items like Q3, the third quarter supplemental, the fourth quarter supplemental, and a small amount of administrative adjustments that these have been proposed and we are aware of from the city budget office.

However, we have not been presented with an alternative funding source for that $13 million Interfund loan that is not going to be issued.

So at the bottom line, What what 2020 is is left with is a $4.9 million balance and which is which is positive, however.

The key point in this particular slide, which is detailed on page six of the memo, is that the 2021 budget, which starts from however we ended 2020, the 2021 budget presented by the mayor actually depends on an $18 million starting balance.

So that is the $13 million difference, which when we get to issue identification later will be one of the key takeaways.

Next slide, please.

So, and this is essentially what I just said.

So we can probably go to the next slide.

Because this is the key takeaway.

So now we're going to launch into the discussion of the different elements of the 2021 proposed budget.

We'll first talk about the baseline process.

And so this is the way of looking at how to start 2021, basically using the 2020 budget and adjusting it for different measures to bring it into line with the current, the 2021 level of services in 2021. Then we'll do a slide covering net reductions in the mayor's proposed budget.

We will talk about the payroll expense tax revenues that are in the Mayor's proposed budget based on Council's adopted tax.

We will then cover the costs of implementing the tax and the cost of additional COVID relief that's in the budget.

We will touch on the Mayor's proposed Equitable Communities Initiative, and then implications for the fiscal reserves, which are not in the general fund, but are important fiscal relief measure in the city.

Next slide, please.

So the next few slides, so this references to page eight of the memo.

in terms of the detail that's covered.

And you'll see a series of slides that will be similar to this.

And in each one of these slides is tracking the impact that that particular adjustment that we talk about has on the general fund balancing status.

And so when I say balancing status, which I will probably say quite frequently, it's essentially how much are revenues above or below the expenditures.

So in this case, you see in the upper left-hand corner of this slide, the little table, resources and expenditures.

In terms of starting the budget for 2021, the city budget office will take the 2020 adopted budget and then make a number of adjustments to that number to simulate or to basically estimate what it costs to provide the 2020 level of adopted services in 2021. And that's what this reflects.

It reflects in the expenditure line the amount of that level of service, and then the resources, which is essentially the baseline revenue forecast.

And so if you look at the graph on the right, you can see the basically bar graph representation of that.

On the left side, you have expenditures of $1.4 million approximately.

a billion dollars, I'm sorry, and then on the right side in the bar graph, you have the resources of 1.24 billion dollars.

And then on the bottom, sort of the bottom line, the takeaway from this slide is that after that current service level estimate of the budget, there's a $191 million shortfall.

So the expenses that would be needed to cover that baseline are $191 million more than the amount of money available to pay for them.

Next slide, please.

So we'll start then.

So given that there is a shortfall identified in the base level of service, we layer in the mayor's proposed net general fund reductions.

And you'll see in the upper left-hand side that the revenues largely stay the same.

Expenditures become a bit lower because there are about $27 million of net reductions.

And I say net because there are some places where in the budget where there is a reduction in one department and an increase in another department.

A good example of that is parking enforcement that is moving from, I believe the police department budget to the transportation department budget.

Also, similarly, there is a reduction of the 911 call center from the police department budget into a newly created emergency communications center.

So those are cut in one place, add in another, it nets out to essentially zero.

And these topics will be covered in greater detail in the department presentations later on in the issue deliberation schedule.

But I just wanted to provide Just a broad level description of what I mean by net so plus and minus the ads and reductions, the mayor's budget had a $27.8 million operating reduction so it's you can generally somewhat see it in the graph on the right.

that the expenditures slightly decreased.

Still, looking at the yellow shaded bar at the bottom, the general fund shortfall now is reduced to $163 million.

But it is still expenditures $163 million more than the revenues to back them.

Next slide, please.

Council adopted in the summer, in July, the payroll expense tax, which is a tax on large business payroll expenses, as you are familiar with.

The estimated revenue from that tax, which the mayor has built into the budget, is $214 million.

And that that tax source has a number of specific uses that were detailed in in both an ordinance crafting a spending plan for 2021 as well as a resolution that indicated what those resources would be used for in the in the years thereafter.

In this case, it's a general fund revenue source, and some of its uses could cover COVID relief, tax implementation, and continuity of service, which are all general fund expenses.

So we add that.

$214 million to the $163 million shortfall.

And as you can see in the upper left-hand corner, the actual, now that the calculation has changed and it has inverted, in fact, there are $51 million more resources at this stage than there are expenditures.

And on the bar graph on the right, the resources are higher than expenditures.

So that's where we are at that stage in the analysis, though there are a few more steps to go.

Next slide, please.

So this just folds in those costs that were attached and dedicated in the jumpstart spend plan.

There was a percentage that was allowed for payroll tax implementation.

So this shows the $3.3 million in finance and administrative services to implement the tax.

And then it also shows enhanced amounts that are in the budget for COVID relief across a number of different departments, totaling $21.7 million.

So we add those additional costs to the expenditure row, and the balance now becomes $27.3 million, and the bar chart on the right slowly becomes closer, but it's still a net positive number.

Next slide, please.

This is where we add in the significant new addition of resources in the mayor's budget.

This is the equitable communities initiative.

So this is a hundred million dollars that would be put in reserves with a task force formed to to guide the distribution of those resources.

So it's essentially $100 million of additional cost that's added to the calculation.

And then now that brings the general fund balance to a negative $72.75 million, essentially.

And so now we're looking at a revenue shortfall in the general fund.

Next slide, please.

And so the mayor's proposed budget includes $72.7 million from the city's fiscal reserves.

And when you add those resources in, you now have a balanced budget, which this is essentially the revenues matching expenditures in the budget.

And if we look at the next slide, then you can see what the final tally is for the city's fiscal reserves after that use.

So we started the pre-COVID, the budget had $127 million.

It amongst between both reserves, the budget of revisions ordinance this summer used $29 million.

from the revenue stabilization fund.

There is a compromise legislation that is proposed that will use another, what we use $19 million this year from the emergency fund, though I'm not sure that that has been drafted yet, but the 2021 beginning balance includes both of those items.

So we start in the proposed mayor's budget with $78.9 million.

The proposed budget, as we saw in the prior slide, uses $72.7 million of these remaining reserves, leaving our balances in 2021 at $6.2 million.

So next slide, please.

So the key takeaways.

So the first, looking back at the 2021 budget, of the 2020 budget as discussed because of the non-issuance of the Interfund loan that was part of the financing plan for the budget revisions.

The route of balance in the 2021 budget by $13.1 million.

Next, an important takeaway, and I frankly did not highlight this earlier, but it's part of the third quarter balancing package.

is that the mayor's 2020 balancing proposal.

So what's in the third quarter supplemental assumes cutting $30 million from the strategic investment fund.

So this was an amount that was funded from Mercer Mega Block proceeds.

So the sale of the Mercer Mega Block property last year was put in this amount, $30 million was put in the finance general to form a interdepartmental team and with the community to determine how to make strategic investments in areas with high risk of displacement and low access to opportunity.

And so the mayor's budget cuts this amount in order to balance the financial program as part of the third course of the model.

Further, as we've seen, the proposed budget relies heavily on the full amount of the payroll expense tax.

It relies on $27 million in spending reductions, and it brings the city's fiscal reserves from a starting balance of $78.9 million to $6.1 million.

And this is a critical item because in implementing and including the payroll expense tax, the executive has noted that we are dealing with a new tax source that we are unfamiliar with, that there's always legal risks with any tax source that we have, and this would be no exception.

And so there's heightened uncertainty.

And in addition, we are still in the COVID pandemic and a lot of uncertainty on the horizon.

bringing that fiscal reserves down to $6.1 million is a key distinction.

Tom, why don't we have you pause here?

Are you at the end of the summary of the slide here?

Yes, Madam Chair.

Before we continue on with the other slides to come that help us get into some issue identification on the issues that Thomas Ray made, I just want to make sure that all of this is fully digested and that we absorb the ways in which the revenue streams are currently being proposed to be used.

If you could back up one slide for us, Tom.

Or sorry, Allie, thank you so much.

Again, I think that this slide is illustrative of the crisis that is not only in front of us right now, but as Tom just concluded, the concern that we all have with how long this potential recession slash depression may impact residents in Seattle, how a downturn in the economy means that more families, more elders, more kiddos need to turn to the city and other forms of government for support.

And without stable revenue coming in the door in light of the fact that the progressive payroll tax has been used in whole and the reduction in the fiscal reserves, it goes down to 6.1%.

million dollars.

I just wanted to pause here for a second and make sure folks get the chance to ask any questions that they have about the slides that they've already seen.

Council Member Strauss, please go ahead.

Thank you, Chair Mosqueda.

Tom, thank you for this presentation.

It's very helpful.

And I do have a question about this slide.

You might not have the information right now.

I would be curious to understand how this rapid reduction in our reserves compares to the rate at which the city spent down these reserves following the 2008 recession.

as well how that rate of spending relates to the projected recovery timeline for this recession as compared to 2008. And if you don't have that information right now, I'd be happy to follow up with you after this meeting.

Thank you for the question, Council Member Strauss.

I do not have the detail.

Anecdotally, the draw wasn't as quick and it was a bit more delayed in that we got hit by the Great Recession and then the response and necessary fiscal measures were a bit more protracted as opposed to how we were heavily hit.

Though I will follow up with you with a more detailed depiction of that trend.

I would like to know how the drawdown with the revenue stabilization account compares here in the proposed usage versus the way in which it was used in the previous recession.

Thank you Tom for looking into that.

Additional questions?

I'm not seeing any additional questions right now.

Colleagues, please feel free to raise any questions at the end as well.

Okay, so just so I'm clear on the summary here, it sounds like the mayor's proposed budget had no identified source for the $100 million commitment besides using funding from the jumpstart payroll tax and drawing down the reserves.

The funding that would have otherwise gone from the payroll tax into things like child care, rental assistance, child care support, libraries, parks, making sure that those core government services and preventing layoffs, those issues have been in our spend plan as your memo notes has been put to the side and the revenues have been lumped together in the general fund.

have been pulled from and drawn down the reserves to make up that $100 million commitment, is that correct?

Thank you, Council Member, Budget Chair Mosqueda.

That's a great question.

It's by virtue of going into the general fund, the money's become somewhat fungible, meaning they can be used for any purpose.

Though we, that is exactly the reason why we show the specific pieces for the implementation and then the COVID response.

And then everything else is essentially a continuity of service, which is a key There's no distinction beyond that point other than we tried to demonstrate what continuity of service would mean from a baseline perspective.

And that was a way of ordering the analysis to show that, to show how after paying for the payroll expense tax implementation and addressing the COVID emergency, there is still, there would be a balance, a positive balance left over.

In the fund after those measures, so that was the kind of way to do that lacking some more specific strings attached in the budget to do that.

Holly, did you have something else to add to that?

I say you come on camera as well.

Thank you, Chair Mosqueda.

I was just making myself available if there were more detailed questions about how the mayor's proposed budget compares to the adopted spending plan for the payroll expense tax.

So I'm happy to go into even further detail if you want.

But it seems like Tom may have answered the question.

And if I could add.

There's not a slide for this, but it's in the memo.

I believe it's on the last page.

And this is with regards to the sustainability concept.

So we are, because of the Council's adopted resolution to only do a one-year budget where we would normally be doing two years, we're only looking at 2021. and then decisions will be made for 2022 next fall.

However, there is a financial plan that has been presented by the city budget office and they do a financial plan with every budget.

It's nothing new, but it's important to understand that financial plan and how the decisions that are in this budget interweave with particularly with regards to the payroll expense tax.

And there's just two pieces that I just wanted to highlight.

Understanding that we're not making decisions about 2022, though we have this guidance in this financial plan that is instructive.

And one is that the mayor's equitable communities initiated about $100 million.

So it is proposed in the current year budget And it is included, there is an amount that is included in future years.

So it's included at $100 million in the general governmental program.

Though it's not precisely entirely clear that that is for the equitable communities initiative.

But there is money from the payroll that's available from the general fund for $100 million commitment on an ongoing basis.

The budget book indicates that that amount is, that that investment is an ongoing investment, though there has also been communication that perhaps it is, that is intended that there will be an alternative revenue stream identified, a progressive revenue source for that investment in the future.

It's, again, we're not making 2022 decisions, and there's a different, you know, what's in the budget books suggests it's an ongoing investment.

just raising that as an issue, just because it's the payroll expense tax has a specific spend plan in the resolution that indicates that it's for a slate of housing investments and agree new deal investments and things of that nature.

So again, that decision doesn't have to be made, but I'm just raising that point.

And then further, because the payroll expense tax is baked into the financial plan in the future, Um, it is, is it assumed to be part of the general fund revenue that is supporting services going forward?

So it's again, it's, it's a key point to understand how this new source and the new resolution, um, relates to, um, to the plan that you're looking at now and how, what future decisions could look like, um, based on that set of assumptions.

So I just want to raise that because it's, it's a, it's a sustainability issue.

Not so much in that the financial plan that CBO has shown.

does demonstrate a positive balance or a balanced budget in the future, but it's just want to want to raise that as their concept.

Okay.

Um, I just have two more follow up questions on that.

And I believe I see council member Morales.

If there's other council members, please let me know council members to want.

Thank you.

Um, so just to summarize on this point, uh, and you, Tom, you mentioned it and it's mentioned in your memo and we've repeated this, um, a number of times throughout this year.

the council put firm parameters and direction around the jumpstart payroll tax so that there would not be a criticism that there wasn't a spend plan, but there would be B priority as outlined by the council in conjunction with community partners who were supporting progressive payroll tax so that dollars could be invested in supporting those who are being affected by COVID right now, making sure that there was prevention from We've seen cuts and layoffs in austerity in 2021, and in 2022 and beyond, investments in housing, making sure that there was equitable development initiative, Green New Deal investments, all of those issues do have a disproportionate positive impact on low-wage workers, on black and brown communities, and I think are critically important for us to remember that Resolution 31957 and Council Bill 119811 had clear direction on how we intended those dollars to be spent.

I think that's an important point that you mentioned I wanted to lift up.

Number two, when we look at this slide here, And as covered in your memo, is it accurate to say that there is not a plan built in as the jumpstart proposal had articulated in our spend plan for the first dollars to go back to the reserves?

Is there not a proposal that accompanies this drawdown to pay back the reserves in the mayor's proposed budget?

Chair Mosqueda, I would say that there is not a discrete repayment in 2021 However, there is a, in the analysis that we put together in these slides, there is a $21.7 million commitment for COVID.

So that is our way, by way of adding that into the analysis, that is essentially using the payroll expense tax surplus that was created through the way we structured the analysis to show that there is some element of COVID relief that is being funded.

So it's not necessarily a specific payback, but there is some element of that.

That being said, there is no additional payback of any of the other monies that were used in this year.

That amount specific to COVID is part of the compromise, quote unquote compromise proposal that the council and the mayor's office reached for 45 million over two years, 19 in 2020 and then 20 some in 2021. So, but specific to how we repay the use of the revenue stabilization fund and the emergency fund, there's not a strategy built in to put those dollars back in in this proposal.

Is that accurate?

The budget, Chair Mosqueda, I would say in the financial plan that I referenced, that's in the budget book, there are amounts going back to the reserve, the emergency fund, and the rainy day fund in future years.

And by way of the payroll tax being part of that analysis, that then essentially does institute some level of payback.

I don't have the specific amount at my fingertips.

And again, this is based on a whole slate of assumptions in the financial plan.

But that being said, I would give some credence to the fact that there is, in that plan, some element of paying back these reserves.

Not next year, though in future years.

Thank you very much, Dan.

Go ahead, Dan.

Thanks, Tom.

Sorry about that.

My recollection, and Tom, please correct me if I'm off base here, is that the financial plan assumes that the city will begin to repay the Revenue Stabilization Fund and the Emergency Fund beginning in 2022. And by the end of 2024, those two funds will be nearly back up to the 2021 beginning balance amount at something like $74 million.

By the end of 2024 exactly what resources are used, whether that is the jumpstart Seattle payroll tax or some other general fund.

you know, particular flavor is not specified, nor would we expect it to be specified in that kind of a, you know, a future year financial plan.

But the expectation is that there's enough money to sustain the proposed budget with the caveats that Tom has offered, as well as make repayment, you know, installment payments, if you will, to begin to bring the the two reserves back up to in the mid $70 million range by the end of 24.

Thank you.

And I see Allie as well on muted.

Would you like to add in?

Thank you, Chair Biscayne.

I think so, Director Eater and Tom are speaking to the mayor's proposed budget and the what is in the financial plans.

For replenishing the reserves.

I just want to clarify because I think what you were asking was what was in the Spending plan for the payroll expense tax specifically regarding replenishment of of the emergency fund in 2021 it gets a little bit complicated because the the jumpstart spending plan assumed that the council uh that the the spending plan for covid relief in 2020 that was adopted through council bill 119812 i believe um was using 86 million dollars from the emergency fund in 2020 that would then be paid back in 2021 so the original plan was $86 million out the door in 2020, the first $86 million in 2021 to replenish the Emergency and Revenue Stabilization Fund.

And then after paying back that use, it would then be used in 2021, 75% of the remaining for continuity of services, 20% for continued COVID relief, and 5% to implement and administer the payroll tax and begin to implement or set up the programs necessary to implement the spending plan investments proposed in 2022 and beyond.

Ultimately, through another revised ordinance that was adopted in September, Council Bill 119860, the amount of funding from the emergency fund was reduced to $57 million.

And following that, there was a compromise between the mayor and the council that reduced the overall use of the emergency fund for COVID relief to $45 million and spread that out over 2020 and 2021. So I think to the, And there is legislation that was transmitted with the budget to repeal Council Bill 119860 and replace it with a bill that reflects the proposed use from the emergency fund in 2020. And the proposed use for 2021 is in the proposed budget.

So to be most accurate, I think, or in line with the adopted spending plan for the payroll tax, what we would have expected to see in the proposed budget would have been replenishing, you know, leaving $40 million in emergency in the emergency fund that would have been paying back the $20 million used in 2020 and not drawing the $20 million needed for the compromise in 2021, because it could have been paid just directly out of the payroll tax revenues.

And then about $130 million for continuity of services, about $35 million for continued COVID relief, and about $8.5 million for administration.

Now, I will note, during these conversations, Director Noble from the Budget Office said more than once that he was expecting to need to make use of the reserves in 2020, so even if they were replenished, they would be used again.

But I think the analysis that Tom just reflected is that at least some money could have gone back into the emergency funds had there been different spending choices made.

And it's not a, you know, there are a lot of competing policy choices here right now.

So it is just to note that the expectation was that in 2021, you saw replenishment of the funds, at least those funds that were used in 2020 for COVID relief.

Thank you all very much.

I'm going to turn it over to Council Member Morales.

Please go ahead.

Thank you.

Thanks, Tom, for this, the memo and this presentation.

Really helpful to Help us walk through what's going on here.

I'm sorry, I don't remember which slide.

We don't really have to go there, but I have questions about the strategic investment fund.

I wasn't here when that happened, but I recall following that conversation, particularly because, as I recall, the funds were intended to be used for the equitable development initiative Permanent affordable housing, the kinds of community investments that we've been talking about since I have been here.

And so I am just wanting to kind of unpack that a little bit and make sure that I'm understanding what that fund was intended to be used for.

And I believe I just heard you say that the process established for that was to create an interdepartmental team to help make decisions about how those resources would be allocated.

Is that right?

Yes, Council Member Rallis, that's correct.

And Ali may have additional information to add though.

The team was formed and there was perhaps a couple of meetings earlier in this fiscal year and then COVID hit.

And I believe the process was stalled at that point given the COVID crisis.

So that's the status.

With regards to, I think your description of the investments and the intent is accurate.

But that's essentially the status of that money right now, what it was for, and how the team was compromised, and how they had started but have not finished with that work.

OK.

So there was a process started, a department IDT forms.

It was funded to make these investments.

And that's now removed from this budget proposal.

Council Member Murrell, oh, sorry, if I could just add in, I think, yeah, there was, I believe there were some internal meetings formed.

I also understand that there were a few meetings with stakeholders to begin the process of developing the criteria.

So I don't know if the official term is a IDT or a stakeholder advisory group or what the, you know, I don't know how formal it was, but I believe that there was some work with stakeholders to start thinking about the criteria for use of those funds and how decisions might be made.

But as Tom mentioned, as far as we know, it sort of stalled out likely due to everything else this year.

COVID and other emergencies, and then the third quarter supplemental would take the $30 million allocated for that fund and use it for balancing 2020. OK.

Thank you.

Just an editorial note on that, though.

But not everything has stalled out, right?

have figured out ways through Councilmember Strauss' leadership to make sure that planning meetings can continue to go forward and people can participate in those discussions.

We've been able to solicit public input at, I would suggest, record numbers here.

And so I think it is important to note that there's other ways in which public input and community feedback could be received.

And it is an important question, Council Member Morales, thank you for raising it.

It was on my list of questions too.

On the bottom of slide five in the memo from Mr. Mike Stoll, it says an explanation of the strategic investment funds financed by the sale of the Mercer Mega Block was intended for community-driven strategic investments in areas at high risk of displacement and or economically disadvantaged and historically marginalized communities.

And that is, I think, an important question for us to figure out what would the impact of a $30 million cut in this area mean for the otherwise promised areas for the community-driven strategic investments that people had really, I think, to support elements of the Mercer sale because that was a component of the final product.

And Council Member Morales, any final, any final comments on that?

Well, I think it bears repeating the irony here of cutting funds for a program committed, dedicated already to equitable investment.

The purpose of this was for transformative equitable development in our city, specifically highlighting areas, as you said, Chair, at highest risk of displacement.

I just think it's ironic that that program is now cut so that we can fund a new program with a new process to make new kinds of investments around equitable development.

And I will say more later, I'm just struggling to understand the logic here.

Thank you, Council Member Morales.

Council Member Sawant, please take it away.

Thank you.

Yeah, I was first just to reiterate the point that has been made by council members Mosqueda and Morales that it's just, we should not accept that this was in some way, you know, that COVID is to blame for the $30 million cut.

I certainly don't accept that.

And while the The that bucket of money was called strategic investment fund, I think.

It was sort of intentionally designed to mean absolutely nothing, and then it's easy to then hide the cuts in the third quarter supplemental budget, which is what the mayor has done.

That is very different from the language, by the way, that the mayor had used during last year's budget when she trumpeted that she was creating this fund, that she would work with community groups to invest these $30 million to address displacement in black and brown communities.

And in fact, I think, To put a fine point on it, she talked about these $30 million last year, exactly in the same way she is now talking about $100 million this year, but not one penny of those $30 million have been seen by the community.

And I, of course, agree with the points that have been made about, well, not everything has doll so why is this doll.

But even on top of that, so much is unfunded or underfunded in the marginalized communities that really.

Is it impossible for the mayor's office to figure out what needs to be funded?

Because so much needs to be funded, we're spoiled for choice.

So I could think of 15 different ways in which to use the $30 million, and it would benefit the community.

And so to say that we, for the mayor's office to say that we cannot do this because we can't have this process anymore, it's just not fair.

It's not just a it's just not a plausible excuse it when there's a no there's no mystery about what needs to be funded a lot needs to be funded $30 million only go so far, but it will concretely make a difference for whatever that's used for.

I just wanted to say my worry is that the same approach is being used for this grand promise of $100 million.

And one could say that the $100 million that is being proposed by the mayor is being partially paid for by ignoring the promise of the $30 million that was made last year.

Because these are just numbers.

in the air.

What the question is, what's actually real?

I mean, what's to stop her from next year promising $150 million and not funding $100 million from this year and saying, Oh, I'm going to be funding $150 million this year.

And so every day, every year have the promises getting ever bigger.

without actually making a real investment.

I also wanted to note that it's quite problematic that the mayor has hidden this, attempted to hide this cut in the third quarter supplemental budget, which is so rarely scrutinized.

And it's very difficult for ordinary people to get involved into the details of the city budget, rather than just being honest about it in our 2021 budget.

And I really appreciate the comments that have been made by council members about all of this and I hope that the council will support the form a from my office to eliminate this cut because it is very important to our communities.

And just lastly I wanted to say I just find it.

Quite, again, you know, I can't take it at face value that the mayor, and this is just paraphrasing what Tom was reporting, that the mayor says that there will be progressive revenue stream to make this a permanent fund, $100 million.

What is this progressive revenue stream?

This is all, again, numbers in the air.

This is the mayor that opposed the Amazon tax, has opposed every progressive revenue source.

So I wouldn't put any, you know, I wouldn't go to the bank with it.

Thank you councilmember Sawant.

Any comments on that?

Okay, I'm not seeing any.

Councilmember, I'm sorry, Dan, please go ahead.

Just wanted to point out that the 2020, as Tom had described, the position of the general fund at the end of 2020 Um, materially affects the, um, the starting place for the 2021 budget.

So, um, council could certainly, uh, take up the question about whether or not to eliminate the $30 million, um, uh, reserve for the, um, uh, the strategic investments that, uh, were anticipated in 2020. That would, if you were to wipe out that cut, which is to say restore the spending, you would have to reduce the amount of spending in 2021, because there would be then $30 million less money available to spend.

You could do that.

I mean, as just an illustration of what would be available to you as options, one of the things you could do is you could take the $100 million and reduce that down to $70 million.

And I think, in fact, that does fairly reflect what we're talking about with the mayor's proposal.

She had $30 million for a similar purpose that she's now saying is no longer proposed for 2020. She's proposing $100 million in 2021, again, for a similar purpose, but a larger amount of money.

One might think about that as $70 million of new spending for that similar purpose.

Thank you very much.

I want to thank all of you, especially for these questions as it relates to the quarter three and the finance general chapter for the 2020 budget.

As was just mentioned, it's very rare that we get the chance to dive into these level of details, knowing that you are providing us with that in-depth analysis so that we know where the starting point is for the 2021 budget is really important.

And again, I know that the conversation we just had just summarizes the pieces in the strategic investment funds.

to address displacement in the 2020 quarter three supplemental budget discussion that we will have very soon.

So these are not our assumptions.

These are baked into what they had put forward from the proposed budget that got sent down.

And we are reading the rationale for why the dollars were taken based on the language that came from the mayor's office and the CBO.

So I think all the points were very well said by our central staff.

And I wanna thank all of you for highlighting those pieces and helping us understand what the rationale was according to the mayor's office.

One more question, Tom, if I might.

On one of your first slides, and then we'll get into the issue ID, we have the $13 million hole question.

And I believe that was on slide three.

Can you help us to understand a little bit more about the $13 million hole here?

You describe it in your memo as well and how this relates to the proposed use of the Interfund loan that Council had passed earlier this summer?

Sure, Chair Mosqueda.

I'd be happy to.

And actually, the prior slide may be more informative to get to this number.

So this is the high-level recap of where the council has been with regards to adjusting to the COVID crisis.

And then there is the proposed final measures.

So Q3, as we have just discussed, and then some additional measures.

Bottom line, all of these adjustments, the balance is shown as $4.9 million.

And the reason for that number, so that's positive, However, the budget for 2021 relies on $18 million as the starting point.

So it's a familiar term, it's a pre-existing condition that's generated by not doing the Interfund loan in 2020. So doing the community safety investments that were in Council Bill 119825, I believe they were in human services.

Doing those investments, though, as shown in the letter from the deputy mayor sent on September 30th, not doing the Interfund loan, doing the investments, but the September 30th letter said, not going to do the Interfund loan.

So therefore, no revenue to support those investments.

And that essentially is what is the issue that will also be covered in issue identification, because it's a critical thing.

If no action is taken, there is a $13 million shortfall.

So that is our essential starting point.

All other issues aside, because of that not issuing that interim loan, we have a $13 million shortfall in the proposed budget.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

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Thank you.

Thank you.

on what was going to be proposed that we are now discussing had introduced some necessity for the city budget office and ultimately the mayor to make some assumptions about what was going to be overridden or not overridden in the council bill 119825. And I think they may have assumed for They had to go one way or the other.

And I think they assumed that the spending included in Council Bill 119825, part of the summer rebalancing or revisions suite of legislation was not going to be overwritten, was going to be sustained.

And so that's part of the mix of why the proposed budget doesn't perfectly marry up with what we now see as the reality of what's happening in 2020 and how it affects 2021.

Thank you.

Thank you both very much for that summary on the $13 million question.

I'm not seeing any more questions on this first half.

Tom, thank you for letting us take a pause there.

If you'd like to continue with the rest of your slides, that'd be great.

So I believe the next slide.

So we've essentially identified six issues through the memo and the presentation.

They have different implications and of course different ways to address them that will be part of council's work for the next month.

So if we go to the next slide.

So this is on the range of issues, a fairly minor issue though, due diligence want to raise this as a topic for council to be aware of at a minimum.

And this is the, As discussed in the memo, the rebalance of the current fiscal year that we are in relies on $11 million of administrative underspend to balance.

And so this is just essentially the executive department saying they're going to spend less than what is approved in all the ordinances.

And there has been a significant amount of work that has been done and been proposed through legislation to bring the budget in balance with the significant COVID challenge.

And then essentially this is the last piece.

And we raise it because it's a unique exercise that we're in in the legislative branch of adjusting our spending plan through appropriations to a new reality.

And a significant amount of work has been done.

But that being said, normally if we were looking at the proposed budget for next year as we are doing, there would always be some element of an underspend assumption in what the department submit.

So this is not out of the ordinary, that there would be some small piece.

This is approximately 1% of the total, the total smaller adjusted $1.2 million amount of revenue that we have.

But this is just essentially that small balancing piece.

It's just by way of central staff communicating that to counsel, though staff is comfortable with the assumptions and information has been provided by the budget office to demonstrate how how the budget will be balanced.

the state law only requires that council adopt a budget balance.

There is no requirement that through successive adjustments through the remainder of the fiscal year that that requirement be met.

That is a standard that must be met by the pure essential of the executive branch will not be able to spend more cash than is available in the fund.

Just bringing forward the issue for full disclosure, not highlighting it as a major concern that needs to be addressed, though it is always at council's option to take any one of these courses of action that are detailed for you.

So if we could just go to the next slide, there are event media issues.

So this is the topic that has received some discussion.

This is the proposal in the third quarter supplemental to use 30 million to basically reduce the strategic investment fund appropriation to zero from $30 million in order to balance the budget.

And so the options are, well, the option is to do some other alternative to that assumption.

However, as I believe Dan mentioned, this then not doing this adjustment would require $30 million to be identified in the 2020 budget.

So the year that we are in right now to balance.

And we are in October.

So the abilities to adjust to that realities would be fairly limited.

It would most likely require some element of using reserves, which as we have discussed, reserves also play a role in 2021. in order to ameliorate the cut in 2020, there would likely be, well, not likely, there would need to be some adjustment to the 2021 spending proposal in order to balance it out.

Of course, another alternative is to take no action.

The next issue to identify is, so this is the ending balance, which we also just touched on, so I think it's fairly clear.

what that, or hopefully, and if not, please ask further questions that, based on the information that I relayed and Dan's helpful additional information about why that was a challenge in order to build into the budget, we indeed are faced with the $11 million and the 2020 ending balance being $13 million lower than what was expected to go into 2021. So again, could identify other cuts in this year, or could identify cuts or new revenues in 2021 to address that.

Or, well, no action is potentially not an action because we are faced with a $13 million shortfall.

Next slide, please.

The, so this one kind of references back to the structure of showing how the, we started with the baseline budget, and then there were cuts that were added, that were proposed by the mayor.

So a net reduction of $27 million, and then addressing the COVID implementation costs and COVID, or the payroll tax implementation and the COVID emergency costs.

And then that identified that we, there was still a positive amount prior to the equity bill communities initiative of of $27 million so the, the payroll expense tax was did have.

a dedication towards continuity of service.

So there could be alternatives identified to address these $27 million reductions, either through identifying new revenues or reducing some other element of the budget.

Or no action is also, of course.

And then a key point of consideration that we've talked about in great depth is the reserve balance and how the proposal takes us from a starting balance of 78.9 million for 2021 to an ending balance of $6 million, and fully understanding that that leaves little in the savings account to address emergencies beyond that period.

So the options would be to reduce the use of reserves, by way of identifying a new revenue source or other cuts in order to get closer to or retain the full amount of the proposed starting balance in those reserves of 78.9 million.

And then I believe the next slide is, and this is essentially a corollary of the $13 million.

So it's the $13 million can be addressed in either 2020 or it can be addressed in 2021. It's a key piece of the financing plan, but there are options about which year that is resolved.

And I believe that those are the key issues from the high-level financing analysis.

I don't know.

And then we will move on to the next slide.

Maybe Ali was going to cover this part.

But this is the high level and then we will dive into issue ID for the departments tomorrow.

And then through the 21st.

≫ Thank you so much for the walkthrough of this presentation.

And for the way in which you have made these slides

Thank you, Chairman Skoda, and thank you, Tom.

Again, excellent presentation.

On the most previous slide, slide 19, you provided us with three different options regarding the $13 million shortfall.

If we were to reauthorize the $13 million loan, is there any guarantee that the loan would be executed by the mayor?

Council Member Strauss, no.

And this, it could be, I mean, it's essentially its own discrete new option that we would have to identify.

So we would have to go through, I believe the loan that was proposed in 2020 was from the Construction Inspections Fund.

So we would have to go through the exercise of finding where there would be cash in the city's coffers that could support this type of loan.

And then it would be the interaction with the executive as to whether or not that's reasonable and whether or not they would support that.

So it's unclear, it's unknowable, but it's an option that could be pursued.

though understanding that eventually there would need to be a repayment identified.

And I just wanted to add, if I could, if I may, to Chair Muscat, your comment about the digestibility of the slide.

So I must give a big shout out to Lisa Kay, who helped us greatly with terms of making the slides formatted in the way they are, I agree.

They came across as helpful and fairly descriptive in terms of the information.

So thanks to Lisa for that.

Thank you very much.

Thank you, Lisa, as well, for all of your work on this.

Allie, I saw you as well come off mute.

Oh, I wasn't.

It was by accident.

Thank you.

Well, thank you, Lisa.

This is very helpful and a preemptive thank you to the folks in the communications shop.

I know Joseph P has been working very hard as well with the images and the data that you all have provided to provide a quick summary slide that will be posted on our council social media accounts so that people can see these charts in real time as the math is done and the calculations change.

right before your eyes.

So I want to say thank you as well to the communications team for their work to take the good work that you all have done on these slides and translate that into a shareable image that we can get out to the public.

Other comments?

Council Member Morales, please go ahead.

Yes.

Tom, I'm looking at the last page of your memo about sustainability, and I wonder if we could just go there for a couple of minutes.

So you reference the five-year financial plan in the proposed budget.

And then towards the end, you talk about some embedded assumptions that are included in there.

And I'm just wondering if you can talk a little bit about what you think some of those assumptions might be, because what you're indicating here is that new revenue is added to the general fund.

But projections of future balancing don't include investments in the things that we had passed in the resolution for Jump Start in particular.

So I'm just wondering if you can talk a little bit about, from your perspective, what the five-year plan says about sustainability of the proposed budget.

Yes, of course.

Thank you for the question, Councilmember Morales.

So the intent of describing this piece in sustainability is to share three critical concepts.

One is that the budget that is being discussed right now for 2021 includes the full measure of the payroll expense tax.

And it starts at $214 million in 2021, and it grows to, I believe I have the number in the memo, $265 million by 2024 based on the assumptions that CBO used for this plan.

So that's basically saying that's baked into the plan, that new source of revenue.

It's also further suggesting that the 2021 proposed budget has the $100 million for the equitable communities initiative in the plan, in the budget proposal for 2021. That amount is included in future years as part of this forecast that they have given.

The decisions about 2020 to spending and beyond, are not really are the discussion that's taking place in council right now, though.

It's just to signify that it's included at $100 million in 2021. And then there's $100 million that grows.

Actually, I believe it stays at $100 million every year thereafter.

The budget book says that equitable communities is an ongoing investment, though there has been subsequent communication that progressive revenue sources will be identified in the future.

However, those new sources are not part of this plan.

So the assumption is that $100 million investment will be paid from general fund revenues of which the new payroll expense tax is one of those pieces.

And then the third key takeaway is that, um, the way that the financial plan is built is it takes the 2021 budget and then just grows it by inflation or different assumptions about how health insurance is going to grow, things like that.

So just a set of standard assumptions.

And so that's assumed also drawing from general revenues of which the payroll expense tax is one piece.

The key piece that I'm trying to highlight is that The payroll expense tax, as council member, as budget chair Mosqueda mentioned, has a spending resolution that indicates that in 2022 and beyond, there are significantly different investments that are in the proposed 2021 budget.

And that's the point of distinction.

We're not, the council is not adopting a 2022 budget right now.

though it's just making it's making clear how the revenue is being assumed to be programmed in the future and how that may vary or does vary from the resolution spending plan.

So that's I hope that it helps explain the kind of that context of of what I was trying to indicate there.

Yeah thank you.

I appreciate that and I am getting from that is one, as somebody who advocated strongly for the $20 million in EDI funding and the Green New Deal funding and Jumpstart, I think that's important to remember.

And that there isn't really any revenue source identified after the first four years of the Equitable Communities Initiative.

And so we just need to shine some light on that.

Thank you.

Other questions, colleagues on the presentation, the memo that we have in front of us right now.

OK, I am not seeing any additional questions at this moment.

Did we want to spend any time going through the second memo regarding quarter three?

I'm happy to have that as background if that was the purpose for right now.

Chair Prescata, that was provided really for background because most of the notable changes in the third quarter supplemental were also, were either just covered by Tom, the $30 million piece specifically, and then other notable changes will be highlighted in the issue identification discussions coming up in committee over the next week or so, is on the line if anyone has a question about those materials, but that was provided for your reference.

Well, Lisa, thanks for popping in.

Just want to say thanks again for the work that you and Tom have done on the visuals.

Tom, thank you for walking through this presentation and your memo.

And Lisa, thanks as well to you for your memo on quarter three.

Again, I'm not seeing any additional questions.

This will not be the last time, colleagues, as this, again, is the first opportunity for us to really digest, pull some of the layers back on the proposed budget in front of us.

This will be the foundation for which we then are able to ask additional questions, think about additional priorities, ask questions about possible investments, revenue streams, and the stability of what needs to be the balanced budget that we send back.

If you have questions now, that's great.

And I'm seeing none still, wonderful.

We will go ahead and move on to item number three on our agenda.

And with that, we'll say thanks as well, one more time to the central staff team.

Madam clerk, could you please read into the record item number three.

Agenda item three, discussion on select budget committee presentation for briefing and discussion.

Thank you very much, Madam Clerk.

Colleagues, I will note that this is an unusual year, as we've talked about.

This is a opportunity for us to, while be remote, be explicit and be transparent in our deliberations for the public, members of the press, and our city employees, and in our partnership with the executive as we try to come up with a balanced budget.

We here endeavor to have these conversations in a public manner so that public can see where we're at and everything from these four main discussions to our desires to understand more about the revenue streams and the impact on the reserves.

This is a really an important discussion that we've had today and in doing things that are a little outside of the norm what I've built into the budget for the next little bit here is an opportunity for us to have just a dialogue We don't get to see each other in person.

Normally during our council meetings, we don't have like floor debates as you would with other legislative bodies.

But what I'd like to use is this as a chance to open up the floor, this virtual floor, to just get any initial feedback, any thoughts and questions that you all have.

I had some initial thoughts that I was going to be looking at related to fiscal responsibility in the budget and the impacts both on short-term and long-term.

lots of questions as you can imagine about the use the proposed use of the revenue from the jumpstart payroll tax and then ultimately where this all leads is whether or not there's cuts or potential investments priorities and how this affects where we all had put our thumb on the scale in the 2020 the balance package and what implications this proposed budget has for those priorities in the 2021 budget.

So I'm really just encouraging us to sort of share any feedback, thoughts that we had from that presentation that we just received from central staff.

And I'm happy to just sort of have a roundtable discussion as we close out this first day in our four-day analysis of the proposed budget that comes in front of us because your thoughts, your questions, your feedback, your leanings will help us have a more robust discussion over the next few days and the next few weeks.

So with that, I am happy to open up with some initial thoughts, and I know Council Member Morales, you indicated you'd like to have some comments as well.

Any other council members, you feel free to just let me know.

And Council Member Peterson, I see you as well, so I'll get you in the queue here.

You know, one of the first things that came to mind as we're looking through the proposed budget in front of us is remembering that usually we have a two-year budget process.

And this year we all agreed, given the uncertain financial situation, to just do one year.

But as Tom mentioned, both in his presentation today and also in the memo, it is going to be imperative for us to think, and not just as a two-year budget process, but in the years out, on how the proposed use of revenue and reserves would impact any future downturns in the economy.

I would hate for us to be mid-2021 and have the next iteration of COVID compounded with what is supposed to be an extreme flu impact future ability for us to maintain stable services for those in the community, especially our most vulnerable.

So I'm gonna be looking to working with all of you to make sure that we are prepared for economic downturn, potential worsening into next year, making sure that we have a sufficient cushion, so to say, so that we can prevent us from being in a scrambling mode next year, but also making sure that we are putting significant investments into preventing the type of layoffs and reductions that we knew we wanted to lessen, given the revenue that we have from Jumpstart payroll tax.

I know that this is going to be a tough conversation, but I really think it's important for us to explore that right balance of making sure that there is a cushion so that we're not creating further harm to both core government services and the very vulnerable and BIPOC communities that we aim to serve.

It is going to be a disservice if we don't have the revenue that we need in next year or the future year to rely on in case something else happens.

Obviously related to jumpstart, I'm worried about the budgetary layoffs and the resulting city service gaps that the council intended to curb when we pass jumpstart.

So, in addition to what I just mentioned, some of the things that I'm interested in looking at.

is making sure that the most vulnerable residents in the city of Seattle get the funding that they need as we really intended for some of those most vulnerable residents, including immigrants and refugees, our smallest businesses, those who are living in unstable housing situations, and making sure that we're investing there.

So I'm looking forward to hearing from all of you about what your thoughts are about the use of that funds, any concerns or issues that this raised from you about the impacts of contracts either funded or left unfunded in 2021 as we had originally intended to invest in in the payroll tax proposal.

And with that, I'll just say, you know, one of the biggest issues that I know we're concerned with as we look at this budget through the lens of how do we create healthy, safe, and housed opportunities for community members in the city of Seattle?

We know that there needs to be a tremendous amount of investments into making sure that there are shelters, that there's beds, that there's rooms to move people into.

As I mentioned when I went on the HealthONE ride-along, They had created this great trusting relationship with the gentleman who needed assistance, but could not get a shelter on the phone, and they had you know they had welcomed him in with open arms created a reciprocal relationship where he did trust he was willing to go to that shelter and our shelters were just at capacity.

So there was no place to refer him off to.

Thank goodness that the King County team came in and was able to sort of have a warm hand up there and they were going to keep working on it.

But we have got to think about that exit plan for those who are currently in shelters so that those shelters don't remain in capacity.

And that's going to be one of my biggest interests is how are we creating that longer term investment in support of housing, opening shelter opportunities so that we can be responsive in this moment of COVID, but that there's also a place for folks to go.

We saw the rates of homelessness continue to increase, you know, well before the council took up any conversations around the navigation team, the crisis of COVID, the instability in Our local economy and the cost of housing continue to rise as headlines say day after day in the last few weeks.

Seattle's housing market is just skyrocketing.

The cost of housing and owning is extremely expensive.

So all of these issues were here prior to this summer's discussion.

We really have to think about how this budget is calling on us to act to create that light at the end of the tunnel.

So that folks can either get into shelter if they're not currently sheltered or out of shelter and into housing and supportive housing so that they don't circle back.

These are some of the issues that are still of grave concern to me.

And I look forward to working with all of you.

So looking forward to hearing more from you all about what you've been hearing directly from stakeholders in these last few weeks as you've been out in community.

That's been one of the biggest ones that's come up.

in my conversations and where you're hearing from stakeholders and key community residents about whatever their biggest concerns are in the initial discussions that we've had so far and where they're hoping that we all continue to invest.

Those are just some of the initial thoughts I have.

I'll turn it over to Council Member Morales and then Council Member Peterson.

I'm looking forward to hearing from others.

I saw some hands already.

Please go ahead.

Thank you Chair Mosqueda and I again want to thank central staff for for all the work that they're doing helping us understand this and walk through the proposed budget and present things with such clarity.

You know we hear over and over again that government budgets are moral documents and I think This has never rung more true for me than hearing what we've been hearing today.

I think our community deserves a really transparent and honest analysis of where we are as a city, especially during a health and a fiscal crisis.

And so I will admit that I am frustrated.

I'm sure that has come out in my questions already.

I think, you know, the mayor's constituents are my constituents too.

And our constituents and our city really deserves, I think, greater transparency in how we are talking about the decisions and the kind of you know, ways that we are thinking about structuring our budget and structuring the kinds of investments that we want to make.

So for me, as I'm listening to central staff, a couple of things really popped off the page for me.

Some might say that this is an aspirational budget that's been proposed.

It paints a picture of generous community investments funded by new revenue sources, which this council fought really hard for.

But, you know, I also think another perception might be that this budget is a bit of a shell game because it relies on spending jumpstart revenue, which we've already spent and committed to COVID relief for next year.

And because it drains our emergency reserves to a dangerously low level.

And I fear that that is a fairly reckless approach, especially when we have so many compounding crises still at hand in the city.

I don't think anybody could have predicted a hundred year pandemic that we have seen, but we've lost lives and businesses and jobs in this city.

And we still have the COVID crisis.

So to drain our emergency management fund from 66 million to 60,000 without any plan for paying that money back is to really gamble with our neighbors' lives.

And I think that's fiscally irresponsible and I think it's downright dangerous.

The other issue for me is really just the illogic of the budget.

As I was saying earlier, this summer the mayor made a commitment of $100 million a year investment in black communities for 10 years, and recently announced her equitable communities task force to help make decisions about how to spend that money.

but she's proposing to pay for that with funds from our critical reserves that serve as an umbrella for rainy day.

And the logic of this doesn't begin with the 2021 budget, it actually starts with the remainder of the 2020 budget, leaving us in the red because of the third quarter supplemental that solves our deficit by zeroing out the $30 million strategic investment fund, As we, as we've learned you know a fund that was dedicated to things like EDI, like permanent permanently affordable housing, land acquisition in areas at high risk of displacement.

No secret to anybody that this is a really important, a really critical tool, particularly for folks in the South End who have seen the greatest displacement in the city.

And I just want to make clear that we have already created, as we've discussed here, we've already created an interdepartmental team or some entity for how to make decisions about that $30 million fund, already made a plan for investments, already funded the process.

And now that's being cut and a new process is beginning with a new team for making new decisions.

So I'm just confused about that process.

On top of that, rather than holding to the 10-year commitment, The executive is directing this new task force to find a new source of funding in four years.

As our central staff memo indicates, there's the $100 million level anticipated to be ongoing annual investments, but the financial plan includes funding only through 2024. So I'm just really struggling with what the thinking is about how we make these investments, make these commitments, especially when we have a COVID-sized crisis, a COVID-sized hole in our budget.

We need to work to build a budget that's sustainable and a budget that is realistic.

And this council deliberated for months to take measures that avoid austerity.

And I think we're all still committed to that.

We wanna preserve, as Chair Mosqueda was saying, preserve services for our most vulnerable and invest in new ways that will begin to address the history of racist policies and practices in the city.

And we have to be realistic about that, about what we can achieve in a pandemic.

And equally important, what we can and cannot afford to do.

I would like nothing more than to invest $100 million in black communities, but I will strongly urge my colleagues to look at the SPD budget and commit again to the divestment and investment strategy that we already talked about.

And we may not find $100 million to make those commitments, but we can't sacrifice the fiscal stability of our city and we can't provide vital COVID relief if we're gonna follow the path that has been set forth in the proposed budget.

I'm really concerned that the mayor has written a check she can't cash.

And I really think it's important to level with our neighbors and that she admit that this might not be something we can do.

And I am looking forward to working with my colleagues to make sure that we are putting forth a budget that serves, continues to serve the most vulnerable in our community and continues to move forward in a way that is much more sustainable than what we're seeing here.

Thank you so much, Councilmember Morales.

And I look forward to hearing more.

Councilmember Peterson, I love all of the comments that you've brought in this year as you bring in this perspective on sort of, you know, long-term thinking and fiscal sustainability.

So I'm looking forward to hearing more of your thoughts on any pieces, but I know that that's been an issue area that you've been very, very I appreciate your conversation there and any other thoughts that you have.

Thank you, Chair Mosqueda, and I want to echo the thanks to our city council central staff for all the hard work and trying to digest all the ideas and comments that we provide and appreciate, Chair Mosqueda, you're going on that health one ride along and talking about how we can expand the health one program with firefighters and social workers.

So, and the forward thinking that, you know, we do need to think about the year 2022, as well as what's in front of us now for 2021. And one of the, one of the great things about the ju plan in 2022. Is that foc housing?

Um, you know, c for 2020 this year and the next year.

I believe Mayor Dirk and our team have actually put forward a budget that is thoughtful and reasonable and I do hope my colleagues do consider it in a collaborative and constructive manner.

I'm pleased that we already have laws on the books that govern how we rebuild our rainy day reserve funds over time.

There are calculations where we sock away money each year.

I would love to look at strengthening that.

It sounds like there might be some common ground on looking how to strengthen that so we are stocking away more money each year to build up that reserve fund faster.

If now is not the time to deploy the rainy day funds with the global pandemic and back-to-back deficits, I can't really imagine a time when we would do that.

So I think this is an appropriate time to do this.

However, I would like to look at how we build it back up faster in the future.

One critique I do have about the budget that is before us that I'd like to put on the table for discussion over the next week or so is, Whether we really want to increase salaries by $42 million on top of the pay raises received by city government employees this year and last year.

When so many people are out of jobs and our city has such deep needs, I personally don't think it's the right time to increase the pay of city government employees again.

If you look at page 28 on tomorrow's miscellaneous issues memo, it's kind of buried in there on page 28, but you'll see a range of options to save anywhere.

between $15 million and $42 million simply by foregoing those pay increases next year.

I think we should reinvest those millions of dollars of pay raises to provide more shelter and mental health support for people experiencing homelessness so they're no longer living in our parks.

I'd like to reinvest the millions of dollars in those pay raises to further invest in BIPOC communities.

And let's reinvest the millions of dollars of those pay raises to increase the safety of our city's aging bridges, which we found are in sad condition with our audit of bridges throughout the city.

So again, I think we should look at how do we get more money out the door to vulnerable populations and our aging infrastructure instead of putting more money in our own pockets.

So I hope that that's just, you know, it's on the table, the research is done, and I know it can be controversial, but I just want to put that out there to provide space for that type of discussion.

Thank you.

Thank you very much Councilmember Peterson, and also look forward to working with you on any of those policy changes to make sure that we are building back reserves, you know, not specific even to this year and next year, I like the idea of making sure that there's stable revenue policies that we can build upon.

And maybe it's time for us to look at those so that we're prepared for the next iteration.

Because with globalization and the ways in which viruses mutate these days, there could absolutely be another pandemic that's not in 100 years, but maybe in 10 years or so.

So let's think through that together.

I like that idea.

Thank you for sharing that.

Colleagues, are there other thoughts?

Any thoughts that you all have?

Revenue, projections, long-term stability we just talked about.

Also would love to hear your thoughts on some of the high-level overview, any additional ideas around jumpstart or cuts, priorities, anything that stood out to you.

Council Member Strauss, anything from you?

Thank you, Chair Mosqueda.

I would just like to take a moment to say that this presentation today was very enlightening for me.

What I have seen is that we have been criticized as a legislative body as a whole for engaging in many of the same actions that we see proposed here in this budget.

It's not a criticism of any other elected officials or staff or the central budget office, rather pointing out that policy must not politics must drive our decision making.

We as council wanted to replace the rainy day funds almost immediately, and those funds being replenished are now delayed.

We received a budget that is not balanced.

And as RCW 35.32A.030 requires us to adopt a balanced budget, it is now our job to make these changes and fixes.

I find that the majority of the 2021 balance the proposal to be very beneficial to Seattleites and there's a lot of really great investments that have not been made in previous years by previous executives or councils and I just want to take a moment to to state that what I don't appreciate is political posturing and divisive statements.

So I want to take this moment to really circle back and call to action that we need to have policy and not politics drive our decision making so that we're able to create budgets that benefit all Seattleites.

Thank you, Tom and Ali, for all of the presentations today.

Thank you, Chair.

Thank you very much Councilmember Strauss for your comments as well.

Well said, appreciate that and I agree.

I know there are a few other folks who had indicated, I thought by way of hand that you wanted to speak.

I don't see you on video right now.

So if there's no other folks who want to say anything at this juncture, I will just reiterate the thanks.

Every council member that has spoken has said thank you to our essential staff for this really helpful overview and presentation and want to reiterate how important it is that we have this level of detail in terms of both our understanding and the public's understanding on how the proposed budget was compiled so that we now have a foundation for which to build upon, ask the questions, identify issues as we are slated to do over the next three meetings.

And this type of work is really important for us to be able to break down what is in the budget set as it has been transmitted and to also break down what the process is and why we are going to be deliberating certain pieces as we move forward.

Again, the information that we've received for the quarter three supplemental is going to be very important for us as we take on looking at Q3 so that we have a better understanding of what will the foundation be for us to build upon as we think about potential changes, for example, to address that $13 million.

I appreciate Tom and Lisa calling that out.

somewhat of a surprise I know to me and I'm sure it was to many of you and many in the community.

So having a better sense of where these pieces came from is very helpful.

And Dan, I think began to articulate some of the ways in which we could see how that 30 million fits in with some of the commitments that have already been made by the executive's office.

So we will have a chance to have more conversations about that moving forward.

If there's no additional comments, and I am seeing none, last two comments from me just in terms of sort of signaling what else this presentation means is we just have a lot of work in front of us to make sure that small businesses and workers have the supports that they need.

so that as people deal with the complications of COVID and the flu, people have the protections they need.

So I'm really concerned about the economic stability of our local region and making sure that we're investing in what small businesses and those workers who are essential workers need, and wanting to make sure that we have small business and worker supports as well built into this budget.

Council Member Swan, did you have anything else before we wrap up today?

Just very quickly on the question of COVID, I just hope everybody has seen the articles.

I'm just right now myself looking at a New York Times article update on COVID-19, and it reports that U.S. cases are trending upwards in 41 states over the last two weeks.

and is reaching uncharted territory and that the United States has surpassed 8 million known cases.

So we know that a COVID pandemic is going to continue to take a massive toll on especially poor and working class people's families.

Families are losing their loved ones and At this moment, I barely have anybody in my whole circle who hasn't lost somebody themselves personally or doesn't know somebody who has lost someone personally.

So this is a massive crisis.

And the least that we could do as the highest legislative body of the city is to pass a no-cuts, zero-austerity budget, which would require raising even more progressive revenues than already what we have fought for and won from our movement, the Amazon tax, we would need to increase those revenues.

We also need to defund the police by at least 50%, which would generate more than enough funds to fully fund the $100 million promise that the mayor has made, because that would mean freeing up $170 million.

So just on the point that Council Member Morales made, that it is possible to fund $100 million from the police by at least 50%.

And as far as the salary increases are concerned, absolutely.

I think that executive salaries should not, I don't believe that executive salaries are going to be increasing from the proposed budget, but I think we have to make a distinction between that and city of Seattle workers, which are not executives and that my office certainly does not support taking away the cost of living increases from the city of Seattle workers salaries.

And instead, as the people's budget movement has brought forward every year, cut council member and mayor salaries to the average wage instead.

And of course, as many people know, I already take the average worker's wage and donate the rest after taxes to social movements.

And I don't think we should see using the Rainy Day Fund as the biggest problem.

The biggest problem is not having enough revenues overall from a progressive source.

And we need to continue increasing the progressive source, because what we did is historic, but it's not enough.

that Amazon tax needs to be increased.

And just to keep in mind that the corporations we are talking about, many of them are profiteering in this pandemic.

Jeff Bezos' wealth alone has gone up by $115 billion just since January, so just in these nine months when people are suffering.

billionaires have profited.

And so we have to, as a council, pass a no-cuts, zero-austerity budget that defunds the police and makes sure that affordable housing and services are funded.

Thank you very much.

Is there any additional comments?

I am seeing none.

Thank you for the reminder on the COVID statistics just before this meeting.

We were listening to the Board of Health presentation and Director Hayes again reminded people please get your flu shots.

It's really important that we all keep up our immunity to the flu because we don't want to have compromised immune systems with COVID out there.

So please do take care everybody.

I want to make sure that I reiterated that message from Director Hayes as well from the Board of Health.

with that we're at the end of our agenda and our next meeting is tomorrow at 9.30 AM.

We will have a budget presentation from the Office of Sustainability and the Environment, Department of Neighborhoods, Seattle Public Library.

Go, council members.

We will have the chance to hear miscellaneous issues, sorry, go into council members' issues on miscellaneous items that are not in specific department areas.

And if there's no further questions, I'm seeing none.

Today's meeting is adjourned.

Thanks again to central staff.

It's 4.15.

Enjoy the rest of your evening, and we'll see you bright and early tomorrow morning, 9.30 on public comment.