Seattle City Council Finance & Housing Committee 51822

We are recording.

Good morning, everyone.

Thank you for joining the Finance and Housing Committee meeting of the Seattle City Council.

Today is May 18th.

The time is 9.45 AM.

Sorry for the 15-minute delay here.

We're going to go ahead and get started with the call of the roll.

Madam Clerk, could you please call the roll?

Council Member Peterson.

Present.

Council Member Nelson.

Present.

Council Member Lewis.

Present.

Council Member Herbold.

Chair Mosqueda.

Present.

Madam Chair, that is four members present, one absent, none excused.

Great, thanks all for joining us today, and I do believe Council Member Herbold's on her way.

We have a full agenda today, which includes two items related to our housing This is going to be a presentation from the Office of Housing Annual Levy Report and the Investment Report.

We'll have a briefing and possible vote on the staffing proposal, which has been attached to our agenda from the previous meeting and is included as well today.

We will then move into a briefing and possible vote on the 2021 Budget Exceptions Ordinance and the 2022 Carry Forward Legislation.

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

Hearing no objection, today's agenda is adopted.

Let's go ahead and begin with public comment.

Colleagues, we do have a number of folks who are signed up to provide public comment.

We're gonna endeavor to get through everybody who was on our list today.

You'll have two minutes to provide public comment.

Please make sure that you're dialing in with the number that you received when you signed up for registration on today's Finance and Housing Committee meeting.

You'll hear a chime at the end of your allotted time.

That's your indication to go ahead and wrap up your public comment so you don't get cut off.

Today's first three speakers will be Ryan Donohue, Joe Thompson, Kathleen Hofstad.

Again, after you've concluded your public comment, please do hang up and continue listening in on either Seattle Channel or the other listening options on today's agenda.

Good morning, Ryan.

Thanks for your patience.

Please take it away.

Hello, thank you so much.

For the record, my name is Ryan Donohue and I'm the advocacy and policy director at Habitat for Humanity Seattle, King and Kinnesas Counties.

I'm here today speaking in strong support of the Seattle Housing Levy and urge not only for its renewal, but also for its expansion.

Thanks to the current round of the Housing Levy, we at Habitat have or are building about 85 permanently affordable homeownership units across the city.

That's almost 40% of our current pipeline.

It's actually easier for us at Habitat to build in the city of Seattle than anywhere else across King or Kitsass County.

Additionally, thanks to the Seattle Housing Levy, Habitat in the City has been able to make drastic improvements in the lives of citizens of the city.

Whether it is Aurora, who's a single mother, educator, and Habitat homeowner who was able to move back to the South Park neighborhood of Seattle, or the Moreta family, Habitat homeowners in our Lake City project who moved here from Ethiopia by way of, you know, that other Washington, the Seattle Housing Levy has made a life-changing difference for thousands of families across this city.

As you look to the future, however, I urge you to stand for affordable housing and expand the housing levy by more than threefold.

This is your opportunity to make the levy a truly transformative expression of who we are, not just as a city, but also move us towards becoming a more equitable and affordable city.

We need to do this not only for Aurora and for the Moreta family, but for everybody who calls Seattle home, both now and into the future.

Thank you so much for your time and consideration.

And please feel free to reach out to us at Habitat if you have any questions or would like to learn more about the work that we're already doing today.

Thank you so much for your time.

Thank you very much.

And it's been exciting to celebrate those new permanent affordable housing home ownership options we received recently.

Joe Thompson, you're followed by Kathleen Hofstad.

Good morning, Joe.

Good morning, council members.

My name is Joe Thompson, and I am the president of Mercy Housing Northwest.

At Mercy Housing Northwest, we create family-size affordable communities, and we are also a member of the Housing Development Consortium.

I am here because I strongly support at least a threefold renewal increase to the housing levy.

This is critical in order to match its level of funding to the scale of the current housing crisis in Seattle, which is at epidemic proportions.

I want you to know that Mercy Housing Northwest, along with other nonprofit affordable housing providers, are making good use of public investments.

The 2016 housing levy has exceeded most goals ahead of schedule, delivering on 126% of promised rental units and 112% of homeownership opportunities with two years left to go.

Through the help of the most recent housing levy, Mercy Housing Northwest was able to produce 350 affordable homes for families.

While the levy has been a life-changing thing for these 350 families, the need for affordable housing in Seattle is greater than ever, and we must do everything we can to increase the city's supply of affordable homes.

The livability of our city and the lives of its citizens literally depends on it.

So thank you for yours and the City of Seattle's 40-year commitment to affordable housing, and I look forward to to hearing about more about your leadership and helping to triple the housing levy to match the scale of need in Seattle.

Thank you.

Excellent.

Thank you, Kathleen Hofstadt, followed by Michael Searworth.

Good morning, Kathleen.

And Kathleen, if you're speaking, just hit star six to unmute.

Sorry, I forgot to mention that at the top, star six on your own line will unmute your line when you hear you have been unmuted.

So Kathleen, I see on the screen, just hit star six on your own phone, and that should send you off mute.

Okay, Kathleen, I'm going to keep you up on the screen.

And when folks hear your name, you should then hear a prompt that says you've been unmuted.

And then that's your indication to hit star six.

Let's keep Kathleen on the screen and move to Michael.

Michael will be followed by Jesse Simpson.

Good morning, Michael.

Star six unmute.

Perfect.

Good morning, council members.

My name is Michael Syrath.

and I'm the executive director of Southeast Effective Development, a nonprofit which provides affordable apartments to families and seniors in Southeast Seattle.

Council members, I'm here to voice my support for more than a threefold renewal to the Seattle housing levy.

The need for more capital funds is huge and the levy must match the scale of need.

SEED has three 100% affordable projects in our pipeline and the lack of sufficient city funds is one of the greatest impediments to creating more affordable homes swiftly.

And we're just one provider.

We alone are helping over 2,000 low income neighbors and many of our nonprofit colleagues are doing similar work.

While we have collectively done this work and exceeded our goals, the need for affordable housing in Seattle is greater than ever.

Thank you, council members for your past commitment, and we look forward to your leadership in helping to increase the housing levy more than threefold.

Thank you very much.

And I see Jesse Simpson up next.

Kathleen, I'm going to come to you as soon as you hit star six to unmute.

You're up in the queue.

Jesse, good morning.

Please go ahead.

Good morning, Council members, my name is Jesse Simpson.

I work as an executive assistant and policy analyst at Bellwether Housing and serve as the chair of the Housing Development Consortium's policy advisory group.

I'm here to voice my support for the renewal and three-fold expansion of the Seattle housing levy.

The current levy has produced and preserved over 2,700 affordable homes.

This includes over 500 homes in two Bellwether developments, Cedar Crossing and Roosevelt, and the rise on Madison.

Let me on track to meet or exceed all of its goals.

However, what the bloodiest met the goal that we know that the housing crisis but only worse since since since 2015. Job and population growth continued out if I'm affordable housing and construction costs have increased dramatically.

This moment calls for robust investment in affordable homes.

How the love of the proven tool found government.

As the current levy approaches its expiration in 2023, we have an opportunity to match its level of funding to the scope of the housing that we face.

I ask you to renew the Seattle Housing Levy with a $1 billion investment in affordable homes, making the levy a truly transformational expression of who we are and the welcoming affordable city we must become.

Thank you for your time and your commitment to affordable housing.

Thank you very much, Jesse.

The next person that I see here is Christopher Pearson, followed by Susan Boyd.

Good morning, Christopher.

Good morning Councilmember Mosqueda and committee members.

I am Chris Persons and I work at Community Roots Housing.

We are a citywide PDA that develops, owns, and operates affordable apartment buildings throughout the city.

We've been around since 1976 and are a founding member of the Housing Development Consortium.

Everyone can agree that we need more affordable housing, that the need for affordable housing is greater than we have resources to build it.

I'm here to voice my strong support for a much larger levy, one where the financial investment actually meets the need for housing.

Community Roots Housing owns and operates over 1,500 units serving 2,200 people and has over 1,000 units in its development pipeline.

That number is only limited by the resources available.

Year after year, the community of nonprofit affordable housing developers working in partnership with the Office of Housing exceeds our goals with limited resources.

This is your opportunity as city leaders to make the levy truly transformative.

Beyond building safe, high-quality, affordable homes, we help fight displacement and build vibrant communities.

Projects like Liberty Bank building, Pride Place, 12th Avenue Arts are examples of how developing affordable housing with community and for community goes beyond housing and builds and sustains great communities.

Now more than ever, we need to go big.

Please move forward a levy large enough to meet the need.

Thank you all.

Excellent.

Very much.

Thank you very much, Chris.

Susan.

Good morning, Susan.

Susan Boyd's followed by Dennis Sillis.

Good morning.

Star six.

Perfect.

Thanks.

Good morning.

Council member Mosqueda and committee members.

This is Susan Boyd, CEO of Bellwether Housing.

I want to thank all of you who have provided powerful leadership in building the city's resources for affordable housing.

We are a national leader when it comes to this and Unfortunately, we are also among the leaders in housing costs and rates of housing insecurity and homelessness.

So I ask that you not only work toward renewing the levy, but, and all us HDC members are on point here, more than tripling that levy.

That levy has been absolutely critical to my organization's ability to bring nearly 900 new homes online in the next year, by the end of the next year.

But I want to make one point in the need for greater expansion, which is in addition to some of the things you'll hear from others.

Our current levy has a built-in assumption that each dollar will be leveraged several times over by other resources, in particular, the federal housing tax credit.

Unfortunately, that resource has become and is likely to remain grossly inadequate to meet our growing need.

If we are to build the amount of housing this community needs, we must expect that our city resources will have to fund a much bigger portion or maybe in some cases, all of the housing costs of some of our new homes.

So this will require far greater resources than we currently have.

Thank you for your time.

And again, thank you for your leadership.

Thank you very much, Susan.

And I see Kathleen Hofstad off mute.

So we'll go to Kathleen and then we'll go to Dennis Sillis.

Good morning, Kathleen.

Good morning.

Thank you so much.

My name is Kathleen Hofstad.

I'm the executive director of Homestead Community Land Trust.

We create stability, equity and opportunity by developing land and housing, giving lower income households the opportunity to own a home that is affordable to them and remains affordable to future owners.

I'm here to support a multiplier increase in the housing levy to achieve the scale of housing need in Seattle so that more of the people who make Seattle great can live here too.

Since the levy was established all of Homestead Seattle homes have been made affordable through levy dollars notably a recently completed project Village Gardens Townhomes which are addressing displacement in Seattle's Central District.

As we advocate for increased funding for all types of housing I note that Permanently affordable homeownership made possible by the levy is one of the most efficient ways to create affordable housing for people in the 50 to 80% area median income.

It also addresses the legacy of redlining, restrictive covenants and discrimination that have suppressed homeownership rates among people of color and the runaway housing costs that withhold the American dream of ownership from all but an affluent few.

Collectively, we have leveraged the use of levy funds to exceed past goals, but the need for affordable housing has only increased.

Thank you for your leadership in renewing and increasing the housing levy so that we can do more.

Thank you.

Thank you, Kathleen.

And congratulations to you, award recipient at the Housing Development Consortium Affordable Housing Week last week, and for all that you did to open up new housing in the Central District on land previously owned by City Light.

Very excited to celebrate that with you as well last week.

Dennis Sills followed by Lauren Faye and then Lisa Wolters.

Good morning, Dennis.

Good morning, Council Members, and good morning, Council Member Mosqueda.

My name is Dennis Sills, and I speak in support of an increase to the Seattle Housing Levy on behalf of Plymouth Housing.

Plymouth provides permanent support of housing to about 1,000 chronically homeless adults in Seattle.

Plymouth is in the process of opening four new apartment buildings and housing additional 400 people by the middle of 2023. We will expand the communities we serve when we open Bertha Pitts Campbell Place in the Central District next month and our new development in Ballard later this year.

Without the housing levy, many of our residents would not have places to call home.

The housing need in Seattle is staggering.

40,000 individuals face homelessness in 2020. There's a shortage of 26,000 rental units and 1.1 billion is needed each year to address this challenge.

This levy is not just about dollars and projects.

It is about making things better for our neighbors.

One Plymouth resident was homeless for 20 years and spent two years in many phone calls to finally receive housing.

People in Seattle should not have to wait years or even decades to find an affordable home.

Plymouth urges the council to increase the levy in all areas to meet the challenges in our city.

We ask that the council increase the proportion of funding for operating and maintenance to support our staff who provide supportive services each day.

Thank you for your time.

Thank you very much.

Lauren, you're followed by Lisa Wolters.

Good morning, Lauren.

Just star six to unmute.

Perfect.

Good morning, Committee Chair Mosqueda and members of the committee.

My name is Lauren Fay and I'm here on behalf of DESC, the Downtown Emergency Service Center.

The ESE is a nonprofit social service organization that works to end homelessness by building and operating permanent supportive housing for adults living with disabling behavioral health and physical health conditions.

We also provide an array of support services that promote the health stability and safety of thousands of Seattleites each year.

We are here today to voice our strong support for the Seattle Housing Levy and its upcoming renewal and expansion.

In its 40 plus years this the levy has been instrumental in ending the homelessness So many of our city's most vulnerable community members.

We've seen proven success year over year as new affordable units come online.

And in the case of DESC, well over 800 units of permanent supportive housing that have permanently ended the homelessness of adults living with disabilities and extremely limited income.

We're at an important moment in time when we're needing significantly greater investment to fully scale these proven strategies at work.

so many more of our neighbors as so many more of our neighbors are falling into homelessness.

As this process of the levy renewal begins CSB asks that you both sustain all current investments made by the levy as well as significantly grow the levy to match the scale of affordable housing units in need and to recognize the increased cost of operating and maintaining permanent supportive housing.

With your continued leadership on this important issue we can make even deeper commitments to our neighbors who are still lacking access to an affordable home and also do more to support the workers who make permanent supportive housing a highly successful model so that they, too, can afford to live in the city that they are serving every day.

Thank you so much for your time, and DESD looks forward to continuing these conversations as the revenue process continues.

Thank you very much.

Very exciting.

Next, we have Lisa.

Lisa, good morning.

Lisa will be followed by Brian Lloyd.

Brian, you are listed as not present, so please go ahead and dial in, and we'll get to you.

Good morning, Lisa.

Good morning.

Good morning, council members and Chairwoman Mosqueda.

Thank you for providing me this opportunity to speak with you today.

My name is Lisa Walters.

I'm the Director of Government Relations at the Seattle Housing Authority, and we are the largest affordable housing provider in Seattle and a member of the Housing Development Consortium.

Seattle Housing Authority provides long-term low-income rental housing and rental assistance to over 30,000, excuse me, 37,000 people representing over 18,000 households in the city of Seattle.

We are also active in providing housing for homelessness through our emergency housing voucher program.

Yet we know that the need is great to house our community and it's far greater than the resources we have available.

At Seattle Housing Authority, our average wait for applicants is two to four years depending on where they choose to live.

Nearly 80% of those we serve are children, elderly or disabled.

67% are elderly or disabled.

And 1 in 10 students are enrolled in Seattle Public Schools live in SHA-supported housing.

Again that's 1 in 10 students in Seattle Public Schools live in SHA-supported housing.

The residents of Seattle care about housing.

They've shown this time and time again by handily approving past levies and they care about those most in need.

And the housing partnerships among the Office of Housing and Housing Providers in the levy have led to successful outcomes that are nationally recognized examples of effective collaboration.

I am here today to voice SHA's support for more than a threefold renewal to the housing levy to match its level of funding to the scale of current housing need in Seattle.

SHA is grateful for Chairwoman, your leadership and the council's leadership and commitment to affordable housing, the city council's passage of Jumpstart in 2020, and we look forward to your leadership in helping to triple the housing levy to match the scale of need in Seattle.

Thank you so much for your time today.

Excellent.

Thanks so much for your time.

Brian Lloyd, I still see you listed as not present.

So we'll go on to Emily Everson, followed by Patience Malava, and then Estella Ortega.

Good morning, Emily.

Just star six to unmute your line on your own end, and then that'll get you off mute.

And as Emily's hitting star six, I just want to read through the last folks who are listed to speak that are not present.

Stella Ortega listed to speak but not present.

And the last person will be Naomi C. Emily, good morning.

Good morning, council members.

I'm Emily Evenson, a project architect and a designer at Weber Thompson, an architecture firm in Seattle that provides architectural interior and landscape design services for a broad range of project types in Seattle and the surrounding region.

Weber Thompson is an active member of HTC and my personal areas of expertise are in designing and building multifamily affordable housing and meaningful sustainable design.

And as others, I'm here to communicate my support for renewable renewed and sizable increase in the housing levy to match the scale of the current housing need in Seattle.

This next iteration of the housing levy needs to create enough housing to address not only today's, but our future's immense affordable housing needs.

And in a time when it seems like all costs are rising, it's no surprise that there has been a significant increase in construction costs since 2016. And we also have the responsibilities as leaders to address equality and climate change through our housing development, which also adds costs, but it's something that we cannot ignore.

So in order to create the volume and the quality of equitable housing we so desperately need, we must address these cost increases head on by investing even more robustly in our community's future through the levy.

And so that's why we're asking for a threefold increase in the levy.

Thank you for your continued leadership and commitment to the people of Seattle through this robust increase in our upcoming housing levy renewal.

If you have any questions about the sustainability or the construction cost piece of this puzzle please feel free to reach out to me.

Again I am Emily Evenson.

Thanks.

Thanks so much, Emily.

I appreciate your testimony today.

And the last three speakers, again, are Patience Malaba, Estella Ortega, and Naomi See.

Good morning, Patience.

Good morning.

Can you hear me?

We can.

Thank you.

Good morning, Committee Chair Muscater and Committee members.

My name is Patience Malaba.

I am the Executive Director at the Housing Development Consortium.

and Membership Association of Affordable Housing Providers.

I'm here today to amplify and reiterate a lot of what the Housing Development Consortium members have spoken to, which is speaking in support of renewing and expanding the housing levy and more than tripling the next iteration of the housing levy to match the level of funding needed.

really by the scale of current exacerbated housing need in Seattle.

As you will see from the Office of Housing's report that will be presented to you today, the Seattle Housing Levy is a great investment in creating a thriving and affordable community.

Our members at HDC have been great partners to the city in delivering and creating homes and providing services to support people in our community.

I believe I lost the last half of patient's testimony.

Patients, if you're still there, you're welcome to dial back in and we'll give you that 41 seconds back on your clock.

At this point, let's go ahead and patients, if you're still with us, I see you on mute.

Would you like to unmute yourself star six?

Okay, great.

And we'll put another 41 seconds back on your clock.

Thank you.

Well, with two years left in the current levy, we are already meeting and exceeding many of our goals.

And while we've collectively done great work and exceeded our goals, the need for affordable housing in Seattle is greater than ever.

The cost to develop housing has increased at least by 24% over the last five years.

Interest rates are also increasing.

And all of this is at the face of limited resources to produce more.

And we must do everything to increase the supply of homes.

We're really grateful for your leadership carrying forward a 40-year tradition of renewing the housing levy and tripling the investment in that funding source.

We're also grateful for your work in increasing funding for affordable housing through Jumpstart in 2020, which we know is a vehicle for progressive revenue, which is exceeding expectations so far.

To address the housing needs, we need every tool in our toolbox, and we're grateful for your leadership in advancing this investment.

Thank you.

Thank you very much.

Patience.

And congratulations on a successful Affordable Housing Week last week.

Good morning, Estella.

Estella Ortega will be followed by Naomi See, just star six to unmute your own line.

And the floor is yours, Estella.

star six to unmute.

And we can tee up Naomi as well, as Estella is hitting star six to unmute.

Good morning, Naomi.

If you'd like to come online, we'll come back to Estella.

Star six to unmute, Naomi.

Good morning.

Hey, good morning, all.

My name is Naomi See, and I'm a student at the University of Washington.

I'm calling today on behalf of a generation of students whose classmates are leaving college to live in their cars, whose parents struggle to live in communities where they raise their children, and whose grandparents are being priced out of their homes and forced onto the streets.

I'm calling to express my support for the renewal and expansion of the levy.

In both my academic, professional, and personal capacity, I've seen the transformative effects of the levy's resources.

Investment in housing is an investment in our collective futures.

Today the Office of Housing providers and advocates in our field have proven their ability to effectively steward these resources to meet the increasing demands for support across our neighborhoods and our communities.

As they balance competing priorities in the face of growing scarcity we must equip them with the tools and resources they need to continue this work.

I want to thank you for your leadership and commitment to this work and look forward to what we can do together.

Thank you.

Wonderful.

Thank you so much.

And our last but not least speaker grand finale is Estella Ortega.

Good morning, Estella.

Please go ahead.

Good morning, Council Member Mosqueda.

I actually was there yesterday a day early.

And then of course, I was pressing the wrong button.

So I apologize for that.

I'm Estella Ortega, the executive director of El Centro de la Raza, the center for people of all races.

As Latinos, we are mestizo, Latino and indigenous people.

We are in our 50th year providing essential services and programs, including early childhood development and affordable housing.

I'm here today to add El Centro de la Raza support to a threefold renewal of the housing levy.

The Seattle housing levy is an essential means for increasing and reinforcing equity in our city.

We could not have built Plaza Maestas providing 112 units of affordable housing without the levy.

And now we are working on a new development in Columbia City with 87 units of housing.

Housing is a home, creating the conditions for a better future, stability, safety, health, graduation, college, and ultimately a place to thrive with dignity and happiness.

All families deserve this.

We are grateful for your commitment to affordable housing and for your work in increasing our affordable housing funding with the City Council's passage of Jump Start in 2020. The times we live in calls for us to triple the housing levy to continue to build an inclusive, beloved community for all.

Thank you so much.

Thank you very much Estella and congratulations to all that you've been able to accomplish and for helping to set the path on what building not just affordable housing looks like but building true community and a place to call home.

Very thankful for your dialing in today.

Colleagues, that does conclude everybody who has signed up.

Please go ahead.

does conclude our public comment today, colleagues.

So thanks again to everyone who dialed in today.

Madam Clerk, let's go ahead and go into item number one, if you can read item number one into the record.

Item number one, Office of Housing annual levy report and investment report for briefing discussion and possible votes.

Wonderful.

Well, thank you.

We're really excited to have our partners here with us from the Office of Housing.

We have acting director from the Office of Housing, Michael Winkler-Chin.

We also have Kelly Larson, and I see Stephanie Velasco, and Lori Olson.

Wonderful to see all of you.

We have Tracy Raskliff, who is our lead on Central Stop on all things housing.

Wonderful to see you again.

And I'm excited for this presentation.

I know that we're going to walk through a PowerPoint here today.

And this item, along with agenda item number two, are our two components related to Office of Housing to give us a chance to really ground ourself in all things that Office of Housing has been doing as we think about the second item on the agenda, which is how we make it possible.

As you heard from public testimony today, there is an opportunity, a huge opportunity in front of us to really think about how we scale up our affordable housing investments in Seattle.

And echoing those public comments, I do want to make sure that we are lifting up the opportunity that the housing levy renewal has in front of us to make sure that we are putting together the pieces for a successful package that will pass from the voters and also continues the successful investments that have been made.

I want to thank Office of Housing for the work that they've done, their excellent stewardship of public dollars, putting public dollars into building affordable housing is leading the way, as you heard from public comment across the nation.

And we are building more community driven projects, scaling up efforts to respond to community needs by making sure that those who are most affected by displacement are at the helm and are at the decision making tables and really at the front of the line to receive important housing dollars.

Especially during this pandemic, there's never been a more important call for building affordable housing and making sure that everyone has access to a place to call home, and that includes staying home to stay safe during a pandemic, and all the time.

This is the cornerstone of what creates healthy communities and population health.

So thanks so much for all the work that you've done, you're going to hear more from the Office of Housing in terms of the work that they've done to build affordable housing with the housing levy that has already been in place.

We'll talk a little bit more about some of the work to come.

I do want to preface one point, especially important as we think about good stewardship of public dollars in these times.

The 2016 levy has exceeded most of its goals ahead of schedule, delivering 126 percent of the promised rental units, and 115% of the homeownership opportunities with two years left to go.

So you'll hear more about that, but wanted to make sure that this piece was really lifted up and to highlight how important this work has been.

We know we need to do more, but already ahead of schedule is so much appreciated, so much needed, and gives us a lot of excitement for the work yet to come.

So with that, I will turn it over.

And Tracy, did you have anything to add before we hand it over to Office of Housing?

I did not I'll let them go ahead and carry on with their presentation.

Wonderful.

Okay, thanks so much, Director Winkler-Chin.

It's wonderful to see you.

Speaking of being at the helm, we're so thankful that you were there at Office of Housing, having had the lived experience of being on the receiving end often of Office of Housing dollars and knowing some of the important ways that we can streamline our efforts to get those dollars to folks who are trying to build affordable housing rapidly for a community most affected by displacement.

Welcome, and thanks again for your leadership at the Office of Housing.

Thank you so much council member, and this is my first presentation so this could end up being kind of awkward because I haven't had to do it on this side before.

And really I think the report actually shows the testament of the dedication of the office of housing staff to the work.

and that they really do believe in, right?

And so we'll just kick it off with that.

So we have a couple of things here today to discuss with you.

The first is the housing levy report, the annual housing levy report.

Just to remind everybody, the housing levy is foundational.

It's the most reliable and predictable source of funding for affordable housing.

2021 was the fifth year of the current housing levy, which was approved by Seattle voters in 2016. and the full 2021 housing levy report is available on our website, along with OH's other annual reports, the 2021 housing investments report, which we'll hear about next, and reports on the mandatory housing affordability, incentive zoning, and multifamily tax extension programs.

So they're all on the website.

So with that, I'm kicking it off to the next slide.

Good morning, council members.

I am Kelly Larson, Strategic Initiatives Manager of the Office of Housing, and I'll start with this overview of the primary programs funded by the 2016 Seattle Housing Levy.

First, we have the Rental Production and Preservation Program, which funds the development and rehabilitation of affordable housing throughout the city.

Next, we have the Acquisition and Preservation Program, which purchases land and existing buildings to expand our affordable housing portfolio.

We rely on our critical operating and maintenance program to support the operating and maintenance costs of our permanent supportive housing projects and other affordable housing buildings in our portfolio.

We invest in permanently affordable home ownership and home repair services, and we fund homelessness prevention and housing stability services.

And next I'm going to walk through the incredible outcomes of the 2016 housing levy as of the end of 2021. Chair Mosqueda already shared the headline, but I'll walk through the details here.

You can see that three of our housing production programs have already exceeded their goals.

The rental production, rental preservation, and homeownership development programs have produced beyond the goals that were established by the 2016 levy.

Our team and providers will soon meet the goals of the operating and maintenance program.

We're currently serving 481 homes with this program, just 30 more to go.

The Homelessness Prevention and Housing Stability Services program is on track to meet its goals as it transitions over to the King County Regional Homelessness Authority.

And we have one more chart that represents the outcomes of the housing levy.

You can see on the far right side of this chart, the accomplishments of the Office of Housing team and our community of affordable housing developers and operators, some of whom you heard from earlier.

In five years of this levy, we have built 2,700 homes.

The goal set was 2,150.

The second line there, we've preserved 445 homes exceeding the goal set of 350. And toward the bottom, we've added or maintained 314 homeownership opportunities, exceeding the goal of 280. At the very bottom, you can see the Acquisition and Preservation Program.

We've added or preserved 1,800 homes through our Acquisition and Preservation Program, lending $77 million to expand our housing portfolio.

And Lori is going to talk a little bit more about some of those projects.

been over.

I just want to also welcome Councilmember Herbold, who's been with us for the last 25 minutes or so, joined us early in public comment.

So thank you, Councilmember Herbold.

Sorry, I didn't announce you at the beginning.

Thank you.

So these buildings represent three of the seven buildings that opened in 2021. And as you know, 2021 was right in the smack middle of the pandemic, you know, to have these buildings under construction during the pandemic took extraordinary efforts on behalf of the contractors and the developers supplying extra PPE, making sure contractors were safe when they went on site.

So just want to recognize that this is quite the feat to have these represented here today.

These three buildings in particular are funded and supported by the levy.

Amazing opportunities for homes in West Seattle serving chronically mentally ill with the rise at Yancey Street.

91 graduation and homeless housing units at Queen Anne in uptown for Plymouth housing.

And then of course, the incredible anti-displacement work of Filipino Community Village.

with 94 homes for low income seniors.

I want to recognize and honor that each of these represent a critical population that would not be able to live in Seattle, but for this housing and recognize that one of these buildings is named after Kristen Benson, who was a case manager at Plymouth who lost her life serving the residents and the people that it is a challenge to do.

And so the naming of this building represents that, you know, these are pretty pictures of buildings, but the work on the ground is so critical and the people serving communities and homeless individuals that are struggling is absolutely paramount to this ongoing effort.

So thank you to Plymouth and honoring her with the naming of this building.

I want to move on to the rental production and preservation.

Again, we're talking levy only, but your incredible efforts and contributions, City Council, allows us to award 13 new projects.

Here's two that were supported by the levy in particular, $14.2 million in the creation of the DESC Woodlawn Project, which is now in design and permitting.

And the continuation of the Yesler Terrace development with Saguaro.

So then we also have the critical and important work of preserving what we have, we will not be able to replace these affordable homes once they're built.

It is very challenging to purchase on the open market.

And so your allowance of us to preserve existing housing like Pacific Apartments, as you see here, this building in particular is currently what they call SROs, where they don't have bathrooms in the units.

And so people have to walk down the hall.

The allowance of this support that we did with this award last year allows them to change these to studios and one bedroom so that during the next pandemic, they don't have to walk down the hall and use the restroom and potentially get COVID or whatever the next pandemic is.

So we are well exceeding our goals for the rental program and the preservation program.

It is with great gratitude that we're able to do this work.

Next slide.

So then we also have to plan for the future right during the pandemic, we hit the gas pedal, and your support of this effort allowed us to do some pretty innovative creative things.

Aurora Heights housing was an acquisition of property in North Seattle on Aurora that's going to create 450 apartments at some point.

We were able to launch the rapid acquisition program, which you can see was, but for market rate housing that was coming online in January of 2021, we were able to quickly move, purchase that building before anyone moved in and allow it to convert to homeless housing.

This was a tremendous opportunity that translated into an additional 210 million available at the state.

for additional rapid acquisition resources.

It's talked about nationwide, and so your allowance for us to do this incredible work really allows more people to move off the street more quickly.

Then finally, we were able to acquire transit-oriented development site opportunity at the Thunderbird and Rainier Beach.

This is going to allow for at least 250 units in a critical neighborhood fighting displacement.

at a light rail station.

So all of those allow us to do more in the future.

Go ahead.

And then finally, one of the reasons why operating and maintenance, so we award the capital investment of the project, but then the project has to be built before we can award the operating and maintenance contract.

This is a critical resource that our service providers need in order to maintain and operate the buildings once they're open.

We have a joke in the office that we can build buildings, but if you don't have the operating support keep the lights on, keep the roof replaced.

We can't open the doors and allow people to move in.

This critical resource allows us to keep projects, especially prioritizing homeless individuals, open and operating for at least 20 years.

That is why there's a lag, if you will, on the progress towards the seven-year goals because the first levy award takes a couple of years to build, and then once that building is open, then we commit to the operating and maintenance.

We are well on track and we are very grateful to SHA, Seattle Housing Authority, who committed 300 vouchers to support the operations in these buildings, supporting permanent supportive housing in particular.

We have consumed all of those vouchers and they are actively in operations in buildings today.

I'll continue on with the homeownership investments in 2021 we invested 3.4 million to create 33 new homes across across three developments.

We assisted nine new homebuyers to purchase homes and 26 current homeowners to remain in their homes through home repair grants or foreclosure prevention loans.

This is an exciting project this picture here from community land trust homestead community land trust and on the next page, you can see two other homeownership developments that opened last year where 21 families are now permanently owning their own homes really exciting to see these projects come to life.

The Homelessness Prevention Program has provided 1.5 million to support 350 households at an imminent risk of homelessness.

And the Rapid Rehousing Program has provided 500,000 to support 120 households to move into stable housing from homelessness.

And then we love talking about housing levy engagement.

We have more work ahead of us as our team works to develop the proposal for the 2023 housing levy.

We're currently engaged with our housing stakeholders and technical experts to explore policy and funding options for the 2023 levy.

We have met with a levy leadership group of our key providers coalitions and funding partners were convening focus groups to more deeply explore the programs of homeownership rental housing on em and equity, and we are regularly meeting with our housing levy oversight committee.

Later this year, we'll convene a technical advisory committee that will further refine the housing levy proposal.

And in the summer, we begin broader community engagement to continue sharing the story of the 2016 levy and refining our proposal.

In early 2023, the mayor submits the levy renewal legislation to council and council takes the next step for inclusion on the ballot.

This concludes our presentation on the levy annual report.

Thank you very much.

I'm really excited that we have this presentation in hand that we will continue to lift up what has been done, but also importantly, what else there is still to do.

We spent last week sharing a number of informational graphics on our social media and out in our Teresa Tuesday newsletter last week, or excuse me yesterday, highlighting all of the investments that have been made and the complementary policies that went along with the housing levy funds.

So I really appreciate that you've lifted that up and really highlighted how this work alone is being complemented with office of housing policies that we've passed with our community housing roundtable partners over the last few years, such as making sure that we are no longer selling surplus city property on the private market and holding that public property in public hands and building affordable housing on it and doing that in partnership with nonprofit organizations that are led by those who are most affected by displacement, that we have reaffirmed and advanced our policy to community preference and affirmative marketing, that we are complementing affordable housing investments with equitable development strategies so that we can co-locate community services like childcare and small business and community space on the first and second floors, Just think El Centro de la Raza, Plaza Roberto Mayesta as described by Estela Ortega earlier today.

complemented by small business and child care and community space, creates opportunity for a sense of place and for more than just a house, but truly a home.

Really excited about this presentation in front of us.

Again, one of the things that I want to lift up is how we have significantly expanded our affordable housing investments going from roughly 52 million in 2016 to now last year, 200 million in the 2022 budget.

increase made possible in partnership with funding from the affordable housing levy that we are talking about today, but also by adding in those jumpstart dollars that was described.

$97 million on nearly half of our investments in affordable housing in last year's budget coming from Jumpstart Progressive Seattle, and the range is going to increase as we think about that throughput.

Folks needing to get out of homelessness, out of shelters, and into somewhere that they can permanently call home.

We are on the continuum for how we are addressing this incredible crisis of homelessness, and at the end of that continuum is a place to call home.

This is very much part of that solution.

Then the mandatory housing affordability investments.

The news from earlier this week showed us that the funding has continued to increase coming in from MHA, The City Council passed in 2019 and brought and that brought in around 76 million in 2001. And again lifting up that enabling the Office of Housing to forward commit affordable housing dollars, which is something that we passed in 2021 or 2020 Tracy I'm not remembering right now.

But what we're seeing is that this forward commitment is also allowing for us to make sure that there's more funding ready for shovel ready projects.

And so much of this stuff sounds like alphabet soup, it can get lost in, you know, our updates to the also alphabet soup titled ANF plan the administration and finance plans.

But all of these policies corresponding to additional dollars that the affordable housing levy is making possible is leading to thousands of affordable units.

So again, 5,400 affordable homes under development now with 4,000 of those coming online.

I just don't think we can lift up the work that has been done by the Office of Housing and our affordable housing partners enough.

and the importance of their stewardship over those public dollars.

So thank you for this presentation.

I look forward to hearing any questions from colleagues and also will, would be remissed if I didn't say that this type of work that we've invested in, the policy changes that we made, much of it needs to be complemented by additional changes to the zoning strategies that our city currently uses and the importance of the comprehensive plan and community engagement strategies that are happening right now that council added funding for so we can make a truly robust community engagement process possible through our partners at Office of Planning and Community Development.

For those who sit on land use, you've heard much of that presentation as well, but these all are the gears that intertwine to help us create more housing.

I think what you're hearing from folks is we just need more of it and we need it faster.

Council Member Herbold, great to see you.

Thanks for your question.

Please go ahead.

Thank you.

Several questions, I'll try to get some of them out, but realize in the interest of time, you might want me to follow up offline.

Just let me know.

In the area around preservation, the levee has two separate programs.

There's the Rental Housing Preservation Program and there's the Acquisition and Preservation Program.

And I just want to understand the difference between them.

I know I probably ask this every time you come and talk about the levy.

I am interested in, I understand that one of those programs is very much focused on the city's existing portfolio of affordable housing and funds used to repair, do maintenance, rehab of properties in that existing portfolio.

I'm interested in which of these funds is used to acquire existing housing to put into the city's portfolio, working with our nonprofit providers to preserve it from being subject to the speculative market.

So I'm interested, one, in which of these two funds functions that way and how many units have we been able to preserve.

And then I understand that the recommendation that we're probably going to speak about another time as it relates to a preservation program using jumpstart funds also has that focus and would just love to understand a little bit about what's different in what's being newly proposed and whether or not that will impact the existing levy programs.

Then on the operations and maintenance side, I'm wondering whether or not housing levy dollars go to support operations and maintenance in affordable housing units that are not permanent supportive housing.

In that same category around the investments.

I'm wondering the resolution that we passed that allowed the Office of Housing to pre commit 2022 dollars in 2021. Can you just let us know whether or not the Office of Housing did in fact take advantage of that flexibility and commit any dollars.

And then I would just love to know a little bit more about new investments in using our community preference policies that Madam Chair worked on quite a bit.

When I chaired the Civil Rights Committee, I also did some work on getting some of those policies rolling.

I would love to learn a little bit more.

Thank you.

I very much appreciate all of the work that you did on affirmative marketing and community preference approaches.

And we are so thankful.

We could build on that as well.

Building pun intended.

Madam Vice Chair, I'm wondering if you might be able to share those questions as well with us.

I think those are four great questions.

I also realize that I may have prematurely interrupted Office of Housing.

I think you have another half of your presentation that might speak to some of the questions asked by the Vice Chair as well.

if we could have those questions answered either as part of the second part of the presentation, and if there's any additional follow-up after that, that would be helpful.

And if that needs to be done today or in writing, that's okay too.

But I think the vice chair has teed up good questions for the second part of the presentation as well that I preempted our discussion about.

So if it's okay, Madam Vice Chair, I think we'll continue with the presentation and then see if some of those questions get answered.

Council Members, I am starting now the second part of the presentation, which is the 2021 Investments Report.

And the Annual Housing Investments Report reflects all investments made across the entire, across all OH programs, including investments in rental housing production and preservation, the development of permanently affordable for sale homes, and the support of low income homeowners through our home repair and home wise weatherization programs.

The annual investments report also includes maps including the geographic distribution of OH investments throughout Seattle and demographic information about the household served through these investments.

So, next slide please.

Okay, so this, this is the city funded.

affordable rental housing chart, and this gets confusing, so bear with me here.

Looking first at OH investments to create new affordable rental housing, it's important to step back and look at how investments made each year build on each other to create thousands of affordable homes.

So through investments made over the past 40 years, at the end of the 2021 year, Seattle had over 15,600 city-funded rental housing units in operation across 328 buildings.

and more buildings have already opened since then.

This graph shows the outcome of OH investments in affordable rental housing over the past five years since 2017. As you can see, each year, hundreds of new homes open up thanks to prior year's funding awards.

And each year that we make new funding awards, we're building the pipeline of new homes under development in construction, permitting, or otherwise preparing construction or permitting.

So these are three additional buildings that opened in 2021 we talked about three levy funded projects and these are funded through MHA jumpstart.

Well, actually not jumpstart because these are opening in 2021, but some of the federal dollars, the Clifford dollars that came in last year.

So these three projects were able to be opened in 2021. Again, during a pandemic, Encore Apartments was done by GMD Development.

This is in Beltown neighborhood, 60 homes for individuals and couples that would not otherwise be able to afford to live in Beltown.

George Fleming Place, of course, the long-beloved state legislator that is actually known for launching the State Housing Trust Fund.

A UW star football player was named for this Lehigh project in Othello right at the rail line station.

106 low-income individuals and families will be able to maintain their housing here in this critical neighborhood that's facing displacement.

And then again, the wonderful opportunity to do the rapid acquisition.

So Broadway Hall is a representation of one of the rapid acquisitions we did last year.

This is going to serve 36 homeless young adults, supported in part by low-income housing and youth care.

This opportunity to use the federal dollars 16 of the Clifford dollars that came in through Treasury last year is what allowed us to take advantage of opportunities in the market that wouldn't have otherwise normally been available.

Going on.

So then we try to fund projects all throughout the city.

It is a challenge because it also depends on who is bringing in projects at what time so we are dependent on the applicant in bringing in the project as to where the project decided but we have some wonderful opportunities that came into play.

in 2021, where we were able to award 1,500 units, nine new construction, five rapid acquisitions, and a site for new development.

And this speaks a little bit to Councilmember Herbold's question.

So we do have the rental housing program, which actually can support preservation of, but for naturally affordable, I think is the word that you might be looking for, buildings on the open market.

The challenge with that program coming into a permanent award is the timing.

A lot of times market rate sellers don't want to wait for the purchase of their building.

And so that is where we use the acquisition and preservation program to support purchases of existing building with people living in them.

It's a little bit of a challenge because the people living in them have to meet our affordability requirements.

What we don't want to do is displace further or harm further households that have been living in these buildings for generations.

That's a nuance that we have to pay attention to.

But we have done quite a few of acquisition of existing buildings to preserve them from the open market and the risk.

The Madison Apartments on First Hill is an example of that.

As well as some work we did with Seattle Housing Authority.

Two years ago now where we help preserve three buildings that would have otherwise been available in the open market.

Moving on again the preservation oh i'm sorry go back stephanie the preservation program of our portfolio right, so this is.

The rental housing and preservation program the preservation can go towards projects that don't exist in the oh portfolio, but it is critical to maintain the buildings that we do have that are regulated in our portfolio.

We are often serving populations that cannot afford any significant rent payments and so lack of income to support the buildings means that we need to step in deeper and further to make sure that the roof is replaced, make sure that the community spaces are safe and the siding is there to protect the water intrusion of the buildings and so we do invest heavily into our existing portfolio to maintain those indefinitely.

Hoping that that provides some clarity, but both the rental housing program can do preservation of our existing portfolio and new product coming into our portfolio.

In addition, the acquisition preservation program can move more quickly to acquire buildings on the open market that are at risk of especially anti-displacement work.

Can you repeat the number of buildings in Acquisition Preservation?

You know, for this program and this time, I believe we did three, but we can get back to you on specifics on the Acquisition Preservation Program for the year.

But over the lifetime of the program, there's been many buildings acquired and pieces of land.

Okay, moving on.

So these are the funds that you all allowed, right?

So by allowing the Jumpstart 2022 amount of funds in which we were allocated 71 million, we put that to good use.

So we announced in the summer of last year, only 35 million available for the fall round.

Your ability and your execution of the budget last year allowed us to expand those resources significantly.

And we awarded 86 million in the fall round in addition to the work we did with the rapid acquisition program, which totals 153 million.

So you'll see here, the levy contributed 15.2.

This is modest compared to previous years because of the PSH pilot.

If you remember two years ago where we forward committed one year's worth of levy, this is the remainder for that option.

Of course, the mandatory housing affordability payments were available.

modest amount of incentive bonus payments as that program essentially sunsets with the replacement of the mandatory housing affordability program.

And then thank you very much to the 71 million of jumpstart that allowed these 13 projects that were applying in the fall rental program round.

that we were able to support and fund.

And then finally, 16 million in what we call Clifford dollars were available and a modest amount of home dollars were available in the fall round.

In addition, we use that in the rapid acquisition round as well.

So total rental housing allocation is 153 million.

So here are some of the things we did in 2021 under the fall round.

Of course, the Rapid Acquisition Program with the Beacon Hill Apartments.

So CMAR Community Health is supporting a program of 39 homeless units for women and couples and men that need housing immediately.

So we were able to purchase that building off the open market.

It did not have people living in it.

And so we were able to move quickly to make it programmatically acceptable for what the work that CMR is doing in particular.

The religious lands legislation is allowing St. Luke's, which is a St. Luke's Episcopal Church in Ballard.

They are now supporting the bridge affordable housing project that is going to bring online 85 homes.

in that neighborhood, a critical neighborhood that we often cannot get into because of the high market competition that we face in that neighborhood.

And then finally, a long standing historic building on Capitol Hill at Broadway and Pine is now being supported to do both affordable housing and youth homeless programs with youth care.

84 units on Capitol Hill at that critical component, a partnership with Community Roots Housing and Youth Care.

to do a number of things, including support workforce housing, but also provide a place and work activities for young adults who are trying to exit homelessness.

Great opportunities in 2021. And then these are some of the projects that we were able to support.

New Hope Baptist Church, of course, in partnership with Lehigh, Chief Seattle Club, in supporting their Sacred Medicine House project, and Africatown Community Land Trust.

These are the projects that we love to support to fight that anti-displacement.

El Centro de la Raza, as Stella mentioned, their next project in Columbia City, continues this challenging work of doing by and for the community anti-displacement efforts, but also growing these agencies to be a powerhouse for us in affordable housing development, that they can be the go-to agencies to support this ongoing effort that we have.

Oh, right.

And I'll be taking over from here.

Stephanie Velasco from the Office of Housing.

So we've heard now about rental housing projects that were invested in 2021 using levy dollars and all of the other fund sources that Lori mentioned.

And so now we'll be talking a little bit about homeownership development projects that were funded in 2021. So as you can see, those purple dots represent four different developments that will create a total of 50 new permanently affordable for sale homes, which means those those homes will be sold to low income households and then upon resale.

So at whatever point that household decides to sell, they will also again be sold to another low income income eligible household.

So across all of these four developments, you will see 36 condo units, two limited equity co-op homes, and 12 cottages.

And I'll give you an opportunity on this next slide to see a rendering of one of those projects.

So this is the picture here.

We'll look at the picture first, and then we'll look at the chart next.

But the picture here is of Highland Terrace, so that'll be A project that Habitat for Humanity is going to be developing in Delridge, and this will have 12 resale restricted permanently affordable two bedroom cottages for low income first time homebuyers.

And now shifting over to the left side of the slide here with this chart, you'll see here that we have $4.8 million that were dedicated from the Seattle housing levy to support homeownership development.

And you'll see also for the first time that we have MHA payments that are able to support.

homeownership development, as you all know, the a portion of of mha contributions that are received are set aside specifically to support homeownership development, and so this is the first year that we are able to to support a development a homeownership development, using MHA dollars and that project is Olympic Ridge which is also a habitat for humanity project.

And that one will have 17, one and two bedroom condo units in capital hub.

So now thinking about all of the housing investments across the board so both rental and home ownership, just want to take a moment to talk a little bit about where we are locating those.

So we strive as Lori and others have said to make sure that we are distributing our investments across the city so in neighborhoods across the city.

We also want to make sure that our investments and those buildings where people are going to be calling home are accessible to reliable public transit to people's jobs schools and other amenities that you would need to live and thrive in your communities.

And then with that we also want to be making sure that we are investing in areas of the city that have high access to opportunity, as well as areas that are that households may be at high risk of displacement and you'll see here.

In a moment, I'll show you some maps that illustrate that.

But just to take a moment here to look at the rendering on the right side of that screen is another housing, rental housing development that received funding in 2021. So this is a rendering of Grand Street Commons.

And so, again, as we talk about access to public transit, this is a this will be a mixed income, mixed use development that will include the affordable units that we're funding here.

So 200 affordable rental homes.

And this will be two blocks away from the future Judkins Park light rail station.

So here are those two maps that I mentioned.

So on the left side, that map is showing access to opportunity and the right side is showing displacement risk.

And so you can see this is, we've got all of the housing investments.

So orange dots are rental housing, yellow dots are the rental housing developments that are receiving reinvestment or preservation.

And then the purple dots again are the affordable homeownership projects.

But again, you can see, we've got those investments are really spread throughout the city in areas that have high access to opportunity, as well as in areas that the households that are living there may be at high risk of displacement.

So now moving to talk, we've been talking about the buildings.

Let's talk about the people that live in the buildings that are funded thanks to city funds.

So on the left side, you'll see is the incomes of renter households who were served in city-funded apartments in 2020, which is the latest year that we have kind of available demographic data.

So you can see that 72% of those renter households were making 0 to 30% AMI.

So just as an example, you can see down in the table below, for a three-person household, 30% AMI in 2021 was $31,250.

So again, these zero to 30% renter households are really individuals and families who are either going to be very severely housing cost burdened or facing housing instability if they're looking for housing out on the private market.

And then on the right side of the screen, you'll see of those renter households that we have, sorry, about 42% of our households served are considered special needs households.

And so that includes older adults, that includes people who have chronic mental illness, people with different physical abilities, those who are facing addiction and other issues.

So really, again, trying to give you a picture of the people, families, and individuals who are served by housing that is receiving funding from the city.

And so from renter households, now we'll talk about homebuyers or homeowners.

So the chart on the left is homebuyers assisted.

So that is low-income, time low income home buyers, and the income levels of those folks.

So the orange slice there is 31 to 60% AMI, and the gray slice, as you can see, is the majority is individuals and households that are making between 61 to 80% AMI.

And so just to give you an example, 60% AMI for a three person household is $62,000.

480. So again, households who are on the private market would really be buying a house would be really out of reach for these households.

And so thanks to city funds and assistance coming from the city, these are first time homebuyers who are actually able to buy a home.

And then on the right side, you have our home repair and weatherization program.

So we haven't yet mentioned these programs, but this is really an important piece of the Office of Housing's work.

We serve low-income homeowners and make sure that They are able to affordably and safely live and stay in the homes that they already own.

So as we all know, it is becoming more and more expensive to live in Seattle and if you are a homeowner, the costs of living.

kind of stacking up, and especially for low-income homeowners, that is certainly true.

And so these programs support low-income homeowners to make repairs, health and safety repairs to their homes, as well as weatherize them.

So that can include making their homes more comfortable during the winter and summer months.

So as we know, the summers are getting much hotter and winters can healthy for them to stay in.

So again, looking at that, you can see a large number of those households are making zero to 30% or earning zero to 30% AMI.

A lot of those folks are older adults who are living on fixed incomes.

And then you can see the spread there of the rest of the households.

And then I just want to touch very quickly here because actually we will be coming back to this committee on June 1st to give our race and social justice presentation, our annual presentation from the Office of Housing's change team.

So we'll be digging into more about the demographics, particularly racial demographics of the households served.

But here, just to give you some high level points, 57% of the renter households that are and 46% of the home buyers and homeowners assisted were led by a person of color.

And just to give you some comparison there, that's compared to 37% of people in Seattle who identify as people of color or Hispanic in our latest census five-year estimates.

And then to answer, or just to briefly touch on Council Member Herbold's question about community preference, we will also talk more about that, the kind of outcomes of that policy that we're going to be talking about in terms of policy in our R.

S J. I presentation on June 1st.

Um uh, but just to give you a little bit of sense or a little bit of a teaser here.

Um Jenkins Junction, which is also known as Jackson Heights is one of the, um, renter or sorry rental housing developments that is using community preference Village Gardens, which is the Homestead Community Land Bryant Manor, which is a rental housing development that's not yet started construction.

And there are others that you'll get an opportunity to hear about on June 1st.

So I'll pause there.

And that is the end of our presentations on the reports, on our housing levy report and the annual investments report.

And I want to answer Stephanie, Council Member Herbold's question on the operating and maintenance funds.

So the operating and maintenance funds is $2,500 per unit.

That has typically in the past been paired with the McKinney match required for homeless programs and to achieve new funding from the federal government.

As we know, McKinney has not supported new projects in some time.

And so primarily, the $2,500 per unit goes towards homeless projects.

There is a way that we support non-homeless projects, and it is using additional capital dollars to do what we call buy down the perm loan.

So this is typically in senior projects that have a mix of incomes.

where they have 30% AMI, 50% AMI, and some 60% AMI, those buildings cash flow.

And when that occurs, the 30% AMI still needs additional support.

So what we do is we reduce the amount of PERM mortgage from a private bank so that the building and the organization doesn't have to support a larger loan that they otherwise could afford.

And that supports the 30% AMI units.

So we do it in a different way, just not through the operating and maintenance program.

Additional comments or questions?

Just to respond to one more of Council Member Herbold's questions, which I think she was referring to a resolution, and I think it was actually the Rescue Plan Ordinance that you may have been remembering, where we gave them authority to spend $60 million, knowing that we couldn't give them all of the money that they needed to go do acquisition and to do investment and development projects.

But I think the answer to that question would be that, yes, they did, and yes, they are.

Okay, and I do think, you know, we are happy to take a few additional comments, but we are running over, colleagues, you should have received a hold on your calendar till 1230, because we do have three other items here, but just want to take an opportunity to take a few more comments or questions, and thanks as well to Office of Housing for being interested and able to answer questions in writing as well.

Council Member Herbold and then Council Member Nelson.

Thanks, I just want to, get a little bit local as far as the district investments that I'm seeing.

I appreciate seeing some of the homeownership projects in District 1, but as a district representative, I want to ask a little bit about what's happening for the distribution of rental housing investments in District 1. It doesn't seem like a lot's happening either with the levy dollars I saw the bonus report that recently came out as well, dollars that are coming from the district or don't seem to be going back into the district.

I have a specific network of constituents.

The District 1 Community Network, they represent community organizations all throughout District 1 who have been asking and trying to organize for affordable housing in their neighborhoods.

year and probably two years ago, I guess a little bit before the pandemic hit, they invited the Housing Development Consortium to come out and talk to them to find out what they can be doing to get more rental housing investment to meet the needs of families who need affordable housing in the district.

and just wanting to understand whether or not OH would be assisted by policies or approaches that would result in a more equitable spread of investments throughout the city.

Thanks.

Lori, do you mind taking that question?

Because I know that you know about the investments upcoming.

Yeah, no, we actually have a pipeline, Council Member Herbold, of projects that we anticipate in your district in particular.

There's two sites in South Park that we're working on.

One, of course, the Office of Housing purchased themselves soon, actually.

And then there's several projects that I know of in the pipeline that are coming our way, applying as soon as this fall.

So we do anticipate changing that in addition, you know, a couple sites in West Seattle in particular that we're keenly interested in acquiring and hoping that the neighbor, the owners of those sites would be open to selling to the affordable housing community.

So working on that, but it is a journey, right?

And you are in a very popular neighborhood in some of your jurisdictions, and it's a challenge to compete against the market, right?

But we do know of several, I know of at least four projects that we anticipate this year and next.

I'm aware of the South Park projects.

Yes, thank you.

I'm focusing more on the West Seattle side of the district and aware of the aspirational hope as it relates to one project.

But I really think we need to be doing more to generate more interest among our partners in developing in West Seattle.

So thank you.

One thing that's going to actually help quite a bit is that the state legislature passed a real estate excise tax exemption.

So gives us a little bit of an edge for when you sell to an affordable housing developer, you get a real estate excise tax that kicks in in January.

of 2023. We're hopeful that that will give us a little bit of an edge for competing against the market.

But I know of one project in West Seattle coming in this fall.

You know of the second that we're working on.

But I absolutely agree with you.

It is a target area for our office.

Thank you.

Thank you very much, neighbor.

Appreciate that question.

Council Member Nelson, please go ahead.

Thank you.

How much is the total voter approved housing levy right now?

I'm just trying to get a sense of what threefold increase or expansion would be.

$300 million.

Thank you.

Thank you for that question.

And I know that this is just the beginning of a discussion.

Again, the housing levy is slated for consideration by voters in the November election next year.

So we have a lot of time to talk about what goes into that housing levy and great questions teed up by Councilmember Herbold.

If other colleagues have questions about sort of the base line understanding that we've received in terms of where we're at and some of the items on the horizon, please do feel free to email those, happy to collect those and send those off and also to be copied on them if you're already initiating emails, that's fine as well.

But look forward to hearing more.

Director Winkler-Chin, anything else to add on this item or preview of the conversations to come on the housing levy in our committee?

No, I think we have a few things coming up.

I think we have acquisition and preservation funding coming up for conversation shortly.

I think Council Member Herbold had a question about the community preference that we can get back to you on email on that.

I think we have multiple things coming before the committee.

So looking forward to talking with you all.

Okay, great.

Tracy, anything you'd like to add on next steps regarding the levy?

not on these two reports.

I think this will segue nicely into the piece of legislation that is up in front of you next.

Well, I will move us that way unless Councilmember Herbold, is that an old hand?

Okay, great.

Let's go ahead and do that.

Thanks again for this overview.

Very helpful grounding.

And I know you've been working on this presentation for a while.

So wonderful to have you in our committee.

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

Agenda item two, Council Bill 120318, an ordinance relating to appropriations for the Executive Department, a briefing discussion and possible vote.

Wonderful, thank you very much.

And thanks for sticking with us, Director Winkler-Chin, Tracey Raskopf of Central Staff, and I see Becky Guerra on the line here as well.

Please go ahead, Director.

All right.

I think, Stephanie, could you move the slide forward one, please?

So this budget ordinance authorizes 12.5 new FTE in the Office of Housing funded by what's commonly called Jump Start.

Funding was authorized during the 2022 budget and OH conducted detailed analysis to determine ongoing staffing needs.

And this legislation assigns appropriation to the current BSL.

This work started way before I showed up in this office.

I think it was acknowledged last year by the previous director and the previous interim director's work that really, really needed to be done.

And there was a lot of work involved by Miriam Roskin, who was a previous deputy director, as well as Emily Alvarado and Robin Kosky to figure out what we needed to do.

This office, and having been here eight weeks, I can tell you that this office runs really, really lean.

And with The new projects coming on and a lot of the work that needs to be done around the RSGI work that this office needs to really consider.

We needed to add some staff in order to really sustainably grow the department.

So our workload here in this office is increasing the additional position authority of response to the increase in workload associated with new investments from jumpstart.

And just to be clear, jumpstart added approximately $100 million to the OH budget in 2022 and is an ongoing funding source.

And Becky, I am not pulled this up correctly so Becky feel free to jump in here if you'd like to on any of this.

Sure, so just looking at our workload impacts we have an increased number of loans for new development.

We have for both rental and home ownership, we've got compliance monitoring, asset management needs for our completed projects.

As that portfolio grows, the monitoring and management of those projects grows as well.

We also have an increase in transactional work, approval and implementation of new projects being the primary piece of that.

And then there's the community engagement side, which is increasing the equitable community outreach and our neighborhood engagement.

Our technical assistance for BIPOC organizations and developers who are exploring getting into this line of work and exploring being partners with us.

And then we have our thoughtful equity work and stakeholder process in both policy and program development.

And as you all know, that all takes staff time.

On the policy and program side, we have the performance measurement and metrics.

We have very intentional racial equity analysis and monitoring.

We are looking at climate resiliency, equitable place-based development, and key targeted policy and program development areas.

In addition to the 12 staff that we are requesting as part of this, we are also requesting financial support that we would then give to FAS to add on one FTE for wage monitoring.

And similarly, financial support that we would then give to law for probably a paralegal staff member, the purpose being additional support with loan document preparation and closings.

So they, it says here that FAS is not, FAS and law are not currently requesting additional position authority, meaning through this council bill, they are not, not now.

And sorry, I have a sick kid at home.

And we are, FAS and law, it's my understanding, they are requesting that position authority through the second quarter supplemental.

So I think you will see that separately.

But it is not through this council bill.

Sorry.

So the total cost for this is 2.1 million, which, as you know, of jumpstart.

Jumpstart allows up to 5% for administrative costs.

This would represent about 2.3%, so not even half of the threshold.

And then anything unused as far as administrative funds, anything that does not make up that 5% will go back into capital and will be deployed for program loans for both new rental housing and homeownership projects.

So the other thing this legislation does.

So everything we just talked about is jumpstart related now moving forward here.

We also need a modest amount to start to develop the 2023 housing levy proposal.

And so this legislation uses proposes to use existing housing levy administrative fund balance in order to do the following to prepare us for the 2023 housing levy.

Evaluating current levy outcomes, developing the legislation for the next levy, convening stakeholder and community conversations, developing communication tools about the levy in various languages.

So all of that again not being paid for with payroll tax but being paid for with administrative balance from the current housing levy.

This legislation includes the 2022 portion of that, and then our 2023 budget will include probably a similar amount for the 23 portion of that.

That's it.

Great.

Well, thank you again.

This is very helpful follow up to the first presentation you gave us just reiterate jumpstart oh excuse me Tracy did you have anything you'd like to add okay.

Just to reiterate a few of the points that was made in the presentation jumpstart spending plan, which was unanimously passed by Council.

Thank you again colleagues, it already authorizes 5% for administration of various strategies across jumpstart and that includes the spend plan associated with the housing portion.

Instead of 5% this would draw 2.3% of the administrative funds authorized.

So just less than half, and the remaining would go to rental and home ownership programs.

I think this Council probably very much appreciates that we were trying to be conservative with the amount going into administration and really redirecting the rest to strategies already authorized as components of the jumpstart spend plan in relation to housing.

And colleagues, this would mean that funding is being made available, as Office of Housing has said, for the needed staff capacity to deploy the housing resource dollars to things already specified in the codified spend plan, including the vast majority for rental housing services at or below 30% of AMI, community-focused acquisition, development, and capacity building, and permanently affordable home ownership opportunities serving Seattleites.

Really appreciate that you have kept this within the scope of the spend plan as codified in statute and that the Office of Housing staff would go to those items already authorized in the 2022 budget.

Are there any additional questions or clarification needed?

Okay, thanks, colleagues.

I'm not seeing any and Office of Housing, you've been generous with your time for us today.

Is there anything else that you'd like to add?

No?

of the heads.

Again, thanks to the team at Office of Housing for your existing stewardship of public resources, and thank you for your attention to detail on how to deploy the remaining dollars in Jumpstart.

With that, I'm going to go ahead and put the bill in front of us.

I move the committee recommends passage of Council Bill 120318. Second.

Thank you, Council Member Nelson.

It's been moved and seconded.

Is there additional comments or questions?

Hearing none, Madam Clerk, will you please call the roll on passage of Council Bill 120318.

Council Member Herbold?

Yes.

Council Member Peterson?

Yes.

Council Member Nelson?

Aye.

Council Member Lewis?

Yes.

Chair Mosqueda?

Aye.

Madam Chair, that is five in favor and none opposed.

Okay, wonderful.

It is unanimous.

Congratulations to the team at Office of Housing.

The committee recommendation that the bill pass will be sent to the May 24th Seattle City Council meeting for a final vote.

Appreciate it.

And we'll see you very soon to talk more about the housing levy and all the things coming out of Office of Housing.

Thanks for all your work during these times and take care.

Let's move on to items 3 and 4. And we do have two complementary pieces of legislation that will be in front of us.

I'm going to ask Madam Clerk if you could please read items 3 and 4 into the record together.

Sure.

Item number 3, Council Bill 120317, an ordinance amending Ordinance 126237, which adopted the 2021 budget, including the 2021-2026 Capital Improvement Program for briefing, discussion, and possible vote.

Item number four, Council Bill 120316, an ordinance amending Ordinance 126490, which adopted the 2022 budget, including the 2022 to 2027 Capital Improvement Program, a briefing discussion and possible vote.

Thank you very much Madam Clerk.

appreciate that and we're joined here today by Interim Director Ali Panucci and Tom Meisel of Central Staff.

Colleagues, every year we address two sets of supplemental budget bills, the Carry Forward Ordinance and the Exceptions Ordinance.

They have become part of our routine course of business to retroactively approve overages and spending and to carry forward into the next year projects that have not been completed.

However, I want to continue to underscore that we are in the midst of a process that we initiated two years ago to really examine processes that had been routine and to try to make sure that we're creating greater transparency and accountability in our budgeting overall.

I mentioned in our May 4th meeting that we don't actually want to have it be routine to have an exceptions ordinance by its very name and nature.

It should be exceptional.

So this is part of the process that we currently have, but I do look forward to our ongoing conversations in the Select Budget Committee meetings and in the Finance and Housing Committee meetings about how we can continue to create budgets that more accurately align with each of the department's needs for the budget in front of them for the upcoming year.

And ideally, the upcoming biannual budgets as we move towards biannual budgeting as well.

I really appreciate the work that Tom Meisel has done.

As you saw in the memo that has been attached to this agenda and circulated to the city council, central staff has done some great research on options to help us eliminate or reduce the need for exceptions to our budgeting practice.

In front of us, we do have the exceptions ordinance, which I understand is the general ballpark of exceptions we've allowed in previous years, as well as the carry forward ordinance.

I'm going to let Tom Mikesell and Ali Panucci really speak to what is in front of us, and we can talk a little bit more about how we are trying to get a better sense of more accurate budgeting so that we're not in the process of passing exceptions ordinance.

to be done in the future, but in terms of this legislation in front of us, the two documents in front of us, this is, I think, in alignment with similar practices of the past, and I'll let Tom Mikesell and Allie Panucci walk through the details.

So you all know what's in the carry-forward ordinance and in the exception ordinance before we consider them.

Thank you.

Good morning.

I am going to turn it over to Tom and we will share my screen.

Similar to last year, what I plan to do is to provide a kind of overview on how the city of Seattle budgets are adjusted throughout the year, starting from the adopted budget, including automatic carry forwards, which I'll explain a bit more of what that means.

And then also supplementals that are before the council during the year.

And then finally, the exceptions bill that gets submitted after the fiscal year has been completed.

and then going to the details of some significant highlights of the 2020-21 carry forward and the 2021 exceptions bills.

So by way of background, the RCW, so state law, the citation noted here, requires that by November of each year, the city council passes an annual budget for the year.

That budget authority covers the operations from January 1st through December 31st of the year.

The budget discussion and document includes reference to a multiple-year capital improvements program.

The actual budget adoption itself only adopts one year of capital investments for the upcoming budget year.

And then in specific terms, passed by the Council on November 23rd of last year, ordinance 126490 is the 2022 adopted budget.

and includes appropriations totaling 7.1 billion dollars from all sources.

So moving into the kind of operating phase of the 2022 budget year.

There's a sort of a technical adjustment that takes place and that is the accounting for automatic carry for us.

So state law allows for certain size cities, so Seattle being one of those cities, in fact the only one, to have non-lapsing capital appropriations.

So that means that monies that are dedicated for capital project improvements automatically carry into future years until they're either fully spent or the city council elects to abrogate or reduce those appropriations through a law.

All other appropriations absent any other measure are assumed to be non-lapsing.

That means when the fiscal year is complete at December 31st, the authority to spend that money goes away.

The exceptions to that are grants.

In the event that the Council accepts money from external sources so grant revenues is a key a key type, but there's also some service contract type revenues.

There will be provision in the ordinance that spends that money that provides for a non lapsing so similar to the capital money.

The ability for that money to be fully spent and largely that's due to the the concept that grant money is our regular.

in terms of receiving their tie to performing a specific.

Attached to the reason why the grant money was provided in the first place so so it's not it doesn't always align specifically with the fiscal year so they the Council provides that non-lapsing authority.

Also there are there are other cases where Council may in ordinance provide what's more Trump more administrative authority and to some select appropriations within the budget.

So those are all done within the budget or to provide within the budget legislation provides those specific parties.

And then finally there's what what we term in Congress is and so this is essentially an accounting term which which is providing shipping the budget authority to complete contracts or agreements that the city has already entered into the prior year and just providing the authority to spend money from the city treasury when we receive those invoices, which can sometimes come after the year is complete.

That's really just tied at an accounting level where we just want to ensure that we have money to pay invoices when we receive them.

By way of a high-level perspective, And there's a detail on this on page, I believe it's page three of the memo.

There's a $1.9 million of automatic carry forward across all city funds.

So in last year's analysis, approximately the same amount of money that was carried forward into the 2021 budget, which it was about 27% increase in the budget authority for the year.

And so that's across all funds, and it's automatically been adjusted into the revised budget.

And you'll see in a later table how that factors into the full context of the city budget.

So if we can look at the next slide.

So that covers the automatic authority.

The next piece, more salient to the discussion today, is supplementals.

And so state law provides for some models and I and I referenced in the memo kind of the specific wording because it's interesting to know.

It allows the council with the 3 force majority to appropriate from the emergency fund or other doesn't the state funds and amounts sufficient to meet the actual necessary expenditures of the city for which insufficient or no appropriations have been made due to causes which could not have reasonably enforcing at the time of making the budget.

So that is the provision of state law that allows for supplemental adjustments to take place.

You noted in the the definition that there is a voting threshold that applies.

So when there is an actual stated specifically stated emergency similar to the covid emergency that that was that's still in place and the voting threshold for for supplemental adjustments to pay for things related to that emergency is two-thirds of the city council.

Otherwise, it's a three-quarters approval threshold.

However, in cases where there are grant monies that are being received in the legislation that are completely funding the supplemental increase to the budget, it's a simple majority vote.

And so some of the legislation that has been approved so far this year has has been subject to that majority because it is essentially accepted new grant revenue and spent that revenue.

And finally, just in terms of the kind of the nature of the supplementals there are what I termed standalone or comprehensive.

So standalone bills kind of are single subject and more specific that the grant acceptance ordinances, some of which have been already passed this year, are of that type.

And then there are more comprehensive ones, which are the ones we're talking about today, where it's more of a process by which the city budget office solicits feedback and input from the departments for what the various needs are.

and collects that assessment across the city of what the proposed increases should be and submits kind of a package of adjustments that affect multiple funds and multiple city budgets.

And again, those are the ones that we are talking about today.

Thanks, Tom.

I would just add here that we have been working with the direction of Chair Mosqueda to really try to reduce the number of supplemental budget actions that the council is asked to take up during the year.

The number of budget changes throughout the year make it difficult for the, I think for the public and the council to track what was approved and what is happening and how funds are being expended and outcomes and that sort of thing.

And so just we'll highlight that we have moved from a quarterly supplemental process to what we're hoping to get even more clearly a twice a year project.

process for the comprehensive bills, a mid-year supplemental and a year-end supplemental budget bill that gets transmitted in September with the next year's proposed budget and hope over time to also streamline all of the individual grant acceptance ordinances into just those comprehensive mid-year packages, except when there are sort of emergent situations that require immediate action.

And so just a little bit more detail.

Thank you for having that alley.

The additional detail and this is covered in page 3 to 4 of the memo.

There have been 4 stand alone.

Supplemental bills passed by City Council this far program total $26.8 million.

These include appropriations for the Seattle rescue plan act for except a couple of acceptances of SPD grants.

And finally us not grant acceptance.

So that's the activity thus far.

The comprehensive bills are to carry forward and then as I pointed out the midyear and year and supplemental bills and then finally the exceptions which is budget.

In instances where department spending is exceeded the appropriation for the year, and there is a request to true that up after the fiscal year on an exceptional basis.

This ties it all together.

As you can see, we started with a 2022 adopted budget of $7.1 million.

You can see the general fund other fund splits.

There's $96.7 million of automatically carried forward money in the general fund, $1.8 million in other funds, bringing the total adjustment up to $1.9 billion dollars.

Stand-alone bills the 4 bills that I just mentioned had another 26.8 million dollar budget authority.

Bringing the total revised budget to just shy of 9.1 billion dollars which is roughly a 27% increase to the adopted budget.

So now with that kind of context about budget adjustments in general, I'll now dive into some of the specific details of the bills before you this morning.

So Council Bill 120316, the carry forward legislation would increase the city budget across all funds by $127.7 million.

The summary attachments submitted with the legislation shows the The detail for all of these proposed changes, as submitted by the executive, central staff has reviewed those to determine whether or not they meet the character and nature of a carry forward.

So essentially, continuing work that was begun in 2021, that is anticipated to continue into 2022 and just needs the resources to shift across fiscal years to continue that work.

What what what I've done in the memo and this presentation is just pulled out those most significant changes on those items that are of Council interest to just kind of give a flavor and to kind of show the bulk of where the where the funds are going.

Once and I would also point out that the memo the appendix so page 9 of the staff memo.

includes a very detailed table by department showing the information I've covered so far so the adopted budget starting points.

The auto carry forward adjustments and then puts puts that revised budget in the context of this this request.

So you can see the the percentage increases to each department budget because of this country would fill.

And so these are the percent that I show on the slide The OPCD budget, so the Office of Planning and Community Development, would increase by 95% based on the appropriation change in this bill.

The overwhelming chunk of that is in the general fund, and it's to continue the equitable development initiative.

So it's basically for awards that have not yet been contracted.

And so it's just ensuring that the money is available to deliver those monies when they are contracted.

Similarly, there's $5.7 million, which is 14% of the Office of Arts and Culture budget.

That's a general fund increase to implement strategic investment fund allocations.

So the strategic investment fund, just for a little back story, was funded originally in the 2020 budget from Mercer MegaBlock sales proceeds for a variety of for a variety of purposes.

So there's $30 million.

The council continued that in 2021. This request would then continue this portion of money to be available to complete the projects that were awarded to RFP last year.

Also, there's an 8% increase to the finance general budget.

largely general fund, $27.2 million, and the most significant part of that is for the participatory budgeting program to continue in 2022. Rounding it out, there is a $7.6 million or 4% increase.

That's general fund to the Department of Education and Early Learning.

5.4 million of it is to basically have funding available to honor the 2021-22 school year contracts.

And those are the largest on a percentage basis.

There are a few other noteworthy items on the next slide that I pulled out.

One is $7.8 million general fund increase to the Office of Housing.

So this is for rental assistance contracted with United Way.

They will administer the program, the awards.

However, the contract had not been completed at the end of 2021. So now that it has been, the money needs to be available to pay those amounts.

And then finally, there's a $1.4 million general fund increase to the Human Services Department, and this is for the administration of the Community Safety Capacity Building.

They were appropriating monies for capacity building that are anticipated to continue through 2022. However, this would also include ensuring that the amounts exist in 2020 budget to do the administrative side of that work.

I believe that is the carry-forward bill at a very high level.

And before I continue with the discussion of the exceptions, I'll pause to see if there are any questions.

Vice Chair Hurdle, please go ahead.

Just to restate what I think this presentation shows as it relates to the carry-forward.

The carry-forward is there's no new proposed uses for those dollars.

It's a carry forward for the original purpose as budgeted.

Vice Chair Hurdle, that is exactly correct.

That is actually one of the key factors that central staff looks at when we're screening is to ensure that it's within that.

Otherwise, it would be a mid-year supplemental item or something.

Thank you.

Thank you very much.

Now I will move to the exceptions.

So the total requested increase and the 21 exceptions bill is 13.3 million dollars.

There's really 2 primary notable items that are in this bill and and again this is that an exception from from nearly 6 7 billion dollar budget.

But it is still indicative of money that were spent and higher than the budget appropriation that existed for the year.

The first one is in the Seattle Department of Human Resources.

So this is in the health care fund.

And it was a $6.5 million overage based on unanticipated claims activity at the end of the year.

And so those claims were all paid because they were deemed to be eligible and valid by the department.

However, the budget authority didn't exist at the time to fully make them.

And then next, within the Seattle Department of Transportation, there are about a total of $6.8 million, $5.1 million, or 5.2 from the Transportation Fund, and 1.6 from the Moved Seattle Levy Fund, due to an assortment of unanticipated expenses, including emergency response, pot hole repair, and operation support.

Again, similar to the unanticipated claims activity, these were just items that were that were not expected, according to the department, and therefore were in excess of the 21 budget authority.

And so, similar, you know, kind of building off the chairs, I see a question that I'm happy to address.

Madam Chair?

Please go ahead, Vice Chair.

So the exceptions ordinance is, we're not providing new money.

We're just providing the authority for money that they've already spent.

Is that correct?

Okay, thank you.

Go ahead, Tom.

So if we could look at the next slide.

So this is some ongoing work that we have been doing at a staff level based on as the chair mentioned, that the exceptions board ordinances has become a sort of a regular practice as opposed to an exceptional piece of legislation.

And therefore we've done a bit of additional research to that end.

One piece of that, and it's covered in the memo on page, let's see, page seven.

is a detailed table showing the department characteristics of the past 5 years worth of exceptions ordinance I didn't go further than that I just took up kind of set up at a point in time and and went forward just to show the size and nature of the exceptions bills that have been approved in the past years.

And there's really it's it's sort of sporadic in terms of departments that are having exceptions to the budget authority.

As explained in the memo, the total size of the bill ranges from $5 million in 2017 to a high point of $30 million last year, and to something that if there is a regular trend in this table, about $13 million in 2018 and 2019, similar to the bill that is before you today.

The key takeaway is that the exceptions ordinance has become and recently is a regular practice.

And as such, it kind of posed the question of, is this a regular practice at our peers?

And so what I did is just, again, just kind of picked a university sample and looked at the next four largest first-class cities in Washington state and contacted their finance officials to understand if they similarly have this type of legislation as part of their budget adjustment practice.

I did not get any responses that indicated that that is a regular practice at those other cities.

I would point out that our city of Seattle is significantly larger than their next closest first class peers.

And furthermore, our level of budget control is at the BCL level, which is a sort of program plus fund level of constraint.

whereas some other cities, notably Tacoma, control at the fund level.

So meaning it's easier, for lack of a better word, to stay within budget when the level of fiscal control is more broad.

But that being said, the management capacities between Seattle and those other peers are most likely different, meaning there are more staff available to manage budgets in city of Seattle departments than there are in other cities.

But again, it's just a bit of context to just kind of show what the lay of the land is in pure cities in this state.

So by way of an issue identification, kind of continuing along the line of the thought of how to address if there's a desire to address the exceptions ordinance as a regular practice at Seattle.

One option, and this kind of builds on comments from the CBO Director Dingley at the May 4th presentation, is regular transparent budget monitoring.

So this is a kind of a way to show spending against budget trends in a more consistent and public way to kind of give early advance notice that spending may exceed budget and that corrective action may be necessary.

And so that that actually could be taken in for example the year and supplemental bill.

The council receives a kind of another option is contingent appropriations and so this is saying identifying those places in those areas where it is more likely for there to be I need to spend over budget, though it's not 100% certain and you know not comfortable to build into the budget itself.

As at the department level, but provide some level of a contingent appropriation, so this is kind of similar to the Seattle Department of constructions and inspections has.

contingent authority to spend if the revenue is higher than what they anticipated because it's assumed that the fee revenue is to then support work that that is in need of being completed in that year so something along that line could be an option I would know that that would reduce the level of fiscal control so when you build kind of flexibility and do a contingent appropriation.

you have a little bit less budget constraint.

And now along similar line, the city has a transfer policy in place that allows the budget director to transfer $500,000 between BCLs within a department to kind of correct this sort of thing.

And in some cases, that is clearly already occurring when there are possibilities to do so.

However, given the dollar amounts we've been talking about so far today, $500,000 is insufficient to cover this level of exception.

So there could be some thought, and we haven't really had detailed conversations of what that would look like, but something that would revise the transfer policy so that these budget exceptions could be handled at a more administrative level by CBO.

But again, similar to the option B, That would be, the trade-off would be reduced fiscal control.

So kind of one of the reasons why there is exceptions is because there is a fiscal control in place that says this is the level of authority that you have.

So, you know, any sort of change that would kind of, I guess, release the pressure valve a bit is just logically reducing fiscal control.

And then finally, no action, of course, is an option.

And I would just add here, we are in discussions with the city budget office on some of these options.

And for example, if we scroll the scrolling, but if we go back, oh, it's in the memo, not in the presentation, pardon me.

But if we look at the table in the memo of the five-year and look back, the Department of Transportation is a frequent, it has in each year had budget exceptions and the Department of Human Resources, and I think in three of the five years.

And so part of the discussion is really looking at those departments in particular and making sure their appropriation authority annually is set appropriately, as well as looking at these other options and then considering the trade-offs, as Tom pointed out, of maintaining enough fiscal control and transparency with the council's oversight role and appropriation authority on the one hand, as well as trying to avoid having to take up this exceptions bill on a regular routine basis.

Right.

Well, thank you very much.

Thanks for the comprehensive memo.

And if folks haven't had the chance to read it yet, I encourage you to do so.

There is no pressing question that the council or this committee is poised to ask or answer today regarding these issues that have been identified or potential options from central staff.

So we wanted to tee those up early and to really flag that there is going to be ongoing policy conversations about how to help create a remedy so that the exceptions ordinance are truly exceptional.

On page 7, for example, you'll see that in 2020, we saw the 2020 calendar year be exceptional in that it was nearly or it was over twice the amount of money as we hadn't seen compared to the other 4 years in that 5-year look back.

Perhaps that should be expected because 2020 was exceptional.

It was the year that COVID first hit the city.

We were one of the first areas in the nation to be impacted by COVID.

And so in many aspects, we did see some of the departments really stepping up to try to provide additional services in new ways, and that required additional spending.

So, you know, recognizing that there may be times where we need to have something that does look like an exceptions ordinance is, I think, good governing practice, but it's also, I think, good budgeting just to make sure that we don't have exceptions ordinance on a routine basis.

So thanks so much for teeing up this conversation, Tom, and for the work that you've done, especially in the comparison to Vancouver, Spokane, Everett, and Tacoma, to see what their practices are.

And also, I know you bring with us a wealth of experience from working in other jurisdictions as well and not seeing this practice used in those jurisdictions.

I want to thank the city budget office and Julie Dingley specifically for her interest in working with us to figure out if there's a remediation strategy or a different path that we should be taking as it relates to exceptions ordinances.

Just teeing this up for an early and transparent discussion in the context of considering the exceptions ordinance and the carry forward ordinance.

So do colleagues have any questions about the two council bills that are in front of us and need additional clarification of any sort as we consider this legislation today?

Okay, I'm seeing, excuse me, no additional comments or questions.

Allie or Tom, do you have anything that you'd like to offer in closing?

I'm sure just in closing I would just talk about the kind of that cadence for the rest of the year in terms of known no supplementals and so there is likely not already transmitted soon to be transmitted an additional stand-alone 7 supplemental which would provide 2022 annual wage increases and holiday appropriations for Juneteenth and indigenous people and indigenous people's day.

So that bill I believe is going to full Council because it's essentially giving appropriation authority for prior Council actions.

You know coincident with all those those prior authorizations and then finally we anticipate soon to receive a midyear supplemental that will include a cop grant acceptance bill.

And then finally a year and supplemental submitted with the budget process this fall which would also grant except and that concludes my.

Remind me this is state Legislature consider like and and the biennial supplemental don't they usually just do one supplemental between the biennium.

That's actually that's my understanding that's it's determined by based on session so there's a long session and short session and met this work session is the supplemental session.

yeah still looking forward to moving us towards a true one.

time mid-year supplemental, but really appreciate that we've been able to move away from especially the end of year supplemental.

It was not ideal to conclude our budgeting the last week of November just to receive a supplemental request that first week of December.

Everyone is exhausted at that point and it's not great practice.

Great, great work has been done in this arena.

Thanks in large part to the partnership with the new City Budget Office Director and their interest in working with us, but really in large part to the heroic efforts of Central South.

So thanks a lot.

Thank you again to Tom Mikesell and Ali Panucci.

And with that colleagues.

We might be able to get out of here before noon.

We have 2 bills in front of us again the first bill relates to the exceptions ordinance.

Council one 2, 0, 3, 1, 7, I'm going to that up for us and move the committee recommends passage of Council bill one 2, 0, 3, 1, 7, the Thank you very much.

Thank you very much.

Colleagues.

It has been seconded.

Are there any additional comments or questions?

Hearing none on the exceptions ordinance, Madam Clerk, will you please call the roll on the passage of the bill?

Councilmember Herbold?

Yes.

Councilmember Peterson?

Yes.

Councilmember Nelson?

Aye.

Councilmember Lewis?

Yes.

Chair Mosqueda?

Aye.

I move the committee recommends passage of council bill 120316.

It's been moved and seconded.

Thank you very much, Vice Chair.

Is there any additional comments or questions?

Hearing none, Madam Clerk, will you please?

Oh, I'm sorry.

You were covered by my notes here, Vice Chair.

Please go ahead, Madam Vice Chair.

I want to take this opportunity to thank all the folks who were involved in bringing to reality a commitment made in 2017 for the Lambert House, there's $600,000 in this piece of legislation to fulfill that 2017 commitment.

I know a lot of people, former budget director Noble, current budget director Dingley, and a lot of other folks worked really hard to make sure that we could close out that promise.

Thank you.

Great.

Thanks so much for lifting that up.

Appreciate that.

I'm hearing no additional comments or questions.

Madam Clerk, will you please call the roll on the passage of the carry forward ordinance, Council 120316.

Council Member Herbold?

Yes.

Council Member Peterson?

Yes.

Council Member Nelson?

Aye.

Council Member Lewis?

Yes.

Chair Mosqueda?

Aye.

Madam Chair, that is five in favor, none opposed.

Thank you very much.

The motion carries, and the committee recommendation that the bill pass will be sent to the May 24th Seattle City Council meeting for a final vote.

That means we'll be moving forward both the carry forward ordinance and the exceptions ordinance, and look forward to the ongoing work to do with you all and central staff and CBO on some of these bigger issues that have been raised in the central staff memo.

Again, if you haven't had the chance to read that memo, please do, because it will tee up some of the future work for the committee on the macro level.

All right, I think it's just before noon and I've kept you an extra 27 minutes.

I look forward to seeing you at our next committee meeting.

We'll have the next Finance and Housing Committee meeting on June 1st at 9.30am.

We are still working on finalizing our agenda, but some of the items include two presentations on race and social justice initiatives from the city budget office and the office of housing.

We will also have the office of housing appointment for your consideration.

Again, that is interim director Michael Winkler-Chin, who joined us today.

We will also have the Washington State Department of Transportation, Royal.

How do I say that?

Go ahead.

Okay.

Royal Braum.

Royal Braum lease.

That is the two real estate leases from Finance and Administrative Services.

The time is 1158 a.m.

Is there anything else for the good of the order?

Hearing none, we are adjourned.

Have a great rest of your afternoon.

Thank you and thanks for your patience as we got the meeting started today.

Take care, everyone.

Bye-bye.