1 00:00:16,149 --> 00:00:16,816 -- GOOD AFTERNOON. THE. FRIDAY, 2 00:00:16,816 --> 00:00:20,053 AUGUST 7th, 2020. TODAY IS 3 00:00:20,053 --> 00:00:21,254 FRIDAY, AUGUST 7th, 2026 AND 4 00:00:21,254 --> 00:00:22,856 THIS MEETING OF THE ECONOMIC AND 5 00:00:22,856 --> 00:00:23,890 REVENUE FORECAST COUNCIL WILL 6 00:00:23,890 --> 00:00:24,557 COME TO ORDER. I'M DAN STRAUSS, 7 00:00:24,557 --> 00:00:26,760 CHAIR OF THE ECONOMIC AND 8 00:00:26,760 --> 00:00:28,294 REVENUE FORECAST COUNCIL. I'M 9 00:00:28,294 --> 00:00:29,963 HERE TODAY WITH MY COLLEAGUES 10 00:00:29,963 --> 00:00:32,432 AND I'LL CALL ROLL HERE. 11 00:00:32,432 --> 00:00:34,501 COUNCIL PRESIDENT HOLLINGSWORTH 12 00:00:34,501 --> 00:00:35,235 PRESENT DEPUTY DIRECTOR OF CITY 13 00:00:35,235 --> 00:00:37,370 OPERATIONS AND FORECAST COUNCIL 14 00:00:37,370 --> 00:00:39,372 VICE PRESIDENT, VICE CHAIR MARK 15 00:00:39,372 --> 00:00:42,042 ELLENBROOK HERE, CITY FINANCE 16 00:00:42,042 --> 00:00:43,676 DIRECTOR DWIGHT DIVELY HERE. 17 00:00:43,676 --> 00:00:45,845 COUNCILMEMBER STRAUSS HERE. UH, 18 00:00:45,845 --> 00:00:46,780 WE HAVE FOUR PRESENT AND A 19 00:00:46,780 --> 00:00:48,081 QUORUM HERE. SO WE ARE ALSO 20 00:00:48,081 --> 00:00:49,616 JOINED TODAY BY STAFF FROM THE 21 00:00:49,616 --> 00:00:50,583 ECONOMIC AND REVENUE FORECAST, 22 00:00:50,583 --> 00:00:52,318 AS WELL AS REPRESENTATIVES FROM 23 00:00:52,318 --> 00:00:53,720 THE CITY BUDGET OFFICE AND THE 24 00:00:53,720 --> 00:00:59,058 CITY COUNCIL. CENTRAL STAFF IS 25 00:00:59,058 --> 00:01:00,393 ALSO HERE SOMEWHERE. THEY'LL BE 26 00:01:00,393 --> 00:01:01,494 HERE MOMENTARILY. THE MAIN 27 00:01:01,494 --> 00:01:02,162 PURPOSE OF TODAY'S MEETING IS 28 00:01:02,162 --> 00:01:03,663 THAT THE FORECAST IS FOR THE 29 00:01:03,663 --> 00:01:04,697 FORECAST COUNCIL TO RECEIVE AND 30 00:01:04,697 --> 00:01:08,201 REVIEW THE UPDATED ECONOMIC AND 31 00:01:08,201 --> 00:01:10,737 REVENUE FORECASTS. THIS FORECAST 32 00:01:10,737 --> 00:01:11,271 IS PARTICULARLY IMPORTANT 33 00:01:11,271 --> 00:01:11,871 BECAUSE IT WILL SERVE AS THE 34 00:01:11,871 --> 00:01:13,506 BASIS FOR THE MAYOR'S UPCOMING 35 00:01:13,506 --> 00:01:15,175 PROPOSED BUDGET. CITY BUDGETS 36 00:01:15,175 --> 00:01:17,310 ARE ALWAYS LEGALLY MUST BE 37 00:01:17,310 --> 00:01:19,078 BALANCED, AND SO THE MAYOR'S 38 00:01:19,078 --> 00:01:20,613 PROPOSED SPENDING WILL BE 39 00:01:20,613 --> 00:01:22,482 DIRECTLY AFFECTED BY THE 40 00:01:22,482 --> 00:01:24,551 FORECAST IN WHICH WE RECEIVE 41 00:01:24,551 --> 00:01:25,952 TODAY. CITY COUNCIL WILL THEN 42 00:01:25,952 --> 00:01:26,753 BEGIN ITS REVIEW OF THE PROPOSED 43 00:01:26,753 --> 00:01:28,321 BUDGET, AND WE. THE FORECAST 44 00:01:28,321 --> 00:01:29,589 COUNCIL ARE SCHEDULED TO RECEIVE 45 00:01:29,589 --> 00:01:31,991 A FINAL REVENUE FORECAST FOR THE 46 00:01:31,991 --> 00:01:35,628 YEAR ON FRIDAY, OCTOBER 16th. 47 00:01:35,628 --> 00:01:37,397 THIS OCTOBER FORECAST WILL SET 48 00:01:37,397 --> 00:01:39,132 THE STAGE FOR THE CITY'S CITY 49 00:01:39,132 --> 00:01:41,668 COUNCIL'S BUDGET DELIBERATIONS 50 00:01:41,668 --> 00:01:43,503 AND DETERMINE THE TOTAL 51 00:01:43,503 --> 00:01:44,103 RESOURCES TO BE APPROPRIATED 52 00:01:44,103 --> 00:01:45,605 THROUGH THAT PROCESS. BEFORE 53 00:01:45,605 --> 00:01:47,440 MOVING ON TO THE FORECAST 54 00:01:47,440 --> 00:01:49,275 PRESENTATION, LET'S BEGIN BY 55 00:01:49,275 --> 00:01:50,210 FORMALLY ADOPTING THE AGENDA FOR 56 00:01:50,210 --> 00:01:51,277 TODAY'S MEETING. A COPY OF THE 57 00:01:51,277 --> 00:01:52,912 AGENDA HAS BEEN CIRCULATED TO 58 00:01:52,912 --> 00:01:54,614 MEMBERS AND IS AVAILABLE ONLINE 59 00:01:54,614 --> 00:01:55,882 AT THE FORECAST OFFICE WEBSITE. 60 00:01:55,882 --> 00:01:57,283 I MOVE TO ADOPT THE AGENDA. IS 61 00:01:57,283 --> 00:02:01,955 THERE A SECOND? SECOND. 62 00:02:01,955 --> 00:02:02,255 -- SECOND? 63 00:02:02,255 --> 00:02:03,189 -- THANK YOU. IT'S BEEN MOVED 64 00:02:03,189 --> 00:02:03,923 AND SECONDED TO ADOPT THE 65 00:02:03,923 --> 00:02:06,292 AGENDA. TODAY'S AGENDA IS BEFORE 66 00:02:06,292 --> 00:02:07,694 THE FORECAST. COUNCIL. UH, THIS 67 00:02:07,694 --> 00:02:08,828 IS THE OPPORTUNITY FOR MEMBERS 68 00:02:08,828 --> 00:02:12,165 TO AMEND THE AGENDA TO ADD OR 69 00:02:12,165 --> 00:02:14,534 REMOVE AN ITEM. ARE THERE ANY 70 00:02:14,534 --> 00:02:16,703 PROPOSED AMENDMENTS OR REMOVALS? 71 00:02:16,703 --> 00:02:18,037 THANK YOU. IF THERE ARE NO 72 00:02:18,037 --> 00:02:20,073 OBJECTIONS, TODAY'S AGENDA WILL 73 00:02:20,073 --> 00:02:21,007 BE ADOPTED. HEARING NO 74 00:02:21,007 --> 00:02:22,976 OBJECTION, TODAY'S AGENDA IS 75 00:02:22,976 --> 00:02:24,010 ADOPTED. MOVING ON TO ITEM ONE, 76 00:02:24,010 --> 00:02:25,311 WHICH IS THE APPROVAL OF THE 77 00:02:25,311 --> 00:02:27,080 MINUTES FROM THE APRIL 10th, 78 00:02:27,080 --> 00:02:28,681 2026 MEETING. A COPY OF THE 79 00:02:28,681 --> 00:02:30,083 MINUTES FROM THE APRIL 10th 80 00:02:30,083 --> 00:02:30,717 MEETING OF THE FORECAST COUNCIL 81 00:02:30,717 --> 00:02:31,718 HAVE BEEN CIRCULATED TO THE 82 00:02:31,718 --> 00:02:32,685 MEMBERS AND POSTED ON THE 83 00:02:32,685 --> 00:02:35,388 WEBSITE OF THE FORECAST OFFICE. 84 00:02:35,388 --> 00:02:36,956 I MOVE TO. I MOVE AND SEEK A 85 00:02:36,956 --> 00:02:39,092 SECOND FOR THE APPROVAL OF THE 86 00:02:39,092 --> 00:02:39,359 MINUTES. 87 00:02:39,359 --> 00:02:40,260 -- SECOND. 88 00:02:40,260 --> 00:02:41,494 -- IT HAS BEEN MOVED AND 89 00:02:41,494 --> 00:02:42,462 SECONDED TO APPROVE THE MINUTES 90 00:02:42,462 --> 00:02:44,297 FROM OUR LAST MEETING. IF THERE 91 00:02:44,297 --> 00:02:46,132 ARE NO OBJECTIONS, THE MINUTES 92 00:02:46,132 --> 00:02:48,801 WILL BE APPROVED. HEARING NO 93 00:02:48,801 --> 00:02:49,869 OBJECTIONS, THE MINUTES ARE 94 00:02:49,869 --> 00:02:51,871 APPROVED. NOW LET'S JUMP RIGHT 95 00:02:51,871 --> 00:02:54,407 INTO WHY WE'RE HERE. UH, WE'RE 96 00:02:54,407 --> 00:02:56,009 GOING TO MOVE RIGHT INTO ITEM 97 00:02:56,009 --> 00:02:58,545 TWO, WHICH IS THE PRESENTATION 98 00:02:58,545 --> 00:02:59,646 OF THE AUGUST 2026 ECONOMIC AND 99 00:02:59,646 --> 00:03:00,680 REVENUE FORECAST AND THE 100 00:03:00,680 --> 00:03:03,283 RECOMMENDATIONS OF THE OFFICE OF 101 00:03:03,283 --> 00:03:03,883 ECONOMIC AND REVENUE FORECAST 102 00:03:03,883 --> 00:03:09,289 REGARDING 2026, 2027 AND 2028. 103 00:03:09,289 --> 00:03:11,124 REVENUE FORECASTS MOVING INTO 104 00:03:11,124 --> 00:03:13,226 THIS AGENDA ITEM, THE FORECAST 105 00:03:13,226 --> 00:03:13,760 OFFICE WILL PRESENT THESE 106 00:03:13,760 --> 00:03:16,195 REVISED FORECASTS FOR THIS YEAR, 107 00:03:16,195 --> 00:03:18,998 NEXT YEAR, AND 2028. WHY THIS IS 108 00:03:18,998 --> 00:03:20,266 IMPORTANT IS BECAUSE WE ARE AT 109 00:03:20,266 --> 00:03:22,068 THE BEGINNING OF OUR BIENNIAL 110 00:03:22,068 --> 00:03:23,269 BUDGET PROCESS. SO NOT ONLY DO 111 00:03:23,269 --> 00:03:25,838 WE HAVE TO TRUE UP THIS YEAR, WE 112 00:03:25,838 --> 00:03:27,707 ARE SETTING THE BUDGET FOR 27 113 00:03:27,707 --> 00:03:31,511 AND 28. THIS FORECAST UPDATES 114 00:03:31,511 --> 00:03:32,879 THOSE FORECASTS. TODAY'S 115 00:03:32,879 --> 00:03:33,880 PRESENTATION WILL BE LED BY 116 00:03:33,880 --> 00:03:34,380 STAFF FROM THE CITY'S 117 00:03:34,380 --> 00:03:35,515 INDEPENDENT OFFICE OF ECONOMIC 118 00:03:35,515 --> 00:03:36,849 AND REVENUE FORECASTS. AND AS A 119 00:03:36,849 --> 00:03:37,984 REMINDER TO THE PUBLIC, THIS 120 00:03:37,984 --> 00:03:39,719 OFFICE IS SIMILAR TO THE 121 00:03:39,719 --> 00:03:41,454 INDEPENDENT FORECASTING OFFICES 122 00:03:41,454 --> 00:03:42,488 OPERATING IN KING COUNTY AND AT 123 00:03:42,488 --> 00:03:43,890 WASHINGTON STATE, WITH THE MAIN 124 00:03:43,890 --> 00:03:46,759 PURPOSE TO INCREASE TRANSPARENCY 125 00:03:46,759 --> 00:03:47,360 AND ACCOUNTABILITY AROUND THE 126 00:03:47,360 --> 00:03:48,728 CITY'S REVENUE FORECASTING 127 00:03:48,728 --> 00:03:50,296 PROCESS AND TO ENSURE THAT THERE 128 00:03:50,296 --> 00:03:52,732 IS NO POLITICAL INFLUENCE ON THE 129 00:03:52,732 --> 00:03:55,401 FORECASTS THEMSELVES. TO ENSURE 130 00:03:55,401 --> 00:03:57,170 THE FORECAST, COUNCIL IS FULLY 131 00:03:57,170 --> 00:03:59,305 INFORMED AND TO HAVE FULL RANGE 132 00:03:59,305 --> 00:04:00,273 OF QUESTIONS ADDRESSED. STAFF 133 00:04:00,273 --> 00:04:01,975 FROM CITY COUNCIL, CENTRAL STAFF 134 00:04:01,975 --> 00:04:04,243 AND CITY BUDGET OFFICE ALSO 135 00:04:04,243 --> 00:04:04,978 PARTICIPATE IN THIS BRIEFING. 136 00:04:04,978 --> 00:04:06,045 THE STAFF FROM THE CITY BUDGET 137 00:04:06,045 --> 00:04:07,614 OFFICE IS ALSO PRESENT TODAY TO 138 00:04:07,614 --> 00:04:09,315 PROVIDE BRIEFING REGARDING THE 139 00:04:09,315 --> 00:04:10,950 REVENUES STILL WITHIN THE 140 00:04:10,950 --> 00:04:12,685 PURVIEW OF THE BUDGET OFFICE. 141 00:04:12,685 --> 00:04:15,054 AND SO THIS THE FORECAST OFFICE 142 00:04:15,054 --> 00:04:17,957 WILL NOW PRESENT THE BACKGROUND. 143 00:04:17,957 --> 00:04:20,560 UH, DIRECTOR DURIS, I ALWAYS 144 00:04:20,560 --> 00:04:22,495 APPRECIATE THAT THERE'S A LONG 145 00:04:22,495 --> 00:04:25,064 LEAD IN WITH OUR CURRENT 146 00:04:25,064 --> 00:04:25,598 ECONOMIC SITUATION. WHILE 147 00:04:25,598 --> 00:04:26,299 EVERYONE'S ON PINS AND NEEDLES 148 00:04:26,299 --> 00:04:28,468 TO KNOW HOW MUCH MONEY WE WANT, 149 00:04:28,468 --> 00:04:29,902 WE WE RECEIVED OR LOST. UM, BUT 150 00:04:29,902 --> 00:04:31,904 IT IS REALLY IMPORTANT THAT THAT 151 00:04:31,904 --> 00:04:34,374 FIRST SECTION THAT YOU ALWAYS 152 00:04:34,374 --> 00:04:35,675 PRESENT BECAUSE HAVING THIS 153 00:04:35,675 --> 00:04:37,210 THREE TIMES A YEAR GIVES US A 154 00:04:37,210 --> 00:04:39,245 GOOD SNAPSHOT OF WHAT'S, WHAT'S 155 00:04:39,245 --> 00:04:40,313 CHANGED SINCE THE LAST TIME WE 156 00:04:40,313 --> 00:04:43,316 MET. AND SO WE'LL TURN IT OVER 157 00:04:43,316 --> 00:04:45,051 TO YOU TO RUN THROUGH YOUR 158 00:04:45,051 --> 00:04:47,420 PRESENTATION. ALL I ASK IS THAT 159 00:04:47,420 --> 00:04:49,922 BEFORE YOU MOVE FROM OUR 160 00:04:49,922 --> 00:04:50,523 ECONOMIC ENVIRONMENT INTO THE 161 00:04:50,523 --> 00:04:52,291 FORECAST OPTIONS THAT WE PAUSE, 162 00:04:52,291 --> 00:04:54,193 ASK, AND ANSWER ANY QUESTIONS 163 00:04:54,193 --> 00:04:55,995 THERE. UM, OVER TO YOU. 164 00:04:55,995 --> 00:04:58,731 DIRECTOR. DR. ROSS AND THE 165 00:04:58,731 --> 00:05:00,900 COMMITTEE TABLE WOULD LIKE TO 166 00:05:00,900 --> 00:05:02,135 INTRODUCE THEMSELVES. JUST FOR 167 00:05:02,135 --> 00:05:04,404 THE RECORD, WE ALL KNOW YOU. WE 168 00:05:04,404 --> 00:05:05,004 ALL REALLY APPRECIATE ALL THE 169 00:05:05,004 --> 00:05:07,473 WORK YOU DO, BUT MAYBE ROUND OF 170 00:05:07,473 --> 00:05:08,975 INTRODUCTIONS AND THEN JUMP 171 00:05:08,975 --> 00:05:09,642 RIGHT INTO THE PRESENTATION. AND 172 00:05:09,642 --> 00:05:11,210 COLLEAGUES, IF YOU DO HAVE 173 00:05:11,210 --> 00:05:12,078 QUESTIONS ALONG THE WAY, PLEASE 174 00:05:12,078 --> 00:05:13,413 FEEL FREE TO ASK THEM. JUST 175 00:05:13,413 --> 00:05:14,580 NOTING THAT WE ARE STARTING A 176 00:05:14,580 --> 00:05:16,349 HALF AN HOUR LATE BECAUSE 177 00:05:16,349 --> 00:05:18,718 COUNCIL CHAMBERS WERE 178 00:05:18,718 --> 00:05:22,188 UNAVAILABLE. UM, YEAH 179 00:05:22,188 --> 00:05:22,889 -- THANK YOU. CHAIR STRAUSS. 180 00:05:22,889 --> 00:05:25,324 -- UH, GOOD AFTERNOON. 181 00:05:25,324 --> 00:05:25,958 COUNCILMEMBERS. FOR THE RECORD, 182 00:05:25,958 --> 00:05:26,926 MY NAME IS JAN DURAS. I'M 183 00:05:26,926 --> 00:05:28,795 INTERIM DIRECTOR AND CHIEF 184 00:05:28,795 --> 00:05:29,562 ECONOMIST AT THE OFFICE OF 185 00:05:29,562 --> 00:05:31,397 ECONOMIC AND REVENUE FORECASTS. 186 00:05:31,397 --> 00:05:33,066 -- GOOD AFTERNOON EVERYBODY. 187 00:05:33,066 --> 00:05:33,800 THIS IS SEAN THOMPSON. I WORK 188 00:05:33,800 --> 00:05:35,802 WITH THE ON WITH THE OFFICE OF 189 00:05:35,802 --> 00:05:37,570 ECONOMIC& REVENUE FORECAST AS 190 00:05:37,570 --> 00:05:37,770 WELL. 191 00:05:37,770 --> 00:05:39,639 -- GOOD MORNING OR GOOD 192 00:05:39,639 --> 00:05:40,440 AFTERNOON, JOE RUSSELL, CITY 193 00:05:40,440 --> 00:05:43,042 BUDGET OFFICE 194 00:05:43,042 --> 00:05:44,477 -- GOOD AFTERNOON. ALEXANDRIA IS 195 00:05:44,477 --> 00:05:47,613 AN ECONOMIST WITH THE CITY 196 00:05:47,613 --> 00:05:55,488 BUDGET OFFICE. 197 00:05:55,722 --> 00:06:06,165 -- SO WHICH ONE IS IT AGAIN? 198 00:06:22,882 --> 00:06:26,419 THERE WE GO. ALL RIGHT. SO 199 00:06:26,419 --> 00:06:29,889 LET'S DIVE INTO IT. UM, SO, UM, 200 00:06:29,889 --> 00:06:34,160 AS ALWAYS, WE ARE FIRST GOING TO 201 00:06:34,160 --> 00:06:35,962 LOOK AT THE ECONOMIC DEVELOPMENT 202 00:06:35,962 --> 00:06:37,263 SINCE THE LAST FORECAST. UM, THE 203 00:06:37,263 --> 00:06:39,465 MAIN REASON WHY WE ARE SPENDING 204 00:06:39,465 --> 00:06:40,500 CONSIDERABLE AMOUNT OF TIME ON 205 00:06:40,500 --> 00:06:43,536 THAT IS THE WAY HOW THE REVENUE 206 00:06:43,536 --> 00:06:44,670 FORECASTS ARE DEVELOPED. UM, 207 00:06:44,670 --> 00:06:47,507 IT'S A TWO STEP PROCESS. UH, IN 208 00:06:47,507 --> 00:06:49,909 THE FIRST STEP, WE ARE TAKING 209 00:06:49,909 --> 00:06:52,044 THE US FORECAST. UM, AND AS A 210 00:06:52,044 --> 00:06:55,415 MAIN INPUT AND USING IT TO 211 00:06:55,415 --> 00:06:56,015 DEVELOP THE REGIONAL ECONOMIC 212 00:06:56,015 --> 00:06:57,250 FORECAST. AND THEN THAT REGIONAL 213 00:06:57,250 --> 00:06:58,951 ECONOMIC FORECAST IS USED AS A 214 00:06:58,951 --> 00:07:01,521 MAIN INPUT TO DEVELOP THE 215 00:07:01,521 --> 00:07:03,990 REVENUE FORECAST FOR THOSE 216 00:07:03,990 --> 00:07:05,124 REVENUE STREAMS WHICH ARE DRIVEN 217 00:07:05,124 --> 00:07:07,393 BY THE ECONOMY, BUSINESS AND 218 00:07:07,393 --> 00:07:08,528 OCCUPATION, TAX, SALES TAX, UH, 219 00:07:08,528 --> 00:07:10,830 PAYROLL EXPENSE TAX, UTILITY 220 00:07:10,830 --> 00:07:16,335 TAXES, AND ALL SORTS OF OTHER 221 00:07:16,335 --> 00:07:18,771 REVENUE STREAMS. UM, IN RECENT 222 00:07:18,771 --> 00:07:21,174 MONTHS, THE IRAN CONFLICT HAS 223 00:07:21,174 --> 00:07:22,341 BEEN SHAPING THE OUTLOOK QUITE 224 00:07:22,341 --> 00:07:24,744 CONSIDERABLY. IT HAS CREATED 225 00:07:24,744 --> 00:07:27,146 NOTABLE HEADWINDS ON THE CHART 226 00:07:27,146 --> 00:07:29,015 HERE SHOWS THE IMPACT OF THAT 227 00:07:29,015 --> 00:07:31,117 WAR ON OIL AND GAS PRICES IN 228 00:07:31,117 --> 00:07:33,719 SEATTLE AREA. THERE WAS A LARGE 229 00:07:33,719 --> 00:07:37,190 SPIKE IN MARCH. UM, LOTS OF UP 230 00:07:37,190 --> 00:07:39,792 AND DOWNS, LOTS OF UNCERTAINTY. 231 00:07:39,792 --> 00:07:41,828 OIL PRICES HAVE COME DOWN 232 00:07:41,828 --> 00:07:44,130 RECENTLY, BUT THERE IS STILL 233 00:07:44,130 --> 00:07:45,998 VERY HIGH UNCERTAINTY AROUND THE 234 00:07:45,998 --> 00:07:48,434 OUTLOOK. UM, THINGS ARE VERY 235 00:07:48,434 --> 00:07:51,270 HARD TO PREDICT. AND SO THAT 236 00:07:51,270 --> 00:07:53,973 ADDS TO OVERALL UNCERTAINTY THAT 237 00:07:53,973 --> 00:07:55,708 WAS ALREADY PRESENT. THERE. 238 00:07:55,708 --> 00:07:57,743 DESPITE ALL THAT UNCERTAINTY, 239 00:07:57,743 --> 00:07:59,679 FINANCIAL MARKETS HAVE IN 240 00:07:59,679 --> 00:08:01,414 GENERAL PERFORMED QUITE 241 00:08:01,414 --> 00:08:04,217 REMARKABLY. UM, THERE WAS A 242 00:08:04,217 --> 00:08:05,785 ABOUT 9% DROP AFTER THE WAR 243 00:08:05,785 --> 00:08:08,154 STARTED, BUT THEN S&P 500, AS 244 00:08:08,154 --> 00:08:10,356 YOU CAN SEE IN THIS CHART, 245 00:08:10,356 --> 00:08:12,859 RECOVERED. UM, THOSE RED DOTS 246 00:08:12,859 --> 00:08:14,460 SHOW THE POINTS AT WHICH WE WERE 247 00:08:14,460 --> 00:08:16,362 DELIVERING FORECASTS. SO YOU CAN 248 00:08:16,362 --> 00:08:18,965 ALSO SEE THAT LAST YEAR THERE 249 00:08:18,965 --> 00:08:21,367 WAS SIMILAR SORT OF SITUATION 250 00:08:21,367 --> 00:08:23,102 WHERE THE APRIL FORECAST CAME 251 00:08:23,102 --> 00:08:23,636 RIGHT AFTER TARIFFS WERE 252 00:08:23,636 --> 00:08:25,438 ANNOUNCED. THINGS LOOKED BETTER 253 00:08:25,438 --> 00:08:27,974 BY AUGUST, IMPROVED EVEN FURTHER 254 00:08:27,974 --> 00:08:29,675 BY OCTOBER. THEN AGAIN, WITH THE 255 00:08:29,675 --> 00:08:34,447 IRAN WAR, THINGS TURNED, UH, 256 00:08:34,447 --> 00:08:36,048 DOWN. THE OUTLOOK WAS MORE 257 00:08:36,048 --> 00:08:37,383 PESSIMISTIC IN APRIL. BUT SINCE 258 00:08:37,383 --> 00:08:39,752 THEN, IN GENERAL, THE ECONOMY 259 00:08:39,752 --> 00:08:42,355 HAS, UH, KIND OF MUDDLED 260 00:08:42,355 --> 00:08:45,157 THROUGH. UM, AND IN DESPITE ALL 261 00:08:45,157 --> 00:08:49,495 THOSE, THOSE TAILWINDS, UM, THE 262 00:08:49,495 --> 00:08:51,764 ECONOMY CONTINUES TO GROW AT A 263 00:08:51,764 --> 00:08:53,466 SOLID BASE. THAT SAID, THERE ARE 264 00:08:53,466 --> 00:08:55,968 NOTABLE RISKS BECAUSE OF THE 265 00:08:55,968 --> 00:08:57,937 HIGH CONCENTRATION OF GROWTH, 266 00:08:57,937 --> 00:08:59,672 WHETHER IT'S LOOKING AT THE 267 00:08:59,672 --> 00:09:01,941 INVESTMENT, LOOKING AT CONSUMER 268 00:09:01,941 --> 00:09:04,777 SPENDING, LOOKING AT THE SP5 269 00:09:04,777 --> 00:09:06,145 HUNDRED INDEX, THERE IS A LOT, 270 00:09:06,145 --> 00:09:09,348 UH, ESSENTIALLY THAT'S HANGING 271 00:09:09,348 --> 00:09:11,250 ON THE OUTCOME OF HOW THE AI 272 00:09:11,250 --> 00:09:13,152 BUILD OUT AND THE INVESTMENT IN 273 00:09:13,152 --> 00:09:16,155 AI, HOW THAT WILL AFFECT THE 274 00:09:16,155 --> 00:09:18,324 ECONOMY UM, AND WE CAN TALK A 275 00:09:18,324 --> 00:09:19,859 LITTLE BIT MORE. 276 00:09:19,859 --> 00:09:20,626 -- BEFORE YOU MOVE ON TO THAT 277 00:09:20,626 --> 00:09:22,695 NEXT SLIDE, I'LL JUST MAKE ONE 278 00:09:22,695 --> 00:09:24,063 COMMENT THAT THE YOU NOTE HERE, 279 00:09:24,063 --> 00:09:25,765 APRIL 10th AS BEING A DATA POINT 280 00:09:25,765 --> 00:09:29,335 ON THIS CHART. I THINK THAT'S 281 00:09:29,335 --> 00:09:30,403 IMPORTANT JUST BECAUSE WHEN YOU 282 00:09:30,403 --> 00:09:31,237 ARE PULLING YOUR INFORMATION TO 283 00:09:31,237 --> 00:09:32,805 PROVIDE US THESE FORECASTS, 284 00:09:32,805 --> 00:09:33,839 YOU'RE YOU'RE DOING THIS THE 285 00:09:33,839 --> 00:09:36,108 WEEKS AHEAD OF THIS MEETING AND 286 00:09:36,108 --> 00:09:37,944 THIS GRAPH CLEARLY DESCRIBES 287 00:09:37,944 --> 00:09:40,880 THAT WE WERE IN A STOCK MARKET 288 00:09:40,880 --> 00:09:42,348 DOWNTURN WHILE YOU WERE CREATING 289 00:09:42,348 --> 00:09:44,350 THOSE THOSE FORECASTS LAST TIME 290 00:09:44,350 --> 00:09:46,519 AROUND. SO JUST FOR THE VIEWING 291 00:09:46,519 --> 00:09:48,354 PUBLIC, ALL 150, 000 PEOPLE 292 00:09:48,354 --> 00:09:50,356 WATCHING THIS PROGRAM RIGHT NOW. 293 00:09:50,356 --> 00:09:52,091 I JUST WANTED TO NOTE THAT 294 00:09:52,091 --> 00:09:52,758 BECAUSE IT'S IMPORTANT CONTEXT 295 00:09:52,758 --> 00:09:55,094 FOR THIS WHOLE CONVERSATION. 296 00:09:55,094 --> 00:09:57,396 -- YEAH, IT IS. YEAH. THERE IS 297 00:09:57,396 --> 00:09:59,031 ALWAYS THAT ISSUE THAT BY THE 298 00:09:59,031 --> 00:10:00,299 TIME THE FORECAST IS DELIVERED, 299 00:10:00,299 --> 00:10:01,667 SOME OF THE INPUT DATA IS 300 00:10:01,667 --> 00:10:05,271 ALREADY STALE. AND SO IT'S, UH, 301 00:10:05,271 --> 00:10:06,272 ESPECIALLY CHALLENGING IN, IN A 302 00:10:06,272 --> 00:10:08,407 SITUATION IN AN ENVIRONMENT 303 00:10:08,407 --> 00:10:09,408 WHERE THINGS CHANGE WEEK TO 304 00:10:09,408 --> 00:10:12,878 WEEK, DAY TO DAY UM, LOOKING A 305 00:10:12,878 --> 00:10:15,448 LITTLE BIT AT THE MAIN ECONOMIC 306 00:10:15,448 --> 00:10:19,251 DATA FOR THE REGION. UM, AND 307 00:10:19,251 --> 00:10:21,654 THAT'S THE EMPLOYMENT DATA. UM, 308 00:10:21,654 --> 00:10:24,724 THIS CHART HERE COMPARES HOW THE 309 00:10:24,724 --> 00:10:26,625 REGIONAL ECONOMY FARED RELATIVE 310 00:10:26,625 --> 00:10:29,328 TO, TO THE US. THE TOP TWO BARS 311 00:10:29,328 --> 00:10:32,898 THAT ARE LABELED TOTAL NONFARM 312 00:10:32,898 --> 00:10:35,601 ARE SHOWING THE CHANGE IN 313 00:10:35,601 --> 00:10:36,235 OVERALL EMPLOYMENT IN THE FIRST 314 00:10:36,235 --> 00:10:39,438 SIX MONTHS OF 2026. FOR THE US 315 00:10:39,438 --> 00:10:42,708 THAT'S A BLUE BAR. UM, ROUGHLY 316 00:10:42,708 --> 00:10:44,977 A SLIGHTLY LESS THAN 0.2% YEAR 317 00:10:44,977 --> 00:10:46,412 OVER YEAR INCREASE IN THE JOB 318 00:10:46,412 --> 00:10:47,713 NUMBERS FOR SEATTLE AREA, WE 319 00:10:47,713 --> 00:10:50,850 HAVE SEEN A DECLINE, ALMOST HALF 320 00:10:50,850 --> 00:10:52,051 A PERCENT DECLINE YEAR OVER YEAR 321 00:10:52,051 --> 00:10:58,124 IN THE FIRST HALF OF 2026. THEN 322 00:10:58,124 --> 00:10:58,658 THOSE BARS BELOW SHOW THE 323 00:10:58,658 --> 00:11:00,259 DECOMPOSITION BY INDUSTRY. SO 324 00:11:00,259 --> 00:11:03,896 ESSENTIALLY SHOW WHICH OF THE 325 00:11:03,896 --> 00:11:06,065 INDUSTRIES HAVE UM, HAVE BEEN 326 00:11:06,065 --> 00:11:08,134 BEHIND THE SIGNIFICANT DECLINE 327 00:11:08,134 --> 00:11:10,036 IN THE SEATTLE METRO AREA. AND 328 00:11:10,036 --> 00:11:11,170 HERE I WANT TO STRESS THAT THIS 329 00:11:11,170 --> 00:11:12,271 IS REALLY SEATTLE METRO AREA, 330 00:11:12,271 --> 00:11:16,442 NOT SEATTLE CITY, BUT, UH, 331 00:11:16,442 --> 00:11:18,277 WHAT'S CALLED SEATTLE 332 00:11:18,277 --> 00:11:18,878 METROPOLITAN DIVISION, WHICH 333 00:11:18,878 --> 00:11:20,279 MEANS KING AND SNOHOMISH 334 00:11:20,279 --> 00:11:22,948 COUNTIES. THAT'S THE DATA THAT 335 00:11:22,948 --> 00:11:24,383 WE USE TO DEVELOP THAT ECONOMIC 336 00:11:24,383 --> 00:11:25,718 FORECAST, BECAUSE THAT'S THE 337 00:11:25,718 --> 00:11:27,386 DATA THAT'S RELEASED ON A 338 00:11:27,386 --> 00:11:29,255 REGULAR BASIS WITH RELATIVELY 339 00:11:29,255 --> 00:11:31,390 LITTLE DELAY. IT'S RELEASED 340 00:11:31,390 --> 00:11:34,060 MONTHLY. UM, THERE IS SOME DATA 341 00:11:34,060 --> 00:11:36,228 ON EMPLOYMENT BY CITY, BUT IT'S 342 00:11:36,228 --> 00:11:38,898 COMING MUCH LESS OFTEN. UH, I'LL 343 00:11:38,898 --> 00:11:40,299 TALK A LITTLE BIT ABOUT THAT IN 344 00:11:40,299 --> 00:11:43,869 A COUPLE OF SLIDES. BUT HERE 345 00:11:43,869 --> 00:11:44,503 AGAIN, THIS IS THE REGION AS A 346 00:11:44,503 --> 00:11:46,772 WHOLE. AS YOU CAN SEE, UM, 347 00:11:46,772 --> 00:11:50,676 LAYOFFS IN THE TECH SECTOR HAVE 348 00:11:50,676 --> 00:11:51,977 LED TO A SIGNIFICANT AMOUNT OF 349 00:11:51,977 --> 00:11:54,013 JOB LOSSES IN THE INFORMATION 350 00:11:54,013 --> 00:11:58,651 SECTOR. THE HIGHER INTEREST 351 00:11:58,651 --> 00:11:59,251 RATES, UH, HAVE ALSO CREATED 352 00:11:59,251 --> 00:12:01,420 HEADWINDS FOR THE REAL ESTATE 353 00:12:01,420 --> 00:12:03,422 INDUSTRY. THAT'S UNDER 354 00:12:03,422 --> 00:12:04,056 FINANCIAL ACTIVITIES HERE. THERE 355 00:12:04,056 --> 00:12:06,292 ARE ONGOING EFFECTS OF TARIFFS 356 00:12:06,292 --> 00:12:08,794 WHICH ARE PULLING DOWN WHOLESALE 357 00:12:08,794 --> 00:12:11,997 AND RETAIL TRADE. AND SO THOSE 358 00:12:11,997 --> 00:12:13,732 ARE THE PRIMARY SECTORS BEHIND 359 00:12:13,732 --> 00:12:15,034 THOSE DECLINES THAT WE ARE 360 00:12:15,034 --> 00:12:18,637 SEEING YEAR OVER YEAR IN THE 361 00:12:18,637 --> 00:12:19,939 REGION. TURNING TO THE OUTLOOK, 362 00:12:19,939 --> 00:12:22,942 UH, FIRST, LOOKING AGAIN AT THE 363 00:12:22,942 --> 00:12:25,277 US AS A WHOLE, THAT'S THE 364 00:12:25,277 --> 00:12:26,712 FORECAST THAT WE GET FROM S&P 365 00:12:26,712 --> 00:12:29,815 GLOBAL AND FROM MOODY'S 366 00:12:29,815 --> 00:12:32,585 ANALYTICS. UH, THE CHARTS HERE 367 00:12:32,585 --> 00:12:34,787 SHOW THE AVERAGE FORECAST FROM 368 00:12:34,787 --> 00:12:36,522 THOSE TWO COMPANIES. THE MAIN 369 00:12:36,522 --> 00:12:39,191 IDEA HERE IS TO HEDGE THE RISK 370 00:12:39,191 --> 00:12:41,026 IN TERMS ONE OF THOSE FORECASTS 371 00:12:41,026 --> 00:12:43,295 TURNS OUT TO BE EITHER TOO 372 00:12:43,295 --> 00:12:45,297 OPTIMISTIC OR PESSIMISTIC. THE 373 00:12:45,297 --> 00:12:47,500 AVERAGE IS AN ATTEMPT TO TO 374 00:12:47,500 --> 00:12:51,871 BALANCE IT OUT. UM, SO THE LINE 375 00:12:51,871 --> 00:12:54,673 FOCUSING HERE ON THAT PANEL ON 376 00:12:54,673 --> 00:12:57,343 THE LEFT LABELED CPU THAT SHOWS 377 00:12:57,343 --> 00:13:00,446 THE EXPECTED YEAR OVER YEAR 378 00:13:00,446 --> 00:13:04,116 INFLATION BACK IN IN MARCH. IT 379 00:13:04,116 --> 00:13:04,683 SHOWS THE BASELINE AND THE 380 00:13:04,683 --> 00:13:07,653 PESSIMISTIC OUTLOOK. UH, SINCE 381 00:13:07,653 --> 00:13:10,389 THEN. UM, THE OIL PRICES HAVE 382 00:13:10,389 --> 00:13:12,958 GONE UP AND STAYED HIGHER FOR 383 00:13:12,958 --> 00:13:15,594 LONGER THAN EXPECTED. AND SO THE 384 00:13:15,594 --> 00:13:18,130 INFLATION HAS ACTUALLY, UM, HAS 385 00:13:18,130 --> 00:13:19,798 ACTUALLY INCREASED MORE IN LINE 386 00:13:19,798 --> 00:13:20,866 WITH THAT PESSIMISTIC SCENARIO. 387 00:13:20,866 --> 00:13:24,036 SO WE HAVE SEEN A 4%, ROUGHLY 4% 388 00:13:24,036 --> 00:13:26,972 YEAR OVER YEAR CHANGE IN THE US 389 00:13:26,972 --> 00:13:30,342 INFLATION. UM, IT'S EXPECTED TO 390 00:13:30,342 --> 00:13:32,545 STAY ELEVATED FOR THE REST OF 391 00:13:32,545 --> 00:13:34,813 THE YEAR BEFORE IT COMES DOWN. 392 00:13:34,813 --> 00:13:35,614 NOW UNDER THE PESSIMISTIC 393 00:13:35,614 --> 00:13:37,583 FORECAST, AGAIN, LOTS OF 394 00:13:37,583 --> 00:13:40,186 UNCERTAINTY AROUND WHERE THINGS 395 00:13:40,186 --> 00:13:42,655 WILL GO AROUND THE ION CONFLICT 396 00:13:42,655 --> 00:13:45,057 IN THE PESSIMISTIC, MORE 397 00:13:45,057 --> 00:13:46,625 PESSIMISTIC SCENARIO. UM, THERE 398 00:13:46,625 --> 00:13:48,394 IS A MORE PRONOUNCED EFFECT ON 399 00:13:48,394 --> 00:13:51,797 INFLATION. AND IT WOULD PEAK 400 00:13:51,797 --> 00:13:53,532 SOMEWHERE AROUND 4.5%, NOT 401 00:13:53,532 --> 00:13:56,168 ANYWHERE AS HIGH AS IN 2022, BUT 402 00:13:56,168 --> 00:13:58,003 SIGNIFICANT INCREASE COMPARED TO 403 00:13:58,003 --> 00:13:59,071 WHERE THE INFLATION WAS LAST 404 00:13:59,071 --> 00:14:02,675 YEAR AND WHERE IT WAS EXPECTED 405 00:14:02,675 --> 00:14:05,611 TO HEAD WERE IT NOT FOR, AGAIN, 406 00:14:05,611 --> 00:14:06,545 THE ION WAR. ON THE CHART ON 407 00:14:06,545 --> 00:14:09,648 THAT PANEL ON THE RIGHT SIDE 408 00:14:09,648 --> 00:14:10,282 LABELED FEDERAL FUNDS EFFECTIVE 409 00:14:10,282 --> 00:14:12,618 RATE SHOWS, UH, THE INTEREST 410 00:14:12,618 --> 00:14:14,053 RATE THAT THE FED IS USING AS 411 00:14:14,053 --> 00:14:16,355 ITS PRIMARY TOOL FOR MONETARY 412 00:14:16,355 --> 00:14:17,656 POLICY. AGAIN, REWINDING A 413 00:14:17,656 --> 00:14:19,225 LITTLE BIT BACK TO WHAT THINGS 414 00:14:19,225 --> 00:14:24,230 LOOKED LIKE, UM, IN, IN MARCH, 415 00:14:24,230 --> 00:14:25,164 IT WAS IN THE GENERAL BELIEF WAS 416 00:14:25,164 --> 00:14:27,299 THAT THE FED WILL CONTINUE WITH, 417 00:14:27,299 --> 00:14:29,134 UH, WITH EASING TO SUPPORT THE 418 00:14:29,134 --> 00:14:31,737 ECONOMY, LABOR MARKET WAS IN, IN 419 00:14:31,737 --> 00:14:33,339 A WEAK SPOT AND IT LOOKED LIKE 420 00:14:33,339 --> 00:14:34,974 THAT THE SIDE OF A DUAL MANDATE 421 00:14:34,974 --> 00:14:38,777 THAT IT WILL HAVE TO FOCUS MORE 422 00:14:38,777 --> 00:14:40,879 ON BECAUSE OF RISING INFLATION. 423 00:14:40,879 --> 00:14:41,380 THE OUTLOOK HAS CHANGED 424 00:14:41,380 --> 00:14:43,616 CONSIDERABLY. AND THAT THE RED 425 00:14:43,616 --> 00:14:46,652 LINE LABELED JULY 2026 BASELINE, 426 00:14:46,652 --> 00:14:49,521 SHOWS THAT THE INTEREST RATE ARE 427 00:14:49,521 --> 00:14:52,858 NOW EXPECTED TO STAY HIGH NO 428 00:14:52,858 --> 00:14:55,060 RATE CUTS THROUGHOUT THE YEAR. 429 00:14:55,060 --> 00:14:55,694 IF ANYTHING, FINANCIAL MARKETS 430 00:14:55,694 --> 00:14:58,130 ARE ACTUALLY PRICING IN, UM, AN 431 00:14:58,130 --> 00:15:00,599 INCREASE. THERE IS A SIGNIFICANT 432 00:15:00,599 --> 00:15:02,635 PROBABILITY OF AT LEAST ONE RATE 433 00:15:02,635 --> 00:15:05,004 HIKE BY THE END OF THE YEAR. AS 434 00:15:05,004 --> 00:15:12,011 OF THIS MORNING, IT'S 76% 435 00:15:12,011 --> 00:15:12,645 CHANCE THAT WE ARE GOING TO SEE 436 00:15:12,645 --> 00:15:13,279 AT LEAST 1.25 PERCENTAGE POINT 437 00:15:13,279 --> 00:15:13,946 HIKE BY BY THE END OF THIS YEAR, 438 00:15:13,946 --> 00:15:18,050 POTENTIALLY EVEN EVEN TO. AND 439 00:15:18,050 --> 00:15:19,852 THAT HAS IMPLICATIONS FOR FOR 440 00:15:19,852 --> 00:15:21,620 THE OUTLOOK FOR THE ECONOMIC 441 00:15:21,620 --> 00:15:22,922 ACTIVITY, LONG TERM INTEREST 442 00:15:22,922 --> 00:15:24,356 RATES, UH, MORTGAGE RATES, FOR 443 00:15:24,356 --> 00:15:25,924 EXAMPLE, ARE NOT DIRECTLY LINKED 444 00:15:25,924 --> 00:15:28,794 TO FEDERAL FUNDS, UH, RATE. BUT 445 00:15:28,794 --> 00:15:31,597 THERE ARE SOME FACTORS THAT ARE 446 00:15:31,597 --> 00:15:32,531 DRIVING THEM IN THE SAME 447 00:15:32,531 --> 00:15:34,900 DIRECTION, HIGHER INFLATION, 448 00:15:34,900 --> 00:15:36,669 HIGHER UNCERTAINTY IN GENERAL, 449 00:15:36,669 --> 00:15:38,671 LOW INTEREST RATES UP, UM, THE 450 00:15:38,671 --> 00:15:40,272 MORTGAGE RATE HAS GONE FROM 451 00:15:40,272 --> 00:15:44,643 ROUGHLY 6% IN EARLY MARCH TO 452 00:15:44,643 --> 00:15:48,447 6.7% RIGHT NOW. AND THAT HAS A 453 00:15:48,447 --> 00:15:49,048 CONSIDERABLE IMPACT ON THINGS 454 00:15:49,048 --> 00:15:50,449 LIKE RATE REVENUES THAT WE'LL 455 00:15:50,449 --> 00:15:51,951 GET TO, UM, WHEN WE ARE TALKING 456 00:15:51,951 --> 00:15:53,585 ABOUT THE UPDATED OUTLOOK FOR 457 00:15:53,585 --> 00:16:00,426 THAT REVENUE STREAM. UM, SO THAT 458 00:16:00,426 --> 00:16:03,762 THAT'S NOT SO GREAT NEWS ON THE 459 00:16:03,762 --> 00:16:04,730 SLIGHTLY BETTER NEWS IS THAT 460 00:16:04,730 --> 00:16:06,265 AGAIN, THE ECONOMY HAS KIND OF 461 00:16:06,265 --> 00:16:09,201 MUDDLED THROUGH, UM, THE CHANGE 462 00:16:09,201 --> 00:16:11,437 IN THE REAL GDP GROWTH IS 463 00:16:11,437 --> 00:16:14,173 RELATIVELY MINOR. UM, BOTH S&P 464 00:16:14,173 --> 00:16:17,876 GLOBAL AND MOODY'S ANALYTICS 465 00:16:17,876 --> 00:16:19,044 EXPECT 2% YEAR OVER YEAR GROWTH 466 00:16:19,044 --> 00:16:21,980 RATE THIS YEAR. AND THE NEXT 467 00:16:21,980 --> 00:16:25,584 YEAR. IN ADDITION TO THAT, UM, 468 00:16:25,584 --> 00:16:27,052 IN A MORE BROADER SURVEY OF 469 00:16:27,052 --> 00:16:29,388 ECONOMISTS, THE WALL STREET 470 00:16:29,388 --> 00:16:29,888 JOURNAL JULY SURVEY OF 471 00:16:29,888 --> 00:16:32,424 ECONOMISTS, UM, CONDUCTED IN 472 00:16:32,424 --> 00:16:36,128 JULY SHOWED THAT THE PERCEIVED 473 00:16:36,128 --> 00:16:36,962 PROBABILITY OF A RECESSION IN 474 00:16:36,962 --> 00:16:39,031 THE NEXT 12 MONTHS HAS COME 475 00:16:39,031 --> 00:16:41,567 DOWN. SO FROM ROUGHLY 33% IN 476 00:16:41,567 --> 00:16:44,069 APRIL DOWN TO ABOUT 25%, THAT 477 00:16:44,069 --> 00:16:47,840 WAS SOMETIME IN MID-JULY BEFORE 478 00:16:47,840 --> 00:16:50,042 ADDITIONAL FLARE UPS IN, UH, IN 479 00:16:50,042 --> 00:16:51,777 IRAN, FLARE UPS OF HOSTILITIES 480 00:16:51,777 --> 00:16:54,146 IN IRAN. NEVERTHELESS, IT'S 481 00:16:54,146 --> 00:16:56,115 SOMEWHERE, LET'S SAY, AROUND 25 482 00:16:56,115 --> 00:16:57,516 TO 30% CHANCE OF A RECESSION 483 00:16:57,516 --> 00:16:59,518 NEXT YEAR. THAT'S WHERE MOST 484 00:16:59,518 --> 00:17:01,787 ECONOMISTS WOULD PROBABLY PUT 485 00:17:01,787 --> 00:17:04,323 IT. AND SO OVERALL, THE BASELINE 486 00:17:04,323 --> 00:17:05,724 SCENARIO, BASELINE PATH, THAT 2% 487 00:17:05,724 --> 00:17:07,693 GROWTH IS THE MORE LIKELY 488 00:17:07,693 --> 00:17:12,030 OUTCOME. UM NEVERTHELESS, IN 489 00:17:12,030 --> 00:17:13,132 THAT PANEL ON THE RIGHT SIDE 490 00:17:13,132 --> 00:17:14,900 SHOWING THE EMPLOYMENT CHANGE, 491 00:17:14,900 --> 00:17:18,937 SO YEAR OVER YEAR GROWTH IN US, 492 00:17:18,937 --> 00:17:21,106 EMPLOYMENT SHOWS THAT THE 493 00:17:21,106 --> 00:17:23,275 EXPECTATIONS ARE THAT VERY FEW 494 00:17:23,275 --> 00:17:25,177 JOBS WILL BE CREATED. THERE HAS 495 00:17:25,177 --> 00:17:26,678 BEEN A SLOWDOWN IN BOTH ON BOTH 496 00:17:26,678 --> 00:17:28,213 THE SUPPLY AND THE DEMAND SIDE 497 00:17:28,213 --> 00:17:31,583 IN THE LABOR MARKET. IN THE US. 498 00:17:31,583 --> 00:17:35,487 UM, SLIGHTLY HARDER TO SEE, BUT 499 00:17:35,487 --> 00:17:36,055 THAT CURRENT FORECAST IS A 500 00:17:36,055 --> 00:17:37,956 LITTLE BIT ABOVE, UH, COMPARED 501 00:17:37,956 --> 00:17:39,925 TO THE MARCH FORECAST. THE 502 00:17:39,925 --> 00:17:41,326 DARKER RED LINE IS JUST A TINY 503 00:17:41,326 --> 00:17:43,662 BIT ABOVE THE EMPLOYMENT 504 00:17:43,662 --> 00:17:47,433 FORECAST FROM FROM MARCH. UM, 505 00:17:47,433 --> 00:17:48,767 THAT'S THE RESULT OF A COUPLE 506 00:17:48,767 --> 00:17:50,602 OF MONTHS OF GOOD NEWS. UM, UP 507 00:17:50,602 --> 00:17:53,472 UNTIL THIS MORNING, WHERE THE 508 00:17:53,472 --> 00:17:57,142 JOB NUMBERS CAME SIGNIFICANTLY 509 00:17:57,142 --> 00:17:59,311 BELOW EXPECTATIONS AND TOTAL 510 00:17:59,311 --> 00:18:00,712 PAYROLL ACTUALLY DECLINED MONTH 511 00:18:00,712 --> 00:18:02,815 OVER MONTH. UM, FINANCIAL 512 00:18:02,815 --> 00:18:04,349 MARKETS DID NOT REACT BY 513 00:18:04,349 --> 00:18:05,918 DROPPING. THEY ACTUALLY WENT UP. 514 00:18:05,918 --> 00:18:09,388 UM, SO, UH, AGAIN, MUDDLING 515 00:18:09,388 --> 00:18:11,590 THROUGH. THAT'S HOW THIS WOULD 516 00:18:11,590 --> 00:18:14,760 BE DESCRIBED. UM, THERE IS THAT 517 00:18:14,760 --> 00:18:15,394 AI INVESTMENT THAT'S DRIVING 518 00:18:15,394 --> 00:18:17,563 AGAIN, A LOT OF THE, UH, THE 519 00:18:17,563 --> 00:18:21,200 GROWTH, UM, THE WEALTH EFFECTS, 520 00:18:21,200 --> 00:18:24,269 UM, HIGHER STOCK PRICE 521 00:18:24,269 --> 00:18:24,870 VALUATIONS ARE SUPPORTING THE 522 00:18:24,870 --> 00:18:26,738 SPENDING, ESPECIALLY FROM THE 523 00:18:26,738 --> 00:18:28,073 HIGHER INCOME FAMILIES. IN 524 00:18:28,073 --> 00:18:29,942 ADDITION, THE TAX CUTS HAVE 525 00:18:29,942 --> 00:18:31,677 PROVIDED SOME BUFFER AGAINST 526 00:18:31,677 --> 00:18:32,277 THOSE PRICE INCREASES THAT WE 527 00:18:32,277 --> 00:18:36,782 HAVE SEEN AS A RESULT OF HIGHER 528 00:18:36,782 --> 00:18:39,284 OIL PRICES. UM, AGAIN, A LOT OF 529 00:18:39,284 --> 00:18:40,352 RISK HERE BECAUSE OF HOW 530 00:18:40,352 --> 00:18:42,488 CONCENTRATED THAT THAT GROWTH 531 00:18:42,488 --> 00:18:44,690 IS, THE PESSIMISTIC SCENARIO, 532 00:18:44,690 --> 00:18:47,392 THE CURRENT PESSIMISTIC 533 00:18:47,392 --> 00:18:49,094 SCENARIO, ESSENTIALLY ASSUMES 534 00:18:49,094 --> 00:18:53,065 THAT THOSE DISRUPTIONS TO THE 535 00:18:53,065 --> 00:18:53,565 OIL PRICES AND, UM, THE 536 00:18:53,565 --> 00:18:55,534 FOLLOWING IMPACT ON INFLATION 537 00:18:55,534 --> 00:19:00,839 WILL LEAD TO CONSUMER AND 538 00:19:00,839 --> 00:19:01,373 HOUSEHOLD AND BUSINESSES 539 00:19:01,373 --> 00:19:04,510 SPENDING, MUCH LESS, UH, THAT 540 00:19:04,510 --> 00:19:07,279 WILL LEAD TO LAYOFFS. UM, 541 00:19:07,279 --> 00:19:08,614 POTENTIALLY COUPLED WITH THE 542 00:19:08,614 --> 00:19:12,751 SALE OF, IN THE STOCK PRICE 543 00:19:12,751 --> 00:19:13,385 STOCK MARKET SELL OFF, WHERE THE 544 00:19:13,385 --> 00:19:14,019 INVESTMENT IN AI DOES NOT TURN 545 00:19:14,019 --> 00:19:16,288 OUT TO BE AS PROFITABLE AS, UH, 546 00:19:16,288 --> 00:19:19,057 AS THE INVESTORS ARE CURRENTLY 547 00:19:19,057 --> 00:19:21,527 EXPECTING ALL THAT WOULD 548 00:19:21,527 --> 00:19:24,696 CONTRIBUTE TO RECESSION STARTING 549 00:19:24,696 --> 00:19:28,100 IN, UH, 2027, SECOND HALF OF 26 550 00:19:28,100 --> 00:19:32,404 GOING INTO 2027, LASTING THROUGH 551 00:19:32,404 --> 00:19:34,773 THE END OF NEXT YEAR. UM, SO 552 00:19:34,773 --> 00:19:36,909 THAT'S THE PESSIMISTIC 553 00:19:36,909 --> 00:19:38,677 SCENARIO. AND SO WE HAVE THOSE, 554 00:19:38,677 --> 00:19:39,878 UH, BASELINE PESSIMISTIC 555 00:19:39,878 --> 00:19:41,513 SCENARIOS. THERE IS AN 556 00:19:41,513 --> 00:19:43,015 OPTIMISTIC ONE FOR, UM, IN THE 557 00:19:43,015 --> 00:19:45,083 INTEREST OF TIME, WE'RE NOT 558 00:19:45,083 --> 00:19:47,753 GOING THROUGH THAT, BUT WE ARE 559 00:19:47,753 --> 00:19:49,087 DEVELOPING THREE FORECASTS FOR 560 00:19:49,087 --> 00:19:51,156 REVENUES. THE BASELINE, THE 561 00:19:51,156 --> 00:19:51,790 PESSIMISTIC AND THE OPTIMISTIC 562 00:19:51,790 --> 00:19:53,892 ONE. THEY ARE AVAILABLE ON OUR 563 00:19:53,892 --> 00:19:56,361 WEBSITE. AND WE HAVE SHARED THAT 564 00:19:56,361 --> 00:20:00,799 WITH THE STAFF. UM, WE'LL BE 565 00:20:00,799 --> 00:20:01,400 MAKING RECOMMENDATIONS AT THE 566 00:20:01,400 --> 00:20:02,034 END REGARDING THE ADOPTIONS OF, 567 00:20:02,034 --> 00:20:02,634 OF ONE OF THOSE. AND AGAIN, 568 00:20:02,634 --> 00:20:04,736 THESE ARE THE MAIN INPUTS FOR 569 00:20:04,736 --> 00:20:06,738 THE REGIONAL ECONOMIC FORECAST. 570 00:20:06,738 --> 00:20:09,308 AND CONSEQUENTLY THOSE REVENUE 571 00:20:09,308 --> 00:20:11,043 FORECASTS. SO TURNING TO THE 572 00:20:11,043 --> 00:20:16,448 OUTLOOK FOR THE REGION AGAIN 573 00:20:16,448 --> 00:20:17,082 LOOKING QUICKLY AT THE INFLATION 574 00:20:17,082 --> 00:20:19,051 SIMILAR SORT OF, UH, CHANGES AS 575 00:20:19,051 --> 00:20:21,687 IN THE US FORECAST, HIGHER OIL 576 00:20:21,687 --> 00:20:22,988 PRICES THAN EXPECTED LED TO 577 00:20:22,988 --> 00:20:24,790 HIGHER INFLATION THAN INITIALLY. 578 00:20:24,790 --> 00:20:28,293 THAT WAS INITIALLY ANTICIPATED, 579 00:20:28,293 --> 00:20:31,697 SOMEWHERE AROUND 4.5% THROUGHOUT 580 00:20:31,697 --> 00:20:33,432 THIS YEAR, OVER 5% IN THE CASE 581 00:20:33,432 --> 00:20:35,867 OF A CURRENT PESSIMISTIC 582 00:20:35,867 --> 00:20:37,569 SCENARIO. SO AGAIN, MIRRORING 583 00:20:37,569 --> 00:20:39,004 THOSE THOSE CHANGES IN THE 584 00:20:39,004 --> 00:20:41,206 FORECAST FOR THE US WHEN IT 585 00:20:41,206 --> 00:20:45,344 COMES TO THE EMPLOYMENT, UM. 586 00:20:45,344 --> 00:20:46,945 THERE ARE SOME ADDITIONAL 587 00:20:46,945 --> 00:20:50,215 FACTORS, SOME THAT WERE THAT 588 00:20:50,215 --> 00:20:51,750 HAVE CONTRIBUTED TO THE CHANGES, 589 00:20:51,750 --> 00:20:54,586 THE EMPLOYMENT SECURITY 590 00:20:54,586 --> 00:20:57,656 DEPARTMENT REGULARLY REVISES 591 00:20:57,656 --> 00:20:59,324 EMPLOYMENT NUMBERS AND DID THAT 592 00:20:59,324 --> 00:21:03,195 THIS TIME GOING BACK TO 2023, 593 00:21:03,195 --> 00:21:03,762 THE EMPLOYMENT NUMBERS WERE 594 00:21:03,762 --> 00:21:07,566 REVISED DOWN FOR 23 AND 24 AND 595 00:21:07,566 --> 00:21:10,269 SLIGHTLY UP FOR 2025. SO WHAT 596 00:21:10,269 --> 00:21:12,638 THAT DID MECHANICALLY IS THAT 597 00:21:12,638 --> 00:21:14,272 EVEN IF YOU ARE LOOKING BACK 598 00:21:14,272 --> 00:21:15,674 FROM THE DOTTED LINE, SO THAT 599 00:21:15,674 --> 00:21:17,075 THE HISTORICAL DATA, WE ARE 600 00:21:17,075 --> 00:21:18,310 CURRENTLY WHERE THE DOTTED LINE 601 00:21:18,310 --> 00:21:19,845 IS TO THE RIGHT, WE HAVE A 602 00:21:19,845 --> 00:21:21,780 FORECAST TO THE LEFT, WE HAVE 603 00:21:21,780 --> 00:21:23,949 THE HISTORICAL DATA, THE RED 604 00:21:23,949 --> 00:21:25,917 LINE IS NOT ALIGNED WITH THE 605 00:21:25,917 --> 00:21:27,919 PREVIOUS ONE. IT SHOWS LESS OF A 606 00:21:27,919 --> 00:21:32,424 GROWTH IN 2024, LESS OF A 607 00:21:32,424 --> 00:21:35,427 DECLINE IN 2025. SOME SMALL 608 00:21:35,427 --> 00:21:36,428 DECLINES IN EMPLOYMENT NUMBERS 609 00:21:36,428 --> 00:21:38,230 LAST YEAR, BUT NOT AS BIG AS WE 610 00:21:38,230 --> 00:21:41,066 WERE PRESENTING IN MARCH. AGAIN, 611 00:21:41,066 --> 00:21:42,968 THAT'S THE RESULT OF THOSE 612 00:21:42,968 --> 00:21:43,602 REVISIONS TO THE HISTORICAL DATA 613 00:21:43,602 --> 00:21:44,836 THAT THE ESD DOES REGULARLY. IN 614 00:21:44,836 --> 00:21:50,542 THIS PARTICULAR CASE, IT WAS 615 00:21:50,542 --> 00:21:52,277 KIND OF ASYMMETRIC EFFECT. UM, 616 00:21:52,277 --> 00:21:54,546 BEYOND THAT, YOU CAN SEE THAT 617 00:21:54,546 --> 00:21:55,247 GOING TO LOOKING AT THE 618 00:21:55,247 --> 00:21:56,581 FORECAST, GOING TO THE RIGHT OF 619 00:21:56,581 --> 00:21:59,084 THE DOTTED LINE, THE CHANGES ARE 620 00:21:59,084 --> 00:22:00,285 REALLY MARGINAL. THERE IS 621 00:22:00,285 --> 00:22:03,288 SLIGHTLY BETTER GROWTH AND 622 00:22:03,288 --> 00:22:06,158 SLIGHTLY HIGHER GROWTH PREDICTED 623 00:22:06,158 --> 00:22:07,225 IN THE EMPLOYMENT AS A RESULT 624 00:22:07,225 --> 00:22:11,296 OF, UH, MORE OF A MOMENTUM, UM, 625 00:22:11,296 --> 00:22:14,032 SO THOSE SLIGHTLY SMALLER 626 00:22:14,032 --> 00:22:15,701 DECLINES IN 2025 MEANS THAT 627 00:22:15,701 --> 00:22:18,003 THERE WILL BE SMALLER JOB LOSSES 628 00:22:18,003 --> 00:22:19,271 THROUGHOUT 2026. NEVERTHELESS, 629 00:22:19,271 --> 00:22:21,940 WE DO PREDICT THAT THE REGIONAL 630 00:22:21,940 --> 00:22:23,809 ECONOMY WILL END THE CURRENT 631 00:22:23,809 --> 00:22:30,315 YEAR WITH JOB LOSSES. UM, BEFORE 632 00:22:30,315 --> 00:22:33,318 BEFORE IT STARTS TO GROW AGAIN. 633 00:22:33,318 --> 00:22:34,853 THE GROWTH IN 2027 IS HOWEVER, 634 00:22:34,853 --> 00:22:37,189 MINOR. ONLY POINT 4% YEAR OVER 635 00:22:37,189 --> 00:22:40,258 YEAR INCREASE FOLLOWING ROUGHLY 636 00:22:40,258 --> 00:22:43,695 0.3% DECLINE THIS YEAR. UM, 637 00:22:43,695 --> 00:22:44,296 PESSIMISTIC SCENARIO IS AGAIN 638 00:22:44,296 --> 00:22:46,064 THE ONE WHERE RECESSION WOULD 639 00:22:46,064 --> 00:22:48,366 OCCUR WOULD LEAD TO MEANINGFUL 640 00:22:48,366 --> 00:22:50,936 JOB LOSSES. ABOUT 34,000 FEWER 641 00:22:50,936 --> 00:22:54,439 JOBS BETWEEN END OF 25 AND MID 642 00:22:54,439 --> 00:22:58,009 2027. THOSE JOB LOSSES WOULD BE 643 00:22:58,009 --> 00:23:00,579 RECOVERED SOMETIME AT THE END OF 644 00:23:00,579 --> 00:23:07,919 2028. SO AGAIN, JUST TO REMIND 645 00:23:07,919 --> 00:23:09,921 THE PUBLIC, THIS IS KING AND 646 00:23:09,921 --> 00:23:11,590 SNOHOMISH COUNTIES, THAT THE 647 00:23:11,590 --> 00:23:13,458 MAIN INPUT THAT WE ARE USING IN 648 00:23:13,458 --> 00:23:15,460 THE ECONOMIC REGIONAL FORECAST, 649 00:23:15,460 --> 00:23:16,228 BECAUSE THAT'S THE DATA THAT WE 650 00:23:16,228 --> 00:23:21,199 HAVE AND WE WE DON'T REALLY 651 00:23:21,199 --> 00:23:23,835 RECEIVE. UM, UPDATES ON THE 652 00:23:23,835 --> 00:23:26,404 ECONOMIC SITUATION ON THE CITY 653 00:23:26,404 --> 00:23:31,343 LEVEL. THEY OCCUR VERY, UH, WITH 654 00:23:31,343 --> 00:23:33,245 A SIGNIFICANT LAG AND ONLY ONCE 655 00:23:33,245 --> 00:23:35,247 PER YEAR IN PARTICULAR, LAST 656 00:23:35,247 --> 00:23:37,082 MONTH, THE PUGET SOUND REGIONAL 657 00:23:37,082 --> 00:23:39,384 COUNCIL HAS RELEASED CITY LEVEL 658 00:23:39,384 --> 00:23:41,887 EMPLOYMENT ESTIMATES FOR MARCH 659 00:23:41,887 --> 00:23:43,622 2025. SO THEY DO IT ONCE A YEAR 660 00:23:43,622 --> 00:23:46,691 IN JULY FOR MARCH OF A PREVIOUS 661 00:23:46,691 --> 00:23:49,327 YEAR. THE MOST RECENT DATA IS 662 00:23:49,327 --> 00:23:51,797 FOR MARCH 2025. UM, THAT DATA 663 00:23:51,797 --> 00:23:55,167 SET WILL LOOKING AT INDIVIDUAL 664 00:23:55,167 --> 00:23:56,902 CITIES WITHIN REGION, WITHIN 665 00:23:56,902 --> 00:23:59,271 KING COUNTY, AND PROVIDES 666 00:23:59,271 --> 00:24:01,573 ESTIMATES FOR TOTAL EMPLOYMENT. 667 00:24:01,573 --> 00:24:04,476 UM, THE RECENT DATA SHOWS THAT 668 00:24:04,476 --> 00:24:07,879 SEATTLE HAS LOST ABOUT 18,000 669 00:24:07,879 --> 00:24:10,749 JOBS BETWEEN MARCH 24th AND 670 00:24:10,749 --> 00:24:12,284 MARCH 2025. UM, ONE THING TO 671 00:24:12,284 --> 00:24:15,320 NOTE HERE IS THAT THIS IS NOT 672 00:24:15,320 --> 00:24:16,655 REALLY SHOWING THE IMPACT OF 673 00:24:16,655 --> 00:24:17,255 THOSE LARGE LAYOFFS THAT HAVE 674 00:24:17,255 --> 00:24:19,391 BEEN ANNOUNCED RECENTLY BY 675 00:24:19,391 --> 00:24:21,226 AMAZON, MICROSOFT AND META 676 00:24:21,226 --> 00:24:23,595 PLATFORMS, EVEN THOSE THAT WERE 677 00:24:23,595 --> 00:24:25,063 ANNOUNCED IN 2025 WILL ONLY SHOW 678 00:24:25,063 --> 00:24:28,200 UP, UH, SHOW UP NEXT YEAR. AND 679 00:24:28,200 --> 00:24:29,801 THE ONE AFTER THAT. SO WE ARE 680 00:24:29,801 --> 00:24:32,170 GOING TO SEE THE FULL IMPACT 681 00:24:32,170 --> 00:24:34,105 ONLY IN SUMMER 2028, WHEN THE 682 00:24:34,105 --> 00:24:36,842 DATA FOR MARCH 2027 IS RELEASED 683 00:24:36,842 --> 00:24:38,109 BY THE PUGET SOUND REGIONAL 684 00:24:38,109 --> 00:24:42,714 COUNCIL. AND SO SOME SOME REASON 685 00:24:42,714 --> 00:24:45,083 TO BELIEVE THAT THOSE RED BARS 686 00:24:45,083 --> 00:24:47,018 ARE GOING. AND THERE ARE SOME 687 00:24:47,018 --> 00:24:49,788 SIGNIFICANT HEADWINDS THERE. AND 688 00:24:49,788 --> 00:24:51,323 UNLESS SOME JOBS ARE CREATED 689 00:24:51,323 --> 00:24:51,957 ELSEWHERE IN THE ECONOMY, WE ARE 690 00:24:51,957 --> 00:24:54,593 GOING TO SEE ADDITIONAL YEAR 691 00:24:54,593 --> 00:24:57,462 OVER YEAR DECLINES IN TOTAL 692 00:24:57,462 --> 00:24:57,762 EMPLOYMENT. 693 00:24:57,762 --> 00:24:59,064 -- THANK YOU. DIRECTOR, BEFORE 694 00:24:59,064 --> 00:25:01,933 WE MOVE ON THERE, UH, AM I 695 00:25:01,933 --> 00:25:04,502 READING THIS CORRECTLY WITH THE 696 00:25:04,502 --> 00:25:06,471 EMPLOYMENT NUMBERS FROM 2020 AND 697 00:25:06,471 --> 00:25:07,873 THEN 2021, LOOKS LIKE WE LOST A 698 00:25:07,873 --> 00:25:10,208 LOT OF EMPLOYEES AND THEN WE 699 00:25:10,208 --> 00:25:10,809 REHIRED THEM. 700 00:25:10,809 --> 00:25:11,076 -- YEAH. 701 00:25:11,076 --> 00:25:12,110 -- IS THAT WHAT HAPPENED? 702 00:25:12,110 --> 00:25:15,881 -- OKAY, SO THE 2020 AND 2021, 703 00:25:15,881 --> 00:25:17,449 AGAIN, THE TIMING HERE IS A 704 00:25:17,449 --> 00:25:20,819 LITTLE BIT, UH, NOT NOT 705 00:25:20,819 --> 00:25:22,954 INTUITIVE. UH, THE MARCH 2020 IS 706 00:25:22,954 --> 00:25:24,856 ESSENTIALLY THE POINT RIGHT 707 00:25:24,856 --> 00:25:26,525 BEFORE THE PANDEMIC. AND IF YOU 708 00:25:26,525 --> 00:25:28,660 REMEMBER WHAT WAS HAPPENING BACK 709 00:25:28,660 --> 00:25:32,364 IN MARCH, UM, THE LOCKDOWNS ONLY 710 00:25:32,364 --> 00:25:32,998 OCCURRED SOMETIME LATER IN THE 711 00:25:32,998 --> 00:25:34,532 MONTH, FIRST HALF OF A MONTH. 712 00:25:34,532 --> 00:25:37,235 DID NOT SEE ANY IMPACT ON, ON 713 00:25:37,235 --> 00:25:39,404 PANDEMIC YET. AND SO THE DATA 714 00:25:39,404 --> 00:25:41,172 THAT, UH, RELEASED, THAT WAS 715 00:25:41,172 --> 00:25:43,608 RELEASED FOR MARCH 2020 IS 716 00:25:43,608 --> 00:25:46,044 SHOWING MINIMAL IMPACT OF COVID 717 00:25:46,044 --> 00:25:48,647 ON EMPLOYMENT NUMBERS. THEN THE 718 00:25:48,647 --> 00:25:50,815 FULL IMPACT OR THE BRUNT OF IT 719 00:25:50,815 --> 00:25:55,020 WAS, UH, IN THE RELEASE FOR 720 00:25:55,020 --> 00:25:56,187 MARCH 2021. SO THAT SHOWED WHAT 721 00:25:56,187 --> 00:25:58,990 HAPPENED THROUGHOUT THE YEAR 722 00:25:58,990 --> 00:26:00,659 2020 AND EARLY 2021. AND SO 723 00:26:00,659 --> 00:26:03,028 THOSE TWO BIG DROPS, UH, THOSE 724 00:26:03,028 --> 00:26:05,897 TWO BIG BARS, THEY ARE FOR MARCH 725 00:26:05,897 --> 00:26:08,133 2021 AND SHOW THE CHANGE BETWEEN 726 00:26:08,133 --> 00:26:10,068 MARCH 21st, MARCH 20th AND MARCH 727 00:26:10,068 --> 00:26:13,371 21st. AND THOSE ARE THE THOSE 728 00:26:13,371 --> 00:26:16,241 SIGNIFICANT JOB LOSSES THAT HAVE 729 00:26:16,241 --> 00:26:19,511 THEN OVER TIME, UM, THE ECONOMY 730 00:26:19,511 --> 00:26:21,846 HAS RECOVERED SLOWLY, BUT 731 00:26:21,846 --> 00:26:24,282 OVERALL, THERE WASN'T, UM, ANY 732 00:26:24,282 --> 00:26:25,283 MEANINGFUL GROWTH ON THE 733 00:26:25,283 --> 00:26:27,752 REGIONAL LEVEL. WE ARE STILL 734 00:26:27,752 --> 00:26:28,320 HOVERING SOMEWHERE SLIGHTLY 735 00:26:28,320 --> 00:26:30,622 BELOW THE TOTAL PRE-PANDEMIC 736 00:26:30,622 --> 00:26:32,724 NUMBERS. AND FOR CITY OF 737 00:26:32,724 --> 00:26:34,693 SEATTLE, WE ARE ACTUALLY 738 00:26:34,693 --> 00:26:36,328 SIGNIFICANTLY BELOW. THERE WAS A 739 00:26:36,328 --> 00:26:38,096 SIGNIFICANT DECLINE IN TOTAL 740 00:26:38,096 --> 00:26:38,396 EMPLOYMENT. 741 00:26:38,396 --> 00:26:39,331 -- YEAH. THIS IS A REALLY 742 00:26:39,331 --> 00:26:40,932 HELPFUL CHART BECAUSE IT TELLS 743 00:26:40,932 --> 00:26:45,036 THE STORY OF THE 2008 RECESSION. 744 00:26:45,036 --> 00:26:47,205 THEN THE TEN YEARS OF HIGHEST 745 00:26:47,205 --> 00:26:48,440 WERE FASTEST GROWING CITY IN THE 746 00:26:48,440 --> 00:26:49,441 NATION FOR THOSE TEN YEARS, 747 00:26:49,441 --> 00:26:51,042 WHICH GAVE US A LOT OF ONE TIME 748 00:26:51,042 --> 00:26:52,577 FUNDS THAT WE STARTED FUNDING 749 00:26:52,577 --> 00:26:53,244 ONGOING PROGRAMS WITH, WHICH IS 750 00:26:53,244 --> 00:26:54,779 PART OF HOW WE GOT TO A 751 00:26:54,779 --> 00:26:56,247 STRUCTURAL BUDGET DEFICIT. THIS 752 00:26:56,247 --> 00:26:57,983 IS JUST REALLY HELPFUL TO SHOW 753 00:26:57,983 --> 00:26:59,517 THAT GROWTH. WE THEN LOST A LOT 754 00:26:59,517 --> 00:27:01,686 OF JOBS IN THE PANDEMIC AND 755 00:27:01,686 --> 00:27:03,688 REGAINED THEM. BUT THEN FROM 756 00:27:03,688 --> 00:27:05,223 THERE, WE HAD A SHORT GROWTH. 757 00:27:05,223 --> 00:27:07,225 LOOKS LIKE OTHER CITIES IN KING 758 00:27:07,225 --> 00:27:08,927 COUNTY GREW FASTER, AND SINCE 759 00:27:08,927 --> 00:27:10,562 THEN, OTHER CITIES IN KING 760 00:27:10,562 --> 00:27:13,098 COUNTY ARE ABOUT FLAT. BUT WE 761 00:27:13,098 --> 00:27:14,666 ARE LOSING JOBS. AND DID YOU SAY 762 00:27:14,666 --> 00:27:18,970 WE'VE LOST 18,000 JOBS BETWEEN 763 00:27:18,970 --> 00:27:19,938 25 AND 26. 764 00:27:19,938 --> 00:27:20,705 -- 24 AND 25? SO AGAIN, LAST 765 00:27:20,705 --> 00:27:24,175 YEAR, FOR WHICH WE HAVE THE DATE 766 00:27:24,175 --> 00:27:26,745 MARCH 25th, AND 18,000, THAT RED 767 00:27:26,745 --> 00:27:28,346 BAR AT THE VERY END, THAT SHOWS 768 00:27:28,346 --> 00:27:30,115 ABOUT 3% DECLINE. THAT 769 00:27:30,115 --> 00:27:32,651 REPRESENTS ABOUT 18,000 JOBS IN 770 00:27:32,651 --> 00:27:35,520 SEATTLE, RIGHT. 771 00:27:35,520 --> 00:27:37,455 -- THANK YOU. WAS MY SUMMARY. 772 00:27:37,455 --> 00:27:38,757 ESSENTIALLY, WHAT YOU SEE AS 773 00:27:38,757 --> 00:27:40,992 WELL? YEAH, YEAH. THANK YOU. 774 00:27:40,992 --> 00:27:41,559 APPRECIATE. I MEAN, I THINK 775 00:27:41,559 --> 00:27:44,129 IT'S JUST VERY DESCRIPTIVE OF 776 00:27:44,129 --> 00:27:45,530 HOW DID WE GET TO WHERE WE ARE 777 00:27:45,530 --> 00:27:46,664 TODAY AND WHAT ARE WE DOING 778 00:27:46,664 --> 00:27:48,466 ABOUT IT? 779 00:27:48,466 --> 00:27:50,101 -- RIGHT. UM, SO THERE IS A 780 00:27:50,101 --> 00:27:52,671 LITTLE BIT MORE DETAIL IN THE 781 00:27:52,671 --> 00:27:54,839 DATA THAT WAS RELEASED, UH, 782 00:27:54,839 --> 00:27:55,473 ESSENTIALLY SHOWING AGAIN, THE 783 00:27:55,473 --> 00:27:57,242 DECOMPOSITION BY INDUSTRY 784 00:27:57,242 --> 00:27:59,144 SHOWING WHERE THOSE, UH, LOWER 785 00:27:59,144 --> 00:28:03,581 JOB NUMBERS ARE COMING FROM, HOW 786 00:28:03,581 --> 00:28:06,418 INDIVIDUAL INDUSTRIES FARED 787 00:28:06,418 --> 00:28:08,219 BETWEEN MARCH 20th AND MARCH 788 00:28:08,219 --> 00:28:09,754 25th. AGAIN, MARCH 20th IS RIGHT 789 00:28:09,754 --> 00:28:15,927 BEFORE PANDEMIC. UH, AND MARCH 790 00:28:15,927 --> 00:28:17,162 2025. THAT'S MORE THAN A YEAR 791 00:28:17,162 --> 00:28:18,863 AGO, BUT THAT'S THE MOST RECENT 792 00:28:18,863 --> 00:28:23,535 DATA THAT WE HAVE. THE TOTAL 793 00:28:23,535 --> 00:28:27,372 CHANGE FOR SEATTLE IS, UH, IS 794 00:28:27,372 --> 00:28:31,910 SOMEWHERE AROUND 25000 JOBS LOST 795 00:28:31,910 --> 00:28:33,912 BETWEEN MARCH 20th AND MARCH 796 00:28:33,912 --> 00:28:36,214 25th. UM, KING COUNTY AS A WHOLE 797 00:28:36,214 --> 00:28:40,618 ADDED ABOUT 21,000 JOBS IN 798 00:28:40,618 --> 00:28:42,520 DURING THE SAME PERIOD. UH, THE 799 00:28:42,520 --> 00:28:44,856 LOSSES IN, IN SEATTLE ARE RATHER 800 00:28:44,856 --> 00:28:46,991 BROAD BASED. AND WITH THE 801 00:28:46,991 --> 00:28:48,693 EXCEPTION OF PRIVATE EDUCATION 802 00:28:48,693 --> 00:28:49,561 AND HEALTH SERVICES AND 803 00:28:49,561 --> 00:28:51,496 GOVERNMENT, MOST OTHER SECTORS 804 00:28:51,496 --> 00:28:53,398 HAVE DECLINED, SOME MORE SO THAN 805 00:28:53,398 --> 00:28:58,336 OTHERS. UM INFORMATION SECTOR UM 806 00:28:58,336 --> 00:28:59,504 DECLINED NOTABLY. UM THAT'S 807 00:28:59,504 --> 00:29:01,973 AGAIN NOT, NOT REALLY THOSE 808 00:29:01,973 --> 00:29:03,641 RECENT LAYOFFS. UH, THERE WAS 809 00:29:03,641 --> 00:29:06,177 ONE ROUND OF LAYOFFS SOMEWHERE 810 00:29:06,177 --> 00:29:08,513 IN 2023, BUT THE IMPACT OF 25 811 00:29:08,513 --> 00:29:11,716 AND 26 IS NOT HERE. TRADE AND 812 00:29:11,716 --> 00:29:12,317 PROFESSIONAL BUSINESSES, SAME 813 00:29:12,317 --> 00:29:14,719 SORT OF THING. THEY DECLINED, 814 00:29:14,719 --> 00:29:16,554 UH, ABOUT AS MUCH AS INFORMATION 815 00:29:16,554 --> 00:29:17,655 SECTOR. ONE MORE THING TO NOTE 816 00:29:17,655 --> 00:29:20,125 HERE. THE DATA, THE WAY HOW, UH, 817 00:29:20,125 --> 00:29:22,894 IT'S, UH, ASSEMBLED AND HOW 818 00:29:22,894 --> 00:29:24,863 IT'S, HOW IT'S CONSTRUCTED 819 00:29:24,863 --> 00:29:26,231 DOES NOT ALLOW TO SEPARATE OUT 820 00:29:26,231 --> 00:29:28,867 THE TRADE SECTOR FROM 821 00:29:28,867 --> 00:29:29,400 PROFESSIONAL AND BUSINESS 822 00:29:29,400 --> 00:29:30,301 SERVICES. THERE WAS 823 00:29:30,301 --> 00:29:32,770 RECLASSIFICATION OF SOME 824 00:29:32,770 --> 00:29:35,507 ACTIVITIES. NON-STORE RETAILERS, 825 00:29:35,507 --> 00:29:37,776 E-COMMERCE, UM, ESSENTIALLY WAS, 826 00:29:37,776 --> 00:29:39,811 UH, MOVED AROUND AND THAT MOVED 827 00:29:39,811 --> 00:29:41,713 A SIGNIFICANT NUMBER OF JOBS 828 00:29:41,713 --> 00:29:43,515 BETWEEN THOSE TWO CATEGORIES. SO 829 00:29:43,515 --> 00:29:45,416 THE CHART SHOWS THEM, SHOWS THEM 830 00:29:45,416 --> 00:29:47,752 AS A COMBINED SINGLE TRADE PLUS 831 00:29:47,752 --> 00:29:49,354 PROFESSIONAL AND BUSINESS 832 00:29:49,354 --> 00:29:53,558 SERVICES CATEGORY. HERE UM, 833 00:29:53,558 --> 00:29:54,192 CONSTRUCTION SECTOR, OBVIOUSLY 834 00:29:54,192 --> 00:29:56,227 THERE'S SIGNIFICANTLY LESS 835 00:29:56,227 --> 00:29:57,829 DEMAND FOR OFFICE SPACE, HIGHER 836 00:29:57,829 --> 00:30:01,065 INTEREST RATE MAKE FINANCING, 837 00:30:01,065 --> 00:30:01,533 UM, FINANCING HARDER. 838 00:30:01,533 --> 00:30:03,168 MANUFACTURING HAS NOT REALLY 839 00:30:03,168 --> 00:30:04,469 BENEFITED FROM HIGHER INTEREST 840 00:30:04,469 --> 00:30:06,037 RATES. THERE WASN'T ANY SORT OF 841 00:30:06,037 --> 00:30:08,439 CONSTRUCTION BOOM THAT THAT 842 00:30:08,439 --> 00:30:10,308 WOULD FOLLOW THAT. SO WE ARE 843 00:30:10,308 --> 00:30:13,211 AGAIN SEEING FEWER JOBS THAN IN 844 00:30:13,211 --> 00:30:17,715 2020. SO THAT'S, UH, THE YEAH, 845 00:30:17,715 --> 00:30:18,950 THAT THAT'S THE TIME FOR PAUSE 846 00:30:18,950 --> 00:30:21,719 NOW. HAPPY TO TAKE ANY QUESTIONS 847 00:30:21,719 --> 00:30:22,353 REGARDING ECONOMIC SITUATION AND 848 00:30:22,353 --> 00:30:23,855 OUTLOOK. 849 00:30:23,855 --> 00:30:24,389 -- THANK YOU COLLEAGUES. 850 00:30:24,389 --> 00:30:26,858 QUESTIONS ON THE ECONOMIC 851 00:30:26,858 --> 00:30:29,127 ENVIRONMENT IN WHICH WE ARE IN 852 00:30:29,127 --> 00:30:30,094 SEEING NONE. I THINK WE'RE ALL 853 00:30:30,094 --> 00:30:32,230 JUST PINS AND NEEDLES. WE LOSE. 854 00:30:32,230 --> 00:30:32,997 DID WE WIN? WHAT ARE WE WHERE 855 00:30:32,997 --> 00:30:33,565 ARE WE AT. 856 00:30:33,565 --> 00:30:36,434 -- TODAY? RIGHT. SO THERE ARE A 857 00:30:36,434 --> 00:30:40,171 LOT OF, UH, CROSSWINDS HERE. 858 00:30:40,171 --> 00:30:41,072 BEFORE WE LOOK AT THE NUMBERS, 859 00:30:41,072 --> 00:30:43,308 JUST TO, AGAIN, REMIND MEMBERS 860 00:30:43,308 --> 00:30:44,642 OF THE PUBLIC THAT ARE MAYBE NOT 861 00:30:44,642 --> 00:30:46,711 WATCHING IT EVERY TIME OR FORGOT 862 00:30:46,711 --> 00:30:48,479 SINCE LAST TIME WE WERE 863 00:30:48,479 --> 00:30:51,849 PRESENTING IT. UM, WE ARE NOW IN 864 00:30:51,849 --> 00:30:55,353 THE MIDDLE OF 2026, BUT FOR SOME 865 00:30:55,353 --> 00:30:56,754 REVENUE STREAMS, WE HAVE NOT 866 00:30:56,754 --> 00:31:00,458 EVEN SEEN HALF OF ALL THE ANNUAL 867 00:31:00,458 --> 00:31:01,659 REVENUES COMING IN. OVERALL, 868 00:31:01,659 --> 00:31:03,428 IT'S ABOUT A THIRD OF GENERAL 869 00:31:03,428 --> 00:31:05,029 FUND REVENUES THAT WE WOULD GET 870 00:31:05,029 --> 00:31:06,664 BY THIS POINT. POINT IN THE 871 00:31:06,664 --> 00:31:09,100 YEAR, BUT IT'S SIGNIFICANTLY 872 00:31:09,100 --> 00:31:09,934 VARIES BY THE REVENUE STREAM. 873 00:31:09,934 --> 00:31:13,037 AND THAT CHART ON THE RIGHT 874 00:31:13,037 --> 00:31:14,639 SHOWS HOW BETWEEN THE APRIL AND 875 00:31:14,639 --> 00:31:17,108 THE AUGUST FORECAST, WE RECEIVE 876 00:31:17,108 --> 00:31:17,709 ADDITIONAL INFORMATION IN THE 877 00:31:17,709 --> 00:31:19,811 FORM OF TAX RETURNS. BUT EVEN 878 00:31:19,811 --> 00:31:21,980 WHEN WE GET TO THE OCTOBER 879 00:31:21,980 --> 00:31:25,016 FORECAST, OVERALL AMOUNT OF FOR 880 00:31:25,016 --> 00:31:27,218 SOME REVENUES, IT'S LESS THAN 881 00:31:27,218 --> 00:31:29,254 HALF OF THE REVENUES RECEIVED 882 00:31:29,254 --> 00:31:30,154 FOR BUSINESS AND OCCUPATION TAX 883 00:31:30,154 --> 00:31:32,357 FOR PAYROLL EXPENSE TAX. IT'S 884 00:31:32,357 --> 00:31:33,958 AGAIN, NOT NOT EVEN HALF THAT WE 885 00:31:33,958 --> 00:31:37,729 GET FOR REAL ESTATE EXCISE TAX 886 00:31:37,729 --> 00:31:39,530 THAT THOSE RETURNS ARE COMING. 887 00:31:39,530 --> 00:31:40,965 UM WITH LESS OF A DELAY. 888 00:31:40,965 --> 00:31:43,735 SIMILARLY FOR FOR UTILITY TAXES. 889 00:31:43,735 --> 00:31:44,769 SO WHAT THAT MEANS IS THAT THE 890 00:31:44,769 --> 00:31:47,038 CURRENT FORECAST IS ESSENTIALLY 891 00:31:47,038 --> 00:31:49,674 BASED ON WHEN IT COMES TO MAIN 892 00:31:49,674 --> 00:31:51,242 REVENUE STREAMS. IT'S BUILT ON 893 00:31:51,242 --> 00:31:54,279 THE FIRST FIVE MONTHS OF SALES 894 00:31:54,279 --> 00:31:57,482 TAX REVENUE DATA AND FULLY 895 00:31:57,482 --> 00:31:59,617 INCORPORATES THE FIRST QUARTER 896 00:31:59,617 --> 00:32:01,319 BUSINESS AND OCCUPATION RETURNS. 897 00:32:01,319 --> 00:32:02,220 NOW, THE RESTRUCTURE HAS SHIFTED 898 00:32:02,220 --> 00:32:06,491 SOME OF THOSE, UH, UM, SOME OF 899 00:32:06,491 --> 00:32:07,525 THOSE PAYMENTS TOWARDS LATER OF 900 00:32:07,525 --> 00:32:09,327 THE YEAR AND THE CHARTS 901 00:32:09,327 --> 00:32:10,461 INCORPORATES THE IMPACT OF, OF 902 00:32:10,461 --> 00:32:11,829 THAT, THE IMPACT OF THE 2 903 00:32:11,829 --> 00:32:14,499 MILLION DEDUCTION, THAT KIND OF 904 00:32:14,499 --> 00:32:16,467 POSTPONED SOME OF THE PAYMENTS 905 00:32:16,467 --> 00:32:18,102 TOWARDS LATER PART OF THE YEAR. 906 00:32:18,102 --> 00:32:20,605 AT THIS POINT, UH, THERE IS 907 00:32:20,605 --> 00:32:23,007 ABOUT 90% OF Q2 FILINGS ALREADY 908 00:32:23,007 --> 00:32:25,910 IN, BUT IT'S NOT FULLY 909 00:32:25,910 --> 00:32:27,278 INCORPORATED IN THAT FORECAST. 910 00:32:27,278 --> 00:32:29,414 AGAIN, GIVEN THE DELAY BETWEEN 911 00:32:29,414 --> 00:32:30,982 WHEN WE HAVE THE DATA AVAILABLE, 912 00:32:30,982 --> 00:32:33,818 HOW MUCH TIME IT TAKES TO UPDATE 913 00:32:33,818 --> 00:32:35,753 THE FORECAST AND TO PRESENT IT. 914 00:32:35,753 --> 00:32:39,290 UM, BUT WE SEEM TO BE TRENDING 915 00:32:39,290 --> 00:32:40,491 ROUGHLY IN LINE WITH THE 916 00:32:40,491 --> 00:32:41,092 BUSINESS AND OCCUPATION TAX 917 00:32:41,092 --> 00:32:46,030 FORECAST. OVERALL. UM, AND I'LL 918 00:32:46,030 --> 00:32:47,932 SPEAK TO THAT IN JUST A MINUTE. 919 00:32:47,932 --> 00:32:49,634 OVERALL, WE HAVE SENT OUT A 920 00:32:49,634 --> 00:32:51,869 SECOND QUARTER REVENUE REPORT 921 00:32:51,869 --> 00:32:53,171 AND IT'S AVAILABLE ON OUR 922 00:32:53,171 --> 00:32:55,406 WEBSITE. IT SHOWS THAT OVERALL 923 00:32:55,406 --> 00:32:56,874 THE GENERAL FUND IS ONLY 924 00:32:56,874 --> 00:32:58,609 SLIGHTLY BELOW WHERE WE WERE 925 00:32:58,609 --> 00:33:01,546 EXPECTING IT TO BE BY THE END OF 926 00:33:01,546 --> 00:33:03,881 SECOND QUARTER, LESS THAN A 927 00:33:03,881 --> 00:33:06,718 MILLION, ABOUT 0.12%, EXCLUDING 928 00:33:06,718 --> 00:33:09,220 GRANTS AND FUND BALANCE 929 00:33:09,220 --> 00:33:09,787 TRANSFERS DUE TO TECHNICAL 930 00:33:09,787 --> 00:33:13,491 REASONS. UH, THE GENERAL FUND IS 931 00:33:13,491 --> 00:33:18,262 ACTUALLY SLIGHTLY ABOVE, UM, 7.5 932 00:33:18,262 --> 00:33:20,498 MILLION OR 1.2% HIGHER THAN THAN 933 00:33:20,498 --> 00:33:23,134 ANTICIPATED. AGAIN, VERY 934 00:33:23,134 --> 00:33:24,369 SIGNIFICANTLY BY THE REVENUE 935 00:33:24,369 --> 00:33:26,738 STREAM. AND WE ARE NOW GETTING 936 00:33:26,738 --> 00:33:31,309 TO THOSE, UH, ADDITIONAL FACTORS 937 00:33:31,309 --> 00:33:33,845 BEYOND CHANGES IN THE ECONOMIC 938 00:33:33,845 --> 00:33:37,482 ENVIRONMENT. UM, THERE ARE A LOT 939 00:33:37,482 --> 00:33:40,018 OF CROSSWINDS HERE. THE, THE 940 00:33:40,018 --> 00:33:42,220 REVENUE HAS THE REVENUE 941 00:33:42,220 --> 00:33:42,720 COLLECTION TO DATE HAS 942 00:33:42,720 --> 00:33:46,357 SIGNIFICANTLY BENEFITED FROM THE 943 00:33:46,357 --> 00:33:49,060 SB 5814, WHICH RECLASSIFIED SOME 944 00:33:49,060 --> 00:33:51,095 ACTIVITIES FROM SERVICE TO 945 00:33:51,095 --> 00:33:53,731 RETAIL AND ESSENTIALLY EXPANDING 946 00:33:53,731 --> 00:33:56,134 THE TAX BASE FOR THE SALES TAX. 947 00:33:56,134 --> 00:33:58,770 UM, THAT'S CLEARLY VISIBLE IN 948 00:33:58,770 --> 00:34:00,838 THOSE LAST FIVE SET OF BARS 949 00:34:00,838 --> 00:34:06,110 STARTING JANUARY 2026, THE YEAR 950 00:34:06,110 --> 00:34:07,812 OVER YEAR GROWTH RATE FOR SALES 951 00:34:07,812 --> 00:34:10,114 TAX IS ON AVERAGE ABOUT 10%. 952 00:34:10,114 --> 00:34:12,583 THERE IS A SIGNIFICANT SPIKE IN 953 00:34:12,583 --> 00:34:14,519 MARCH, BUT AVERAGING THOSE 954 00:34:14,519 --> 00:34:17,388 COUPLE OF MONTHS, IT'S ABOUT 10% 955 00:34:17,388 --> 00:34:20,258 YEAR OVER YEAR INCREASE. UM 956 00:34:20,258 --> 00:34:23,127 IT'S PRIMARILY INFORMATION AND 957 00:34:23,127 --> 00:34:25,129 PROFESSIONAL AND BUSINESS 958 00:34:25,129 --> 00:34:27,965 SERVICES SECTORS. THEY HAVE 959 00:34:27,965 --> 00:34:29,867 CONTRIBUTED ABOUT 5% 5.6% TO THE 960 00:34:29,867 --> 00:34:30,902 OVERALL GROWTH. SO THOSE ARE THE 961 00:34:30,902 --> 00:34:33,638 ACTIVITIES THAT WERE AGAIN 962 00:34:33,638 --> 00:34:35,039 RECLASSIFIED FROM FROM SERVICE 963 00:34:35,039 --> 00:34:37,875 TO RETAIL. THOSE ARE UNDER 964 00:34:37,875 --> 00:34:39,877 WHAT'S LABELED IN THE CHART AS 965 00:34:39,877 --> 00:34:41,813 REST OF INDUSTRIES. UH, THOSE 966 00:34:41,813 --> 00:34:44,115 PURPLE BARS THAT ARE SHOWING 967 00:34:44,115 --> 00:34:45,383 SIGNIFICANT YEAR OVER YEAR 968 00:34:45,383 --> 00:34:49,020 GROWTH, TRADE HAS CONTRIBUTED 969 00:34:49,020 --> 00:34:50,788 ABOUT 2.5%. LEISURE AND 970 00:34:50,788 --> 00:34:54,292 HOSPITALITY, MINOR POSITIVE 971 00:34:54,292 --> 00:34:54,759 CONTRIBUTION, 0.7 FOR 972 00:34:54,759 --> 00:34:57,762 CONSTRUCTION SECTOR. WE ARE 973 00:34:57,762 --> 00:34:59,497 CONTINUING TO SEE DECLINES, BUT 974 00:34:59,497 --> 00:35:01,399 MUCH SMALLER. IF YOU LOOK AT 975 00:35:01,399 --> 00:35:03,935 THOSE YELLOW BARS, UM, THE 976 00:35:03,935 --> 00:35:07,171 DECLINES HAVE KIND OF FLATTENED 977 00:35:07,171 --> 00:35:08,873 OUT COMPARED TO WHAT WE WERE 978 00:35:08,873 --> 00:35:13,711 SEEING TWO YEARS, THREE YEARS 979 00:35:13,711 --> 00:35:17,782 AGO. SO THAT'S ESSENTIALLY 980 00:35:17,782 --> 00:35:18,349 THOSE LARGE INCREASE IN THE 981 00:35:18,349 --> 00:35:20,184 SALES TAX ARE ESSENTIALLY 982 00:35:20,184 --> 00:35:23,387 WHAT'S DRIVING THE MAJORITY OF 983 00:35:23,387 --> 00:35:24,655 THE REVISION IN THE IN THE 984 00:35:24,655 --> 00:35:27,158 FORECAST HERE. AND IT'S A LARGE 985 00:35:27,158 --> 00:35:29,360 TABLE WITH LOTS OF NUMBERS 986 00:35:29,360 --> 00:35:34,065 LOOKING FIRST AT THE VERY BOTTOM 987 00:35:34,065 --> 00:35:34,632 ROW, THE TOTAL GENERAL FUND 988 00:35:34,632 --> 00:35:36,400 WITHOUT GRANTS AND TRANSFERS AND 989 00:35:36,400 --> 00:35:39,937 SPECIFICALLY LOOKING AT THE 990 00:35:39,937 --> 00:35:42,673 CHANGE FOR 2026 REVENUES, IT'S A 991 00:35:42,673 --> 00:35:45,343 24.5 MILLION TO THE PLUS SIDE. 992 00:35:45,343 --> 00:35:48,946 UM, AND LOOKING UP AT THOSE 993 00:35:48,946 --> 00:35:50,982 INDIVIDUAL STREAMS, 19.9 SO 994 00:35:50,982 --> 00:35:54,418 ALMOST 20 MILLION IS COMING FROM 995 00:35:54,418 --> 00:35:55,052 ADDITIONAL SALES TAX REVENUES. 996 00:35:55,052 --> 00:35:57,655 AGAIN, WE HAVE SEEN SIGNIFICANT 997 00:35:57,655 --> 00:36:00,057 INCREASE YEAR OVER YEAR. IT WAS, 998 00:36:00,057 --> 00:36:03,361 UH, MORE IT WAS ACTUALLY HIGHER 999 00:36:03,361 --> 00:36:05,630 GROWTH THAN WE WERE PREDICTING. 1000 00:36:05,630 --> 00:36:08,199 UH, OUR FORECAST BY CONSTRUCTION 1001 00:36:08,199 --> 00:36:09,667 IS IN GENERAL TENDS TO BE 1002 00:36:09,667 --> 00:36:12,036 CONSERVATIVE. AND SO WE ARE 1003 00:36:12,036 --> 00:36:13,905 SEEING MORE REVENUES FROM SALES 1004 00:36:13,905 --> 00:36:18,309 TAX THAN THAN PREDICTED. UM, IT 1005 00:36:18,309 --> 00:36:19,911 WAS ABOUT 4.5 MILLION FOR THE 1006 00:36:19,911 --> 00:36:20,311 FIRST HALF OF THE 1007 00:36:20,311 --> 00:36:22,513 -- YOUR EXTENDING IT TO THE REST 1008 00:36:22,513 --> 00:36:25,016 OF THE YEAR, THAT WOULD 1009 00:36:25,016 --> 00:36:25,650 ESSENTIALLY BRING IT SOMEWHERE 1010 00:36:25,650 --> 00:36:28,586 TO TEN FOR REGULAR AND OPTIONAL 1011 00:36:28,586 --> 00:36:30,154 SALES TAX. IN ADDITION, WE HAVE 1012 00:36:30,154 --> 00:36:31,789 SEEN SOME NONCURRENT PAYMENTS. 1013 00:36:31,789 --> 00:36:33,391 ABOUT 5 MILLION OF THOSE. SO 1014 00:36:33,391 --> 00:36:35,092 THAT ALSO EXPLAINS WHY THERE IS 1015 00:36:35,092 --> 00:36:37,862 LESS OF AN INCREASE PREDICTED 1016 00:36:37,862 --> 00:36:41,332 FOR 2027 FOR SALES TAX REVENUES, 1017 00:36:41,332 --> 00:36:44,335 AND ALSO LESS OF AN INCREASE 1018 00:36:44,335 --> 00:36:46,637 PREDICTED FOR 2028 REVENUES SO 1019 00:36:46,637 --> 00:36:49,006 SALES TAX OVERALL ADDED ABOUT 48 1020 00:36:49,006 --> 00:36:51,809 BILLION OVER THE THREE YEARS. 1021 00:36:51,809 --> 00:36:53,611 THAT'S ABOUT 5%. THE OVERALL 1022 00:36:53,611 --> 00:36:57,248 YEAR OVER YEAR GROWTH HERE 1023 00:36:57,248 --> 00:36:59,116 BETWEEN 2025 AND 2026 IS QUITE 1024 00:36:59,116 --> 00:37:02,086 SIGNIFICANT. THAT'S PRIMARILY 1025 00:37:02,086 --> 00:37:04,956 AGAIN, THOSE LEGISLATIVE 1026 00:37:04,956 --> 00:37:08,759 CHANGES. UM, SB 5814 AND THEN 1027 00:37:08,759 --> 00:37:11,262 THE NEW UM PUBLIC SAFETY SALES 1028 00:37:11,262 --> 00:37:14,899 TAX, THE 0.1 PERCENT NEW TAX 1029 00:37:14,899 --> 00:37:15,566 THAT'S ADDING ABOUT 4 MILLION. 1030 00:37:15,566 --> 00:37:20,771 THEY COMBINED ADD TO A 1031 00:37:20,771 --> 00:37:21,606 SIGNIFICANT GROWTH. AND SO FOR 1032 00:37:21,606 --> 00:37:23,441 TOTAL GENERAL FUND WITHOUT 1033 00:37:23,441 --> 00:37:25,710 GRANTS AND TRANSFERS, IT'S A 1034 00:37:25,710 --> 00:37:28,079 10.6 YEAR OVER YEAR GROWTH THIS 1035 00:37:28,079 --> 00:37:32,750 YEAR FOLLOWED BY UM FOLLOWED BY 1036 00:37:32,750 --> 00:37:36,520 3.6% NEXT YEAR. AND THEN 4.3 THE 1037 00:37:36,520 --> 00:37:37,655 YEAR AFTER THAT. AGAIN, A LOT OF 1038 00:37:37,655 --> 00:37:40,658 IT COMING FROM SALES TAX, 1039 00:37:40,658 --> 00:37:41,192 SMALLER REVISIONS TO THE 1040 00:37:41,192 --> 00:37:44,595 BUSINESS AND OCCUPATION TAX TO 1041 00:37:44,595 --> 00:37:46,597 THE DOWNSIDE. THAT HAS TO DO 1042 00:37:46,597 --> 00:37:48,232 WITH THE CHANGES IN THE 1043 00:37:48,232 --> 00:37:51,469 COMPOSITION OF EMPLOYMENT, THE 1044 00:37:51,469 --> 00:37:52,103 INCORPORATION INCORPORATING THE 1045 00:37:52,103 --> 00:37:53,871 IMPACT OF OF THE LAYOFFS, 1046 00:37:53,871 --> 00:37:54,905 INCORPORATING THE HIGHER 1047 00:37:54,905 --> 00:37:57,842 INTEREST RATE THAT ARE EXPECTED 1048 00:37:57,842 --> 00:38:00,211 TO SLOW DOWN THE ECONOMIC 1049 00:38:00,211 --> 00:38:02,480 ACTIVITY. UM, AND THERE IS THAT 1050 00:38:02,480 --> 00:38:05,149 ASYMMETRIC EFFECT OF 5814 ON 1051 00:38:05,149 --> 00:38:08,352 SALES TAX AND BUSINESS 1052 00:38:08,352 --> 00:38:08,786 OCCUPATION TAX. THE 1053 00:38:08,786 --> 00:38:10,388 RECLASSIFICATION, UM LEADS TO 1054 00:38:10,388 --> 00:38:11,656 LOWER BUSINESS AND OCCUPATION 1055 00:38:11,656 --> 00:38:13,024 TAX REVENUE. SO AS A RESULT OF 1056 00:38:13,024 --> 00:38:15,526 HIGHER PREDICTED REVENUES FOR 1057 00:38:15,526 --> 00:38:18,295 SALES TAX AND MECHANICALLY HAVE 1058 00:38:18,295 --> 00:38:20,531 ACTUALLY SMALLER BUSINESS AND 1059 00:38:20,531 --> 00:38:22,933 OCCUPATION TAX REVENUES. THAT 1060 00:38:22,933 --> 00:38:25,336 SAID, OVERALL, THE FORECAST, AS 1061 00:38:25,336 --> 00:38:27,638 I SAID, AS THE THE THE CHANGES 1062 00:38:27,638 --> 00:38:33,010 ARE SMALLER HERE BECAUSE WE HAVE 1063 00:38:33,010 --> 00:38:34,011 BEEN MORE MORE SUCCESSFUL. IT 1064 00:38:34,011 --> 00:38:35,146 APPEARS AT THIS POINT WE HAVE 1065 00:38:35,146 --> 00:38:37,715 BEEN MORE SUCCESSFUL PREDICTING 1066 00:38:37,715 --> 00:38:39,784 THE IMPACT ON BUSINESS AND 1067 00:38:39,784 --> 00:38:41,152 OCCUPATION TAX RATHER THAN SALES 1068 00:38:41,152 --> 00:38:42,019 TAX. THE CAVEAT HERE IS THAT WE 1069 00:38:42,019 --> 00:38:46,590 ONLY HAVE FIRST QUARTER IN AND 1070 00:38:46,590 --> 00:38:49,126 ABOUT 90% OF THE SECOND QUARTER 1071 00:38:49,126 --> 00:38:52,997 IN. SO THERE IS SOME, UH, SOME 1072 00:38:52,997 --> 00:38:53,631 UNDERLYING UNCERTAINTY ABOUT HOW 1073 00:38:53,631 --> 00:38:55,900 THINGS ARE GOING TO LOOK A 1074 00:38:55,900 --> 00:38:59,637 COUPLE OF MONTHS FROM NOW. AND 1075 00:38:59,637 --> 00:39:01,338 I'LL HAND IT OVER TO, TO SEAN 1076 00:39:01,338 --> 00:39:03,507 TO TALK ABOUT PRIVATE UTILITY 1077 00:39:03,507 --> 00:39:03,741 TAXES. 1078 00:39:03,741 --> 00:39:05,910 -- THANK YOU, JOHN. YES. SO 1079 00:39:05,910 --> 00:39:07,945 PRIVATE UTILITY TAXES, WHICH IS 1080 00:39:07,945 --> 00:39:09,313 COMPOSED OF CABLE, TELEPHONE, 1081 00:39:09,313 --> 00:39:10,881 NATURAL GAS, STEAM, AND I 1082 00:39:10,881 --> 00:39:13,117 BELIEVE SOLID WASTE AS WELL, 1083 00:39:13,117 --> 00:39:15,252 THAT HAS BEEN GIVEN A SLIGHT 1084 00:39:15,252 --> 00:39:15,853 REVISION DOWNWARD, PRIMARILY 1085 00:39:15,853 --> 00:39:17,521 CAUSED BY CABLE, TELEPHONE AND 1086 00:39:17,521 --> 00:39:18,155 STEAM REVENUES FOR THE MOST 1087 00:39:18,155 --> 00:39:20,291 RECENT YEAR OR MOST RECENT 1088 00:39:20,291 --> 00:39:22,860 QUARTER. UM, AS A RESULT, OR I 1089 00:39:22,860 --> 00:39:25,396 SHOULD SAY THAT THOSE TAX 1090 00:39:25,396 --> 00:39:27,231 REVENUE STREAMS HAVE VERY 1091 00:39:27,231 --> 00:39:29,133 CONCENTRATED TAX BASES. SO THEY 1092 00:39:29,133 --> 00:39:30,034 CAN BE QUITE VOLATILE. FOR 1093 00:39:30,034 --> 00:39:32,236 EXAMPLE, STEAM IS PRIMARILY 1094 00:39:32,236 --> 00:39:33,437 THEIR CUSTOMER BASE IS MOST 1095 00:39:33,437 --> 00:39:35,239 BUILDINGS WITHIN DOWNTOWN. SO IT 1096 00:39:35,239 --> 00:39:36,340 CAN BE REALLY SENSITIVE TO EVEN 1097 00:39:36,340 --> 00:39:37,541 ONE BUILDING GOING OFF OF STEAM, 1098 00:39:37,541 --> 00:39:40,578 FOR EXAMPLE. UM, THERE WERE SOME 1099 00:39:40,578 --> 00:39:41,912 UPWARD REVISIONS IN NATURAL GAS. 1100 00:39:41,912 --> 00:39:43,848 UM, IT WAS DUE TO AN APPROVED 1101 00:39:43,848 --> 00:39:45,983 RATE INCREASE FOR THE STATE, AND 1102 00:39:45,983 --> 00:39:48,152 IT WAS ROUGHLY ABOUT 14% 1103 00:39:48,152 --> 00:39:49,253 INCREASE. THAT RAISES THE BASE 1104 00:39:49,253 --> 00:39:51,689 FOR NEXT YEAR AND RAISES OVERALL 1105 00:39:51,689 --> 00:39:52,923 THE FORECAST UM, SOME UPSIDE 1106 00:39:52,923 --> 00:39:54,492 RISK WITH THAT AS WELL. IS THAT 1107 00:39:54,492 --> 00:39:57,795 UM THERE IS ANOTHER PLANNED RATE 1108 00:39:57,795 --> 00:39:58,429 INCREASE ABOUT THE SAME AMOUNT, 1109 00:39:58,429 --> 00:40:00,398 BUT IT MIGHT BE REVISED DOWNWARD 1110 00:40:00,398 --> 00:40:01,832 WHEN IT'S APPROVED. UM BUT 1111 00:40:01,832 --> 00:40:03,367 OVERALL PRIVATE UTILITIES ARE 1112 00:40:03,367 --> 00:40:05,202 SLIGHTLY DAMPENED FROM THE APRIL 1113 00:40:05,202 --> 00:40:06,036 FORECAST MOSTLY DRIVEN BY SMALL 1114 00:40:06,036 --> 00:40:08,105 REVISIONS. AND THESE SMALL TAX 1115 00:40:08,105 --> 00:40:09,573 REVENUE STREAMS THAT RESULTS IN 1116 00:40:09,573 --> 00:40:11,008 A 5.8 MILLION REDUCTION ACROSS 1117 00:40:11,008 --> 00:40:14,211 THE LAST THREE YEARS COMPARED TO 1118 00:40:14,211 --> 00:40:19,083 APRIL. BACK TO CBO. 1119 00:40:19,083 --> 00:40:21,118 -- THANKS, JOHN. UM, I'LL TAKE 1120 00:40:21,118 --> 00:40:23,087 PROPERTY TAX. PROPERTY TAX IN 1121 00:40:23,087 --> 00:40:25,256 THIS TABLE INCLUDES BOTH THE 1122 00:40:25,256 --> 00:40:27,425 CITY'S GENERAL EXPENSE PROPERTY 1123 00:40:27,425 --> 00:40:30,327 TAX AS WELL AS THE CITY'S SHARE 1124 00:40:30,327 --> 00:40:34,231 OF THE EMS. MEDIC ONE LEVY, UM, 1125 00:40:34,231 --> 00:40:36,667 WE SEE QUITE A BIT OF A BUMP IN 1126 00:40:36,667 --> 00:40:41,071 2027 AND 2028. UM, A SMALL SHARE 1127 00:40:41,071 --> 00:40:46,110 OF THAT IS DUE TO, UM, UPWARD 1128 00:40:46,110 --> 00:40:48,179 REVISIONS OF NEW CONSTRUCTION IN 1129 00:40:48,179 --> 00:40:50,848 SEATTLE, UH, WHICH IS, UM, 1130 00:40:50,848 --> 00:40:52,349 GARNERING US A BIT MORE 1131 00:40:52,349 --> 00:40:52,917 COLLECTIONS ON OUR GENERAL 1132 00:40:52,917 --> 00:40:55,152 EXPENSE PROPERTY TAX. BUT MOST 1133 00:40:55,152 --> 00:40:58,022 OF IT IS ACTUALLY DRIVEN BY THE 1134 00:40:58,022 --> 00:40:59,623 EMS LEVY. AND SO, UM, JUST TO 1135 00:40:59,623 --> 00:41:01,125 BRIEFLY EXPLAIN WHAT'S GOING ON 1136 00:41:01,125 --> 00:41:05,129 BEHIND THE SCENES THERE. UH, SO 1137 00:41:05,129 --> 00:41:05,963 THE RATE ON THE COUNTY LEVY, THE 1138 00:41:05,963 --> 00:41:07,631 TAX RATE ON THE COUNTY LEVEL 1139 00:41:07,631 --> 00:41:09,633 LEVY IS DETERMINED BY TOTAL 1140 00:41:09,633 --> 00:41:13,103 COUNTY COLLECTION SPREAD OVER, 1141 00:41:13,103 --> 00:41:15,606 UM, THE TAX BASE, WHICH IS THE, 1142 00:41:15,606 --> 00:41:17,441 WHICH IS TOTAL KING COUNTY 1143 00:41:17,441 --> 00:41:21,345 ASSESSED VALUE. UM, THE 1144 00:41:21,345 --> 00:41:22,947 COUNTY'S EXPECTATION OF THEIR A 1145 00:41:22,947 --> 00:41:24,815 V UM, IN THEIR MOST RECENT 1146 00:41:24,815 --> 00:41:27,651 FORECAST, WHICH IS JULY WAS 1147 00:41:27,651 --> 00:41:31,055 ACTUALLY REVISED PRETTY 1148 00:41:31,055 --> 00:41:32,156 SIGNIFICANTLY DOWNWARD, UM FROM, 1149 00:41:32,156 --> 00:41:34,992 COMPARED TO MARCH. UM, THAT 1150 00:41:34,992 --> 00:41:36,427 MEANS THAT THAT ACTUALLY PUSHES 1151 00:41:36,427 --> 00:41:38,762 THE TAX RATE UP, WHICH ENDS UP 1152 00:41:38,762 --> 00:41:40,197 BENEFITING THE CITY. UM, ON TOP 1153 00:41:40,197 --> 00:41:42,766 OF THAT, GIVEN THE HIGH, SO THE 1154 00:41:42,766 --> 00:41:45,703 CITY SHARE IS CALCULATED USING 1155 00:41:45,703 --> 00:41:47,771 THE OVERALL TAX RATE AND THE 1156 00:41:47,771 --> 00:41:48,639 CITY'S EXPECTATION OF OUR 1157 00:41:48,639 --> 00:41:52,643 ASSESSED VALUE. AND SO OUR 1158 00:41:52,643 --> 00:41:53,244 EXPECTATION OF ASSESSED VALUE 1159 00:41:53,244 --> 00:41:58,082 ACTUALLY WENT UP. SO BOTH UM SO 1160 00:41:58,082 --> 00:42:01,151 THE MOVEMENT IN RAV AND THE KING 1161 00:42:01,151 --> 00:42:03,420 COUNTY EXPECTATIONS ARE BOTH 1162 00:42:03,420 --> 00:42:05,556 BENEFITING HOW MUCH WE'RE 1163 00:42:05,556 --> 00:42:08,292 COLLECTING FROM THE EMS LEVY UH, 1164 00:42:08,292 --> 00:42:10,527 UTILITY TAX PUBLIC. SO THIS 1165 00:42:10,527 --> 00:42:16,100 INCLUDES UM, TAX ON UTILITY 1166 00:42:16,100 --> 00:42:18,669 REVENUES FROM ELECTRICITY, WATER 1167 00:42:18,669 --> 00:42:20,804 DRAINAGE, WASTEWATER, SOLID 1168 00:42:20,804 --> 00:42:23,440 WASTE AND TONNAGE. UM, SO OFTEN 1169 00:42:23,440 --> 00:42:26,477 THERE'S THOSE PIECES MOVE UP 1170 00:42:26,477 --> 00:42:28,679 AND DOWN WITHIN THIS CATEGORY ON 1171 00:42:28,679 --> 00:42:31,215 NET, WE CAN SEE THAT IT'S 1172 00:42:31,215 --> 00:42:35,486 PRETTY STABLE. UH, IN 27, 28, 26 1173 00:42:35,486 --> 00:42:37,054 WAS REVISED A LITTLE BIT UPWARD, 1174 00:42:37,054 --> 00:42:39,189 UM, DUE TO ACTUALS PERFORMING 1175 00:42:39,189 --> 00:42:42,226 BETTER THAN EXPECTATIONS. UM, 1176 00:42:42,226 --> 00:42:46,163 PARTICULARLY WITH WATER AND 1177 00:42:46,163 --> 00:42:49,366 ELECTRICITY AND THEN OTHER CITY 1178 00:42:49,366 --> 00:42:51,902 TAXES COMPRISES SEVERAL SMALL, 1179 00:42:51,902 --> 00:42:53,003 FAIRLY SMALL CITY TAXES THAT SUM 1180 00:42:53,003 --> 00:42:57,675 UP TO ABOUT 16 MILLION PER YEAR. 1181 00:42:57,675 --> 00:42:58,809 UM, THIS WAS REVISED DOWN A 1182 00:42:58,809 --> 00:43:02,446 LITTLE BIT FOR 26 DUE TO ACTUALS 1183 00:43:02,446 --> 00:43:04,348 ACTUALLY PERFORMING A LITTLE BIT 1184 00:43:04,348 --> 00:43:06,517 WORSE FOR LEASEHOLD EXCISE TAX, 1185 00:43:06,517 --> 00:43:11,555 AS WELL AS TNC TAX. UM, WHICH 1186 00:43:11,555 --> 00:43:13,057 HAS NOT BEEN FARING TOO WELL, 1187 00:43:13,057 --> 00:43:15,125 UM, EVER SINCE THE PANDEMIC 1188 00:43:15,125 --> 00:43:17,294 ACTUALLY GIVEN, UM, NOT ONLY LOW 1189 00:43:17,294 --> 00:43:19,296 DEMAND, BUT ALSO LOW SUPPLY OF 1190 00:43:19,296 --> 00:43:22,866 DRIVERS AND I WILL PASS IT TO 1191 00:43:22,866 --> 00:43:24,969 JOE. 1192 00:43:24,969 --> 00:43:26,503 -- I'LL SPEAK TO THE PARKING 1193 00:43:26,503 --> 00:43:28,439 METERS LINE HERE IN THIS TABLE. 1194 00:43:28,439 --> 00:43:30,975 UM, THIS LINE IS COMPOSED 1195 00:43:30,975 --> 00:43:32,409 ESSENTIALLY OF TWO REVENUE 1196 00:43:32,409 --> 00:43:35,646 STREAMS. ONE IS UM THE, WHAT YOU 1197 00:43:35,646 --> 00:43:36,880 PAY IN THE PARKING METERS ON THE 1198 00:43:36,880 --> 00:43:39,083 STREET. THE OTHER IS WHAT WE 1199 00:43:39,083 --> 00:43:41,285 CALL METER HOODING REVENUES. AND 1200 00:43:41,285 --> 00:43:42,820 THAT'S KIND OF AN ANTIQUATED 1201 00:43:42,820 --> 00:43:45,756 TERM FOR WHEN YOU, UH, RESERVE A 1202 00:43:45,756 --> 00:43:48,258 PAID PARK, WHEN YOU PAY TO 1203 00:43:48,258 --> 00:43:49,693 RESERVE SPOTS THAT ARE NORMALLY 1204 00:43:49,693 --> 00:43:52,296 PAID PARKING. SO THE PARKING 1205 00:43:52,296 --> 00:43:55,099 METERS FORECAST IS DOWN A BIT. 1206 00:43:55,099 --> 00:43:57,701 UM, WE DID SEE A RATE 1207 00:43:57,701 --> 00:43:59,269 ADJUSTMENT, ONE OF THE NORMAL 1208 00:43:59,269 --> 00:44:00,504 RATE ADJUSTMENTS DURING THE YEAR 1209 00:44:00,504 --> 00:44:02,406 BACK IN THE SECOND WEEK OF MAY, 1210 00:44:02,406 --> 00:44:03,507 THE RATES WERE ADJUSTED A LITTLE 1211 00:44:03,507 --> 00:44:04,975 HIGHER THAN PREVIOUSLY EXPECTED 1212 00:44:04,975 --> 00:44:06,543 IN THE APRIL FORECAST. BUT WE 1213 00:44:06,543 --> 00:44:08,946 CONTINUE TO SEE TRANSACTIONS 1214 00:44:08,946 --> 00:44:10,714 UNDER PERFORMING. UM, SO 1215 00:44:10,714 --> 00:44:11,782 SOMETHING OF A WASH THERE IN 1216 00:44:11,782 --> 00:44:16,954 TERMS OF THE UM PARKING METER 1217 00:44:16,954 --> 00:44:18,889 FORECAST. UM THE METER HOODING 1218 00:44:18,889 --> 00:44:22,393 FEES HAVE BEEN UM ADJUSTED 1219 00:44:22,393 --> 00:44:24,228 UPWARDS SLIGHTLY. THEY OF THE 1220 00:44:24,228 --> 00:44:25,162 FIRST HALF OF THE YEAR. THOSE 1221 00:44:25,162 --> 00:44:26,597 REVENUES HAVE COME IN STRONGER 1222 00:44:26,597 --> 00:44:28,932 THAN WE HAD PREVIOUSLY 1223 00:44:28,932 --> 00:44:31,535 ANTICIPATED. UM SO THAT FORECAST 1224 00:44:31,535 --> 00:44:32,803 IS UM IS RESPONSIBLE FOR SOME OF 1225 00:44:32,803 --> 00:44:36,040 THE BUMP YOU SEE IN THOSE IN 27, 1226 00:44:36,040 --> 00:44:39,143 28 UM, LOOKING AT THE, THE NEXT 1227 00:44:39,143 --> 00:44:41,045 ROW, WHICH IS LABELED COURT 1228 00:44:41,045 --> 00:44:42,813 FINES HERE, UH, THIS IS COMPOSED 1229 00:44:42,813 --> 00:44:45,115 OF QUITE A FEW DIFFERENT SMALL 1230 00:44:45,115 --> 00:44:47,418 FINES THAT THE CITY IMPOSES. UM, 1231 00:44:47,418 --> 00:44:48,986 THE VAST MAJORITY OF WHAT WE SEE 1232 00:44:48,986 --> 00:44:53,090 IN THIS LINE IS ACTUALLY PARKING 1233 00:44:53,090 --> 00:44:54,625 CITATIONS. UM, WE IN THE APRIL 1234 00:44:54,625 --> 00:44:58,662 FORECAST, THERE WAS QUITE A BIT 1235 00:44:58,662 --> 00:45:00,464 OF CHANGE TO THIS REVENUE 1236 00:45:00,464 --> 00:45:01,965 STREAM. UM, THERE HAVE BEEN 1237 00:45:01,965 --> 00:45:03,667 SOME, THERE HAVE BEEN DEPRESSED, 1238 00:45:03,667 --> 00:45:07,071 UH, CITATIONS FROM PARKING 1239 00:45:07,071 --> 00:45:08,572 ENFORCEMENT STARTING IN LATE 1240 00:45:08,572 --> 00:45:09,907 NOVEMBER. UM, A LOT OF THAT IS 1241 00:45:09,907 --> 00:45:11,608 DUE TO VARIOUS LABOR ISSUES. 1242 00:45:11,608 --> 00:45:15,345 SOME OF THAT IS INTO 26. WE'VE 1243 00:45:15,345 --> 00:45:16,780 SEEN LOWER CITATIONS DUE TO SOME 1244 00:45:16,780 --> 00:45:19,450 CHANGES IN STATE LAW THAT LIMIT 1245 00:45:19,450 --> 00:45:21,151 LICENSE PLATE READERS. THE USE 1246 00:45:21,151 --> 00:45:23,921 OF THAT TECHNOLOGY. UM, SO, UH, 1247 00:45:23,921 --> 00:45:26,824 THAT WAS INCORPORATED INTO THE 1248 00:45:26,824 --> 00:45:28,926 APRIL FORECAST, BUT IT SEEMS NOW 1249 00:45:28,926 --> 00:45:32,029 THAT REVENUES IN 26 ARE THE 1250 00:45:32,029 --> 00:45:34,965 CITATION VOLUMES, RATHER IN 26 1251 00:45:34,965 --> 00:45:36,667 ARE OVERPERFORMING. WHAT WE, THE 1252 00:45:36,667 --> 00:45:37,301 RELATIVELY CONSERVATIVE FORECAST 1253 00:45:37,301 --> 00:45:39,236 WE HAD IN APRIL. UM, SO THAT'S 1254 00:45:39,236 --> 00:45:40,804 RESPONSIBLE FOR THE UPWARD 1255 00:45:40,804 --> 00:45:42,539 ADJUSTMENT THERE. AND UM, AND 1256 00:45:42,539 --> 00:45:45,175 THAT FLOWS THROUGH INTO THE OUT 1257 00:45:45,175 --> 00:45:47,778 YEARS AS WELL. UM, SO WE'RE 1258 00:45:47,778 --> 00:45:49,646 SEEING A RECOVERY IN THOSE 1259 00:45:49,646 --> 00:45:52,282 CITATIONS THAT'S CLOSER TO WHAT 1260 00:45:52,282 --> 00:45:54,184 WE EXPERIENCED EARLIER IN 2025. 1261 00:45:54,184 --> 00:45:55,919 UM, THOUGH WE'RE NOT QUITE 1262 00:45:55,919 --> 00:45:58,088 THERE YET CERTAINLY, BUT BEATING 1263 00:45:58,088 --> 00:45:59,890 OUR APRIL FORECAST, UM, ALEX, 1264 00:45:59,890 --> 00:46:02,359 YOU SPEAK TO THE NEXT ROW THERE. 1265 00:46:02,359 --> 00:46:04,027 -- YEAH. SO LICENSES, PERMITS, 1266 00:46:04,027 --> 00:46:04,995 INTEREST INCOME AND OTHER. 1267 00:46:04,995 --> 00:46:07,364 THAT'S A MOUTHFUL. UM, MOST OF 1268 00:46:07,364 --> 00:46:08,732 THAT IS FEE REVENUE FROM 1269 00:46:08,732 --> 00:46:12,136 LICENSES AND PERMITS. UM SOME OF 1270 00:46:12,136 --> 00:46:13,804 IT IS INTEREST INCOME, WHICH IS, 1271 00:46:13,804 --> 00:46:16,273 UH, INTEREST EARNINGS ON THE 1272 00:46:16,273 --> 00:46:20,144 GENERAL FUND FUND BALANCE. AND 1273 00:46:20,144 --> 00:46:23,080 SO IN 2026, UM, THERE'S ABOUT A 1274 00:46:23,080 --> 00:46:26,383 $2 MILLION REVISION UPWARD, UM, 1275 00:46:26,383 --> 00:46:28,485 DUE TO, UM, BOTH ACTUALLY A, 1276 00:46:28,485 --> 00:46:33,090 SOME FEE FOR FUNDING AS WELL AS, 1277 00:46:33,090 --> 00:46:36,160 UM, AS WELL AS THE NETWORK 1278 00:46:36,160 --> 00:46:38,262 COMPANY FEE ACTUALLY ON APP 1279 00:46:38,262 --> 00:46:39,663 BASED DELIVERY. THAT WAS 1280 00:46:39,663 --> 00:46:42,032 EFFECTIVE LAST YEAR, BUT TAX 1281 00:46:42,032 --> 00:46:43,133 COLLECTIONS ONLY STARTED THIS 1282 00:46:43,133 --> 00:46:45,736 YEAR. AND SO WE WILL ESSENTIALLY 1283 00:46:45,736 --> 00:46:46,570 COLLECT ABOUT TWO YEARS WORTH OF 1284 00:46:46,570 --> 00:46:50,874 REVENUE THIS YEAR FROM THAT FEE 1285 00:46:50,874 --> 00:46:53,744 IN THE OUT YEARS FOR 2728, WE 1286 00:46:53,744 --> 00:46:54,745 SEE A BIT OF A BUMP UPWARD, UM, 1287 00:46:54,745 --> 00:46:59,449 ACTUALLY DUE TO INTEREST INCOME. 1288 00:46:59,449 --> 00:47:01,385 UM, THE EXPECTATION FOR SHORT 1289 00:47:01,385 --> 00:47:03,387 TERM TREASURY YIELDS HAS GONE 1290 00:47:03,387 --> 00:47:05,989 UP. UM, MOSTLY GIVEN THE 1291 00:47:05,989 --> 00:47:07,658 EXPECTATION THAT THE FED WILL 1292 00:47:07,658 --> 00:47:09,893 NOT MOVE TO CUT RATES AND MIGHT 1293 00:47:09,893 --> 00:47:14,631 EVEN HIKE THEM THIS YEAR. UH, 1294 00:47:14,631 --> 00:47:14,898 REVENUE., 1295 00:47:14,898 --> 00:47:17,467 -- REVENUE FROM OTHER PUBLIC 1296 00:47:17,467 --> 00:47:19,303 ENTITIES IS COMPOSED MAINLY OF 1297 00:47:19,303 --> 00:47:20,571 TRANSFERS THAT THE CITY RECEIVES 1298 00:47:20,571 --> 00:47:22,406 FROM THE STATE. UNDER STATE LAW, 1299 00:47:22,406 --> 00:47:24,041 CERTAIN STATE REVENUES ARE 1300 00:47:24,041 --> 00:47:24,842 SHARED WITH COUNTIES AND 1301 00:47:24,842 --> 00:47:28,011 MUNICIPALITIES. UM, THE CHANGE 1302 00:47:28,011 --> 00:47:32,916 WE SEE HERE IS DRIVEN BY UM, TWO 1303 00:47:32,916 --> 00:47:35,185 DIFFERENT, UH, STATE SHARED 1304 00:47:35,185 --> 00:47:37,454 REVENUES, MAINLY FROM THE LIQUOR 1305 00:47:37,454 --> 00:47:39,656 EXCISE TAX AND SOMEWHAT FROM THE 1306 00:47:39,656 --> 00:47:42,860 MARIJUANA EXCISE TAX. UM, THE 1307 00:47:42,860 --> 00:47:44,862 STATE PUBLISHES GROWTH FACTORS 1308 00:47:44,862 --> 00:47:47,164 FOR THE OUTLOOK FOR THESE SHARED 1309 00:47:47,164 --> 00:47:50,500 REVENUES. AND THERE HAS BEEN AN 1310 00:47:50,500 --> 00:47:52,903 UPDATE SUBSEQUENT TO THE APRIL 1311 00:47:52,903 --> 00:47:54,338 FORECAST AND THE OUTLOOK FOR THE 1312 00:47:54,338 --> 00:47:56,740 LIQUOR EXCISE TAX PROFIT, UH, 1313 00:47:56,740 --> 00:47:57,908 REVENUES AS WELL AS THE 1314 00:47:57,908 --> 00:48:00,143 MARIJUANA EXCISE TAX REVENUES 1315 00:48:00,143 --> 00:48:02,746 WERE UM WERE DOWNGRADED SINCE 1316 00:48:02,746 --> 00:48:06,483 THE APRIL FORECAST. SO THAT IS 1317 00:48:06,483 --> 00:48:07,117 RESPONSIBLE FOR THE DOWNGRADE OF 1318 00:48:07,117 --> 00:48:08,752 ABOUT 1.2 MILLION OVER THE THREE 1319 00:48:08,752 --> 00:48:11,955 YEAR PERIOD IN THIS TABLE. 1320 00:48:11,955 --> 00:48:14,291 -- AND THEN SERVICE CHARGES AND 1321 00:48:14,291 --> 00:48:17,094 REIMBURSEMENTS. UM, A LOT OF THE 1322 00:48:17,094 --> 00:48:18,996 REVENUES THAT GO INTO THIS 1323 00:48:18,996 --> 00:48:21,531 CATEGORY ARE INTERNAL SERVICE 1324 00:48:21,531 --> 00:48:23,333 CHARGES. SO CHARGE CHARGES THAT 1325 00:48:23,333 --> 00:48:25,636 ARE, UM, REVENUES THAT 1326 00:48:25,636 --> 00:48:27,237 DEPARTMENT GET DEPARTMENTS GET 1327 00:48:27,237 --> 00:48:29,573 FOR THEIR SERVICES TO OTHER 1328 00:48:29,573 --> 00:48:34,077 DEPARTMENTS, UM, THE, IN 2026, 1329 00:48:34,077 --> 00:48:37,014 THE 1.7 MILLION ACTUALLY POINTS 1330 00:48:37,014 --> 00:48:39,149 TO SOME REVENUE TO THE LAW 1331 00:48:39,149 --> 00:48:41,618 DEPARTMENT THAT ACTUALLY WAS 1332 00:48:41,618 --> 00:48:44,588 SHIFTED FROM 25 TO 26. UM, AND 1333 00:48:44,588 --> 00:48:46,890 27 AND 28. UM, SO AGAIN, THESE 1334 00:48:46,890 --> 00:48:49,593 ARE, UM, VARIOUS 1335 00:48:49,593 --> 00:48:50,227 INTER-DEPARTMENTAL CHARGES THAT 1336 00:48:50,227 --> 00:48:53,530 HAVE BEEN MOVING UP AND DOWN. 1337 00:48:53,530 --> 00:48:57,267 UM, THIS, UH, SO ON NET, WE ARE 1338 00:48:57,267 --> 00:49:02,172 ASSUMING, UM, AN INCREASE TO 1339 00:49:02,172 --> 00:49:04,274 THOSE CHARGES OVERALL. UH, AND 1340 00:49:04,274 --> 00:49:07,411 THEN GRANTS IN 2026, THE 18.3 1341 00:49:07,411 --> 00:49:10,514 MILLION IS, UM, COMPLETELY, 1342 00:49:10,514 --> 00:49:12,883 ENTIRELY FROM THE MIDYEAR 1343 00:49:12,883 --> 00:49:15,218 SUPPLEMENTAL AS WELL AS MORE FEE 1344 00:49:15,218 --> 00:49:17,654 FOR FUNDING, UM, SEVERAL MILLION 1345 00:49:17,654 --> 00:49:21,191 IN FEE FOR FUNDING IN 2728. 1346 00:49:21,191 --> 00:49:23,894 THESE ARE REVISED EXPECTATIONS 1347 00:49:23,894 --> 00:49:28,398 FOR GRANTS THAT ARE NOW ASSUMED 1348 00:49:28,398 --> 00:49:31,301 TO BE ONGOING INTO THE BIENNIUM 1349 00:49:31,301 --> 00:49:33,170 AND THEN FINALLY FUND BALANCE 1350 00:49:33,170 --> 00:49:35,772 TRANSFERS. UH, THIS -1 MILLION, 1351 00:49:35,772 --> 00:49:39,643 UM, IS SIMPLY A CORRECTION OF AN 1352 00:49:39,643 --> 00:49:41,011 ERROR TO THE PAYROLL EXPENSE TAX 1353 00:49:41,011 --> 00:49:43,280 TRANSFER, WHICH IS THE BULK OF 1354 00:49:43,280 --> 00:49:47,317 THIS CATEGORY 1355 00:49:47,317 --> 00:49:50,287 -- ALL RIGHT. SO OVERALL IT'S 1356 00:49:50,287 --> 00:49:51,254 59.4 MILLION MORE OVER THREE 1357 00:49:51,254 --> 00:49:56,360 YEARS. THAT'S ROUGHLY 1.1% MORE 1358 00:49:56,360 --> 00:49:56,994 IN REVENUES PREDICTED FOR THOSE 1359 00:49:56,994 --> 00:49:58,095 THREE YEARS FOR THE GENERAL 1360 00:49:58,095 --> 00:50:00,063 FUND. MOVING TO THE NON-GENERAL 1361 00:50:00,063 --> 00:50:02,366 FUND REVENUES. UH, YEAH. 1362 00:50:02,366 --> 00:50:03,567 -- YEAH. DIRECTOR. JUST BEFORE 1363 00:50:03,567 --> 00:50:07,170 WE MOVE ON, I WANTED TO NOTE IN 1364 00:50:07,170 --> 00:50:07,671 THE EARLIER PART OF THE 1365 00:50:07,671 --> 00:50:08,872 PRESENTATION, YOU NOTED THAT WE 1366 00:50:08,872 --> 00:50:10,240 WERE MUDDLING THROUGH OUR 1367 00:50:10,240 --> 00:50:12,275 ECONOMY. WE'VE SEEN THIS FOR 1368 00:50:12,275 --> 00:50:14,444 THE LAST SEVERAL YEARS OF SLOW 1369 00:50:14,444 --> 00:50:17,481 OR THERE WAS ONE MOMENT, 1370 00:50:17,481 --> 00:50:18,081 NEGATIVE GROWTH THAT WE WERE 1371 00:50:18,081 --> 00:50:20,984 CONCERNED WITH IN HERE, WE HAVE 1372 00:50:20,984 --> 00:50:22,386 $59 MILLION OVER THREE YEARS, 1373 00:50:22,386 --> 00:50:25,322 WHICH IS A LOT OF MONEY. BUT IN 1374 00:50:25,322 --> 00:50:27,357 THE CONTEXT OF OUR CITY'S BUDGET 1375 00:50:27,357 --> 00:50:29,893 AND OUR GENERAL, WHEN WE RECEIVE 1376 00:50:29,893 --> 00:50:32,662 THESE REPORTS EVERY, YOU KNOW, 1377 00:50:32,662 --> 00:50:33,864 THREE TIMES A YEAR IN THE PAST 1378 00:50:33,864 --> 00:50:35,432 WHEN WE'VE BEEN IN OUR HIGH 1379 00:50:35,432 --> 00:50:40,470 GROWTH PERIOD, WHAT WERE OUR 1380 00:50:40,470 --> 00:50:42,806 CHANGES AT THAT POINT? WAS IT 1381 00:50:42,806 --> 00:50:43,774 TWICE THIS THREE TIMES THIS A 1382 00:50:43,774 --> 00:50:46,009 HALF OF THIS? WHAT ARE WE SEEING 1383 00:50:46,009 --> 00:50:47,110 GENERALLY OVER THE COURSE OF 1384 00:50:47,110 --> 00:50:48,178 TIME HERE? 1385 00:50:48,178 --> 00:50:51,715 -- YEAH. SO AGAIN, 59 MILLION IS 1386 00:50:51,715 --> 00:50:54,951 A LOT, BUT NOT OUT OF IF YOU ADD 1387 00:50:54,951 --> 00:50:57,621 UP THE THREE YEARS, UH, 1.8, 1388 00:50:57,621 --> 00:51:01,024 1.8, 1.9 BILLION. SO IT'S OUT 1389 00:51:01,024 --> 00:51:02,092 OF ROUGHLY 6 BILLION. UM, SO 1390 00:51:02,092 --> 00:51:05,429 AGAIN, JUST 1.1%. SO THAT THE 1391 00:51:05,429 --> 00:51:06,930 SMALL SORT OF REVISIONS IN THE 1392 00:51:06,930 --> 00:51:08,365 GRAND SCALE, THEY WERE 1393 00:51:08,365 --> 00:51:10,934 DEFINITELY MUCH LARGER REVISIONS 1394 00:51:10,934 --> 00:51:12,769 DURING COVID. UM, BEFORE THAT, 1395 00:51:12,769 --> 00:51:14,404 FOR THE TEN YEARS BEFORE THAT, 1396 00:51:14,404 --> 00:51:16,673 WHAT WAS USUALLY HAPPENING IS 1397 00:51:16,673 --> 00:51:18,575 THAT THE GROWTH WAS EXCEEDING 1398 00:51:18,575 --> 00:51:20,077 EXPECTATIONS DURING THE 1399 00:51:20,077 --> 00:51:25,348 CONSTRUCTION BOOM. THE TECH 1400 00:51:25,348 --> 00:51:25,949 SECTOR, BOOM BETWEEN 2010 AND 1401 00:51:25,949 --> 00:51:28,785 2019, THE FORECAST REVISIONS 1402 00:51:28,785 --> 00:51:30,187 WERE UP BECAUSE OF THOSE CHANGES 1403 00:51:30,187 --> 00:51:32,322 IN BETTER OUTLOOK HERE. A LOT OF 1404 00:51:32,322 --> 00:51:33,890 IT IS AGAIN, DRIVEN BY CHANGES 1405 00:51:33,890 --> 00:51:37,327 DUE TO THE LEGISLATION, NOT 1406 00:51:37,327 --> 00:51:37,861 REALLY BIG CHANGES IN THE 1407 00:51:37,861 --> 00:51:39,029 ECONOMIC OUTLOOK, WHICH AGAIN 1408 00:51:39,029 --> 00:51:41,665 DID NOT CHANGE MUCH. KIND OF 1409 00:51:41,665 --> 00:51:42,265 STILL ROLLING THROUGH THERE. 1410 00:51:42,265 --> 00:51:44,134 -- SO IF WE HAD NOT HAD THESE 1411 00:51:44,134 --> 00:51:47,771 LEGISLATIVE CHANGES, WE MIGHT BE 1412 00:51:47,771 --> 00:51:50,006 AT A 0% INCREASE RATHER THAN A. 1413 00:51:50,006 --> 00:51:52,309 -- YEAH. SO IT WOULD BE TOUGH 1414 00:51:52,309 --> 00:51:54,211 WITHOUT THOSE ADDITIONAL 1415 00:51:54,211 --> 00:51:55,011 REVENUES IN SALES TAX, 1416 00:51:55,011 --> 00:51:56,847 ADDITIONAL REVENUES IN BUSINESS 1417 00:51:56,847 --> 00:51:57,914 OCCUPATION TAX. YES. 1418 00:51:57,914 --> 00:51:58,548 -- AND JUST HIGHLIGHTING AGAIN 1419 00:51:58,548 --> 00:52:00,517 THAT THESE THIS THIS POSITIVE 1420 00:52:00,517 --> 00:52:02,085 NEWS IS NOT NECESSARILY FROM 1421 00:52:02,085 --> 00:52:04,287 ECONOMIC GROWTH, RATHER FROM 1422 00:52:04,287 --> 00:52:06,490 CHANGES IN LAW. 1423 00:52:06,490 --> 00:52:07,457 -- YEAH. AND THE WAY HOW HOW WE 1424 00:52:07,457 --> 00:52:10,460 WERE ASSUMING A MORE 1425 00:52:10,460 --> 00:52:11,094 CONSERVATIVE, WE WERE TAKING A 1426 00:52:11,094 --> 00:52:13,830 MORE CONSERVATIVE APPROACH AND 1427 00:52:13,830 --> 00:52:16,867 ADDING THOSE REVENUES. WELL, THE 1428 00:52:16,867 --> 00:52:18,702 ACTUAL REVENUES EXCEEDED OUR 1429 00:52:18,702 --> 00:52:19,836 EXPECTATIONS WITH ADDITIONAL 1430 00:52:19,836 --> 00:52:23,173 REVENUES FROM NEW SALES TAX HAS 1431 00:52:23,173 --> 00:52:24,541 EXCEEDED OUR EXPECTATIONS. AND 1432 00:52:24,541 --> 00:52:24,841 THAT'S. 1433 00:52:24,841 --> 00:52:26,076 -- THANK YOU. AND MY LAST 1434 00:52:26,076 --> 00:52:28,245 COMPLIMENTS TO JOE. WE HAVE 1435 00:52:28,245 --> 00:52:29,012 GOTTEN OVER THE BOW WAKE OF OUR 1436 00:52:29,012 --> 00:52:31,381 PARK, OUR PARKING METER CHANGES 1437 00:52:31,381 --> 00:52:32,482 WHERE WE WEREN'T CHARGING 1438 00:52:32,482 --> 00:52:34,684 ENOUGH, WHERE OUR FINES WERE 1439 00:52:34,684 --> 00:52:37,621 ACTUALLY, UM, LESS EXPENSIVE 1440 00:52:37,621 --> 00:52:38,655 THAN NOT PAYING FOR PARKING. WE 1441 00:52:38,655 --> 00:52:40,924 NOW HAVE A MORE APPROPRIATE 1442 00:52:40,924 --> 00:52:42,225 FINES AND WE ARE ROLLING OUT 1443 00:52:42,225 --> 00:52:45,128 PAID PARKING OUT IN MORE PLACES. 1444 00:52:45,128 --> 00:52:46,396 UM, JUST WANTED TO NOTE, THIS IS 1445 00:52:46,396 --> 00:52:47,697 THE FIRST TIME WE'VE BEEN ABLE 1446 00:52:47,697 --> 00:52:49,533 TO SEE US GETTING BACK INTO THE 1447 00:52:49,533 --> 00:52:52,135 BLACK. AND THAT'S NOT BECAUSE OF 1448 00:52:52,135 --> 00:52:54,104 THE ANALYSIS YOU PROVIDE, BUT 1449 00:52:54,104 --> 00:52:55,672 RATHER THE POLICY THAT WE MAKE 1450 00:52:55,672 --> 00:52:57,307 HERE. AND SO IT'S GOOD TO SEE 1451 00:52:57,307 --> 00:52:58,475 THAT THAT IS STABILIZING. SO 1452 00:52:58,475 --> 00:53:00,177 THINK THIS IS THE LAST TIME I'LL 1453 00:53:00,177 --> 00:53:00,944 BRING UP PARKING METERS. JOE, 1454 00:53:00,944 --> 00:53:02,345 THANK YOU FOR ALL YOUR WORK. 1455 00:53:02,345 --> 00:53:05,615 -- VERY WELCOME. THANK YOU. 1456 00:53:05,615 --> 00:53:11,021 -- ALL RIGHT. MOVING ON TO THE 1457 00:53:11,021 --> 00:53:11,655 NON GENERAL FUND REVENUES. UH, 1458 00:53:11,655 --> 00:53:12,656 THE LARGEST REVISIONS ARE AS 1459 00:53:12,656 --> 00:53:15,192 USUALLY TO THE PAYROLL EXPENSE 1460 00:53:15,192 --> 00:53:19,062 TAX THAT UH, HAS TO DO A LOT 1461 00:53:19,062 --> 00:53:21,031 WITH THE UNDERLYING TAX BASE AND 1462 00:53:21,031 --> 00:53:22,866 THE FACTORS DRIVING IT. UH, 1463 00:53:22,866 --> 00:53:24,201 WHENEVER THERE IS A CHANGE IN 1464 00:53:24,201 --> 00:53:26,436 THE OUTLOOK FOR STOCK PRICES, 1465 00:53:26,436 --> 00:53:30,106 UM, THERE IS A SIGNIFICANT, 1466 00:53:30,106 --> 00:53:30,707 USUALLY SIGNIFICANT CHANGE IN 1467 00:53:30,707 --> 00:53:31,641 THE OUTLOOK FOR THIS REVENUE 1468 00:53:31,641 --> 00:53:35,512 STREAM. THIS YEAR. WE ALSO HAVE 1469 00:53:35,512 --> 00:53:37,080 THE IMPACT OF THOSE LAYOFFS IN 1470 00:53:37,080 --> 00:53:39,849 THE TECH SECTOR AFFECTING THE 1471 00:53:39,849 --> 00:53:41,851 OUTLOOK FOR PAYROLL EXPENSE TAX. 1472 00:53:41,851 --> 00:53:45,889 YOU CAN SEE THERE IS A YEAR OVER 1473 00:53:45,889 --> 00:53:46,656 YEAR DECLINE BETWEEN 25 AND 26. 1474 00:53:46,656 --> 00:53:49,593 UH, AGAIN, LAYOFFS, BUT LARGELY 1475 00:53:49,593 --> 00:53:54,297 OFFSET BY THE IMPROVED OUTLOOK. 1476 00:53:54,297 --> 00:53:58,435 UH, SINCE SINCE APRIL THAT THAT 1477 00:53:58,435 --> 00:54:00,503 ADDED ABOUT 18 MILLION THIS 1478 00:54:00,503 --> 00:54:01,871 YEAR. SIMILAR AMOUNTS IN NEXT TO 1479 00:54:01,871 --> 00:54:04,207 FOR A TOTAL CHANGE OF 57.7 1480 00:54:04,207 --> 00:54:06,876 MILLION OVER THE THREE YEARS, 1481 00:54:06,876 --> 00:54:10,180 UM, HANDING IT OVER TO INTEREST 1482 00:54:10,180 --> 00:54:11,481 INCOME FOR THIS FUND. 1483 00:54:11,481 --> 00:54:12,782 -- YEAH. UH, SO AGAIN, THIS 1484 00:54:12,782 --> 00:54:15,085 TABLE IS A MIX OF FORECASTS THAT 1485 00:54:15,085 --> 00:54:16,519 ARE FORECASTED BY THE FORECAST 1486 00:54:16,519 --> 00:54:17,087 OFFICE AND BY CITY BUDGET 1487 00:54:17,087 --> 00:54:18,188 OFFICE. SO WE'RE GOING TO PING 1488 00:54:18,188 --> 00:54:19,389 PONG A LITTLE BIT HERE. BUT THE 1489 00:54:19,389 --> 00:54:21,758 INTERESTING COME ON THE PAYROLL 1490 00:54:21,758 --> 00:54:24,294 EXPENSE TAX FOLLOWS SIMILAR 1491 00:54:24,294 --> 00:54:25,562 UNDERLYING TRENDS TO THE 1492 00:54:25,562 --> 00:54:27,564 INTEREST INCOME ON THE GENERAL 1493 00:54:27,564 --> 00:54:30,233 FUND IN THAT UM THE, UH, THE 1494 00:54:30,233 --> 00:54:32,268 FORECAST IS UP FOR THESE FOR, 1495 00:54:32,268 --> 00:54:34,137 FOR INTEREST ON EARNINGS ON THIS 1496 00:54:34,137 --> 00:54:39,643 FUND, GENERALLY BECAUSE OF, UM, 1497 00:54:39,643 --> 00:54:40,610 THE HIGHER EXPECTED YIELDS TO 1498 00:54:40,610 --> 00:54:42,345 TREASURY BONDS, WHICH IS THE 1499 00:54:42,345 --> 00:54:47,384 MAIN INVESTMENT VEHICLE FOR, FOR 1500 00:54:47,384 --> 00:54:47,851 THESE FUND BALANCES. 1501 00:54:47,851 --> 00:54:50,920 -- UM, WHEN IT COMES TO THE 1502 00:54:50,920 --> 00:54:51,588 IMPACT OF THE HIGHER INTEREST 1503 00:54:51,588 --> 00:54:52,856 RATE IS THE OPPOSITE. UH, AS I 1504 00:54:52,856 --> 00:54:55,625 MENTIONED EARLIER, UM, THE 1505 00:54:55,625 --> 00:54:58,094 EXPECTATIONS ARE NOW THAT THE 1506 00:54:58,094 --> 00:54:59,262 FEDERAL, THE, THE FED WILL NOT 1507 00:54:59,262 --> 00:55:01,798 CUT THE INTEREST RATES. MORTGAGE 1508 00:55:01,798 --> 00:55:02,866 RATES HAVE GONE UP. SO THERE WAS 1509 00:55:02,866 --> 00:55:05,869 ALSO A CHANGE AT THE LOWER END 1510 00:55:05,869 --> 00:55:10,674 OF THE YIELD CURVE. UM, THERE IS 1511 00:55:10,674 --> 00:55:12,008 UH, AN IMMEDIATE IMPACT ON THE 1512 00:55:12,008 --> 00:55:15,178 NUMBER OF HOMES THAT ARE SOLD. 1513 00:55:15,178 --> 00:55:15,679 THEY ARE BECOMING LESS 1514 00:55:15,679 --> 00:55:17,313 AFFORDABLE WITH HIGHER MORTGAGE 1515 00:55:17,313 --> 00:55:19,616 RATES. IN ADDITION, WE HAVE THAT 1516 00:55:19,616 --> 00:55:21,351 EFFECT OF HIGHER UNCERTAINTY AND 1517 00:55:21,351 --> 00:55:22,719 LAYOFFS IN THE TECH SECTOR, 1518 00:55:22,719 --> 00:55:24,921 WHICH ARE MAKING SOME BUYERS 1519 00:55:24,921 --> 00:55:27,357 MOST LIKELY VERY HESITANT ABOUT 1520 00:55:27,357 --> 00:55:31,795 MAKING A BIGGER PURCHASE. UM, SO 1521 00:55:31,795 --> 00:55:32,796 THAT HAS RESULTED IN, UH, A 1522 00:55:32,796 --> 00:55:37,233 REVISION DOWN FOR RATE, UM, 1523 00:55:37,233 --> 00:55:39,936 OVERALL, ABOUT 23 MILLION OVER 1524 00:55:39,936 --> 00:55:44,307 THREE YEARS. UM, AND, UH, UM, 1525 00:55:44,307 --> 00:55:47,577 THEN FOR THE ADMISSIONS TAX, 1526 00:55:47,577 --> 00:55:48,211 SLIGHTLY SMALLER REVENUES THIS 1527 00:55:48,211 --> 00:55:51,181 YEAR, SLIGHTLY LARGER REVENUES 1528 00:55:51,181 --> 00:55:52,949 IN THE NEXT TWO OVERALL, VERY 1529 00:55:52,949 --> 00:55:54,451 MINOR CHANGE OVER THREE YEARS. 1530 00:55:54,451 --> 00:55:55,351 UH, I'LL HEAD. 1531 00:55:55,351 --> 00:55:56,753 -- OVER THE SWEETENED BEVERAGE 1532 00:55:56,753 --> 00:55:58,722 TAX. WE HAVE REVISED DOWNWARD A 1533 00:55:58,722 --> 00:56:02,392 TOTAL OF 3.8 MILLION ACROSS THE 1534 00:56:02,392 --> 00:56:03,593 THREE YEAR PERIOD. WE HAVE SEEN 1535 00:56:03,593 --> 00:56:04,861 ACTUAL REVENUES COMING IN LOWER 1536 00:56:04,861 --> 00:56:05,795 IN THE FIRST QUARTER OF THIS 1537 00:56:05,795 --> 00:56:07,664 YEAR, WHICH IS AN ADJUSTMENT 1538 00:56:07,664 --> 00:56:09,532 THAT, UM, THAT BLEEDS THROUGH 1539 00:56:09,532 --> 00:56:12,936 INTO THE OTHER YEARS OF THIS 1540 00:56:12,936 --> 00:56:15,038 MODEL AND EXPECTED REVENUES, UM, 1541 00:56:15,038 --> 00:56:16,539 UH, WE ALSO, THERE WAS ALSO A 1542 00:56:16,539 --> 00:56:18,742 DOWNWARD REVISION TO POPULATION 1543 00:56:18,742 --> 00:56:21,111 GROWTH ESTIMATES FOR THE REGION. 1544 00:56:21,111 --> 00:56:22,479 AND THE REASON FOR IN THIS 1545 00:56:22,479 --> 00:56:23,813 FORECAST. AND SO THAT IS ONE OF 1546 00:56:23,813 --> 00:56:25,415 THE INPUTS THAT WE USE TO 1547 00:56:25,415 --> 00:56:27,784 FORECAST THIS REVENUE STREAM. SO 1548 00:56:27,784 --> 00:56:30,153 THAT ALSO COMPOSES A DOWNWARD, 1549 00:56:30,153 --> 00:56:32,555 UM, IMPACT ON THIS REVENUE 1550 00:56:32,555 --> 00:56:35,125 STREAM. AND I WILL ALSO ADD THAT 1551 00:56:35,125 --> 00:56:37,460 IN 26, WE HAD ASSUMED A BUMP 1552 00:56:37,460 --> 00:56:39,629 FROM WORLD CUP ACTIVITY. UM, WE 1553 00:56:39,629 --> 00:56:42,098 STILL ASSUME SOME BUMP. WE HAVE, 1554 00:56:42,098 --> 00:56:43,533 UH, SOFTENED THAT INCREASE IN 1555 00:56:43,533 --> 00:56:45,802 THIS REVENUE FORECAST BASED ON 1556 00:56:45,802 --> 00:56:48,271 VERY EARLY DATA ON TOURIST 1557 00:56:48,271 --> 00:56:50,473 ACTIVITY. UM, WE DON'T HAVE 1558 00:56:50,473 --> 00:56:51,241 SALES TAX INFORMATION FOR THE 1559 00:56:51,241 --> 00:56:52,876 WORLD CUP PERIOD AS YET, BUT, 1560 00:56:52,876 --> 00:56:57,147 UM, BUT SOME JUST, UM, SORT OF 1561 00:56:57,147 --> 00:57:00,183 PERIPHERAL DATA SOURCES SUGGEST 1562 00:57:00,183 --> 00:57:00,817 MAYBE SOFTENING THAT, UM, THAT 1563 00:57:00,817 --> 00:57:05,021 ASSUMPTION. SO WE HAVE IN 26. 1564 00:57:05,021 --> 00:57:07,257 -- UM, AS FOR SHORT TERM RENTAL 1565 00:57:07,257 --> 00:57:10,193 TAX, THE STORY IS SIMILAR IN 1566 00:57:10,193 --> 00:57:13,963 2026. THAT REDUCTION CASCADES 1567 00:57:13,963 --> 00:57:15,331 THROUGH 27 TO 28 A LITTLE BIT. 1568 00:57:15,331 --> 00:57:17,200 UM ACTUALS HAVE BEEN A LITTLE 1569 00:57:17,200 --> 00:57:20,436 BIT WEAKER THAN UM THAN 1570 00:57:20,436 --> 00:57:23,740 FORECASTED. AND THEN ON TOP OF 1571 00:57:23,740 --> 00:57:25,842 THAT, RELATED TO THE WORLD CUP 1572 00:57:25,842 --> 00:57:28,278 EFFECT, UM, HOTEL REVENUE AND 1573 00:57:28,278 --> 00:57:30,880 OCCUPANCY, UM, HAVE BEEN 1574 00:57:30,880 --> 00:57:32,615 REVISED, NOTABLY DOWN, OR AT 1575 00:57:32,615 --> 00:57:35,552 LEAST THE OUTLOOK FOR THAT FOR 1576 00:57:35,552 --> 00:57:37,420 THE REST OF 2026. AND SO, UM, WE 1577 00:57:37,420 --> 00:57:40,757 DON'T HAVE, WE ACTUALLY DON'T 1578 00:57:40,757 --> 00:57:42,091 HAVE JUNE OR JULY ACTUALS FOR 1579 00:57:42,091 --> 00:57:43,359 SHORT TERM RENTAL TAX. UM, BUT 1580 00:57:43,359 --> 00:57:44,828 THERE ARE DEFINITELY SOME 1581 00:57:44,828 --> 00:57:46,496 INDICATIONS THAT WE NEED TO 1582 00:57:46,496 --> 00:57:48,832 TEMPER OUR EXPECTATIONS. UM, 1583 00:57:48,832 --> 00:57:52,602 ABOUT WORLD CUP 1584 00:57:52,602 --> 00:57:56,105 -- ALL RIGHT. THE NEXT LINE IS A 1585 00:57:56,105 --> 00:57:58,341 NEW ONE. OUR OFFICE TOOK OVER 1586 00:57:58,341 --> 00:57:58,908 FORECASTING FOR AFFORDABLE 1587 00:57:58,908 --> 00:58:01,511 HOUSING SALES TAX. UH, THAT 1588 00:58:01,511 --> 00:58:04,280 REVENUE IS KEPT, UH, BY, BY 1589 00:58:04,280 --> 00:58:06,416 STATE, ESSENTIALLY, UH, TRANSFER 1590 00:58:06,416 --> 00:58:07,884 OF SOME SHARE OF A SALES TAX 1591 00:58:07,884 --> 00:58:09,419 THAT WOULD OTHERWISE GO TO THE 1592 00:58:09,419 --> 00:58:12,288 STATE AND, UH, HOVERS AROUND 1593 00:58:12,288 --> 00:58:14,357 4.4. THAT'S WHERE WE ARE SEEING 1594 00:58:14,357 --> 00:58:15,625 IT IN THE NEXT COUPLE OF YEARS 1595 00:58:15,625 --> 00:58:18,394 DUE TO THOSE, UM, DUE TO 1596 00:58:18,394 --> 00:58:20,163 ESSENTIALLY THAT, THAT CAP AND 1597 00:58:20,163 --> 00:58:22,265 THE, THE MECHANICS FOR THIS TAX 1598 00:58:22,265 --> 00:58:27,704 WORK. UM, THE LINE BELOW, UH, 1599 00:58:27,704 --> 00:58:28,338 TRANSPORTATION BENEFIT DISTRICT 1600 00:58:28,338 --> 00:58:31,875 SALES TAX, UM, THAT ONE, UNLESS 1601 00:58:31,875 --> 00:58:33,943 IT'S RENEWED, UM, IT ENDS IN, 1602 00:58:33,943 --> 00:58:37,280 UH, FIRST QUARTER OF 2027. SO 1603 00:58:37,280 --> 00:58:39,215 THAT'S WHY THERE IS A BIG DROP 1604 00:58:39,215 --> 00:58:41,417 IN 2027. IT'S ONLY ONE QUARTER 1605 00:58:41,417 --> 00:58:44,787 OF REVENUES. AND THEN NOTHING 1606 00:58:44,787 --> 00:58:46,456 FOR 2028. THERE IS A PROPOSAL 1607 00:58:46,456 --> 00:58:49,459 TO, FOR THIS TO BE RENEWED AT 1608 00:58:49,459 --> 00:58:53,730 0.3% RATE. THAT WOULD GENERATE 1609 00:58:53,730 --> 00:58:57,433 AN ADDITIONAL 96.3 MILLION IN 27 1610 00:58:57,433 --> 00:58:59,302 AND ABOUT 125.3 IN 2028. UM, 1611 00:58:59,302 --> 00:59:01,604 I'LL HAND IT OVER AGAIN TO JOE. 1612 00:59:01,604 --> 00:59:03,273 -- YEAH. UM, ALSO PART OF THE 1613 00:59:03,273 --> 00:59:06,042 SEATTLE TRANSIT BENEFIT DISTRICT 1614 00:59:06,042 --> 00:59:06,943 FUND IS A VEHICLE LICENSE FEE. 1615 00:59:06,943 --> 00:59:08,611 THAT IS THE $50 FEE YOU PAY WHEN 1616 00:59:08,611 --> 00:59:13,249 YOU RENEW YOUR CAR TABS. UM, WE 1617 00:59:13,249 --> 00:59:15,852 HAVE REVISED THIS FORECAST DOWN 1618 00:59:15,852 --> 00:59:16,986 BY 5.5 MILLION ACROSS THE THREE 1619 00:59:16,986 --> 00:59:20,723 YEAR PERIOD. UM, REVENUE SO FAR 1620 00:59:20,723 --> 00:59:22,058 IN 26 ARE LOWER THAN EXPECTED. 1621 00:59:22,058 --> 00:59:24,127 AND SO THAT IS, UM, PART OF 1622 00:59:24,127 --> 00:59:25,662 WHAT'S DEPRESSING THE, THE 1623 00:59:25,662 --> 00:59:27,230 OUTLOOK FOR THESE REVENUES, THE 1624 00:59:27,230 --> 00:59:29,499 REASONS FOR THAT ARE FRANKLY A 1625 00:59:29,499 --> 00:59:30,667 LITTLE BIT DIFFICULT TO DISCERN 1626 00:59:30,667 --> 00:59:34,370 AT THIS MOMENT. THERE, UM, 25th 1627 00:59:34,370 --> 00:59:36,339 MAY HAVE BEEN SLIGHTLY ANOMALOUS 1628 00:59:36,339 --> 00:59:38,641 IN THAT THERE WERE FEDERAL TAX 1629 00:59:38,641 --> 00:59:40,310 CREDITS EXPIRING FOR VEHICLE 1630 00:59:40,310 --> 00:59:41,711 PURCHASES. THERE WERE, UM, THERE 1631 00:59:41,711 --> 00:59:43,980 MAY HAVE BEEN SOME VEHICLE 1632 00:59:43,980 --> 00:59:44,881 PURCHASING TO GET AHEAD OF 1633 00:59:44,881 --> 00:59:47,583 TARIFF EFFECTS. UM, THERE, BUT, 1634 00:59:47,583 --> 00:59:49,919 BUT UM, THERE MAY ALSO BE SOME 1635 00:59:49,919 --> 00:59:51,721 IMPACT OF HOW THE DEPARTMENT OF 1636 00:59:51,721 --> 00:59:53,222 LICENSING REMINDS YOU TO RENEW 1637 00:59:53,222 --> 00:59:55,892 YOUR TABS. UM, THAT CHANGED IN 1638 00:59:55,892 --> 00:59:58,528 ABOUT A YEAR AGO, IN AUGUST OF 1639 00:59:58,528 --> 01:00:02,532 2025. UM, AND SO WE, UM, ARE 1640 01:00:02,532 --> 01:00:03,099 THEORIZING THAT POTENTIALLY 1641 01:00:03,099 --> 01:00:04,267 THERE IS SOME IMPACT IN FOLKS 1642 01:00:04,267 --> 01:00:06,636 DELAYING OR MAYBE EVEN FORGOING 1643 01:00:06,636 --> 01:00:08,471 RENEWING TABS. AND SO, UM, 1644 01:00:08,471 --> 01:00:09,238 THERE'S A BEHAVIORAL COMPONENT 1645 01:00:09,238 --> 01:00:11,174 HERE THAT THAT IS POSSIBLY AT 1646 01:00:11,174 --> 01:00:15,178 PLAY. UM, YOU'LL ALSO SEE A 1647 01:00:15,178 --> 01:00:17,313 LARGER DOWNWARD REVISION IN 2027 1648 01:00:17,313 --> 01:00:18,748 OF 3.2 MILLION. AND FRANKLY, 1649 01:00:18,748 --> 01:00:21,117 THAT IS DUE TO A RECALIBRATION 1650 01:00:21,117 --> 01:00:23,152 OF THE MODEL THAT HAD PREVIOUSLY 1651 01:00:23,152 --> 01:00:25,555 BEEN PICKING UP QUITE A LARGE 1652 01:00:25,555 --> 01:00:29,125 BUMP IN THIS REVENUE STREAM IN 1653 01:00:29,125 --> 01:00:31,928 2027. UM, WE HAVE BEEN IN 1654 01:00:31,928 --> 01:00:33,296 CONVERSATION WITH THE STATE'S 1655 01:00:33,296 --> 01:00:33,896 FORECASTING OFFICE AND THEIR 1656 01:00:33,896 --> 01:00:35,064 OUTLOOK FOR VEHICLE 1657 01:00:35,064 --> 01:00:36,933 REGISTRATIONS OVER THIS TIME 1658 01:00:36,933 --> 01:00:38,534 PERIOD, AND HAVE MOSTLY 1659 01:00:38,534 --> 01:00:40,069 ELIMINATED THAT BUMP IN 27 IN 1660 01:00:40,069 --> 01:00:43,606 ORDER TO, UH, BRING OURSELVES 1661 01:00:43,606 --> 01:00:44,941 OUR MODELING INTO ALIGNMENT WITH 1662 01:00:44,941 --> 01:00:49,345 THEIR OUTLOOK. UM, AND, UH, AND 1663 01:00:49,345 --> 01:00:50,780 SO THAT LEADS TO QUITE A 1664 01:00:50,780 --> 01:00:55,351 REVISION IN THE 27 FORECAST. 1665 01:00:55,351 --> 01:00:58,021 -- GOOD UH, FOR COMMERCIAL 1666 01:00:58,021 --> 01:00:58,688 PARKING TAX. UM, THERE'S A BIT 1667 01:00:58,688 --> 01:01:02,759 OF A DOWNWARD REVISION IN 2026. 1668 01:01:02,759 --> 01:01:04,460 UM, THE REASONS ARE TWOFOLD. ONE 1669 01:01:04,460 --> 01:01:07,664 IS ACTUALS ARE LAGGING FORECAST 1670 01:01:07,664 --> 01:01:10,967 JUST A LITTLE BIT. UH, THE OTHER 1671 01:01:10,967 --> 01:01:12,969 IS THAT THE OUTLOOK FOR LEISURE 1672 01:01:12,969 --> 01:01:14,070 AND HOSPITALITY, WHICH IS, UM, 1673 01:01:14,070 --> 01:01:16,706 TRYING TO CAPTURE ECONOMIC 1674 01:01:16,706 --> 01:01:18,708 ACTIVITY, ESPECIALLY DOWNTOWN, 1675 01:01:18,708 --> 01:01:21,577 UM, IS WEAKER IN 2026, 1676 01:01:21,577 --> 01:01:24,914 PRESUMABLY IN PART, AT LEAST IN 1677 01:01:24,914 --> 01:01:27,216 PART BECAUSE OF HIGHER INFLATION 1678 01:01:27,216 --> 01:01:29,318 EXPECTATIONS. BUT THAT OUTLOOK 1679 01:01:29,318 --> 01:01:30,486 DOES BOUNCE BACK IN 27 TO 28. SO 1680 01:01:30,486 --> 01:01:34,023 ON NET UM, THERE'S A $1.5 1681 01:01:34,023 --> 01:01:35,358 MILLION GAIN OVER THE THREE 1682 01:01:35,358 --> 01:01:37,527 YEARS 1683 01:01:37,527 --> 01:01:39,595 -- AND THEN THE FINAL ROW OF 1684 01:01:39,595 --> 01:01:41,664 THIS TABLE IS LABELED AUTOMATIC 1685 01:01:41,664 --> 01:01:44,367 TRAFFIC SAFETY CAMERAS. THIS, 1686 01:01:44,367 --> 01:01:45,635 UH, IS A ROW THAT ALIGNS TO THE, 1687 01:01:45,635 --> 01:01:49,338 TO THE A T C FUND. AND IT IS 1688 01:01:49,338 --> 01:01:52,175 COMPOSED OF ESSENTIALLY FIVE 1689 01:01:52,175 --> 01:01:54,544 DIFFERENT TRAFFIC CAMERA TYPES. 1690 01:01:54,544 --> 01:01:57,980 UM, THERE I WILL SPEAK TO EACH 1691 01:01:57,980 --> 01:01:58,948 YEAR INDIVIDUALLY OVERALL, 1692 01:01:58,948 --> 01:02:00,583 ACROSS THE THREE YEARS, WE HAVE 1693 01:02:00,583 --> 01:02:01,584 A FORECAST, AN INCREASE TO THE 1694 01:02:01,584 --> 01:02:04,320 FORECAST OF $21.1 MILLION. THAT 1695 01:02:04,320 --> 01:02:06,089 SEEMS LARGE. I'LL EXPLAIN THE 1696 01:02:06,089 --> 01:02:08,925 LOGIC THERE. UH, IN 2026 THAT 1697 01:02:08,925 --> 01:02:11,160 THE DROP OF $3.3 MILLION IN THE 1698 01:02:11,160 --> 01:02:15,298 FORECAST IS RELATED TO THE NEW 1699 01:02:15,298 --> 01:02:16,999 CROP OF SCHOOL ZONE CAMERAS THAT 1700 01:02:16,999 --> 01:02:18,201 ARE BEING INSTALLED THAT BEGAN 1701 01:02:18,201 --> 01:02:22,905 TO BE INSTALLED IN LATE 25 AND 1702 01:02:22,905 --> 01:02:23,506 ARE STILL BEING INSTALLED NOW 1703 01:02:23,506 --> 01:02:24,941 INTO 2026. THE EARLY RETURNS 1704 01:02:24,941 --> 01:02:26,309 FROM THAT NEW CROP OF CAMERAS, 1705 01:02:26,309 --> 01:02:27,343 WHICH ESSENTIALLY DOUBLED THE 1706 01:02:27,343 --> 01:02:29,445 SIZE OF THIS CAMERA PROGRAM, 1707 01:02:29,445 --> 01:02:30,947 WENT, UH, ESSENTIALLY A NEW 37 1708 01:02:30,947 --> 01:02:33,516 CAMERAS WENT IN TO COMPLEMENT 1709 01:02:33,516 --> 01:02:35,184 THE THE PREVIOUS STOCK OF 37. SO 1710 01:02:35,184 --> 01:02:38,154 AN EXACT DOUBLING, UM, AND THE 1711 01:02:38,154 --> 01:02:40,289 NEW CAMERAS, THE, THE CITATION 1712 01:02:40,289 --> 01:02:42,592 VOLUMES ARE UNDERPERFORMING 1713 01:02:42,592 --> 01:02:45,361 EXPECTATIONS SOMEWHAT. WE HAD 1714 01:02:45,361 --> 01:02:45,928 ANTICIPATED THEM PERFORMING 1715 01:02:45,928 --> 01:02:46,562 ABOUT AT THE AVERAGE OF THE OLD 1716 01:02:46,562 --> 01:02:47,930 STOCK. AND THEY ARE 1717 01:02:47,930 --> 01:02:49,499 UNDERPERFORMING THAT. SO SOME OF 1718 01:02:49,499 --> 01:02:52,602 THIS IS UM FORECASTING FORWARD 1719 01:02:52,602 --> 01:02:54,270 THAT LOWER REVENUE OR LOWER 1720 01:02:54,270 --> 01:02:56,672 CITATION VOLUMES. UM THE 1721 01:02:56,672 --> 01:02:58,307 INSTALLATION SCHEDULE HAS ALSO 1722 01:02:58,307 --> 01:02:58,841 BEEN PUSHED BACK A LITTLE 1723 01:02:58,841 --> 01:03:01,144 FURTHER INTO 26 RELATIVE TO WHAT 1724 01:03:01,144 --> 01:03:03,246 WE'D ANTICIPATED IN, IN THE 1725 01:03:03,246 --> 01:03:04,981 APRIL FORECAST. AND THAT ALSO 1726 01:03:04,981 --> 01:03:06,549 LEADS TO A DOWNWARD REVISION IN 1727 01:03:06,549 --> 01:03:11,220 THE 26 OUTLOOK. UM, FOR 2027 AND 1728 01:03:11,220 --> 01:03:13,055 2028, THE LARGE BUMPS WE SEE 1729 01:03:13,055 --> 01:03:16,459 HERE, UH, ARE DUE TO NEW CAMERAS 1730 01:03:16,459 --> 01:03:19,128 COMING ON THAT ARE ANTICIPATED 1731 01:03:19,128 --> 01:03:20,830 FOR ACTIVATION IN THE MIDDLE OF 1732 01:03:20,830 --> 01:03:23,232 2027. THESE CAMERAS WOULD BE 24 1733 01:03:23,232 --> 01:03:25,868 HOUR SPEED CAMERAS. UH, AND SO 1734 01:03:25,868 --> 01:03:27,069 THAT IS A NEW CAMERA TYPE FOR 1735 01:03:27,069 --> 01:03:29,872 THE CITY. UM, SO, UH, THE 1736 01:03:29,872 --> 01:03:32,074 FORECASTING IS ADMITTEDLY 1737 01:03:32,074 --> 01:03:33,743 CHALLENGING, BUT WE BELIEVE 1738 01:03:33,743 --> 01:03:37,146 THAT, UM, THOSE WILL, UM, DRIVE 1739 01:03:37,146 --> 01:03:38,881 ABOUT $9 MILLION IN REVENUE IN 1740 01:03:38,881 --> 01:03:42,418 2027. UH, AND THEN SO THE, 1741 01:03:42,418 --> 01:03:43,653 THAT'S 2027 IS ABOUT HALF A 1742 01:03:43,653 --> 01:03:44,687 YEAR OF THESE NEW SPEED CAMERAS. 1743 01:03:44,687 --> 01:03:46,389 28 IS A FULL YEAR OF THOSE SPEED 1744 01:03:46,389 --> 01:03:48,324 CAMERAS. AND THAT'S WHAT'S 1745 01:03:48,324 --> 01:03:48,958 DRIVING THESE REVISIONS UPWARD 1746 01:03:48,958 --> 01:03:51,027 IN THOSE YEARS. 1747 01:03:51,027 --> 01:03:54,197 -- ALL RIGHT. AND THEN THERE'S 1748 01:03:54,197 --> 01:03:55,331 THAT ROW ALMOST ALL THE WAY AT 1749 01:03:55,331 --> 01:03:58,434 THE BOTTOM, ESSENTIALLY ADDING 1750 01:03:58,434 --> 01:03:59,569 UP ALL THE REVENUES FROM THE 1751 01:03:59,569 --> 01:04:01,170 GENERAL FUND, PLUS ALL THE NON 1752 01:04:01,170 --> 01:04:03,172 GENERAL FUND REVENUES AND 1753 01:04:03,172 --> 01:04:06,242 SHOWING THE CHANGE, OVERALL 1754 01:04:06,242 --> 01:04:08,711 CHANGE IN THE FORECAST BETWEEN 1755 01:04:08,711 --> 01:04:11,047 APRIL AND AUGUST, THE THREE YEAR 1756 01:04:11,047 --> 01:04:12,381 DIFFERENCE IS 116 MILLION. 1757 01:04:12,381 --> 01:04:14,350 AGAIN, QUITE A LOT OF MONEY. BUT 1758 01:04:14,350 --> 01:04:17,620 RELATIVE TO THE OVERALL SIZE UH 1759 01:04:17,620 --> 01:04:22,325 IT'S LESS THAN 1.5%. SO NOT NOT 1760 01:04:22,325 --> 01:04:24,594 PARTICULARLY BIG REVISION HERE. 1761 01:04:24,594 --> 01:04:28,231 UM, AGAIN, THE MAIN, UH, CHANGE, 1762 01:04:28,231 --> 01:04:29,832 THE BIGGEST JUMP HERE IS IN 1763 01:04:29,832 --> 01:04:32,435 2026, WHERE THE YEAR OVER YEAR 1764 01:04:32,435 --> 01:04:36,639 GROWTH IS 7.3%. IT DROPS TO 2.2 1765 01:04:36,639 --> 01:04:38,941 IN THE FOLLOWING YEAR AND 4.1 1766 01:04:38,941 --> 01:04:42,011 THE ONE AFTER 1767 01:04:42,011 --> 01:04:43,479 -- UH, BEFORE YOU MOVE ON, IF 1768 01:04:43,479 --> 01:04:44,313 YOU COULD, UH, COLLEAGUES, DO 1769 01:04:44,313 --> 01:04:49,051 YOU HAVE QUESTIONS ON THIS SLIDE 1770 01:04:49,051 --> 01:04:50,553 I HAVE A FEW. SO I'LL JUST AS WE 1771 01:04:50,553 --> 01:04:52,955 WERE TALKING A LITTLE BIT MORE 1772 01:04:52,955 --> 01:04:54,690 ABOUT MUDDLING THROUGH WHAT I'M 1773 01:04:54,690 --> 01:04:56,525 GOING TO CALL A STAGNANT ECONOMY 1774 01:04:56,525 --> 01:04:58,461 HERE IN THE CITY OF SEATTLE OVER 1775 01:04:58,461 --> 01:05:00,463 THE LAST YEAR OR TWO, WE'VE BEEN 1776 01:05:00,463 --> 01:05:01,130 HAVING THIS CONVERSATION OF, ARE 1777 01:05:01,130 --> 01:05:04,433 WE GROWING? ARE WE RECEDING? ARE 1778 01:05:04,433 --> 01:05:06,535 WE STAGNANT? I KNOW THAT 1779 01:05:06,535 --> 01:05:07,670 RECESSIONS ARE A TECHNICAL TERM 1780 01:05:07,670 --> 01:05:08,971 THAT ARE LARGER THAN ANY ONE 1781 01:05:08,971 --> 01:05:10,640 CITY, WHICH IS WHY WE SAW IN THE 1782 01:05:10,640 --> 01:05:13,809 1980s, ABERDEEN HAD A LOCAL 1783 01:05:13,809 --> 01:05:14,410 RECESSION WITHIN THEIR 1784 01:05:14,410 --> 01:05:15,745 COMMUNITY, WHILE THE REST OF THE 1785 01:05:15,745 --> 01:05:16,712 STATE AND THE REST OF THE NATION 1786 01:05:16,712 --> 01:05:19,415 DID VERY WELL ECONOMICALLY. AS 1787 01:05:19,415 --> 01:05:22,585 ONE OF MY TELLTALES. AND THANK 1788 01:05:22,585 --> 01:05:23,352 YOU, DWIGHT, FOR TALKING TO ME 1789 01:05:23,352 --> 01:05:25,554 ABOUT THIS YESTERDAY, ABOUT OUR 1790 01:05:25,554 --> 01:05:28,057 REIT FUNDING RATE IS ALWAYS A 1791 01:05:28,057 --> 01:05:31,661 TELLTALE OF HOW IS OUR ECONOMY 1792 01:05:31,661 --> 01:05:36,232 GOING. AND SO I'M SEEING IN OUR 1793 01:05:36,232 --> 01:05:36,666 PAST YEARS IN THESE 1794 01:05:36,666 --> 01:05:38,834 CONVERSATIONS, A SITTING, 1795 01:05:38,834 --> 01:05:40,803 STAGNANT LAST REVENUE FORECAST, 1796 01:05:40,803 --> 01:05:41,404 REACH STARTED DIPPING FOR THE 1797 01:05:41,404 --> 01:05:45,608 FIRST TIME SINCE 2020. AND NOW 1798 01:05:45,608 --> 01:05:46,409 WE'RE SEEING THE JOBS LEAVING 1799 01:05:46,409 --> 01:05:49,045 THE CITY. AND OUR REACH SLOWING. 1800 01:05:49,045 --> 01:05:51,414 THE ONLY SALES TAX THAT WE'RE 1801 01:05:51,414 --> 01:05:53,983 GAINING IS FROM LAW CHANGES, NOT 1802 01:05:53,983 --> 01:05:54,917 ACTIVITY. IS THIS WHAT YOU'RE 1803 01:05:54,917 --> 01:05:57,086 SEEING, OR SHOULD WE BE MORE 1804 01:05:57,086 --> 01:05:59,322 CONCERNED ABOUT A LOCALIZED. I 1805 01:05:59,322 --> 01:06:01,123 DON'T THINK WE'RE ALLOWED TO 1806 01:06:01,123 --> 01:06:03,759 TECHNICALLY CALL IT A RECESSION, 1807 01:06:03,759 --> 01:06:04,360 BUT A LOCALIZED STAGNATION IN 1808 01:06:04,360 --> 01:06:06,829 OUR ECONOMY, MORE SO TODAY THAN 1809 01:06:06,829 --> 01:06:09,498 WE HAVE IN THE PAST 1810 01:06:09,498 --> 01:06:11,233 -- UM, SO WHEN IT COMES TO THE 1811 01:06:11,233 --> 01:06:13,336 REVISIONS TO THE RATE, LET ME 1812 01:06:13,336 --> 01:06:14,804 ADDRESS THAT. AND THERE WAS 1813 01:06:14,804 --> 01:06:16,672 ESSENTIALLY A ROW OF DOWNWARD 1814 01:06:16,672 --> 01:06:18,941 REVISIONS IN RATE. UH, LOOKING 1815 01:06:18,941 --> 01:06:22,445 BACK AT LAST YEAR, ESSENTIALLY 1816 01:06:22,445 --> 01:06:24,113 IT'S UH, EVERY FORECAST HAS 1817 01:06:24,113 --> 01:06:26,082 BEEN DOWNWARD REVISION. UM, NOT 1818 01:06:26,082 --> 01:06:28,985 JUST IN SEATTLE, SIMILAR SORT OF 1819 01:06:28,985 --> 01:06:30,886 THINGS HAVE, UM, OCCURRED AT 1820 01:06:30,886 --> 01:06:31,821 KING COUNTY LEVEL. THE RATE 1821 01:06:31,821 --> 01:06:33,556 FORECASTS HAVE, HAVE BEEN 1822 01:06:33,556 --> 01:06:35,958 ESSENTIALLY REVISED DOWN, UM, 1823 01:06:35,958 --> 01:06:38,294 STARTING FROM, FROM APRIL 2025. 1824 01:06:38,294 --> 01:06:40,229 AND THERE WERE ALL THESE CHANGES 1825 01:06:40,229 --> 01:06:42,732 THAT INCREASED THE UNCERTAINTY 1826 01:06:42,732 --> 01:06:44,800 COUPLED WITH THE CHANGES IN THE 1827 01:06:44,800 --> 01:06:47,303 TECH SECTOR AND THE LOCAL 1828 01:06:47,303 --> 01:06:52,508 ECONOMY. UM, IS NOT IN A 1829 01:06:52,508 --> 01:06:54,310 PARTICULARLY STRONG PLACE THERE 1830 01:06:54,310 --> 01:06:56,479 RECESSION IS AGAIN, TECHNICAL 1831 01:06:56,479 --> 01:06:58,381 TERMS, AS YOU SAID, WE WOULD 1832 01:06:58,381 --> 01:07:02,318 REQUIRE, UM, A BROAD SET OF 1833 01:07:02,318 --> 01:07:02,952 INDICATORS, NOT JUST EMPLOYMENT, 1834 01:07:02,952 --> 01:07:06,589 BUT ALSO LOOKING AT INCOMES, 1835 01:07:06,589 --> 01:07:09,558 LOOKING AT WAGE GROWTH, AND THEN 1836 01:07:09,558 --> 01:07:11,827 OBSERVING THOSE, UH, CLOSELY, 1837 01:07:11,827 --> 01:07:14,463 HOW MUCH OF A DECLINE THERE IS 1838 01:07:14,463 --> 01:07:16,399 IN INDIVIDUAL ONES, HOW BROAD 1839 01:07:16,399 --> 01:07:17,533 BASED THOSE DECLINES ARE WHEN IT 1840 01:07:17,533 --> 01:07:20,536 COMES TO EMPLOYMENT, HOW LONG 1841 01:07:20,536 --> 01:07:22,104 THEY ARE LASTING. AND SO THE 1842 01:07:22,104 --> 01:07:24,774 YEAR OVER YEAR CHANGE IN THE AT 1843 01:07:24,774 --> 01:07:26,442 THE REGIONAL LEVEL FOR 1844 01:07:26,442 --> 01:07:27,943 EMPLOYMENT IS RELATIVELY SMALL. 1845 01:07:27,943 --> 01:07:29,445 IT'S LESS THAN A HALF PERCENT. 1846 01:07:29,445 --> 01:07:30,813 BUT THE CONCERNING THING IS 1847 01:07:30,813 --> 01:07:32,515 DEFINITELY THAT, UH, RECENT 1848 01:07:32,515 --> 01:07:34,150 RELEASE BY PUGET SOUND REGIONAL 1849 01:07:34,150 --> 01:07:37,420 COUNCIL, WHICH IS DATED FOR 1850 01:07:37,420 --> 01:07:38,487 MARCH 2025. BUT THERE ARE 1851 01:07:38,487 --> 01:07:39,688 REASONS TO BELIEVE THAT THE TECH 1852 01:07:39,688 --> 01:07:41,123 SECTOR, WITH THOSE ADDITIONAL 1853 01:07:41,123 --> 01:07:42,792 LAYOFFS THAT HAVE BEEN 1854 01:07:42,792 --> 01:07:44,427 ANNOUNCED, THAT SECTOR IS GOING 1855 01:07:44,427 --> 01:07:46,462 TO HAVE A TOUGH TIMES IN IN THE 1856 01:07:46,462 --> 01:07:47,630 COMING YEARS. AND SO THAT'S 1857 01:07:47,630 --> 01:07:50,132 DRAGGING THE LOCAL ECONOMY. 1858 01:07:50,132 --> 01:07:52,268 -- SO WE'LL STAY TUNED, WE'LL 1859 01:07:52,268 --> 01:07:54,270 STAY ATTENTIVE, AND WE WANT TO 1860 01:07:54,270 --> 01:07:54,904 MAKE SURE THAT WE'RE AHEAD OF 1861 01:07:54,904 --> 01:07:55,604 ANY. AND THIS IS THE IMPORTANCE 1862 01:07:55,604 --> 01:07:58,274 OF. LAST YEAR, WE ADDED MORE 1863 01:07:58,274 --> 01:07:59,975 FUNDS TO OUR RESERVE ACCOUNTS. 1864 01:07:59,975 --> 01:08:01,677 WE ADDED, UM, YOU KNOW, MORE 1865 01:08:01,677 --> 01:08:03,546 FUNDS TO HOLDING BACK FOR 1866 01:08:03,546 --> 01:08:04,513 CONTINUUM OF CARE PROBLEMS THAT 1867 01:08:04,513 --> 01:08:06,549 WE MIGHT SEE. WE HELD FUNDS BACK 1868 01:08:06,549 --> 01:08:09,318 FOR FEDERAL RESPONSE. LAST 1869 01:08:09,318 --> 01:08:11,787 YEAR'S BUDGET WAS IN FACT, MORE 1870 01:08:11,787 --> 01:08:12,822 PRUDENT THAN IN PAST YEARS IN 1871 01:08:12,822 --> 01:08:14,490 THE SENSE THAT WE WERE HOLDING 1872 01:08:14,490 --> 01:08:16,192 MONEY BACK IN A WAY THAT WE 1873 01:08:16,192 --> 01:08:17,393 HADN'T BEFORE. AND PART OF THAT 1874 01:08:17,393 --> 01:08:18,360 WAS THE WORK THAT YOU PRESENT TO 1875 01:08:18,360 --> 01:08:20,830 US, DIRECTOR. SO I APPRECIATE 1876 01:08:20,830 --> 01:08:22,198 THAT. ONE OF THE QUESTIONS I 1877 01:08:22,198 --> 01:08:25,067 HAVE AND ADDITIONAL QUESTIONS 1878 01:08:25,067 --> 01:08:25,701 YOU'RE NOTING THAT EMPLOYMENT 1879 01:08:25,701 --> 01:08:29,505 FIGURES ARE DOWN, BUT JUMP START 1880 01:08:29,505 --> 01:08:29,738 IS UP. 1881 01:08:29,738 --> 01:08:31,307 -- MHM. 1882 01:08:31,307 --> 01:08:31,941 -- HOW'D THAT HAPPEN? 1883 01:08:31,941 --> 01:08:34,643 -- YEAH. SO I'LL THAT'S WHAT 1884 01:08:34,643 --> 01:08:35,377 THIS SLIDE. 1885 01:08:35,377 --> 01:08:36,178 -- IF YOU'VE GOT SLIDES THERE, 1886 01:08:36,178 --> 01:08:38,247 LET ME LET ME JUST ASK LAST 1887 01:08:38,247 --> 01:08:40,416 QUESTION FOR JOE. WE'VE RETIRED 1888 01:08:40,416 --> 01:08:43,085 PARKING METERS. BUT NOW BEGUN 1889 01:08:43,085 --> 01:08:45,788 OUR AUTOMATIC TRAFFIC SAFETY 1890 01:08:45,788 --> 01:08:47,756 CAMERAS. SO WITH ONE WITH ONE 1891 01:08:47,756 --> 01:08:50,793 BEING COMPLETE, LET'S START A 1892 01:08:50,793 --> 01:08:52,528 NEW JOURNEY. I APPRECIATE, UH, 1893 01:08:52,528 --> 01:08:53,896 YOUR ANALYSIS HERE BECAUSE IT 1894 01:08:53,896 --> 01:08:55,931 TRACKS WITH WHAT I'VE 1895 01:08:55,931 --> 01:08:56,532 EXPERIENCED WITH THE SEATTLE 1896 01:08:56,532 --> 01:08:58,100 DEPARTMENT OF TRANSPORTATION, 1897 01:08:58,100 --> 01:08:59,969 WHERE IT WAS, I BELIEVE TWO 1898 01:08:59,969 --> 01:09:03,172 YEARS AGO THAT WE STARTED 1899 01:09:03,172 --> 01:09:04,874 FUNDING NOT ONLY SCHOOL ZONE 1900 01:09:04,874 --> 01:09:05,508 CAMERAS, BUT ALSO THE ABILITY TO 1901 01:09:05,508 --> 01:09:10,045 DO SPEED CAMERAS. IT HAS BEEN, 1902 01:09:10,045 --> 01:09:11,213 UM, THE MOST POLITE WAY I CAN 1903 01:09:11,213 --> 01:09:13,916 PUT IT IS DIFFICULT TO GET THEM 1904 01:09:13,916 --> 01:09:15,784 TO DEPLOY THESE CAMERAS. THERE 1905 01:09:15,784 --> 01:09:17,653 ARE A NUMBER OF PLACES, AT LEAST 1906 01:09:17,653 --> 01:09:19,955 IN MY DISTRICT, WHERE RESIDENTS 1907 01:09:19,955 --> 01:09:21,657 HAVE HAD CARS HITTING BUILDINGS 1908 01:09:21,657 --> 01:09:25,761 BECAUSE OF THEIR EXCESSIVE 1909 01:09:25,761 --> 01:09:26,562 SPEED. UM, WE HAVE, I MEAN, 1910 01:09:26,562 --> 01:09:28,163 IT'S JUST IT IS A DANGEROUS 1911 01:09:28,163 --> 01:09:29,865 SITUATION OUT THERE. OFTENTIMES, 1912 01:09:29,865 --> 01:09:31,767 SDOT RESPONSE IS SPEED HUMPS. 1913 01:09:31,767 --> 01:09:36,906 UM, BUT WHAT WE FIND IS THAT A 1914 01:09:36,906 --> 01:09:39,341 AUTOMATIC TRAFFIC SAFETY CAMERA, 1915 01:09:39,341 --> 01:09:41,410 NINE OUT OF TEN PEOPLE NEVER GET 1916 01:09:41,410 --> 01:09:43,512 A SECOND TICKET. AND SO IT IS A 1917 01:09:43,512 --> 01:09:47,182 MORE EFFECTIVE TOOL TO REDUCE 1918 01:09:47,182 --> 01:09:48,684 SPEEDING THAN SPEED HUMPS. 1919 01:09:48,684 --> 01:09:51,687 BECAUSE IF YOU HAVE A BIG TRUCK, 1920 01:09:51,687 --> 01:09:53,522 YOU CAN JUST DRIVE FAST. BUT 1921 01:09:53,522 --> 01:09:57,159 THAT CAMERA IS NEVER GOING TO 1922 01:09:57,159 --> 01:09:58,260 YOU CAN'T DRIVE, CAN'T ELUDE 1923 01:09:58,260 --> 01:09:59,562 THAT CAMERA. SO I JUST I'M 1924 01:09:59,562 --> 01:10:00,696 NOTING THIS. I DON'T NEED A 1925 01:10:00,696 --> 01:10:04,867 RESPONSE FROM YOU TODAY, BUT IT 1926 01:10:04,867 --> 01:10:05,501 ALIGNS WITH THE POLICY PROBLEMS 1927 01:10:05,501 --> 01:10:07,136 THAT I'VE BEEN SEEING WITHIN THE 1928 01:10:07,136 --> 01:10:10,072 DEPARTMENT OF GETTING THESE 1929 01:10:10,072 --> 01:10:10,706 CAMERAS DEPLOYED ON THE SCHEDULE 1930 01:10:10,706 --> 01:10:11,807 IN WHICH WE ASKED THEM TO. AND 1931 01:10:11,807 --> 01:10:15,010 SO I JUST APPRECIATE THE FACT 1932 01:10:15,010 --> 01:10:16,946 THAT YOU ARE PROVIDING US AN 1933 01:10:16,946 --> 01:10:18,981 ACCURATE ANALYSIS OF WHAT THOSE 1934 01:10:18,981 --> 01:10:21,750 POLICY CHOICES HAVE HAD AN 1935 01:10:21,750 --> 01:10:23,252 IMPACT ON OUR BUDGET. THANK YOU. 1936 01:10:23,252 --> 01:10:24,453 SO NOW WE'LL JUST START TALKING 1937 01:10:24,453 --> 01:10:26,555 ABOUT THIS EVERY TIME WE MEET. 1938 01:10:26,555 --> 01:10:27,856 -- YEAH, YEAH. TO BE CLEAR TO 1939 01:10:27,856 --> 01:10:29,425 THE PUBLIC PARKING METERS STILL 1940 01:10:29,425 --> 01:10:32,795 EXIST. UH, YES. YES. A NEW 1941 01:10:32,795 --> 01:10:33,395 CHALLENGE IN FORECASTING FOR 1942 01:10:33,395 --> 01:10:35,030 SURE. 1943 01:10:35,030 --> 01:10:35,631 -- THANK YOU COLLEAGUES. ANY 1944 01:10:35,631 --> 01:10:36,899 OTHER QUESTIONS ON THIS SLIDE, 1945 01:10:36,899 --> 01:10:38,267 DIRECTOR DORIS, DO YOU WANT TO 1946 01:10:38,267 --> 01:10:40,102 COME BACK TO TELLING US HOW JOBS 1947 01:10:40,102 --> 01:10:42,738 ARE DOWN. BUT JUMP STARTS UP. 1948 01:10:42,738 --> 01:10:43,205 HOW'D THAT HAPPEN? 1949 01:10:43,205 --> 01:10:46,342 -- YEAH. UM, SO SOME OF THOSE 1950 01:10:46,342 --> 01:10:46,976 LAYOFFS WERE ALREADY ANNOUNCED 1951 01:10:46,976 --> 01:10:48,277 BEFORE THE APRIL FORECAST WAS 1952 01:10:48,277 --> 01:10:50,379 PREPARED AND THEY WERE BUILT 1953 01:10:50,379 --> 01:10:52,948 INTO THE APRIL FORECAST. UM, 1954 01:10:52,948 --> 01:10:54,183 THERE HAVE BEEN SOME ADDITIONAL 1955 01:10:54,183 --> 01:10:56,552 LAYOFF ANNOUNCEMENTS SINCE THEN, 1956 01:10:56,552 --> 01:10:58,454 BUT THE BRUNT WAS ALREADY BAKED 1957 01:10:58,454 --> 01:11:04,159 IN IN APRIL. THE MAIN DRIVER FOR 1958 01:11:04,159 --> 01:11:04,793 THE REVISION HERE IS THE CHANGE 1959 01:11:04,793 --> 01:11:08,230 IN THE OUTLOOK FOR STOCK PRICES. 1960 01:11:08,230 --> 01:11:09,598 AGAIN, WE HAVE REASONS TO 1961 01:11:09,598 --> 01:11:11,900 BELIEVE BASED ON OUR ANALYSIS OF 1962 01:11:11,900 --> 01:11:15,938 PAST COLLECTION DATA. UM THAT 1963 01:11:15,938 --> 01:11:17,573 THAT'S AN IMPORTANT FACTOR 1964 01:11:17,573 --> 01:11:20,042 HERE. THE CHART HERE SHOWS UH, 1965 01:11:20,042 --> 01:11:21,777 FOR ILLUSTRATIVE PURPOSES A SET 1966 01:11:21,777 --> 01:11:24,279 SET OF COMPANIES, NOT 1967 01:11:24,279 --> 01:11:26,582 NECESSARILY OPERATING IN 1968 01:11:26,582 --> 01:11:27,816 SEATTLE, BUT SOME OF THEM ARE IN 1969 01:11:27,816 --> 01:11:31,553 THE BROADER REGION. SOME OF THEM 1970 01:11:31,553 --> 01:11:32,688 ARE JUST MAJOR COMPANIES IN THE 1971 01:11:32,688 --> 01:11:34,223 TECH SECTOR. AND AGAIN, IT'S A 1972 01:11:34,223 --> 01:11:36,892 TECH SECTOR, AN AI BUILD OUT 1973 01:11:36,892 --> 01:11:38,394 THAT'S DRIVING A LOT OF THAT 1974 01:11:38,394 --> 01:11:41,530 GROWTH THAT WE ARE SEEING IN IN 1975 01:11:41,530 --> 01:11:45,834 STOCK MARKET. UM, SO THE CHART 1976 01:11:45,834 --> 01:11:47,102 SHOWS THE ANTICIPATED YEAR OVER 1977 01:11:47,102 --> 01:11:49,571 YEAR CHANGE IN THE STOCK PRICE 1978 01:11:49,571 --> 01:11:53,709 OF, OF THOSE OF STOCK PRICE OF 1979 01:11:53,709 --> 01:11:55,778 THOSE INDIVIDUAL COMPANIES. THE 1980 01:11:55,778 --> 01:11:58,714 GRAY DOTS, UM, ARE THE ESTIMATE 1981 01:11:58,714 --> 01:12:02,584 BACK IN, IN APRIL, THE BLUE DOTS 1982 01:12:02,584 --> 01:12:04,386 ARE THE CURRENT ESTIMATES AND 1983 01:12:04,386 --> 01:12:07,690 THEY ARE COMING FROM WALL STREET 1984 01:12:07,690 --> 01:12:11,193 ANALYSTS. WE'RE COMPILING THEM 1985 01:12:11,193 --> 01:12:15,230 ON AND USING THEM AS AN INPUT IN 1986 01:12:15,230 --> 01:12:17,466 THE FORECAST. UM, AND IF YOU 1987 01:12:17,466 --> 01:12:19,501 COMPARE WHERE THOSE GRAY DOTS 1988 01:12:19,501 --> 01:12:20,602 ARE AND WHERE THE BLUE DOTS ARE 1989 01:12:20,602 --> 01:12:24,139 IN GENERAL, THE OUTLOOK IS MORE 1990 01:12:24,139 --> 01:12:25,941 POSITIVE. THOSE BLUE DOTS ARE TO 1991 01:12:25,941 --> 01:12:28,210 THE RIGHT IN GENERAL FROM FROM 1992 01:12:28,210 --> 01:12:29,712 THE GRAY DOTS. SO AS A FIRST 1993 01:12:29,712 --> 01:12:32,915 CHART SHOW, THE FINANCIAL 1994 01:12:32,915 --> 01:12:36,485 MARKET, UH, HAS ESSENTIALLY 1995 01:12:36,485 --> 01:12:39,154 RECOVERED SINCE SINCE APRIL. 1996 01:12:39,154 --> 01:12:41,156 AFTER THAT INITIAL DOWNWARD, UH, 1997 01:12:41,156 --> 01:12:42,658 UM, AND AFTER THAT INITIAL DROP 1998 01:12:42,658 --> 01:12:45,928 IN STOCK PRICES AND THE INITIAL 1999 01:12:45,928 --> 01:12:48,363 MORE NEGATIVE OUTLOOK DUE TO THE 2000 01:12:48,363 --> 01:12:50,999 IRAQ WAR, THERE IS STILL A 2001 01:12:50,999 --> 01:12:52,468 CONSIDERABLE AMOUNT OF 2002 01:12:52,468 --> 01:12:54,269 UNCERTAINTY. SO THAT THE SECOND 2003 01:12:54,269 --> 01:12:56,138 THING THIS CHART SHOWS THE LINE 2004 01:12:56,138 --> 01:12:57,840 FROM THE LEFT TO THE RIGHT. THEY 2005 01:12:57,840 --> 01:13:00,576 SPREAD FROM THE LOW TO THE HIGH 2006 01:13:00,576 --> 01:13:02,177 ESTIMATE FOR THE STOCK PRICE 2007 01:13:02,177 --> 01:13:05,114 CHANGE. IN THAT SURVEY OF OF 2008 01:13:05,114 --> 01:13:07,983 THOSE ANALYSTS, UM, NOW AGAIN WE 2009 01:13:07,983 --> 01:13:10,452 ARE USING THAT AS, AS A MAIN ONE 2010 01:13:10,452 --> 01:13:12,554 OF THE MAIN INPUTS INTO THE 2011 01:13:12,554 --> 01:13:14,790 FORECAST. IN ADDITION TO THE 2012 01:13:14,790 --> 01:13:16,725 CHANGES IN THE EMPLOYMENT. SO 2013 01:13:16,725 --> 01:13:18,494 THOSE ARE TWO MAIN COMPONENTS 2014 01:13:18,494 --> 01:13:22,731 NOW. BUT AGAIN, THE CHANGES IN 2015 01:13:22,731 --> 01:13:23,432 THE LAYOFF ANNOUNCEMENTS ARE 2016 01:13:23,432 --> 01:13:25,801 RELATIVELY SMALL. THEY ARE 2017 01:13:25,801 --> 01:13:27,770 EXPECTED. THEY WERE ALREADY 2018 01:13:27,770 --> 01:13:28,871 EXPECTED IN THE APRIL FORECAST. 2019 01:13:28,871 --> 01:13:29,905 UH, THE FINAL THING THAT WE 2020 01:13:29,905 --> 01:13:33,275 COULD, UH, USE, BUT IT'S LESS 2021 01:13:33,275 --> 01:13:34,977 INFORMATIVE ARE THE YEAR TO DATE 2022 01:13:34,977 --> 01:13:35,577 COLLECTION IN PAYROLL EXPENSE 2023 01:13:35,577 --> 01:13:38,547 TAX REVENUES. GIVEN THE WAY HOW 2024 01:13:38,547 --> 01:13:41,784 THIS TAX IS IMPOSED, IT'S BASED 2025 01:13:41,784 --> 01:13:44,052 ON ANNUAL COMPENSATIONS, ANNUAL 2026 01:13:44,052 --> 01:13:46,789 PAYROLLS. UM, THOSE QUARTERLY 2027 01:13:46,789 --> 01:13:48,624 PAYMENTS ARE ONLY ESTIMATES AND 2028 01:13:48,624 --> 01:13:50,692 IN GENERAL TEND TO BE 25% OF THE 2029 01:13:50,692 --> 01:13:52,728 PREVIOUS YEAR'S TOTAL 2030 01:13:52,728 --> 01:13:54,496 OBLIGATION. SO THEY DON'T REALLY 2031 01:13:54,496 --> 01:13:57,900 PROVIDE MUCH OF AN INSIGHT. UH, 2032 01:13:57,900 --> 01:13:59,101 COMPANIES IN, IN GENERAL FOLLOW 2033 01:13:59,101 --> 01:14:00,569 THAT RULE UNLESS THEY HAVE 2034 01:14:00,569 --> 01:14:01,670 STRONG REASONS TO BELIEVE THAT 2035 01:14:01,670 --> 01:14:03,572 THAT WOULD LEAD THEM TO OVERPAY. 2036 01:14:03,572 --> 01:14:04,706 AND THEN THEY, THEY WOULD PAY 2037 01:14:04,706 --> 01:14:08,010 LESS FOR, FOR PARTICULAR, UM, 2038 01:14:08,010 --> 01:14:12,247 FOR PARTICULAR QUARTER. UM, SO 2039 01:14:12,247 --> 01:14:14,483 YEAH, THERE ARE THESE TWO 2040 01:14:14,483 --> 01:14:16,785 EFFECTS LAYOFFS IN TECH SECTOR 2041 01:14:16,785 --> 01:14:19,254 OVERALL. UM, UM, MORE NEGATIVE 2042 01:14:19,254 --> 01:14:21,957 OUTLOOK FOR, FOR EMPLOYMENT, BUT 2043 01:14:21,957 --> 01:14:24,760 A BETTER OUTLOOK FOR 2044 01:14:24,760 --> 01:14:27,162 COMPENSATION PER EMPLOYEE 2045 01:14:27,162 --> 01:14:27,696 AVERAGE COMPENSATION PER 2046 01:14:27,696 --> 01:14:28,764 EMPLOYEE BASED ON, UH, THE 2047 01:14:28,764 --> 01:14:30,399 RESTRICTED STOCK UNITS AND THEIR 2048 01:14:30,399 --> 01:14:34,203 IMPACT ON, ON WAGES. SO, UM, 2049 01:14:34,203 --> 01:14:38,073 THAT'S ALSO DRIVING THE CHANGES 2050 01:14:38,073 --> 01:14:42,311 IN 2027, EVEN MORE GROWTH IS 2051 01:14:42,311 --> 01:14:44,947 EXPECTED IN, IN THE STOCK 2052 01:14:44,947 --> 01:14:48,250 PRICES. UH, THE RED DOTS NOW ARE 2053 01:14:48,250 --> 01:14:51,954 SHOWING THE AVERAGE, UH, FOR THE 2054 01:14:51,954 --> 01:14:53,789 STOCK PRICE CHANGE FOR THOSE 2055 01:14:53,789 --> 01:14:55,591 COMPANIES. AND THE LINE AGAIN, 2056 01:14:55,591 --> 01:14:57,526 SPREADS FROM THE LOW ESTIMATE TO 2057 01:14:57,526 --> 01:14:58,293 THE HIGH ESTIMATE. AND YOU CAN 2058 01:14:58,293 --> 01:15:00,796 SEE THAT THE AMOUNT OF 2059 01:15:00,796 --> 01:15:03,165 UNCERTAINTY IS REALLY JUST VAST. 2060 01:15:03,165 --> 01:15:05,834 UH, SO THAT MEANS THAT 2061 01:15:05,834 --> 01:15:08,403 INHERENTLY THAT, UH, THAT 2062 01:15:08,403 --> 01:15:09,972 REVENUE STREAM, UH, IS QUITE 2063 01:15:09,972 --> 01:15:14,209 HARD TO, TO PREDICT. UH, WE HAVE 2064 01:15:14,209 --> 01:15:16,478 SEEN YEARS WHERE IT HAS 2065 01:15:16,478 --> 01:15:17,613 OVERPERFORMED OUR EXPECTATIONS. 2066 01:15:17,613 --> 01:15:21,083 WE HAVE SEEN A YEAR WHERE IT HAS 2067 01:15:21,083 --> 01:15:21,717 SIGNIFICANTLY UNDERPERFORMED OUR 2068 01:15:21,717 --> 01:15:25,687 EXPECTATION. UM, THAT, UH, ALSO 2069 01:15:25,687 --> 01:15:28,156 TIES BACK TO THAT CHART SHOWING 2070 01:15:28,156 --> 01:15:29,358 THE YEAR OVER CHANGES, YEAR OVER 2071 01:15:29,358 --> 01:15:31,193 YEAR CHANGES IN TOTAL 2072 01:15:31,193 --> 01:15:35,664 EMPLOYMENT. UM, BACK IN 2024 OR 2073 01:15:35,664 --> 01:15:36,732 THE PAYROLL EXPENSE TAX REVENUES 2074 01:15:36,732 --> 01:15:38,734 FOR YEAR 2024 GREW YEAR OVER 2075 01:15:38,734 --> 01:15:41,036 YEAR, BUT CAME IN SIGNIFICANTLY 2076 01:15:41,036 --> 01:15:46,174 BELOW OUR EXPECTATIONS AND OUR 2077 01:15:46,174 --> 01:15:48,644 INITIAL ASSESSMENT WAS THAT THAT 2078 01:15:48,644 --> 01:15:51,813 WAS BECAUSE THE JOB GROWTH, UH, 2079 01:15:51,813 --> 01:15:56,718 HAS OCCURRED IN KING COUNTY, BUT 2080 01:15:56,718 --> 01:15:58,987 NOT REALLY IN SEATTLE. AND 2081 01:15:58,987 --> 01:15:59,655 THAT'S CONSISTENT WITH WHAT WE 2082 01:15:59,655 --> 01:16:01,023 ARE SEEING IN THIS RECENT 2083 01:16:01,023 --> 01:16:02,858 RELEASE OF EMPLOYMENT DATA BY 2084 01:16:02,858 --> 01:16:05,360 PUGET SOUND REGIONAL COUNCIL. SO 2085 01:16:05,360 --> 01:16:08,864 THAT'S THE EMPLOYMENT DATA IS 2086 01:16:08,864 --> 01:16:10,599 NOW A NEW SOURCE THAT WE ARE WE 2087 01:16:10,599 --> 01:16:14,069 HAVE STARTED INCORPORATING INTO 2088 01:16:14,069 --> 01:16:16,271 INTO THE FORECAST TO ACCOUNT FOR 2089 01:16:16,271 --> 01:16:19,441 THE IMPACT OF LAYOFFS AND 2090 01:16:19,441 --> 01:16:22,477 OVERALL CHANGES IN IN EMPLOYMENT 2091 01:16:22,477 --> 01:16:25,380 AMONG THOSE TAXPAYERS THAT ARE 2092 01:16:25,380 --> 01:16:30,052 PAYING THIS TAX. UM, AGAIN, THE 2093 01:16:30,052 --> 01:16:31,453 THERE, THERE IS INHERENTLY A LOT 2094 01:16:31,453 --> 01:16:36,458 OF UNCERTAINTY GIVEN LOTS OF 2095 01:16:36,458 --> 01:16:37,092 LIMITATIONS REGARDING THE DATA 2096 01:16:37,092 --> 01:16:39,795 AND THE UNDERLYING FACTORS 2097 01:16:39,795 --> 01:16:44,566 DRIVING THAT REVENUE STREAM UM, 2098 01:16:44,566 --> 01:16:46,268 SO UNLESS THERE IS ANY OTHER 2099 01:16:46,268 --> 01:16:48,136 QUESTIONS, WE CAN MOVE TO THE 2100 01:16:48,136 --> 01:16:50,706 PESSIMISTIC FORECAST. UH, 2101 01:16:50,706 --> 01:16:52,074 -- SORRY JOHN. SO I GUESS THE 2102 01:16:52,074 --> 01:16:54,176 QUESTION THERE IS WE HAVE FEWER 2103 01:16:54,176 --> 01:16:55,744 EMPLOYEES, BUT THEY HAVE A 2104 01:16:55,744 --> 01:16:57,713 HIGHER NET WORTH. IS THAT THE 2105 01:16:57,713 --> 01:16:59,414 ANSWER TO THE QUESTION ABOUT. 2106 01:16:59,414 --> 01:17:03,952 -- THE CHANGES? SO THERE IS A 2107 01:17:03,952 --> 01:17:08,890 YEAR OVER YEAR DECLINE FOR 2108 01:17:08,890 --> 01:17:09,524 PAYROLL EXPENSE TAX FROM 406 TO 2109 01:17:09,524 --> 01:17:12,094 394 YEAR OVER YEAR. UM, THAT, 2110 01:17:12,094 --> 01:17:14,496 UH, AGAIN, BECAUSE THERE ARE 2111 01:17:14,496 --> 01:17:15,897 LAYOFFS EXPECTED AND THEY ARE 2112 01:17:15,897 --> 01:17:17,332 EXPECTED TO HAVE AN IMPACT ON 2113 01:17:17,332 --> 01:17:19,768 PAYROLL EXPENSE, TAX REVENUES, 2114 01:17:19,768 --> 01:17:21,036 THE REVISIONS, THOSE UPWARD 2115 01:17:21,036 --> 01:17:22,571 REVISIONS HAVE TO DO WITH THE 2116 01:17:22,571 --> 01:17:24,272 CHANGE IN THE OUTLOOK FOR, FOR 2117 01:17:24,272 --> 01:17:27,976 STOCK PRICES, WHICH HAS IMPROVED 2118 01:17:27,976 --> 01:17:29,711 SINCE APRIL. AND SO GOING INTO 2119 01:17:29,711 --> 01:17:30,846 THE FUTURE, AGAIN, STOCK PRICES 2120 01:17:30,846 --> 01:17:34,750 ARE EXPECTED TO GROW. AND 2121 01:17:34,750 --> 01:17:35,417 THAT'S OFFSETTING THOSE THOSE 2122 01:17:35,417 --> 01:17:36,818 LOSSES. 2123 01:17:36,818 --> 01:17:37,452 -- HELPFUL CLARIFICATION NOT NET 2124 01:17:37,452 --> 01:17:39,654 WORTH BUT COMPENSATION. 2125 01:17:39,654 --> 01:17:42,391 -- YEAH. 2126 01:17:42,391 --> 01:17:47,462 -- THANK YOU. 2127 01:17:47,462 --> 01:17:49,231 -- SO TURNING TO THE PESSIMISTIC 2128 01:17:49,231 --> 01:17:50,632 SCENARIO AGAIN THAT'S THE SECOND 2129 01:17:50,632 --> 01:17:52,401 OF THE THREE SCENARIOS. WE ARE 2130 01:17:52,401 --> 01:17:54,770 DEVELOPING A BASELINE REVENUE 2131 01:17:54,770 --> 01:17:55,303 FORECAST. THE PESSIMISTIC 2132 01:17:55,303 --> 01:17:56,738 SCENARIO AND THEN AN OPTIMISTIC 2133 01:17:56,738 --> 01:17:58,240 SCENARIO FORECAST IN THE 2134 01:17:58,240 --> 01:18:00,308 INTEREST OF TIME, I'LL NOT SHOW 2135 01:18:00,308 --> 01:18:02,444 THE OPTIMISTIC SCENARIO HERE, 2136 01:18:02,444 --> 01:18:04,446 BUT IT'S AVAILABLE. UH WE HAVE 2137 01:18:04,446 --> 01:18:05,847 DISTRIBUTED IT AND WILL BE 2138 01:18:05,847 --> 01:18:08,517 AVAILABLE ON OUR WEBSITE. WE DO 2139 01:18:08,517 --> 01:18:09,985 HAVE REASONS TO BELIEVE THAT THE 2140 01:18:09,985 --> 01:18:11,386 PESSIMISTIC SCENARIO IS MORE 2141 01:18:11,386 --> 01:18:14,589 RELEVANT. ONE AGAIN, GIVEN THAT 2142 01:18:14,589 --> 01:18:16,625 THERE IS 25 TO 30% PROBABILITY 2143 01:18:16,625 --> 01:18:18,460 OF A RECESSION, THE DOWNSIDE 2144 01:18:18,460 --> 01:18:20,829 RISK, UH, IS QUITE, QUITE 2145 01:18:20,829 --> 01:18:23,065 RELEVANT. IT'S CERTAINLY 2146 01:18:23,065 --> 01:18:24,499 POSSIBLE THAT INDIVIDUAL REVENUE 2147 01:18:24,499 --> 01:18:25,901 STREAMS WILL OUTPERFORM OUR 2148 01:18:25,901 --> 01:18:29,237 EXPECTATIONS. UM, BUT AGAIN, IN, 2149 01:18:29,237 --> 01:18:31,239 IN THE INTEREST OF BEING FINE, 2150 01:18:31,239 --> 01:18:35,477 UH, FINANCIALLY PRUDENT AND, UH, 2151 01:18:35,477 --> 01:18:36,111 CONSIDERING THE DOWNSIDE, THIS 2152 01:18:36,111 --> 01:18:38,914 IS WHERE WE WANT TO SPEND OUR 2153 01:18:38,914 --> 01:18:40,782 ATTENTION DURING THIS, THIS 2154 01:18:40,782 --> 01:18:42,984 PRESENTATION. SO THE DOWNTURN IN 2155 01:18:42,984 --> 01:18:44,586 THE ECONOMY WOULD, UH, DRAW 2156 01:18:44,586 --> 01:18:47,722 DOWN, WILL DRAG DOWN THOSE 2157 01:18:47,722 --> 01:18:49,791 REVENUES, WHICH ARE DRIVEN BY 2158 01:18:49,791 --> 01:18:51,226 THE ECONOMY. SO SALES TAX, 2159 01:18:51,226 --> 01:18:53,929 BUSINESS AND OCCUPATION TAX ARE 2160 01:18:53,929 --> 01:18:56,431 THE TWO PRIMARY ONES WHERE THE 2161 01:18:56,431 --> 01:18:59,668 REVISION, UM, OR THE CHANGE FROM 2162 01:18:59,668 --> 01:19:01,536 THE APRIL FORECAST, UH, WOULD BE 2163 01:19:01,536 --> 01:19:03,738 SIGNIFICANT AND TO THE DOWNSIDE 2164 01:19:03,738 --> 01:19:06,441 BACK IN APRIL, THE FORECAST 2165 01:19:06,441 --> 01:19:09,077 COUNCIL HAS, UH, BASED ON OUR 2166 01:19:09,077 --> 01:19:09,678 RECOMMENDATIONS, ADOPTED THE 2167 01:19:09,678 --> 01:19:11,780 BASELINE SCENARIO. SO THE 2168 01:19:11,780 --> 01:19:13,281 COMPARISON HERE IS BETWEEN THE 2169 01:19:13,281 --> 01:19:15,417 BASELINE SCENARIO IN APRIL AND 2170 01:19:15,417 --> 01:19:18,320 THE PESSIMISTIC SCENARIO IN 2171 01:19:18,320 --> 01:19:19,821 JULY. SO AGAIN, SHOULD A 2172 01:19:19,821 --> 01:19:22,858 RECESSION OCCUR, IT WOULD HAVE A 2173 01:19:22,858 --> 01:19:24,626 MEANINGFUL IMPACT ON LARGE 2174 01:19:24,626 --> 01:19:26,027 REVENUE STREAMS. UM THERE IS 2175 01:19:26,027 --> 01:19:29,397 ALSO SOME, UH, ASSUMPTIONS 2176 01:19:29,397 --> 01:19:30,432 AROUND THE OTHER REVENUE 2177 01:19:30,432 --> 01:19:32,834 STREAMS. AND I'LL LET CBO STAFF 2178 01:19:32,834 --> 01:19:33,568 TALK. 2179 01:19:33,568 --> 01:19:35,137 -- YEAH, I WOULD SAY JUST, UH, 2180 01:19:35,137 --> 01:19:37,139 BY AND LARGE, THE REVENUE 2181 01:19:37,139 --> 01:19:39,274 STREAMS THAT THE CITY BUDGET 2182 01:19:39,274 --> 01:19:40,642 OFFICE FORECASTS ARE A LITTLE 2183 01:19:40,642 --> 01:19:42,611 LESS DEPENDENT ON ECONOMIC 2184 01:19:42,611 --> 01:19:44,746 CONDITIONS. UH, SO WE GENERALLY 2185 01:19:44,746 --> 01:19:46,648 DON'T SEE QUITE THE OUTSIZED 2186 01:19:46,648 --> 01:19:48,817 IMPACT OF PESSIMISTIC SCENARIO 2187 01:19:48,817 --> 01:19:51,086 ON THESE REVENUE STREAMS. UH, 2188 01:19:51,086 --> 01:19:52,687 ONE EXCEPTION TO NOTE WOULD BE 2189 01:19:52,687 --> 01:19:55,290 PROPERTY TAXES, PARTICULARLY, 2190 01:19:55,290 --> 01:19:58,793 UH, THAT THAT STREAM IS 2191 01:19:58,793 --> 01:19:59,361 RELATIVELY STABLE GIVEN HOW 2192 01:19:59,361 --> 01:20:03,031 STATE LAW DICTATES WE, UH, 2193 01:20:03,031 --> 01:20:03,665 INCREASE OUR REVENUE COLLECTIONS 2194 01:20:03,665 --> 01:20:05,934 FOR PROPERTY TAXES, IT IS PRETTY 2195 01:20:05,934 --> 01:20:07,602 MUCH GUARANTEED AT 1% PLUS THE 2196 01:20:07,602 --> 01:20:08,904 VALUE OF NEW CONSTRUCTION. SO WE 2197 01:20:08,904 --> 01:20:10,539 DO SEE GROWTH SLOW IN A 2198 01:20:10,539 --> 01:20:11,540 PESSIMISTIC SCENARIO, 2199 01:20:11,540 --> 01:20:14,442 PARTICULARLY BECAUSE OF THAT NEW 2200 01:20:14,442 --> 01:20:15,844 CONSTRUCTION PIECE BEING 2201 01:20:15,844 --> 01:20:17,145 DEPRESSED. UM, BUT OVERALL, 2202 01:20:17,145 --> 01:20:20,282 THOSE REVENUES WOULD STILL 2203 01:20:20,282 --> 01:20:21,149 INCREASE THOUGH AT A LOWER SPEED 2204 01:20:21,149 --> 01:20:25,320 OR LOWER RATE. IN THE 2205 01:20:25,320 --> 01:20:28,423 PESSIMISTIC SCENARIO. 2206 01:20:28,423 --> 01:20:31,193 -- ALL RIGHT. UM, SO YEAH, AS 2207 01:20:31,193 --> 01:20:33,662 YOU CAN SEE, ESPECIALLY THE 27 2208 01:20:33,662 --> 01:20:35,864 AND 28, THOSE TWO YEARS WOULD BE 2209 01:20:35,864 --> 01:20:36,464 THE ONES WHERE THE RECESSION 2210 01:20:36,464 --> 01:20:37,933 WOULD HAVE A MEANINGFUL IMPACT 2211 01:20:37,933 --> 01:20:43,605 ON REVENUES FOR THE FIRST YEAR, 2212 01:20:43,605 --> 01:20:44,206 THE 2026. WE STILL HAVE THAT 2213 01:20:44,206 --> 01:20:46,141 POSITIVE EFFECT OF HIGHER SALES 2214 01:20:46,141 --> 01:20:48,276 TAX, SINCE WE ALREADY HAVE, UH, 2215 01:20:48,276 --> 01:20:52,948 YEAR IN WITH WITH SALES TAX 2216 01:20:52,948 --> 01:20:54,716 COLLECTION, THE IMPACT THERE IS 2217 01:20:54,716 --> 01:20:58,286 COMING AGAIN FROM THAT HIGHER 2218 01:20:58,286 --> 01:21:01,523 COLLECTION DUE TO 5814. UM, SO 2219 01:21:01,523 --> 01:21:05,527 THAT THAT DOMINATES WHEN IT 2220 01:21:05,527 --> 01:21:07,996 COMES TO THE NON-GENERAL FUND 2221 01:21:07,996 --> 01:21:10,432 REVENUES. UM, A RECESSION WOULD 2222 01:21:10,432 --> 01:21:12,934 ALSO, UM, MEAN SIGNIFICANTLY 2223 01:21:12,934 --> 01:21:14,836 LOWER STOCK PRICES AND 2224 01:21:14,836 --> 01:21:16,738 POTENTIALLY ADDITIONAL LAYOFFS. 2225 01:21:16,738 --> 01:21:18,807 BOTH OF THOSE WOULD DRIVE DOWN 2226 01:21:18,807 --> 01:21:21,509 THE PAYROLL EXPENSE TAX 2227 01:21:21,509 --> 01:21:23,445 REVENUES. THE OVERALL IMPACT IS 2228 01:21:23,445 --> 01:21:25,647 QUITE SIGNIFICANT, 63 MILLION 2229 01:21:25,647 --> 01:21:29,784 LESS COMPARED TO THE APRIL, UM, 2230 01:21:29,784 --> 01:21:33,521 BASELINE FORECAST UM, FOR RATE 2231 01:21:33,521 --> 01:21:35,357 AGAIN, THAT'S, UH, QUITE A 2232 01:21:35,357 --> 01:21:38,093 SIGNIFICANT DROP THERE BECAUSE 2233 01:21:38,093 --> 01:21:40,161 OF THE OVERALL DOWNTURN THAT WE 2234 01:21:40,161 --> 01:21:42,030 TEND TO SEE WHENEVER THERE IS A 2235 01:21:42,030 --> 01:21:43,899 RECESSION RATE FALLS 2236 01:21:43,899 --> 01:21:44,733 SIGNIFICANTLY. AND THAT'S 2237 01:21:44,733 --> 01:21:48,703 EXACTLY THE KIND OF, UH, IMPACT 2238 01:21:48,703 --> 01:21:50,472 THIS, THIS FORECAST HAS, HAS 2239 01:21:50,472 --> 01:21:53,508 BUILT INTO IT. UM SO OVERALL, 2240 01:21:53,508 --> 01:21:59,114 WHEN IT COMES TO THE THREE YEAR 2241 01:21:59,114 --> 01:21:59,814 DIFFERENCE, IT'S A 233 MILLION 2242 01:21:59,814 --> 01:22:02,751 LESS COMPARED TO THE APRIL 2243 01:22:02,751 --> 01:22:05,153 BASELINE. THE DIFFERENCE BETWEEN 2244 01:22:05,153 --> 01:22:07,622 THE PESSIMISTIC SCENARIO IN JULY 2245 01:22:07,622 --> 01:22:09,424 AND THE BASELINE SCENARIO IN 2246 01:22:09,424 --> 01:22:13,461 JULY IS EVEN LARGER BECAUSE THE 2247 01:22:13,461 --> 01:22:14,896 THE JULY BASELINE IS HIGHER THAN 2248 01:22:14,896 --> 01:22:16,765 THAN THE APRIL BASELINE. SO THE 2249 01:22:16,765 --> 01:22:19,334 OVERALL CHANGE WOULD BE THE 232 2250 01:22:19,334 --> 01:22:25,507 SHOWN HERE, PLUS THE 116. SO 2251 01:22:25,507 --> 01:22:27,442 THAT'S THE OVERALL SPREAD 2252 01:22:27,442 --> 01:22:28,576 BETWEEN THE BASELINE AND THE 2253 01:22:28,576 --> 01:22:29,944 PESSIMISTIC. AGAIN THERE IS AN 2254 01:22:29,944 --> 01:22:31,746 OPTIMISTIC SCENARIO WHICH ADDS, 2255 01:22:31,746 --> 01:22:33,815 UH, SOME REVENUES. THERE IS 2256 01:22:33,815 --> 01:22:36,952 POTENTIAL TO THE UPSIDE. BUT UM, 2257 01:22:36,952 --> 01:22:42,957 WE DO BELIEVE THAT, UH, THAT THE 2258 01:22:42,957 --> 01:22:44,826 DOWNSIDE RISKS ARE THE RISKS ARE 2259 01:22:44,826 --> 01:22:45,393 PROBABLY SKEWED MORE TO THE 2260 01:22:45,393 --> 01:22:47,362 DOWNSIDE THAN TO THE UPSIDE. 2261 01:22:47,362 --> 01:22:52,100 THAT SAID, THIS TABLE HERE 2262 01:22:52,100 --> 01:22:54,569 COMPARES, UM, EVEN THE 2263 01:22:54,569 --> 01:22:55,136 OPTIMISTIC SCENARIO TO THE 2264 01:22:55,136 --> 01:22:56,805 BASELINE. AND YOU CAN SEE THAT, 2265 01:22:56,805 --> 01:22:59,441 YEAH, IT WOULD RESULT IN 2266 01:22:59,441 --> 01:22:59,941 POTENTIALLY MEANINGFUL 2267 01:22:59,941 --> 01:23:00,709 ADDITIONAL REVENUES THERE. 2268 01:23:00,709 --> 01:23:02,811 -- THANK YOU DIRECTOR. I SEE WE 2269 01:23:02,811 --> 01:23:03,812 HAVE THE ABILITY WE MIGHT BE 2270 01:23:03,812 --> 01:23:07,515 ABLE TO STAY ON TIME. SO I WOULD 2271 01:23:07,515 --> 01:23:09,084 SAY IF WE COULD JUMP AHEAD TO 2272 01:23:09,084 --> 01:23:11,953 THE SOCIAL HOUSING AND THE 2273 01:23:11,953 --> 01:23:12,520 FORECAST RISK AND RISKS AND 2274 01:23:12,520 --> 01:23:13,188 SCENARIOS, THAT WOULD BE GREAT. 2275 01:23:13,188 --> 01:23:14,456 -- YEAH, WE ARE CLOSE TO THE 2276 01:23:14,456 --> 01:23:17,592 END. YES. UH, THE SOCIAL HOUSING 2277 01:23:17,592 --> 01:23:19,160 TAX FORECAST HAS HAS BEEN 2278 01:23:19,160 --> 01:23:21,629 UPDATED. OUR OFFICE HAS BEEN 2279 01:23:21,629 --> 01:23:22,964 ASKED TO PROVIDE FORECASTS FOR 2280 01:23:22,964 --> 01:23:24,432 THE DEVELOPER. UM, SO WE HAVE 2281 01:23:24,432 --> 01:23:27,969 LOOKED AT THE COLLECTION FOR 2282 01:23:27,969 --> 01:23:29,304 2025 OBLIGATIONS AND THE YEAR TO 2283 01:23:29,304 --> 01:23:34,142 DATE COLLECTION FOR 2026. UH, 2284 01:23:34,142 --> 01:23:36,344 UM, THERE'S A FIRST QUARTER 2285 01:23:36,344 --> 01:23:39,547 THAT'S COMPLETELY IN, UM, 2286 01:23:39,547 --> 01:23:41,316 POTENTIALLY SOME LATE, UH, 2287 01:23:41,316 --> 01:23:43,051 RETURNS MIGHT SHOW UP, BUT MOST 2288 01:23:43,051 --> 01:23:46,621 OF IT SHOULD BE IN THE SECOND 2289 01:23:46,621 --> 01:23:47,789 QUARTER IS STILL, UM, STILL 2290 01:23:47,789 --> 01:23:49,391 BEING, BEING FILED AND BEING 2291 01:23:49,391 --> 01:23:53,428 PROCESSED. SO UM, THAT, THAT WAS 2292 01:23:53,428 --> 01:23:55,196 USED TOGETHER WITH THE DATA THAT 2293 01:23:55,196 --> 01:23:57,565 WE HAVE ON, UH, ON THE 2294 01:23:57,565 --> 01:23:59,501 EMPLOYMENT, UM, COMING FROM 2295 01:23:59,501 --> 01:24:02,103 EMPLOYMENT SECURITY DEPARTMENT. 2296 01:24:02,103 --> 01:24:03,405 SO SIMILAR SORT OF AN APPROACH, 2297 01:24:03,405 --> 01:24:06,808 UH, UM, TO PAYROLL EXPENSE TAX 2298 01:24:06,808 --> 01:24:08,810 WITH THE CAVEAT THAT WE HAVE 2299 01:24:08,810 --> 01:24:10,912 ONLY ONE ONE YEAR, UM, OF, OF 2300 01:24:10,912 --> 01:24:13,381 COLLECTION. SO WE CANNOT REALLY 2301 01:24:13,381 --> 01:24:14,115 DO A FULL ANALYSIS OF, LET'S 2302 01:24:14,115 --> 01:24:17,652 SAY, WHAT THE IMPACT OF HIGHER 2303 01:24:17,652 --> 01:24:19,854 STOCK PRICES WOULD BE. BUT, UM, 2304 01:24:19,854 --> 01:24:21,122 THAT'S, THAT'S WHERE THIS IS 2305 01:24:21,122 --> 01:24:23,558 GOING TO BE HEADING IN THE 2306 01:24:23,558 --> 01:24:26,594 FUTURE. UM, THE REASON IS THAT 2307 01:24:26,594 --> 01:24:30,165 THOSE TWO ARE IMPOSED ON SIMILAR 2308 01:24:30,165 --> 01:24:32,734 BASE, NOT EXACTLY THE SAME, BUT 2309 01:24:32,734 --> 01:24:35,069 THEY SHARE SOME, SOME 2310 01:24:35,069 --> 01:24:37,005 SIMILARITIES. THE TAX BASE IS 2311 01:24:37,005 --> 01:24:37,806 NARROW FOR SOCIAL HOUSING TAX 2312 01:24:37,806 --> 01:24:40,442 JUST LIKE IT IS FOR PAYROLL 2313 01:24:40,442 --> 01:24:44,979 EXPENSE TAX. EVEN NARROWER. 2314 01:24:44,979 --> 01:24:47,315 THERE IS ONLY ABOUT 220 TAX 2315 01:24:47,315 --> 01:24:48,817 PAYERS FOR 2025. ABOUT HALF OF 2316 01:24:48,817 --> 01:24:53,121 THAT HAVE FILED Q1 AND Q2 2317 01:24:53,121 --> 01:24:53,755 OBLIGATIONS. MORE ARE EXPECTED 2318 01:24:53,755 --> 01:24:54,656 LATER ON BECAUSE OF THE WAY HOW 2319 01:24:54,656 --> 01:24:58,092 THIS TAX IS IMPOSED ONLY ON 2320 01:24:58,092 --> 01:24:58,660 EXCESS COMPENSATION ABOVE A 2321 01:24:58,660 --> 01:25:00,962 MILLION. AND SO COMPANIES ARE 2322 01:25:00,962 --> 01:25:04,532 NOT ALL OF THEM ARE ARE NOT ALL 2323 01:25:04,532 --> 01:25:06,167 THE EMPLOYEES THAT THEY PAY ARE 2324 01:25:06,167 --> 01:25:08,736 HITTING IT AT THE SAME TIME? UM, 2325 01:25:08,736 --> 01:25:12,207 IT'S ALSO SIMILARLY 2326 01:25:12,207 --> 01:25:14,109 CONCENTRATED TO PARALLEL EXPENSE 2327 01:25:14,109 --> 01:25:16,478 TAX TOP TEN TAXPAYERS PAY ABOUT 2328 01:25:16,478 --> 01:25:20,648 TWO THIRDS OF THE OVERALL UM TAX 2329 01:25:20,648 --> 01:25:23,051 TOP 50, ABOUT 90%. UM, SO THAT 2330 01:25:23,051 --> 01:25:24,252 MEANS THAT THERE IS AGAIN, 2331 01:25:24,252 --> 01:25:27,188 INHERENTLY A LOT OF UNCERTAINTY 2332 01:25:27,188 --> 01:25:29,123 REGARDING THE FORECAST. UM, THE 2333 01:25:29,123 --> 01:25:31,526 THREE SCENARIOS THAT ARE HERE 2334 01:25:31,526 --> 01:25:34,329 ARE NOT NECESSARILY SHOWING THE 2335 01:25:34,329 --> 01:25:35,330 WHOLE UNCERTAINTY WHEN IT COMES 2336 01:25:35,330 --> 01:25:41,536 TO, UH, COMES TO THE POSSIBLE 2337 01:25:41,536 --> 01:25:42,170 OUTCOMES. EVEN THIS YEAR, JUST 2338 01:25:42,170 --> 01:25:42,770 LIKE FOR, FOR PAYROLL EXPENSE 2339 01:25:42,770 --> 01:25:44,906 TAX, THOSE FIRST COUPLE OF YEARS 2340 01:25:44,906 --> 01:25:49,844 THEY HAVE SEEN, UM, SIGNIFICANT 2341 01:25:49,844 --> 01:25:50,378 VARIANCE FROM BETWEEN THE 2342 01:25:50,378 --> 01:25:52,680 FORECAST AND THE ACTUALS. AND 2343 01:25:52,680 --> 01:25:53,815 THAT'S, UH, POSSIBLY GOING TO 2344 01:25:53,815 --> 01:25:59,320 OCCUR HERE AS WELL. ALL RIGHT. 2345 01:25:59,320 --> 01:26:01,322 AND SO FINALLY WRAPPING IT UP 2346 01:26:01,322 --> 01:26:04,259 WITH THE FORECAST RISK SCENARIO 2347 01:26:04,259 --> 01:26:06,327 RECOMMENDATION. UM, AGAIN ARE IN 2348 01:26:06,327 --> 01:26:09,931 CONFLICT IS DRIVING A LOT OF, 2349 01:26:09,931 --> 01:26:10,498 UH, CHANGES IN THE ECONOMIC 2350 01:26:10,498 --> 01:26:12,534 OUTLOOK, UH, THE OVERALL OUTLOOK 2351 01:26:12,534 --> 01:26:15,103 IS NOT THAT DIFFERENT COMPARED 2352 01:26:15,103 --> 01:26:17,705 TO WHAT, WHAT, WHAT WAS IN 2353 01:26:17,705 --> 01:26:19,574 APRIL, THE PROBABILITY OF A 2354 01:26:19,574 --> 01:26:24,646 RECESSION HAS COME DOWN. UM, THE 2355 01:26:24,646 --> 01:26:26,781 ECONOMY IS KIND OF GOING THROUGH 2356 01:26:26,781 --> 01:26:28,683 A TOUGH TIME, BUT IT'S NOT 2357 01:26:28,683 --> 01:26:30,652 BREAKING YET. THERE ARE 2358 01:26:30,652 --> 01:26:32,387 CERTAINLY ELEVATED RISKS. UH, 2359 01:26:32,387 --> 01:26:34,989 THE, THE GROWTH IS VERY 2360 01:26:34,989 --> 01:26:37,692 CONCENTRATED. UM, AND SO THE 2361 01:26:37,692 --> 01:26:41,596 RISKS ARE THERE. THE BASELINE 2362 01:26:41,596 --> 01:26:42,230 SCENARIO IS HOWEVER CONSIDERED 2363 01:26:42,230 --> 01:26:43,431 BY THE US FORECASTERS AS THE 2364 01:26:43,431 --> 01:26:47,235 MOST LIKELY OUTCOME. UM, FOR THE 2365 01:26:47,235 --> 01:26:48,903 REGIONAL ECONOMY. AGAIN THE DATA 2366 01:26:48,903 --> 01:26:50,638 THAT WE HAVE RECEIVED, UM, 2367 01:26:50,638 --> 01:26:54,909 PAINTS A PICTURE OF A WEAKER 2368 01:26:54,909 --> 01:26:55,543 ECONOMY COMPARED TO THE NATIONAL 2369 01:26:55,543 --> 01:26:58,012 ONE. UM, ON THE MORE POSITIVE 2370 01:26:58,012 --> 01:26:59,380 SIDE, WE HAVE SEEN COLLECTION, 2371 01:26:59,380 --> 01:27:02,383 WHICH IS NOT SIGNIFICANTLY LOWER 2372 01:27:02,383 --> 01:27:03,818 THAN WHAT WE WERE EXPECTING. AND 2373 01:27:03,818 --> 01:27:07,288 IN SOME CASES FOR SALES TAX IN 2374 01:27:07,288 --> 01:27:09,757 PARTICULAR IS ACTUALLY, UM, 2375 01:27:09,757 --> 01:27:13,027 NOTABLY ABOVE THE APRIL 2376 01:27:13,027 --> 01:27:15,296 FORECAST. AND SO TAKING ALL OF 2377 01:27:15,296 --> 01:27:17,632 THAT INTO ACCOUNT, WE CONTINUE 2378 01:27:17,632 --> 01:27:19,400 WITH OUR RECOMMENDATION OF A 2379 01:27:19,400 --> 01:27:20,835 BASELINE SCENARIO. THE OUTLOOK 2380 01:27:20,835 --> 01:27:22,737 IS NOT SIGNIFICANTLY WORSE. 2381 01:27:22,737 --> 01:27:24,906 THERE ISN'T ANY SORT OF 2382 01:27:24,906 --> 01:27:25,473 COMPELLING ARGUMENT WHY WE 2383 01:27:25,473 --> 01:27:27,875 SHOULD BE UH, ADOPTING A 2384 01:27:27,875 --> 01:27:29,310 SCENARIO THAT ASSUMES THAT THE 2385 01:27:29,310 --> 01:27:30,478 ECONOMY IS HEADING INTO A 2386 01:27:30,478 --> 01:27:32,380 RECESSION. AND SO THE BASELINE 2387 01:27:32,380 --> 01:27:34,782 IS THE RECOMMENDATION WITH THE 2388 01:27:34,782 --> 01:27:35,550 SAME CAVEAT AS LAST TIME, THAT 2389 01:27:35,550 --> 01:27:38,152 THERE IS HIGH UNCERTAINTY 2390 01:27:38,152 --> 01:27:40,221 BECAUSE OF THE POLICY CHANGES AT 2391 01:27:40,221 --> 01:27:44,425 THE FEDERAL LEVEL. UM, THAT ARE 2392 01:27:44,425 --> 01:27:45,493 JUST REALLY HARD, HARD TO 2393 01:27:45,493 --> 01:27:47,228 PREDICT. AND BECAUSE OF THOSE 2394 01:27:47,228 --> 01:27:48,429 LEGISLATIVE CHANGES THAT MAKE IT 2395 01:27:48,429 --> 01:27:50,331 TRICKIER TO FORECAST SALES TAX 2396 01:27:50,331 --> 01:27:51,866 AND BUSINESS AND OCCUPATION TAX. 2397 01:27:51,866 --> 01:27:54,402 SO THE VARIANCE MIGHT BE LARGER 2398 01:27:54,402 --> 01:27:57,038 WHEN WE SEE THE 2026 ACTUALS. SO 2399 01:27:57,038 --> 01:27:59,707 WITH THAT, I'M HAPPY TO ANSWER 2400 01:27:59,707 --> 01:28:00,074 ANY QUESTIONS. 2401 01:28:00,074 --> 01:28:02,310 -- THANK YOU DIRECTOR. THANK YOU 2402 01:28:02,310 --> 01:28:05,146 SEAN. JOE. ALEXANDRA ALWAYS 2403 01:28:05,146 --> 01:28:06,614 FANTASTIC AND AMAZING WORK. JUST 2404 01:28:06,614 --> 01:28:07,882 NOTING. DIRECTOR, SINCE YOUR 2405 01:28:07,882 --> 01:28:08,816 TIME HERE AT THE CITY, YOU'VE 2406 01:28:08,816 --> 01:28:10,318 BEEN WITH US THROUGH THE 2407 01:28:10,318 --> 01:28:11,853 PANDEMIC WHEN WE HAD MORE 2408 01:28:11,853 --> 01:28:14,088 ACCURATE FORECASTS IN THE STATE 2409 01:28:14,088 --> 01:28:15,423 AND THROUGH ALL OF THESE 2410 01:28:15,423 --> 01:28:16,858 DIFFERENT UPS AND DOWNS, YOU'VE 2411 01:28:16,858 --> 01:28:19,327 ALWAYS LED US THROUGH A AN 2412 01:28:19,327 --> 01:28:21,796 INCREDIBLE AN IMPRESSIVELY 2413 01:28:21,796 --> 01:28:23,731 ACCURATE FORECAST. AND SO JUST 2414 01:28:23,731 --> 01:28:27,268 GREATLY APPRECIATE IT, 2415 01:28:27,268 --> 01:28:27,869 ESPECIALLY NOTING THAT WE DID 2416 01:28:27,869 --> 01:28:28,436 HAVE TO ADOPT A PESSIMISTIC 2417 01:28:28,436 --> 01:28:29,203 FORECAST. I THINK JUST TWO YEARS 2418 01:28:29,203 --> 01:28:31,839 AGO. AND SO, UM, JUST GREATLY 2419 01:28:31,839 --> 01:28:32,907 APPRECIATE ALL YOUR WORK 2420 01:28:32,907 --> 01:28:34,208 COLLEAGUES AT THIS TIME. ARE 2421 01:28:34,208 --> 01:28:35,677 THERE ANY QUESTIONS ABOUT THE 2422 01:28:35,677 --> 01:28:38,313 FORECAST THAT WE'VE RECEIVED 2423 01:28:38,313 --> 01:28:41,249 -- NO QUESTIONS. I APPRECIATE 2424 01:28:41,249 --> 01:28:44,519 ALL THE INFORMATION. UH THANKS 2425 01:28:44,519 --> 01:28:46,421 FOR ALL THE INFORMATION. 2426 01:28:46,421 --> 01:28:46,988 CERTAINLY VERY DETAILED. I 2427 01:28:46,988 --> 01:28:48,089 THINK, UM, I'VE HAD AN 2428 01:28:48,089 --> 01:28:49,590 OPPORTUNITY TO TALK TO A COUPLE 2429 01:28:49,590 --> 01:28:50,124 OF FOLKS ABOUT THEIR OWN 2430 01:28:50,124 --> 01:28:51,426 BRIEFINGS ON IT, SO I DON'T HAVE 2431 01:28:51,426 --> 01:28:52,126 ANY ADDITIONAL QUESTIONS. THANK 2432 01:28:52,126 --> 01:28:55,763 YOU. AND I WOULD JUST NOTE, 2433 01:28:55,763 --> 01:28:57,265 OTHER THAN THREE REVENUE SOURCES 2434 01:28:57,265 --> 01:28:59,167 FOR WHICH THERE ALWAYS IS GREAT 2435 01:28:59,167 --> 01:29:01,536 UNCERTAINTY. EVERYTHING ELSE IS 2436 01:29:01,536 --> 01:29:03,571 LIKE EXACTLY RIGHT. ON THE APRIL 2437 01:29:03,571 --> 01:29:04,172 FORECAST, WHICH IS REMARKABLY 2438 01:29:04,172 --> 01:29:06,074 GOOD WORK. 2439 01:29:06,074 --> 01:29:07,408 -- NOW, IF ONLY WE WILL GET 2440 01:29:07,408 --> 01:29:09,177 THOSE RED LIGHT TRAFFIC CAMERAS 2441 01:29:09,177 --> 01:29:11,713 OUT THERE. AM I AM I RIGHT? 2442 01:29:11,713 --> 01:29:13,314 COUNCIL PRESIDENT, ANY OTHER 2443 01:29:13,314 --> 01:29:14,615 COMMENTS AT THIS TIME? 2444 01:29:14,615 --> 01:29:15,316 -- NO, I DON'T HAVE ANY. THANK 2445 01:29:15,316 --> 01:29:17,985 YOU FOR THE PRESENTATION. VERY 2446 01:29:17,985 --> 01:29:19,754 DETAILED. SO THANK YOU. 2447 01:29:19,754 --> 01:29:21,355 -- FANTASTIC. PER THE ORDINANCE 2448 01:29:21,355 --> 01:29:21,989 THAT CREATED THE FORECAST OFFICE 2449 01:29:21,989 --> 01:29:23,124 IN THIS FORECAST COUNCIL IS THE 2450 01:29:23,124 --> 01:29:24,158 ROLE THE FORECAST COUNCIL TO 2451 01:29:24,158 --> 01:29:25,059 REVIEW AND APPROVE THE FORECAST 2452 01:29:25,059 --> 01:29:26,527 IN TERMS OF APPROVING THE 2453 01:29:26,527 --> 01:29:30,298 FORECAST. IF WE CONCUR WITH THE 2454 01:29:30,298 --> 01:29:31,466 RECOMMENDATION, THERE'S NO 2455 01:29:31,466 --> 01:29:32,400 FORMAL VOTE REQUIRED. THE GOAL 2456 01:29:32,400 --> 01:29:33,534 OF THE LEGISLATION IS TO REMOVE 2457 01:29:33,534 --> 01:29:36,170 THE RISK OF POLITICAL INFLUENCE 2458 01:29:36,170 --> 01:29:38,206 AND CREATE A LITTLE BIT MORE 2459 01:29:38,206 --> 01:29:39,307 COLLABORATION HERE AT CITY HALL. 2460 01:29:39,307 --> 01:29:40,942 SO WE ARE IN CITY COUNCIL 2461 01:29:40,942 --> 01:29:43,177 CHAMBERS, BUT WE ARE NOT A CITY 2462 01:29:43,177 --> 01:29:45,747 COUNCIL COMMITTEE. WE ARE A 2463 01:29:45,747 --> 01:29:46,347 JOINT FORECAST COUNCIL. THAT 2464 01:29:46,347 --> 01:29:47,381 SAID, WE DO REPRESENT THE 2465 01:29:47,381 --> 01:29:48,816 ELECTED LEADERSHIP OF BOTH THE 2466 01:29:48,816 --> 01:29:50,084 LEGISLATIVE AND EXECUTIVE 2467 01:29:50,084 --> 01:29:51,586 BRANCHES. IT IS THUS APPROPRIATE 2468 01:29:51,586 --> 01:29:54,155 THAT WE HAVE THE AUTHORITY 2469 01:29:54,155 --> 01:29:55,390 TOGETHER TO OVERRIDE THE 2470 01:29:55,390 --> 01:29:57,225 RECOMMENDATION SHOULD WE CHOOSE 2471 01:29:57,225 --> 01:29:57,992 TO, BUT WITH ALL THE COMPLIMENTS 2472 01:29:57,992 --> 01:29:58,626 THAT WE JUST PROVIDED THE TEAM, 2473 01:29:58,626 --> 01:30:00,294 I DOUBT WE'RE GOING TO OVERRIDE 2474 01:30:00,294 --> 01:30:03,698 YOU TODAY. UH, JUST WITH YOUR 2475 01:30:03,698 --> 01:30:05,233 GREAT ACCURACY, WE ALL GREATLY 2476 01:30:05,233 --> 01:30:06,300 APPRECIATE YOUR WORK. AS YOU'VE 2477 01:30:06,300 --> 01:30:08,703 HEARD, OUR DIRECTOR HAS 2478 01:30:08,703 --> 01:30:10,071 RECOMMENDED THE BASELINE 2479 01:30:10,071 --> 01:30:12,373 SCENARIO OF THE AUGUST 2026 2480 01:30:12,373 --> 01:30:13,007 FORECAST IN THE CASE THAT THERE 2481 01:30:13,007 --> 01:30:15,343 ARE NO OBJECTIONS, WE CAN MOVE 2482 01:30:15,343 --> 01:30:17,378 FORWARD. SO I'M GOING TO JUST 2483 01:30:17,378 --> 01:30:20,248 ASK FORMALLY, ARE THERE ANY 2484 01:30:20,248 --> 01:30:22,350 OBJECTIONS TO, UH, LET ME SEE 2485 01:30:22,350 --> 01:30:23,885 HOW THIS IS THIS IS NOT ARE 2486 01:30:23,885 --> 01:30:27,522 THERE ANY OBJECTIONS TO ADOPTING 2487 01:30:27,522 --> 01:30:30,625 THE RECOMMENDED FORECAST? BY THE 2488 01:30:30,625 --> 01:30:33,127 BY THE FORECAST OFFICE. 2489 01:30:33,127 --> 01:30:33,528 -- NO OBJECTION. 2490 01:30:33,528 --> 01:30:34,529 -- SEEING NO OBJECTIONS. AND SO 2491 01:30:34,529 --> 01:30:36,631 THAT MEANS HEARING NO 2492 01:30:36,631 --> 01:30:40,635 OBJECTIONS. I DIRECT THE 2493 01:30:40,635 --> 01:30:41,235 FORECAST OFFICE TO RECORD OUR 2494 01:30:41,235 --> 01:30:41,702 CONCURRENCE WITH THE 2495 01:30:41,702 --> 01:30:42,303 RECOMMENDATION RECOMMENDED 2496 01:30:42,303 --> 01:30:44,071 FORECAST IN THE MEETING MINUTES. 2497 01:30:44,071 --> 01:30:45,907 AND WITH THAT, IS THERE ANY 2498 01:30:45,907 --> 01:30:47,341 FURTHER BUSINESS, ANY GOOD OF 2499 01:30:47,341 --> 01:30:49,177 THE ORDER? SEEING NONE, WE HAVE 2500 01:30:49,177 --> 01:30:51,078 REACHED THE END OF OUR FORMAL 2501 01:30:51,078 --> 01:30:52,180 AGENDA. BEFORE ADJOURNING, I 2502 01:30:52,180 --> 01:30:53,414 WANT TO REMIND EVERYONE THAT THE 2503 01:30:53,414 --> 01:30:54,882 NEXT MEETING WILL TAKE PLACE ON 2504 01:30:54,882 --> 01:30:56,417 FRIDAY, OCTOBER 16th AT 9:30 2505 01:30:56,417 --> 01:30:58,619 A.M., SO WE'LL GET CHAMBERS 2506 01:30:58,619 --> 01:30:59,787 INSTEAD OF EVERYONE ELSE WHEN WE 2507 01:30:59,787 --> 01:31:02,256 WILL RECEIVE THAT FINAL FORECAST 2508 01:31:02,256 --> 01:31:04,091 UPDATE OF THIS YEAR. UH, 2509 01:31:04,091 --> 01:31:05,660 DIRECTOR DR. S, THE ENTIRE TEAM. 2510 01:31:05,660 --> 01:31:06,761 I GREATLY APPRECIATE YOU. WE 2511 01:31:06,761 --> 01:31:08,229 STARTED A HALF AN HOUR LATE AND 2512 01:31:08,229 --> 01:31:09,564 WE'RE ENDING FOUR MINUTES 2513 01:31:09,564 --> 01:31:13,434 EARLY. APPRECIATE YOU SO MUCH. 2514 01:31:13,434 --> 01:31:14,068 UM, AND SO NO FURTHER QUESTIONS. 2515 01:31:14,068 --> 01:31:15,470 WE