>>> COUNCILMEMBER MORALEZ.
COUNCILMEMBER NELSON. VICE
CHAIR RIVERA. AND CHAIR
STRAUSS.
>> WE WILL MAKE THAT
ANNOUNCEMENT AS WELL AS ANY
OTHER COUNCIL MEMBERS. WE HAVE
TWO BRIEFINGS ON THE AGENDA
TODAY. 2401, BRIEFING AND
DISCUSSION FROM THE STAFF AT
THE COMMITTEE, AND OUR SELECTED
BUDGET COMMITTEE FOR THIS YEAR.
WE ALSO HAVE AN INFORMATIONAL
ITEM, 2402, LEAVING A
DISCUSSION ON THE OVERVIEW OF
THE CITY BUDGET. GENERALLY,
SINCE THIS IS THE FIRST TIME,
WERE GOING TO LOOK AT SOME
EXPECTATIONS. WE ALSO HAVE
CONGRESSMAN CATHY MOORE JOINING
US TODAY. IN OUR COMMITTEE,
INSTEAD OF CLA I AM ONLY ALLOWI
PUBLIC COMMENT ON ITEMS ON THE
AGENDA TODAY. I SEE WE HAVE
SOME GUESTS. I'M GUESSING
YOU'RE NOT HERE TO SPEAK ON
THE BUDGET, BUT I'M WILLING TO
MAKE AN EXCEPTION BECAUSE THIS
IS THE FIRST COMMITTEE MEETING
AND YOU MIGHT NOT HAVE KNOWN
THAT STANDARD. I'M SORRY, WE
ARE IN COMMITTEE RIGHT NOW.
THANK YOU, SIR. AS WE CONTINUE
GOING THROUGH OUR COMMITTEE
WORK PLAN, I WILL SHARE MORE OF
THESE SMALL LITTLE ITEMS, BUT
THESE ARE ALL ITEMS TO MAKE
SURE WE ARE ABLE TO ACCOMPLISH
OUR WORK IN AN EFFECTIVE AND
EFFICIENT MANNER WITHOUT
DISRUPTION OR HARASSMENT. AND
WE ALSO HAVE VICE CHAIR RIVERA.
MY STALLING WORKED. BEFORE YOU
BEGIN, IF THERE'S NO OBJECTION
, THE AGENDA IS NOW ADOPTED. WE
WANT TO START WITH PUBLIC
COMMENT. AS I SAID, MOVING
FORWARD FROM THIS COMMITTEE, WE
WILL ONLY BE ALLOWING PUBLIC
COMMENT ON ITEMS ON THE AGENDA.
TODAY, WE WILL MAKE AN
EXCEPTION, AND WE WILL NOW OPEN
HYBRID PUBLIC COMMENTS AND THEY
SHOULD RELATE TO ITEMS ON
TODAY'S AGENDA. CLERK, HOW
MANY SPEAKERS DO WE HAVE SIGNED
UP TODAY? JUST ONE. FANTASTIC.
EACH SPEAKER WILL HAVE TWO
MINUTES. WE'LL START WITH THE
IN PERSON SPEAKERS FIRST, AND
THE PUBLIC COMMENTS WILL BE
MODERATED IN THE FOLLOWING
MANNER. THE PUBLIC COMMENT
PERIOD IS UP TO 20 MINUTES, AND
THEY WILL BE CALLED BY THE
ORDER IN WHICH THEY REGISTERED
AND SPEAKERS WILL ALTERNATE THE
FORCE AND WILL DO IN PERSON
FIRST. SPEAKERS WILL HEAR A
CHIME IN 10 SECONDS OR LEFT OF
THEIR TIME. SPEAKERS MUTE OF
MICROPHONES WILL BE MUTED IF
THEY DO NOT AND COMMENTS WITHIN
THE ALLOTTED TIME. WE ALWAYS
ACCEPT WRITTEN COMMENTS. AT
THIS TIME, THE PUBLIC COMMENT
PERIOD IS OPEN AND WE WILL
BEGIN WITH THE FIRST., JEFF
HEALY. PLEASE JOIN US AT THE
MICROPHONE. AND PLEASE PROVIDE
COMMENTS ON TODAY'S AGENDA.
>> I THINK IT'S THE BUDGET.
AND I THINK YOU GUYS FAIL AT
LETTING PEOPLE EVEN KNOW THAT
THIS MEETING WAS EXISTING
TODAY. OBVIOUSLY, PEOPLE WOULD
BE HERE AT THIS MEETING, AT
LEAST A FEW MORE PEOPLE, IF
THEY FELT THE MEETING WAS
HAPPENING. IT ALSO SUCKS THAT
NOBODY KNOWS ABOUT THE MEETING,
BECAUSE THEY WOULD COME TO THE
MEETING IF THEY KNEW ABOUT IT,
I'M SURE. AM I ALLOWED TO
TALK ABOUT THE BUDGET, OR OTHER
THINGS?
>> THIS IS A MEETING ABOUT THE
BUDGET TODAY.
>> YOU SAID YOU COULD MAKE AN
EXCEPTION ABOUT THE TOPIC.
>> THERE ARE CERTAIN PEOPLE
THAT IF THEY GOT SIGNED UP OR
DID NOT SIGN UP.
>> YOU SAID THERE WAS AN
EXCEPTION ABOUT SOMETHING
THOUGH?
>> I WILL ACCEPT ANY PUBLIC
COMMENT FROM YOU TODAY, AND
MOVING FORWARD, WE WILL RESERVE
THE TIME FOR ITEMS ON THE
AGENDA. YOU HAVE 51 SECONDS.
>> I DON'T KNOW. THERE'S A
LOT OF REALLY IMPORTANT THINGS,
AND I ALMOST FEEL LIKE
PURPOSELY WITHHOLDING THEM JUST
TO HAVE ONE OVER ON YOU GUYS IS
TO NOT TELL YOU THE HELPFUL
THINGS SO THAT YOU GUYS LEARN
YOUR LESSON FOR NOT BEING
HELPFUL, LIKE YOU GUYS COULD.
BECAUSE I THINK THAT YOU GUYS
MAYBE DESERVE THAT. AND --
WHAT DOES THAT MEAN? IT MEANS I
CAN'T TALK ANYMORE?
>> YOU ONE LESS THING YOU CAN
SAY.
>> IT JUST IRRITATES ME BECAUSE
I FEEL LIKE SOME PEOPLE DON'T
EVEN WANT ME TO TRY TO BE HELP,
AND THAT MAKES ME TO WANT TO
RETIRE AGAINST THEM AND NOT
EVEN SAY HELPFUL THINGS.
>> YOUR TIME IS NOW EXPIRED.
>> CLERK, CAN YOU PLEASE
CONFIRM?
>> NO MORE PUBLIC COMMENTS.
THIS NOW CONCLUDES HER PUBLIC
COMMENT PERIOD.
>> WE MOVE ON TO THE FIRST ITEM
ON TODAY'S AGENDA. CLERK, WILL
YOU PLEASE READ THE SHORT TERM
INTO THE RECORD?
>> WE ARE JOINED BY DEPUTY
DIRECTOR ALY PENNUCCI FROM
CENTRAL COUNCIL STAFF FOR THIS
PRESENTATION. WOULD YOU PLEASE
INTRODUCE YOURSELVES?
COLLEAGUES, THIS FIRST
PRESENTATION WILL BE A GENERAL
OVERVIEW. I KNOW WE'VE HAD A
LOT OF DISCUSSION ABOUT WHAT IS
THE DIFFERENCE BETWEEN FINANCE,
NATIVE COMMUNITIES, AND TRIBAL
GOVERNMENTS. THE FIRST TO
SELECT BUDGET COMMUNITY. WE ARE
STILL NAILING DOWN THE DATES
FOR WHICH DAYS WILL BE SELECT
COMMITTEE AND WHICH DAYS WILL
BE JUST A FINANCE NATIVE
COMMUNITIES AND TRIBAL
GOVERNMENTS COMMITTEE. YOU
MIGHT HEAR ME SLIP BECAUSE MANY
YEARS AGO, IT USED TO BE THE
FINANCE AND NEIGHBORHOODS
COMMITTEE, AND SO IF YOU KEEP
HEARING ME SLIP, THAT'S WHY I
AM SLIPPING THAT WAY. I AM
REALLY EXCITED. IF YOU'D LIKE
TO TAKE IT AWAY, WE WILL JUST
DIE RIGHT ON IN.
>> I AM ALY PENNUCCI OF YOUR
COUNCIL CENTRAL STAFF .
>> MICROPHONE.
>> I'M WITH COUNCIL CENTRAL
STAFF AS WELL, THINK .
>> WELL, THIS MORNING, WE ARE
GOING TO DO A BRIEF
WALK-THROUGH OF THE WORK PLAN
FOR THE FINANCE, NATIVE
COMMUNITIES, AND TRIBAL
GOVERNMENTS COMMITTEE AND THE
SELECT BUDGET COMMITTEE FOR
2024. MOVING FORWARD, I WILL
LIKELY JUST REFER TO IT AS THE
FINANCE COMMITTEE AND THE
BUDGET COMMITTEE FOR REMEDY.
>> I'M ALSO NOTICING ON THE
AGENDA, I THINK WE ARE PROBABLY
GOING TO RUN THROUGH THIS IN
ABOUT 10 TO 15 MINUTES. JUST AN
AWARENESS THERE, AN ERROR ON MY
PART.
>> HAPPY TO TALK ALL DAY ABOUT
COMMITTEES, BUT IN THE INTEREST
OF TIME, WE WILL MOVE THROUGH
THIS RELATIVELY QUICKLY. THIS
FIRST LIGHT IS REALLY JUST
OUTLINING SORT OF THE
DIFFERENCES IN POLARITIES
BETWEEN THE FINANCE COMMITTEE
AND THE BUDGET COMMITTEE.
DIRECTOR NOBLE PRESENTED SOME
OF THIS INFORMATION A COUPLE OF
WEEKS AGO TO THE COUNCIL. AT A
COUNCIL BRIEFING. WE JUST
WANTED TO REVISIT THAT IDEA AND
THEN TALK A LITTLE BIT ABOUT
SOME OF THE ITEMS THAT WILL
COMING TO EACH OF THE
COMMITTEES THIS YEAR. THE
FINANCE COMMITTEE IS THE ONLY
STANDING COMMITTEE ESTABLISHED
BY THE CITY CHARTER. IT IS NOT
UNCOMMON FOR THE FINANCE
COMMITTEE TO ALSO INCLUDE OTHER
TOPICS, SO THIS YEAR FOR
EXAMPLE, IT INCLUDES FINANCE AS
WELL IS NATIVE COMMUNITIES AND
TRIBAL GOVERNMENTS. THIS WILL
COVER ISSUES AND POLICIES
RELATED TO BOTH TOPICS. THEY
WILL RECEIVE REPORTS AND
BRIEFINGS FROM CITY FINANCE,
THE CITY BUDGET OFFICE
REGARDING IMPLEMENTATION OF THE
FISCAL POLICY WORK OR THINGS
THAT IMPACT THE CITY BUDGET.
AND ALSO FORMALIZES
CONSULTATION OF GOVERNMENT AND
WILL BE WORKING WITH THE
CITY'S INDIGENOUS ADVISORY
COUNCIL ON BUDGET PROGRAM
SERVICES AND PROJECTS THAT
DIRECTLY AFFECT INDIGENOUS
POPULATIONS.
>> CAN YOU PAUSE RIGHT THERE? I
JUST WANT TO DIG IN THIS A
LITTLE BIT MORE DEEPLY. THE
FINANCE COMMITTEE, WE WILL BE
REVIEWING ITEMS SUCH AS --
THAT'S THE NEXT SLIDE, ISN'T
IT?
>> THANK YOU. AND SO THE
SELECT BUDGET COMMITTEE IS
REALLY ESTABLISHED ANNUALLY AND
THE PURPOSES OF ESTABLISHING
COUNCIL RULES. THE MAIN
PURPOSES RELATED TO THE CITY'S
ANNUAL BUDGET ADOPTION PROCESS
THAT HAPPENS EACH FALL. IT IS
TYPICALLY ESTABLISHED SOMETIME
EARLY SPRING BY THE COUNCIL
PRESIDENT, AND IT INCLUDES ALL
MEMBERS OF THE COUNCIL AND IS
CHAIRED BY THE FINANCE
COMMITTEE CHAIR AND TYPICALLY
VICE CHAIRED BY THE FINANCE
COMMITTEE, VICE CHAIR RIVERA.
THE MEETINGS DON'T NEED TO BE
LIMITED TO THE FALL BUDGET
DELIBERATIONS. SOME YEARS, THE
COUNCIL HAS DECIDED TO CONVENE
THIS BUDGET COMMITTEE EARLIER
IN THE YEAR, PARTICULARLY
AROUND LEGISLATION THAT AMENDS
THE BUDGET. IN PAST YEARS, WE
WILL TALK MORE ABOUT THAT IN A
MINUTE, TO CONVENE IT FOR
LARGER BUDGET DISCUSSIONS. BUT
BRIEFINGS RELATED TO THE BUDGET
WILL OCCUR IN BOTH COMMITTEES.
I'M GOING TO PASS IT OVER
UNLESS THERE ARE QUESTIONS ON
THIS ONE.
>> GOOD MORNING AGAIN. SO AS
THE FINANCE AND COMMITTEE
GOVERNMENT COORDINATOR, I WILL
PROVIDE A QUICK OVERVIEW OF THE
PROCESS. THIS IS BASED ON THE
DIRECTION THE CHAIR STRAUSS HAS
PROVIDED SO FAR. SO MOST
LEGISLATION WILL RECEIVE AT
LEAST TWO HEARINGS BEFORE IT
GETS VOTED OUT OF COMMITTEE,
WITH SOME OBSESSIONS. AND THE
SELECT BUDGET COMMITTEE WILL
MAKE RECOMMENDATIONS TO THE
FULL COUNCIL FOR COMPREHENSIVE
BUDGET LEGISLATION . IT AFFECTS
MULTIPLE FUNDS, AND MULTIPLE
DEPARTMENTS. EVEN THOUGH SOME
OF THE INITIAL BRIEFINGS MAY BE
HELD AT THE FINANCE COMMITTEE.
HENCE THE NAME, TRIBAL
GOVERNMENTS AND NATIVE
COMMUNITIES WILL BE HELD --
WILL BE DISCUSSED AT THAT
FINANCE COMMITTEE AS WELL. AND
WE WILL OFFICIALLY BEGIN THE
ANNUAL BUDGET PROCESS IN SELECT
BUDGET COMMITTEE ON SEPTEMBER
24th. AND IT IS SUPPOSED TO RUN
THROUGH NOVEMBER 28th, ALTHOUGH
WE HOPE TO FINISH A WEEK EARLY
FOR THE HOLIDAYS. SEPTEMBER
SEEMS LIKE A LONG WAYS AWAY,
BUT IT'S GOING TO COME QUICKLY
FOR MOST OF US.
>> JUST BEFORE WE MOVE ON HERE,
WE ALL HOPE THIS BUDGET IS DONE
BY NOVEMBER 28th. COLLEAGUES,
HERE WE WILL SEE REGISTRATION
WILL RECEIVE THE VOTE FOR TWO
HEARINGS. TYPICALLY WITH
APPOINTMENTS, I WILL DO TWO
HEARINGS ON APPOINTMENTS.
THAT'S WHERE WE WON'T BE
HAVING THOSE TWO MEETINGS.
>> THIS IS A PRACTICE BROUGHT
OVER FROM THE LAND-USE
COMMITTEE. IT WAS A VERY
HEALTHY PROCESS SO NOBODY EVER
FELT LIKE THEY WERE CAUGHT OFF
GUARD OR THEY WERE ABLE TO HAVE
THE BRIEFING, UNDERSTAND THE
CONTENT, AND HAVE TIME TO GO
DIGGING THROUGH IT MORE BEFORE
WE ASK FOR A VOTE. THAT'S THE
INTENTION BEHIND THIS PRACTICE.
IT'S A LITTLE BIT DIFFERENT
NOW THAT WE HAVE A SELECT
BUDGET COMMITTEE, A FINANCE
COMMITTEE, AND THE SUBJECT
MATTER OF NATIVE COMMUNITIES
AND TRIBAL GOVERNMENTS. SO WE
ARE GOING TO BE IMPLEMENTING
SOMETHING OF A HYBRID HERE,
WHERE IF THERE IS A MEETING --
A VOTE IN SELECT BUDGET
COMMITTEE, WE WILL HAVE IT
BRIEFED IN FINANCE. AGAIN, ALL
COMMITTEE MEMBERS ARE INVITED
TO FINANCE. IF A COUNCIL MEMBER
DOES NOT SIT ON FINANCE, I WILL
BE ASKING CENTRAL STAFF OR A
CBO TO BRIEF THEM INDIVIDUALLY.
SO IT'S GOING TO BE A TWO STEP
PROCESS THERE. SO WE CAN ENSURE
THAT EVERYONE HAS THE MOST
AMOUNT OF INFORMATION. ALL
COLLEAGUES ARE WELCOME TO JOIN
THE FINANCE, NATIVE
COMMUNITIES, AND TRIBAL
GOVERNMENTS COMMITTEE. I ALSO
UNDERSTAND THAT ADDING MORE
COMMITTEES IS NOT ALWAYS
APPRECIATED. SO THE REASON THAT
WE ARE ENGAGING IN THIS A
LITTLE BIT DIFFERENT WAY THIS
YEAR THAN WE HAVE IN PREVIOUS
YEARS IS BECAUSE EVERYONE IS
VERY AWARE OF THE BUDGET HOLE
THAT WE HAVE, WHICH IS
STRUCTURAL IN NATURE. I AM A
BIT RELIEVED THAT EVERYONE IS
CHOMPING AT THE BIT TO DIVE
INTO WHAT IS OUR CURRENT
BUDGET SITUATION AND HOW DO WE
SOLVE FOR IT, BECAUSE THERE
BEEN MANY OF US THAT ARE BEEN
TALKING ABOUT THIS FOR MANY
YEARS AT THIS POINT. IT'S BEEN
HARD TO GAIN TRACTION. WITH
COUNCILMEMBERS AND OTHERS, THIS
IS SOMETHING THAT WE NEED TO
SOLVE. I DON'T MEAN TO GET
INTO FUTURE PRESENTATIONS, BUT
WE WERE ABLE TO DELAY THIS
IMPACT DURING THE PANDEMIC
BECAUSE OF FEDERAL FUNDING. WE
CAN'T DELAY THESE DECISIONS
ANY LONGER. SO THAT'S ONE
REASON I'M STARTING THE SELECT
BUDGET COMMITTEE A LITTLE BIT
EARLIER. I WOULD LIKE TO
BECAUSE IT IS IMPORTANT THAT WE
ALL DIG INTO THIS TOGETHER. THE
SECOND REASON IS THAT I'VE
ALWAYS FOUND IT A BIT ODD THAT
WE DO SUPPLEMENTAL BUDGET AND A
COMMITTEE THAT NOT EVERYONE
SITS ON. AND SO MIDYEAR
SUPPLEMENTAL BUDGETS ALLOW
CHANGES TO OUR BUDGET FINANCE.
I THINK I GAVE THE EXAMPLE THAT
IF WE WANT THE UNIFIED CARE
TEAM TO WORK SEVEN DAYS A WEEK,
BEFORE JANUARY 1st, 2025, WE
WOULD HAVE TO MAKE THAT CHANGE
IN THE SUPPLEMENTAL BUDGET.
OTHERWISE OUR NEXT OPPORTUNITY
IS AT THE BEGINNING OF THE NEXT
FISCAL YEAR. ALSO, NOTING ON
THIS SLIDE, DURING THE ANNUAL
BUDGET ADOPTION PROCESS, IT IS
ONLY THE SELECT BUDGET
COMMITTEE, AND ALL OTHER
COMMITTEES ARE NOT ALLOWED TO
TAKE UP THEIR WORK. AND SO
IT'S QUITE IMPORTANT TO
RECOGNIZE THIS NOW, BECAUSE IF
YOU ARE WORKING ON LEGISLATION
IN YOUR OWN COMMITTEE, NEEDS TO
BE PASSED BY SEPTEMBER,
OTHERWISE YOUR NEXT OPPORTUNITY
IS IN DECEMBER. I THINK I HAVE
OVER EXPLAINED FOR THE MOMENT.
ANY QUESTIONS AT THIS TIME?
COUNCIL PRESIDENT.
>> GOOD EITHER YOU OR CENTRAL
STAFF EXPLAINED PERHAPS FOR NEW
MEMBERS AND ALSO FOR ME WHAT IS
INTENDED TO BE INCLUDED IN
SUPPLEMENTAL, OR AT LEAST THE
MIDYEAR, THE ONE THAT WE DO IN
AUGUST?
>> COULD WE WAIT FOR THE CBO TO
JOIN US? IS THAT ALL RIGHT?
SHE WILL SPEAK DURING OUR
SECOND PRESENTATION.
>> YOU WERE JUST TALKING ABOUT
THE SUPPLEMENTAL, THAT'S WHY
HAD BROUGHT IT UP.
>> I WILL PASS IT BACK BEFORE I
TAKE US OFF TRACK ANYMORE.
>> SO ON THIS SLIDE, THIS IS
NOW THE LEGISLATION -- SOME OF
YOU LEGISLATION WE ARE AWARE OF
TODAY. FOR EXAMPLE, THE
SUPPLEMENTAL COULD GO TO THE
FINANCE COMMITTEE. HOWEVER, THE
SELECT BUDGET COMMITTEE
PROVIDES AN OPPORTUNITY FOR ALL
THE COUNCILMEMBERS TO STAY
INFORMED AND TO WEIGH IN. SO
FOR ALL OF THE BUDGET RELATED
ITEMS. FOR APPROVAL, THE
APPROVAL OF LEASES, AND THAT
MANAGEMENT RELATED -- AND
SELECT BUDGET COMMITTEE WILL
INCLUDE MORE COMPREHENSIVE
BUDGET RELATED LEGISLATION SUCH
AS THE GRANT ORDINANCES,
SUPPLEMENTAL, EXCEPTIONS,
CARRYFORWARDS, AND NOW ANY
OTHER COMPREHENSIVE BUDGET PLAN
RELATED LEGISLATION. WITH THAT,
I WILL PASS IT BACK OVER.
>> IF YOU COULD GO BACK, THIS
IS JUST SIMPLY -- ALL OF THESE
POLICIES COULD GO THROUGH THE
FINANCE, NATIVE COMMITTEES, AND
TRIBAL GOVERNMENTS COMMITTEE.
THIS IS HOW I FORESEE US
SPLITTING OUT THIS WORK. ISSUES
THAT ARE SMALLER IN NATURE OR
JUST THE GOVERNMENT DOING ITS
BASIC FUNCTIONING WILL COME TO
THE FINANCE COMMITTEE. FOR
THESE LARGER CONVERSATIONS OF,
HOW ARE WE CRAFTING OUR BUDGET
AND HOW ARE WE ADJUSTING,
THAT'S RIGHT LIKE THIS TO
OCCUR SO THAT EVERYONE IS ON
THE SAME PAGE. I'VE ALWAYS
FOUND IT ODD THAT -- BECAUSE I
HAD A PROGRAM THAT NEEDED A
LITTLE SUPPLEMENTAL FUNDING,
AND WE HAD TO GO ASK THE
FINANCE CHAIR. I WOULD PREFER
YOU TO BE ABLE TO SPEAK FOR
YOURSELF.
>> CHAIR, WE KEEP BRINGING UP
SUPPLEMENTAL. SO CAN WE PLEASE
ADDRESS? I THINK IT'S A QUICK
ANSWER. WOULD YOU INDULGE IN
EXPLAINING WHAT THE
SUPPLEMENTAL IS? THINK.
>> GENERALLY SPEAKING, THE
SUPPLEMENTAL BUDGETS SHOULD BE
A PROCREATION'S TO ADDRESS
ISSUES THAT COULD NOT HAVE BEEN
FORESEEN WHEN ADOPTING THE
ANNUAL BUDGET. EMERGENCY
ISSUES, UNKNOWNS, THAT SORT OF
THING. IN A PERFECT WORLD, WE
ADOPT AN ANNUAL BUDGET AND YOU
ALL SPEND THE YEAR PROVIDING
OVERSIGHT AND TRACKING IT, BUT
WE ALL KNOW THAT SOMETIMES
NEEDS CHANGE. THIS YEAR, THE
COUNCIL CHANGED BETWEEN THE
ADOPTION OF THE ANNUAL BUDGET.
AND SO THERE MAY BE EMERGING
NEEDS THAT COME UP THROUGHOUT
THE YEAR. BUT IN ORDER FOR US
TO PROVIDE GOOD OVERSIGHT AND
STAY ON TRACK WITH THE BUDGET,
WE RECOMMEND MINIMIZING THE
NUMBER OF BUDGET AMENDMENTS
THROUGHOUT THE YEAR, BECAUSE
THAT'S HARD TO START PLANNING
FOR NEXT YEAR WHEN WE ARE
ADJUSTING MIDYEAR. IN 2020,
FOR EXAMPLE, WHEN THE PANDEMIC
HIT, THERE WAS A NEED TO DO
MULTIPLE SUPPLEMENTAL BUDGET TO
ADDRESS BOTH THE REVENUE
CHALLENGES AND THE EMERGING
NEEDS DUE TO THE PANDEMIC.
>> THANK YOU. THE BOTTOM LINE
BEING, IT'S JUST MEANT TO
ADDRESS UNFORESEEN ACTIONS, NOT
MEANT TO USE IT AS AN
OPPORTUNITY TO CHANGE SOMETHING
THAT HAS ALREADY PASSED IN THAT
YEAR'S BUDGET? CORRECT?
>> YES, IDEALLY. IN PRACTICE,
THERE HAVE BEEN PRACTICES THAT,
YOU KNOW, MAY HAVE BEEN KNOWN,
BUT RESOURCES WERE NOT
AVAILABLE AT THE TIME IT WAS
ADOPTED. SO I ALSO WANT TO BE
HONEST THAT IN SOME CASES,
THAT'S A BEST PRACTICE AND
THAT'S WHY COUNCILMEMBERS AND
THE MAYOR PROPOSE CHANGES.
>> I'M GOING TO SAVE MY OTHER
COMMENTS. THE LAST THING I WILL
SAY ABOUT SUPPLEMENTALS -- I
WAS HOPING TO SAVE THIS FOR
WHEN WE HAVE A CBO HERE. THE
EXECUTIVE DEPARTMENTS HAVE
CHANGES, WHETHER IT UNDER SPEND
OR NEED FOR OVERSPEND OR NEED
FOR ADDITIONAL SPENDING, I
SHOULD SAY, AS WELL AS
COUNCILMEMBERS HAVING AN
INSIGHT INTO PROGRAMS OR
PROJECT THAT MAY UNDER SPEND OR
MAY NEED ADDITIONAL FUNDING.
MOVING ON.
>> SO MUCH OF THE WORK OF THE
FINANCE COMMITTEE WILL BE A
REVIEW AND EXAMINATION OF THE
BUDGET. DIRECTOR NOBLE
DISCUSSED SOME OF THIS, BUT I
WANT TO JUST HIGHLIGHT AGAINST
THEM OF THE WORK THAT IS
UNDERWAY, SOME OF WHICH WILL BE
BRIEFED HERE AND FINANCE, AND
CENTRAL STAFF WILL ALSO BE
WORKING WITH ALL OF YOU
INDIVIDUALLY IN OFFICE TO BRIEF
YOU AND HELP YOU UNDERSTAND
WHAT IS IN THE BASE BUDGET FOR
2024. WHAT WE ARE STARTING
POINTS BE FOR DISCUSSIONS GOING
INTO THE NEXT BIENNIUM? WE ARE
DOING A STUDY ON HOW SPENDING
HAS INCREASED IN RECENT YEARS.
SO LOOKING AT WHY AND HOW
EXPENDITURES HAVE GROWN, WHAT
IS HAPPENING WITH REVENUES, AND
HELPING UNRAVEL HOW PREVIOUS
COUNCILS HAVE MANAGED TO
BALANCE THE BUDGET WITH
ONE-TIME RESOURCES. HOW DID WE
GET TO THIS POINT WHERE WE ARE
LOOKING AT A 250+ MILLION
DOLLAR ANNUAL DEFICIT. IN
APRIL, THERE WILL BE AN
ECONOMIC REVENUE FORECAST
UPDATE RELEASED BY THE FORECAST
UPDATE, AND THE CITY BUDGET IS
ALSO WORKING WITH DEPARTMENTS
TO CLOSEOUT 2023. AND SO THERE
WILL BE -- HOW DID THE YEAR
END? DID WE UNDER SPEND THE
BUDGET? DID REVENUES COME IN
HIGHER OR LOWER THAN
ANTICIPATED ? THAT ALL HAS AN
IMPACT ON BALANCING THE '24
BUDGET AND WHAT WE ARE LOOKING
AT GOING INTO '25 AND BEYOND.
FOR EXAMPLE, IN APRIL, GIVEN
RECENT ECONOMIC NEWS, THE
REVENUE FORECAST IS MORE
POSITIVE THAN WHAT WE ASSUMED
IN NOVEMBER, WE MIGHT IDENTIFY
THAT THERE ARE MORE RESOURCES
AVAILABLE. IS THAT REVENUE
PROJECTED ON AN ONGOING BASIS?
IS IT GOING TO IMPROVE, AND
DOES THAT HELP US WITH OUR
STRUCTURAL PROBLEM, OR IS IT A
ONE-TIME BUMP THAT MIGHT BE
APPROPRIATE FOR A ONE-TIME
NEED? THERE WAS ALSO A REQUEST
IN RESOLUTION 32116 THAT THE
COUNCIL PASSED AS PART OF THE
LAST BUDGET PROCESS TO DO A
DEEP DIVE INTO CENTRAL RATES.
SO REVIEWING HOW THE CITIES
COST ALLOCATION PLAN AND
CHANGES TO CENTRAL RATES IMPACT
THE BUDGET. THOSE ARE CHANGES
THAT ARE INTERNAL SERVICE
DEPARTMENTS CHARGE TO OTHERS,
LIKE I.T. CHARGES ALL
DEPARTMENTS SOME RATES, AND
THAT MONEY IS USED TO SUPPORT
THE CITY'S I.T. NEEDS. ANGES IN
THAT SPENDING OVER THE YEARS,
SO WE'VE BEEN WORKING WITH THE
CITY BUDGET OFFICE TO SORT OF
UNRAVEL WHAT IS GOING ON THERE
AND BETTER UNDERSTAND WHAT IS
DRIVING THOSE COSTS. WERE ALSO
WORKING ON THE JUMPSTART AND
LOOKING AT REVENUES AND
EXPENDITURES AND HOW THAT HAS
ACTUALLY PLAYED OUT OVER THE
YEARS COMPARED TO WHAT WAS
INITIALLY IMAGINED AND HAVING
DISCUSSIONS WITH ALL OF YOU
ABOUT OPTIONS FOR MOVING
FORWARD. AND THEN LOOKING
FORWARD AT THE BUDGET BY SOURCE
OF FUNDS --
>> BEFORE WE JUMP IN THERE, I
THINK THIS IS GOING TO TAKE US
ON TOUR NEXT STEP OF REVIEWING
AND EXAMINING OUR BUDGET.
FIRST, AS ALLIE SAID, WE NEED
TO UNDERSTAND WHAT THE BASIC
SITUATION IS. WE ARE GOING TO
DO THAT FIVE-YEAR LINK BACK.
AND THE BENEFIT OF WHAT WE HAVE
TODAY IS EVERYONE IS REALLY
AWARE OF THIS BUDGET CRISIS.
THAT ALLOWS US TO LOOK AT THIS
COMPREHENSIVELY RATHER THAN
INCREMENTALLY. AND SO NOW IF
YOU WANT TO GO ONTO THE NEXT
SLIDE, THIS IS SOME OF THE
THINKING ON HOW WERE GOING TO
REVIEW AND EXAMINE OUR BUDGET.
>> THE BASE BUDGET REVIEW THE
CENTRAL STAFF IS DOING,
PROVIDED TODAY, THEY WILL GIVE
A DETAILED OVERVIEW OF THE CITY
BUDGET. WE ARE GOING TO GO A
LAYER DEEPER WITH HELP FROM
THE CITY BUDGET OFFICE AND
SHARING WHAT WE APPRECIATE TO
BETTER SHOW YOU THE DETAILS OF
WHAT IS IN EACH DEPARTMENT
BUDGET SO THEY CAN ALL START
THINKING ABOUT WHAT IS MOST
IMPORTANT TO KEEP AND WHERE
THERE MIGHT BE OPPORTUNITIES
FOR EFFICIENCIES AND NEW
REVENUES AND THOSE SORTS OF
THINGS. IT'S KIND OF A
FUNNELING APPROACH. WE ARE
STARTING AT THE TOP.
>> I WILL ADD TO THAT, WE ARE
ALSO ENDEAVORING TO LOOK AT THE
LINES OF BUSINESS SO THAT WE
ARE NOT JUST LOOKING AT -- I
USE MY FIRST EXAMPLE OF, PARKS
HAVE ARBORIST. THAT'S NOT
EFFICIENT GOVERNMENT.
>> CHAIR STRAUSS, JUST A QUICK
QUESTION FOR POTENTIALLY BOTH
OF YOU. ARE WE ACTUALLY
LOOKING AT THE BUDGET PROCESS
ITSELF, THE STRUCTURE OF THE
BUDGET REFORM SO IT IS ALL OF
THE ABOVE? OR ARE WE JUST
LOOKING AT WHAT PROGRAMS WE ARE
TRYING TO SUPPORT OR NOT
SUPPORT, WERE WE GOING TO BE
LOOKING AT THE STRUCTURE? AS WE
TALKED LAST YEAR, FIREWALLS, IF
YOU WILL, IS EQUITABLY PART OF
THIS REVIEW? I HEAR SOMETIMES
TALKING ABOUT PROGRAMS, THE
FIVE-YEAR INCREASE AND SO
FORTH. WHAT ARE WE ALSO LOOKING
AT THE MECHANICS OF THE BUDGET,
I GUESS IS WHAT WE ARE SAYING?
>> FANTASTIC QUESTION. WERE
GOING WITH LINES OF SERVICE. IF
WE ARE DELIVERING A TYPE OF
SERVICE OVER TWO DEPARTMENTS,
AND THIS BUREAUCRATIC OVERHEAD,
THAT IS SOMETHING WE NEED TO
LOOK AT. AND SO I GUESS SHORT
ANSWER IS YES. THE LONG ANSWER
IS, THE MAYOR AND CBO TRANSMITS
A BUDGET TO THE CITY COUNCIL.
WE TAKEN UP IN EARNEST. I
BELIEVE THAT THAT'S IN
CHARTER.
>> THE BUDGET PROCESS AS
OUTLINED IN STATE LAW. THE
STATE BUDGET ACT.
>> IT REALLY DOES TAKE ALL OF
US.
>> THANK YOU. I'M REMINDED
THAT YESTERDAY IN THE MAYOR'S
CITY SPEECH, HE TALKED ABOUT
BASICALLY THE SAME TOPIC.
REFORMING THE BUDGET. NOT JUST
LOOKING AT DIFFERENT PROGRAMS,
BUT IN TERMS OF WHAT WE ARE
DEALING WITH.
>> CANDIDLY, I THINK THAT'S
HOW WE FALLEN INTO SOME OF
THIS. WHERE WE LOOKED AT IT BY
PROGRAMS AND WE LOOKED AT IT BY
DEPARTMENT RATHER THAN AS A
BUSINESS OR WHAT SERVICES ARE
WE PROVIDING. BECAUSE
SOMETIMES, REDUNDANCY IS
HELPFUL SO THE POWER DOESN'T
GO OUT. BUT SOMETIMES
REDUNDANCY IS NOT HELPFUL WHEN
YOU HAVE OUTBURSTS IN EVERY
DEPARTMENT.
>> I EXPECT THAT SOME OF THIS
WILL BE A LONGER CONVERSATION
THAN JUST THIS YEAR. WHAT WE
ARE HOPING FOR IS A WORK WE ARE
DOING ON THE BASE BUDGET AND
HOW THEY'VE GROWN OVER THE
YEAR WILL HELP YOU PEOPLE
IDENTIFY WHERE YOU ARE SEEING
MAY BE SOME OVERLAP
OPPORTUNITIES FOR EFFICIENT
NEEDS TO DO SOMETHING
DIFFERENTLY BY PROVIDING
PROGRAMS FOR DEPARTMENTS OR
PARTNERING FOR THOSE SORTS OF
THINGS. IT'S AN ALMOST $1
BILLION BUDGET. WE ARE NOT
NAPTIME, FRANKLY, TO GOING TO
EVERY SINGLE LINE OF BUSINESS
AND IDENTIFY EVERY SINGLE
EFFICIENCY THIS YEAR. SO I
EXPECT THERE WILL BE SOME
OPPORTUNITIES IDENTIFIED THIS
YEAR AND WE WILL BE WORKING
WITH THE BUDGET OFFICE TO
UNDERSTAND WHAT THOSE SAVINGS
OR OPPORTUNITIES MAY BE, AND I
EXPECT THE COUNCIL WILL ALSO
IDENTIFY SOME ADDITIONAL WORK
THAT TO CARRY INTO NEXT YEAR SO
THAT WE CAN CONTINUE TO IMPROVE
THE BUDGET -- BOTH THE BUDGET ,
HOW PROGRAMS ARE FUNDED, BUT
ALSO THE STRUCTURE OF THE
BUDGET. I'M A BIG BELIEVER IN
CONTINUOUS IMPROVEMENT,
ESPECIALLY OUR BUDGET PROCESS.
I AM VERY MUCH EAGER TO DISCUSS
DIFFERENT WAYS IN APPROACHING
HOW WE DO THIS WORK AND GET OUR
BUDGET UP.
>> THAT'S REALLY WELL SAID.
WE SHOULD GO TO THE NEXT SLIDE
OF MAPPING THIS BUDGET, WHICH
IS TO SAY, WE HAVE STRUCTURAL
ISSUES THAT TOOK MANY YEARS TO
CREATE, AND IT'S GOT A TICKET
A FEW YEARS TO UNWIND. I USE
LISA'S AS AN EXAMPLE OF
CHANGING A LEASE FROM ME
CITY-OWNED LEASE AND A PRIVATE
BUILDING WHICH INCREASES OUR
EXPENSES IN THE SHORT TERM. ALL
OF THAT. AND ALL AROUND, IT
WILL SAVE THE CITY MONEY TO
HAVE THAT IN THE CITY BUILDING.
AND SO WE WILL HAVE TO LOOK AT,
WHAT ARE THESE LONG-TERM
CHANGES THAT WE NEED TO MAKE?
AND AT THE SAME TIME, WE NEED
TO DO SOME SHORT RUN CHANGES
JUST THIS YEAR.
>> THIS FINAL SLIDE JUST REALLY
OUTLINES THE DIFFERENT WAYS
THAT THE BUDGET IS FUNDED, AND
WHAT THOSE RESTRICTIONS ARE.
AND SO THE FIRST TWO LINES, THE
FUNDS THAT ARE RESTRICTED
EITHER BY THE STATE
CONSTITUTION OR STATE LAW, YOU
ALL DON'T HAVE THE AUTHORITY
TO CHANGE. WE WILL PROVIDE MORE
DETAILS ON WHAT AND HOW THOSE
FUNDS ARE USED AND WHICH PARTS
OF THE BUDGET IT SUPPORTS. A
LOT OF OUR UTILITY IS IN
TRANSPORTATION AND PERMITTING
THINGS THAT ARE RESTRICTED IN
VARIOUS WAYS, AS WELL AS OTHERS
A LOT RESTRICTIONS. YOU SORT OF
FIRST HAVE TO UNDERSTAND THAT
AND TAKE THAT OFF THE TABLE IN
TERMS OF ADDRESSING THE GENERAL
FUND DEFICIT, AND THEN THERE
ARE LOCAL RESTRICTIONS, YOU
KNOW, VOTER APPROVED LEVIES AND
DEDICATION OF NEW REVENUE
STREAMS. SO THINGS LIKE WHEN
THE CITY ADOPTS A NEW TAX, THAT
COULD BE A GENERAL FUND -- IT
CAN SUPPORT ANY GENERAL
GOVERNMENT PURPOSE, BUT IN SOME
CASES, IT IS ADOPTED FOR A
SPECIFIC REASON, LIKE THE
BEVERAGE TAX WHICH WAS AT THE
TIME ADOPTED TO PROVIDE
INVESTMENTS IN FOOD SECURITY AS
WELL AS EARLY CHILDHOOD SUPPORT
AND THAT SORT OF THING. COUNCIL
COULD CHOOSE TO CHANGE THOSE
RESTRICTIONS AND USE THOSE
FUNDS FOR OTHER GENERAL
GOVERNMENT PURPOSES. AND OF
COURSE, THE GENERAL FUND IS THE
CITY'S MOST FLEXIBLE REVENUE
SOURCE. BECAUSE OF THAT, IT IS
WHAT IS USED TO FUND MANY OF
YOUR PRIORITIES. AND SO THAT IS
WHERE THERE IS THE MOST DEMAND
AND WHERE WE HAVE THE
STRUCTURAL DEFICIT. WE WILL
SPEND THE MOST TIME THIS YEAR
LOOKING AT THE GENERAL FUND AS
WELL AS THE DEDICATED REVENUE
STREAMS.
>> COUNCIL PRESIDENT.
>> THANK YOU VERY MUCH. GOING
TO THE LOCAL RESTRICTIONS, I'M
GLAD YOU'RE GOING TO BE DOING
A DEEP DIVE INTO THAT, BECAUSE
THE WAY OF LOOKING AT HOW THESE
FUNDS ARE RESTRICTED IS, WHAT
HAVE WE BEEN SPENDING ON AND TO
WHAT LEVEL HAVE WE EXERTED OUR
OVERSIGHT FUNCTION? WITH THE
EXCEPTION OF THE P.E.T., IT
SEEMS LIKE THE OTHER RESTRICTED
FUNDS, SUITE AND BEVERAGE,
SHORT-TERM RENTAL TAXES,
SOMETHING ABOUT -- WHAT ARE THE
OTHER ONES?
>> THERE'S ALSO ADDING THE
ADMISSIONS TAX. THE
TRANSPORTATION NETWORK
COMPANIES.
>> I HOPE THIS IS SOMETHING
YOU'RE GOING TO BE LOOKING AT.
THOSE EXPENSES DON'T ACTUALLY
HAVE TO COMPETE AGAINST, YOU
KNOW, FOR FUNDING AT THE LEVEL
THAT P.E.T. EXPENSES DO OR
GENERAL FUND EXPENSES DO.
THAT'S ALWAYS SEEMED A LITTLE
BIT ODD. SO WHAT ARE WE
SPENDING THE SUITE AND BEVERAGE
TAX ON, OR WHATEVER ? IS THAT
ONE COMPONENT THAT YOU'RE
GOING TO BE LOOKING AT, OR ARE
PRESENTING TO US? WHAT DO THESE
RESTRICTED FUNDS FUND, AND WHAT
ARE THE OUTCOMES OF THOSE
INVESTMENTS?
>> WE WILL FOR SURE BE LOOKING
AT WHAT THEY FUND AND THE
CHOICES AT THE TIME IN TERMS OF
PRIORITIZING USE OF THOSE FUNDS
AND IDENTIFYING OPTIONS IN
TERMS OF OUTCOMES. I THINK SOME
OF THAT WILL BE INVITING THE
INDIVIDUAL DEPARTMENTS AND
PROGRAM MANAGERS TO REPORT IF
THAT IS THE REQUEST OF THE
COUNCIL, TO TALK ABOUT HOW THEY
ARE PERFORMING. I WILL JUST
NOTE THAT MANY OF THOSE FUNDS
ARE RELATIVELY SMALL. THE SUITE
AND BEVERAGE TAX, THE ADMISSION
TAX, THOSE THINGS. FOR EXAMPLE,
THE JUMPSTART PAYROLL EXPENSE
TAX HAS BEEN BACKFILLING FOR
ONGOING EXPENDITURES THAT HAD
PREVIOUSLY BEEN FUNDED BY THE
SUITE AND BEVERAGE TAX IN THE
'23 A '24 BIENNIUM. EACH
LAYER YOU LOOK AT, WE IDENTIFY
DIFFERENT SORTS OF PROBLEMS. WE
WILL BE LOOKING AT ALL OF THOSE
FUNDS AND ASKED INTEGERS
BECAUSE IN TERMS OF
PRIORITIZATION, YOU WILL WANT
TO DECIDE IF THE PRIORITIES
THAT WERE ESTABLISHED AT THE
TIME THOSE REVENUE SOURCES WERE
ADOPTED ARE THE PRIORITIES
TODAY WHEN PUT AGAINST WHAT
WOULD NEED TO BE CUT OTHERWISE.
AND SO IT'S NOT GOING TO BE
EASY, BUT WE WILL BE IN IT
TOGETHER.
>> IF I COULD EXPAND, THIS
LIGHT IS REALLY -- SO THIS
LIGHT REALLY IS INTENDED TO
SHOW WHAT THE PROCESS OF
PRESENTATIONS TO OUR COMMITTEE
ARE. I CALL IT BIG R RESTRICTED
AND LITTLE ARE RESTRICTED.
STATE-MANDATED ISSUES AND FEES
COLLECTED BY DEPARTMENTS. THE
LITTLE IS RESTRICTED IN USE
LIKE A LEVY, OR LIKE A SWEET
AND BEVERAGE TAX OR A JUMPSTART
TAX. SO WE ARE GOING TO BE
MAPPING NOT ONLY -- LIKE THE
COUNCIL PRESIDENT WAS SAYING,
WHAT ARE THEY FUNDING? WHAT ARE
THEY ACHIEVING? AND THEN ARE WE
HAVING A DUPLICATION OF OTHER
LIKE THIS?
>> I THINK IT IS ALSO
IMPORTANT, IF YOU WANT TO TALK
ABOUT THIS NOW, THAT WE
UNDERSTAND SOME OF THE OTHER
STRUCTURAL PROBLEMS THAT WE
HAVE. FOR EXAMPLE, WE BUDGET AT
THE LEVEL WHERE, IT'S ONLY SO
FAR DOWN IN THE DEPARTMENT
EXPENSES THAT WE HAVE ACCESS TO
THAT WE HAVE AUTHORITY TO
DEDICATE. WE ALSO DON'T HAVE A
COST ANALYSIS, SO IT'S HARD
FOR US TO UNDERSTAND SOMETIMES,
YOU KNOW, WHERE THE -- WHERE
THE DEPARTMENT SPENDING IS
GOING. WE DON'T HAVE A FULL
UNDERSTANDING SOMETIMES OF WHY
SOME DEPARTMENTS CONTINUALLY
HAVE -- UNDER SPEND IN THEIR
FTE COST ALLOCATION. SO THERE
ARE SEVERAL STRUCTURAL
CHALLENGES TO THE KIND OF
INFORMATION THAT WE HAVE ACCESS
TO THAT KEEPS US FROM BEING
ABLE TO MAKE SOME OF THE
DECISIONS THAT WE NEED TO MAKE.
MY HOPE IS THAT IS STARTING TO
CHANGE. AND IT SOUNDS LIKE
CHAIR STRAUSS IS INDICATING
THAT, YOU KNOW, THE MAYOR IS
INTERESTED IN HELPING MAKE SURE
WE HAVE ACCESS TO BETTER
INFORMATION SO WE CAN REALLY
MAKE THESE HARD DECISIONS. AND
FORTHCOMING, SUBSEQUENTLY.
>> WILL BE BREAKING DOWN AT A
DEEPER LEVEL THAN THE BSL. WE
WILL BE LOOKING AT BUDGET
PROGRAMS AS WELL AS, THAT WILL
BE COMPLEMENTED BY SOME
ADDITIONAL MINOR BUSINESS
INFORMATION. THAT THE EXECUTIVE
PROVIDED THAT WE ARE STILL
SORTING THROUGH. BUT THAT WILL
HELP PROVIDE A LITTLE MORE
INSIGHT INTO THE DEPARTMENTS,
AND WILL HELP YOU ALL IDENTIFY
WHERE YOU NEED MORE INFORMATION
OR TO UNDERSTAND MORE, AND WE
WILL CONTINUE TO FOCUS ON HOW
WE CAN BETTER UNDERSTAND THE
STAFFING IN DEPARTMENTS, BUT
THAT IS AN ONGOING, LONGER-TERM
PROJECT. AND THERE IS ALSO WORK
TO THE FISCAL TRANSPARENCY
PROGRAM THAT WAS ADOPTED BY THE
COUNCIL IN NOVEMBER OR DECEMBER
OF '23. THAT IS STARTING UP A
BUDGET MONITORING PROGRAM THAT
THE CITY BUDGET OFFICE IS
WORKING ON AND IS EXPECTED TO
BE LAUNCHED IN MID-2025. BUT
JUST FLAGGING ALL OF THIS WORK
GOING ON THAT MAY END UP
NEEDING TO GET PUSHED OUT A BIT
AS THE CITY BUDGET OFFICE IS
GETTING PULLED IN MULTIPLE
DIRECTIONS ALL AT THE SAME
TIME. THE DIRECTOR CAN SPEAK
MORE TO THAT, BUT I WILL JUST
ACKNOWLEDGE IT'S NOT A SMALL
BODY OF WORK. AND THAT SHOULD
HELP THE COUNCIL BETTER
UNDERSTAND THROUGHOUT THE YEAR
WHERE THE CITY IS OVERSPENDING
OR UNDER SPENDING ITS BUDGETS
AND HAVE BETTER INFORMATION TO
UNDERSTAND IF FUNDS COULD BE
REALLOCATED FOR EMERGING NEEDS
OR IF IN A STRUCTURAL WAY, WE
ARE OVER OR UNDER BUDGETING
CERTAIN PROGRAMS FOR OUR
SERVICES. AND THEN I WILL JUST
NOTE, BECAUSE IT CAN BE
CONFUSING ON THIS SLIDE,
PROPERTY TAX IS LISTED AS FUNDS
RESTRICTED BY STATE
CONSTITUTION. THERE ARE
RESTRICTIONS ON HOW MUCH
PROPERTY TAX THE CITY CAN
COLLECT. BUT PROPERTY TAXES ARE
ONE OF THE MAIN SOURCES OF
FUNDS IN THE GENERAL FUNDS WHO
DOES ALSO PROVIDE FUNDING FOR
MANY GENERAL GOVERNMENT
SERVICES.
>> VICE CHAIR.
>> THANK YOU. I JUST WANT TO
POINT OUT ALSO THAT THIS DOES
NOT PRECLUDE US. WE EACH HAVE
DEPARTMENTS WE WORK WITH UNDER
OUR RESPECTIVE COMMITTEES, AND
IT DOESN'T PRECLUDE US FROM
WORKING WITH OUR RESPECTIVE
DEPARTMENTS TO GET BETTER
INSIGHT AS TO THE PROGRAMS THAT
THEY ARE ADMINISTERING AND HOW
WELL THOSE PROGRAMS ARE DOING.
SO IT IS MY HOPE THAT WE ARE
ALL ENGAGING IN THAT AS PART OF
THIS THAT WILL HELP INFORM PART
OF THIS BUDGET PROCESS AS WELL.
WHEN THE DEPARTMENTS OF IN
PRESENTING AT EVERYONE'S
INDIVIDUAL COMMITTEES, THEY
BEEN TALKING ABOUT THE BUDGET,
BOTH SOURCE AND USE. I SAW
THIS AT THE TRANSPORTATION LEVY
WHERE THEY DIDN'T JUST STOP IN
AND TALK ABOUT THE LEVY, THEY
LOOKED AT THE REST OF THEIR
FUNDING SOURCES. I THINK IT
WILL BE ABSOLUTELY IMPORTANT TO
START COLLATING THIS
INFORMATION. I HAD IT ON MY
NOTES BEFORE, WHEN IT COMES TO
EXECUTIVE ISSUES, IT IS MY
PREFERENCE THAT THE EXECUTIVE
IS PRESENTING. WHEN IT COMES TO
CITY COUNCIL GENERATED ISSUES
OR IDEAS, IT'S MY PREFERENCE
THAT CENTRAL STAFF IS
PRESENTING. I KNOW IT MIGHT
SEEM LIKE A SMALL DIFFERENCE,
BUT IT IS MORE DIFFICULT TO GET
ACCURATE INFORMATION TO ASK
ALLIE TO GO RESEARCH EVERY LINE
ITEM IN MY DEPARTMENT AS
COMPARED TO ASKING THE CEO TO
COME AND PRESENT THAT
INFORMATION. SO THE ANSWER IS
YES TO THE INVESTIGATION. AND
THAT WAS SOMETHING THAT I WAS
GOING TO SAY BEFORE YOU MADE
YOUR COMMENTS AS WELL. AS WE DO
SOME CULTURAL NORMING IN THE
COMMITTEE, I JUST WANTED TO SET
THAT IS ONE.
>> JUST FOR TRANSPARENCY, I
KNOW THAT THE EXECUTIVE HAS
INDICATED THEIR SUPPORT OF OUR
WORKING WITH THE DEPARTMENTS TO
LOOK AT THEIR APPROPRIATE ET
CETERA.
>> I THINK THAT'S A PERFECT
TRANSITION TO ITEM NUMBER TWO.
BEFORE WE GET ITEM NUMBER TWO,
WE HAVE SPENT TODAY TALKING
ABOUT -- WE HAVE SPENT TODAY
TALKING SIMPLY ABOUT THE
FINANCE ASPECT OF FINANCE,
NATIVE COMMUNITIES, AND TRIBAL
GOVERNMENTS. MARCH 6th, WE ARE
GOING TO DO THE SAME DEEP DIVE
INTO NATIVE COMMUNITIES AND
TRIBAL GOVERNMENTS, BECAUSE WE
HAVE SOME REALLY INCREDIBLE
WORK THAT HAS BEEN BUILT UP
OVER THE LAST NUMBER OF YEARS
WITH THE DEPARTMENT OF
NEIGHBORHOODS. WE HAVE THE
TRIBAL RELATIONS SUMMIT, AND
HOW WE ARE GOING TO ENGAGE IN
GOVERNMENT TO GOVERNMENT
CONSULTATION. AND BEFORE WE
FORMALLY TRANSITION,
COUNCILMEMBER SAKA. OH, I SEE.
COUNCIL PRESIDENT.
>> THANK YOU. I WAS WAITING FOR
THE QUESTIONS SLIDE. BUT IN
ANSWER TO YOUR QUESTION, VICE
CHAIR, PART OF THE INTENT OF
THE ACCOUNTABILITY SECTION IN
MY COMMITTEE IS ALSO TO DIVE
DEEP ON SOME OF THOSE QUESTIONS
WHERE THE EXECUTIVE INFORMATION
RUNS INTO COUNCIL QUESTIONS ON
PERFORMANCE OR RESOURCE
TRACKING OR WHATEVER. THAT IS
ALSO AN OPTION. JUST WANT TO
PUT THAT ON THE TABLE. I'VE
BEEN WAITING FOR THOSE TOPICS
TO OCCUR IN MY COMMITTEE. AND
THEN I HAD A BIGGER QUESTION
ABOUT THE SUPPLEMENTAL -- I
DON'T KNOW IF WE WOULD CALL IT
THE SUPPLEMENTAL BUDGET OR
WHATEVER, BUT IT OCCURS TO ME
THAT I HAVE HEARD
COUNCILMEMBERS NOTE THAT SOME
OF THE FUNDING DECISIONS THAT
ARE IN THE CURRENT BUDGET
BETWEEN 2024 ADOPTED BUDGET OUR
PRIORITIES THAT WERE -- THAT
REFLECT THE PREVIOUS COUNCILS
PRIORITIES. AND SO I DON'T
KNOW OF CHANGES TO THE ADOPTED
BUDGET ARE ANTICIPATED, OR IF
IT WOULD REQUIRE CHANGED
INPUTS, LIKE CHANGED CONDITIONS
TO BE ENTERTAINED IN THE
SUPPLEMENTAL. COULD YOU SPEAK
TO THAT? IT IS COMPLICATED BY
THE FACT THAT SOME OF THE
EXPENSES ARE ALSO CONTRACTED
OUT, SO THAT WHEN WE SIGN A
CONTRACT, THE CONTRACT IS A
CONTRACT AND WE CAN'T GO BACK
ON THAT. COULD YOU SPEAK TO
THAT A LITTLE BIT?
>> YEAH. WHAT I KNOW IS, BUDGET
STABILITY IS ONE OF THE MOST
IMPORTANT THINGS. WE TALK ABOUT
MAKING -- YES IS A FINANCER,
NO IS A FINANCER, MAYBE IT'S
NOT. WE LIKE TO KEEP THAT
CONSISTENCY SO THAT PEOPLE KNOW
HOW TO USE THEIR BUDGETS AND SO
ON AND SO FORTH. I DON'T
FORESEE US MAKING DRASTIC
CHANGES TO THE BUDGET DURING
THE SUPPLEMENTAL. I DO SEE US
MAKING CHANGES THAT ARE NEEDED,
AND THAT HAVE BEEN ANALYZED TO
ENSURE THAT WE ARE ABLE TO
ADDRESS THE 2025 BUDGET. SO THE
SUPPLEMENTAL IS JUST FOR THIS
YEAR. THE BIG CHANGE, WHICH IS
BALANCED AT THIS TIME, WE
DON'T HAVE A BUDGET HOLE FOR
THIS YEAR'S BUDGET TO BE
ADDRESSED IN THE SUPPLEMENTAL.
WE DO HAVE A STRUCTURAL DEFICIT
MOVING FORWARD, AND THAT IS
WHAT WEFOR
2025.
>> OKAY. I THOUGHT THAT THE
LINES ON THE GRAPH WE WERE
SHOWN IN BEN'S PRESENTATION DID
SHOW A DIVERSION FOR THE
GENERAL FUNDING.
>> THIS IS WHERE HAVING THE
EXECUTIVE PRESENT ON EXECUTIVE
ISSUES AND CENTRAL STAFF
PRESENTING ON CENTRAL STAFF
ISSUES. BEFORE YOU JUMP IN,
I'M GOING TO HAVE THE CLERK
RUN THE SECOND ITEM INTO THE
RECORD. AND IF YOU COULD STAY
AT THE TABLE SO I CAN JUST
CONTINUE THIS CONVERSATION.
>> OKAY.
>> ITEM TWO, INFORMATIONAL ITEM
2402, CITY BUDGET OVERVIEW
BRIEFING AND DISCUSSION.
>> COUNCIL PRESIDENT, WOULD YOU
LIKE TO ASK YOUR QUESTION?
>> THIS IS A CHART CENTRAL
STAFF REGULARLY PRESENTS THAT
SHOWS THE BIRTH ANNUAL DEFICIT.
IN 2024, THE ANNUAL PROJECTED
ONGOING REVENUES AND ANNUAL
PROJECTED EXPENDITURES, THERE
IS A GAP. BUT THAT IS THAT IS
A ONE-TIME OPTION. THERE IS NOT
A SOLUTION FOR THE GAP
PROJECTED IN '25 A '26 AND
BEYOND. HOWEVER, I WILL JUST
FLAG. THERE ARE ALSO SOME
EMERGING ISSUES THAT WILL COME
UP THIS YEAR THAT WILL LIKELY
THROW THE '24 BUDGET OUT OF
BALANCE. LABOR CONTRACTS, AND
POTENTIALLY OTHER THINGS THAT
THE DOCTOR COULD SPEAK TO. SO
DEPENDING ON A NUMBER OF
FACTORS MIDYEAR, THERE MAY NEED
TO BE SOME ADJUSTMENTS TO
REBALANCE. THE EXECUTIVE DOES
HAVE AUTHORITY TO JUST NOT
SPEND MONEY. AND SO SOME OF
THIS ADMINISTRATIVELY, BUT I
EXPECT JULIAN I WILL BE BACK
HERE AT THE TABLE IN MAY
TALKING ABOUT HOW THE 24 BUDGET
WILL REMAIN IN BALANCE BASED ON
HOW '23 ENDED AND THE
OUTSTANDING LABOR CONTRACTS
THAT MIGHT BE BETTER KNOWN AT
THAT TIME. BUT YOU ARE RIGHT,
THAT WE ARE EXPECTING THAT
THERE ARE SOME ISSUES TO
ADDRESS IN '24 AS WELL AS A
LONGER-TERM ISSUES AND '25 AND
BEYOND.
>> I LIKE TO BRING JULIE
DINGLEY TO THE COMMITTEE TABLE.
WE'VE BEEN JOINED BY
COUNCILMEMBER WU. IS IT ALL
RIGHT IF I LET THEM KIND OF
OPENED IT UP AND THEN I WILL
PASS IT RIGHT TO YOU,
COUNCILMEMBER SAKA. IF YOU'D
LIKE TO MAKE ANY INDUCTOR HE
REMARKS, THIS IS THE TIME. I
KNOW YOU GOT A SLIDE DECK THAT
WE WILL WALK THROUGH.
>> CAN YOU HEAR ME OKAY? I'M
JULIE DINGLEY. I HAVE THE
PLEASURE OF REPRESENTING THE
CITY BUDGET OFFICE. IT'S A
TEAM OF ABOUT 40 PROFESSIONALS.
WE HAVE ABOUT 25% OF THAT AS
THE INNOVATION AND PERFORMANCE
TEAM, AND THEY DO WITH THEIR
NAME SUGGESTS. THEY WORKED ON
INNOVATION AND IMPROVING WHAT
WE DO. THEY HAD SEVERAL ITEMS
IN THE CITY SPEECH YESTERDAY.
IT'S THE BRAINCHILD OF THE
PERFORMANCE TEAM, AND THEN WE
HAVE THE BUDGET SIDE. OUR STAFF
ARE BROKEN UP INTO ISSUE AREAS,
SO WE HAVE A TEAM THAT WORKS ON
REVENUE AND WERE CAST, HAVE A
TEAM THAT WORKS ON
TRANSPORTATION AND UTILITIES,
AND THEN ON HUMAN SERVICES AND
NEIGHBORHOOD DEVELOPMENT, ARTS
CULTURE, AND SO WE REALLY ON
THE GAMUT. JUST REALLY PROUD TO
REPRESENT SUCH INCREDIBLE TEAM.
IT'S GREAT TO BE WITH YOU THIS
MORNING.
>> WONDERFUL. I KNOW YOU GOT A
PRESENTATION. CLERKS, IS THIS
ALL SET UP AND READY TO ROLL?
ARE WE STILL HAVING TECHNICAL
DIFFICULTIES? GREAT.
COUNCILMEMBER SAKA, YOU ANY
QUESTION, AND THEN WE WILL DIE
RIGHT INTO THE PRESENTATION.
>> TWO QUESTIONS. HOPEFULLY
THEY ARE FAIRLY STRAIGHTFORWARD
. WE UNDERSTAND THE
SUPPLEMENTAL BUDGET PROCESS IS
REQUIRED TO UNFORESEEN
CIRCUMSTANCES. AND SO WE TALKED
ABOUT A FEW POTENTIAL SCENARIOS
THERE, ONE RAISED BY THE
COUNCIL PRESIDENT. THERE ARE
SIX NEW MEMBERS HERE ALIGNING
SPENDING TO THE PRIORITIES OF
THIS COUNCIL . YOU KNOW, WE
ALSO TALKED ABOUT -- THERE IS
REAL WORLD STUFF POTENTIALLY
COMING UP WITH LABOR CONTRACT.
ALTHOUGH TO BE HONEST, I MEAN,
WE HAVE KNOWN THAT CITY WORKERS
ARE DUE FOR THOSE DISCUSSIONS,
NEGOTIATED AND ONGOING. THEY
HAVE BEEN DUE FOR A RAISE FOR A
LONG TIME. SAME THING FOR THE
COLLECTIVE BARGAINING AGREEMENT
WITH OUR POLICE OFFICERS, THAT
ARE A. I'M NOT SURE IF THAT'S
ENTIRELY UNFORESEEN. BUT THAT
SAID, IF THE SUPPLEMENTAL
BUDGET PROCESS IS INTENDED TO
COVER THOSE UNFORESEEN
CIRCUMSTANCES, WHERE DOES THE
MONEY COME FROM? ISN'T IT
ALREADY SPENT, MOSTLY? DURING
THE REGULAR -- WHERE ARE THE
RESOURCES COMING FROM?
>> I'M GOING TO LET THE
DIRECTOR TAKE A CRACK AT THAT
QUESTION.
>> AND THEN IT WOULD HAVE US
RENDER THE PRESENTATION,
BECAUSE -- AND WE'VE BEEN
JOINED BY COUNCILMEMBER
HOLLINGSWORTH. I'M GOING TO
PASS IT BACK TO YOU TO ANSWER
THE QUESTIONS. LET'S JUMP INTO
THIS PRESENTATION AS I THINK A
LOT OF THESE QUESTIONS WILL GET
ANSWERED.
>> THANKS COUNCILMEMBER FOR
YOUR QUESTIONS. SO THERE HAVE
BEEN A LOT OF DIFFERENT WAYS
THAT SUPPLEMENTALS HAVE BEEN
HANDLED IN THE PAST. AND THE
WAY THAT WE ARE HANDLING IT NOW
IS THAT WE HAVE A LITTLE BIT
MORE LONG-TERM THINKING, IS OUR
GOAL. IN THE PAST,
SUPPLEMENTALS HAVE BEEN SEEN AS
AN OPPORTUNITY TO CHANGE THE
BUDGET MIDSTREAM TO ADDRESS
EMERGING PRIORITIES, WHETHER IT
BE UP, DOWN, OR DIAGONALLY. YOU
WOULD SEE SOMETIMES THE LAUNCH
OF A BRAND-NEW PROGRAM DURING A
SUPPLEMENTAL. YOU ASK WHERE THE
MONEY CAME FROM, IT WAS OFTEN
WITH ONE-TIME RESOURCES. LET'S
SAY WE ENDED THE CALENDAR YEAR
2023 WITH MORE MONEY THAN WE
EXPECTED. WE GOT MORE IN
REVENUE, WE DIDN'T SPEND AS
MUCH AS EXPECTED -- FOLKS
TAKING VOTES BEFORE MIGHT'VE
DECIDED THAT THEY WANTED TO USE
THAT ONE TIME TO START A NEW
PILOT PROGRAM. AND THEN WE HAVE
TO FIND ONGOING MONEY IN THE
BUDGET TO SUPPORT IT. WE GET
INTO A SITUATION WE FIND
OURSELVES IN. I WOULD SAY IN
GENERAL, WE ARE LOOKING FOR
SUPPLEMENTS TO BE VERY MINOR,
VERY TECHNICAL. YOU WILL SEE
THOSE COME THROUGH IN
SUPPLEMENTALS AS WELL. WE WANT
TO LIMIT THE USE FROM THE
EXECUTIVE SIDE. BECAUSE WE KNOW
WE HAVE THE 2025 DEFICIT AHEAD
OF US. AND SO WE WOULD
ENCOURAGE YOU ALSO TO CONSIDER
THE MOST DEPARTMENTS -- HERE WE
ARE, FEBRUARY 21st. MOST
DEPARTMENTS HAVE GOTTEN A
SPENDING UNDERWAY FOR 2024 AND
ARE DEEP IN THE COMMUNITY
CONVERSATIONS ON CONTRACTING
THOSE FUNDS. I THINK IF YOU HAD
A DESIRE, YOU WOULD HAVE TO
MAKE SURE THAT THOSE FUNDS
HADN'T ALREADY BEEN COMMITTED.
AND SO IT IS DEFINITELY A
CONVERSATION WITH WHATEVER YOU
HAD IN MIND. I HOPE THAT HELPS
CLARIFY.
>> WELL DONE.
>> WELL, I AM JUST PLEASED TO
BE WORKING ON THIS HERE WITH
YOU, AS I SAID. I SEE WE HAVE
SOME NEW COUNCILMEMBERS OVER
HERE CHALLENGING MY
RECOLLECTION OF THEIR REAL
NAMES. OH, YOU SWITCHED
NAMETAGS. GREAT. I'M GOING TO
DIVE IN. HOPEFULLY I CAN
NAVIGATE THIS. SHE HAS THE
MAGIC TOUCH. GOOD MORNING. WE
ARE GOING TO DRILL A LAYER
DEEPER AND GET SOME CHALLENGES
AND OPPORTUNITIES WE HAVE IN
FRONT OF US THIS YEAR FOR
BUILDING THE 2025 BUDGET. I
WANT TO SPEND A LITTLE BIT OF
TIME THIS MORNING TALKING
THROUGH THE P█ROJECTED DEFICIT,
AND REALLY BUILDING IT FROM
WHAT KIND OF FUNDS DO I HAVE.
IT BUILDS ON DEPUTY DIRECTORS
PRESENTATION. WHAT IS THE
OVERALL BUDGET, AND WHAT ARE WE
TALKING ABOUT THAT HAS THE
DEFICIT? WERE GOING TO TALK
ABOUT HOW REVENUE HAS CHANGED
OVER TIME, AND CAN ANSWER
QUESTIONS AS WE GO. AND THEN I
WENT TO TALK YOU THROUGH ABOUT
A LITTLE BIT OF CONTEXT ON
TRANSPORTATION FUNDING IN
PARTICULAR, BECAUSE THAT'S A
PRETTY BIG CHALLENGE FOR THIS
YEAR, AS WELL AS FUNDING
CHALLENGES, WHICH IS A REAL
ESTATE EXCISE TAX. WILL GET
INTO MORE OF THAT IN A LITTLE
BIT. SO FOR A LITTLE CONTEXT
SETTING, OVERALL, AS YOU HEARD
IN PRIOR PRESENTATIONS, THE
OVERALL CITY BUDGET IS ABOUT
7.9 MILLION, THAT IS ACROSS ALL
FUNDS. YOU JUST HEARD IN THE
LAST PRESENTATION DEPUTY
DIRECTOR CANOOCHEE WALK YOU
THROUGH HOW NOT ALL FUNDS ARE
CREATED EQUALLY IN TERMS OF
YOUR ABILITY TO CHANGE HOW THEY
ARE USED. SO SOME FUNDS ARE
RESTRICTED, WHETHER IT'S BY
STATE LAW, BY VOTERS, OR BY
LOCAL ORDINANCE. AND SO WHEN
YOU LOOK AT THIS PIE CHART, YOU
HAVE 7.9 BILLION OVERALL, BUT
IT IS NOT ALL CREATED EQUALLY
TO USE HOW YOU WANT. YOU COULD
HAVE, FOR EXAMPLE, USE ALL 7.9
BILLION TOWARDS HOMELESSNESS,
FOR EXAMPLE. SO YOU 50% OF THE
FUNDS GOING TOWARDS UTILITIES,
TRANSPORTATION, AND
ENVIRONMENT. YOU GOT ABOUT 10%
OF THE TOTAL FUNDS GOING
TOWARDS PUBLIC SAFETY. AND THAT
I WON'T READ THE FULL CHART,
BUT I DO WANT TO POINT OUT IN
THE TOP RIGHT CORNER, WE HAVE
ADMINISTRATION AT 1%. AND THEN
IN THE FURTHEST TOP RIGHT
CORNER, I HAVE LISTED OUT THE
DEPARTMENTS THAT THAT 1%
REPRESENTS. SO IT'S A LOT OF
DEPARTMENTS FOR A VERY SMALL
SLICE OF THE PIE TO KEEP ALL
THE CITY RUNNING. WE HAVE THE
CITY AUDITOR, THE BUDGET
OFFICE, MY TEAM, ETHICS AND
ELECTION, FORECASTS, THE
LEGISLATIVE DEPARTMENT, COURSE,
THE MAYOR'S OFFICE, AND SO ON.
AND THEN YOU HAVE A VERY LARGE
CHUNK, WHICH IS CENTRAL SERVICE
FUNCTIONS AT 19%. SO THAT
INCLUDES A LOT OF OUR
BIG-TICKET FIXED COSTS THAT WE
INCUR FOR THE CITY. THINK ABOUT
THAT IN TERMS OF OUR CITIES
JUDGMENT AND CLAIMS FUND. OUR
WORKERS COMPENSATION AND
INSURANCE. YOU MIGHT NOT KNOW
THAT THE CITY IS SELF INSURED,
AND SO WE TAKE ON A LOT OF
THOSE -- WE TAKE ON ALL OF
THOSE COSTS. THAT'S A HUGE
PART OF THIS. AS WELL, WE HAVE
ESSENTIAL SERVICE DEPARTMENTS
FAS WHO MAINTAINS OUR
BUILDINGS, I.T., TO MAKE SURE
WE CAN BE CONNECTED AND ALL
SPEAKING TODAY, AND OF COURSE,
HR. SO WHEN WE'VE ISSUED
BONDS, WE HAVE TO PAY THOSE
BONDS OFF OVER TIME, JUST LIKE
PAYING YOUR MORTGAGE. AND SO
THE FIXED DEBT SERVICE COSTS
ARE INCLUDED AS PART OF THAT
CENTRAL SERVICE FUNCTION.
>> DIRECTOR, THIS SLIDE AND
SLIDE SIX ARE A VISUALIZATION
OF THE TABLE THAT SHE HAD ON
HER PRESENTATION. THESE ARE A
DEEP DIVE FROM THE TOP DOWN,
AND WE WILL ALSO TALK ABOUT
LINES OF SERVICE AS WE REVIEW
AND AM IN THE BUDGET AND THE
BOTTOM UP AS WELL.
>> RATES. THANK YOU. THIS IS
THE SAME INFORMATION IN A
DIFFERENT VISUAL. SO INSTEAD OF
BEING BY TYPES OF SERVICE
PROVIDED, WE ARE SHOWING YOU
THIS BY FUND. THIS IS THE FULL
7.9 BILLION ACROSS THE
DIFFERENT FUNDS. SO GOING FROM
THE BOTTOM UP, JUST TO KEEP YOU
ON YOUR TOES, THE GENERAL FUND
IS THERE IN BLUE. IS THAT WHAT
.7 BILLION. AND THEN YOU HAVE
THE UTILITIES. RIGHT ABOVE THAT
IN ORANGE AND GRAY, YOU WILL
NOTICE THERE IS A BIG JUMP DOWN
IN TERMS OF FUND SIZE WHEN YOU
GET TO THE REST. YOU'RE
LOOKING AT THE HEALTHCARE FUND,
TRANSPORTATION FUND, I.T., PEER
ATTACK SIX RENTS, FAS FUND, AND
THEN THERE IS SOMETHING LIKE --
DON'T QUOTE ME ON THIS. 60
FUNDS WITHIN THAT OTHER
CATEGORY. GREAT. SO WHAT WE
TALKED THE MOST ABOUT? I WOULD
POSIT TO YOU THAT WE ARE GOING
TO TALK THE MOST ABOUT GENERAL
FUND AND PAYROLL TAX. AND SO I
HAVE TWO SLIDES TO BREAK DOWN
THOSE PARTICULAR FUNDING
SOURCES. SO THE FIRST ONE IS
GENERAL FUND. THE GENERAL FUND
MAKES UP, OF THE TOTAL NEARLY 1
BILLION OF RESOURCES, ABOUT 1.7
BILLION COMES FROM GENERAL
FUND. YOU WILL NOTICE THAT THE
LARGEST SLICE OF THE PIE WITH
GENERAL FUND WENT FROM 10%
OVERALL DOWN TO -- WE ARE AT
46% FOR PUBLIC SAFETY. AND
THAT MIGHT STRIKE YOU AS A LOT
OR A LITTLE, AND IT'S IMPORTANT
TO REMEMBER THAT PUBLIC SAFETY
IS A CHARTER RESPONSIBILITY FOR
THE CITY. THERE ARE NOT MANY
CHARTER RESPONSIBILITIES THAT
WE HAVE, FEWER THAN 10, BUT YOU
WOULD SEE THIS TYPE OF
DISPERSION AMONG MUNICIPAL
LEVEL RESOURCES, WHEREVER THAT
IS THE CASE.
>> DIRECTOR, WHEN YOU SAY
PUBLIC SAFETY, I DIDN'T ASK
THIS QUESTION BEFORE, WHICH
DEPARTMENTS ARE INCLUDED?
>> WITHIN THIS SLICE OF THE
PIE, WE ARE POLICE, FIRE, THE
CARE DEPARTMENT. WE HAVE A LAW
AND THE SMALLER ACCOUNTABILITY
OFFICES, LIKE CPC. I'M TRYING
TO THINK -- OFFICE OF EMERGENCY
MANAGEMENT. A BE A COUPLE OF
OTHER SMALL ONES. WE CAN GET
YOU THE FULL LIST OF THAT WOULD
BE HELP.
>> WHICH IS ALSO WHY I WANT TO
BE DOING A DEEP DIVE INTO EACH
OF THE SLICES OF THE PIE.
COUNCILMEMBER KETTLE.
>> YEAH, CHAIR STRAUSS, I WOULD
IMAGINE IT LINES UP WITH THE
NINE ENTITIES THE DEPARTMENTS
OFFICES AND COMMISSION -- I
WOULD IMAGINE IT IS 9, BUT IF
IT IS NOT 9, PLEASE TELL ME.
>> I THINK IT'S THE SAME
OVERLAP THAT YOU HAVE.
>> I WILL JUST NOTE, IT IS THE
9+ THE POLICE RELIEF AND
PENSION THAT IS NOT A
DEPARTMENT, BUT IT IS ITS OWN
SEPARATE BUDGET.
>> ANSWERING THE QUESTION ON
THE FLY, YOU RECEIVE 98%.
>> I WILL TAKE IT.
>> OTHER PIECES TO HIGHLIGHT,
EDUCATION AND HUMAN SERVICES AT
18%. AS WE GO THROUGH THE
CONVERSATION ABOUT THE GENERAL
FUND DEFICIT, THIS IS WHERE THE
LARGEST SHARES OF THE GENERAL
FUND ARE SPENT. THIS IS WHY AM
SHOWING YOU THIS TODAY, SEE HOW
THAT CONTEXT. SIMILARLY, WE
HAVE BROKEN OUT ADMINISTRATION
AND CENTRAL SERVICE FUNCTIONS
WITH GREATER DETAIL, AND NOTES
IN THE BOTTOM RIGHT-HAND
CORNER. WE ARE HAPPY TO DISCUSS
THOSE, AND WE CAN SET UP
SEPARATE BRIEFINGS. SO THE
NEXT ONE I WANTED TO SHOW YOU
IN A LITTLE BIT GREATER DETAIL
-- THIS LOOKS REALLY BIG ON
THAT SCREEN. THE NEXT ONE IS
HOW IS THE PAYROLL EXPENSE TAX
USED? AND SO THE ANNUAL BUDGET
-- THE 2024 ADOPTED BUDGET,
RATHER, THESE ARE THE USES
FOUND IN THERE. IT'S ABOUT 330
MILLION TOTAL, AND YOU CAN SEE
THE LION'S SHARE GOING TO
HOUSING AND SERVICES. THAT'S
PART OF THE SPENDING PLAN.
IT'S ABOUT 141 MILLION. THE
NEXT LARGEST CARE GOES TO THE
GENERAL FUND. THE GENERAL FUND
TRANSFER IS HOW WE DESCRIBE
THAT. THE INITIAL LEGISLATION
THE PAST JUMPSTART ALLOCATED
THE FIRST YEAR OF THE RESOURCES
IN ITS ENTIRETY TO THE GENERAL
FUND, AND THAT WAS THE
RECESSION INDUCED BY THE
PANDEMIC, WHEN OUR REVENUES
DECREASED PRECIPITOUSLY. IN
ORDER TO KEEP THE CITY
OPERATING AND KEEP AS MANY
PEOPLE IN THEIR JOBS AS
POSSIBLE, THE FULL AMOUNT --
SOME 220, I THINK THAT FIRST
YEAR, THAT WAS TRANSFERRED.
THEN FROM THAT YEAR, WE
TRANSITIONED INTO HAVING THE
ACTUAL SPENDING PLAN GOVERN,
WHERE YOU HAVE ALL THE
DIFFERENT SPENDING CATEGORIES.
ECONOMIC REVITALIZATION, A
GREEN NEW DEAL, EACH WITH A
PERCENTAGE ALLOCATION. WHAT
HAPPENED IN THE YEARS AFTER
THAT, AFTER THAT INITIAL YEAR
WAS, IT WAS CLEAR THAT THE
GENERAL FUND WASN'T HEALTHY
ENOUGH. IT HAD RECOVERED TO
PRE-PANDEMIC GROWTH RATES. WE
STILL NEEDED THE TRANSFER AND
THE NEIGHBOR WHAT A 100
MILLION. YOU SEE 2024
TRANSFERRED ABOUT 86 MILLION,
AND YOU GOT ECONOMIC
REVITALIZATION. THE SPECIAL
EXEMPTIONS CATEGORY I WANT TO
HIGHLIGHT FOR YOU, IT WAS
INCREASED GREATLY BY YOUR
PREDECESSORS IN THE LAST
COUNCIL. AS PART OF THE
REACTED BUDGET, THE COUNCIL
INCREASED THE PAYROLL TAX RATE
TO GENERATE A TARGETED $20
MILLION OF ADDITIONAL REVENUE.
THEY DEDICATED THAT NEW REVENUE
TO SPENDING ON MENTAL HEALTH
AND MENTAL SCHOOLS. THAT IS 20
MILLION OF THAT 21 MILLION
SPECIAL EXEMPTION CATEGORY IN
THE TOP RATE.
>> CHAIR STRAUSS. MAY I ASK TWO
QUESTIONS? ONE IS THE HOUSING
AND HUMAN SERVICES. HOW MUCH OF
THAT IS GOING TO THE HOUSING
LEVY?
>> THE HOUSING LEVY IS A
SEPARATE FUNDING SOURCE. SO THE
FUNDS FROM THE PAYROLL TAX
SUPPORT THE GOALS. I THINK
OVERALL, OF THE HOUSING LEVY.
SO THERE'S A BREAKDOWN WITHIN
THE LEGISLATION ON HOW FUNDS
ARE USED BETWEEN CAPITAL,
BETWEEN HOMEOWNERSHIP, BETWEEN
-- THE OF THE OTHER CATEGORIES?
>> THERE'S HOMEOWNERSHIP,
RENTAL PRODUCTION, AND THERE IS
ALSO, I THINK, 6% OF THE
HOUSING FUNDS ARE DEDICATED TO
SPECIFIC COMMUNITIES AND
SMALLER ORGANIZATIONS TRYING
TO ADDRESS DISPLACEMENT ISSUES.
I WILL JUST NOTE THAT THE
HOUSING AND SERVICES CATEGORY
IS NOT INCLUSIVE OF HOMELESS
SERVICES OR HOUSING SERVICES.
OF THAT 141 MILLION, ALMOST ALL
OF IT IS GOING TO THE OFFICE OF
HOUSING FOR THEIR PROGRAMS THAT
THEY DO TO PROVIDE HOUSING.
THERE'S A SMALL PORTION OF
THAT 141 MILLION THAT I BELIEVE
IS GOING TO EITHER HST OR THE
DEPARTMENT OF CONSTRUCTION AND
INSPECTIONS FOR TENANT
ASSISTANCE. SO TELL PEOPLE PAY
RENT, TO AVOID EVICTION.
EVICTION PREVENTION IS THE
PROGRAM.
>> MY UNDERSTANDING IS FROM THE
OFFICE OF HOUSING THAT THE
HOUSING LEVY IS NOT ITSELF
GOING TO PROVIDE ALL OF THE
FUNDING FOR THE HOUSING THAT IS
BEING PROPOSED AND THAT
JUMPSTART MONEY IS GOING TO BE
NEEDED TO ACTUALLY ACTUALIZE
THE HOUSING LEVY. SO MY
QUESTION IS, HOW MUCH OF THE
JUMPSTART MONEY IS GOING TO BE
NEEDED TO ACTUALIZE THE HOUSING
?
>> THINK YOU FOR CLARIFYING. I
WILL GET BACK TO YOU ON THAT
NUMBER. DON'T QUOTE ME ON IT,
I THINK THE INITIAL
PRESENTATION THAT THE EXECUTIVE
DID AROUND THE LEVY WAS IN THE
NEIGHBORHOOD OF ABOUT 35
MILLION. DON'T QUOTE ME ON
THAT UNTIL I CAN CONFIRM,
PLEASE. I WILL LET YOU KNOW IF
I WAS WRONG.
>> I WILL HOLD OFF ON ANY
QUOTES. QUICK QUESTION. SO YOU
MENTIONED THIS MENTAL HEALTH
MONEY. WHERE IS THAT MONEY
HOUSED?
>> IN THE DEPARTMENT OF EARLY
LEARNING.
>> WAS THAT THE MONEY FOR THE
COUNSELING FOR THE SCHOOLS?
>> YEAH.
>> THANK YOU SO MUCH.
>> VICE PRESIDENT RIVERA.
>> AND SEPARATE FROM SOME
MENTAL HEALTH FUNDS THAT DEAL
AND ADMINISTER. AND ACTUALLY,
WE HAVE TWO COUNCILMEMBERS HERE
WHO CAN ADDRESS WHY THE 20
MILLION WAS PUT IN.
>> THAT'S FINE. I JUST WANTED
TO KNOW WHERE IT WAS. THANK YOU
VERY MUCH.
>> IT IS GREAT HAVING ALL NINE
COUNCILMEMBERS ON THE DAIS.
THIS IS REALLY GOOD. THIS IS --
THIS IS THE EXACT CONVERSATION
THAT I WAS HOPING TO HAVE,
BECAUSE WE HAVE TO LOOK AT THIS
BOTH TOP-DOWN FROM A REVENUE
SOURCES AND BOTTOM-UP FROM THE
LINES OF BUSINESS. BECAUSE IN
THE MID TEENS, McKINSTRY DID AN
ANALYSIS OF THE CITY ON HOW
MUCH WE NEED TO BE PROVIDING
FOR AFFORDABLE HOUSING TO MEET
THE AFFORDABILITY CRISIS. THEY
BENCHMARKED IT AT AROUND $200
MILLION A YEAR. THAT IS JUST
US. AND BEING ON COUNCIL, I WAS
LUCKY ENOUGH TO BE ON THE FIRST
COUNCIL THAT MET THAT BENCHMARK
UNDER MAYOR DURKIN. WE HAVE
CONSISTENTLY MET THAT BENCHMARK
TIME AND TIME AGAIN. AND IT HAS
BEEN BECAUSE OF A GRADE OF
FUNDING SOURCES. COUNCILMEMBER
MOORE MENTIONED THE LEVY. WE
ALSO HAVE FEES FOR PEOPLE NOT
AFFORDING ON-SITE TO BUILD THAT
AFFORDABLE HOUSING. AND ALSO
HERE THE JUMPSTART TAX.
>> CHAIR STRAUSS. JUST A QUICK
QUESTION. IT'S PROBABLY MORE
FOR CHAIR STRAUSS, AS WE TALK
ABOUT THE BUDGET REVIEW, THE
PROGRAMS, THE SPENDING AND SO
FORTH, THEN THERE'S ALSO THE
REVIEW OF THE STRUCTURE, THE
BUDGET. BUT DO WE ALSO LOOK AT
WHAT THE COUNTY AND THE STATE
ARE DOING AS WELL? FOR EXAMPLE,
I APPRECIATE WHAT IS GOING ON
WITH THIS QUESTION REGARDING
THE MENTAL HEALTH, BUT DID THE
COUNCIL, DID THE CITY DO ITS
DUE DILIGENCE IN TERMS OF
ENGAGING WITH THE STATE,
EDUCATION AND MENTAL HEALTH?
THIS IS WHAT WERE SPEAKING TO
IN TERMS OF PUBLIC SAFETY
BECAUSE IT'S SO IMPORTANT. AS
I SAID, WE CAN'T HAVE PUBLIC
SAFETY IF WE DON'T SUCCEED IN
PUBLIC HEALTH. FOR EXAMPLE,
THAT IS CLEARLY A STATE
FUNCTION. DID WE GO THROUGH THE
PROCESS OF ENGAGING WITH THE
STATE AND THEN WE ARE TOLD NO
AND THEN WE TRY TO SUPPLEMENT
BECAUSE OF OUR OWN INTERESTS
AND DESIRES? WHICH IS ONE
THING. BUT IF WE HAVEN'T BEEN
DOING THE DUE DILIGENCE FOR THE
STATE AND MENTAL HEALTH AND
EDUCATION SPENDING, THAN THAT
IS A QUESTION IN TERMS OF THIS
BUDGET REVIEW PROCESS. I THINK
IT SHOULD ALSO INCLUDE WHAT
WE'VE BEEN DOING OR NOT DOING
RELATED TO AREAS THAT REALLY
FOLLOW IN OTHER JURISDICTIONS.
>> THAT'S AN EXCELLENT
QUESTION. I CAN TELL YOU WHAT
YOU JUST DESCRIBED IS THE IDEAL
SITUATION, IDEAL PROCESS IN
WHICH WE WOULD ENGAGE IN. I CAN
TELL YOU THAT JUST OFF THE TOP
OF MY HEAD -- I UNDERSTAND THAT
THE STATE ALLOCATION AND MENTAL
HEALTH COUNSELORS IN SCHOOLS
ARE WOEFULLY UNDERPERFORMING,
AND HAS BEEN ASKED FOR A LOT OF
OUR STUDENTS. THE CITY OF
SEATTLE -- THERE'S A GAP
THERE. THE CITY OF SEATTLE IS
ONE OF THE ONLY CITIES IN OUR
STATE THAT PROVIDES FUNDING
DIRECTLY TO SCHOOLS TO THE
FAMILIES EDUCATION LEVY. THAT
IS THE FUNCTIONAL WAY THAT WE
ARE PATCHING A WHOLE THAT, WE
DON'T NEED TO GO INTO
McCLEARY. I PROBABLY WON'T
HAVE A BUDGET COMMITTEE ABOUT
THE McCLEARY FIX IN OLYMPIA,
BUT THAT, TO BE SAID, THEY HAVE
ALSO NOT PERFORMED THEIR
DUTIES. AND SO WE HAVE A
FUNCTION IN OUR GOVERNMENT THAT
ATTENDS TO THAT MISSING GAP,
AND THAT THE FAMILIES
EDUCATION. I HAVE SEEN A LOT OF
HANDS --
>> THINK YOU CHAIR STRAUSS. IN
TERMS OF GOOD GOVERNANCE, WE AS
A CITY NEED TO BE FORMALLY
GOING TO THIS DATE AND SAYING,
THESE ARE REQUIREMENTS, WHETHER
MENTAL HEALTH GENERALLY OR IN
OUR SCHOOLS. BUT WE HAVE NOT
BEEN DOING THAT STEP, AND THEN
JUST GOING TO PART B FIRST, I
THINK THAT'S A PROBLEM.
BECAUSE WE NEED TO LAY IT FOR
THE RECORD. AND THIS IS REALLY
IMPORTANT FOR PUBLIC SAFETY, AS
WELL.
>> THAT'S RIGHT. COUNCIL
PRESIDENT, IS THAT OLD HAND OR
NEW HAND? GREAT. I'M GOING TO
PASS IT TO YOU, THE VICE CHAIR
OVER HERE, AND THEN
COUNCILMEMBER MORALES.
>> THANK YOU, CHAIR. OKAY, ALL
RIGHT. GOT IT. YOU DID A GREAT
JOB OF DESCRIBING THE HISTORY.
IS IT CORRECT THAT THE
ORIGINAL SPENDING PLAN THAT WAS
CODIFIED BY LAW ANTICIPATED AN
ANNUAL -- OR AT LEAST IT DID OF
220 MILLION, AND THEN WAS IT
ANTICIPATED THE SPENDING PLAN
WOULD JUST SORT OF
AUTOMATICALLY EXPAND
PROPORTIONALLY AS REVENUE --
WHAT WAS THE PLAN FOR IF WE
WENT TO OVER 220 MILLION IN
P.E.T. REVENUES ? WHEN WE SAY
PAYROLL EXPENSE TAX, THAT IS
PRETTY MUCH SYNONYMOUS THE
JUMPSTART.
>> THINKS FOR THE QUESTION. I
WILL ANSWER PART OF THIS AND
THEN TURN IT OVER TO DEPUTY
DIRECTOR CANOOCHEE FOR SOME OF
THE LEGISLATIVE HISTORY ON IT.
THE PAYROLL TAX IN THE FIRST
YEAR WAS, IN ITS ENTIRETY, TO
SUPPORT THE GENERAL FUND
BALANCING TO MAKE SURE THAT WE
CAN KEEP EVERYTHING GOING. FROM
THEREAFTER, THE LAW ENVISIONED
-- IT ESTABLISHED A FLOOR FOR
THE GENERAL FUND THAT, IF THE
REVENUES FOR THE CITY DID NOT
EXCEED -- I THINK IT WAS A
NOMINAL AMOUNT OF 1.51 BILLION.
ABOUT 1.51 BILLION. THAT WAS A
FIXED AMOUNT. OF REVENUES --
GENERAL FUND REVENUES DID NOT
MEET THAT THRESHOLD, PAYROLL
TAX WAS GOING TO STEP IN TO
MAKE UP THE DIFFERENCE. I THINK
ONE OF THE KEY PROBLEMS THAT WE
HAVE SEEN FROM THE EXECUTIVE
SIDE IS THAT IS A FIXED AMOUNT,
THAT FLOOR IS A FIXED AMOUNT IN
THE LEGISLATION. SO AS WE'VE
SEEN GENERATIONALLY HIGH
INFLATION OVER THE LAST --
SINCE THE CREATION OF THE
PAYROLL TAX, THAT CALCULATION
HASN'T SHIFTED ALONG WITH THE
INCREASES IN COST THAT WE HAVE
SEEN. ELSEWHERE. I WILL LET
DEPUTY DIRECTOR CANOOCHEE SPEAK
TO THE LEGISLATIVE -- OR
CORRECT ANYTHING ON THE
LEGISLATIVE SIDE.
>> AT A HIGH LEVEL, THAT ALL
TRACKS. IN 2021 THE JUMPSTART
PAYROLL EXPENSE TAX WAS
ADOPTED, IT WAS EARLY IN THE
PANDEMIC. AND AT THAT TIME, IT
WAS REALLY BEING CREATED TO
ADDRESS THE FOUR PRIORITY AREAS
-- HOUSING AND SERVICES, RENEW
DEAL, ECONOMIC REVITALIZATION,
AND THE EQUITABLE DEVELOPMENT
CONDITION. AND SO AS WE WERE
WORKING WITH COUNCILMEMBERS TO
DEVELOP THAT PLAN, AND THEN WE
ALL FOUND OURSELVES AMIDST A
GLOBAL PANDEMIC, A RECKONING
WITH RACIAL EQUITY, AND THEN
ALL OF THOSE THINGS IN THE
BUDGET CRISIS. AS THOSE
DISCUSSIONS DEVELOPED, THEY SET
OUT A SPENDING PLAN FOR THE USE
OF THOSE REVENUES IN 2020. THAT
WOULD GO INTO EFFECT IN '21.
THE FIRST YEAR IT WAS A $214
MILLION ESTIMATED REVENUE IN
THAT FIRST YEAR OF '21, AND ALL
OF THE FUNDS WERE ALLOCATED TO
PROVIDE CONTINUITY OF CITY
SERVICES AND TO PROVIDE COVID
RELIEF. THE FIRST YEAR, IT ALL
WENT TO THE GENERAL FUND, AND
THE SPENDING PLAN OF THE
JUMPSTART FUND IS NOT YET
CREATED. IN 2021, FOLLOWING
SOME, I WOULD SAY,
DISAGREEMENTS BETWEEN --
>> PROFESSIONAL DISAGREEMENTS.
>> PROFESSIONAL DISAGREEMENTS
BETWEEN THE COUNCIL AND THE
EXECUTIVE. BECAUSE IN 2021, NO
ONE PREDICTED THE CHALLENGES
WOULD PERSIST FOR SO LONG. IN
JULY OF 2020, WE ALL THOUGHT,
WE WILL BE BACK TO WORK, RIGHT?
IN A MONTH, TWO MONTHS? THAT
SORT OF THING. THE PANDEMIC
PERSISTED, REVENUE ISSUES
PERSISTED. THE NEED FOR COVID
RELIEF AND CONTINUITY OF
SERVICES WAS CREATED. THERE WAS
NOT FULL ALIGNMENT BETWEEN THE
COUNCIL AND EXECUTIVE ON THE
BEST USE OF JUMPSTART FUNDS.
THE COUNCIL, IN SEPTEMBER OF
'21, CREATED THE JUMPSTART
FUND, CODIFY THE SPENDING PLAN,
AND SET THAT GENERAL FUND THAT
WAS REALLY ESTABLISHED TO SAY
-- BECAUSE JUMPSTART WAS NEVER
MEANT TO BE THE SOLUTION TO THE
STRUCTURAL GENERAL FUND
DEFICIT. THAT WAS AN ISSUE
PRIOR TO THE PANDEMIC. IT JUST
WAS NOT AS DEEP. THERE WAS A
PROJECTED ONGOING DEFICIT PRIOR
TO THE PANDEMIC AND JUMPSTART
WAS NOT CREATED TO ADDRESS THAT
PROBLEM. BUT IN 2021, THE
COUNCIL SAID WE SEE THAT THERE
IS STILL CHALLENGES IN '21.
THEY WANTED TO MAINTAIN
SERVICES. FOR THE 2022 BUDGET
TO BE TRANSFERRED TO THE
GENERAL FUND AND THEN CODIFY
THE SPENDING PLAN. THE INTENT
WAS THAT IN '23, THE FULL
ALLOCATION OF JUMPSTART FUNDS
WOULD BE ALLOCATED TO THE
SPENDING CATEGORIES AND
ECONOMIC REVITALIZATION AND
RENEW DEAL. AND FOLLOW '22,
WE CONTINUE TO HAVE A GENERAL
FUND ISSUE. AND SO THE COUNCIL
AMENDED OUR POLICIES TO ALLOW
ONLY FOR THE '23 A '24
BIENNIUM, ABOUT $84 MILLION
ANNUALLY TO BE TRANSPORTED TO
THE GENERAL FUND, AND THE REST
WAS ALLOCATED TO THE SPENDING
CATEGORIES OR THE SPECIAL
EXCEPTIONS. WHERE WE ARE TODAY
MILLION NEXT YEAR WOULD BE
ALLOCATED TO THOSE FOUR
SPENDING CATEGORIES. SO INTO
THE FUTURE. SO THE COUNCIL HAS
THE OPTION OF AMENDING THOSE
POLICIES, AND WILL BE SORT OF
DETAILING OUT THOSE OPTIONS
WITH ALL OF YOU THROUGHOUT THE
YEAR. THERE ARE MANY DIFFERENT
WAYS THAT COULD BE CHANGED.
>> IS IT CORRECT TO SAY THAT
THE P.E.T. REVENUES HAVE BEEN
OUTPERFORMING ANTICIPATION BY
ABOUT 100,000? I MEAN, 100
MILLION, IF IT WAS ORIGINALLY
THOUGHT ABOUT 220 AND NOW AT
THIS STAGE?
>> WE DID ANTICIPATE THAT IT
WOULD INCREASE TO SOME AMOUNT,
BUT CENTRAL STAFF WAS DOING THE
ESTIMATE, AND YOU WILL FIND
THAT WE WILL BE RELATIVELY
CONSERVATIVE IN OUR ESTIMATE,
AND WE ARE QUITE PLEASED WHEN
REVENUES CAME IN HIGHER THAN
THE ORIGINAL S OMIT AND
CONTINUE TO OUTPERFORM
PROJECTIONS. I WILL SAY THAT
THERE IS SOME VOLATILITY IN
THIS REVENUE SOURCE. SOME OF
THIS IS TOTAL EARNINGS, SO
THINGS LIKE STOCKS AND THAT
SORT OF THING CAN IMPACT THE
SORT OF REVENUE. BUT IT IS
OUTPERFORMING. THE GENERAL LINE
THAT THE PREVIOUS COUNCIL HAS
HELD IS, THEY WANT TO ALLOCATE
JUMPSTART FUNDS IN THE AMOUNTS
THAT WERE ASSUMED IN 2020, SO
THAT'S ABOUT 220 MILLION,
INCREASED BY ABOUT TWO TO 3%
ANNUALLY TO THE SPENDING
CATEGORIES. AND THEN ALLOWED
ANYTHING ABOVE THAT TO BE
TRANSFERRED TO THE GENERAL
FUND. THAT 85 MILLION REALLY IS
THAT DIFFERENCE. IN THE 2024
ADOPTED BUDGET, THE PAYROLL TAX
FUNDS WERE ALLOCATED TO THE
SPENDING CATEGORIES IN THE
AMOUNT THAT WAS ASSUMED WHEN
THE COUNCIL ADOPTED THE PAYROLL
TAX IN 2020 AND THE REMAINDER
WAS USED FOR GENERAL GOVERNMENT
PURPOSES.
>> A QUICK NOTE TO ADD ON TO
THE VOLATILITY. MAYBE YOU
DON'T KNOW YET, AND YOU WILL
FIND OUT WHEN WE GET THE FIRST
REVENUE FORECAST UPDATE FOR YOU
ALL -- THAT A DISPROPORTIONATE
AMOUNT OF PAYROLL EXPENSE TAX
REVENUE COMES FROM A
DISPROPORTIONATELY SMALL NUMBER
OF TAXPAYERS. SO IT IS IN THE
NEIGHBORHOOD OF 75% IS COMING
FROM FEWER THAN 10 TAXPAYERS.
AND SO THE RELIANCE UPON -- YOU
HAVEN'T SPREAD OUT THE RISK
LIKE YOU WOULD LIKE TO WITH
INVESTMENTS. AND SO IT IS QUITE
CONCENTRATED. IF ANY ONE OF
THOSE BIG PLAYERS WERE TO MAKE
DIFFERENT CHOICES, I WOULD MAKE
HUGE IMPACTS TO THE REVENUE.
JUST SOMETHING TO KEEP IN MIND
FOR FUTURE PLANNING FOR THIS
SOURCE, THAT IT IS SOMEWHAT
VOLATILE.
>> AND HOW WE STARTED SPENDING
THE $21 MILLION OF ADDITIONAL
P.E.T. REVENUE?
>> NO, WE HAVE NOT BEGUN
SPENDING THAT THIS YEAR.
>> ARE WE COLLECTING IT?
>> WE ARE COLLECTING IT. BUT WE
HAVE NOT STARTED SPENDING -- WE
ARE DOING SOME POLICY WORK JUST
TO FIGURE OUT HOW THAT IS BEST
PROGRAMS.
>> THIS IS A GREAT EXAMPLE OF
WHY IT IS MY PREFERENCE THAT
THE EXECUTIVE PRESENTS ON
EXECUTIVE ASPECT IN THE CENTRAL
STAFF EXPECTS ON CITY COUNCIL
ASPECTS. JUST SEEING THAT
EXCHANGE BETWEEN THE DEPUTY
DIRECTOR PANNUCCI , THIS WAS A
GREAT EXAMPLE. WE ARE SEVEN
SLIDES OF 21 WITH 40 MINUTES TO
GO. AND I GIVE EVERYONE THE
REASSURANCE THAT EACH ONE OF
THESE SLIDES WE ARE GOING TO BE
DOING, PROBABLY A FULL OR HALF
PRESENTATION DONE. WITH THAT
BEING SAID, VICE CHAIR RIVERA,
AND THEN COUNCILMEMBER MORALES
.
>> THANK YOU, CHAIR. YOU
ANSWERED ONE OF MY QUESTIONS.
IF THERE ARE ANY CHANGES TO --
>> EXCUSE ME, COULD YOU SPEAK
INTO THE MIC?
>> APOLOGIES. YES. I JUST
WANTED TO UNDERSCORE WHAT THE
DIRECTOR SAID ABOUT ANY CHANGES
TO WHO IS PAYING THE PAYROLL
TAX WILL HAVE A SIGNIFICANT
IMPACT ON THESE PROJECTIONS.
ALSO, CAN YOU PLEASE PROVIDE US
WITH THOSE FOUR BUCKETS? WHAT
DEPARTMENTS ARE IMPACTED WITH
THOSE FOUR BUCKETS? NOT NOW, AT
SOME POINT. THAT WOULD BE
GREAT. THANKS. THE ORIGINAL
INTENDED FOUR BUCKETS. THANK
YOU.
>> WELL SAID. COUNCILMEMBER
MORALES.
>> I WILL PASS MY TIME TO MAKE
SURE WE CONTINUE.
>> BACK TO YOU, DIRECTOR
JINGLY.
>> I WANTED TO PROVIDE YOU A
SENSE OF, YOU KNOW, PRIOR TO
COMING INTO OFFICE, YOU MAY
HAVE HEARD PUBLIC DISCOURSE
AROUND THE REVENUES THAT THE
CITY BRINGS IN. AND SO I WANTED
TO JUST CLARIFY FOR YOU, AS WE
TAKE A LOOK AT NEW REVENUES THE
CITY HAS CREATED RECENTLY. SO
SINCE 2015, A TOTAL OF 3.5
BILLION OF NEW REVENUE HAS BEEN
CREATED FOR THE CITY. THAT
INCLUDES -- AND ALL OF THAT
REVENUE IS OUTSIDE OF THE
GENERAL FUND. SO OF THE 3.5
BILLION, ABOUT 2.7 BILLION
COMES FROM LEVEES. ABOUT 206
MILLION COMES FROM WHAT WE HAVE
LOVINGLY AND VERY
BUREAUCRATICALLY DUBBED GENERAL
FUND ADJACENT. WHICH IS YOUR
SUITE AND BEVERAGE TAXES, YOUR
SHORT-TERM RENTAL TAXES, YOUR
TRANSPORTATION NETWORK COMPANY
TAXES. THOSE ALL HAVE BEEN
CREATED FOR SPECIFIC USES, AS
WELL AS THE PAYROLL EXPENSE TAX
AT 606 MILLION. AND SO WHEN WE
TALK ABOUT -- YES, WE
ABSOLUTELY HAVE NEW REVENUES
INTO THE CITY, BUT ALL OF THESE
HAVE BEEN CREATED FOR NEW
PURPOSES, AND THE VAST MAJORITY
HAVE BEEN CREATED WITH, WHAT WE
CALL DO NOT SUPPLANT LANGUAGE.
MEANING THAT THEY ARE INTENDED
FOR NEW INVESTMENTS THAT ARE
ADDITIVE TO WHAT WE ARE ALREADY
SUPPORTING WITH THE CITIES
GENERAL FUND. WE HAVE NOT ADDED
ANY GENERAL FUND RESOURCE IN
THIS TIME. WE ARE GOING TO GET
INTO A LITTLE BIT MORE OF THAT
IN CHALLENGES AND
OPPORTUNITIES. ANY QUESTIONS
BEFORE I MOVE ON? OKAY. ALL
RIGHT. WE ARE DIGGING INTO THE
MEAT NOW. GENERAL FUND DEFICIT.
WHAT IS THE CURRENT PROJECTED
DEFICIT? THE PROJECTED DEFICIT
FOR THE GENERAL FUND IS ABOUT
230 MILLION FOR 225. NOW,
DON'T GET TOO TIED TO THAT
NUMBER, BECAUSE THAT NUMBER IS
GOING TO CHANGE IN A MATTER OF
WEEK AS WE GET NEW AND
DIFFERENT INFORMATION. SO WE
WILL FIND OUT AT THE END OF
THIS MONTH HOW WE CLOSED 2023,
FOR EXAMPLE. WE WILL FIND OUT
ACTUAL REVENUES THAT WE
COLLECTED, AS WELL AS WE WILL
WORK OUT EXACTLY HOW MUCH WE
SPEND, BECAUSE RIGHT NOW, DID
WE HAVE OPEN CONTRACTS THAT WE
NEEDED TO CONTINUE INTO THIS
YEAR AND THINGS LIKE THAT? WE
WILL HAVE ACTUAL SPENDING AND
REVENUE NUMBERS AT THE END OF
THIS MONTH. THAT WILL IMPACT
WITH THAT DEFICIT LOOKS LIKE
FOR 2025. HOW DID WE GET HERE?
SO I'M GOING TO DEVIATE A
LITTLE BIT FROM THE SLIDE
BECAUSE I WANT TO HELP PAINT A
LITTLE BIT OF A PICTURE FOR YOU
ALL TO GET THE CONTEXT HERE.
SO FROM THE END OF THE GREAT
RECESSION THROUGH TO ABOUT
2020, THE CITY ENJOYED A
REMARKABLY LONG PERIOD OF
EXPANSION, PRIMARILY DRIVEN BY
OUR TECH GROWTH. WE ALL FELT
IT. PUBLIC OFFICIALS AT THE
TIME WERE RAPIDLY INCREASING
THE SCOPE AND DEPTH OF THE
SERVICES OFFERED TO A GROWING
SEATTLE POPULATION. WE HAD BOTH
GROWING REVENUES AND GROWING
EXPENDITURES AT THE SAME TIME.
WHEN THE COVID PANDEMIC HIT, WE
HAD A CHOICE TO MAKE ON WHETHER
TO ADOPT -- HOW TO CLOSE THE
DEFICIT. I'M GOING TO GET INTO
THAT A LITTLE BIT, BUT THE
CHOICES THAT WE MADE THERE WERE
REALLY CRITICAL AND SORT OF SET
US ON THE PATH AT THE MAGNITUDE
WE ARE LOOKING AT. SO HOW DID
WE GET HERE? OUR GENERAL
REVENUES HAVE NOT YET RECOVERED
TO WHAT THEY WERE PRIOR, TO
WHAT THEY WOULD HAVE BEEN AND
WERE PROJECTED TO BE PRIOR TO
COVID. THERE WERE SOME
PERMANENT CHANGES TO WHERE
FOLKS PHYSICALLY WORK, HOW
PEOPLE GO ABOUT THEIR DAY,
WHETHER THEY ARE STAYING IN
NEIGHBORHOODS OR WHETHER THEY
ARE COMING INTO THIS EDDIE.
THEY HAVEN'T COME ALL THE WAY
BACK TO WHERE THEY WERE.
INFLATION HAS BEEN ANY
GENERATIONAL HIGH. WHY THAT
CONSTRAINS THE GENERAL FUND
REVENUES OVERALL. WE HAD A
SIGNIFICANT SLUG OF FEDERAL
COVID RELIEF DOLLARS TO THE
C.A.R.E.S. ACT AND ARPA THAT
CAME IN AND ACTUALLY CRITICAL
TIME AND ALLOWED US WITH SOME
OF THOSE FUNDS TO ACTUALLY
REPLACE REVENUE WE HAD LOST. SO
TO KEEP THE CITY AFLOAT. THEY
WERE A KEY LIFELINE FOR
JURISDICTIONS AROUND THE
NATION. THOSE FUNDS HAVE BEEN
USED. THEY ARE DONE, SO WE NOW
DON'T HAVE THAT BENEFIT. AND
AS WELL, SOMETHING YOU FOR BOTH
OF US TALK ABOUT THIS MORNING
IS, THERE WERE A LOT OF PRIOR
DECISIONS FOR BOTH THE
EXECUTIVE AND LEGISLATIVE
BRANCHES TO USE ONE-TIME FUND
BALANCE TO SUPPORT BUDGETED
ADDITIONS IT BECAME ONGOING. SO
THAT IS SOMETHING WE ARE GOING
TO HAVE TO TAKE A LOOK AT. AND
THEN WHAT ARE OUR TOOLS? AT THE
HIGHEST OF HIGH LEVELS, WE CAN
CUT EXPENSES SO WE CAN LOOK AT
STAFF, WE LOOK AT PROGRAMS,
STAFF, ALL OF THAT. WE CAN
LOOK AT PAYROLL TAX, WE CAN
LOOK AT SUITE AND BEVERAGE. WE
CAN LOOK AT HOW WE ARE LOOKING
AT OTHER SOURCES OF FUNDING AND
FIGURE OUT, HAVE WE MAXIMIZED
THE USE THERE? WE COULD RAISE
REVENUES. YOU CAN TURN THE DIAL
ON THE CURRENT REVENUE, YOU
COULD CREATE A WHOLE NEW
REVENUE. IT MIGHT NOT BE A
POLICY CHOICE HE WOULD LIKE TO
PURSUE, BUT IT IS AN OPTION. AS
WELL, THINKING ABOUT SOME
ONE-TIME BALANCING STRATEGIES,
WERE NOT GOING TO BE ABLE TO
IMPLEMENT THE FULL MEAL DEAL OF
230 MILLION WORTH OF REDUCTIONS
AS OF JANUARY 1st. JUST
OPERATIONALLY IMPLEMENT THAT.
IT WOULD HAVE TO THINK ABOUT,
WHAT ARE SOME ONE-TIME
STRATEGIES TO STAGGER THE
IMPLEMENTATION A LITTLE BIT? WE
WILL GET THERE.
>> COUNCILMEMBER MOORE HAS SOME
QUESTIONS HERE ON THIS SITE.
UNDER THE FIRST COLUMN, WHAT IS
THE CURRENT PROJECTED DEFICIT
YOU HAVE FOR ESTIMATES? THESE
ARE ESTIMATES AND MIKE
UNDERSTANDING BECAUSE WE DON'T
UNDERSTAND TO DATE WHAT I
REVENUE COLLECTION IS BEEN FROM
LAST YEAR AND WE ALSO DON'T
UNDERSTAND OUR UNDERS AND FROM
LAST YEAR. COUNCILMEMBER SAKA
HAS QUESTIONS ABOUT HOW YOU
FUND SOMETHING IN SUPPLEMENTAL,
BY TAKING UNDER SPEND FROM
OTHER DEPARTMENTS OR SOURCES
WITHIN THIS LAST YEAR. ARE
THERE OTHER FACTORS THAT ARE
PLAYING INTO THIS ESTIMATE
RIGHT NOW?
>> ABSOLUTELY. WE WILL ALSO
HAVE THE APRIL REVENUE
FORECAST, WHICH WILL TELL US
WHETHER THE FORECAST THAT THIS
IS BASED ON, WHICH IS FROM
NOVEMBER OF -- OR OCTOBER OF
LAST YEAR. SO WE WILL GET
UPDATED NUMBERS IN APRIL. GET
THAT YEAR AND DATA TO CLOSEOUT,
AND THEN WE GET A BETTER SENSE
AS A GO THROUGHOUT THE YEAR OF
UNANTICIPATED THINGS, AND
THAT'S ALWAYS PRESSURES ON
FIXED COST THAT WE HAVE IN THE
CITY. THINK INSURANCE COSTS.
THOSE SOMETIMES COME IN, THEY
ARE SORT OF A KNOWN UNKNOWN. WE
KNOW THEY'RE GOING TO COME,
BUT WE DON'T KNOW THE
MAGNITUDE. WE ESTIMATE, BUT WE
MIGHT BE WRONG. AND DIFFERENT
PIECES OF INFORMATION THAT WILL
FEED IT.
>> JUST A BIT OF COMMENTARY
WORKING UP WHAT YOU JUST SAID
ABOUT THE FAR RIGHT COLUMN, OUR
TOOLS, THESE ARE THE FULL TOOLS
IN OUR TOOLBOX. IS THERE A
CHOICE TO PURSUE ANY OF THESE
DICTATED UPON THIS COMMITTEE
MEETING TODAY. THIS IS JUST THE
UNIVERSE IN WHICH WE HAVE TO
WORK WITH IT IN.
>> AND DON'T FORGET GROWING
ECONOMIC ACTIVITY THAT COULD
ALSO OCCUR IN MY COMMITTEE THAT
WAS ALSO CALLED OUT BY THE
REVENUES ABLE HIS ASIAN BOARD.
>> COUNCIL PRESIDENT.
>> THANK YOU. A COUPLE OF
QUESTIONS ON THIS. SO CAN YOU
SPECIFY WHICH OUTSTANDING LABOR
CONTRACT FOR 2023?
>> I DON'T BELIEVE I CAN GET
THAT HERE, I CAN BRIEF YOU
ONLINE.
>> YOU CAN'T TELL ME THE NAME
OF THE CONTRACTS, WHICH
DEPARTMENTS HAVE OUTSTANDING
CONTRACTS?
>> I BELIEVE THAT WAS BRIEFED
THIS LAST WEEK.
>> RIGHT, BUT IS THAT NOT
PUBLIC INFORMATION, WHICH
DEPARTMENTS HAVE OUTSTANDING
CONTRACT NEGOTIATIONS?
>> YEAH. SO THE CONTRACTS ARE
NOT NECESSARILY BY DEPARTMENT.
IT IS BY UNION THAT MIGHT
REPRESENT WORKERS IN SEVERAL
DEPARTMENTS. AND SO THE BIG ONE
IS THE POLICE OFFICER'S GUILD
AND THE COALITION OF CITY
UNIONS. THERE ARE SOME OTHER
ONES THAT HAVE CONTRACTS, BUT
THAT'S ALL INFORMATION THAT IS
PUBLICLY AVAILABLE ON THE
WEBSITE ABOUT WHICH CONTRACT
ARE OPEN OR NOT. WE JUST CAN'T
DISCUSS ANY OF THE DETAILS. I
WAS JUST CLARIFYING WHAT WE CAN
SAY PUBLICLY.
>> THANK YOU. ONE OTHER ONE
THAT IS THE LOCAL 77, ANOTHER
ONE THAT'S NOT -- IT REMAINS
OPEN.
>> THANK YOU. AND ON THE SECOND
SLIDE, YOU TALKED ABOUT
INFLATION AT A GENERAL HIGH AND
PRESSURE ON OUR LABOR NEEDS.
CAN YOU EXPLAIN WHAT THAT
MEANS?
>> INFLATION AT A GENERATIONAL
HIGH AND PRESSURE ON OUR LABOR
NEEDS. SO WHEN WE ARE TALKING
ABOUT THE INCREASED COST OF
GOODS AND SERVICES, THAT IS --
IT'S NOT JUST THE GOODS THAT
WE BUY AS A CITY, BUT ALSO, WE
ARE AN EMPLOYER. AND SO WE HAVE
INCREASED COST THAT COMES AS A
CENTRAL RESULT OF NEGOTIATIONS
DEPENDING ON HOW THEY PLAY OUT.
>> I UNDERSTAND THE RISING COST
TO PROVIDE SERVICES. I DON'T
UNDERSTAND WHAT PRESSURE ON OUR
LABOR NEEDS MEANS.
>> WHICH SLIDER YOU --
>> I'M LOOKING AT THE MIDDLE
SLIDE HERE. HOW DID WE GET
HERE, SECOND BULLET POINT,
INFLATION AT A GENERATIONAL
HIGH, RISING COST TO PROVIDE
SERVICES, AND PRESSURE ON OUR
LABOR NEEDS. WHAT EXACTLY DOES
THAT MEAN, PRESSURE ON OUR
LABOR NEEDS?
>> THE PRIMARY DRIVER OF GROWTH
AND EXPENDITURES FOR THE
GENERAL FUND OVER THE LAST 10
TO 15 YEARS IS FROM LABOR. AND
SO WHAT WE HAVE SEEN IN THE
PAST IS, WHEN WE HAVE
SIGNIFICANT -- AS I WAS
DESCRIBING, WE HAVE THIS
REMARKABLY LONG PERIOD OF
ECONOMIC ASK MANSION FOR ABOUT
A DECADE, AND DURING THAT TIME,
THIS COST OF THE CITY LABOR
INCREASED CONSIDERABLY. DO TO
VARIOUS CONTRACTS. AND SO WE
KNOW THAT WE HAVE A LOT OF OPEN
CONTRACTS THAT CAUSE A LOT OF
QUESTION MARKS IN OUR PLANNING
PROCESS. WE HAVE ESTIMATES OF
WHAT WE THINK THAT IMPACT COULD
BE, BUT WE DON'T HAVE ANSWERS,
NECESSARILY. PUTS PRESSURE ON
WHAT THOSE NEEDS ARE. THAT
UNCERTAINTY IS WHAT I WAS
TRYING TO GET TO.
>> DOES THIS MEAN IN THE PERIOD
IN WHICH WE WERE FLUSH, WE WERE
HIRING MORSE, AND WE WERE ALSO
INCREASING WAGES AT THE SAME
TIME?
>> THAT'S EXACTLY RIGHT.
>> LAST QUESTION. AT THE LAST
BULLET POINT HERE, THE PRIOR
DECISIONS TO USE ONE-TIME FUND
BALANCE, WILL YOU BE ABLE TO
PROVIDE US WHERE THE ONE-TIME
FUND BALANCES WERE -- WERE MOST
ALLOCATED, I GUESS IS WHAT I'M
LOOKING FOR?
>> I.V. CHART SHOWING UP THAT
SHOWS A LITTLE BIT OF THAT, BUT
I'M HAPPY TO GET YOU WHATEVER
YOU NEED TO UNDERSTAND THAT
MORE FULLY. THANKS FOR THE
QUESTIONS.
>> COUNCIL MEMBER SAKA, AND
THEN COUNCILMEMBER KETTLE.
>> THANK YOU, MR. CHAIR. JUST
CURIOUS TO BETTER UNDERSTAND.
DOES THE CITY HAVE A RAINY DAY
FUND? CAN YOU TALK A LITTLE BIT
ABOUT WHAT THAT LOOKS LIKE?
I'M NOT SEEING THAT LISTED AS
A SLICE IN THAT SLIDE FOUR, THE
TOTAL CITY BUDGET. BUT I'M
CURIOUS TO LEARN MORE ABOUT
THAT. IT SOUNDS LIKE, YES, AND
WHAT ARE THOSE FUNDS GENERALLY
USED FOR? IT SEEMS TO ME LIKE
THAT MIGHT BE NOT ONLY A BEST
PRACTICE, BUT, YOU KNOW, THAT
MIGHT BE A POLICY DECISION ON
WHETHER TO EXPAND THAT AND BY
HOW MUCH. BUT ALSO, IN ADDITION
TO UNDER SPENDING BY VARIOUS
CITY DEPARTMENTS AND AGENCIES,
AND ADJUSTED ADDITIONAL
UNANTICIPATED ADDITIONAL
REVENUE, THAT MIGHT BE A GOOD
-- WHICH I UNDERSTAND, IS HOW
WE, WE FIGURE OUT THE FUNDING
SOURCES, THAT MIGHT BE A GOOD
ONE AS WELL FOR CERTAIN THINGS.
AND THEN SO -- BEFORE I FORGET,
SO THAT IS QUESTION ONE. WILL
LOOK FOR MORE DETAILS ARE ON
THAT SORT OF RAINY DAY FUND. IN
THE SECOND THING IS, FROM YOUR
PERSPECTIVE, DIRECTOR, WE HAVE
$230 MILLION ANTICIPATED
DEFICIT, AND WE JUST HEARD FROM
OUR OWN CENTRAL STAFF DEPUTY
DIRECTOR, IT'S 215 MILLION AND
GROWING. AND THIS MIGHT BE AN
EXAMPLE OF THE EXECUTIVE VERSUS
-- OR EXECUTIVE RELATIVE TO THE
ESTIMATES AND PREROGATIVES. AND
I ALSO UNDERSTAND THAT THIS IS
SOMETHING -- THESE ARE
ESTIMATES ONLY AND THEIR
PROJECTIONS BASED OFF WHAT WE
KNOW TODAY. DIRECTOR, WE ALSO
LEARNED THAT IN A FEW SHORT
WEEKS, WE WILL HAVE UPDATED
ESTIMATES. AND OVER THE COURSE
OF THIS YEAR, IT WILL BE EVEN
MORE UP-TO-DATE. THE
INFORMATION IN THESE ESTIMATES
WILL BE MORE ACCURATE, RATHER.
WHAT IS -- TODAY, WHAT IS THE
WORST-CASE SCENARIO IN TERMS OF
-- SO BEST CASE SCENARIO, IT'S
A BUDGET DEFICIT OF 0. WHICH IS
HIGHLY UNLIKELY.
>> ALTHOUGH MY DREAM SCENARIO.
>> YEAH. WHAT IS THE WORST-CASE
SCENARIO BASED ON THE
INFORMATION WE KNOW TODAY? 400
MILLION? 500 MILLION DEFICIT?
>> THE WORST-CASE SCENARIO IS A
REASON FOR MY AND OMNIA. IT'S
IF WE GET AN UPDATED FORECAST
AND THE GENERAL RESOURCES GO
DOWN. WE HAVE SOME NATURAL
DISASTER BETWEEN NOW AND THE
END OF THE YEAR THAT WE HAVE TO
REST ON TWO IN AN UNEXPECTED
WAY THAT CAUSES A HUGE DRAIN ON
OUR RESOURCES. BUT IT IS HARD
TO RESPOND TO THAT
HYPOTHETICAL, BECAUSE, YOU
KNOW, IT -- BUT I THINK THAT
THOSE ARE THE TWO WORST CASE
THAT I THINK OF, WHEN I THINK
OF THAT QUESTION.
>>'S A WORST-CASE SCENARIO IN
TERMS OF TOTAL BUDGET DEFICIT
POSSIBLE. SO WE HAVE TWO
SCENARIOS FLOATING RIGHT NOW.
230 MILLION GROWING, 250
MILLION. WHAT IS THE ABSOLUTE
WORST, FROM YOUR PERSPECTIVE?
>> I CAN SPEAK TO HISTORY. WHEN
THE COVID PANDEMIC HIT, WE
THOUGHT OUR REVENUES GO DOWN
CLOSE TO 300 MILLION WITHIN A
SPAN OF TWO MONTHS. AND SO IF
SOMETHING LIKE THAT WERE TO
HAPPEN, YOU COULD SEE A DEFICIT
GO AS HIGH AS 650, 700 IN THE
BLINK OF AN EYE. AND SOME
OUTSIDE FORCE CAUSING THAT. I
DON'T THINK THAT GIVEN
REASONABLE ASSUMPTIONS RIGHT
NOW, I DON'T FORESEE SOMETHING
LIKE THAT HAPPENING. ANOTHER
ATTEMPTED THE UNIVERSE BY
SAYING IT OUT LOUD, I VERY
ANXIOUS ABOUT WHATEVER THIS IS.
>> PLEASE DON'T DO THAT.
>> LET NOTHING BE
UNANTICIPATED. WE NEED TO
UNDERSTAND THE FULL SCOPE OF
WHAT'S GOING ON HERE, THE FULL
SCOPE OF THE CHALLENGES, AND
OPPORTUNITIES. SO I THINK WE
NEED TO BE VERY CRISP ON, YOU
KNOW, WHAT WE ARE FACING HERE,
AND THE GOOD, THE BAD, AND THE
UGLY. AND I WOULD LOVE TO HEAR
-- ACTUALLY, BOTH YOUR
THOUGHTS, IF YOU HAVE ANY, ON
THE RAINY DAY FUND. WHAT THAT
CURRENTLY LOOKS LIKE, AND --
>> I THINK DEPUTY DIRECTOR
PANNUCCI WANTED TO MENTION ONE
THING.
>> I JUST WANTED TO CLARIFY, WE
ARE IN AGREEMENT OF THE $230
MILLION NUMBER BASED ON THE
BUDGET. THE REASON I SAID 250,
IS I JUST ROUNDED UP BECAUSE IT
IS GOING TO CHANGE. YOU ALSO
NEED TO BE COMFORTABLE WITH,
IT'S GOING TO BE A MOVING
TARGET AND IS QUICK TO CONTINUE
TO MOVE THROUGHOUT THE YEAR.
AND SO AGAIN, THAT'S WHY
CENTRAL STAFF TYPICALLY
PRESENTS IT AS THE ANNUAL GAP
BETWEEN ESTIMATED REVENUES AND
EXPENDITURES. BECAUSE FROM A
STRUCTURAL -- FROM A
STRUCTURAL PERSPECTIVE, THAT IS
REALLY WHAT YOU NEED TO
ADDRESS. I JUST WANTED TO
CLARIFY FOR THE PUBLIC THAT WE
ARE ALIGNED. WE ARE ALIGNED ON
WHAT WE THINK THE PROBLEM WAS
COMING OUT OF THIS YEAR'S
BUDGET PROCESS, AND I THINK WE
ARE ALSO ALIGNED AND EXPECT
THAT NUMBER TO CHANGE. BASED ON
WHAT WE KNOW RIGHT NOW, LIKELY
TO INCREASE OR DECREASE. BUT
I'M GOING TO HOPE FOR THE
OPPOSITE OF THE WORST-CASE
SCENARIO AND THE BEST CASE
SCENARIO THAT WE GET BETTER
NUCYNTA DECREASES.
>> WE HAVE TWO DIFFERENT FUNDS.
WE HAVE AN EMERGENCY FUND, WE
ALSO USED TO DURING THE COVID
PANDEMIC. IT'S A MINIMUM OF
ABOUT $60 MILLION, AND THAT
ADJUSTS THE CPI. WE DO HAVE A
LIMIT OF HOW MUCH WE CAN
RESERVE THERE, WHICH IS ABOUT
37.5 CENTS PER 1000 OF ASSESSED
VALUE. IT IS SET BY -- I WILL
GET BACK TO YOU ON HOW IT IS
ESTABLISHED. I THINK IT'S SMC.
I DON'T BEGETS A STATE
RESTRICTION.
>> THERE IS A CITY POLICY IN
CPI. I THINK THERE IS A
DIFFERENT CAP SET AT STATE LAW.
IN 2016, THE CITY CHANGE THE
POLICY, BECAUSE IT USED TO BE
TAGGED TO ASSESSED VALUE
GROWTH. AND IN THE PREMIERS, TO
CONTINUE TO INCREASE SPENDING,
ESSENTIALLY, THE POLICY WAS
CHANGED TO ADD CONTRIBUTION TO
THE EMERGENCY FUND AND TAG IT
TO CPI, RATHER THAN THE
ASSESSED VALUE. AND SO JUST ONE
OF THE DECISIONS THAT REMAIN IN
THE PAST IN THE BOOM YEARS THAT
CONTRIBUTES TO WHERE WE ARE
NOW. BECAUSE WE WOULD HAVE HAD
MORE IN RESERVES.
>> WE ARE ACTIVELY LOOKING TO
REFILL THOSE FUNDS. WE HAVE A
POLICY THAT WE WANT TO REFILL
TO THE MAXIMUM ALLOWED WITHIN
FIVE YEARS. WE ARE ON A PATH TO
DO THAT. CURRENTLY, THERE'S
ABOUT 70 MILLION IN THE
EMERGENCY FUND, AND WE ARE
TARGETING A FUND BALANCE OF 87
MILLION BY 2026. SO WE HAVE
CONTRIBUTIONS ESTIMATED IN THE
FINANCIAL PLAN THAT WOULD GET
US TO THAT AMOUNT. WE ALSO HAVE
A REVENUE STABILIZATION FUND
WHICH IS ALSO KNOWN AS A RAINY
DAY FUND. THAT'S FOR SUDDEN
AND ANTICIPATED SHORTFALLS DUE
TO ECONOMIC DOWNTURNS AND OTHER
FACTORS. SO WE HAVE LIMITS AS
WELL. IT'S .5% OF GENERAL TAX
FUND RECEIPTS, AND GENERAL TAX
REVENUE. WE DO MAKE AN ANNUAL
CALCULATION OF WHETHER WE NEED
TO MAKE A CONTRIBUTION TO THE
RAINY DAY FUND AS WELL. THAT
CURRENTLY SIT AT ITS LIMIT. I
RAINY DAY FUND IS AT 68 MILLION
. IT WILL CHANGE BECAUSE WE
WILL ALSO BE LOOKING AT IT FOR
2024 IF WE NEED TO MAKE A
CONTRIBUTION, BUT THAT WAS LAST
YEAR'S AMOUNT.
>> VERY HELPFUL. THANK YOU
BOTH, AND DEPUTY DIRECTOR
PANNUCCI, I LOVE A SLIGHTLY
DEEPER DIVE OFF LINE ABOUT
RAINY DAY FUNDING SOURCES AND
POLICY OPTIONS AVAILABLE. THANK
YOU.
>> IF I CAN CORRECT SOMETHING I
SAID, THE MAXIMUM IS STATE LAW
RESTRICTION, SO THAT WAS NOT
SET BY US.
>> THANK YOU.
>> IS SOMEONE WHO IS BOTH USED
THESE EMERGENCY RESERVES AND
REPLENISHED WHAT WAS
REPLENISHED IN THE TRANSMISSION
AND BUDGET WORK, THE AMENDMENTS
INCREASED OUR CONTRIBUTIONS AND
YOUR QUESTION ABOUT WORST-CASE
SCENARIO -- IN MY FIRST TERM ON
FEBRUARY 21st, WE DID NOT SEE
THE PANDEMIC COMING. SO THAT'S
WHY YOU JUST SCARED ME A LITTLE
BIT THERE.
>> CAN YOU GO BACK A SLIDE,
PLEASE? A STATEMENT ANY
QUESTION. FIRST, I SMILE AT THE
BULLET THING INFLATIONARY
GENERATIONAL HIGH, BECAUSE I AM
SURE SOME --
>> THE TREASURER HAS DONE A LOT
OF WORK ON THE FINANCE SIDE AND
SAVED A LOT OF MONEY FOR THE
STATE IN TERMS OF GAINING
REVENUE. FINANCING IS NOT HERE
IN TERMS OF THE TOOL. IS THERE
ANY FINANCING OPTIONS THAT IS
BEEN DONE BY THE STATE
TREASURER THAT COULD HELP IN
THE SITUATION IN TERMS OF
SERVICING, ALONG THOSE LINES?
>> THAT'S A REALLY GOOD
QUESTION. WE HAVE -- WE HAVE A
LOT OF WHAT I WOULD CALL GOOD
GOVERNANCE POLICY WORK
UNDERWAY, SO WE ARE LOOKING AT
-- ANNUALLY, AND VERY
REGULARLY, I JUST YESTERDAY MET
WITH THE BOND TEAM TO TALK
ABOUT ADVANTAGEOUS STRATEGIES
FOR US IN TERMS OF TAKING ON
DEBT. BUT THEN WE ALSO HAVE USE
OF OUR CASH BALANCE. ARE WE
MAXIMIZING USE THERE? I WAS
TRYING TO GET SOME MORE OF THE
HIGH-LEVEL POLICY
CONVERSATIONS. THOSE ARE
ABSOLUTELY TOOLS, THOUGH.
>> GREAT, THANK YOU. LOVE THE
USE OF GOOD GOVERNANCE TOO, BY
THE WAY.
>> THAT'S MY MIDDLE NAME.
>> WITH 18 MINUTES REMAINING IN
COMMITTEE, WE ARE HALFWAY
THROUGH THE SLIDE DECK.
>> OKAY. SOME OF YOU PREPARED
AN UNINTENTIONALLY EXCELLENT
TRANSITION FOR ME. AS WE ARE
TALKING ABOUT THE DEFICIT IN A
HIGH LEVEL, WHEN WE THINK
ABOUT, HOW DID OTHER
JURISDICTIONS HANDLE THE
DEFICIT? WHEN OUR REVIT DUES
PRECIPITOUSLY DROPPED FROM THE
RECESSION CAUSED BY THE
PANDEMIC, WE WERE AT A
CROSSROADS AND WE HAD A
DECISION TO MAKE FROM A POLICY
PERSPECTIVE, WHETHER TO -- I
WILL JUST SAY TURN LEFT, WHICH
IS WHERE MOST FOLKS WENT.
THAT'S NOT A PUT POLITICAL
DISTINCTION. THESE ARE
HEADLINES FROM AROUND THE
COUNTRY OF DECISIONS THAT OTHER
JURISDICTIONS MADE DURING THE
PANDEMIC. EVERY MAJOR
JURISDICTION IN THE NATION HAD
SIGNIFICANT LAYOFFS AND SERVICE
REDUCTIONS IN THE PANDEMIC TO
RESPOND TO A DECREASE IN
REVENUE. WE WERE VERY MUCH
ALONE ON AN ISLAND WHERE WE
WERE NOT ONLY ABLE TO PREVENT
-- PREVENT MASS LAYOFFS, BUT
WE ALSO GREW AND EXPANDED
SERVICES AT THE SAME TIME.
WHERE THERE WAS A LEFT TURN FOR
EVERYBODY ELSE, WE TURNED RIGHT
AND WE TOOK ON A HUGE
CHALLENGE. THIS IS A VISUAL
REPRESENTATION THAT I WILL
EXPLAIN A LITTLE BIT HOW IT
DIFFERS FROM WHAT YOU HAVE SEEN
IN THE PAST FROM COUNCIL
CENTRAL STAFF. BUT WE TOOK ON
A LOT OF NEW SPENDING. WHAT YOU
ARE LOOKING AT ON THIS CHART.
SO EXPENSES IS THE GREEN LINE,
AND THEN REVENUES AND/OR
BALANCING -- THE BALANCING SIDE
OF THE LEDGER ARE IN THE
STACKED BARS. BASE REVENUES ARE
IN BLUE, GRANTS ARE IN ORANGE.
ONE-TIME REVENUE FUND BALANCE,
RESERVES, THAT'S IN PINK, AND
THEN JUMPSTART PAYROLL TAX
TRANSFER IS IN YELLOW. SO YOU
CAN SEE, WE WENT FROM 2019 TO
2020, YOU CAN SEE A
PRECIPITOUSLY THE REVENUE
DROPPED. THAT BLUE BAR WENT
FROM JUST OVER 1.4+ TO 1.3,
QUITE A BIT LOWER. BUT AT THE
SAME TIME, UCR EXPENDITURES DID
NOT. WE KEPT UP EXPENDITURES,
AND WE HAD THE BENEFIT OF THE
PAYROLL TAX AND THE FEDERAL
FUNDING FROM COVID TO BUOY US.
SO WE WERE ABLE TO MORE OR LESS
DEFY FISCAL GRAVITY FROM THE
TIME OF THAT RECESSION UNTIL
TODAY. SO IT BOUGHT US A LOT OF
TIME TO EXIST IN THIS HIGHER
SERVICE LEVEL, HIGHER STAFFING
LEVEL ENVIRONMENTS THAT WE FIND
OURSELVES IN. THE PLUS SIDE IS
THAT WE GET THE PLAN FOR THIS
DEFICIT WITH THE BENEFIT OF NOT
HAVING A PANDEMIC RAGING THAT
WE HAVE NO IDEA WHERE IT'S
GOING TO TAKE US OR HOW LONG
IT'S GOING TO LAST. SO WE HAVE
A LITTLE BIT CLEARER MINDS AS
WE ARE TRYING TO SOLVE FOR
THIS. AND THEN ON THE RIGHT,
ALL THE WAY TO THE RIGHT, THIS
IS SHOWING YOU -- THIS IS A
COMPOUNDED DEFICIT TO THE
RIGHT, SO WHERE YOU ARE SEEING
230 MILLION, THAT'S THE AMOUNT
OF AN ANNUAL OPERATING DEFICIT.
IT IS SHOWN AS 452 HERE. THIS
SORT OF ASSUMES THAT IF YOU
ONLY SOLVED 2025 WITH ONE-TIME
STRATEGIES, THAT'S THE AMOUNT
YOU HAVE TO FIND IN 2026. BUT I
KNOW ALL OF YOU WILL SOLVE IT
WITH ONGOING STRATEGIES. AND SO
THAT WILL ONLY BE 230 TO SOLVE.
>> THAT IS CORRECT.
>> I LOVE IT.
>> BEFORE I PASS IT OFF, WE
HAD COUNCILMEMBER STRAUSS WITH
A QUESTION HERE. I JUST WANT TO
CLARIFY. THIS IS SIMPLY THE
SLICE OF THE PIE THAT IS
GENERAL FUNDS. SO THERE COULD
BE A SIMILAR BAR CHART THAT
LOOKS VERY DIFFERENT FOR EVERY
SINGLE OTHER FUND THAT WE HAVE
WITHIN OUR CITY BUDGET. THANK
YOU, COUNCILMEMBER MORALES.
>> THANK YOU. DIRECTOR, I HAVE
TWO QUESTIONS HERE. ONE IS THAT
THE PLAN FOR GENERAL FUND THAT
CENTRAL REPRESENTED, IT SHOWED
2024 ADOPTED BUDGET AT THE END
OF 2024, THE UNRESERVED FUNDING
BALANCE IS ZERO. WE TALKED
ABOUT THE ONE-TIME REVENUE THAT
IS ASSUMED IN 2025 IN 2026?
THAT IS ONE QUESTION. AND THEN
THE OTHER QUESTION IS ABOUT --
JUST TO MAKE SURE I'M
UNDERSTANDING HERE, THE
DIFFERENCE BETWEEN THE 25
PROJECTED DEFICIT AND THE '26
PROJECTED DEFICIT ASSUMES A
COMPOUNDING. SO WE WILL SOLVE
THE $230 MILLION GAP FOR 2025,
WHICH MEANS THAT IN 2026, THE
GAP WILL REALLY BE 200 MILLION,
220. I JUST WANT TO CONFIRM
THAT.
>> THIS IS SHOWING BASED ON THE
FINANCIAL PLANNING AND
COMPOUNDING TOTALS. IN
HINDSIGHT, OR PERHAPS AN
FORESIGHT GOING FORWARD, I WILL
ENDEAVOR TO PRESENT YOU WITH
WHAT THE FINANCIAL PLAN SHOWS,
AND THEN ACTUALLY AN ANNUAL ONE
THE TRACKS CLOSER TO WHAT
CENTRAL STAFF SHOWS SO YOU CAN
BE ASSURED WE ARE TALKING
APPLES TO APPLES.
>> YOU HAD ASKED ME ABOUT THE
PINK SECTION. SO THAT IS
REPRESENTING FUNDS RESERVED
FROM -- BEING RELEASED TO
PRESERVE EXPENSES. TO ENSURE WE
MATCH THE REVENUES AND
EXPENSES, WE SHOW THE PLANNING
RESERVE FUNDS AS A RESERVE IN
THE PINK TO CORRESPOND TO THE
PLANNING RESERVES AND THE
EXPENSE SIDE, WHICH HE SHOWED
ON THE GREENLINE. WE CAN
CERTAINLY FOLLOW UP WITH MORE
DETAIL IF NEEDED. JUST IN THE
INTEREST OF TIME THOUGH, I'M
GETTING THE NOD FROM THE CHAIR.
>> THE VICE CHAIR HAS A
QUESTION WITH 12 MINUTES
REMAINING.
>> THANK YOU. I JUST HAVE A
CLARIFYING QUESTION. THE 230,
WE MAY NOT ACTUALLY FIND A
SOLVE FOR. WE MIGHT FIND A
ONE-TIME SOLVE. IF IT'S ONLY A
ONE TIME SOLVE, THEN THE
FOLLOWING YEAR, WE HAVE A
GREATER. SO WE NEED TO BE
REALLY MINDFUL WHEN WE SAY THIS
ALL FOR NEXT YEAR. I DON'T
KNOW WHAT IT WOULD BE, BUT IT
COULD POTENTIALLY BE ANOTHER
ONE TIME.
>> THAT'S A GREAT POINT, AND
IT GIVES ME A GOOD OPPORTUNITY
TO REMIND EVERYONE THAT WE
BUILD BIANNUAL BUDGET, SO WE
ARE GOING TO BE TRANSMITTING A
'25 '26 BUDGET WITH WHAT
COMES DUE IN SEPTEMBER.
>> I WANT SO ALSO CLARIFY THAT
MOST OF US, INCLUDING THE
EXECUTIVE, ARE VERY INTERESTED
IN FINDING THE LONGER-TERM, NOT
JUST THE ONE TIME STARTING AT
'25. I ALSO WANTED TO CLARIFY
THAT.
>> FOR THE SAKE OF MAKING SURE
THE DIRECTOR -- THESE ARE
ONGOING CONVERSATIONS. I KNOW
WHEN WE DID INDUSTRIAL MARITIME
LANE CHANGES FOR THE FIRST TIME
IN 13 YEARS LAST YEAR, I
REQUESTED THE COUNCIL MEMBERS
GO PRETTY DEEP IN BRIEFINGS. IF
YOU THINK THIS IS COMPLICATED,
TRY A LAND-USE POLICY. AND IT
REALLY HELPED FACILITATE THE
CONVERSATION AT COMMITTEE. IF
WE COULD HOLD QUESTIONS UNTIL
THE END JUST SO THAT THE
DIRECTOR CAN RUN THROUGH THIS,
AND THEN WE WILL CALL ON
EVERYONE.
>> SOUNDS GREAT. I'VE ALREADY
COVERED THIS, SO I'M NOT GOING
TO SPEND TOO MUCH TIME HERE.
THIS IS WHAT I LOVINGLY
REFERRED TO AS KNOWN UNKNOWNS.
THIS IS JUST HIGHLIGHTING WHAT
IS GOING TO CHANGE THE DEFICIT
CALCULATION YEAR AND, HOW WE
AND SPENDING AS WELL AS
UPCOMING REVENUE FORECASTS
OVERALL. JUST A QUICK NOTE
HERE, THE IMPACT OF HIGH
INFLATION ON CITY REVENUES,
THIS SPEAKS TO THE HIGH
INFLATION ENVIRONMENT. SO YOU
MIGHT ASSUME THE CITY REVENUES
WOULD GENERALLY GROW AS THE
PRICE OF GOODS AND SERVICES
CONTINUE. SO PROPERTY TAX
REVENUES WHICH ARE 24%, SORT OF
THE BOTTOM WEBSITE SO THAT PLY,
20% OF THE GENERAL FUND ARE
RESTRICTED BY STATE LAW TO GROW
AND JUST 1% PLUS THE VALUE OF
NEW CONSTRUCTION. DURING THE
BOOM YEARS, WHEN WE WERE
BUILDING MASSIVE SKYSCRAPERS
EVERY YEAR, NOT A PROBLEM. WHEN
WE HAD HISTORICALLY LOW
INFLATION AT LESS THAN TWO
PERCENT, THOSE WERE THE DAYS. I
WANT TO BE BUDGET DIRECTOR
THEN. IT SEEMS LIKE A GOOD
TIME. WHAT WE ARE LOOKING AT IS
IN A HIGH INFLATION
ENVIRONMENT, THESE REVENUES
HAVE GROWN JUST 8.9% COMPARED
TO CVI GROWTH DURING THE SAME
TIME PERIOD OF 19.5%. SO THAT
IS A HUGE CHUNK OF THE REVENUE
THAT IS NOT GOING TO KEEP UP
WHEN WE ARE TALKING ABOUT THE
HIGH INFLATION LEVEL. FURTHER,
IT'S ALSO IMPORTANT TO POINT
OUT THAT WE HAVE SIGNIFICANT
REVENUE, SOME 20% OF OUR
REVENUE COMES FROM FEES,
CHARGES, OR OTHER REVENUES. WE
SET POLICY CHOICES AROUND WHAT
LEVELS THOSE ARE SET AT. AND SO
IT COULD BE THE CASE THAT THE
POLICY DECISION IS THAT WE
DON'T WANT TO PASS ON THE FULL
COST OF INFLATION TO RESIDENTS
OF THE CITY AS THEY ARE LOOKING
TO GET SWIMMING LESSONS OR
THINGS LIKE THAT, WHERE THEY
ARE PAYING IN A FEE FOR USE ON
SOMETHING. WE MAKE A POLICY
CHOICE THAT WE WANT TO SPREAD
OUT OVER TIME, BUT WE WOULDN'T
NECESSARILY CAPTURE THAT ALL AT
ONCE. AND THEN, OF COURSE, AT
THE SAME TIME, THE COST OF
EVERYTHING WE BUY, ALL OF OUR
CONSTRUCTION PROJECTS,
CONTRACTED LABOR, ALL OF THAT,
ALL THIS COST GO UP WHILE CPI
IS DOWN AS WELL. AND THIS IS
SOME BALM FOR MY SOUL, BUT
UNFORTUNATELY, NOT EVEN
RELEVANT ANYMORE FOR THIS
PARTICULAR YEAR. THE 1%
PROPERTY TAX CAP. THIS IS A
STATE LAW RESTRICTION. THE
CURRENT USE IS THE GRAY LINE AT
THE BOTTOM WITH THE TRIANGLES.
AND THIS IS DEMONSTRATING THAT
THERE ARE SEVERAL OTHER POLICY
CHOICES THE STATE COULD
CONSIDER THAT WOULD BENEFIT
CITIES AROUND THE STATE IN
TERMS OF HAVING LOCAL REVENUES
BE ABLE TO KEEP UP WITH
INFLATION OR COME CLOSER TO
KEEPING UP WITH INFLATION. YOU
PROBABLY HEARD THAT THE COUNTY
HAS MADE THIS THEIR NUMBER ONE
PRIORITY BECAUSE THEY ARE ALSO
SEVERELY LIMITED BY THE 1%
GROWTH, AND UNFORTUNATELY, THIS
NO LONGER VIABLE AT THE STATE
LEVEL THIS YEAR, SO WE LOOK FOR
LEADERSHIP FROM THIS TEAM NEXT
YEAR SO THEY CAN TRY TO KEEP UP
WITH INFLATION OVER TIME. JUST
A QUICK NOTE HERE ON
TRANSPORTATION FUNDING
CHALLENGES. I WON'T GET INTO
TOO MUCH DETAIL HERE. SEVERAL
PRIMARY REVENUE SOURCES AND
TRANSPORTATION ARE DECLINING OR
HAVE DECLINED SIGNIFICANTLY.
COMMERCIAL PARKING TAX, GAS
TAX, PERMANENT AND LYSING FEES
AS WELL AS SCHOOLS OF SAFETY
CAMERAS, ALL OF THAT REVENUE
HAS GONE DOWN. THOUGH SUPPORT
CORE OPERATIONAL WORK.
SOMETHING YOU MIGHT SEE IS A
GREATER PROPORTION OF
OPERATIONAL, KEEPING THE LIGHTS
ON IN WORKING TRANSPORTATION
SPACE AND YOU MIGHT'VE SEEN IN
PRIOR LEVIES. WE HAVE TO MAKE
UP FOR THE FACT THAT THESE
REVENUES ARE DECREASING. I JUST
PROVIDE THIS TO YOU AS, I'M NOT
MAKING ANY POLICY STATEMENTS
HERE. IT'S REALLY THAT THIS IS
JUST CONTEXT FOR YOU AS YOU'RE
CONSIDERING THIS IN THE COMING
MONTH. THE NEXT ONE IS REAL
ESTATE EXCISE TAX. THIS IS A
TAX ON THE TRANSACTIONS OF
RESIDENTIAL AND COMMERCIAL
PROPERTIES. THE REVENUES
REFLECT THE HEALTH OF THE LOCAL
REAL ESTATE MARKET. THAT IS
BASED ON THE MARKET OF THOSE
TRANSACTIONS. THE REVENUES FOR
EACH HAVE GONE DOWN
PRECIPITOUSLY AS THE FEDERAL
RESERVE HAS INCREASED INTEREST
RATES TO TRY TO TAME INFLATION.
SO THE COST OF BORROWING HAS
GONE UP. WHERE PREVIOUSLY YOU
COULD GET A MORTGAGE FOR 2.5 OR
3% INTEREST, YOU ARE NOW
LOOKING AT 7, 06, 7, SOMETIMES
8%. THAT'S NOT JUST
RESIDENTIAL. THAT IS COMMERCIAL
AS WELL. THE COST OF BORROWING
HAS GONE UP SO MUCH, IT HAS
DEPRESSED A LOT OF ACTIVITY.
YOU ARE TRANSACTIONS MEANS LESS
REVENUE. IT'S IMPORTANT TO
KNOW THAT THEY ARE
PAY-AS-YOU-GO MAINTENANCE. THIS
IS CORE ASSET MANAGEMENT THAT
WE HAVE. WE ALSO PAY FOR THAT
SERVICE IN PARKS, SEATTLE
CENTER, TRANSPORTATION,
LIBRARIES, AS WELL AS FAS. THE
PRESENCE OF REAL ESTATE
TRANSACTIONS IS AN INDICATOR OF
THE HEALTH AND THE ABILITY FOR
CONSUMER CONFIDENCE TO BE
SPENDING, AND THEY ARE ALSO
ACCESS TO CAPITAL. AND SO WHEN
WE SEE LESS SPENDING IN THIS
SPACE, WE ARE SEEING LESS
CONSTRUCTION, WHICH MEANS LESS
SALES TAX REVENUE. THAT MEANS
WE ARE NOT BUILDING NEW OFFICES
SO LESS TAX REVENUE. IT REALLY
DOES CASCADE THROUGH. I WANT TO
PROVIDE YOU A VISUAL HERE. I'M
GOING BACK QUITE FAR TO SHOW
YOU HOW THIS IS AN INDICATOR OF
THE OVERALL HEALTH OF THE
ECONOMY. SO YOU CAN SEE THE
LAST TIME WE HAD A DIP OF THIS
MAGNITUDE WAS DURING THE GREAT
RECESSION. BETWEEN 2007 AND
2008, THE REVENUE WENT DOWN 58%
IN A SINGLE YEAR. THAT, OF
COURSE, IS A RECESSION CAUSED
BY A HOUSING CRISIS. IT WAS
VERY ADJACENT TO THE REASON FOR
THE DECREASE. IT TOOK SEVERAL
YEARS, UNTIL 2015 BEFORE ON A
NOMINAL LEVEL, THOSE REVENUES
CAME BACK. IF YOU GO ALL THE
WAY TO THE RIGHT AND YOU CAN
SEE BETWEEN '21 AND '23, WE
SAW THE REVENUE GO DOWN 53%.
THAT IS -- THOSE ARE IN REAL
DOLLAR TERMS. WE HAVE AN
INFLATION ADJUSTED THAT FROM
2008. SO IF I WERE TO INFLATION
ADJUST THE 2023 NUMBERS, YOU
WOULD SEE EVEN LESS REVENUE
THAN WE HAD DURING A HOUSING
CRISIS. OVERALL. SO IT'S NOT
ENCOURAGING NEWS ON THAT FRONT.
WE HAVE A LOT OF CHALLENGES WE
ARE GOING TO HAVE TO SOLVE FOR
THE COMING YEAR, HOW TO
MAINTAIN OUR CRITICAL ASSETS,
HOW TO CONTINUE TO MAKE SURE WE
PAY DEBT SERVICE ON PROJECTS WE
COMMITTED TO. JUST SOME
ADDITIONAL CONTEXT. LAST BUT
NOT LEAST, I WANTED TO GIVE YOU
A LITTLE BIT OF A HIGHLIGHT,
HIGH-LEVEL DISCUSSION ABOUT
WHERE WE ARE GOING AT '25. SO
THE GOAL THAT WE HAVE SET IS TO
CREATE A SUSTAINABLE BUDGET
THAT REFLECTS THE PRIORITIES
AND SUPPORTS HEALTH, SAFETY,
AND ECONOMIC VITALITY OF
SEATTLE. WE'VE BEEN TALKING
ABOUT DEFICIT ALL DAY. THE
SITUATION HERE IS, THE SCALE OF
THIS DEFICIT IS SIGNIFICANTLY
LARGER THAN IN PAST YEARS. AT
THIS POINT, IT'S ABOUT 15% OF
THE GENERAL FUND. THAT IS MORE
LIKELY TO CHANGE. WHAT WE'VE
DECIDED TO DO, IN TERMS OF OUR
INITIAL THINKING WITH 2025, IS
WHEN WE HAVE SOLVED DEFICITS OF
THE PAST, WHEN WE SAW A, LET'S
SAY, 3% -- A 3% DEFICIT TO
CLOSE. WE WOULD SAY, OKAY, CITY
DEPARTMENTS, WE NEED TO SEE 3%
WORTH THE REDUCTION IDEAS SENT
TO US, AND WE WILL TAKE A LOOK
AT THOSE REDUCTION IDEAS,
DECIDE WHAT WE CAN LIVE WITH,
AND THEN THAT'S WILL BE
INCLUDED IN THE BUDGET. BUT
IMPORTANTLY, WE ARE ONLY
LOOKING AT THE INCREMENT.
COUNCIL MEMBER KETTLE, THIS
GETS YOUR POINT DURING DEPUTY
DIRECTOR PANNUCCI'S
PRESENTATION. THIS YEAR WE ARE
DOING SOMETHING DIFFERENT. FOR
THE FIRST TIME, WE ARE ASKING
DEPARTMENTS TO BUILD THEIR
BUDGETS FROM THE GROUND UP.
YOU MIGHT'VE HEARD THE TERM
ZERO-BASED BUDGETING. THIS IS
AN QUITE ZERO-BASED BUDGETING.
WE DON'T HAVE THE TECHNOLOGY
IN PLACE TO BE ABLE TO SUPPORT
THAT. THIS IS AS CLOSE AS WE
CAN GET. WE ARE ASKING
DEPARTMENTS TO TALK ABOUT WHAT
LINES OF BUSINESS WITH THEIR
BUDGETS BE ABLE TO SUPPORT
UNDER DIFFERENT ALLOCATION
SCENARIOS? AND SO THEY ARE
JUSTIFYING WHAT IS STAYING, BUT
ALSO WHAT THAT TOP LINE
ALLOCATION DOESN'T HAVE ROOM
FOR. WHAT MAKES THAT REALLY
IMPORTANT IS, AS YOU ALL AS
DECISION-MAKERS IN THIS SPACE,
WHEN YOU ARE LOOKING AT A
REDUCTION, LET'S SAY WE ARE
LOOKING AT THE COST OF TISSUES
FOR THE LEGISLATIVE DEPARTMENT.
WE ARE PICKING SOMETHING
TOTALLY INNOCUOUS SO NO ONE CAN
GET MAD AT THIS EXAMPLE. THE
COST OF TISSUES HERE. IF I TELL
YOU THAT YOU ARE GOING TO CUT,
YOU KNOW, WE NEED YOU TO CUT
$500 FROM THE COST OF TISSUES,
YOU SAY, HOW CAN WE CUT THE
COST OF TISSUES? IF I AT THE
SAME TIME TELL YOU, WE ACTUALLY
SPEND $1 MILLION ON TISSUES. WE
CAN GET YOU TISSUES ELSEWHERE.
THAT CONTEXT IS WHAT YOU NEED
TO FEEL COMFORTABLE AND
CONFIDENT IN THE DECISIONS THAT
YOU ARE MAKING. AND YOU DON'T
HAVE PERFECT INFORMATION OR
FULL INFORMATION. WE ARE GOING
TO DO OUR BEST THIS YEAR AS WE
PRESENT BUDGET IDEAS TO THINK
THROUGH, WHAT IS THE FULL
CONTEXT FOR THAT
DECISION-MAKING THAT YOU NEED
TO MAKE? THERE'S GOT TO BE A
LOT OF PRESENTATIONS I KNOW
THAT ARE STELLAR FROM COUNCIL
CENTRAL STAFF TO TALK TO YOU
ABOUT BASE BUDGETS. I KNOW WE
WILL WORK CLOSELY WITH THEM ON
THAT. THAT'S REALLY WHAT WE'VE
ASKED DEPARTMENTS. WHAT WE'RE
DEPARTMENTS MAINTAIN IN 2026,
AND WHAT SERVICES WILL NEED TO
BE ADJUSTED WHETHER THE
SCALING, EFFICIENCIES,
ELIMINATION, IS ANOTHER
JURISDICTION PROVIDE THAT
SERVICE? THAT'S WHERE WE ARE
HEADED. AT A VERY HIGH LEVEL,
WE ARE STILL VERY EARLY IN THE
PROCESS FOR '25 '26. WE HAVE
A LOT MORE TO COME.
>> THANK YOU. COLLEAGUES, EACH
ONE OF THESE SLIDES IS GOING TO
BE EITHER A FULL OR PARTIAL
COMMITTEE MEETING. I ALSO
ENCOURAGE YOU TO RECEIVE
BRIEFINGS TO THE SIDE TO DIG
DEEPER INTO SOME OF THESE
QUESTIONS. WE ARE AT 11:30. IF
I CAN QUIT TALKING, WE WILL GET
OUT ON TIME. I JUST WANT TO
HIGHLIGHT A FEW THINGS THAT
WERE SAID IN THAT LAST SECTION,
WHICH IS THAT WE COULD'VE MADE
SOME OF THESE CHOICES DURING
THE PANDEMIC UNDER DURESS. AND
I THINK THAT WE HAVE A BETTER
OPPORTUNITY WITH A LONGER
RUNWAY TODAY TO MAKE THESE
LONG-TERM STRUCTURAL CHANGES TO
OUR BUDGETING. THIS IS AN
OPPORTUNITY TO HAVE A
COMPREHENSIVE REVIEW AND
EXAMINATION, BOTH FROM THE TOP
DOWN AND THE BOTTOM UP, WHICH
IS IN CONTRAST TO MOST YEARS,
WHERE IT HAS BEEN INCREMENTAL
CHANGES. WITH THAT, UNLESS
THERE IS ANYTHING ELSE IN THE
ORDER, I WILL CONCLUDE US AT
11:31 FOR OUR FIRST MEETING.
OUR NEXT MEETING OF THE
FINANCE, NATIVE COMMUNITIES,
TRIBAL GOVERNANCE -- I'M JUST
CALLING IT FNC FOR SHORT, WILL
BE MARCH 6th, 2024. WE WILL
HAVE FRANCESCA MURDOCH JOIN US
AS WELL. THANK YOU ALL.