Human Services, Labor, and Economic Development Committee 8/21/2026

Good morning.

The Human Services Labor and Economic Development Committee meeting of the Seattle City Council will now come to order.

It is 9.33 a.m.

August 21st, 2026. I'm Councilmember Alexis Mercedes Rink, chair of the committee.

Will the committee clerk please call the roll?

Chair Rink?

Here.

Vice Chair Foster?

Here.

Councilmember Hollingsworth?

Here.

Councilmember Saka?

Good morning.

Here.

There are four members present and one excused.

Thank you.

Let the record reflect that Councilmember Juarez is excused.

We will now move on to approval of today's agenda.

If there is no objection, the agenda will be adopted.

Hearing no objection, the agenda is adopted.

Welcome, everyone.

Today's agenda is lengthy with five substantive items, including a briefing, discussion, public hearing, and votes on two business improvement area ordinances, one for the Broadway BIA in Capitol Hill and one for the Ballard Assessment Formula Amendment.

We'll also have a discussion and vote on the amended domestic workers' ordinance, which this committee was briefed on during our last meeting.

We'll then have a briefing from central staff on policy considerations and we will hear from council members on their amendment concepts for the fair pricing and transparency ordinance and lastly we will have a briefing and discussion on an ordinance related to commercial lease transparency.

With that we will now open the hybrid public comment period.

Public comments should relate to items on today's agenda or within the purview of this committee.

Two of today's items do require public hearings, so if you are registered for today's public hearing on agenda items one and two relating to the Capitol Hill BIA and the Ballard BIA, please hold your comments relating to those BIAs until we reach those agenda items, and the public hearings will begin with each agenda item.

So, Clerk, how many speakers do we have signed up for today?

Currently we have ten in person and five remote speakers.

Thank you.

Each speaker will have two minutes, and we will start with in-person speakers first.

Clerk, will you please read the public comment instructions?

The public comment period will be moderated in the following manner.

The public comment period is up to 60 minutes.

Speakers will be called in the order in which they registered.

Speakers will alternate between sets of in-person and remote speakers until the public comment period is ended.

Please begin by stating your name and the item you're addressing.

Speakers will hear a chime when 10 seconds are left of their time.

Speakers' mics will be muted if they do not end their comments within the allotted time to allow us to call on the next speaker.

The public comment period is now open and we will begin with the first speaker on the list.

Thank you so much.

So I'm going to read the first five just so folks know how to orient themselves.

So first we have Joan Paulson, followed by Cliff Holland, then Robert Singleton, Amanda Dalton, and then David Hill.

All right, coming together.

Great.

Yes, we are.

Thank you.

I'm Joan Paulson.

I'm a board member of the Central Area Senior Center, which is in district number three, and this is a continuation of the August 7th meeting.

and information that was shared about human services and the reimbursement process that is being adjusted as time goes on.

I'm basically saying that our organization has been not paid and reimbursed for May, June, and July.

at a cost of $30,000 each month, not being able to pay bills and staffing.

Since January, the process for reimbursing paperwork has changed five to six different times, which requires adjustment in terms of accommodating those changes.

This is the downfall.

that has happened in terms of the overall process this year.

And that needs to be mitigated in order to allow services to be paid for and provided, but reimbursed in a more appropriate timeframe of 60 to 90 days out waiting time.

Thank you for my time, and now Cliff will take it as president.

I'm Cliff Holland, I'm the board president at Central Area Senior Center, and along with what Joan says, we're really impacted by the slow reimbursements after we invoice.

It takes three to four months to get reimbursements.

This has caused us to have short delay in payments with our contractors, being the program folks.

Also, staff has been delayed getting payments and everything.

Our reserve funds that we had are depleted because we have to use our funds.

Then we invoice, that bill means, okay, I'm about to get shot, but that invoice, okay, good.

That invoicing, Then it takes three to four months after that, which causes us a major, major shortfall in our revenue.

Our reserve funds have been depleted while we're waiting for these reimbursements.

Thank you so much.

My team is going to actually reach out to you to get...

I'll get you some contact information and see how we can help and support.

Thank you very much.

Thank you.

Help a brother.

Thank you from District 3. Thank you.

And as a reminder to all, that little bing means you have 10 seconds left, and nobody gets hurt, okay?

All right, next up on here, I have Cliff Holland.

Cliff.

Oh, sorry, so you were...

okay, apologies.

Next up is Robert.

We're about to go on council recess all, sorry.

Robert, please.

Good morning, Chair.

My name is Robert Singleton.

I'm here at Chamber of Progress.

We're part of a tech industry association that supports inclusive innovation.

I'm here today in opposition to the proposed data-driven pricing ban because of the practical result of this ordinance would be to make Seattle an even more expensive city for residents, an even harder place to do business or for businesses to operate.

To be clear, we agree that consumers should be protected from personalized price increases.

However, we have three paramount concerns with this measure as written.

That when adopted, we work in tandem to make Seattle an island of unaffordability.

This ordinance openly limits and then further discourages businesses from offering discounts and loyalty rewards for their customers based upon the way they are defined and in creating multi-page compliance burdens on those offering legitimate discounts to the letter of the law.

This measure is paired with a private right of action, meaning that any and every price change could be subject to a frivolous lawsuit, with or without merit, forcing every business to justify every price change for every product, potentially divulging sensitive information, but more often than not having to spend time, energy, and money in response.

and three, this ordinance can only apply in the jurisdiction of Seattle, which will change and inherently segment out the operational practices of every business that does business in and outside of the city limits, which will again cost time, energy, and money, all of which will be passed on the consumer in the form of higher prices.

Taken together, local businesses could be forced to respond to the ordinance as follows.

End all specialized coupons, discounts, and loyalty rewards because it's simply easier and it's cheaper than trying to figure out if they apply and under what conditions as per the ordinance, especially when improper compliance opens you up to legal scrutiny.

Presume that you will be sued at some point because prices need to change for many legitimate reasons all the time and dynamically so in our modern digitally connected world and anyone who doesn't like those price changes can cause you to spend time energy and money to fight improper assumptions again even if the challenge is without merit and three likely likely increase prices within the city limits in proactive anticipation of legal and compliance costs The end results are that Seattle residents will have financially fewer deals and coupons and higher overall costs and fewer options for products and services because compliance and legal costs disproportionately fall on smaller companies.

Thank you.

Thank you, Robert.

Next up we have Amanda Dalton.

Good morning, Chair Rink and members of committee.

Amanda Dalton, I'm here on behalf of the Northwest Grocery Retail Association.

As I shared at the last hearing, my members support prohibiting the use of personal information to increase prices.

But the ordinance's narrow exemptions, broad disclosure requirements, and significant private litigation exposure creates substantial uncertainty regarding how covered retailers may continue to deliver, communicate, and administer discounts that consumers receive today through retail rewards programs.

As you have heard from me, we disagree with proponents that the ordinance before you, without any amendments, ensures that Seattle customers will continue to have the same access to coupons and discount programs that they do today.

Specifically, we believe that as currently drafted, the ordinance will reduce the availability of loyalty program discounts and manufacturer-funded coupons for Seattle customers.

I want to provide a few examples of discounts and personalized savings that we believe are prohibited under the current draft.

category discounts, brand win-back discounts, competitive brand switching discounts.

For example, an emerging brand wanting to offer a coupon through a third party would not be able to rely on purchase history to target customers of the bigger brands.

Or if you regularly buy Cheerios and Kellogg's wants to give you $2 off a box to encourage you to try its product instead, not allowed.

Household essentials and replenishment discounts.

If you recently bought toilet paper, and Charmin wants to give you $5 off your next buck when you're likely to need more?

Not allowed.

Return offers, basket level savings, cross product store offers, merchant targets, repeat purchase discounts, abandoned cart discounts, non-member grocery discounts.

If manufacturers can no longer effectively target discounts to interested customers, they may reduce promotional spending, reduce the value of offers, or offer fewer promotions altogether just for customers who live and shop in Seattle.

The ordinance as written will make groceries less affordable for your customers.

We encourage you to support amendments that make this distinction clear and ensure that ordinance advances Seattle's goals of affordability and grocery access rather than undermining them.

Thank you, Amanda.

Next up, we'll have David Hill, followed by Zoe March.

Good morning.

My name is David Hill.

I'm speaking today on behalf of the Transit Riders Union in favor of the Fair Pricing Ordinance.

I've been out of work for most of this year, and while that does free up a lot of time to come see you good folks about three times a month, it does mean that I've had to work to make sure that I can stretch every dollar to the fullest so that I can get the nutrition I need to continue making these meetings.

Big corporate grocers should not be allowed to use invasive tech and surveillance algorithms to guess what price I'm willing to pay and push prices up.

Opponents claim this bill will hurt everyday loyalty programs, but that's simply untrue.

Those basic discount carve-outs are already built right into this measure.

Seattle residents' basic nutrition must come before corporate profits.

Please protect working families and vote yes to pass this ordinance onto the full council.

Thank you.

Thank you, David.

Next, we'll hear from Zoe March, followed by Christian Wilder.

Good morning, council members.

My name is Zoe March, and I work at PCC Corner Market in downtown Seattle, just a few blocks away from here.

I'm speaking today to ask you to pass the Fair Pricing and Transparency Ordinance with no corporate amendments.

Groceries are more expensive now than ever, and shoppers spend time looking at ads and sales, deciding what fits their budgets each week.

When items they expect to be on sale aren't, or when prices at the register don't match the price on the shelf, customers speak up.

So when some AI-driven tech charges one customer more than another because of data big grocers track, the staff member at the check stand has to deal with it, not the executive who made that decision.

My fellow grocery workers don't deserve to be put in that position.

Now, this ordinance exempts my employer, and that's why this matters so much to me.

This helps level the playing field.

When it comes to tracking data and the newest AI pricing tech, we will never be able to keep up, not that we'd even want to.

Healthy competition is over quality, customer service, and fair pricing, not manipulating our customers to pay more.

Additionally, the private right of action in this ordinance is so important.

We all know warnings of frivolous lawsuits, warnings coming from those who benefit from these pricing schemes, are nonsense.

An ordinance relying on enforcement by an understaffed, underfunded agency will never live up to its intention, and violations will sneak through.

That and pushing higher grocery bills on Seattle's families is exactly what the large corporations opposing this ordinance want.

Thank you for your time, and please pass this ordinance as written without corporate amendment.

Thank you, Zoe.

Next we'll hear from Kristen Wilder, followed by Lomho.

Good morning, council members.

My name is Kristen Wilder and I work as a floral manager at Uptown QOC.

I am here today to ask you to pass the fair pricing transparency ordinance with no corporate amendments.

When I work at a check stand, I saw customers watching prices very closely.

Sometimes I'd say hi with a smile on my face and they'd just stare at the screen as I rang them up.

making sure they got the price they were hunting for.

And if they didn't, they'd let us know.

Surveillance prices put us in a position of having to explain customers that some algorithms in the black box decide that they should pay more than someone else, which makes our work that much harder.

I want to deliver great customer service not tech support.

And here is the other thing.

Grocery store workers are customers too.

I've read customer reports investigations showing that surveillance prices could cost Seattle families over hundreds of dollars more a month.

I don't even spend hundreds of dollars a month on groceries right now.

I definitely don't have extra hundreds of dollars to hand over to a giant grocery corporation.

Now I know the grocery industry lobby wants us once an amendment to allow grocery stores to use surveillance prices to offer so-called discounts.

Don't give it to them.

What they're asking for is loopholes that will allow them to run the scheme on most grocery store transitions, rendering this orderings useless.

Discounts should be transparent and applied fairly.

not secretly, tolerant by algorithms that know more about my personal habits than my family does.

Please pass this ordinance as written, without corporate amendments.

Seattle families and Seattle workers deserve to know we're all paying the same prices for the same things.

Thank you.

Thank you, Kristin.

Thank you, Council Members.

My name is Lam Ho, and I am the General Manager for the Transit Riders Union, as well as one of the co-chairs of the Stay House, Stay Healthy Coalition.

I want to first start by thanking you, because I have not had the opportunity to thank Council Member Foster and the entire Council for passing such a strong junk fees ban legislation, which provided fairness, transparency and accountability for families who are struggling to stay in their homes or even find them.

And so I'm here to ask for you to do the same for families who are struggling to put food on their tables.

And they are really struggling.

In the recent Food Washington survey, which covers 2026, the first quarter, 48% of households, that's almost half of households, used food assistance in the past month.

69% of food insecure households reported reducing the quantity and quality of food that they eat because of rising prices.

Even households earning $75,000 to $150,000 saw a 25% food insecurity rate.

Families across the our state are struggling to put food on the table.

So we need the fair and transparent pricing ordinance now.

Everyone needs to eat.

This bill prioritizes health, wellness, and fairness over opaque corporate profit models by protecting Seattle families from algorithmic pricing that uses personal data to change the price even for two shoppers shopping the same aisle.

It also protects small and local retailers by preventing the big chains from basically using surveillance pricing to undercut them, to drive them out of business, and then leave consumers with no options besides the price gouging that the corporate chains are using.

Thank you so much for your time.

Please pass this ordinance without any corporate amendments.

All right, thank you, Lam.

Next we'll hear from Maya Morales, followed by Dustin Lambrough.

Good morning, everyone.

Good morning, council.

I'm here to speak to you today about the fair pricing ordinance.

I want to first say that I'm really proud of both the mayor's office and the council for taking this up.

As grocery workers, everyone really here who buys groceries and can speak to the fact that it's gotten more expensive, as well as housing organizers, all of us can really relate to the fact that our groceries are becoming less affordable.

And so this is so common sense.

Thank you so much for sponsoring this.

I want to just address a few things.

It is not complex to offer basic discounts.

that is not something that needs to be complex.

We've done that for years.

Before we had AI powered tech, that was something that was totally attainable for grocery.

And so I just wanna kind of debunk that a little bit.

I also wanna say that, would this ordinance offer shoppers fewer deals or fewer scam deals where the price has been inflated and then you're given a sort of fake discount.

I don't feel like that's what shoppers deserve.

I think we deserve transparency, accountability, fairness, and non-discriminatory pricing.

We don't want to have personalized pricing.

And then the last note is I want to say that Reminder, past purchase history is allowed in this ordinance.

And so if you buy toilet paper a bunch of times, that coupon to get a discount off that toilet paper is allowed.

Lastly, I wanna speak to the importance of the electronic surveillance tech definition in this ordinance.

It is part of what makes it one of the strongest ordinances that we've seen brought forward.

It is so important because we are on the precipice of emerging tech.

There is tech that is able to measure things about our bodies, about our heart rate, about our eye movements.

It's really important that that data is not used to set prices.

Thank you so much for your work.

All right, and our last in-person speaker is Dustin, and then we'll be moving online.

Good morning, Councilmembers.

I'm Dustin Lambrough here today with UFCW 3000. I sent each of you an email this morning laying out our position in a little bit more detail, but I want to emphasize three important safeguards as you consider potential amendment concepts.

First, preserving the bona fide market price standard.

Without an objective baseline, a retailer could and would inflate the supposed regular price, give different customers different personalized, quote, discounts, and claim everyone received a bargain.

Second, preserve the private right of action.

Central staff acknowledges that these investigations may require analyzing large volumes of data and that the city attorney may not have sufficient capacity, yet no additional fiscal resources have been identified.

City enforcement alone is therefore not enough.

And finally, do not create a cure period that lets a company refund the one customer who catches a violation while ignoring everybody else who didn't catch that violation and was otherwise affected by the algorithm.

As amendment language is considered here and between now and the next meeting, urge you to apply one central test.

Would this change allow two customers buying the same product from the same retailer under the same conditions to pay different final prices because of their personal information or predicted behavior?

Please distinguish amendments that clarify the ordinance from those that make its protections impossible to enforce.

Thank you so much.

We will now move to our remote speakers.

The first remote speaker is Amy Harris.

Please plus star six when you have to be unmuted.

Chair of Mercedes Rankin Committee, my name is Amy Harris, testifying on behalf of the Washington Technology Industry Alliance, representing nearly 810 companies in Seattle and across Washington State.

last committee.

We have a number of concerns about the proposed pricing ordinance and its impact on consumers and businesses in Seattle.

In short, this proposal would exacerbate Seattle's affordability crisis and harm the city's retailers, especially grocers.

As drafted, the ordinance would reduce customer savings, not protect them.

Customers rely on fuel discounts, digital coupons, personalized promotionals, and rewards to save money.

The carve-outs in the ordinance are so narrow, they effectively prohibit or discourages much loved consumer programs.

It also adds significant penalties for businesses and would potentially require disclosure of competitively sensitive information, which may lead grocers and other retailers to forgo these programs entirely.

As a result, shoppers would face a shortage of critical money saving options.

Merchants would be deprived of vital chances to foster customer loyalty and encourage repeat business.

It is expensive to live in Seattle.

It is already the most expensive city in the country for delivery right now.

Seattle consumers need more tools to make ends meet.

Retailers and grocers need programs that encourage customers and encourage them to shop in their stores.

Unfortunately, this ordinance removes those options when they are needed most by shoppers and retailers alike.

Thank you so much for your time today.

Next, we have Lars Erickson.

Please press star six to be unmuted.

Good morning, Chair Rink and Council members.

My name is Lars Erickson.

I'm representing the more than 2,600 members of the Seattle Metro Chamber regarding the Surveillance Pricing Ordinance.

We share the goal of protecting consumers.

If a retailer is using personal information to charge someone more, that practice should be addressed.

What we do know is that this legislation, as currently drafted, creates significant compliance costs and legal risk for grocers and retailers that offer discounts, loyalty programs, and fuel rewards that many Seattle families depend on.

During an affordability crisis, the likely outcome is fewer discounts, higher grocery costs, and reduced incentives for retailers to invest in communities that already struggle with access to grocery stores and pharmacies.

Price differences alone are not evidence of surveillance pricing.

Prices vary for many legitimate reasons, including promotions, inventory, delivery costs, and locations.

We should not adopt the most restrictive ordinance in the country to solve a problem that has not been demonstrated to exist in Seattle.

We urge the Council to narrow the legislation to focus on actual price increases, remove the private right of action, and continue working with grocers and retailers to develop a balanced approach that protects consumers without increasing costs.

Thank you for your time and consideration.

The next speaker is Travis Hall.

Press star six to be unmuted.

We'll come back to Travis.

The next speaker is John Pincus.

Please press star six to be unmuted.

I'm John Pincus from the Nexus of Privacy.

Here to support the fair pricing and transparency ordinance also to urge you to resist industry lobbyists' pressure to weaken it.

Please don't add any amendments with loopholes allowing them to feed our personal information to black box algorithms to, quote, optimize pricing, unquote, by charging some people more than others for the same item.

And just as importantly, please do not weaken enforcement.

A strong private right of action is vital Large corporations are extremely expensive to take on.

For example, the state attorney general sued Mehta for blatant violations of campaign finance law in 2018 and Mehta stretched the case out until earlier this summer, a full eight years when the Supreme Court finally upheld the fine.

The city attorney has limited resources and so won't be able to bring very many of these cases at all.

Without a strong private right of action, large retailers and delivery services have a very strong incentive to break the law in hopes that they can dodge accountability.

And the Fair Pricing and Transparency Ordinance only applies to large retailers and delivery services, so there's no risk of the private right of action unintentionally harming small family businesses.

They aren't even covered entities here.

You know, of course, lobbyists will claim that a private right of action will cause the sky to fall, and they'll say, oh, we have to have a right to cure to make up for these without being held accountable.

They always say that.

In 2022, they made similar arguments to the state legislature with the private right of action in My Health, My Data, and guess what?

The sky hasn't fallen.

So please ignore lobbyists, spin, and keep the enforcement provisions and the rest of the ordinance as strong as possible.

The Seattle families need food security and the price of groceries is out of control.

Thank you.

Travis Hall, please press star six to be unmuted.

Hi, my name is Travis Hall and I am dialing in to talk about the Fair Pricing Ordinance and I'm calling in favor of it.

I represent the Center for Democracy and Technology, a non-profit, non-partisan organization that works to advance civil rights and civil liberties in the digital age for everyone.

The digital collection sorting and processing and selling of vast amounts of personal data has enabled businesses and data brokers who serve them to create intimate portraits of individual consumers and not to their benefit.

And surveillance pricing is truly a rank abandonment of transparent list price approach that has served customers well and has justified free enterprise as the best benefiting consumers in the economy.

The ordinance at hand rightly addresses discounts and exempts them.

And I just want to be absolutely clear here that When there is no set price and the price is not transparent and stable, discounts become meaningless.

And ultimately what this creates is vast information asymmetry where retailers and stores are able to know about and set prices for their consumers based on, again, this vast amount of personal information.

whereas the consumers themselves are not in that position.

It also creates an information asymmetry between large chains who are able to have the resources to access this information and use these tools in order to set individual prices, which creates a massive disadvantage for local or smaller entities for whom they are using more traditional discounts or more regular discounts.

The ordinance does a great job of exempting out actual discounts while prohibiting the practice of setting individualized pricing.

And we thank you for your leadership on this and urge you to move this ordinance forward.

Next, we have David Haynes.

Please press star six.

Hi, thank you, David Ains.

It could be said that Kroger has already violated the antitrust monopolized shelf space, whether it's through their efforts to deny competitors moving in when they move out, yet still have a grocery store in the neighborhood, or they're profiling us through their apps and combining QFC with Fred Meyer and then anchoring some of their stores in the same neighborhood to make sure that the prices are never reasonably dropped while Wall Street middlemen are recording record profits at our expense.

And I think it's obvious that the state of Washington was targeted heavily by the evil greed of Kroger and shook this state down.

And some of our leaders, I'm not suggesting council, but maybe on the state level, have looked the other way on some of it.

They've touched on the subject, but they haven't truly addressed it and dealt with the Sophisticated monopolized shelf space that violates that antitrust that gouges the living hell out of the local neighborhoods and shakes us down and leaves us dying of starvation with a belly full of junk food.

Anyway, that said, I'm more upset about the fact that we have a homeless crisis and the Human Services Department is spending millions of dollars running interference for criminal repeat offenders that are connected to the underworld drug pushers and junkie thieving low-lifes who steal all the innocent homeless people's survival here.

And yet, we don't have any accountability from any of the non-profit service providers that King County Regional Homeless Authority was supposed to keep honest and forthright and diligent and proactive and constructively criticized in a positive manner to help them solve the crisis instead of a self-humanist treatment that's taking place because the oversight only cares about Making sure that people get paid a padded cost of subhuman mistreating innocent people that needs to be addressed a little bit more, like, honestly.

Next we have Alberto Alvarez, press star six.

There you go.

Good morning.

Surveillance pricing and exploiting consumer data.

The fact is, business groups have no interest in saving consumers money.

Just a few months ago, these companies received millions upon millions of taxpayer money as refunds for the high tariffs of the previous year.

None of that money was refunded to the consumer or even used to give working staff a bonus, let alone being used to alleviate the price increases due to the war in Iran.

The legislation today for grocery affordability is a great move for our city.

Please make no amendments or carve outs or ones that favor corporations to exploit personal information.

Thank you all and have a good day.

Thank you.

There are no additional registered speakers.

And with that, we will now proceed to our items of business.

And I wanna thank everyone who came out today to provide public comment.

Truly appreciate your engagement in local government.

With that, moving to our first item of business, will the clerk please read item one into the record?

Item one, council bill 121270, an ordinance relating to the Ballard Business Improvement Area, amending section six of ordinance 126911 to clarify provisions on assessment escalations for public hearing discussion and possible vote.

Thank you so much.

And as our presenters are getting settled in at the table, I will note colleagues, before we move into the presentation, I want to note at the top that while a public hearing for this kind of technical amendment to the BIA ordinance is not technically legally required, we feel it's good governance to hear from folks directly impacted by even small changes to BIAs.

So there will be a public hearing opened up following the presentation.

and that public hearing will be to solicit feedback to the proposed technical edit, the Ballard BIA's ordinance clarifying the language to ensure consistent, predictable implementation on inflationary adjustments.

And following the public hearing, we will vote on the ordinance today.

Just give us one second here.

Okay, can you resend it?

Colleagues, we'll be at ease.

We'll be sort of at the technical challenge.

All right, colleagues, we are back.

Apologies, we have a small technical challenge just with two...

The one presentation uploaded twice, and so we are fixing that right now.

In the spirit of keeping the agenda rolling, we are going to move towards opening up the public hearing on this item.

And so with that, as presiding officer, I am now opening the public hearing on Council Bill 121270. Public comment relating to Council Bill 121270 is only being accepted at this time.

Clerk County speakers are signed up for public comment.

Currently we have zero in person and there are two remote speakers.

Okay, each speaker will be provided two minutes.

Clerk, I will now hand this over to you to present the instructions.

Speakers will be called on in the order of registration.

The public hearing registration will remain open until the conclusion of this public hearing.

The same public comment rules apply to this public hearing.

A 10 second chime will be your notice that time to wrap up your comments.

Speakers' mics will be muted at the end of the allotted time.

Speakers are asked to begin their comments by stating their name.

The first speaker on the list is Mark Craig.

And let me...

You can click star sticks to begin speaking.

Good morning committee members.

My name is Mark Craig.

I'm a property owner and rate payer within the Ballard Improvement Area.

I'm here today to voice support for the legislation being discussed regarding the Ballard BIA.

As a commercial and residential property owner in Ballard, I view the Ballard Alliance as an invaluable partner in maintaining and strengthening the neighborhood.

Their clean and safe initiatives help create an environment where businesses, residents, and visitors feel welcome, while their advocacy provides an effective voice for the community in working with the City of Seattle.

The Alliance plays a critical role in preserving Ballard's continued success as one of Seattle's most vibrant commercial districts.

The pending ordinance under consideration is a minor amendment in how the annual inflationary escalator is applied.

The full intent of the ordinance is to add clarity and ensure the annual inflationary increase will represent the year-over-year change in the consumer price index, with a floor of 2% and a ceiling of 6%.

This was the intent of the original ordinance that was adopted in late 2023, and as a ratepayer and a member of the Ballard Alliance Ratepayer Advisory Board, I'd like to encourage adoption of this amendment.

Thank you.

All right, there are no additional speakers for this public hearing.

And so with that, the public hearing is now closed.

And so now turning to the table, are we ready with the presentation up?

We're almost there, everyone.

We will be at ease again just for two more minutes.

I think we're almost there.

Again, apologies all.

It's the first time this has happened to us, so thank you for your patience.

All right, I think we're good to go.

Perfect, wonderful.

Thank you everyone.

Thank you all.

Technology on Friday.

Thank you for having us here.

My name is Casey Rogers.

I'm here with Tom Malone and Brian Scott, representing Ballard.

I'm going to give an overview of our BIA program and of what the legislation that we're going over today is, and then I'll pass it over to these two to go into more detail.

So Seattle's Business Improvement Area Program, we have 11 BIAs across the city, representing more than $45 million in total assessments, and that provides enhanced business services and other services in each district.

All that funding does stay locally, and the funding is predictable and sustainable, which is one thing we love about our BIA program.

The revenue is collected by the city, by the Treasury Services, but 100% of it goes back to the district, so it really all stays locally.

And then lastly, the BIA program is supported by both OED, Office of Economic Development, and the Treasury Services.

And just to frame a little bit more about BIAs and the legislation that we're discussing today, so each BIA itself has its own unique ordinance that outlines the assessment methodology, so the way that they assess the ratepayers within the district is unique to each district.

And I just want to note that inflationary factors are really commonly used and recommended with each assessment formula, and that ensures that the budgets keep in pace with economic conditions and keep up with rising costs.

So the amendment that's being proposed today, a few things, it clarifies ambiguous ordinance language about how the annual inflation adjustments should be applied.

It confirms the intended method.

So there's a few interpretations we realized, but the intended method is that for years three through 12 of the ordinance, you must base the previous year's assessment plus the Seattle CPIU change from October to October, with a 2% minimum and a 6% maximum.

And it does provide a CPUI backup, so CPIU is the Consumer Price Index, in case that there is not a CPI announced in October, which incidentally did happen last fall with the federal government shutdown.

I do want to note that it doesn't actually change the assessment methodology.

This is really about clarifying language.

It ensures consistent calculations to make sure that we calculate the correct assessment for the following years.

And it improves transparency and predictability for the rate pairs in Ballard.

In conclusion, OED has done a review of the proposed amendment and we recommend approving it.

It's reasonable and aligns with our city BIA policies and we think it's necessary for accurate implementation of the assessment moving forward.

So with that, I'll pass it over to Tom and Brian.

Good morning Chair Rink and other council members of this committee.

My name is Tom Malone and I am Chair of the Ballard Alliance Ratepayer Board.

Ballard Alliance was initially formed in 2017 and we had one full term.

And then in 2023, we adopted a new ordinance in regard to this program, but we've been basically around since 2017 as a BIA, but we, as our slides indicate, This really has grown out of the Ballard Chamber of Commerce that's been around helping to work with the community since 1927. So, excuse me.

Our mission is for collective action to build and sustain an inclusive and resilient Ballard.

Our board consists equally of members of landowners and businesses and residents.

Our mission focuses on clean streets, economic development, marketing, advocacy, and public realm and beautification.

So we are obviously in favor of getting this amendment to this program because having been involved with both the 2017 and the 2023 ordinance, when we had to get 60% of our people to agree with the ordinance, we were telling them that we were going to put this floor of 2% and ceiling of 6% in on an annual basis.

We think that we strongly endorse this technical amendment to provide our people with what we promised them.

Thank you.

Good morning, Chair Rankin, members of the Council.

I'm Brian Scott.

I'm the founding partner of Uncommon Bridges.

I've been involved in the place management industry and business improvement districts for more than 40 years, and I've had a role in all of Seattle's business improvement areas and been a consultant for the city pretty much just about 20 years.

This amendment is simply about fixing some language that isn't producing the intended impact.

You pass an ordinance in 2023 reauthorizing the district, and that methodology created a challenge.

Unfortunately, the language in one section is causing an unexpected change.

The intent was to increase the assessment by an inflation factor every year with limits on how there wouldn't be too much or too little.

But the language creates two possible misinterpretations of what is happening.

It could cap the assessments at a total increase of 6% over the original year, and inflation will be much more than 6% over the 12-year life of the district.

Another option, another way to read it would be that it would inflate it.

Once you reach 6%, it would continue to inflate it 6% every year, which would be much greater than the assessment.

It would be a tremendous burden on ratepayers.

so neither of these was the intent one would depress services the other would unfairly assess rate payers so we're proposing a modest change the again the intent is basically that we would increase the assessment each year by the consumer price index but by at least two percent and by no more than six percent so by approving that consistent 2% floor and 6% ceiling on the assessments that allows predictable funding that ratepayers can plan on their assessments and helps the assessment keep pace with rising costs of providing the services.

So the fix is very small.

It's change in one paragraph in Section 2B to say that in each year the percentage change in the assessment will be equal to the percentage change in the consumer price index for Seattle from October of the previous year to that of the current year.

It also makes a provision just in case, as was the case this last year, if the consumer price index does not become available, we would just use that same factor for the previous year.

So this is a pretty simple technical amendment just to get things lined up with intent.

We encourage you to pass it today.

Thank you.

Thank you all for the presentation today and for hanging with us through the technical issues.

Thank you to, I know, the number of staff behind the scenes who got the presentation up.

I appreciate your quick work.

Colleagues, do you have any questions about the presentation or what's before us today?

Vice Chair Foster.

Thank you so much, Chair Rink.

No questions for me today.

I just want to express my appreciation to you all for your work and for coming down to share with us today why these changes are needed and the approach that you took to making sure that members were engaged and participated.

So just expressing my gratitude.

Thank you.

Thank you, Vice Chair Foster.

I am not seeing any additional hands, so I will note that this item is scheduled for a vote the same day as a public hearing, and the rules must be suspended to allow us to move forward with a vote today.

So if there is no objection, the rules will be suspended to allow for a committee vote on Council Bill 121270 the same day a public hearing was held.

All right, seeing no objection, I move that the committee recommend passage of Council Bill 121270. Is there a second?

Second.

It is moved and seconded to recommend passage of the bill.

Are there any final comments?

All right, seeing and hearing none, will the committee clerk please call the roll on the committee recommendation to pass the bill.

Vice Chair Foster?

Yes.

Council President Hollingsworth?

Councilmember Saka?

Aye.

Chair Rink?

Yes.

Chair, there are three in favor, zero opposed with one not present.

All right.

With that, the motion carries and the committee recommendation that the bill pass will be sent to the September 15th full city council meeting.

Thank you all again for the presentation, for the work you do.

Thank you very much.

Well, with that, we will now move on to our next item of business.

Will the clerk please read item two into the record?

Item two, council bill 121272, an ordinance relating to the Capitol Hill business improvement area, modifying the boundaries, amending ordinance 113029 as previously amended by ordinances 115998 1-2-0-3-0-3 and 1-2-4-5-1-4, modifying the assessment structure for the Capitol Hill Business Improvement Area and ratifying and confirming certain prior acts for public hearing discussion and possible vote.

Thank you so much.

So I am noting for the record that this item does require a public hearing and we will hold that today following the presentation and before a vote on the ordinance.

Council Bill 121272 contains five proposed adjustments to the Capitol Hill Broadway BIA's ordinance intended to stabilize the BIA's budget and better align the district boundary with current commercial activity.

And with that, I will now turn it to our presenters at the table.

Or pardon me, before we move to, pardon me, Ms. Redd, this point.

I will now turn it to our presenters at the table.

Thank you, just one second.

All right, thank you everyone.

Let me do full screen.

All right, and we're live.

All right, hi again.

Casey Rogers, BIA Policy Advisor for Office of Economic Development, here today again to talk about the Capitol Hill, or also known as the Broadway BIA, Ordinance Amendment.

Some background on the Capitol Hill or Broadway Business Improvement Area was originally established in 1986, so it's a long-standing BIA.

The CHBIA is actually business-based, so the assessments are based on self-reported revenue from each business that's a member of the BIA.

It currently has a cap of $3,500, a maximum cap of $3,500 as the maximum that any rate payer would pay.

and that actually really limits the growth of the BIA.

As I mentioned in the previous presentation, there's no inflationary factor there given.

And so rising costs for cleaning, safety, and district management kind of outpace the assessments.

And so that's why we're here today to talk about adjusting this.

The proposed amendment offers short-term budget stabilization by adjusting the rates for inflation and making one small boundary adjustment.

It increases some fixed assessments that I'll go into that improves equity across rate payers.

And just to mention, longer term, the Broadway BIA plans to really reevaluate shifting from this business-based model to a more predictable, sustainable, property-based assessment model, which is more common amongst our BIAs.

The elements of the proposal that we're discussing today are as follows.

raising the maximum assessment from $3,500 to 5,000.

It will increase the Seattle Central College's fixed assessment by removing a special lower rate, so then it pays the standard maximum rate of 5,000.

It will increase a financial institution's fixed assessment, so they also pay the standard maximum rates.

And then it will add, starting in 2032, a steady $200 annual increase to account for inflation.

The map here, I just want to note the boundary adjustment.

If you can see in the very southeast corner, there's just one parcel that's being removed from the boundary to better match the actual commercial district of Broadway.

And in conclusion, again, OED has reviewed the amendment being discussed and found that it is reasonable and it aligns with city policy.

And we do recommend this for approval here today.

So thank you for this.

I'm gonna pass it over to Egan O'Ryan.

Good morning, council members.

My name's Egan Orion.

I'm the director of the Broadway Business Improvement Area, in legislation referred to as the Capitol Hill Business Improvement Association.

So, who we are.

We were founded in 1986. We're one of the earliest BIAs in the city.

We're a 501 nonprofit, and our board is made up of BIA rate payers.

We have about 150 businesses.

We're nested in Seattle's historic LGBTQI neighborhood of Capitol Hill.

And right in the middle of our district is the light rail station, and so we are the gateway to Capitol Hill.

Our mission is to connect businesses, residents, and visitors to create a safe, clean, and thriving community.

Welcome to all.

and as Casey highlighted, this is just a prettier version of what he gave us.

Basically, our business just goes from Pike in the south to Roy in the north with some side streets included.

and some basics on the amendment that we're proposing.

As Casey stated, we want to change our max rate from $3,500 to $5,000, and after a stabilization period of five years, we'll add $200 a year to account for inflation.

The reason we do this rather than having a simple CPI adjustment is because these are self-assessments, and so having odd numbers becomes confusing for folks that are filling out forms.

So we wanted something that will align roughly with inflation just to keep up with our expenses, but not confuse our rate payers.

By the way, this max was set in 2001 through an amendment of 3,500.

and those not paying the max our smaller businesses pay on a formula and as their revenues increased they pay more but the max payers have not paid more since 2001 so really this is a fix to that legislation so that we can make the assessments more equitable for all businesses in the Broadway BIA.

We're also removing the Seattle Central College exemption in this legislation and so Seattle Central College will become a max payer and then we're shrinking the BIA map by one business because the business is naturally part of Pike Pine and rather than being part of the Broadway Business District.

Why now?

Well, the cost for garbage pickup and graffiti abatement have increased with inflation, and yet our assessments, especially from our max payers, have remained relatively flat, so this creates a more equitable assessment for all, and it allows the BIA to continue at current service levels, plus add back promotion, beautification budgets, event sponsorship, and more.

The rate payer outreach that we did, we notified all of our max rate payers either by email or by distributing a flyer in person or going in and talking to like a bank manager, a branch manager.

From all those who responded, we got positive responses.

There were no no's to the legislation that we're proposing from any of the folks that we engage with.

The one rate payer with special exemption, SEC, of $1,500 was in favor of the max payer rate now.

and it's just our esteemed board, which we've actually since added to in the last week.

So this is already out of date, we're growing.

And yeah, this legislation just really intends to help keep Broadway a welcoming, safe, clean place for all of our visitors and our businesses.

Thank you for your consideration today.

Thank you so much for the work you do and for being before committee today.

Colleagues, I'd like to open it up to questions first and a reminder, following questions, we will have the public hearing.

Seeing a hand first from Vice Chair Foster and then followed by that, Council President Hollingsworth.

Thank you so much, Chair Rink, and thank you all for being here today.

I appreciate you taking the time to come down.

I just wanted to ask a question about how you decided on the increase from 3,500 to 5,000.

it sounds like that hasn't been increased since I think I heard you say 2001 and so it does seem fairly modest and I'm just curious if I can hear a little bit more about how you landed on that maximum number.

Yeah, that figure was decided upon by discussion through the board and lots of numbers were bandied about.

I think in the economic climate that we find ourselves in, we didn't want to place undue burden on any of our rate payers.

And so basically the intent was to stabilize our budget and with this particular formula that does that.

Thank you, and just one follow-up question, and that makes a ton of sense.

We're all managing increased costs and inflation, as you already discussed.

My follow-up is just if you have a sense of, with this increase, the term that it might be able to sustain you for, just knowing we haven't been 25 years, so I'm curious how you sort of thought about the future, or if this may be something we need to take up again a couple of years down the road, if that was part of the discussion.

Yeah, well, we put an additional increase in starting five years after this legislation would go into effect starting in 2032. So there would be adjustments for inflation later on.

However, in the meantime, Broadway is going to be exploring moving to a property-based model or establishing a brand new BIA and sunsetting this particular model as property-based assessments are more sustainable than B&O-based assessments.

Thank you so much.

Thank you, Chair.

Thank you, Vice Chair Foster.

Council President Hollingsworth.

Thank you, Chair.

and thank you Casey and Egan for being here.

Fully support this and just, I don't have any questions because very familiar with the Broadway BIA and all the work Egan does.

Very grateful for all the work that you have done just to kind of keep the neighborhood.

I know it's always a challenge with just some of the stuff that we've seen, but just really appreciate all the work that you've done.

And I think oftentimes North Broadway, the area that you covered, kind of gets left out of the mix because we get so focused on Pike Pine Corridor that we forget that there's a large part of Capitol Hill that extends to North Broadway and then the area that the BIA covers.

And so wanting to make sure that those resources are being provided for for you all and support from the city.

So just saying thank you.

Happy to vote on this today and the continued work that you all are doing with the Broadway BIA.

So thank you, Egan.

And thank you, Casey, for all your work as well.

Thank you, Council President.

Thank you for those remarks, Council President.

I have just two quick clarifying questions for the record, and thank you, Eakin, for, again, the work you do and for walking us through all of this today.

What I'm hearing is that these changes are just to make assessments for the max rate payers to make this more equitable, correct?

That's correct.

It currently affects about 24 of our rate payers, and we have about 150, so about one-sixth of our rate payers are affected.

who already answered my follow-up question, so 24 repairs.

Thank you so much.

All right, colleagues.

I'm not seeing any additional hands, so I am going to keep us moving in again before we vote on this item.

The committee must hold a public hearing, and so as presiding officer, I am now opening the public hearing on Council Bill 121272. Public comment relating to Council Bill 121272 is only being accepted at this time.

Clerk, how many speakers are signed up for the public hearing?

We have one in-person speaker and one remote speaker.

Each speaker will be given two minutes and clerk, I will hand it over to you to present the instructions.

Speakers will be called on in the order of registration.

The public hearing registration will remain open until the conclusion of this public hearing.

The same public comment rules apply to this public hearing.

A 10 second chime will be your notice when it is time to wrap up comments.

Speakers mics will be muted at the end of the allotted time.

Speakers are asked to begin their comments by stating their name.

Thank you so much.

Our first in-person speaker, and only in-person speaker, is Grant Bowker.

Good morning.

Oh, is this on?

Thank you.

Good morning, Chairperson and Council.

I'm Grant Bowker with Seattle Central College.

And I just want to confirm what Egan has stated there is we have underpaid, in my opinion, for 25 years.

And we are probably the largest footprint in the Broadway Neighborhood Association.

We find it to be absolutely equitable for us to have our limit increased.

Quite frankly, double of what we pay is what we would really like to see.

But this is a great start for us, and the value that we receive is massive.

So we are in full support of this.

Okay, thank you, Grant.

We'll now move to our remote speaker, but hearing from the clerk that they are not present.

So going once, going twice, we have now heard from our last registered speaker at this public hearing, and with that the public hearing on Council Bill 121272 is now closed.

So this item is scheduled for a vote on the same day as a public hearing and the rules must be suspended to allow us to move forward with a vote today.

So if there is no objection, the rules will be suspended to allow the committee to vote on Council Bill 121272 the same day a public hearing was held.

All right, hearing no objection, I move that the committee recommend passage of Council Bill 121272. Is there a second?

Second.

It is moved and seconded to recommend passage of the bill.

Are there any final comments?

Hearing and seeing none, will the clerk please call the roll on the committee recommendation to pass the bill?

Vice Chair Foster?

Yes.

Council President Hollingsworth?

Aye.

Council Member Saka?

Aye.

Chair Rink?

Yes.

Chair, there are four in favor, zero opposed.

Thank you.

The motion carries and the committee recommendation that the bill pass will be sent to the September 15th full city council meeting.

Thank you so much.

Thank you so much.

Thank you.

Have a great day.

All right, colleagues.

We will now move to our third item of business.

Will the clerk please read item three into the record?

Item three, Council Bill 121266, an ordinance relating to domestic workers' labor standards in Seattle, amending sections 1423-010, 1423-020, and 1423-095 to the Seattle Municipal Code, and adding new sections 1423-025, 1423-127, and 1423-128 to the Seattle Municipal Code to establish written agreement requirements, establish protections for entitled paid and unpaid leave, including retaliation protection for taking permissible time off, requiring hidden require hiring entities to create and retain records and advance notice of termination requirements, update remedy provisions and conform to certain changes to state law and with the city labor standards for discussion and possible vote.

Thank you to the clerk for reading the long title.

Colleagues, we were briefed on this item during our last committee meeting on August 7th by the Office of Labor Standards.

Today, we have Karina Bull from Central Staff at the table to give us a quick reminder on what those changes to the amended domestic workers' ordinance are before we move to a vote on the legislation.

I'll turn it to you, Karina.

Good morning committee members, Karina Bull from Council Central Staff.

I have a very brief one minute summary of the ordinance.

It sounds a lot like the ordinance title, but I am available to ask or to answer any questions if council members would like to go deeper.

Council Bill 121266 would amend the Domestic Workers Ordinance, Seattle Municipal Code 14.23, to incorporate domestic worker protections passed by the state legislature earlier this year, reflect recommendations from the Domestic Workers Standards Board, and adopt typical provisions and other Seattle labor standards.

Specifically, these amendments would require written agreements, advanced notice of termination and records retention, explicitly prohibit hiring entities from retaliating against a domestic worker for using their entitled leave, update enforcement remedies to include inflation adjustments that are already in effect but would be reflected in the ordinance, and also add fines.

Last, the amendments would add provisions to prohibit waiver of rights and to encourage more generous policies.

These amendments would go into effect on July 1st, 2027, the same date that the new state domestic worker protections would go into effect, and the amendments would be implemented by the Office of Labor Standards.

There are no amendments for the committee's consideration.

Thank you so much for the overview, Karina.

Colleagues, I know we've had a number of discussions related to the Domestic Workers Ordinance as well as the work of the Domestic Workers Standards Board.

I'd like to open it up to you all if you have any questions for Karina today.

I am not seeing any hands.

And colleagues, as a reminder, we do intend to vote today.

I know there were no amendments that came forward on this.

And hearing and seeing none, I'm going to move us towards a vote, which I'm very excited about.

So with that, I move to recommend, pardon me, I move that the committee recommend passage of Council Bill 121266. Is there a second?

Second.

Thank you.

It is moved and seconded to recommend passage of the bill.

Are there any final comments?

All right, will the committee clerk please call the roll on the committee recommendation to pass the bill?

Vice Chair Foster?

Yes.

Council President Hollingsworth?

Aye.

Council Member Saka?

Aye.

Chair Rink?

Yes.

There are four in favor, zero opposed.

Wonderful.

The motion carries and the committee recommendation that the bill pass will be sent to the September 15th full city council meeting.

Huge thank you to the Office of Labor Standards for your hard work on this.

Thank you again, Karina, for your work on this as well, and to the Domestic Workers Standards Board for the work that you've put in over the past several months to bring us to today.

Thank you.

And with that, we will now move to our fourth item of business.

Will the clerk please read the item into the record?

Item 4, Council Bill 121267, an ordinance relating to prohibiting algorithmic-based price discrimination, requiring covered retailers' disclosures to consumers, requiring that covered retailers retain certain records, and adding a new Chapter 7.35 to the Seattle Municipal Code for briefing and discussion.

Thank you so much.

Now, before our central staff presents on policy considerations, I wanna take a moment to briefly speak to what our fair pricing and transparency ordinance is and isn't and where we are in the process.

This bill is focused solely on preventing big companies from using our personal information to set unique prices for each of us individually.

That's it.

This bill does not prevent senior discounts or gas rewards.

This bill does not prevent membership rewards or club card savings.

Companies can still offer a discount to sign up or come back.

This bill does not impact our independent grocers or ethnic markets at all.

This bill does not stop companies from giving Seattleites coupons.

Now, after months of deep engagement with privacy and consumer protection experts, community advocates, labor, and critically industry, my team and the mayor's office crafted this bill to put guardrails on one specific practice.

Large grocery and delivery companies setting, altering, or manipulating the price of goods based on monitoring, tracking, or automated analysis of our behavior, location, demographics, biometric data, or other personal information, including personal information acquired from a third party, or personal information that is gathered, purchased, or collected by these companies using electronic surveillance technology.

And in our last committee meeting, we heard from the executive and national experts on AI and civil liberties on the details of this bill and why we need it now.

Today we'll hear from our independent central staff's objective analysis on the bill and hear directly from colleagues on the committee about their amendment concepts.

So with that, I will now turn it over to central staff to proceed with their presentation.

Thank you so much.

Good morning, Council Members.

My name is Jasmine Marwaja on Council Central Staff.

Good morning, Tommaso Johnson, Council Central Staff.

We are here to walk you through a presentation that provides a summary of our analysis memo on this legislation.

The memo which you are in receipt of is also posted on the agenda for members of the public.

This bill, Fair Pricing and Transparency, Council Bill 121267, As a background, as you mentioned, and as was discussed in more detail during the last committee meeting, this bill is intended to address the concept of surveillance pricing, also known as individualized pricing.

The terminology used in the bill is different, but just by way of background, surveillance pricing is based on a combination of technology and business practices where information about individual consumers is gathered, aggregated, and analyzed, and then utilized to vary the price presented to the consumer.

We'll hear distinctions between price, posted price, and discounts, and there's some difference of terminology there when describing the prices that people pay.

But when we use pricing in this context, we're referring to the price that someone pays, which may or may not reflect a discount or be the posted price.

So in general, as I mentioned, this is the practice known as surveillance pricing or individualized pricing.

The term that this bill used is algorithmic-based price discrimination.

consumer protection laws in general in this country and in Washington state were created at a time before the technology was as prevalent as it is now to regulate this kind of price variability, frequency and level of variability to the individual consumer.

I think it's important to note that we've seen several other consumer protection laws attempting to address the use of algorithms and personal information to vary the price paid for goods or services.

The ordinance from last year, known as the Algorithmic Rent Fixing Ordinance, is analogous in some ways.

That ordinance sought to limit the use of algorithmic variability in terms of residential rental markets, and as I said, that was passed by this council last year.

There have been related legislative efforts in a number of jurisdictions around the country.

There are currently three state laws enacted on this topic, Connecticut, Maryland, and New Jersey.

New York and Colorado have also passed, those state legislatures have passed bills addressing this topic.

I should say that there is a more comprehensive summary snapshot of those efforts in a table at the end of this memo.

There's also proposed legislation that has not been passed at a municipal level that's similar in some ways to this effort in Portland, Oregon.

There was, as well, state legislation in Washington State in Olympia this past year, this past session earlier in the year.

It did not pass this year and would need to be maybe reintroduced in some form during the new session in 2027. As far as what this bill does, it would create a new chapter in the Seattle Municipal Code 7.35 that would have four sort of core requirements.

Number one is a prohibition on the use of electronic shelf labels.

That is a technology that allows shelf prices in physical retail environments to be varied dynamically through a digital label as opposed to the more traditional printed shelf label.

It would also create a prohibition on what the bill defines as algorithmic-based price discrimination.

This prohibition would be specific to the sale of groceries and certain other items, and it would include exceptions, which I will be discussing momentarily.

It would also put new disclosure requirements on certain information related to pricing and discounts by those covered retailers, and it would also address record keeping related to compliance.

This bill, in terms of the scope, this bill uses several defined terms.

The covered retailers would include three broad categories.

First and foremost is grocery businesses.

Those are businesses that are engaged primarily in the selling of groceries for offsite consumption.

It explicitly excludes convenience stores and farmers markets.

And as was mentioned earlier, it also applies only to grocers of a certain size.

So those requirements are 10,000 square feet or more in the store and 20 or more locations worldwide.

The term that the bill uses is globally, but across the world.

Secondly, mixed use grocery businesses are defined as those businesses that do not exclusively sell groceries, but have at least 10,000 square feet.

of floor space in their store dedicated to the sale of groceries.

And regulated goods in those mixed-use businesses would include groceries, as well as grooming products, hygiene products, and over-the-counter drugs sold there.

Lastly, delivery service providers are those entities that facilitate the delivery or online ordering from one of the above categories of businesses, covering the same categories of goods for each business type.

And the requirement there is that that delivery service provider have 100 or more employees worldwide.

The core of this bill is this term, defined term, algorithmic-based price discrimination, which is defined as, quote, the setting, altering, or manipulating of the price of goods based on monitoring, tracking, or automated analysis of a consumer's behavior, location, demographic characteristics, biometric data, or other personal information.

This is a catch-all definition that includes the term random variations in price between different customers.

There are exceptions built into this definition, so categories of price variation that are not considered to be algorithm-based price discrimination include variations in price based on delivery cost or location, per-physical store pricing variation, as long as that variation is available to all customers at that store.

Third-party or manufacturer's coupons are exempted, provided that there is not use or sharing of that customer information.

Discounts are also allowed to members of a group, a broadly defined, commonly accepted group.

Examples, a non-exclusive list of examples is provided, teachers, students, veterans, employees, seniors, etc.

And lastly, discounts, or I should say finally on this slide, discounts based on eligibility criteria potentially available to any customer at that store, such as bulk purchases, participation in a mailing list, or other promotions.

Finally, and maybe most importantly for the topic of discussion on this bill is the exemptions related to participation in a loyalty, membership, or rewards program.

Those exceptions are premised on the following requirements, that participation in the program is voluntary, opt-in, affirmative enrollment.

Discounts are available to all members of that loyalty, membership, or rewards program.

Discounts are allowed to subsets of the program that use prior purchase history.

This discount type must be based on tiers as opposed to individualized personal consumer purchase history and pricing.

Those tiers are allowed to be based only on prior purchase history without the use of other personal info or third-party data.

Retention and re-enrollment discounts are also allowed.

Those discounts are designed to entice a member who is contemplating leaving the program or who has lapsed and is now being targeted for re-enrollment, which includes so-called cross-selling of similar related items.

However, those discounts must be available on equal terms to all similarly situated consumers.

Getting to the policy considerations, we have like three or four to discuss, and first is the consideration of personalized discounts.

So industry stakeholders have claimed that the legislation would limit a covered retailer's ability to set personalized discounts that would benefit consumers.

The legislation would not, for example, allow the use of an individual's prior purchase history to provide discounts on their commonly purchased items unless that individual was a member of a retailer's loyalty program and the discount was available to all members with a similar purchase history grouped into tiers.

The legislation would also not permit any personalized discount based on an individual's other personal information, such as their internet search history.

It's difficult to ascertain whether these limitations would result in a net cost increase for consumers.

The second policy consideration relates to enforcement.

There are two avenues for enforcement of the bill.

One would be a private right of action, or a PRA, and I think it's worth getting into a little bit more about what that means.

So many city regulations contain a PRA provision as an alternative to agency enforcement.

A PRA provision allows an individual to file a civil lawsuit against a person or entity when a law is alleged to have been violated.

Typically, a PRA is not the sole means of enforcement, but rather an alternative path to agency action if, for example, the agency is delayed or does not have capacity to pursue enforcement.

PRA provisions among different regulations can vary, with differences including but not limited to whether civil penalties or fines, not just damages, can be assessed, who would have standing to file a civil action, and whether a class of people can file instead of just individuals.

So in this case, the bill allows for a class of individuals to file suit with liquidated damages allowed up to $10,000, fines or penalties of $3,000 per violation, and up to $10,000 per subsequent violation.

And that for private right of action would be capped at $1 million per suit in addition to liquidated damages.

The prior right of action in this bill would be available for all covered mixed-use retailers or delivery service providers, but would only be available to grocery stores if they have 25 or more establishments in Washington State.

Because a private right of action requires access to an attorney and an attorney who is willing to take the case, it's unclear whether this will be an accessible avenue of enforcement for the average person.

Many people who suspect algorithmic-based price discrimination may instead turn to the city attorney's office, which would be given authority to investigate and file civil actions in court to enforce the bill's provision.

The city attorney's office avenue does include or allow for the same fines and liquidated damages as the private right of action, but does not have a cap.

The City Attorney's Office has been given no additional funding for this and no fiscal impacts to the CIO were identified.

However, the Attorney's Office may have to develop new systems and procedures to handle intakes directly and may not have capacity to conduct thorough investigations that would involve analyzing large volumes of data.

This legislation could create significant workload for the City Attorney's Office.

Now, the next couple of policy considerations are more contextual.

I think in the memo, the existing consumer protection laws were not under the contextual section.

It probably does belong more as just context.

There are a number of existing consumer protection laws, which as Tommaso mentioned, do not necessarily cover the specific instance of algorithmic-based price discrimination.

However, they do address the need for transparency, in pricing and so may intersect with this issue as well and it's unclear how these laws do intersect and whether stronger enforcement or other avenues looking at these laws might also get at the same issue.

There's also, as Tommaso mentioned, the potential for preemption at the state if it is considered in the 2027 legislative session.

So the next steps, today the intention I believe is to discuss any planned amendment concepts and also to ask questions of central staff for any clarifying questions for our memo.

The next special committee meeting of the Human Services Labor and Economic Development Committee is gonna be September 11th where there will be a formal presentation of amendments and an anticipated committee vote.

and then it should go on, if it is voted out of committee, would go on to the full council on September 22nd.

And with that, that concludes our presentation.

Well, thank you so much for the presentation and thank you again for your work on this.

Colleagues, I'll open it up first to you for questions that you have on the presentation and the bill.

I am Not seeing any hands.

I'm happy to ask a couple of questions just to get us going while my colleagues are considering potential questions.

I think just kicking us off from your assessment, without an objective bona fide market price standard, what prevents a retailer from inflating nominal price and presenting different individualized final prices as discounts?

I think it's difficult to say, but I would say that that's partly why the contextual policy consideration was brought up in the sense that it's possible that existing consumer protection laws could regulate what exactly is the displayed unit price and whether that can change based on the individual.

but again, that is unclear and so this, to my knowledge, there's nothing that specifically bans the use of personal data in individualized pricing.

Thank you.

And taking us to elements related to enforcement, theoretically, if private enforcement was eliminated and the city attorney lacks the capacity to be able to enforce this as identified in your memo, what remedy would realistically remain for an individual consumer seeking recourse?

Well, if the private right of action was eliminated, the sole enforcement mechanism that would remain in the bill would be the city attorney's office.

So I think that, you know, we've identified that there may be challenges or capacity scaling needed to effectuate the City Attorney's Office enforcement.

I don't think that we're saying and I don't think the City Attorney's Office has said that they would be functionally unable to enforce this.

I think, you know, as with any new regulatory scheme, there would be a time that would be required internal work and capacity development that would need to happen.

I think Our understanding, our belief is that there would be some enforcement that would occur.

It just may not be as robust as it otherwise would be at the city's attorney's office without the provision of additional resources.

So should the private right of action be eliminated without any other changes to the current enforcement mechanisms?

You know, individuals would be able to make complaints, make requests to the city attorney's office, and the city attorney's office would evaluate and investigate to the best of their authority, to the best of their ability, using this new authority.

I think it's important to say, yes, we believe that there could be capacity challenges.

However, that is not to say that there would not be any enforcement or complaint mechanism available to individuals.

They would go to the city attorney's office, and then they would respond in accordance to their capacity.

Jasmine?

Any regulatory agency at the city would have internal policies as to if their complaints exceed their capacity to thoroughly investigate and enforce.

Our understanding is that if the complaints do exceed the city attorney's office capacity, that the attorney's office would develop internal policies as to prioritization as well as other avenues of getting redress.

Thank you both for unpacking that.

And my last question before I turn it back to my colleagues is just thinking about this a little bit in practice.

How would refunding the one customer who discovers a violation cure an algorithmic pricing practice that may have affected thousands of customers?

I mean, I think it's hard to say.

I think that the implication within your question is correct to some extent that, you know, an individual refund would not necessarily resolve the underlying issue.

I think the prohibitions and the enforcement mechanisms that are in the bill right now are sort of a You can think about them serving a dual purpose.

With the private right of action in particular, there needs to be a specific injury alleged, and then the private right of action creates a statutory ability for someone to pursue a civil lawsuit to both seek redress for those individual or collective, in the case of a class suit, What they would have to allege to have standing is that there wasn't a specific injury.

So that would allow them to both seek redress for that specific injury, but then also seek enforcement of the prohibitions in the bill.

So I think that the enforcement mechanisms on the city attorney office side are designed similarly, both to pursue damages and to pursue compliance as well.

Thank you so much for that response.

And actually my last question, and just to get it on the record again, what protections in the current bill already preserve legitimate loyalty programs, coupons, promotions, and purchase history tiers?

Yeah, so as we discussed, there are various exceptions related to discounts.

As I mentioned before, Exceptions related to discounts cover third-party or manufacturer's coupons, provided that those coupons do not involve, do not require or use the sharing or use of individual customer information, group discounts based to defined groups, targeted at defined groups, and discounts based on eligibility criteria available to any customer.

I think that a lot of the bulk of this conversation has been related to the loyalty program discounts, and I think the, without You know, without reiterating everything I said before, I think the sort of key thing here is that the move away from consumer by consumer or member by member discounts that might vary between, you know, if Jasmine and I are both part of the same loyalty program at the same store, I think what the bill is requiring and attempting to do is ensure that each of us would receive similar discounts, discounts that, you know, if we had very different prior purchase histories, Jasmine and I we might not receive the same purchase history-related discount, but if Council Member Rink, if you and I, the three of us were part of a loyalty program and you and I had a similar purchase history, that purchase history discount would be available to both of us based on a broader tier or class of behavior rather than individual person-to-person variation and what discounts would be available should we all be part of the same loyalty program.

So I'm painting in broad strokes to try to explain it a little bit better without reiterating myself, so that's not exactly it, but that's the idea of the bill.

I think, too, maybe, and just going further into the example of Tommaso and myself, if we If I purchase a lot of Cheerios, and Tommaso purchases five boxes a week, and he purchases two boxes a week, I couldn't get a coupon that was just individualized for me to get five boxes, but if there was a tier of folks, Anyone who gets more than one box of Cheerios a week would qualify for this coupon.

That would be allowed.

So I think there would be arguably some more restriction on loyalty program members from getting personalized, individualized coupons based on our purchase history.

They'd have to be grouped into larger tiers, but it's unclear how much that truly is a limitation.

Yeah, I think another way to think about what this ordinance does is there are some components of it that are maybe more forward-looking based on business practices that we aren't seeing yet locally or aren't seeing in a widespread way.

I think the electronic shelf labels is an example of that.

That is not a technology that is very widespread yet in our city.

There are some places where it exists, but it is not.

the dominant form of shelf label technology.

So in that sense, that The intervention that the bill is making there is maybe more forward-looking in terms of the prohibition.

There are the changes that we're describing to loyalty and membership rewards programs.

Some of those are already more widespread business practices, and in that sense, those components of this bill would seek to change what is already a current business practice that's more well-established in the city.

Thank you both for taking a stab at outlining all of those scenarios for us.

It's really appreciated.

Colleagues, any additional questions or comments on this?

Beyond just questions, I know this is time to decide to talk about potential amendment concepts, so this is a forum to be able to bring those up as well.

Vice Chair Foster?

Thank you so much, Chair.

I appreciate the clarification.

I was waiting for the time to bring up amendment concepts, so thank you for that.

I just wanted to share with members of the committee, our office is looking at an amendment concept to help clarify who is an aggrieved party, so looking at the current language that states tangible compared to intangible harm.

so we will be working with central staff on that in the coming weeks and the interest there is to make sure that as we are implementing private right of action we have clarity on who is eligible for a class and we want to make sure that we have clarity in the language.

Thank you for sharing that, Vice Chair Foster.

Other committee members, if there's anything else you'd like to share or additional questions on the bill, I'd like to give you space for that.

but I also won't belabor the point if we are ready to move on.

Hearing and seeing no additional hands, I'm gonna thank central staff again for today's presentation and walking through and answering questions.

Colleagues, we will be taking up amendments and a vote on this bill at our next committee meeting, September 11th, I believe.

Yes, thank you.

Thank you.

And so with that, we will now close this out and move on to our fifth and final item of business for the day.

Thank you all again.

Moving to our fifth and final item of business, will the clerk please read item five into the record?

Item five, Council Bill 121275, an ordinance relating to commercial tenancies, establishing lesser requirements to provide transparency regarding access to the lease agreement, previous certificate of occupancy for the space and existing conditions of the space and triple net expenses and amending sections 6104020, 6104030, 6104060 and 6104060. 104070 and 6104080 of the Seattle Municipal Code for briefing and discussion.

Thank you so much.

Colleagues, at the July 17th meeting of this committee, staff at the Office of Economic Development briefed us on a variety of challenges our local small businesses are facing, and we had members of the business community really speaking to those challenges themselves in direct testimony.

One clear common theme was that the cost of securing a lease on a space and making necessary tenant improvements can make or break a small business before it can even open its doors.

In worst case, but not at all uncommon scenarios new tenants and commercial spaces discover is that the space that they leased is not what they thought they were getting and that tens or even hundreds of thousands of dollars in build-outs, retrofits, and permits will be needed to secure occupancy before they can bring in a single dollar of revenue.

And on the other side, our commercial property owners and managers have faced challenges finding and securing long-term tenants who come to the table prepared and informed enough to make the most of what is often the biggest investment of their lives.

Small business owners are not real estate experts.

I'm not a real estate expert by any means.

And the leasers of these spaces are not experts in the specific needs of each business.

And when that information isn't clear, mistakes can be made and everybody loses.

So our businesses, our commercial landlords, and ultimately all of us in Seattle who walked past empty storefronts instead of having an opportunity to support our local entrepreneurs and our thriving neighborhood business districts.

So the Office of Economic Development in partnership with my office has been exploring options to make renting a commercial space in Seattle more affordable and less risky.

and honing in on those ways to make sure that potential tenants had all the information possible about a space before considering leasing and that landlords were clear in their duties to disclose what they knew about a space and how their terms would be determined.

So to be clear, in dozens of meetings with stakeholders on both sides of a lease, it was clear that the majority of commercial landlords already do most, if not all, of what is in this bill.

but this ordinance seeks to enshrine those best practices into regulation to ensure all landlords and tenants are playing from the same rulebook.

So reducing the risk of small businesses falling prey to bad actors or simply signing up for something they don't fully understand will mean less costly surprises for tenants and landlords and better chances for long-term tenancies in a thriving, sustained small business ecosystem.

And so with that introduction, I'd love to turn it over to the Office of Economic Development to share details on the legislation.

Great, thank you so much, Chair Rank and members of the committee.

We can start with some quick introductions.

I'm Alicia Teal, Deputy Director at the Office of Economic Development.

Hi, Isaac Horowitz, Policy Advisor at OED.

Selwyn Green, Tenant Improvement Manager.

Great.

For the records, Jasmine Marwaha, Council Central Staff.

Good morning, Adam Sisic with your Central Staff.

Great, sorry.

Oh, perfect, thank you.

Chairing, thank you so much for that introduction.

You actually covered much of the ground, which is perfect because I think we're very aligned on kind of how this legislation came about.

And so I think the committee is very familiar with the work of Office of Economic Development, but just a quick note, our core purpose is leading projects and making investments that open up access to economic opportunities, reduce the racial wealth gap, and encourage innovation and growth.

access to commercial spaces and vibrant neighborhood corridors is certainly part of that work, and that's two of the pillars of the community-driven future of Seattle economy framework, which serves as the city of Seattle's economic development policy framework via resolution 32099. So, we likewise, Council Member Rink, have appreciated the opportunity to work with you and your staff as we develop this proposal.

And this idea evolved organically through our work over the years, especially with small businesses.

And as you noted, some of these themes came up at the July 17th committee meeting round table.

And so, as we work to strengthen that ecosystem that you mentioned for these ground floor corridors that are inviting for residents, businesses, and visitors, we want to use the full toolkit from programs and investments, and in this case policy as well, to support that.

And as you noted, landlords and property managers are a critical part of that ecosystem.

They've been valued partners to the work of our office, including Seattle Restored.

You can see a couple businesses who have participated in that program here.

And we believe that this proposal will lead to better outcomes across this ecosystem, especially because as you noted, the proposal reflects many of the best practices that landlords and property managers are incorporating.

And so this baseline across our city can help us avoid some of the worst case scenarios that we have encountered while supporting small businesses.

These worst cases have unfortunately led to disputes, unexpected, extended, and costly tenant improvements and permitting processes.

And so this slide just gives some context for how these issues came to our attention.

This chart shows the tiered investments that our office makes to help businesses stabilize and grow.

They range from the left from, and they kind of go from like lowest barrier to with more and more vetting and larger investment.

Our ABC program provides accounting and business consulting, and then we also have a number of programs to strengthen access and readiness for commercial space, since that is such a big part of the issues that we see today, including vacancy.

We want to make sure that as many spaces are occupied and viable as possible.

And so this proposal grew out of staff and consultants identifying patterns, administrating our commercial space consulting program, which is that kind of like brownish red one to and from the left.

That program really works with businesses who are looking for a prospective space or are looking to make improvements to their spaces and is offering consulting support for free.

and our tenant improvement program, which is the brown bar two from the right, or the second one from the right, which invests in equipment, signage, and build-outs.

And so even as both of those programs and really all of our programs involve educating business owners and operators.

And in the case of the Tenant Improvement Program, also assessing business viability and experience, the issues that this legislation seeks to address are still a gap where a policy change is a really critical component to the education that OED and others, including our consultants, offer.

So now I'll turn it over to my colleague Selwyn to talk more about the specific issues we propose addressing.

Hi.

As you saw in the last slide, we have a continuum of programs that we offer to small businesses.

And in particular, my colleagues and I, and consultants, we actually read over hundreds and hundreds and hundreds of leases.

And through our commercial space consulting program, we do a lot of business advocacy work between landlords and tenants.

So we sat down last year and we thought about what could we effect, you know, what could we really help businesses overall to really get them to be able to have stabilization, grow in their communities, and thrive.

And we kept seeing these kind of common themes that come up when we're doing our advocacy work.

So these are some of the things that bubbled up.

And one of them is no copy of the signed lease.

I know that might be shocking, but actually, you know, tenants will sign their lease and not get a copy of it.

And it really puts a real strain of fog into what their business is like.

They don't know what is in their lease.

They don't know how it's going to operate, who's going to be responsible for what, what is the pricing when the lease is over with.

So they're in the fog.

They just don't know.

It seems crazy to think about, but yes, they do not have their own lease for their commercial space.

Secondly, the misunderstanding of the allowed use of space.

This has created a lot of issues when a tenant goes into a space, they sign a lease, and they think say it's a salon they think it's a salon it was a salon before it was marketed as a salon with the landlord and then they sign their lease they go inside to do some minor upgrades and get a permit for that and come to find out they don't have it was never permitted for that so then they're on the hook for actually upgrading that space which costs tens and tens of thousands of dollars for them to bring it up to code and get it permitted properly most of the cases they don't get any kind of compensation from the landlord they have to then pay their rent on top of making all these upgrades to bring them up to code.

And similarly, with the third one, discovering faulty conditions or inadequate utilities only after signing the lease.

So, imagine you're going in and you are trying to start your business, you have a limited budget, and then you come to find out that you don't have the utilities, your hood doesn't work, your plumbing is backed up.

it causes catastrophic outcomes for a business trying to get started.

I mean, before they even open up their doors, they are drowning in a sea of red ink.

And lastly, we thought about this triple net expenses.

which are operational expenses.

Everybody knows operational expenses are going up all the time.

And so, it's nothing that we know we can do about that.

I mean, it's happened to all of us.

Even privately, it's happening to everyone.

But what it is, the issue is that, you know, a lot of these leases are 30 pages, and it might be a small paragraph on page 25 with a couple of um percentages and uh definition and so what does that equate to for a business they really really don't know you know that those percentages and how it's presented um is not explained and people are signing off on that to come to find out when it's time to pay it it might be half of their rent it might be more than half of their rent and they have not allocated that operational cost within their budget.

So then they're at a deficit, they don't know how they're gonna continue, and it's really harmful to the business.

So what we did was, again, we sat down with my colleagues and consultants, and we really went through and formulated what we thought would be some really best practices for transparency.

and so that's what really informed why we made these suggestions on the transparency of those four points.

We also got in touch with at least a dozen stakeholders, which included landlords, industry organizations, business the BIAs and other stakeholders, and we had a couple of really good sessions with them.

I thought it was a great partnership.

They came in, gave us some really good feedback.

We went back, retooled some of our languaging, came back, did another session with them, came back, did some additional retooling of the messaging, and I think that we are in a good spot to move forward with it.

As this legislation passes, we continue.

We really want to work with them.

I think we've created this partnership.

We want a win-win for everybody.

We want all voices heard.

Great.

Thank you, Selwyn.

So now I'm going to get into the specifics of the legislation itself, and the key requirements are listed on the slide, but before I get into that, I just wanted to note a few things, which, you know, as the name of the legislation implies, the goal is really around transparency, disclosure of readily available information.

It's not to impose new warranties or guarantees, and there are a couple sections of the ordinance that clarify that.

As it says there, we are building off of SMC 6104, which is the personal guarantee and security deposit limit legislation that passed through Council, I believe, in 2023. So, the last thing I'll say before I get into the requirements is the definition of commercial property, which this ordinance does not amend, but was created for the personal guarantee and security deposit limit, does exempt some significant sectors of commercial property, so residential and lodging, rentals, office space, research and development, lab space, and medical practice, clinics and dispensaries, and farming are all exempted from these requirements.

So these requirements are kind of in parallel to some of the issues that Selwyn outlined.

So the ordinance would require the landlord provide a copy of the lease at signing and at least one additional copy during the term of the lease.

The second is requiring the most recent certificate of occupancy be attached to the lease.

That is typically readily available on a public portal hosted by SDCI, but the ordinance does include some caveat language that in case it somehow isn't available, the landlord isn't liable or required to provide it.

The existing conditions of the space.

So the definition of existing conditions are kind of the key components of a space, so floor, wall, roof, doors, and key systems like plumbing, electrical, HVAC, sprinkler, and security systems.

There's a form that OED will develop, a model form that landlords can provide, and we'll do that in the rulemaking process.

The fourth is the disclosure of past and an estimate of future triple net expenses for the previous year and for the first year of the lease.

And triple net, as Selwyn mentioned, are the charges above base rent.

That typically includes common area maintenance, taxes, assessments, insurance, utilities, and security.

And so there's the disclosure of past and estimate of future, and also an opportunity for the tenant to access documentation of the actual costs incurred, which lead to the charges to the tenant.

And again, this ordinance doesn't regulate the amount of TripleNet, it's really just providing disclosures around how those costs are incurred.

For implementation considerations, the Office of Economic Development will administer this new section of the code.

There's an effective date of July 1st, next year, 2027, to allow for time for OED to develop rules, education, and outreach materials.

The enforcement mechanism is private right of action to pursue relief for violations and it's not exactly enforcement, but I just will note that OED intends to educate landlords in the programs that we have where we're identifying these issues.

We will proactively educate landlords about these new requirements.

and Finance and Administrative Services administers the personal guarantee and security deposit legislation, so it's possible they will get more calls related to this, although OED will, so I just want to note that we will coordinate with FAS and SDCI on the certificate of occupancy to make sure all the programs are aligned.

So the impact of this legislation, we really are just trying to get the right business in the right spaces.

We want tenants to have great relationships with their landlords and good transparency and communication.

and the same with landlords and property managers.

They want to have a good relationship with their tenants.

We want them rooted in the community as long as they can be, in their neighborhoods, thriving.

And so that's what this, all this legislation would be about, you know.

We want to have, we want to make sure that, you know, when a tenant signs their lease, that there's no kind of big unforeseen expectations of what they are up against.

I mean, that has put businesses out before they've even gotten started, and we really want it, when they're walking into a space, they know what they're getting, they know what they're up against, and if they choose that, then that's great, okay?

It's the things that they're not choosing, that all the unexpected things that happen to them, that's why our office gets involved and does all this advocacy work.

and the transparency of the triple net expenses.

I mean, we want that highlighted off the pages in their lease agreements.

We want them to know exactly what their costs are going to be or projected costs are going to be, so everybody goes in with their eyes open and they know what they're getting There's no trickery or anything that they feel that they would have not known if they would have read through or somebody did more explanation.

It's right there on the pages.

Everybody is on the same page.

And then everybody is more successful.

So with that, I think we are ready for questions.

That's okay, right?

Or did you want to go into your analysis and then we all take questions?

Why don't we go to the central staff analysis next?

If you go back there, it was a tab.

I see.

as Jasmine is pulling this up.

Good morning.

Happy Friday.

My name is Edwin Sisic with your central staff.

I want to thank our OED colleagues for their very thorough presentation.

It makes my job a little bit easier because I can skip over some slides and get right into the policy considerations piece.

We have identified three policy considerations and one contextual, and then we'll go into some next steps as we consider this legislation.

starting with the first policy consideration as described in the memo and as our OED colleagues have pointed out, the provisions in this proposed legislation are enforceable only through private right of action.

and in this case limited to individuals who have suffered financial injury and does not allow for civil penalties.

However, some of the requirements in this bill likely wouldn't result in direct financial injury for tenants, so then there's really no enforcement mechanism and also tenants that may suffer financial injury as a result of our violation would need to have financial and capacity resources to pursue litigation.

A possible mitigation strategy if the committee has concerns around compliance incentives is to strengthen the private right of action provisions or incorporate agency enforcement that already exists for excessive security deposits or guarantee requirements provisions of this chapter.

This work would most likely fall on FAS consumer protection division and would have fiscal impact but those have not yet been calculated or fleshed out fully so.

Moving on to the second policy consideration, this bill requires commercial investors to provide several forms of documentation to their tenants, as OED pointed out earlier, including copies of leases, certificates of occupancy when available, existing conditions disclosure forms, and annual statements of triple net expenses Many landlords already follow these best industry practices.

However, smaller property owners or those with limited administrative capacity may find these new requirements a little bit burdensome and challenging to implement.

So if the committee has concerns about potential administrative burdens, you may wish to consider additional city support.

like providing standardized templates, technical assistance, or phased implementation timeline that would help lessen lessers meet the new requirements while still preserving the transparency benefits that this legislation is designed to provide.

and the third, records compliance policy consideration.

So this bill requires lessers to provide all aforementioned documents, but there's no requirement to retain those records, which could make verifying compliance more difficult.

So another policy consideration is to add a records retention requirement, which is considered a best practice.

in regulatory drafting, and the goal would be to streamline enforcement and reduce disputes regarding compliance.

While this potentially adds a little more administrative burden for some lessers, ensuring all parties have access to consistent, verifiable documents could outweigh those concerns.

So now I'm going into our contextual policy considerations.

Certificate of occupancy often provide broad and limited occupancy information and may not fully reflect all activities under the land use code.

with some buildings that may not have one on record altogether, as we mentioned.

On the other hand, permitted use disclosures more clearly reflects what business activities are allowed in a particular space and could particularly be helpful for businesses that may struggle to interpret them.

the complex code requirements, reducing the unexpected needs for additional approvals or permits after signing a lease.

However, understanding a spaces permitted use is generally more complex as currently any building owner or prospective tenant could call SDCI to look up permitted use by Crawford that references various provisions of the code.

that would apply to a particular building, such as zoning code provisions, building code sections, historical permits and approvals, and other use-specific regulations that may apply to the building or the structure.

And this is more of a labor-intensive than providing delayed a certificate of occupancy that's already on file.

So our understanding is that OED and SDCI plan to explore ways to streamline this process and expand technical assistance.

So the committee may want to receive a status update after implementation of the legislation.

and just real quickly in terms of next steps and the upcoming schedule for Council Bill 121-275.

September 18th at 9.30 is the next discussion and possible vote on amendments and final select committee vote on the bill.

And if any council members are interested in pursuing amendments, please contact central staff, Jasmine and I, no later than noon on September 9th.

But please contact us as soon as possible.

And I know there's recess coming up.

So that concludes our presentation.

So open to questions.

Thank you for that overview.

And yes, this is our last committee before recess.

So we are standing in the way of folks starting their recess.

So with that opening up to my colleagues, any questions on all the material that was presented from the presentation from OED to the central staff presentation?

Seeing a hand from Vice Chair Foster.

Thank you so much Chair Rink and just my appreciation as always to the staff and team at OED for all your hard work and for the central staff as well.

Really appreciate all that went into this with your outreach and communication and relationships with small businesses.

I want to ask a couple of clarifying questions around the permitted use and certificate of occupancy.

just to make sure I understand that.

I really appreciate you ending on that note.

So as written, this policy, this bill would require the disclosure of certificate of occupancy, but not of permitted use.

Is that correct?

Yeah, that's right.

Yeah, I know you all are nodding your heads, but you've got to.

So I think that's helpful.

And I just want to make sure I understand because I was hearing some of the concern around disclosure for businesses if they're coming into a space and they believe that that space could be used.

You gave that example of as a salon.

And so what it seems like is this does a sort of a step forward in that transparency, but there may still be a gap between the certificate of occupancy and the permitted use.

And I just want to understand a little bit more about the decision to land on certificate of occupancy, whether it was just based on capacity and the challenge that it might provide for a landlord if they are giving that transparency to ask them to do the permitted use.

Just want to understand that a little bit more.

Yeah, I can start and then Isaac, feel free to add on and sell one as well.

So I think part of that decision is some of what Chair Rank noted in her opening comments is that the business owner may know best kind of all of the things that they're expecting to do at their place of business.

And so if the salon also wants to have a cafe or a little coffee cart in the salon as well, that is different than just a space that is permitted as a salon.

and so I think one of the things we were trying to balance and this came up multiple times in the stakeholder conversations is what's kind of the responsibility of the landlord or property owner to kind of like intuit and then especially for these more specific business uses kind of run to ground what that space is permitted for compared to the business owner, particularly when that business owner might have kind of like an evolution or a different business model than what was in that space before.

Yeah, I think building off of that, landlords were concerned about being liable for both understanding city regulations and the business owner's intent.

And so the certificate of occupancy was kind of a cleaner way to provide readily available information.

Got it.

Thank you.

I think that's helpful.

So just to say it differently, you want to leave that flexibility because a business owner may be coming in with an intent that is different than the existed permitted use.

And so what I think I'm hearing is it felt like going to the extent of having them disclose the permitted use maybe sort of added additional work given that a business owner may want to depart from that current permitted use based on their vision for the space.

Exactly, and that it's part of the business owner's responsibility to kind of do that homework and make sure if they are thinking about that different use.

That's really helpful, thank you.

You're welcome.

And then my second, well, I don't know if this counts as a second or a fourth question, but I would love to hear a little bit more about the planned work between OED and SDCI that was mentioned towards the end of the presentation.

Yeah, so as I mentioned, there is a portal where you can look up the certificate of occupancy, and there's also a key staff member, Peter Ferbinger at SDCI, who helps small business owners navigate SDCI process.

So I think we would coordinate with the SDCI leadership and policy team just to make sure they understand that they may be getting more requests if this comes through, if there are landlords who aren't familiar with that system or know how to look up the certificate of occupancy for their space, that they might get a little bit more calls.

But the SDCI said that they anticipate absorbing that.

in their costs and that just we want to make sure that the right web pages are cross-linked to each other so it's easier for landlords to navigate.

Got it.

Thank you.

Thank you, Chair.

Thank you for those questions, Vice Chair Foster.

Colleagues, I'm not seeing any additional questions.

And so at this point, again, we're not taking action on this today, but rather there will be an opportunity.

There's an amendment deadline.

I believe amendment concepts are due Wednesday at noon at the 9th?

Correct.

September?

Fabulous.

Thank you so much.

And a huge thank you to the OED team for your continued work and engagement in shaping this and coming before committee today.

Thank you.

All right, colleagues, we have reached the end of today's very busy agenda.

Is there any further business to come before the committee before we adjourn?

Seeing none, the next Human Services, Labor and Economic Development Committee is scheduled for September 11th, 2026 at 930 AM.

Hearing no further business, we are adjourned.

It is 1151 AM.

Thanks, everybody.