Seattle City Council Select Budget Committee Session II - 10/12/22

Thank you so much for joining us back on October 12, 2022. The time is 12.17 PM.

Sorry for the late start here.

Wanted to welcome you back to the Select Budget Committee meeting of the Seattle City Council.

Madam Clerk, will you please call the roll?

Council Member Peterson?

Present.

Council Member Sawant?

Present.

Council Member Strauss?

Present.

Council Member Herboldt?

Present.

Council Member Juarez?

Council Member Lewis.

Present.

Council Member Morales.

Here.

Council Member Nelson.

Present.

Chair Mosqueda.

We are on the second portion of the second item on the second day central staff portion of the presentation for Office of Economic Development, where central staff will walk through their issue identification paper.

We're going to pause at each of the issues if folks have questions or they have comments they want to say, you're welcome to.

And again, the CBO and department are here for any technical questions you might have, if there's also clarification that's needed, but really encourage folks to to feel free to use this as a discussion opportunity and to get your questions and concerns aired.

With that, I'll turn it over to, I believe, Jasmine Marwaha.

Thank you so much for your patience and thanks for crafting this analysis for us.

I do want to welcome and acknowledge for the record that Council President Juarez is with us.

Apologies, Council President, for keep you waiting as well.

Thanks, Jasmine.

You are up.

All right.

Thank you, Chair Mosqueda.

Again, my name is Jasmine Marwaha on Council Central staff.

I think we'll just jump right into the first issue, which is permanent positions for one-time investments.

The 2023-2024 proposed budget includes three FTE to support economic revitalization and workforce development strategies that are currently proposed as one-time investments.

These positions are a Commercial Affordability Advisor, a Strategic Advisor 2 position, a Downtown and Neighborhood Economic Advisor, a Strategic Advisor 1 position, and an Export Accelerator position for Small Business Technical Assistance, which is a Strategic Advisor 1 position.

If council believes that these investments are likely to become part of OED's long-term strategies, it may be appropriate to permanently staff them at these early stages.

However, creating permanent positions before the strategy is finalized might provide less flexibility to adjust approaches if it becomes clear that there are other priorities for these funds once the stakeholder process and strategy development is complete.

This process, I believe, should be completed by early 2023. The options are to reject these permanent positions or add a sunset date to these positions.

OED would still be able to hire temporary staff to support the work if the positions were rejected or there's no change.

Thank you very much, Jasmine.

Are there any questions on issue identification number 1 here?

I think we can go ahead and continue.

All right.

The second issue was already discussed in the department presentation.

This is the Workforce Development General Fund sub-plantation.

And so this funding, as I think was discussed, supports transgender and gender non-conforming individuals and includes but is not limited to training with the Seattle colleges.

towards evolving employer and employee needs and youth employment services and industry-specific workforce development programs for transgender and gender non-conforming individuals.

And this money will be now proposed as part of the jumpstart.

economic revitalization funds.

And so the issue, the options here are to reject the proposed use of the jumpstart funds at the general fund supplantation and find an alternative source of funds for the proposed appropriations, reduce or eliminate the proposed appropriations, or accept the proposed use of funds and amend the jumpstart fund policies to allow the use of jumpstart fund to replace the use of other funds, or there's no change.

Does anybody have any questions or comments?

I won't cease from repeating myself on supplantation, but I appreciate that it's called out here in the issue identification.

Yep.

Okay.

Great.

So the next one is the special event and film permit review.

The proposed budget adds $150,000 of Jump Start funds and ongoing expenditures to cover SDOT's costs for the review of all special event and film permit requests.

Currently, OED staff coordinates special event and film permit reviews across multiple departments.

And SDOT, as of right now, is the only department that's seeking full cost recovery for its permitting review.

My understanding is that this is a long-standing issue related to the sustainability of SDOT's budget and not necessarily a model that will be copied by other departments.

So for now, it's a stopgap measure that anticipates many changing dynamics as events go back to pre-COVID numbers, which would bolster revenues, as OED looks at overall process improvements and efficiencies in their permitting processes.

and potentially as SDOT's issues get resolved.

I'm not sure.

about the details on that.

But with this additional information, there may be, they may be prepared, OED may be prepared to offer a more long term solution in the coming years.

The question before the committee right now is whether to use jumpstart funds for this stopgap measure around permit reviews.

So the options are to reject the proposed use of funds and find an alternative source of funds to cover SDOT's costs for a special event and film permit review, or no change.

I see Councilmember Herbold's hand.

Is the issue in this particular flag, it's not a supplanting issue?

These are costs that weren't being covered at all?

Yeah, it's a little I had some trouble unpacking about packing, whether it was in fact a supplantation issue.

I think Estat in the past has used general funds to absorb or cover some of the costs of their permitting review, but technically as of.

But technically, it's not a direct supplantation, if that makes sense.

OK, so.

I just, I noticed that the options are a little different.

We don't have a suggested, if we were to allow this, a need to amend the jumpstart legislation defining appropriate uses of funds.

I don't see that included as an option because it sounds like you're saying It would not be a direct conflict.

Yeah, exactly.

And it looks like Deputy Director Panucci has something to add.

Sorry.

Thank you, Jasmine.

I would just add, I think it gets a little complicated because there are the two issues with the policies.

One is the supplant question, and then one is it consistent with the use, like if it's not supplanting.

I think in this case, the supplantation question got complicated because my assumption here, and Director Dingley may be able to clarify, is that SDOT has just been able to absorb some of these costs, and they have not had a direct allocation of general fund to support it.

With all of the sort of reductions across the board in general fund expenditures, SDOT can no longer just absorb the costs, and so there needs to be funding somewhere to continue to do this work without seeking full cost recovery.

And so it's not really supplanting, because we just were kind of managing it without a direct funding allocation, which is why it wasn't added to the list.

And then whether or not you think it is consistent with the economic revitalization categories is up to you.

It's a third option here.

to try to get more cost recovery from the permit holders?

My understanding is that there's an overarching review process that OED is doing for its special events and permit review that may inform that.

I mean, I think there's also a concern that this could increase the permitting fees and be an inequitable increase in permitting fees for a lot of folks.

And the department may have more to add as well.

Director McIntyre, do you have anything you'd like to add from corrections or technical?

Yes.

I mean, the special events got hammered by the pandemic.

Everything got shut down.

And so they're digging out of a deep hole.

And so Jasmine nailed it where we need to look both at process improvements to figure out how we do a better job of throughput for those permits in coordination with all those different other offices.

and also look at cost recovery and make sure that we're thinking about how much the city subsidizes or doesn't those activities now and for how long.

And so we've got some significant work to do over this next year on both of those questions.

So we can come back to you with some more information, but the intent here is, as Jasmine mentioned, kind of a stopgap Band-Aid solution, considering the need for SDOT to process these permits and their inability to absorb the funds any longer.

Yeah, I just want to, I totally, totally appreciate that.

I understand this is work that has been pending for a while.

There was, I think it was probably 2016, maybe 2017 audit around this exact issue and recommendations for how to more fully recover costs, but also recognizing as Jasmine and Director McIntyre, you've both mentioned, there are different types of special events.

Some of them are free speech events and burdening the sponsors of free speech events with a lot of costs or other festivals that are proposed by sponsors who may not have a lot of resources is, you know, it is something that we need to consider carefully.

But this identification of this approach towards a stopgap, I just, I don't want to keep kicking the ball down the road on this.

I guess is what I'm trying to say.

Yeah, no, I understand.

I think it's a point well taken.

I see Council President, Council President Juarez's hands up.

And I didn't want to interrupt you Council Member Herbold, but do you have any follow-up?

You're good?

Okay.

Council President Juarez.

Councilmember Herbold actually addressed kind of some of what, I'd say 50% of what I was going to bring up, but I wanted some clarification and just to agree, and I also wanted to know if we could hear from Councilmember Nelson on this.

So basically SDOT wants to be reimbursed for the permit review, and it's a stopgap measure.

You don't anticipate that other departments would be following suit.

And so I'm kind of confused, too, as maybe there's a third option in light of Councilmember Nelson's recent efforts to revitalize the film industry in Seattle.

So I don't think this is going to go away.

I don't think the stopgap is going to work.

And I don't, I'm not trying to like show shade on SDOT, but are we reimbursing them for doing their job?

Just asking for a friend.

Thank you very much, Council President.

Central staff, do you have any thoughts on that?

I think that they're, I think it's like, as was mentioned before, it's a long standing issue and it relates to sort of the SDOT's sustainability and being able to do this work.

And I think pending like a broader, more comprehensive review It's unclear if there's anything to do at this stage that wouldn't impact some of the events that are either free speech events or community events or festivals.

This is a short-term solution to keep things going.

But that's my understanding.

Director Dingley, any additional clarification?

Yeah, I just wanted to clarify that to just lift up what I think Deputy Director Panucci and what you heard from Jasmine around.

that SDOT was absorbing these costs and these had never been.

And we have a lot of functions throughout the city that we cost recover for.

You know, we do sort of service for a fee.

Right.

And so that that's what this work in SDOT does.

But they haven't ever had dedicated budget to be able to to do that, like where the cost recovery doesn't doesn't meet it for those other types of events.

And so this is going to sort of right size it for now, keep everything moving.

And then, you know, there are, you know, many opportunities to take a look at this work.

And there are, it's multifaceted.

So lots of different ways that you could get at this problem overall.

But just wanted to highlight that this, you know, again, that this wasn't previously budgeted, it was something that was being absorbed.

Okay.

Any other comments on this item?

Yeah.

Well, when I want to make sure I understand what SDOT was doing.

I mean, I understand what the PEOs were doing for events.

Was SDOT's product a street use permit for a film shooting or a block party or something like that?

I mean, I know that we recover costs for traffic, but then that used to be done by the PEOs.

My understanding is that SDOT would review any potential use of the right-of-way.

So if it's a festival or if it's something that needs to use the roads or sidewalks, that they would need to review it for potential impacts.

And that had a staffing cost associated with it.

But I don't know if there's any further detail if anyone wants to add, but that's my basic understanding.

Deputy Director Panucci?

I think I would just add that we can, you know, I think this is complicated.

I think we need to better understand what maybe couldn't do if they if they have to continue to absorb this cost and what the implications are.

I think the special event permitting.

in film conversation is complicated and it's been an ongoing issue that we've not quite tackled fully and over many, many years.

So I look forward to continue those conversations, but let us work a little more to identify additional options for council members to consider with a little more time.

Okay, well, let's move on.

Great.

And the next issue is the Seattle Sports Commission so the proposed budget as $200,000 of jumpstart economic revitalization funds to support an organization such as the Seattle Sports Commission to advance development from sports tourism, with the focus on we're going to have some major events coming up.

And it's unclear.

I know we discussed this already in the department presentation.

I bring it up as an issue because it's still unclear how exactly this funding would be programmed or the specific outcomes expected from this from this funding.

or no change.

I think it would be helpful from my perspective to get additional clarification on what the activities are.

I have a question out to the department, but I don't know if they want to respond right now.

Go ahead, Director McIntyre.

We're still figuring this out with MLB, with the Mariners, and with all the constituent parties for the All-Star game.

They have not selected locations for their activations.

There's not been, there have been a lot of decisions made about how the all-star game is going to roll out.

And so we're trying to keep this money flexible so that we can, as I mentioned earlier, do the two things of having the clear narrative and trying to make sure we spread the economic benefit around the city, not just around where the games are happening.

But it's important to note as well, right, if I'm remembering this morning's presentation clearly, this is not actually Jumpstart.

That was an error in the slide from the department.

I'm seeing Director...

No, I think this...

Sorry, that was an incorrect nod.

This is Jumpstart.

The venue services coordinator was General Fund.

Jasmine, were you about to say something?

Yeah, just what Director McIntyre said.

It's a little bit confusing because the venue service coordinator also works with sports teams, but that's more of an ongoing coordination of their activities and contracts with the city, whereas this is a one-time proposed funding using Jump Start funds for the Seattle Sports Commission for these upcoming events.

that help.

All right, I think that I think that we should move I think I'm going to have some questions about this and not the question of the value of the Sports Commission, which by the way, I think is is is working towards greater independence.

If I understand the structure from before and the work that they have to do with creating opportunity for for folks to be able to really promote the exciting opportunities for not just families here, but tourists who are coming and future players in all of these sports.

So I just want to know more about what is being proposed here, especially if there's a tie to one-time use jumpstart funds for economic revitalization.

Okay, let's keep going.

This next issue, number five, was already discussed, I believe, in the Department of Presentation Um, the proposed budget as $350,000 of jumpstart green new deal funds to help scope and evaluate the planning and implementation of downtown mobility projects.

These projects include the center city connector, the Third Avenue.

and the Sound Transit West Seattle Ballard Link Extension.

There may be some rationale to house some of this work in OED as they're already engaging heavily with downtown businesses.

But as I believe was mentioned earlier that SDOT may be more suitable department to lead outreach about transportation planning.

In addition to where this work should be housed, there's also the question about whether Jumpstart funds should fund the work.

If the committee agrees that Jumpstart funds should be used for this purpose, central staff questioned whether it truly fit in the Green New Deal bucket versus economic revitalization.

And I think some of the options relate to that.

But really the fundamental question is whether it's an aligned use of Jumpstart funds to begin with, whatever category you put it in.

The options try to reflect the variables of jumpstart or not jumpstart, which specific bucket within jumpstart, and in any case, which department should lead the work, whether it should be OED or SDOT.

I'm not sure if all the options actually describe all those permutations, but generally those are the decisions before the council.

Thanks so much.

Oh, excuse me, I think Councilmember Nelson has a question on the.

This slide correct comes from yeah, and director McIntyre your hand was up, but I don't know if you're still going.

I think it does, to the extent that I understand this in part.

does talk about mobility and Third Avenue.

And we all seem to have consensus over the need to reimagine that corridor.

And just a note that I think that the nexus between downtown mobility and OED is that we're talking about downtown and the economic engine of our region and also which is also the tax base of Jumpstart.

Clearly, there's a lot of work that needs to be done there.

I'm agnostic about where it lives, whether it be Green New Deal category, et cetera.

But transportation happens across many different departments, including in OPCD this morning when we were talking about subarea planning, which informs PSRC funding of transportation.

So just wanted to put my two cents in for this item.

keeping it in a change.

Okay, thanks so much.

All right, let's move on to the next slide.

All right, on the homestretch.

So Seattle Job Center was already also discussed, I believe, at length in the department presentation.

So just to review, the proposed budget adds $250,000 in 2023 and $750,000 in 2024 of Jumpstart Economic Revitalization Funds.

And the purpose of the Seattle Job Center is to help Seattleites access employment information and resources, find jobs and internships, and education and training pathways for career development.

As was mentioned this morning, or I guess earlier this afternoon, the design and content of these resources will be developed in the coming months following continued stakeholder input.

The issue here is that without further detail, it is unclear whether the Seattle Job Center will require the amount of funding as proposed.

And so the options are to reduce or reject the proposed appropriation or no change.

I think I already heard some of my questions about this earlier.

Is there anything else?

Not seeing any hands.

Okay, let's keep going.

All right.

Last issue in the presentation is the affordable Seattle expansion, which was also discussed in the department presentation.

The proposed budget includes money for two FTE ongoing to expand the affordable Seattle project.

which is designed to reduce barriers for low-income residents and access programs such as utilities, childcare, transportation, and food through CIVIFORM.

This budget, as discussed, also includes additional funding in CBO and the IT department.

We got more clarification a little bit earlier and we're still getting clarification on exactly what will be the functions of each position, in each department and whether these positions in OED are going to be overseen by OED or actually CBO.

I believe there's some clarification that's further needed.

And whether OED is sort of the best place to place these two positions as the program expands, or if there's another department, such as HSD, And so the options are to transfer the affordable scale positions to a different department, such as HSD, potentially find alternative sources of funds for these proposed appropriations if they are potentially not considered jumpstart funds, or no change.

Any questions or comments?

I'll just ask a quick question.

Somebody else had their hand up.

Total funding.

What are we talking about in terms of total funding between IT, OED, CBO?

Yeah, I believe Allie may have an answer to this.

I know there's two FTE added to OED.

There's an additional FTE added to CBO plus $100,000.

And then there's three positions in the IT department.

So there's definitely a number of positions that are expanding.

I'm not quite sure how much exactly that adds up to in terms of dollar figures.

Allie?

I don't have that exact number in front of me, although I can get it pretty quickly.

But it is, as Jasmine described, it is that number.

It's three FTEs, an ITD-2, an OED, and one in CBO, plus $100,000.

And so I think we have some follow-up work to do to understand the full scope of that work, as well as the placement of the positions

Okay, thanks and I see Director Dingle is off mute.

Yes, and I just wanted to let everybody know there are already emails flying around where my team is going to pull together a summary for everyone that will obviously include a total, but then also include sort of an impact statement, if you will, of what would change if these positions were moved to agencies such as suggested in Jasmine's option here for this issue ID number seven.

So we'll have a full summary together for you all with those descriptions in the next day or so.

Jasmine, yeah.

The other question I have, I didn't quite raise in this slide is, you know, if, if this is going to be housed in OED, it's unclear the exact nexus to workforce development and if there could be more of a direct integration with workforce development like is there an intention, for example, for folks who use a city forum to then be connected to job training opportunities specifically and is there going to be like a planned integration of that sounds like a question I had as well.

that's a good point.

I'm struggling to see the connection to economic resilience as defined in the spend plan, which is really tied to workforce training.

And I see Director McIntyre's hand is up.

Did you have any clarification?

Just that the positions are not sitting in OED.

Okay.

Just wanted to reaffirm that.

Okay.

So we'll look forward to Director, Deputy Director I think that we will look forward to additional information and clarification about the structure and the

The positions themselves are budgeted in OED.

What Director McIntyre is referring to is that they will report functionally, they would report to the innovation and performance team within CBO.

Got it, thank you.

OK, thanks so much.

Can I ask just a question for central staff just for for my understanding, during the pandemic, we did do a lot of work to try to create like one portal for all the various programs that people were eligible for.

There was a big call to make sure that we had one point of reference to have everybody get scanned, or excuse me, that's the wrong term, get screened to see if they were eligible for multiple programs if they were applying for one.

Is that this, or what is this?

This yes, so at the city forum is the online platform that the Council had been asking for for several years to have that one central point of contact that was able.

The Executive was able to launch that through funding one time funding provided through clipper really advanced that work.

And I think this is an expansion of that work, but to be just really honest, it's very confusing about what is actually being proposed here and who is doing what work.

And so we will work with CBO to get clarity, as Director Dingley just said, they're putting together a one pager, but it's not entirely clear what more is getting added to that work through these investments.

Yeah.

Okay.

All right.

I think we should wrap this section up.

Director Dingley, did you have anything else that you wanted to add clarification?

Happy to let the future response speak to the answer there.

All right.

Well, that sounds good.

Well, we will look for the org structure on this and the total amounts and maybe some additional information about the what is being either funded or expanded.

that.

Thank you.

With that I believe we serve as councilmember Nelson did you have anything else you'd like to add on this councilmember Nelson for the section.

You're welcome and thank you the members who've been here with us I don't think I've had the chance to have you in a committee yet.

So welcome to the Select Budget Committee.

And again, it's good to see you in this role.

Look forward to future conversations around these items.

Let's go ahead and keep on moving.

Madam Clerk, could you move us into item number four, please?

Agenda item four, Office of Housing for briefing and discussion.

Woo hoo, housing.

Okay, guys, lots of energy going into the last presentation here for today.

And if we have time, we will go into miscellaneous items afterwards.

housing in the house.

We are, just by way of reminder, we have some miscellaneous departments that we were going to cover this afternoon, but we have time as well on Friday in case we need to carry anything over from this afternoon to Friday, but I think we'll be able to get through all of this this afternoon, but we have some flexibility.

I want to welcome Director Michael Winkler-Chin from the Office of Housing as well as Rebecca Guerra from Office of Housing, Tracy Bratz-Cliff, as well as Ali Panucci are with us here today from central staff and I have the pleasure of getting to chair the Finance and Housing Committee, so I'll just make a few comments, if you don't mind, team.

I'm really, really excited about this presentation.

It is an understatement to say that core to our recovery from pandemic is making sure that people have a place to stay housed.

I don't think that there's ever been a time where the importance of housing has been so evident as when COVID hit us.

Folks said to stay home, to stay healthy.

And if you did not have a home, you could not stay healthy.

If you were unstably housed, you could not stay healthy.

And given what we've seen in terms of the number of folks who are living houseless in our community, We have a huge responsibility upon us as a city and as a region to build the housing necessary to help folks who are outside have a place to come inside, to help those who are currently living unstably housed and in precarious financial situations to have more affordable housing.

And quite frankly, across the entire income spectrum, as you've heard me talk about, we need more housing of all types.

The Office of Housing has been there working on this effort prior to COVID and especially in the last two and a half years during COVID to scale up the affordable housing and housing options across our region, to bring more affordable housing online quickly, and has been really a tremendous partner in trying to do that with us, with community at the table, through the community lens to make sure that those organizations who are directly working within communities that have been hardest hit by displacement and and have seen historic divestment from, that they're at the table to talk about how we not only can move funding into creating affordable housing, but how we can reduce barriers so that more people can get inside and that more organizations can be at the helm for greater self-determination to build their own housing.

I am really excited about the progress that we've made on some important policy with the Office of Housing in the last five years.

I'm excited that we're not doing this alone.

We have regional, state, and federal partners.

we're going to be able to do that.

We're going to be able to do that.

But even with those partnerships we've seen that the amount of money that is currently going into housing right here in Seattle is still not enough.

The mayor's proposed budget does maintain I think the amount that was required under jumpstart to go into affordable housing and even even how many individuals need affordable housing and need housing in general in our region.

But I am really thrilled about some of the investments we've been able to make, and I just wanted to thank the Office of Housing for their work with us.

We've been able to get we're excited about the work that we have yet to do on the maintained a focus on home ownership, making historic investments in home ownership, first time home ownership opportunities for especially black and brown and indigenous communities to be able to get out of generational poverty by being able to access new housing opportunities that people had historically been prevented from being able to access whether it was because of lending and racist zoning restrictions, we are trying to make sure that home ownership is central to our investments from Jumpstart and the Office of Housing has been a great partner.

And in moving forward, I think that We have seen Office of Housing be very flexible in rapid acquisition efforts, again, leveraging COVID relief dollars from the federal government, making sure that there's, if there's property or multifamily structures on the market that we we're going to continue to do that.

We're going to quickly act with urgency to try to create more opportunities for public.

Public ownership and in partnership with our nonprofit held housing developers.

But those dollars and individuals to work to create more affordable housing across our region.

Seattle rescue plan invested 28 million and paired with some of the And we are really thrilled that it's been under Michael's leadership and also with Emily Alvarado.

We have had really forward thinking staff within the Office of Housing who've been thinking about how we forward commit existing funding to act now when an opportunity comes up so that we don't miss the chance to either get property, land, buildings, and units in our hands as soon as possible so that we can get more people housed.

We know what we have here is not enough.

I don't want that to be lost on everyone.

It is an important investment, but we got to keep doing everything we can in partnership with our region, our state, and federal partners to bring our housing investments up to scale.

So thank you, Office of Housing, for all that you've done and your creative thinking around policy, but really always making sure that you've invited community to the table.

And I'm going to turn it over to Director Winkler-Chin.

Thank you very much, Councilmember.

for that great wrap up of what the past two and a half years have been like, I think, here.

And you just fed straight into my budget presentation with that.

So before we look towards 2023 and 2024, I think it's always important to reflect kind of what the past experience has been.

So here at the Office of Housing, where I've been for seven months now, We always talk about buildings, units, leverage, AMIs, get into that very interesting language that we do.

But I also think that it's really important to remember that what we're building are homes for our community and for the people that want to live and stay in Seattle.

So as the Office of Housing thinks back to what the past two, two and a half years have been, we've continued to do what we know works.

And we know what works is one, committing to making Seattle a place where all people can afford a home.

That includes our unhoused neighbors, seniors and individuals who are disabled and living on fixed incomes, and the families, children and their parents who are working in low-wage jobs.

We know what works is investing in our partners for the creation of homes through capital investments and long-term operating maintenance and services supports, OMS.

We shut that down to all of us.

And just to give you a sense of what the capital investments look like, we've just closed on our fall notice of funding availability round.

We had $44 million that was being offered up in this NOFA round, and we received over $180 million worth of requests during that time.

The third thing we do is that we ensure that existing buildings within our portfolio are operating sustainably and serving low-income residents the best that they can.

And the fourth thing, which also gets into that kind of wonky Office of Housing talk, is leverage.

We leverage local resources to create and sustain homes where people can stay connected to community, feel safe, gain strength and are supported in health, whether that's through needed living supports or access to appropriate unit sizes and features or proximity to good jobs, schools, parks, and transit.

And we are doing more than ever because one, the need is greater than ever before, but two, also because of the support of the people who live and work in Seattle from our elected leaders, such as you all, City Council and Mayor Harrell.

So thank you all very much for the opportunity to work here and for the resources that you've provided this department to do and to work in.

So next slide.

So as, oh, nope, you went too far.

There we go.

So as we look into the budget, we'll continue to do what works, but we'll also continue adapting.

So we have a record $252 million for this department next year, which is, by far a record for us.

And so some of the adaptations that we wanted to highlight, which Council Member, I think you already have, which is one, the Rapid Acquisition Program.

We, along with our partners, took advantage of the opportunity to purchase nine new unoccupied buildings built as market rate housing.

And we worked with our partners to secure $91 million in state leverage to acquire 556 homes for unhoused community members.

We support them not just with the capital in order to acquire, but through the OMS resources that I mentioned earlier.

Just to be clear, those properties don't generate enough revenue through rent to pay for the cost of staffing, insurance, utilities, or the services that the residents rely on to make these units their homes.

Just to be clear, we need to take advantage of these types of situations and opportunities in the future, and so we have to be ready to do that.

We also have the PSH pilot, the Permanent Supportive Housing pilot, where we focused on efficient development through two different models.

The pilots are not quite complete yet, and we still need to analyze them for figuring out future potential integration into our work, what really worked, and what should we continue doing out of that.

I think, Council Member, you also mentioned the Self-Determination Fund.

which is capacity building technical assistance and loans to community-based organizations to build housing for their community with that community lens that they have.

We have potential new practices and working with our partners in other departments, OPCD and OED, who you heard from earlier today, OSC and HSD to further our joint goals.

How do you make this one big investment benefit the greater community?

and then analyze how some of our newer policies around community preference and notice of intent to sell, for example, can be strengthened and potentially grow and just become stronger, more robust policies.

So we greatly appreciate the additional FTEs provided earlier this year, and we're ready for what the future holds as we look forward to supporting community greater in our work.

And with that, I'll turn it over to Becky, our finance manager.

Okay, so we can go to the next screen.

The next slide.

What we have here is our budget summary.

I just want to point out a few blips here that might seem odd.

In the general fund 2022 revised, the 7 million you see there, that is the carry forward of rental assistance that was added to our budget late in 2021 in a mid-year change.

The general fund that you see in 2023 and 24, That is the portion of payroll tax that is for OH admin needs as is being done throughout the budget citywide.

The changes in the other appropriation section, that's what we'll focus on in the next slide, but that is primarily an increase in payroll tax.

And as you see the FTEs in the bottom section here, that is what happened through the mid-year ordinance change this year in 2022. In addition to the totals you see here, we also have four TLTs for temporary staff.

Two of them are working on the rental assistance program and two are working on the housing levy renewal effort.

If we go to the next slide.

So here are the specific changes in our budget.

The first is an addition of $46 million of uh, payroll tax for affordable housing capital to be used as described by the payroll tax spending categories.

So the 82% for rental housing, the 13% for community self-determination, and the 5% for homeownership.

So this combined with our baseline amount, uh, results in a total payroll tax investment of $136 million.

The second item here is an increase in ongoing funding of payroll tax for our PSH operating maintenance and services, that OMS work that we talked about.

With this combined with the baseline brings our total support for this effort to about $10 million.

The third item is ongoing payroll tax funding for the oil heat conversion program, which supports the conversion of low-income homes from oil to more sustainable electric heating.

this is an increase of 350,000 over the 2022 budgeted amount, bringing us to a total amount of 1.85 million for this program.

Next slide, please.

Just a quick question on that.

On number three, is that coming from the Green New Deal portion of Jump Start?

That's correct.

Thank you.

Okay.

That's a good example of where we see a direct tie to the Green New Deal Oversight Board, which has this as one of their clear recommendations.

I just wanted to highlight that.

I just on the side.

If my numbers are wrong of course correct me, but you know as we look at the investment in affordable housing in the budget 253 million.

I I think it's a good example for why it's so important to sort of be protective of the existing spend plan we are really thrilled that we're seeing this increase.

But last year was about 200 million dollars this year is about 250. we're going to see a significant increase in revenue stream.

And nearly all of the 50 million dollar increase is all coming from the jumpstart proceeds so.

We're all thrilled about the increase and I just think it's another good example of where the codified spend plan, you know as being here to here and I don't think there's any questions about that is how the department nodding as well, Becky.

Thanks for letting me share that as a good example.

Yes, of course.

The next slide is not tremendously exciting compared to the first slide.

This item 4 here, funding for pre-development expenses for an affordable housing project, $100,000 of general fund.

Since the development of this presentation, there's been a lot of discussion It is looking like this is more suitable as a shelter project rather than an affordable housing project.

So we are in discussions with CBO and with council staff about shifting this to HSD for that purpose.

And then item five is the really boring stuff.

All the remaining budget changes are technical adjustments, which is a net change of all the standard citywide cost changes.

annual wage adjustments, removal of one-time ads from last year, and the continuation of our big mid-year 2022 FTE increase.

That is all we have.

Okay, wow.

Well, thank you so much.

I'll hold some of my questions or comments.

Are there any questions from folks on this item?

These sets of I'm going to turn it over to councilmember Perkins.

I see your hand up and councilmember Morales.

Maximizing optimizing the use of the existing portfolio that we have in addition to adding many low income housing units throughout the city.

So the question here is about, the budget lays out changes in investments for 2022 to what's proposed for 2023. And I'm not seeing much, or maybe it's not obvious where there might be ads to asset management, because the last time we checked of Office of Housing's portfolio of approximately 14,000 units, I believe the, the availability rate or the vacancy rate was about 5%, which is relatively, some would argue, relatively high for a high-cost market like Seattle.

That's about 600 units.

That's after taking into account newly constructed units that are just leasing up for the first time.

Is there something in the budget that's trying to drive down that vacancy rate and fill up those units?

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

I know that vacancy rate has been very, very important for you.

I know internally we have started talking with our partners at KCRHA and I think recently staff had done some research and looking at the zero to 30% AMI units, it's less than a 2% vacancy rate currently by looking at some of the data because we got the end of last year's data during the middle of summer, we will be looking at some of those how to strengthen and to decrease the vacancy rate to make sure that it meets our standards.

And that would involve conversations with our partners as to what that should look like.

And I know that that's important to you.

So we'll get back to you on as we work through some of that.

It really shouldn't cost that much really.

at this point that we have determined that there's actually a cost factor for in the budget that talks about that.

That would actually be staff just reaching out to our partners and just trying to figure out what it is that's driving those costs.

to add on to that.

I do believe with the addition of the positions that we did in the second quarter supplemental that we did add staffing to the asset management team to provide some assistance specifically as it relates to this issue.

So I think we did add some staffing capacity to address in part this issue.

Thanks, Tracy.

Thank you.

Member Peterson, any follow-up?

Thank you.

Did I see Councilmember Morales' hand

Sorry, I'm waffling on whether this is a question for the department or for central staff, so I'll just ask it.

The central staff memo indicates that MHA revenue was significantly more than projected, and I wonder if there's an explanation or what you can tell us about why that was so much more than we expected it to be.

I think it's really difficult to pinpoint the cause of these significant increases or decreases, frankly.

As soon as we find out, you'll be the first to know.

It was just simply how much came in and however much comes in, we put out in our NOFAs.

I've been with the Office of Housing a long time, and in 2012, for example, when the economy was not at its best, exactly $0 at the time, instead of zoning revenue.

So it really fluctuates wildly.

Sorry, Council Member, I didn't mean to cut you off.

I do think that we are seeing the benefit of the now citywide MHA being fully implemented, and now then the revenues that are being generated from that full implementation on that program.

And I think it's just taken a couple years to understand, so what does that look like?

Especially in a robust economy, you know, how that's gonna change should things start to slow down in terms of the construction industry is yet to be known, I think, so.

Yeah, well, I asked because I feel like in a conversation earlier this year with folks, I was under the impression that, you know, the program was really not, you know, and sort of run its course.

Perhaps that was just specifically as it relates to the impact of the townhouse development.

But so I was just surprised to hear that it actually generated more revenue than we had projected.

It's not insignificant, the amount of revenue that's been generated from that program, that and the payroll tax now account for over 80% of OH's revenues and support.

So it's fairly significant.

Okay, thank you.

Does anybody have a comment or any additional information regarding whether or not it's running its course?

I think I was under the impression that it's just beginning to ramp up.

I see nods.

Anybody, feel free to jump in.

Go ahead, Becky.

I would say it's ramping up, yes.

There's a great OHMHA implementation report that came out a couple of months ago that is, I think, very instructive to this conversation and the revenue being generated.

Excellent.

Thank you for that reminder.

And your hand is up so you are recognized if you have additional questions.

I do.

I'm shifting the topic just a little bit.

I worked to get some funding as advocates in the affordable housing world identified as a great need for resident services in affordable housing that is not permanent supportive housing.

And there was $2 million appropriated for the purpose.

The funds were used for 14 nonprofit housing providers, each with two-year contracts.

We're in the startup on that.

I think only something like 8% of the funds, of the $2 million in funds have been invoiced.

it seems clear that there's sufficient funding through 2023, which I think the contracts go through 2023. And I also think there's some additional federal funding for a similar purpose.

But I'm just wanting to flag that I might I know we're trying to limit the number of slide reports that we do this year.

The slide response that we did from OH, and I appreciate that, really was before the any significant number of dollars have gone out the door, I think it will be really helpful to Council to get that information next year.

So just signaling I am likely to request a slide again on the funding for this purpose.

We've had some back and forth with the executive about this, and I think their intent is to actually do some further work that actually might inform what could be included into the housing levy renewal package next year.

So I think you might have more information brought forward.

So I do not think a slide is necessary, Councilmember, with all due respect, because I think we're going to have work and we're going to have further information that may inform some programmatic aspect included in the next levy renewal measure.

Councilmember Herbold, to be clear, staff will be coming back with more information next year because we are very interested in what our providers are telling us as well.

Okay, any additional questions for the department before we go down to issue ID?

I had a question going back to slide three.

Can you give us a sense or a general number on what you're seeing in terms of project applications?

What's the current fall NOFA amount?

How many projects have applied?

What level of funding are folks seeking?

I can tell you that we had $44 million to give out in the fall NOFA and as of the NOFA

It would take me, let me get back to you with that information.

Yeah, no, I think that that's helpful.

I mean, I think that the takeaway from that is just that the sheer need in in affordable housing generally.

Again, you know, we're excited to see an increase in affordable housing, but that number of NOFA applications and the available funds really underscores, I think, why we're going to continue to try to push to see additional affordable housing dollars, maintenance and the jump start spend plan, and I just also want to reiterate, I think that the reason that I think this is important for us to understand the scope of need, the number of applicants, and then the relative dollar amount available for affordable housing developers is that this is about the entire income spectrum.

I know there's a lot of conversation about to 30% AMI, which is where our housing folks really focus on.

But the more we can do to support housing at the lowest income means that there's additional support that can be spread around to those also creating missing middle, excuse me, that's probably the wrong way to use that term, middle income housing.

And the McKinsey report just underscores how important it is for us to get more funding or more housing really into the zero to 30% am I category, along with higher incomes or income moderate incomes at 30 to 50 and 50 to 80 so I think that.

In alignment with what the McKinstry analysis says and in alignment with what the commerce analysis says, we're going to continue to try to figure out how we can not only get more funding into affordable housing, but that we look for creating housing across the income spectrum and great to see the increased funding coming from MHA.

and our community stepping up to want to build affordable housing and housing of all kinds across the spectrum.

I think this issue crosses from OH to our conversations on land use and our conversations on permitting.

But this is exciting and yet it's maybe the tip of the iceberg in terms of what we need in terms of stock.

Um, let's go on to central staff.

And we will welcome folks from the department to, you know, stay on, turn your mic, turn your cameras off, leave if you want to, no problem, no offense taken.

But would be happy to, of course, just have some technical answers if you had any clarifications needed as well as we go forward.

but I think that this is really a chance for central staff to highlight any issues or concerns that they're seeing for our consideration as we consider amendments.

I want to say thanks again to all of the team at the Office of Housing for their incredible work and in partnership with community.

Tracy, this wouldn't have been possible without you and the central staff's work over the years.

Thanks for helping us brainstorm policy ideas and let's turn it over to you.

Well, this is going to be very short and sweet.

I don't actually have any issues to identify for the housing, the changes that they have to their budget are really quite limited this year.

The one technical change is that there was an error in the appropriation that was done by the executive when they put the budget together.

There should have been a distribution of the payroll tax, more distribution of funding to the home ownership program versus the multifamily program.

So we will be doing a technical CBA to correct that appropriation.

It was an unintentional error that happens in these processes.

So that is the only issue and certainly just a technical issue that we will correct with a technical CBA.

But otherwise I have no issues to raise for you today for the housing.

I was flipping through my papers thinking maybe I just didn't print out the central staff presentation.

I do have a few questions that might be for central staff or for the departments as well, if you don't mind, since we have you all on the line, that would be helpful for me.

And apologies, Director McKellar-Chin for trying to get through your presentations.

I thought maybe we needed some additional time for central staff.

So for the team here, that is housing focus.

And Patty, I think if you want to pull up slide number five again, that would be great.

Since we have a little bit more time, I will ask a few more questions.

And of course, central staff, please weigh in as well.

In slide number five, there's $100,000 for pre-development for an affordable housing project.

Is this a specific project that we're thinking about, or is there a reason that only one project is receiving funding?

Do we have a broader sense of what pre-development funding needs are in the community?

Because this is something that we hear about a lot.

Officer Housing, do you want to respond to the question or would you like me to?

I'm looking at you, Tracy.

I noticed that Becky just unmuted.

There we go.

Becky, I'll let you go.

And if I need to add anything, I'll add something.

The intent is a specific project that is more closely aligned with shelter.

We are learning than it is affordable housing.

I think that's a great question.

Thank you.

Is there a broader conversation happening about pre development costs that we should be.

I'm seeing Tracy go ahead, Tracy.

I was going to say not to my knowledge, but that actually doesn't mean that there isn't conversation again kind of around the next housing levy renewal and whether there's more pre

I would add that there are some pre development funds that are allocated through the jumpstart self determination fund that pot of money which is 13% of the payroll expense tax goes towards pre development work as well as capacity building and all that.

is something that organizations fund themselves typically, and that gets to be a challenge.

And that's why I think the self-determination fund is extremely helpful.

Most organizations either do it with their own funds or they go through organizations like Impact Capital.

But because of the timing of our dollars and the fact that we're an investor, they typically come in at project closing.

So that is how we are an investor in projects in that way.

Yeah, well, and we should know that it's 13% of the 62% from Jump Start.

So it's not the full 13% of the whole entire payroll tax.

And so we did bring this up in conversation with community a few times where folks have said, we've received funding, but we really need support on the front end, especially as affordable housing developers who might be new, BIPOC led.

I'm wondering if there's like an assessment or something like that that's already been done or that would be helpful to identify perhaps in combination with Councilmember Herbold's comments, like where are we seeing some of the biggest emerging needs in affordable housing?

Do we need to be doing more in pre-development costs, supportive housing, investments, investments to communities that are not just creating the units, but also the supportive services?

I think one thing Council Member Muscatty, you touched on this, and I think Council Member Herbold brought this up to me in a conversation, is that we need to figure out the technical assistance that organizations are looking for and where that is funded through.

Some organizations are working with the Equitable Development Initiative.

Others are working with us.

How do we align those a little bit better?

And then there's also the section $4 that is given out by enterprise community partners.

and Puget Sound LISC or Puget Sound's forming office of LISC.

They are the two of the three national intermediaries that receive federal section four dollars.

And a lot of those do go towards capacity building and towards redevelopment costs.

So how do we try to think about all of these dollars and trying to make sure that the conversation encompasses all of those?

Yeah.

Yeah.

Yeah.

I think it's coming up as we're hearing some grant recipients from SIF or Equitable Development also wanting to do more in the housing realm, saying they really need support to figure out how to braid funding.

So beyond the self-determination fund, that might be.

Council members, the term that you use, braiding funding, like the various sources coming together.

Braiding.

Okay, braiding.

Okay.

Yeah.

Okay, great.

And then forward committing funding for 2023. Policy wise, the department already has the ability to forward commit funding.

Like we've done in the past few years.

There's nothing that you need us to do to help expedite or for or be able to authorize forward committing capacity.

That's correct.

Okay.

We do come to the council and in a late supplemental quarter three Supplemental, if that forward commitment has resulted in us needing more authority, that would be when we would come to you asking for that.

But as we look ahead to the budget, we don't need it.

OK, great.

And just one more question on the previous slide, on slide number four.

Well, thank you.

Thank you.

Just in terms of the broader investments in capital, again, I don't want anybody to take away from this that there's only $50 million going into affordable housing.

This is additive to last year's budget, so $253 is the total here.

Can you just share for us, and perhaps this is a question for Office of Housing, We've done a lot within policy development in the last few years to really prioritize BIPOC communities who've experienced disproportionate rates of housing insecurity, eviction, homelessness.

We've done a lot to try to ensure that folks can stay in place, whether it's with community preference and affirmative marketing, intentionally creating policies to make sure that folks who've experienced the greatest harm or discrimination are first in line to be able to get into housing.

Can you talk a little bit more just for the general public so they understand when they see $253 million, how is Office of Housing working to prioritize projects because there's so much need?

And there's so many people who want to step into this arena, as you noted, with the NOFA application.

What is the OH process for prioritizing?

So when applications come to the Office of Housing, we have a set of priorities that the projects are looked at.

It looks at some of the OPCD levels of what are high opportunity areas, what are high rates of displacement areas, and focusing on that.

We have typically looked at leverage and timing.

Is the project ready to go now?

Does it meet a need?

Does it help leverage other funds?

And then it meets, it is really about talking with the other departments.

We're starting to do that more.

Thanks very much to council statement of legislative intent on how we work better together as to how did these projects fund each other or work with each other on the multiple opportunities that are created on site, right with this.

We've also, outside of just the regular NOFA rounds, we actually have some, RFPs coming out.

So we are RPing out several sites next year.

And so that is where some of the dollars are going.

It's for the UW Laundry, the Mount Baker station site.

There is the, let's see, as I'm thinking through that list, there's the UW, there's a UW site down there.

There's the South Park site.

That is also one for us to look at.

There's the Lake City Community Center.

And We really think about the projects as we listen to community, trying to make some transparency improvements on how we do our lending, because I think sometimes it seems very cloudy.

And we're looking at specific equity investments over the upcoming years based on input from our community partners.

So what we're really looking forward to is also then how does the full launch of the Self-Determination Fund really fit into what this work is looking forward.

We have a lot of projects that want funding.

We've got these RFQs coming up, and then we also have these policy considerations that we have to really robustly look at, and how does all that balance out?

That was a very incomplete and messy answer, I think, Council Member, for you.

No, it's very high level, and it's all encompassing.

And very, very curious to see what comes out of the OPCB planning efforts next year and how do we coordinate with that?

How do we coordinate with the King County work that they're doing around the Growth Management Act and the Comprehensive Plan, all of that coming together and working with KCRHA as they start looking at their numbers, right?

And how do you make data-driven decisions?

Okay.

Well, that's all very helpful.

And last clarifying question.

I'm going to move on to item and five goes to home ownership.

I think that we had some initial questions, and I'm assuming that they were answered because Tracy doesn't have any issue identification here.

So if central staff has resolved it, that's great to know, but maybe just for clarification, we really want to make sure that we're maintaining our commitment to the home ownership category.

I heard you mention 5% home ownership in your answer, but can you clarify because it did not appear at least at first glance that the affordable home ownership jumpstart funds were included in the proposed budget.

Can we talk about what total amount is going in there and if that is in alignment with the portion that we assume from jumpstart would be allocated for 2023.

Yes, thank you.

This is the area that Tracy mentioned we had a technical error.

This 5 percent of homeownership was all lumped together with the other affordable housing capital and put in one BSL where it should have been pulled out and put in the homeownership and sustainability BSL.

The narrative around this has always been the 5% for the homeownership.

So full support on the executive side for that 5% of homeownership.

Erica Malone in our office will tell you there's full support for that in OH as well.

And so this we're correcting through a Council's correct Council staff's correcting through a CBA, a technical CBA.

But yes, we are definitely committed to that 5% homeownership.

And if you're going to ask me to do the math that quickly, I'm going to embarrass myself.

I can do it if you need the math.

If you want the numbers, I can give it to you or I can just I can just affirm, we will make sure that the allocations are appropriate for the jumpstart funds to the different programs.

Great.

And in a similar vein, it sounds like there's not a policy change that is actually being proposed for jumpstart that keeping and maintaining the commitment from zero to 30% AMI as well for affordable homeownership.

in this same category, excuse me, in affordable housing.

So in the 82% of the total that's going, that you all are still committed to affordable home ownership, zero to 30. And then as central staff described, there was already some flexibility built in there.

But it doesn't sound like the department, the mayor's office is proposing trying to change that, even though that maybe could appear that way in first blush with reading the proposed budget.

No change.

No change.

Okay.

Appreciate that.

All right.

Thanks for the clarification.

Thanks for the work.

Thank you all for helping to house Seattleites.

This is one of our biggest priorities in the budget at least as we look to create the initial proposed balancing package.

Thank you so much for your time.

Okay, colleagues team, we are moving on.

I believe we are on item number five.

This has Ali what are we at 18 categories within miscellaneous.

So let's have item number five read into the record and we will start walking through it.

agenda item five miscellaneous department issue identification for briefing and discussion.

great.

Thank you so much.

I will note that we have Director Dingley who is going to, I think, maybe remain on the line for as long as she can, but there is no actual departments coming to present in this section.

So we have a team from central staff that will be with us, Ali Panucci, Deputy Director, and the crew that may be popping in for specific presentations as well.

Thanks to everybody for sticking with us.

We got about an hour and a half if needed, and I'm going to turn it directly over to Ali,

Thank you, Chair Mosqueda.

So as the chair just described, we have about 18 issues identified across nine departments for this discussion.

And with limited time in committee, we tried to balance the where there are significant changes in departments and we're invited to committee for a more robust conversation versus you know some departments where there's not as much going on in their proposed budget but staff has identified one or two issues it certainly isn't identifying every possible thing that could be discussed in committee so we look forward to your questions and feedback on this and then if council members have questions about other departments that are not within these nine departments that will be discussed today we could take questions you know other analysts are on the line but we can also answer questions offline And with that, I'll just turn it over to Jasmine.

Hey, good afternoon again, council members.

My name is Jasmine Marwaha, council central staff, and I'll be presenting the deal issue ID presentation.

We're starting off with the budget summary that the Department of Early Education, Early Learning is responsible for developing and managing the city's education policies and programs in three broad areas early learning K through 12 and post secondary programs.

The department also administers the family's education preschool and promise or FEC levy which voters approved in 2018 and which will fund education, education services through the 2025 2026 school year.

The overall budget increases you see on the slide roughly track the anticipated FEPP spending plan, as well as the allocation of $9.7 million in underspend from previous years, which will be discussed in further detail later in the presentation.

With that, we can go right into the issue ID.

So before we discuss the underspend, there is, first we have this issue of a long-term strategy for our childcare workers.

The 2020, there's a typo there, 2020 to, 2023-2024 proposed budget includes $5.3 million in one-time hiring and retention bonuses for childcare workers using JumpStart funds.

This allocation expands upon the $2.4 million that was allocated last year and a lot of the increase aims at addressing staff vacancies through hiring bonuses.

DEEL will develop a new hiring bonus strategy in 2023 and anticipates that current and new workers would receive between $500 and $1,000 pending the strategy development.

Well, potentially impactful.

This is a one-time expenditure amidst a lot of parallel conversations that are happening that touch on the child care crisis and the child care labor shortage.

So, for example, my understanding is that DEEL is in conversation with OED about how child care providers might be supported in OED's longer term workforce development and economic recovery plans deals also part of a statewide task force that's going to publish a cost of care study to help understand how much money is needed for high quality child care in the state and King County will soon be implementing a pilot project.

That will provide 1400 childcare workers across the county with $2 an hour increases for four years.

So there's just like a lot of efforts happening conversation that's happening in this in this space around how to support childcare workers.

And so with all these efforts in the mix.

Council may want to consider creating a statement of legislative intent requesting DEEL and OED to create a more comprehensive investment policy and advocacy strategy to support child care workers and help address the child care labor shortage.

So that and or there may be some more shape that we could add to this to this slide, but but generally slide about long term strategies, or no change.

And I forgot to note, I'll also defer to the chair of the committee that these departments report to for any comments as well.

Is there anything on deal, Council Member Morales, that you'd like to say before we get going here?

No, I'll let Jasmine walk through and then I have a couple of comments myself.

Great, thanks.

Sorry for the omission on that.

OK, Jasmine, I'm not seeing any Any questions from I'm going to say any questions from folks on this one right now.

Okay, moving on then.

The second issue is related to the FEPP levy understand.

Their deal is proposing $2 million each year in 2023 and 2024 to go towards culturally specific and responsive programming.

These programs could include those funded in past council budget actions that fit within this CSR frame.

And central staff understands that all of the previously funded council budget actions in this space continue to be funded at the same level as 2022 from the general fund.

But this additional underspend could add additional support to those programs.

This funding could also allow for the continuation of programs recommended by the equitable communities initiative task force, which don't currently have ongoing or additional funds attached to them beyond the 2022 allocation, which will support activities through the end of next year.

So DLN intends to go through an evaluation process of the current existing programming and the pilots to determine which projects best serve BIPOC and other underrepresented youth and where there are opportunities to create a more integrated strategy in the culturally specific and responsive space.

Notwithstanding this attempt at a more comprehensive or integrated approach, Council does have the option of allocating the $2 million in FEPP levy underspend each year towards specific programs or intended outcomes that fit within the CSR frame.

So council has the option of really specifically programming this fund as long as it goes towards culturally and specific responsive programming.

You could do that by placing a proviso as one mechanism to do that, or you could do no change.

I do have a question on this one.

Is one of the eligible items a CBA?

that was held this year?

A CBA, I'm sorry, I didn't...

Oh, an amendment, an addition that council added last year.

It's DL001, B001 for the 350,000 for programming for black girls and young women and black queer and transgender youth.

So my understanding is that could be one of the uses for this fund and that it is funded in the, it is currently funded in the general fund in the proposed budget at $350,000.

But this could be Council could add to it.

There's a little bit of a nuance there that I suspect maybe Allie may want to chime in on.

Thank you, Allie.

Thank you, Jasmine, Chair Mosqueda.

Yeah, so the funding for that specific budget action, budget amendment from last year had been on the hold list to reserve general fund, funds to help balance through the mid-year supplemental.

That was one of the items that were, there was a fund swap, I believe, and supported by the PEP levy so that the 2022 funding did move forward but with a different the general fund.

The proposed budget did include that ongoing with general fund support.

We understand from the executive that that was carried ongoing in error, but our understanding is that that is

Great, that's good news, okay.

Okay, moving on then to the third issue, which also relates to the theft levy underspend.

Deals proposing $5.7 million over the next two years, $2 million in 2023, $3.7 million in 2024, to continue many of the investments that began last year with Clifford Funds and the Promise Program, including more equity scholarships for eligible youth, wraparound services for youth furthest from educational justice, allowing students to have an additional year of program support given the pandemic, and increasing the overall amount of tuition available to sustain higher than projected program enrollment.

Deal currently expects enrollment for the current school year to exceed initial projections by 388 students.

And in the following three school years, it may exceed projections by approximately 500 students each year.

Deal's proposal for this underspend reflects a policy choice to invest more resources to preserve universal access to the program and tuition support, regardless of income as the demand exceeds projections.

This policy choice is different from the FEPP levy implementation and evaluation plans policy direction.

That plan notes that when demand for tuition supports exceed supply, that the direction is to prioritize tuition funds for different groups of students, including low income students, first generation, students of color, refugee and immigrant students, homeless students, English language learners, and LGBTQ students.

So essentially the I&E plan didn't give Direction to Deal to prioritize universal access.

At the same time, the I&E plan also recognized that prioritizing tuition funds among all those groups, low income, first generation, students of color, et cetera, you know, is not a simple task.

Like for example, how would Deal equitably prioritize among those prioritizations listed?

So the plan also asks you to work with Seattle Colleges on an evaluation of promise and to work on and to use this analysis to inform the further refinement of a student prioritization mechanism.

My understanding is that DEEL is either currently engaged in or about to begin at least three evaluation processes related to the program.

And these evaluations would likely inform a potential shift in the program's tuition support and prioritization model.

One last thing to mention before I get to the options is that, according to Council Resolution 31821, the FEPP underspend should be prioritized to go to the Seattle Preschool Program, and any other proposed use of the underspend must be recommended by the FEPP Levy Oversight Committee or the LOC and approved by Council.

The LOC did vote to recommend the proposed use of the underspend, but council must approve the proposal as well.

So now the question is before you, whether to reduce, and I should have said, or reject the proposed funding for promise enhancements in favor of other FEPP levy investment priorities.

And as I mentioned, depending on where else council would put this funding, if it's not the Seattle Preschool Program, further action may be needed to get approval from the LOC.

Another option is to approve the proposed underspend, the $2 million for 2023, but reject or reduce the proposed allocation for 2024 and ask that deal begin working on a proposal for the prioritization in the Seattle Promise Program consistent with the FAP IME plans priorities.

And then C, you could approve the proposed underspend for 2023 and 2024 and still require that there be a proposal for prioritization anticipating that there may be continued underspend allocated and anticipating that maybe council would want to shift direction in future years from investing in the Promise Program.

And then finally, the other option is no change.

Thank you.

Council Member Morales.

Thank you.

Thanks for walking us through that, Jasmine.

I think it's important to note that when we had the oversight committee retreat this summer, on which I sit, we had a lot of discussion.

It was a robust and lengthy retreat day.

And there was a lot of data presented about the programs, understanding that because of COVID, everything is sort of out of whack right now in terms of the impact of these programs for young people.

That said, what became clear about the Seattle Promise program is that the bulk of the funds I was 15 almost $16 million in Seattle promise availability, almost half of the promise dollars go to white students.

Only 12% goes to black students, 19 to Latino students.

And part of the challenge here, especially because of the policy choice to offer universal access to these dollars, is that the promise pool is significantly larger than the equity scholarship fund pool, which is where most of the kids of color get their funding.

And so this is part of the policy discussion that I think the Oversight Committee and Ways Council should be having about whether this is the right time to expand resources to a program that is really having an inequitable impact in terms of access to opportunity.

The promise scholarship is significantly larger 16 million versus three and a half or so.

So white students are getting more access to more dollars and what we learned at this retreat this summer is that they are also having better retention rates and better outcomes than students of color.

So I think, you know, one of the key takeaways during that retreat was around this disparity in BIPOC students and students furthest from educational justice having reduced access to the funding.

So I think no one's disputing the value of the Seattle Promise Program, but the way it is currently structured isn't equitable.

And I think that until this structural problem is fixed, we really shouldn't be expanding it.

I think that's a conversation that we had during the summer and at that time, The discussion was about making those policy changes where the levy is renewed.

I don't know that we need to wait that long, but I do think that right now isn't the time to expand this particular program, given the structural flaws that it has right now.

Thank you Councilmember Morales.

Thanks for sharing that.

And I think we'll look forward to working with you to hear more about maybe where some recommendations from the oversight board could align better with the discussion that they had or that you all had this summer.

Thank you for flagging those concerns.

Vice Chair Herbold.

Thank you.

Just a question about the process policies around underspend.

In issue identification three, the one on the screen now, you reference to the need to get approval from the LLC for spending those underspend dollars.

I don't see that flagged under issue ID Number two, and I'm just wondering, is there a different set of criteria that we need to follow depending on something about the underspend that I'm missing here?

No, and I apologize for if I caused confusion the issue for number two was not necessarily the one I identified was not necessarily whether or not to spend on the CSR programming the levy oversight committee already approved $2 million each year in in spending for that for those funds, for CSR funds.

And so the issue is, does council want to specify within CSR what you want to spend on, but not necessarily whether or not to spend it on CSR.

Whereas this issue is whether or not to actually spend it on Promise.

All right.

Now, in Reddit, you were completely clear.

Thank you.

Appreciate that.

Okay.

Thanks so much.

I think we can move on to number four.

Number four is substantively a similar issue.

It just involves revenue that's not underspent.

So if you wanted to reprogram this funding, it wouldn't necessarily require the approval of the LOC, but it relates to $300,000 each year to go towards the Promise Program.

And so the options are to straight more straightforward to redact or reduce the 2023 and 2024 allocation or no change.

Okay.

I don't see anybody raising their hands with strong opinions on that right now.

But thank you for flagging that for us.

And again, thank you, Councilmember Morales for lifting up the statistics on this program.

I know, lots of interest in universalism, lots of concerned though about not having targeted universalism.

And so I really look forward to hearing more about where we can be really impactful on the investments that we do have the ability to make this year.

Jasmine Yes, please help close this out.

Yeah, sorry, I should mention that CBO has provided other equity measures and indicators to support that the equitable use of promise funds, which I can which I can also share with with other council members as as interest.

That sounds great.

Thank you so much for sharing that.

Okay, I see Lisa Kay up in the queue to walk us through finance administrative services.

Thank you, Jasmine.

Good morning.

Good morning.

This is the point of the day where I start to just see really loopy things.

Good afternoon.

Yes, it's one of those, one of those things.

Thank you, Madam Chair.

And I see Asha as well.

Welcome Lisa Kay and Asha Venkatraman from central staff.

Yes, as you said, I'm Lisa Gay with Central Staff and Asha Venkatraman is joining me.

She'll be speaking to the issue in just a few minutes.

I wanted to thank Patty for running the slides this afternoon.

You'll note that FAS is a large department that provides both internal and centralized services for all city departments.

And it also administers its own direct programs and services.

So when you're looking at the budget overview memo in your spare time, you'll see this extensive table one budget summary that provides all the details on all of the changes by budget summary level.

But I'm going to go ahead and skip to slide four.

Thank you, Patty.

And just note that FAS's proposed budget's about 10% higher than the 22 adopted budget.

and the 2024 proposed budget would be about 3% higher than the 2023 levels.

Some of the larger increases include the $22 million from Jumpstart funds for electric vehicle infrastructure and fleet hub electrification, $13 million in week one for property acquisition for a new waterfront operations and tribal interpretive center, and about $12 million towards the Fire Station 31 replacement project.

Let's go ahead to the next slide, please.

The budget overview paper identified one proposed change for the committee's consideration, and I will hand this off to my colleague, Asha.

Good afternoon, council members.

Asha Venkatraman, council central staff.

As Lisa mentioned, there is one issue for your consideration in the FAS paper, and it is the increase in costs for contracted jail services.

So the proposed budget would increase the jail budget by $2.9 million for the jail contract, bringing the total amount of the jail contract up to $21.4 million.

The reason for that increase is surcharges as well as inflation that are included in the provisions of the contract themselves.

But the reason I bring this to your attention is because there may be some potential for absorbing those costs at the county, depending on how conversation about potential agreement about how to reinvest potential savings goes.

So as a little bit of background in 2021 and 2022. the city and the county had come to agreement about how to potentially reinvest savings that were coming from the fact that the number of people in the jail, the average daily population was low, close to around 80 individuals, and Seattle's contracted bed floor is 188 individuals.

And so in other words, In general, Seattle has to pay the amount of the jail contract that's based on 188 individuals at a minimum being in the jail, regardless of whether we actually have that many individuals in the jail coming from Seattle or not.

And so for 21 and 22, because the ADP was lower, we were able to negotiate with the county that the city council would appropriate and pay the full amounts of the contract in both of those years, but that the county would reallocate $16 million in savings.

So $8 million in 21 and $8 million in 22, and reinvest those savings into health and housing for communities that are disproportionately affected by the criminal legal system and incarceration.

And so the idea was for those funds to be used to ameliorate some of the harm that was happening in terms of racial disproportionality and its use in incarceration and the criminal legal system.

or excuse me, how it shows up in the criminal legal system.

And so that $16 million was slated for 2021 and 2022. But the reason it's been easier for the county to keep ADP at around 80 people for 21 and 22 is because of the booking restrictions that are in place at the jail.

And those booking restrictions come from the county's authority under the COVID-19 state of emergency.

Once that state of emergency ends, which it is slated to at the end of October, the booking restrictions are unlikely to last as well.

And that means that as many people that are booked into the jail can be booked in without looking at a list of those restrictions, which means that it will be the police department that goes back to driving how many people show up at the jail to be booked.

While the executive has had some conversations about what it might be like to potentially reinvest savings for the future.

The interlocal agreement itself doesn't actually end until 2030 so the the conversations that have been ongoing are about how to come to potentially another agreement, but the executive has not finished those conversations yet.

If it's possible for the city and the county to agree to keep ADP lower than the contracted bed floor, not even necessarily at 80, but below that 188 bed floor amount, there may be savings that are associated with our jail contract.

That could mean it's possible that the contract cost increase that is proposed for 23 and 24 of that 2.9 million may be able to be absorbed into whatever savings come out of keeping the ADP low.

And so obviously until the county and the city are finished figuring out if an agreement is possible and what the scope of that agreement is, we won't know for sure.

But it is possible that that kind of reinvestment of savings could cover the increase in costs here And the remainder of the savings could go towards things like support for alternatives to incarceration, something like King County's vital program, which provides permanent supportive housing on a limited basis, or any number of other possible sources of reinvestment into the communities that are most impacted by the criminal legal system.

And so there are a couple options here laid out for you.

The first would be to proviso the $2.9 million increase until we know whether there will be an agreement and what the scope of that agreement is.

Option B would be to reduce the proposed increase of $2.9 million and then consider adding it back in 2023. And that of course, again, depends on the scope of the agreement.

And option C is no change at all.

I'm happy to take questions about any of those things, if council members have them.

Thanks so much.

I saw a few hands, but I only see one right now, so I'll call on that hand.

Council Member Herbold, please go ahead.

Thanks.

So as it relates to the agreement, my recollection is that I understand that what you're saying, Asha, about the number of ADP now being influenced by COVID era booking restrictions that are scheduled to go away, but the decision to base an agreement on 100 fewer people as an ADP than what we're contracted for was a result of policy decisions and goals to reduce the reliance on the jail that predated COVID and was actually based on historical trends.

It's not like we just decided one day that we're gonna not book 100 people that were allowed to book in the jail, it's that we had adjusted our practices throughout the criminal legal system.

And the result was a much lower ADP.

And so the agreement itself was based on the historical use with the understanding that we have this contract that we're bound to, and that we had some agreement with the county on how we should be reinvesting those dollars with the understanding that we would keep paying them.

So I'm certainly hopeful.

You do a very diligent job of reporting to us every week on what the ADP is.

Hovered right around 80 or 90 this this.

since the new administration in the law department, I think, which is some of the changes in practices around making decisions around whether or not to pursue prosecution within five days and the repeat offenders program.

I think those are also drivers in their areas in which There have been exceptions made to the COVID-era booking policies.

But just looping back around, a question, something I've not been able to understand, do we, when we go over 80 ADP, Are we, because that's the agreement, the agreement to diverge from the contract is based on Seattle having about an 80 person ADP.

When we go over, is there like a penalty?

There is not a penalty associated with going over 80. It's just the fact that the estimated savings that underlie the commitment to reinvest that 16 million comes from the difference between 80 and 188. We could go over 80 for 21 and 22, it wouldn't matter because the county has agreed to reinvest those savings, but it's just the basis of that calculation.

So, but if the save it.

So the calculation is like an estimate where the estimate is 16 million but it fluctuates based on so there, there's not a penalty to the city but there's a penalty to our commitment to reinvesting those dollars so do we have.

What is the, I'm sure the number's great for 2021, but how does the 2022 reinvestment that King County is making compare to, I think, the eight million that we had estimated it would be?

So the 16 million that they currently committed to reinvesting, they haven't done it so much as $8 million one year and then $8 million the next year.

There's 11 million that went into, sorry, let me just check my notes real quick on where exactly those funds went.

So the $11 million were intended to be combined with the county's health through housing funds.

to purchase housing for gender diverse BIPOC individuals.

And then that remaining 5 million, and this is probably committed by now, the last information I have on this is from late May, but that was supposed to go into an RFP for community-based housing to divert youth who would otherwise be incarcerated.

And so they invested or plan to invest that 16 million sort of as a whole.

So there are no current conversations between the city and the county for 2023. Is that correct or are there?

I believe the executive is having those conversations.

I don't know how far they've gotten or the content of them at this time.

Just that no agreement has come to, they have not come to agreement yet.

And so are you suggesting that not only might the savings we realize from a lower ADP than what is contracted might continue to be used for the types of investments that we've made in 2022 and 2023, but it might also be possible to absorb this $2.9 million increase that we're contractually obligated to pay.

It's possible.

I don't know that the executive in county have had that specific conversation.

I'm just raising the possibility that we could add that to the conversation with the county as we're having this conversation about whether they are willing to reinvest savings altogether and then what that chunk of money might be spent on.

Yeah, I recognize that this is a contractual obligation.

I recognize that we've made the decision that we aren't renegotiating the jail contract that still has eight more years on it.

But a $2.9 million increase is an increase that will take away from other priorities this council has.

And so I'm really, interested in identifying other ways to absorb this obligation and just would like to understand more how we can elevate our needs to not cut into this $3 million of funds that I think we would all like to spend in a different way.

for the viewing public, there's a lot of nods from Councilmembers on that concept.

And I'll just echo that, and then I'll call on Councilmember Nelson.

I, too, am very interested in this.

I think that if there is a policy approach for us to continue with the path that allows for us to Yes, have a contractual obligation, but especially on this three million, if not more, reallocate those funds to services that help prevent crime in the first place, as we've successfully seen in the past two years.

I would be very interested in doing that.

I also would love to know in the deliberations or discussions that are happening between the mayor and King County, what else we might be able to do, if anything.

to address some of the health concerns that are cropping up in the jails and there's been some recent coverage on from public cola and some other places I first want to note that the folks who are being held in the jail are pre trial.

are largely, by and large, most of those folks are pre-child.

They have not been convicted of a crime.

And the reason that they're being held is because they can't afford to pay bail.

And that's not to say that these conditions would be okay for anyone, but I think it's important to know that this is a holding place until those deliberations can happen for many people.

And the reports that we've seen from Publica and others is that There is lack of potable water.

There is 23 hour a day lockdowns due to staffing shortages.

There is concern around health, including injury, injury prevention, addressing injuries and dental care.

concern about people not getting access to medication.

From the attorney's side, we're hearing lots of concerns about attorneys not having adequate or timely access to clients and a suicide rate eight times the national average.

So I do want to, of course, make sure contractually we are continuing with the path that I would like to make sure that we have the funds to reallocate these funds.

I know that the council has been outlined that that is counsel in the past and especially in this time when we have limited resources and the health concerns are so grave within our current jail, I would love to do what we can to reallocate these funds as identified in option B and see if there is anything else we can do on the health concerns.

I have a couple of questions.

So when are we often under 80 people in the jail for a contract?

So in recent years, even pre pandemic, we were dropping from a couple hundred down back down to I think maybe the just the one hundreds, I'd have to go back and double check the year over year change.

But the 80 I don't think we dropped to until maybe 2019, I'd have to go back and double check the numbers for you.

Okay, but so we're not usually using up all our space.

No, the conference didn't to say that we're even now.

Is it is my understanding and I mentioned this in briefings last week or so after having visited the North Precinct is that there is you know, the jail is not accepting bookings for anything but felony offenses and misdemeanor DUI and DV.

So there's a whole swath of crimes that we get emails about frequently from our constituents that are not bookable.

So would that, so that is the limiting factor.

And I understand that part of that decision not to book was because of COVID and overcrowding, but it's, I'm just trying to understand that that is not, Overcrowding is not currently the issue right now.

It's more of a policy decision on what, or it will be once the emergency is over.

That's kind of what I'm going with.

So bear with me.

I'm reading this.

It says that the increase is attributable to an increase in surcharge costs of 1.5 to 3.3% and a 3.4% increase for inflation.

Is that labor costs?

So the surcharge costs and the inflation costs may be labor costs.

I would have to review the contract itself to figure out if those are specifically labor related or they are related to something different.

OK, I'm just I'm just wondering if that's kind of a usual sort of annual inflation adjustment or whatever like we have with our contractors.

Yes, that part.

I'm sorry, I didn't mean to interrupt you.

But yes, the calculation about the increase in those costs is part of the contract itself and so it does increase year over year.

Basically, we're just basically following the contract which includes an annual increase.

I would have to say that this is a big policy call, because if we if we choose to proviso or not invest this in the terms of the contract that we've got on the table now for another, I don't know, eight years or so, that is something that I think does merit some some discussion, given what we know is, you know, happening out there and the disproportionate impacts of crime as well.

Thanks, Councilmember Nielsen.

Councilmember Herbold, please go ahead.

Sorry for having a hot mic earlier.

The contract is, I believe, 187. That is what we're paying for.

The actual ADP in the agreement is 80. The money that's going out for the things that the county and the city agreed were priorities is the difference between the 187 and the actual number.

So if there is increased numbers of people in the jail, we don't have to do anything.

to the agreement, although the agreement expires this year, to reflect that.

We are always paying for the floor number of beds, which is 187. You and I can have a disagreement of whether or not there should be 80 people in the jail, or based on the side agreement, or, you know, a different number with different filing restrictions.

But we're still going to be paying for 187. Right.

And the difference is the difference that go out the door between what we're actually using and what we're paying.

So I thought I heard you say that the contract was 80. And the contract is not.

And that's not what we're paying.

I think I meant to say agreement.

I'm sorry.

Ah, got it.

I don't know.

I just heard the word 80, and so I'm just trying to track this whole thing, and I have less experience with this.

Very complicated.

Yeah.

Totally agree.

The one last thing I want to say is, you're right, Council Member Nelson, the issues around numbers of people that the physical space can hold are not as driving the the filing decisions so much because of not having the same types of COVID challenges, but there is still very much a capacity issue, maybe not as it relates to physical space, but as it relates to staff.

The jail is very, very, very understaffed, and it is creating unsafe conditions for both people who are being held in the jail, as Councilmember, Madam Chair Mosqueda pointed out, who may not have been proven guilty of anything yet.

It's creating unsafe conditions for them as well as the people who are working to staff the jail.

So that is still very much, I think, something that we should be thinking about when we are talking about the policy decisions that other parts of the criminal legal system, the policy decisions that they are making that drive the jail capacity.

OK.

I got it.

I understand all of that.

And to me, this just seems like a contract, like with our service providers, they you know, we give our, you know, DSC a certain amount over every year for an annual inflation adjustment.

If this is what that is, it seems like all of that other conversation around policy and everything is there that the workers at the jail need.

to have a cost of living increase.

So, anyway.

Okay, thanks to you both and Asha for fleshing that out a little bit more.

Asha, thank you for the issue identification here.

I think we are good to move on.

I think Council Member Nelson, that's a hangover hand, layover, what is that called?

An old hand.

Hanging, thank you.

Hanging shad hand.

if anybody remembers those, right?

But I just want to say thank you, Asha, for walking us through this.

I also think it's important to note, if we remember in January, it was the plea from the jail guards and public defenders, workers within the jail who are also calling for reducing jail populations because of that short staffing.

and that short-staffing leading to inhumane conditions, concerning conditions.

I think this is a both and conversation about how do we address those conditions and also look upstream at the policy solutions that could stem the flow of people into the jail.

We did make these policy choices via the budget in 2019, if I'm not misremembering.

Actually, maybe it was 2018. I think that it's a good conversation for us to continue to have.

about this topic, especially because of the impact on the budget.

So we'll have more to come on this, but appreciate that.

I'm going to ask for us to go slightly out of order.

And I think we're going to skip over to Office of Labor Standards if that sounds okay with folks.

Okay, great.

Let's let's skip on over to Office of Labor Standards.

Patty, I'm not sure I don't have the I know you have labor standards in your committee.

I just want to make sure we got our central staff team.

Hi there.

Hi.

Good afternoon, council members.

Just making sure my mic was turned on.

My name is Karina Bull.

I'm with council central staff and this afternoon I'll be presenting the budget for the Office of Labor Standards.

The mission of OLS is to improve workers' lives by implementing worker protections and creating a culture of compliance among employers and other hiring entities.

In 2023, OLS will implement 17 labor standards, manage two large outreach funds, and provide administrative support to the Labor Standards Advisory Commission and the Domestic Workers Standards Board.

This body of work reflects the addition of two labor standards passed this year, the Cannabis Employee Job Retention Ordinance and the App-Based Workers Minimum Compensation Ordinance, and the attrition of two labor standards that will basically go away due to the state's passage of House Bill 2076, which with certain exceptions will preempt the field of regulating TNCs and drivers as of January 1st of next year.

In the 2023 proposed budget, funding for OLS would decrease by 35%.

That's about $4.25 million.

Most of this decrease, about 86%, would reflect the impacts of state preemption under House Bill 2076. Impacts would include dissolution of the TNC Driver Resolution Center and elimination of one position, a TNC data strategist in the Enforcement Division.

Both items are currently funded by the TNC tax revenue stream and would total about $3.6 million.

Other decreases would include changes to meet targeted budget reductions such as reduced funding for operating expenses, outreach related to the independent contractor protections ordinance that actually would be diverted in the budget to continue a senior investigator position that is funded by the TNC tax revenue, and then removal of one-time authority for funding for domestic worker standards board recommendations, and again, independent contractor protections outreach.

A quick comment that Office of Labor Standards has a unique source of revenue known as the OLS fund.

This is codified under Chapter 3 and requires payment for OLS operations from the city's business license tax revenue and the general fund as backup.

Every year, the OLS director is required to certify to the mayor and council the minimum annual contribution needed to maintain the office's operations.

It is in the code that the policy goal of the city is to appropriate this amount to OLS in the adopted budget.

In September, OLS Director Marchesi issued the certification for the 2023 budget, and it is approximately $1.3 million more than the funding for OLS in the mayor's 2023 proposed budget.

So on that note, two of the issues that have been identified for Council's consideration of OLS's budget reflect this discrepancy.

The first issue, though, is somewhat separate.

And so the first issue involves the Cannabis Employee Job Retention Ordinance.

In September of this year, Council passed legislation establishing this ordinance.

It would be effective in June of 2023. For implementation of this ordinance, estimates 21,000 dollars for set up cost and close to 5,000 dollars for ongoing annual cost.

The certification and the proposed budget do not address funding for this ordinance, potentially, because the legislation was passed just a few weeks before the start of the budget process options for council to consider.

include adding the full amount to the budget in 2023 and 2024, or just 21,000 in 2023 and about 5,000 in 2024, or no change.

OK, are there any comments on that one?

OK, let's keep going.

All right.

The second issue involves the app-based worker minimum compensation ordinance.

In May of this year, council passed legislation establishing this ordinance.

It will be effective in January of 2024. The OLS annual certification estimates that about $950,000 in 2023 is needed to implement this ordinance for setup cost, five FTE additional staff, and community partnerships.

Further dialogue with office of labor standards indicates the need for 1.2 million in 2024 for ongoing annual cost.

The 2023-2024 proposed budget does not include additional appropriations for implementing this ordinance.

Options for council to consider include adding all the resources, precisely 949,000 in 2023 and 1.2 million ongoing in 2024 or itemizing the cost for set up five FTE staff and community partnerships and adding some or all of those in 2023 and 2024 or no change.

Any comments on this?

Okay, Council Member Herbold, please go ahead.

appreciate, Karina, that you're giving us lots of options here.

How does five full-time employees compare for development of director's rules compared to other times that the council has passed worker rights that needed I have a question about the director's rule development.

That seems five FTEs, and I recognize that it's complex regulation, but five FTEs for development of director's rules seems a lot to me.

Sorry.

a TNC data strategist that would be eliminated in the budget, a labor standards engagement specialist, and a labor standards investigator as well.

So it's a holistic approach.

It is more than just developing rules.

And the Office of Labor Standards has itemized what those positions were doing.

It is more than they have received in the past for other labor standards, which sometimes is no additional FTE and sometimes can be as much as two.

And OLS is estimating that this labor standard will require more work.

It's a different set of workers than they are already reaching right now through their existing protections.

And also represents the tipping point of not receiving additional staff or some of the labor standards that have passed in recent years.

Got it.

So again, I appreciate having some options here.

I don't want to create a situation where OLS doesn't have the adequate staff to develop director's rules in the year of time before the ordinance goes into effect.

So I'm looking forward to talking to you more about some of these options.

I do want to flag for my colleagues something that I think you caught, Karina, the legislation states that the number of workers covered is numbers 40,000 app-based workers.

And I think that includes the marketplace companies, which were not included.

So, thank you for catching that.

And I don't know if that was going to have a different result and a different analysis on the costs.

Yeah, well, kudos to your legislative aide, Alex Clardy, for catching that.

It's an error in my budget overview paper.

Initially, the city had heard that it was about 40,000 app-based workers that would be covered by this legislation when it was initially proposed and it was contemplated that would be workers engaged in on-demand delivery work as well as those in marketplace work for when they would set their own rates, like for TaskRabbit.

and handy and et cetera.

So I think ultimately the amount of workers is unknown.

And OLS was, when they developed these estimates, they used their own estimation of how much, how many workers there were and how many hiring entities and what would be needed to support it.

I don't think that the difference of X number of workers would make a significant difference in the amount of OLS's work.

Regardless, the rules still need to be developed.

There still need to be model notices of right.

There is still going to be outreach, questions and answers, posters, information materials, and then contracting with community organizations to do the work.

So it might scale it a little, but I don't think it's going to make a significant difference.

I don't have anything further.

Thank you.

Okay.

Thank you so much.

Let's go to number three.

And the last issue addresses community and business outreach.

Through the Community Outreach and Education Fund, referred to as the COEF, and the Business Outreach and Education Fund, referred to as the BOEF, OLS contracts with local organizations to provide labor standards outreach to workers and businesses that would not be reached through traditional methods of engagement.

COEF funding at 1.5 million right now, has not increased since 2017, and the business outreach funding, which is 600,000, was formally decreased from 800,000 to 600,000 in 2020, and formally decreased by the Office of Labor Standards in 2019 in order to meet targeted budget reductions.

The OLS annual certification estimates that additional ongoing appropriations of 400,000 for the COEF and 200,000 for the BOEF are needed to support these outreach funds, which were established many years ago before the advent of approximately 13 additional labor standards.

And the current rates do not count for inflation.

So these community partners are asked to be doing a tremendous amount of work and reach a large number of workers for the same amount of dollars that they've had for a number of years.

So options could be to fund all, some or none of additional funds for these outreach funds.

Thank you, Karina.

I just had the opportunity to join folks from the Harvard School Economic Policy Institute.

local progress earlier today to talk about labor standards here in Seattle and really had the chance to highlight the good work that Office of Labor Standards does and the role that they're having with not just passing policy, but making sure that we can enforce it and really make sure it's more than just the letter of the law that's going into effect.

Karina Bull did a great job with also reviewing some of the initial data that the folks at Harvard and Economic Policy Institute were looking at so that we could really highlight the role that Seattle has had in setting the national stage on labor policy.

So thank you, Karina, for your work on that.

work on central staff and your previous work at Office of Labor Standards.

So it's exciting.

Seattle constantly gets attention for all the great work that we do on labor standards.

And yet I think we have a real conundrum when we are on the cutting edge, we are passing labor standards policies, but our enforcement element Our Office of Labor Standards doesn't see parallel investments in the proposed budgets year over year.

I know we've spent a lot of time trying to add funding to Office of Labor Standards over the years.

I know my colleagues have supported that and will probably be continually interested in scaling up funding.

But what we are investing in outreach and education, both for business owners as well as workers, is not keeping up with the number of labor standards that we've codified into statute, as Karina noted.

So I'm hoping, Karina, that what we can do is better align our investments originally, but also when it passes council, align our Office of Labor Standards investments more along the line that the Office of Labor Standards outlines as needed from their certification report that they send us.

This is a unique department.

They send us a certification of need.

I'm not sure that's the exact title, but they outline what their entire budget needs are.

No other department really has that in statute.

Can you remind us how this amount that OLS is receiving in the budget compares with what the Office of Labor Standards Certification of Need report said earlier this fall?

So the annual certification is supplemented by additional information for 2024 because the annual certification just addresses the following year.

Forecast the need for $1.3 million in 2023 and $1.8 million in 2024. So these amounts aren't reflected in the 2023-24 proposed budget.

The proposed budget has significant decreases, but most of those are due to the state preemption.

So the dissolution of the driver resolution center, one of the two positions that was added to enforce those TNC labor standards.

So truly what council members are looking at in the budget is the absence of this $1.3 million in 2023 and the absence of the $1.8 million in 2024. Their staff right now is 34 positions.

Next year, it would go to 33, so they would lose one position.

They're asking to gain five.

Okay.

What's the delta?

What's the delta?

Right now, they have 34 positions.

If no positions were removed, then they would be getting four positions.

but their certification asks for five.

Okay.

Got it.

Got it.

All right.

Well, thank you, Karina.

Anything else on OLS?

All right.

I want to thank you for all of your work there and very excited to see your work highlighted in the local progress report.

Thumbs up from our good chair, Council President Juarez.

I have an announcement, colleagues.

It is 4.38 at the end of day two, which has been a very long two days given the public hearing yesterday.

I am going to suggest that we go ahead and continue on with the miscellaneous items.

on Friday and adjourned to give folks an extra 20 minutes of their time back today.

That would mean that we would have, in terms of miscellaneous presentations on Friday, which central staff has assured me that we should have plenty of time to include this in our Friday lineup.

Coming back to miscellaneous and focusing on law, Office of Emergency Management, the OIG, which is Office of Inspector General, OSC, Office of Sustainability and Environment, SDCI, Seattle Department of Construction and Inspection, and SFD, Seattle Fire Department.

Those are the remaining departments that we have yet to walk through for issue identification.

I think we should just cut this presentation in half, lump it off, and have that discussion on Friday.

I'm seeing some nods and smiles from the Vice Chair and the Council President.

I will take that as confirmation.

Okay, colleagues, thanks so much for your walkthrough of these questions today, for identifying initial issues, to the departments and central staff for fielding our numerous questions and for your engagement, colleagues.

I'm going to thank the newly named wizard behind all of the screens.

Thank you, Patty, for keeping up with our discussions.

and I look forward to meeting with all of you again tomorrow.

Tomorrow morning at 930, October 13th is day number three.

We will start with Department of Transportation, move on to the Parking Enforcement Officer discussion, which spans SDOT and SPD.

And we will then conclude with a conversation on Seattle Police Department and the Community Safety and Communication Center with the goal of ending by five.

and that is our full agenda for tomorrow.

Again, a reminder, amendments are due by 2 p.m.

on October 17th, so we'll continue to think through those ideas and share them early with central staff.

If there's no further business to come before the council, oh, excuse me, Council Member Herbold, Vice Chair, please go ahead.

I just wanted to flag, I think as you know, I am I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I will not be here for them.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

I think that's a good point.

Yes, I know.

Sorry, Chair.

Apologies, colleagues.

I just wanted to take this opportunity to share with you and with the public that I'll be hosting a District 6 Town Hall next Thursday, October 20th at 6 p.m.

at Loyal Heights Community Center, which is at 201 Northwest 77th Street in Loyal Heights neighborhood.

So we're excited to have a Town Hall in addition to all of this budget work.

Thank you.

Excellent.

Great.

Thank you so much, Councilmember.

All right, colleagues, have a great evening.

See you tomorrow at 9 30.