PRESIDENT NELSON IS EXCUSED. YOU
CALL THE ROLL?
>> SAKA? .
>> HERE.
>> HOLLINGSWORTH?
>> JUAREZ?
>> HERE.
>> KETTLE?
>> HERE.
>> RINCK?
>> PRESENT.
>> RIVERA?
>> PRESENT. CHAIR STRAUSS?
>> PRESENT.
>> SEVEN PRESENT.
>> THANK YOU. WE ARE GATHERED
HERE TODAY ON OCTOBER 20th. THE
FURTHEST AND BIGGEST DAY IN
MARINERS' FRANCHISE HISTORY AND
HERE'S HOPING THAT TOMORROW IS
AS WELL. EITHER WAY ABOUT IT, NO
MATTER THE OUTCOME OF TONIGHT
AND WE HAVE COUNCILMEMBER
HOLLINGSWORTH T WITH US NOW, NO
MATTER THE OUTCOME NOW WE WILL
ONLY HAVE DAN WILSON WITH US FOR
THE LAST SEASON AND A HALF. NO
MATTER WHAT THE OUTCOME IS
TODAY, I CAN TELL YOU TODAY IS
JUST A MOMENT ON THAT UPWARD
TRAJECTORY OF OUR MARINERS
BASEBALL FRANCHISE. LET'S GO
MARINERS, SEIZE THE MOMENT.
TODAY IS THE DAY. WITH THAT, WE
HAVE ONE ITEM ON TODAY'S
AGENDA. PRESENTATION ON THE
ECONOMIC AND REVENUE FORECAST.
THE FORECAST COUNCIL MET THIS
MORNING AND RECEIVED THE UPDATED
ECONOMIC AND REVENUE FORECAST.
THE FORECAST COUNCIL IS MADE UP
OF A JOINT GOVERNING BODY OF THE
LEGISLATIVE AND EXECUTIVE
DEPARTMENTS. THE CITY COUNSEL IS
REPRESENTED MY MYSELF AND
PRESIDENT NELSON. EXECUTIVE IS
REPRESENTED BY FINANCE DIRECTOR
JAMIE CARNAL AND THE CHIEF OF
STAFF FOR THE MAYOR'S OFFICE,
ANDREW MIERBURG. IF NO
OBJECTION, THE AGENDA WITH THIS
ONE ITEM WILL BE ADOPTED.
HEARING NO OBJECTION, THE AGENDA
IS ADOPTED. WE WILL MOVE ON TO
OUR FIRST AND ONLY ITEM. CLERK,
WILL YOU READ THE SHORT TITLE
INTO THE RECORD?
>> ECONOMIC AND REVENUE FORECAST
FOR BRIEFING AND DISCUSSION.
>> THANK YOU. THE LAST TIME WE
HAD THE ECONOMIC AND REVENUE
FORECAST PRESENTED HERE, WE
BROUGHT ALL OF THE STAFF
RESPONSIBLE FOR THIS AND WE
FOUND IT TO BE MAYBE A BIT
BETTER WAY TO PRESENT WITH JUST
HAVING RICHARD FROM CBO AND
DIRECTOR DURAS FROM THE OFFICE
OF FORECAST TO SHEAR OUT THE
INFORMATION. WE ALSO HAVE TOM
MIKESELL FROM THE CITY COUNCIL
STAFF AS WELL AS DIRECTOR BEN
NOBLE OF OUR CITY COUNCIL
CENTRAL STAFF. COLLEAGUES, I
WILL TURN IT OVER TO YOU TO RUN
THIS PRESENTATION. COLLEAGUES, I
WILL ASK THAT WE HOLD OUR
QUESTIONS UNTIL THE END, AND
ALSO UNDERSTANDING THAT DIRECTOR
DURAS, OFFERING YOU, I HOPE THIS
IS ALL RIGHT, IS AVAILABLE TO
ANSWER YOUR QUESTIONS NOT
NECESSARILY ONLY IN THIS
COMMITTEE. THIS IS JUST AN
OPPORTUNITY FOR US ALL TO COME
TOGETHER TO ASK THE FORECAST
OFFICE DIRECT TER QUESTIONS
ABOUT THE FORECAST AND TO
RECEIVE IT AS A GROUP. IN THE
PAST, THE FORECAST BEFORE THERE
WAS NO INDEPENDENT FORECAST
COUNCIL, THIS WAS DONE JUST
INTERNALLY WITHIN THE CBO. THERE
WAS NOT A LOT OF PUBLIC OR
COUNCIL MEMBER INSIGHT INTO IT.
AS WE DEVELOPED THE FORECAST, IT
WAS STILL MEETING ON ITS OWN. AS
I BECAME BUDGET CHAIR, THAT'S
WHEN I REQUESTED THE FORECAST
OFFICE COME TO OUR COMMITTEE SO
THAT ALL COUNCIL MEMBERS HAVE
EQUAL ACCESS. THAT'S WHY WE ARE
HERE TODAY. ALSO UNDERSTANDING
WE HAVE A COUNCILMEMBER PROPOSAL
DEADLINE IN 22 HOURS, MINUS 5
MINUTES. AND SO COLLEAGUES IF
YOU WANT TO ASK QUESTIONS OF
DIRECTOR DURAS TO THE SIDE TO
REDUCE THE AMOUNT OF TIME WE ARE
HERE TODAY ON THE DIOUS, THAT IS
ALWAYS AN OPTION. THAT'S OUR
LET'S GO MARINERS THEME SONG,
SEIZE THE DAY. SEATTLE MARINERS.
WITH THAT, I WILL TURN IT OVER
TO DIRECTOR DURAS AT THE TABLE.
IF YOU WANT TO INTRODUCE
YOURSELF INDIVIDUALLY, I KNOW I
DID FROM HERE BUT I WILL TURN IT
OVER TO YOU.
>> GOOD AFTERNOON,
COUNCILMEMBERS. MY NAME IS JOHN
DURAS, THE CHIEF ECONOMICIST AT
THE OFFICE OF ECONOMIC REVUE AND
FORECAST.
>> BEN NOBLE.
>> TOM MIKESELL, STAFF.
>> I WILL TURN THINGS OVER TO
DIVE IN. JUST TAKE A MINUTE TO
EXPLAIN WHYIAN AND RICHARD ARE
HERE. HE IS A MEMBER OF THE
FORECAST OFFICE. THE FORECAST
OFFICE AS YOU SEE IS RESPONSIBLE
FOR THE BULK OF THE REVENUE
FORECAST, PARTICULARLY THE
FORECAST FOR THE REVENUES MOST
AFFECTED BY THE LOCAL ECONOMY.
THE FORECAST OFFICE DEVELOPS A
FORECAST OF THE ECONOMIC
CONDITIONS AND THEN FROM THAT A
FORECAST OF REVENUE. THERE WERE,
THERE ARE HOWEVER SOME REVENUE
STREAMS, A FEW NARROW REVENUE
STREAMS THAT REMAIN IN THE
PURVIEW OF THE BUDGET OFFICE
BECAUSE THEY ARE NOT
PARTICULARLY DEPENDENT ON THE
ECONOMY. IT IS RELATIONSHIP TO
THE DEPARTMENTS THEMSELVES THAT
PROVIDE THE BEST INFORMATION TO
DOING THAT FORECAST. SO THERE IS
STILL SOMEWHAT OF A COMBINATION
HERE BUT THE BULK OF THE WORK IS
ON ECONOMIC AND REVENUE FORECAST
TEAM SIDE. I THINK AS YOU WILL
SEE, IT GIVES YOU A STRONG
FOUNDATION AND THEY WILL BE ABLE
TO ANSWER YOUR QUESTIONS AS THEY
GO.
>> SO THIS PRESENTATION HERE
THAT I WILL GO OVER TODAY IS THE
SHORTENED VERSION OF THE ONE
THAT WAS PRESENTED TO THE
FORECAST COUNCIL THIS MORNING.
IT CONSISTS OF TWO PARTS. THE
FIRST IS AN UPDATE ON THE
ECONOMIC UPDATES AND FORECAST
FOR THE U.S. AND THE SEATTLE
METRO AREA. THE REASON WHY THESE
ARE IMPORTANT, THE REVENUE
FORECAST ITSELF DEPENDS ON THE
ECONOMY FORECAST, THE WAY HOW WE
DEVELOP THE FORECAST FOR SALES
TIED TO BUSINESS OCCUPATIONAL
TAX AND OTHER REVENUES DRIVEN BY
THE ECONOMY. FIRST LOOKING AT
THE NATIONAL FORECAST, USING AS
A STARTING POINT TO DEVELOP A
REGIONAL FORECAST FOR THE
ECONOMY. SEATTLE METRO AREA
ECONOMY AND THEN DEVELOP THE
REVENUE FORECAST ITSELF. WITH
THAT, LOOKING AT CHANGES IN THE
U.S. ECONOMIC FORECAST SINCE
JULY, THE TWO CHARTS ON THE
RIGHT SIDE HERE SUMMARIZE MORE
OR LESS WHAT HAPPENS SINCE WE
WERE HERE PRESENTING THE AUGUST
FORECAST. THE PANEL ON THE LEFT
SIDE SHOWS THE REAL GDP
FORECAST. THE RED LINE IS THE
JULY BASELINE SCENARIO. THE
BROWN ONE IS THE SCENARIO FROM
JULY. BACK THEN, THE PESSIMISTIC
SCENARIO ASSUMED THERE IS GOING
TO BE A RECESSION OR THERE WAS
AN ASSUMPTION THAT WOULD LEAD TO
A RECESSION. THE BASELINE
SCENARIO SINCE AUGUST HAS
IMPROVED. THE OUTLOOK IN GENERAL
HAS IMPROVED SLOITLY. THE
CURRENT BASELINE SCENARIO
ASSUMES REAL GDP GROWTH AROUND
2%. THAT'S PRETTY SOLID ECONOMY.
THE PESSIMISTIC SCENARIO
CONTINUES TO FEATURE A
RECESSION. THE RECESSION WAS
POSTPONED A LITTLE BIT. SO
OVERALL IMPROVEMENT IN THE SENSE
THAT THE ECONOMY OUTLOOK HAS
IMPROVED. THERE HAS BEEN
SLOWDOWN IN EMPLOYMENT GROWTH
AND THE FED HAS ACKNOWLEDGED
THAT THE EMPLOYMENT HAS BEEN
GROWING AT THE SLOWER RATE AS A
RESULT OF TRADE, IMMIGRATION
POLICY AS A RESULT OF THE A.I.
RELATED INVESTMENT AND THEIR
IMPLICATIONS FOR PRODUCTIVITY.
SO THE CHART ON THE RIGHT SHOWS
THAT EVEN THOUGH GDP IS EXPECTED
TO GROW AROUND 2%, THE
EMPLOYMENT WOULD BE MUCH WEAKER
THAN THAT. TURNING TO THE
REGIONAL ECONOMY, HIGHLIGHTING
THE MAIN POINTS, FOR REGIONAL
ECONOMY, THE MOST UP TO DATE
DATA IS FOR THE EMPLOYMENT,
MOSTLY EMPLOYMENT DATA THAT
COMES FROM WASHINGTON STATE, THE
SECURITY DEPARTMENT. RECENTLY,
ESD HAS REVISED DOWN THEIR
EMPLOYMENT ESTIMATES GOING BACK
TO THE FOURTH QUARTER OF 2024.
WITH THAT REVISION, THE CURRENT
ESTIMATE BASICALLY SAY THERE HAS
BEEN A DECLINE IN THE NUMBER OF
JOBS IN THE SEATTLE METRO AREA,
KING AND SNOHOMISH COUNTY, 0.7%
DECLINE IN THE FIRST MONTHS OF
2025, RELATIVE TO THE SAME
PERIOD IN 2024. THAT IS ABOUT
13,000 JOBS. THE CHART ON THE
RIGHT SIDE SHOWS HOW DIFFERENT
INDUSTRY CONTRIBUTED TO THAT
TOTAL CHANGE. SO THE TOP BAR IS
0.7% DECLINE IN TOTAL
EMPLOYMENT. THE SMALLER BARS
BELOW THAT FOR INDIVIDUAL
INDUSTRIES, IF YOU STACK THEM
UP, THEY WOULD ADD UP TO THE
TOTAL PROS. AS YOU CAN SEE,
THOSE DECLINES WERE BROAD BASED,
ONLY SLEE SECTORS, EDUCATION AND
HEALTH SERVICES, LEISURE AND
HOSPITALITY AND GOVERNMENT WHERE
JOBS WERE ADDED IN THE REMAINING
INDUSTRIES, THERE WERE JOB
LOSSES. AND IN PARTICULAR,
WORRYING IS THE DECLINE IN
PROFESSIONAL BUSINESSES. THE
ASSOCIATED REVENUES HAVE
GENERATED QUITE LARGE SHARE OF
CITIES TOTAL REVENUE. THAT
REVISION IN THE EMPLOYMENT WAS
ALSO INCORPORATED IN OUR
REGIONAL FORECAST. THE RED LINE
IN THIS CHART SHOWS WHAT THE
BASELINE SCENARIO FORECAST
LOOKED LIKE. WE ARE DEVELOPING
THE AUGUST REVENUE FORECAST.
DARKING RED LINE SHOWS THE
CURRENT WORK AS WE MET REVISION.
TO THE LEFT OF THE LINE DENOTES
THE FORECAST WE SEE THE IMPACT
OF THE REVISION, THE DECLINE IN
EMPLOYMENT FOR THE FIRST
THREE-QUARTERS OF THIS YEAR.
GOING FORWARD, WE EXPECT THE
GROWTH TO RESUME IN 2026 BUT BE
VERY MODEST, BELOW 1 % ON
AVERAGE. THAT'S A BASELINE
SCENARIO. IN CASE OF A
RECESSION, THE PESSIMISTIC
SCENARIO, THE RECESSION WOULD
LEAD TO JOBLESSNESS ABOUT 2.5%
JOBS WOULD BE LOST BETWEEN THE
FIRST QUARTER OF '25 AND THE
THIRD QUARTER OF '27 BEFORE A
RECOVERY WOULD START AND FULL
RECOVERY WOULD TAKE UNTIL
2029Q3. THIS MAKES THE RECESSION
COMPARABLE TO THE 2001
RECESSION, DEEPER 2008 OR 2020
RECESSIONS. MOVING TO THE
REVENUE FORECAST ITSELF, IN THE
FORECAST COUNCIL MEETING THIS
MORNING, THE FORECAST OFFICE HAS
RECOMMENDED THE BASELINE
SCENARIO TO BE USED AS THE
OFFICIAL OCTOBER FORECAST. THAT
SAID, THERE IS A LARGE AMOUNT OF
UNCERTAINTY REGARDING THE
REVENUE FORECAST I WILL SPEAK
ABOUT THAT IN THE NEXT SLIDES.
THERE IS AN A LARGE AMOUNT OF
UNCERTAINTY. WE EXPECT THE
VARIANCES IN ACTUAL REVENUE FOR
2026 MAY DIFFER MORE
SIGNIFICANTLY IN THE CURRENT
FORECAST THAN WHAT WE HAVE SEEN
IN THE PAST. THE CONTEXT IS
ESSENTIALLY A QUICK SUMMARY OF
THE ECONOMIC FORECAST. I WENT
OVER A COUPLE MORE POINTS TO
HIGHLIGHT HERE. THE LIKELIHOOD
OF A RECESSION IN THE NEXT 12
MONTHS IS ABOUT THE SAME AS WHAT
THE ECONOMY PERCEIVED IT TO BE
BACK IN SUMMER, AROUND 33%. THAT
IS QUITE ELEVATED. NEVER THE
LESS, LOWER THAN THE 45%
ESTIMATE BACK FROM APRIL AFTER
THE TARIFFS HAVE BEEN ANNOUNCED,
THE ANNOUNCEMENT WAS MADE. ONE
FINAL POINT HERE THAT RELATES TO
OVERALL UNCERTAINTY AND WHY WE
ARE LESS CONFIDENT ABOUT OUR
FORECAST FOR 2026, THERE ARE A
NUMBER OF POLICY CHANGES THAT
AFFECT SALES AND B&O TAX
COLLECTION. EXPECTED IN TOTAL TO
HAVE A POSITIVE IMPACT ON
CITIES' REVENUES BUT IT IS HARD
TO ESTIMATE HOW BIG THE IMPACT
WILL BE BECAUSE THE DATA WILL
PROVIDE THAT ESTIMATE, TO CREATE
THAT ESTIMATE IS LIMITED. WE
WILL JUST HAVE TO WAIT WITH
ADDITIONAL DATA COMING IN
IMPROVE THE FORECAST AND
UNDERSTANDING OF WHAT EXACTLY
THE IMPACT OF THIS POLICY CHANGE
ON CITIES' REVENUE. SO TURNING
TO THE GENERAL FUNDS REVENUE
FORECAST FOR THE BASELINE
SCENARIO, AND THAT'S A SCENARIO
THAT HAS BEEN RECOMMENDED AND
HAS BEEN ADOPTED BY THE FORECAST
COUNCIL THIS MORNING. AT THE
VERY BOTTOM LINE FOR TOTAL
GENERAL FUND, WITHOUT TRANSFERS,
YOU CAN SEE THERE IS A POSITIVE
REVISION, POSITIVE CHANGE FOR
BOTH 2025 AND 2026, THE TOTAL OF
$12.1 MILLION. THAT IS LESS THAN
HALF A PERCENT OF THE OVERALL
GENERAL FORECAST. SO MINOR
REVISION BUT POSITIVE REVISIONS.
IN GENERAL, THE FORECAST
REFLECTS THAT SLIGHTLY IMPROVED
OUTLOOK INCREASES REVENUES NOT
DRAMATICALLY BUT THERE IS AN
INCREASE IN MOST ECONOMIC
TRIGGERED REVENUES. THE
REVENUES, THE INDIVIDUAL
REVENUES, THOSE THAT ARE
HIGHLIGHTED BLUE IN THE TABLE
ABOVE ARE THE ONES THAT THE
FORECAST OFFICE IS RESPONSIBLE
FOR. SALES TAX REVENUES HERE,
THE 2026 TOTAL INCLUDES THE
IMPACT OF THE 5814 AND INCLUDES
THE 0.1% PUBLIC SAFETY EFFECTS.
SO THAT'S WHY THERE IS A BIG
JUMP BETWEEN 2025 AND 2026. THE
OVERALL INCREASE FOR SALES TAX
REVENUE IS AGAIN A RESULT OF A
SLIGHTLY IMPROVED OUTLOOK FOR
BUSINESS AND OCCUPATION TEXT, IN
ADDITION TO THE IMPROVEMENT TO
THE OVERALL ECONOMIC OUTLOOK,
THE YEAR TO DATE COLLECTION FOR
2025 WAS SLIGHTLY AHEAD OF WHERE
WE WERE EXPECTING IT TO BE AT
THIS POINT AND THAT IS A
CONTRIBUTING FACTOR. THAT IS A
REASON WHY THE FORECAST FOR
BUSINESS AND OCCUPATIONAL TAX IS
SLOIT SLIGHTLY HIGHER. THE MAIN
FACTORS HERE ARE TELEPHONE AND
CABLE TAX REVENUES WHICH IN
RECENT YEARS HAVE TRENDED DOWN.
THE RATE OF DECLINE SLOWED DOWN
A LITTLE BIT SO THE ACTUAL
COLLECTION WAS SLOITLY AHEAD
WHERE WE WERE EXPECTING IT TO
BE, RESULTED IN THE $2.3 MILLION
ADDED TO THE FORECAST. WITH THIS
UPDATE FOR THE REMAINING
REVENUES, I WILL TURN IT OVER TO
RICHARD WHO IS GOING TO PROVIDE
CONTEXT FOR THOSE.
>> YEAH, THANKS DIRECTOR DURAS.
SO FIRST IS PROPERTY TAXES. SO
WE HAVE AN UPWARD REVISION OF
ABOUT $4.1 MILLION FOR '26. A
LOT OF THIS UPWARD REVISION HAS
TO DO THE FACT THAT WE ARE
RECEIVING MORE INFORMATION FROM
THE KING COUNTY ASSESSOR'S
OFFICE FOR PROPERTY COLLECTIONS
IN 2026. THE TWO KEY FACTORS
THAT DRIVE THAT TYPICALLY ARE
NEW CONSTRUCTION WHICH IS THE
AMOUNT THAT WE GET TO ADD TO OUR
LEVY BEYOND THE 1% GROWTH
FACTOR. AND NEW CONSTRUCTION
VALUE FOR '26 COMING IN A
LITTLE HIGHER THAN THEY DID IN
AUGUST. THE SECOND ITEM IS A
REFUND RELEVY WHICH IS THE
AMOUNT OF REFUNDS PAID THE
PREVIOUSLY THAT THE CITY IS
ALLOWED TO RELIVE NEXT YEAR.
THAT AMOUNT IS COMING IN HIGHER
THAN PREVIOUSLY ESTIMATED. AS
FAR AS OTHER CITY TAXES GO, MUCH
OF THIS IS RELATED TO THE
TRANSPORTATION NETWORK AND TAX.
THE ACTUALS ARE COMING IN A
LITTLE HIGHER THAN WHEN WE HAD
OUR PREVIOUS LOOK. SO THAT
UPWARD REVISION THERE IS
REFLECTED IN THAT. WE ALSO HAVE
PARKING METERS AND COURT FINES.
WITH REGARDS TO PARKING METERS,
WE HAVE A SMALL DOWNWARD
REVISION WHICH IS MAINLY DUE TO
PRELIMINARY SORT OF PARKING
RATES THAT ARE EXPECTED TO BE
EXCHANGED NEXT MONTH WHICH WOULD
HAVE A DOWNWARD EFFECT ON
REVENUES. AS FAR AS COURT
FINDINGS GO, WE DON'T T REALLY
SEE MUCH OF A CHANGE HERE OVER
THE TWO YEARS. SO IT IS ABOUT
300,000 DOWNWARD REVISION. SO
UNDERLYING THIS IS SMALL
INCREASE IN PARKING TICKETS BUT
THIS IS MOSTLY UPSET BY DOWNWARD
REVISION TO REVENUE FROM RED
LIGHT CAMERAS, CITATIONS WHICH
IS DOWN MOSTLY FOR A SIMPLE
TECHNICAL REASON THAT IS THAT
COUNSEL CHANGED THE LOCATION OF
RED LIGHT CAMERA REVENUE FROM
80% TO 70%. THEN WITH REGARD TO
LICENSED PERMITS AND INTEREST
INCOMES, A COMPONENT OF THAT HAS
TO DO WITH INTEREST ACCRUES TO
BALANCES IN THE GENERAL FUND. SO
AS YOU ARE AWARE, WE ARE IN
HISTORIC HIGH INTEREST RATE
ENVIRONMENT. THE FED CUT RATES
FOR THE FIRST TIME IN SEPTEMBER.
THE EXPECTATION IS THAT THEY
WILL CUT RATES AGAIN IN OCTOBER.
THEY DON'T HAVE A NOVEMBER
MEETING BUT THE ANTICIPATION IS
THAT ANOTHER RATE CUT WOULD
HAPPEN IN DECEMBER. THE DOWNWARD
REVISIONS YOU SEE THERE ARE
LARGELY DRIVEN BY THE
ANTICIPATION OF A CHANGE OF
INTEREST RATE ENVIRONMENT. AND
THEN ALSO REVENUES FROM OTHER
PUBLIC ENTITIES, A LOT OF THESE
ARE THE STATE SHARED REVENUES
THAT WE GET FROM WASHINGTON
STATE. AND REALLY, THE DOWNWARD
REVISION THERE OF ABOUT 700,000
OVER TWO YEARS IS REALLY A
REFLECTION OF THE ACTUALS THAT
HAVE BEEN COMING IN A LITTLE BIT
LESS ROSIER THAN WE EXPECTED.
FOR SERVICE CHARGES, YEAH, FOR
SERVICE CHARGES, YOU CAN SEE AN
EXTRA $2.2 MILLION. THAT IS
REFLECTED IN THE ACTUALS. MUCH
OF THIS HAS TO DO WITH LAW
ENFORCEMENT FEES. THESE INCLUDE
FEES FOR POLICE PRESENCE AT
SPORTING EVENTS WHICH OBVIOUSLY
HAVE BEEN A POSITIVE IMPACT IN
THE CITY THUS FAR. WITH RESPECT
TO GRANTS, WE NOTICE A BIT OF AN
ERROR IN OUR PRESENTATION HERE.
SO THERE SHOULD BE NO CHANGES
BETWEEN '25 AND '26 COMPARED
TO THE AUGUST FORECAST IMPLYING
THAT THE TOTAL GENERAL FUND
NUMBER LINE SHOULD BE THE SAME
AS TOTAL GENERAL FUND WITHOUT
GRANTS AND TRANSFERS. SO THAT'S
A CORRECTION THAT WE WILL BE
WORKING WITH DIRECTOR DURAS TO
REFLECT.
>> SO THAT IS -- THE NET
INCREASE IN THE GENERAL FUND IS
12.1 MILLION?
>> CORRECT.
>> THANKS.
>> ONE FINAL POINT I WANT TO
MAKE HERE. THE TWO LINES BELOW,
RIGHT BELOW THE TABLE, THEY SHOW
THE ANNUAL GROWTH IN REVENUE
WITHOUT FUNDS AND TRANSFERS AND
COMPARE TO THE SEATTLE AREA
INFLATION RATE. FOR 2025, THERE
IS ABOUT 0.4% ADDITIONAL GROWTH
ABOVE INFLATION. SO REVENUES ARE
EXPECTED TO GROW SLIGHTLY FASTER
BUT JUST SLIGHTLY FASTER THAN
INEXPLANATION. FOR 2026, THE
DIFFERENCE IS MUCH LARGER, 1.3
PERCENTAGE POINT DIFFERENCE.
THAT AGAIN IS PARTIALLY DUE TO
THE ADDITIONAL SALES TAX THAT IS
ALREADY INCLUDED IN THE SALES
AND USE TAX LINE ONE POTENTIAL
ADDITIONAL CHANGE TO THE
REVENUES WHICH HAS NOT BEEN
INCLUDED IN THE TABLE OF THE
PREVIOUS SLIDE IS THE BUSINESS
AND OPTION TAX RESTRUCTURE. THAT
HAS YET TO BE APPROVED BY THE
VOTERS AND IN LINE WITH PAST
PRACTICE WAS BECAUSE OF THIS
FACT NOT INCLUDED IN THE GENERAL
FORECAST. THE PROPOSED BUDGET
ASSUMED $81 MILLION IN GENERATED
REVENUE IF THIS PASSES AND THE
UPDATED ABOUT IS $85.6 MILLION.
TURNING OVER TO NONGENERAL FUND
REVENUE LINE AT THE TOP, THE
LARGEST OF THE REVENUE STREAMS
PAY ROLL EXPENSE TAX. AS YOU CAN
SEE IT HAS BEEN REVISED UP
ESSENTIALLY IN LINE WITH THE
STOCK PRICES GROWING. THE STOCK
MARKET IS GROWING AND THE GAINS
ARE HEAVILY CONCENTRATED IN THE
TECH SECTOR THERE IS AN
ADDITIONAL $7.2 MILLION OVER THE
TWO YEARS. THAT PARTIALLY ALSO
REFLECTS THE INFORMATION WE
RECEIVED FROM THE OFFICE OF CITY
FINANCE REGARDING LATE PAYMENTS
FOR PAST TAX YEARS. THE LINE
BELOW PAY ROLL TAX FUNDS,
RICHARD WILL PROVIDE
INFORMATION.
>> WITH RESPECT TO INTEREST
INCOME FOR THE PAY ROLL EXPENSE
TAX FUND, THIS IS SOMETHING THAT
WAS NOT PREVIOUSLY PREPARED.
HOUFB, UPON MANY CONVERSATIONS
WITH CENTRAL STAFF AS WELL AS
REFLECTED IN THE FACT THAT IN
2024 THE ACTUALS THAT WERE
RECEIVED FOR THAT FUND IN TERMS
OF INTEREST WAS $11.2 MILLION
WHICH IS A VERY SUBSTANTIAL
AMOUNT. WE TOOK ON THE TASK OF
PREPARING THE FORECAST IF YOU
WILL FOR THIS PARTICULAR ITEM.
THE ESTIMATE FOR 2025 IS 10.1
AND THAT IS DOWNWARDLY REVISED
TO ABOUT 9.7 IN '26. PLEASE NOTE
THAT MUCH OF THIS IS REALLY A
REFLECTION OF THE HISTORIC HIGH
INTEREST RATE ENVIRONMENT WE
FIND OURSELVES IN WHICH IS
REALLY CONTRIBUTING TO WHY WE
ARE SEEING HUGE INTEREST INCOME
FOR THIS FUND. SO THE
ANTICIPATION IS THAT AS THE
INTEREST RATE ENVIRONMENT STARTS
TO SOFTEN THROUGH FED POLICIES
AND MONETARY EASING POLICY, WE
WILL EXPECT THE NUMBERS TO GO
DOWN IN THE FUTURE. HOWEVER THEY
ARE SUBSTANTIAL, UP TO DATE. SO
IT WAS APPROPRIATE FOR US TO
CALL THIS OUT. CBO WOULD LIKE TO
THANK TOM AND OTHERS FOR HELPING
US UNDERSTAND AND LOOK THROUGH
THIS A LITTLE BIT BETTER. I WILL
MOVE ON IF YOU DON'T T MIND TO
SWEETENED BEVERAGE TAX. THE LAST
TIME WE WERE HERE SPEAKING, WE
FACTORED IN IF YOU WILL THE
POTENTIAL IMPACT T OF THE WORLD
CUP AND OTHER ACTIVITIES IN THE
SEATTLE AREA DRIVING THE DEMAND
FOR SWEETENED BEVERAGES. UP TO
DATE, THE COLLECTIONS WE ARE
GETTING ARE A LITTLE ROSIER THAN
WE HAD EXPECTED, A LITTLE HIGHER
THAN EXPECTED. ALSO, YOU KNOW
FOR NEXT YEAR FOR THE WORLD CUP,
WE MAINTAIN IF YOU WILL A
FORECAST THAT WE WOULD HAVE IN
SO MANY WAYS HISTORIC
COLLECTIONS FOR THIS PARTICULAR
TAX. SO THAT IS REFLECTED IN
$20.3 MILLION FOR '25.
SHORT-TERM RENTAL TAX, THIS IS A
TAX THAT IS MOSTLY AFFECTED BY
DOMESTIC INTERNATIONAL TOURISM.
IN 2026, THE OUTLOOK HAS BECOME
A LITTLE MORE PESSIMISTIC,
LARGELY OWING TO THE STEEP DROP
IN VISITORS FROM CANADA. THAT'S
NOT EXPECTED TO IMPROVE. AND
THEN 2025 IS SIMPLY REFLECTING
SLIGHTLY HIGHER ACTUALS THAN WE
HAD ANTICIPATED FOR THE
SHORT-TERM RENTAL TAX. AND THEN
ALSO WITH REGARDS TO COMMERCIAL
PARKING TAX, WE HAVE AN UPWARD
REVISION IN '26. THIS IS A
RESULT OF REALLY THE RELATIVELY
IMPROVED EMPLOYMENT OUTLOOK
WHICH IS HOPEFULLY INDICATE TIVE
OF ECONOMIC ACTIVITY ACROSS THE
CITY, MORE PEOPLE GOING O OUT TO
SHOPS AND RESTAURANTS AND
PARKING AT THE COMMERCIAL
GARAGES AROUND THE CITY. AND
THEN FINALLY, I WANT TO SPEAK TO
THE AUTOMATED TRAFFIC SAFETY
CAMERAS. BEFORE THIS WAS
LABELLED AS A SCHOOL ZONE, I
THINK, TRAFFIC CAMERAS BUT WE
HAVE HAD A CHANGE OF NAME. SO WE
HAVE A RELATIVELY LRJ INCREASE
FROM 2025 TO 2026 WITH THE
EXPANSION OF SCHOOL ZONE CAMERAS
WITH NEW CAMERAS EXPECTED TO BE
ACTIVATED LATE THIS YEAR AND
EARLY NEXT YEAR. THE EXPECTED
INSTALLATION SCHEDULE FOR THE
NEW CAMERAS HAS NOT CHANGED
SINCE THE AUGUST FORECAST.
HOWEVER WE ARE HOPEFUL THAT MANY
OF THOSE WILL COME ON LINE LATER
THIS YEAR AND EARLY PART OF NEXT
YEAR. AND THEN WE HAVE A SMALL
DOWNWARD REVISION TO THESE
REVENUES BASED ON CITATION
TRENDS WITH THE START OF NEW
SCHOOL YEAR AND SO FORTH. THIS
IS OFFSET BY THE INCREASED
REVENUES IN RED LIGHT CITATIONS
GOING INTO THE FUND WHICH
INCREASED 20% TO 30%, WHICH WILL
INCREASE 20% TO 30% STARTING IN
2036. I WILL PASS IT BACK OVER
TO DIRECTOR DURAS.
>> SO GOING BACK TO THE READ
REVENUES, THIRD LINE IN THE
TABLE, UPWARD REVISION FOR 2025
IS PRIMARILY DUE TO A COUPLE OF
LARGER PROPERTIES THAT WERE SOLD
AND RESULTED IN ACTUAL CHECKS
ABOVE OUR FORECAST. THE DOWNWARD
REVICTION OF $1.1 MILLION FOR
2026 IS THE RESULT OF WEAKER
HOUSING MARKET FORECAST FROM SNP
GLOBAL AND MOODY'S ANALYTICS
THAT UNDERLIE THE ECONOMIC
REGIONAL FORECAST. SO INTEREST
RATES ARE LONGTERM. INTEREST
RATES ARE STUBBORNLY HIGH. THE S
& P HAS REVISED DOWN THE
ESTIMATE FOR NUMBER OF HOMES
SOLD NEXT YEAR. IN ADDITION TO
THAT, THE DECLINING HOME PRICES
MEAN THE OVERALL FORECAST IS
SLIGHTLY LOWER FOR 2026. THE
COMBINED CHANGE FOR THE TWO
YEARS IS $0.3 MILLION TO THE
PLUS SIDE. SKIPPING TO THE FINAL
LINE HIGHLIGHTED IN BLUE THAT
OUR OFFICE IS RESPONSIBLE FOR,
TRANSPORTATION DISTRICT SALES
TAX HAS BEEN REVISED UP SLIGHTLY
AND MIRRORING THE CHANGES FOR
THE GENERAL FUND SALES TAX DUE
TO IMPROVED ECONOMY OUTLOOK
SLIGHTLY, HIGHER REVENUES
FORECASTED FOR 2026 BUDGET. SO
VERY MODEST INCREASE. SO WITH
THAT, I'M HAPPY TO ADDRESS ANY
QUESTIONS.
>> THANK YOU, DIRECTOR DURAS AND
RICHARD FOR ALL YOUR WORK HERE.
COLLEAGUES, I'M GOING TO MANAGE
COMMITTEE SLIGHTLY DIFFERENTLY
THAN USUAL. I WILL PROVIDE SOME
REMARKS FROM THE FORECAST
COUNCIL THIS MORNING AND THEN I
WILL TURN IT OVER TO YOU
QUESTIONS. DIRECTOR DURAS IF WE
COULD START ON SLIDE NINE, I'M
GOING TO SUMMARIZE THE
CONVERSATION WE HAD THIS
MORNING. ON THE ADMISSION TAX
FRONT, YOUR TEAM IS CONTINUING
TO MONITOR FIFA WORLD CUP. NO
CHANGE IS NOT A BAD THING AND
YOU ARE ALREADY MONITORING FIFA
WORLD CUP. COLLEAGUES, THIS IS
WHERE IF TOMORROW IS ALSO THE
GREATEST DAY IN MARINERS
FRANCHISE HISTORY, WE WILL SEE
AN UPTICK IN THE ADMISSIONS TAX
FOR THIS YEAR BUT NOT FOR NEXT
YEAR.
>> AS A TECHNICAL POINT, WE
DON'T COLLECT AT SAFE CO. SO WE
WILL SEE A BUMP IN OTHER
ACTIVITY T BUT NOT THAT
PARTICULAR STREAM.
>> TOO BAD. NEXT TIME. WITH
THAT, MOVING ON TO THE
CONVERSATION AROUND PARKING
FINES AND TRAFFIC CAMERAS, I
WANTED TO GIVE THE FORECAST
OFFICES GRACE BECAUSE JUST TO
STATE THROUGHOUT THE PANDEMIC,
OUR FORECAST OFFICE HAD MORE
ACCURATE PREDICTIONS THAN THE
STATE'S FORECAST OFFICE. THESE
TWO AREAS OF PARKING FINES AND
TRAFFIC CAMERAS LEAVES THE CITY
COUNCIL EVERYONE IS AWARE OF THE
PARKING FINE CHANGES THAT
OCCURRED LAST YEAR, THE CHANGES
THAT WE ARE MAKING TOWARDS
TRAFFIC CAMERAS. SO THERE IS
LITERALLY NOTHING MORE THAT OUR
FORECAST OFFICE COULD DO TO
BETTER PREDICT THIS BECAUSE WE
ARE CONTINUING TO CHANGE THE
ENVIRONMENT IN REAL TIME.
DIRECTOR DURAS, IF YOU WANT TO
GO BACK ONE SLIDE TO THE B&O,
JUST TO SAY THIS IS THE SAME
CONVERSATION WE HAVE HAD WITH
THE JUMP START PAY ROLL TAXES
OVER A NUMBER OF YEARS. IT
REQUIRES THREE TO FIVE YEARS TO
UNDERSTAND WHAT THE FORECAST --
TO ACCURATELY PREDICT FORECASTS.
THAT IS BECAUSE WE NEED THREE
YEAR SMOOTHING OR FIVE YEAR
SMOOTHING TO UNDERSTAND TRENDS
THROUGHOUT MANY DIFFERENT
ECONOMIC SITUATIONS. NO MATTER
WHAT, WE WILL NEED A FEW YEARS
TO REALLY HAVE A BICE LINE ON
THE FORECASTS MOVING FORWARD. IF
WE COULD RETURN TO SLIDE FOUR
AND THEN TO SLIDE FIVE. I WANT
TO BRING US BACK TO WHERE WE
WERE ONE YEAR AGO TODAY --
SORRY, MY SLIDES ARE DIFFERENT.
TO THE VOLATILITY SLIDE. MAYBE
IT WASN'T ON HERE.
>> THE SLIDE DECK FOR THIS
PRESENTATION IS ABBREVIATED. SO
SOME OF THE SLIDES FROM THIS
MORNING [ INDISCERNIBLE ] .
>> THANK YOU. THE SLIDE ON THE
SCREEN NOW DEMONSTRATES THE
STOCK MARKET GROWTH. AT THE
BEGINNING OF 2025 WAS ABOUT THE
PEAK BEFORE THAT FIRST DROP.
WHERE WE WERE A YOUR AGO TODAY
WAS JUST A LITTLE BIT TO THE
LEFT OF THAT PEAK, WHERE WE
BELIEVED THAT JANUARY WOULD
BRING SLOW GROWTH IN A POSITIVE
DIRECTION. THE REALITY OF WHAT
WE EXPERIENCED THIS YEAR WAS
THAT STEEP DROPOFF AND THEN
RETURN TO SLOW GROWTH. SO WHERE
WE ARE TODAY IS PROBABLY A
SIMILAR PLACE THAT A YEAR AGO WE
WOULD HAVE PREDICTED WE WOULD BE
TODAY BUT IT HAS BEEN THROUGH A
PROCESS OF A DEEP DECLINE WITH A
REBOUND BACK TO SLOW GROWTH. SO
THAT'S WHY I SAY THERE IS
CAUTIOUS OPTIMISM IN THE FUTURE.
AND EVEN THOUGH THIS HAS BEEN A
POSITIVE REVENUE FORECAST, WE
CANNOT PREDICT WHAT WE WILL NEED
TO ATTEND TO IN THE NEXT SIX
MONTHS, IN THE NEXT YEAR. THE
FEDERAL GOVERNMENT IS CLAWING
BACK, RESTRICTING FUNDING TO
SOMANY THINGS IN OUR REGION THAT
NO MATTER WHAT T THE POSITIVE
NUMBER IS IN OUR REVENUE
FORECAST TODAY, THE LIKELIHOOD
WE WILL NEED TO STEP IN FOR THE
FEDERAL WITHDRAWAL IS HIGHER
THAN WHAT WE HAVE GAINED TODAY.
SO WHILE THIS IS A POSITIVE, I
SHARE WITH YOU THAT IT'S A
MUTED POSITIVE. DIRECTOR DURAS,
IF YOU COULD SHOW THE VOLATILITY
SLIDE.
>> I'M AFRAID THAT DIDN'T MAKE
IT.
>> ALL TO SAY THAT AT THE
BEGINNING OF THIS YEAR, WE
EXPERIENCED THE HIGHEST
VOLATILITY IN THE MARKET SINCE
THE PANDEMIC. THAT'S WHAT
CREATED THIS DOWNTURN AND THEN
RETURN TO SLOW GROWTH. SO IF WE
HAD BEEN A YEAR AGO PREDICTING
TO WHERE WE ARE TODAY, WE ARE
PROBABLY SOMEWHERE PRETTY
SIMILAR. WHAT WAS UNPREDICTED
WAS THE PATH IN WHICH WE GOT
HERE TODAY. THIS YEAR HAS BEEN
FULL OF TWISTS AND TURNS. WHILE
TODAY'S NEWS IS POSITIVE, I
SHARE CAUTION BECAUSE WE DON'T
T KNOW WHAT WE WILL NEED TO
ATTEND TO IN THE NEXT SIX
MONTHS, NEXT 12 MONTHS. DIRECTOR
DURAS, I WILL GIVE YOU THE FLOOR
TO CORRECT ANYTHING I SAID
INCORRECT AND THEN I WILL OPEN
FOR QUESTIONS.
>> NO CORRECTIONS NEEDED.
>> I LEARNED FROM THE BEST,
DIRECTOR. WITH THAT, COLLEAGUES,
HAPPY TO TAKE YOUR QUESTIONS.
COUNCILMEMBER JUAREZ?
>> I APOLOGIZE FOR THE SINGING
ON MY PHONE.
>> IT WAS THE LET'S GO MARINERS
SONG, RIGHT?
>> I KNOW THE CHAIR IS SAYING IT
IS POSITIVE. I'M LOOKING AT
SLIDE THREE, AND I'M LOOKING AT
SLIDE FIVE. WE ARE ASSUMING A
RECESSION IN FIRST QUARTER 2027,
NATIONALLY AND SEATTLE KING
COUNTY, SNOHOMISH COUNTY
RECESSIONS ON BOTH SIDES. SO THE
QUESTION I HAVE IS IF WE ARE
GOING TO ASSUME A RECESSION
PRETTY MUCH IN QUARTER ONE,
2027, AND ON PAGE 3 YOU LIST
SOME OF THE REASONS WHY THE
PESSIMISTIC SCENARIO, TRADING
PART TNERS. CAN YOU EXPLAIN OR
MAYBE SHARE AND IF IT IS JUST
MORE POLITICAL THAN LEGAL, YOU
HAVE STRICTER IMMIGRATION
POLICY. HOW DOES THAT -- IS IT
BECAUSE WE ARE QUOTE, UNQUOTE A
BLUE STATE? OR WHAT IS THE
REASON FOR THAT, BESIDES THE
OBVIOUS?
>> SO THE PESSIMISTIC SCENARIO,
THOSE ARE THE TWO BROWN LINES.
THEY ASSUME A COMBINATION OF
FACTORS THAT WOULD PUSH THE
ECONOMY INTO A RECESSION. ONE OF
THEM IS A STRICTER IMMIGRATION
POLICY THAT WOULD AFFECT NOT
JUST THE REGIONAL ECONOMY BUT
THE NATIONAL ECONOMY AS A WHOLE.
SO THAT'S ONE FACTOR THERE,
TOGETHER WITH STRICTER OR
STRONGER RESPONSE FROM TRADING
PARTNERS RETALIATING FOR TARIFFS
AND THEN RETALIATING FOR INITIAL
CONDITIONS. THE CHART THAT WAS
SHOWN BEFORE, OPERATION GROWING.
IF THERE HAPPENS TO BE A
CORRECTION, IF IT TURNS OUT IF
THE A.I. INVESTMENTS ARE A
BUBBLE, THAT WOULD BE A
CONTRIBUTING FACTOR TO AMBUSH
THE ECONOMY INTO RECESSION.
THAT'S A PEST MYSTIC SCENARIO
BUT IT IS NOT THE SCENARIO THAT
THE FORECAST COUNCIL HAS
ADOPTED. IT IS JUST A SCENARIO.
GOING BACK TO THE 2027 RECESSION
AND THE IMPACT ON THE REGIONAL
ECONOMY, SO THE WAY HOW THE
FORECAST IS DEVELOPED, IT TAKES
THE NATIONAL FORECAST, THE
TRENDS IN THE NATIONAL
EMPLOYMENT DATA, TRENDS IN
PERSONAL INCOME IN THE NATION
AND THEN COMBINE THAT WITH THE
INFORMATION THAT WE HAVE ON THE
REGIONAL EMPLOYMENT, REGIONAL
LABOR MARKET. BECAUSE THERE IS
THAT LITTLE BIT OF A DISCONNECT
ON THIS SLIDE HERE SHOWING THAT
THE CHANGES IN OVERALL
EMPLOYMENT ARE DIFFERENT THAN
NATIONAL ECONOMY AND DIFFERENT
IN THE REGIONAL ECONOMY, THE
PATH IS NOT THE SAME IN REGIONAL
AND NATIONAL ECONOMY WHEN IT
COMES TO OVERALL EMPLOYMENT
GROWTH. SO BOTH OF THESE
PESSIMISTIC SCENARIOS FOR THE
NATIONAL ECONOMY AND THE
REGIONAL ECONOMY IN THE
PESSIMISTIC SCENARIO, THERE IS A
RECESSION, INTERNATIONAL
ECONOMY, AFFECTING THE REGIONAL
ECONOMY AS WELL. THE EXTENT TO
WHICH THOSE EFFECTS DIFFER
DEPEND ON WHERE WE ARE RIGHT NOW
AND DIFFERENT COMPOSITION OF
LABOR MARKET.
>> OKAY. CAN I HAVE A FOLLOW UP?
ON PAGE FIVE, THIS IS
INTERESTING FOR SOME OF US WHO
HAVE BEEN AROUND. WHY ARE YOU
SAYING THE DOWNTURN WOULD BE
THUS MORE CLOSELY COMPARABLE TO
THE 2001 RECESSION RATHER THAN
THE '08 OR 2020?
>> THAT IS SUMMARIZING THE
EXTENT OF THE MAGNITUDE OF THE
JOB LOSSES. WE CAN LOOK AT THE
PREVIOUS RECESSION AND COMPARE
THEIR IMPACT ON EMPLOYMENT, HOW
SEVERE THE IMPACT ON JOB NUMBERS
WAS IN EACH OF THOSE INDIVIDUAL
RECESSIONS, HOW FAR DOWN THE
EMPLOYMENT WENT BEFORE IT
STARTED TO RECOVER AND HOW LONG
IT TOOK TO RECOVER.
>> SO 2001 WAS WHEN THE BUBBLE
POPPED, RIGHT? I WAS WORKING AT
AN INVESTMENT HOUSE THEN. I
REMEMBER HOW IT TANKED, WHEN THE
BUBBLE POPPED. I BOUGHT ENRON
STOCK, LONG STORY. SO TELL ME,
WHAT DO YOU ANTICIPATE T THAT IS
LIKE 2001?
>> LET ME PUT A LITTLE CONTEXT
HERE. THE FORECAST OFFICE AS
PART OF ITS CHARGE PREPARES
THREE FORECASTS. A BASELINE
FORECAST, OPT T MYSTIC, AND
BASELINE.
>> AND I'M JUST LOOKING AT THE
PESSIMISTIC?
>> YEAH, TYPICAL VIEW, SORRY.
>> ALL RIGHT, BEN.
>> IT IS USUALLY THE JOB OF THE
ECONOMIST.
>> YOU WERE AROUND IN 2001. YOU
KNOW HOW BAD THAT WAS.
>> YES, LIVED AND EXPERIENCED.
THEY THEN MAKE A RECOMMENDATION
ABOUT WHICH OF THE THREE
FORECASTS SHOULD BE THE ADOPTED
FORECAST. THE RECOMMENDATION
THIS TIME AROUND IS TO THE
BASELINE. THAT WAS ACCEPTED AT
THE FORECAST COMMITTEE AT THIS
TABLE THIS MORNING. SO THE
PESSIMISTIC HIGHLIGHTS RISK BUT
IT IS NOT THE FORECAST TO WHICH
YOU WILL BE ASKED TO BALANCE THE
BUDGET OR WHAT WE ARE EXPECTED
TO HAPPEN. TO GIVE YOU A SENSE
IF THINGS WENT BADLY, THEY COULD
GO VERY BADLY.
>> OKAY. IF YOU DON'T HAVE
ANYTHING TO ADD, THAT'S FINE.
>> YEAH, THAT'S A GOOD POINT.
THE RED AND THE BROWN LINES,
THEY JUST SHOW THE TWO DIFFERENT
ALTERNATIVE SCENARIOS. WHAT WE
EXPECT TO BE THE MORE LIKELY
OUGHTCOME IS THE RED ONE. SO NOT
A RECESSION OCCURRING. JUST
ALTERNATIVE. THERE IS A RECOVERY
.
>> THANK YOU.
>> THANK YOU COUNCILMEMBER
JUAREZ, AND TO BUILD OFF OF
THAT, THE PESSIMISTIC SCENARIO
WOULD SHOW US $7 MILLION. THE
OPTIMISTIC WOULD SHOW US
POSITIVE $90 MILLION. THE
BASELINE THAT WE HAVE ADOPTED IS
ABOUT THERE IN THE MIDDLE. BUT
THAT'S THE UNCERTAINTY THAT
WHILE WE DON'T HAVE THE
VOLATILITY THAT WE HAD EARLIER
THIS YEAR, THE UNCERTAINTY IS
SHOWN BY THE DIFFERENCE BETWEEN
THE OPTIMISTIC AND PESSIMISTIC
SCENARIOS. WITH THAT,
COUNCILMEMBER RIVERA, I SEE YOU
HAVE YOUR HAND?
>> THANK YOU, CHAIR. THANK YOU
FOR BEING HERE TODAY JAN AND
RICHARD AND OF COURSE DIRECTOR
NOBLE AND TOM. I HAVE A QUESTION
ABOUT FEDERAL EMPLOYMENT
NUMBERS. WE DON'T HAVE THOSE,
OBVIOUSLY, THERE IS A SHUTDOWN.
SO WHAT WOULD BE -- HOW ARE WE
CALCULATED -- LIKE, THIS SEEMS
TO ME LIKE IT IS A BIG UNKNOWN
THAT WOULD REALLY HAVE -- WELL,
MY ASSESSMENT BUT YOU CAN
CORRECT ME IF I'M WRONG, IT
WOULD HAVE NOT UNSUBSTANTIAL
IMPACT ON THE FORECAST. SO CAN
YOU EXPLAIN A LITTLE BIT HOW YOU
WENT AT DETERMINING THE FORECAST
WITHOUT THAT BIG CHUNK OF
INFORMATION THIS TIME?
>> SURE. SO YOU ARE REFERRING TO
THE EMPLOYMENT REPORT THAT IS
RELEASED EVERY MONTH. SO IT WAS
NOT RELEASED BECAUSE OF THE
GOVERNMENT SHUTDOWN. IT HAS NOT
BEEN RELEASED IN OCTOBER. THAT
MEANS THAT WE DO NOT HAVE
EMPLOYMENT DATA ESTIMATES FOR
THE PREVIOUS MONTHS FOR
SEPTEMBER. THAT MEANS THAT IN
GENERAL, WE ARE WORKING SLIGHTLY
OUTDATED DATA WITH ONE MONTH LAG
BEHIND WHAT WOULD BE TYPICALLY
AVAILABLE. IT'S NOT A MAJOR
ISSUE BECAUSE IN GENERAL, WHEN
WE START TO DEVELOP THE
FORECASTS, WE HAVE TO RELY ON
THE NATIONAL FORECAST, ALL
RELEASED BY THE POINT THAT THE
EMPLOYMENT IS AVAILABLE. THIS
PARTICULAR FORECAST HAS BEEN
DEVELOPED BASED ON THE U.S.
FORECAST THAT WAS RELEASED BY
SNP GLOBAL AND MOODY'S
ANALYTICS THE FIRST WEEK OF
OCTOBER. FOR THEM TO FINALIZE
EVERYTHING, THEY ALREADY HAVE TO
HAVE THINGS WRAPPED UP BY THE
TIME THE RECORD WOULD BE
AVAILABLE. SO IT IS NOT THAT
MUCH OF A DEAL. IT WOULD BE A
BIGGER DEAL IF THIS CONTINUES
AND WE MISS A COUPLE OF REPORTS
WHICH IS NOT LIKELY BUT WOULD BE
A BIG PROBLEM.
>> THANK YOU, DIRECTOR. JUST AS
A FOLLOW UP, YOU DID SAY THAT --
SORRY, THERE HAS BEEN A DECLINE
IN JOBS IN SEATTLE FROM 2024 TO
2025. AND IT SEEMS AND TO THE
CHAIR'S POINT THAT HE MADE
EARLIER, IT SEEMS LIKE THINGS
HAVE BEEN NOT PREDICTABLE THIS
YEAR. SO GIVEN THAT, I
UNDERSTAND YOU'RE SAYING
NORMALLY BECAUSE YOU ARE LOOKING
AT PAST EMPLOYMENT, UNEMPLOYMENT
DATA, YOU ARE ABLE TO BY THIS
POINT HAVE A GOOD PREDICTION ON
THE FORECAST BUT GIVEN THE
VOLATILITY THIS YEAR AND GIVEN
THAT JOBS ARE DOWN IN THE
REGION, WOULD THAT -- DO YOU
STILL FEEL COMFORTABLE WITH THE
FORECAST YOU ARE GIVEN WITHOUT
THE UNEMPLOYMENT NUMBERS FROM
SEPTEMBER FOR INSTANCE?
>> YEAH, IT WOULD BE OF COURSE
BETTER TO HAVE THAT EXTRA
MONTH'S DATA AVAILABLE. IT
WOULD NOT LIKELY CHANGE OVERALL
PICTURE MUCH. OCCASIONALLY THERE
ARE LARGER REVISIONS TO THE
EMPLOYMENT DATA AND THE CHART
SHOWN HERE HAS CHANGED QUITE
CONSIDERABLY COMPARED TO WHAT WE
WERE SHOWING I WOULD SAY IN
APRIL BECAUSE ESV GOES BACK AND
REVISES THE EMPLOYMENT ESTIMATES
GOING BACK A COUPLE OF QUARTERS.
YOU ARE RIGHT. OVERALL
UNCERTAINTY HAS BEEN HIGHER FOR
A VARIETY OF REASONS COMPARED TO
A PREVIOUS YEAR. THAT WAS ONE OF
THE POINTS WHEN THE BASELINE
SCENARIO WAS RECOMMENDED. WE
ALSO SAID THAT WE HAVE LESS
CONFIDENCE IN THE 2026 FORECAST
AND WE EXPECT A LARGER VARIANCE
OF REVENUES FROM 2024 TO 2026
FORECAST WE JUST DEVELOPED
BECAUSE OF ALL OF THE THINGS
CONTRIBUTING TO UNCERTAINTY.
>> THANK YOU, DIRECTOR. CAN YOU
TELL ME WHAT IS THE MODELING
THAT GOES INTO CREATING THE
BASELINE? WHAT IS IT COMPRISED
OF? I'M JUST TRYING TO
UNDERSTAND THAT.
>> SO THE BASIC IDEA FOR HOW WE
DEVELOP THIS FORECAST IS EVERY
MONTH, SNP GLOBAL AND MOODY'S
ANALYTICS PROVIDES US WITH A
FORECAST FOR THE U.S. ECONOMY.
THE FORECAST HAS A LARGE NUMBER
OF INDICATORS AND INCLUDES THE
FORECAST FOR EMPLOYMENT,
PERSONAL INCOME, INTEREST RATES,
AND INFLATION, A COUPLE OF
ADDITIONAL THINGS BUT THESE ARE
ONES THAT ARE QUITE IMPORTANT
FOR THE REGIONAL PURPOSE. WHEN
WE ARE DEVELOPING THE FORECAST,
WE THEN TAKE THE U.S. FORECAST
AND HAVE -- WE HAVE AN INHOUSE
STATISTICAL MODEL THAT USES THE
U.S. FORECAST TOGETHER WITH
REGIONAL DATA ON EMPLOYMENT,
INCOME, VACANCIES FOR THE
OFFICE, VACANCIES FOR
MULTIFAMILY HOUSING, REGIONAL
HOME PRICES, THINGS LIKE THAT.
THERE IS A STATISTICAL MODEL
THAT TAKES THE TRENDS IN THE
NATIONAL ECONOMY, ADDS THE
FACTORS THAT MATTER FOR THE
REGIONAL ECONOMY AND PRODUCES
WHAT'S BEST FOR THE REGIONAL
INDICATORS LIKE EMPLOYMENT,
INFLATION, PERSONAL INCOME, HOME
PRICES, THINGS LIKE THAT. THE
NEXT STEP IS TAKING THESE
REGIONAL ECONOMIC FORECAST FOR
EMPLOYMENT, PERSONAL INCOME,
THINGS LIKE THAT, AND AGAIN
USING SOME STATISTICAL MODELS,
WE LINK THOSE TO THE REVENUES WE
COLLECT USING THE PATTERNS WE
HAVE CHEKTED IN THE PAST, HOW
MUCH EMPLOYMENT GROWTH
CONTRIBUTES TO SALES TAX REVENUE
GROWTH, HOW MUCH PERSONAL INCOME
MATTERS FOR SALES TAX OR
BUSINESS AND OCCUPATION TAX.
THESE KIND OF RELATIONSHIPS AND
THE HISTORICAL PATTERNS HELP US
TO DEVELOP THE FORECAST FOR THIS
YEAR AND THE COMING YEAR.
>> THANK YOU, DIRECTOR. THAT IS
ACTUALLY HELPFUL TO ME BECAUSE I
KNOW IN THIS PAST YEAR, THERE
HAS BEEN A LOT OF TALK ABOUT
LOSING TECH JOBS AND THINGS LIKE
THAT. AND I SEE HOW YOU LOOK AT
THE REGIONAL ACTIVITY AS YOU PUT
TOGETHER THE BASELINE AND THEN
IT MAKES SENSE, GIVEN LOSS OF
JOBS LOCALLY THAT IT IS WHY WE
HAVE HAD VOLATILITY. THANK YOU
FOR EXPLAINING THAT. IT PAINTS A
PICTURE AT LEAST FOR ME. SO
THANK YOU FOR DOING THAT. AND
CHAIR I HAVE ONE LAST QUESTION
IF I MAY. YOU DIDN'T -- SORRY.
I HAVE YOUR SLIDE DECK FROM THIS
MORNING AND I'M TOGGLING BACK
AND FORTH. ON YOUR BASELINE
SCENARIO, ON PAGE 7 FROM
TODAY'S. SO I SEE HERE, I JUST
WANT TO MAKE SURE I HAVE THIS
CORRECT. IT SAYS THAT FOR --
THIS IS YOUR BASELINE WHICH IS
WHAT YOU ARE RECOMMENDING, IT
SAYS THE TWO YEAR TOTAL
DIFFERENCE IS $12 MILLION. AND
SO BASICALLY THAT'S REALLY WHAT
WE -- WHAT'S BEING PROJECTED IN
TERMS OF GROWTH IN OUR BUDGET
FOR THE NEXT -- FOR '25 AND
'26.
>> THE POINT I WOULD MAKE IS IF
IT IS REALLY THE '26 NUMBER IN
SOME SENSE THAT REPRESENTS THE
ONGOING PORTION OF THIS REVENUE.
SO THERE IS 12.1 IN TOTAL BUT IN
2026, IT'S 7.6. SO THAT'S
REALLY THE INCREASE IN THE BASE.
AND IN THAT SENSE REPRESENTS A
BETTER ESTIMATE OF THE ONGOING
REVENUES THAT ARE EMBEDDED IN
THE FORECAST UPDATE.
>> THANK YOU, I WAS GOING THERE
NEXT. THIS IS GOOD BECAUSE WE
NEED TO BE REALLY CLEAR ON WHAT
WE ARE TALKING ABOUT FOR 2026 AS
WE ARE DOING OUR BUDGETING. THIS
MEANS THERE REALLY ISN'T A LOT
TO RELY ON OUTSIDE OF THE
CURRENT BUDGET THAT WE ARE
LOOKING AT THAT THE EXECUTIVE
SENT DOWN. IT IS IMPORTANT FOR
THE PUBLIC TOUNDERSTAND BECAUSE
OF COURSE WE ARE THREADING THE
NEEDLE BETWEEN THE NEEDS OF OUR
CONSTITUENTS, THE ASK OF OUR
CONSTITUENTS, AND THE REALITY OF
WHAT WE HAVE IN TERMS OF MONEY.
SO KNOWING THAT, WE ARE TALKING
ABOUT A SEVEN, ALMOST $8 MILLION
FOR 2026 IS WHAT THIS FORECAST
IS PREDICTING IN TERMS OF
ANYTHING ADDITIONAL MAYBE THAT
WE DON'T CURRENTLY HAVE. SO
THAT'S WHAT I WANTED TO MAKE
SURE I HAVE THAT I'M
UNDERSTANDING THAT CLEARLY. SO
THANK YOU FOR THAT, DIRECTOR.
AND THEN SORRY, CHAIR, I HAVE
ONE LAST QUESTION IF THAT'S
OKAY. MY LAST QUESTION IS ABOUT
TRENDS OVER THE LAST TEN YEARS.
I CAN'T REMEMBER AND I HAVE
BEEN HERE FOR THE LAST EIGHT,
BUT IN THE OCTOBER FORECAST,
WHICH IS AN IMPORTANT FORECAST,
A FALL FORECAST BECAUSE IT HELPS
PAINT THE PICTURE FOR THE
BUDGETING PROCESS. IF YOU DON'T
HAVE THE ANSWER, THAT'S FINE,
HAPPY TO FOLLOW UP. BUT JUST
WONDERING IF IN THE LAST TEN
YEARS, DO YOU NORMALLY RECOMMEND
THE BASELINE? ARE THERE YEARS
YOU HAVE RECOMMENDED THE
OPTIMISTIC OR OTHERS YOU HAVE
RECOMMENDED THE PESSIMISTIC? I
CAN'T REMEMBER FROM YEAR TO
YEAR THE LAST EIGHT YEARS. THE
SECOND PART TO THAT QUESTION IS
HOW HAVE THE NUMBERS CHANGED
FROM WHAT YOU HAVE PREDICTED?
WHICH I KNOW IS A LOT. I DON'T
EXPECT T YOU TO KNOW THIS OFF
THE TOP OF YOUR HEAD BUT I
WANTED TO ASK THE QUESTION FOR
THE RECORD. IT IS IMPORTANT IN
SEEING TRENDS.
>> RIGHT. SO THE FIRST PART OF
THE QUESTION REGARDING THE
SCENARIO RECOMMENDATION, IN
GENERAL, BASELINE SCENARIO IS
RECOMMENDED. GIVEN THE WAY THE
FORECASTS ARE CONSTRUCTED, THE
NATIONAL FORECAST ALWAYS HOLDS
THE LARGEST PROBABILITY ON THE
BASELINE. THE ALTERNATIVE
FORECAST SCENARIOS COME WITH A
LOWER LIKELIHOOD ATTACHED TO
THEM. THERE WERE A COUPLE OF
CASES WHERE THE PESSIMISTIC
SCENARIO HAS BEEN RECOMMENDED. I
DON'T BELIEVE THERE WAS ANY
RECOMMENDATION MADE FOR AN
OPTIMISTIC IN THE LAST FEW
YEARS. THE CASE WHERE THE
PESSIMISTIC SCENARIO WAS
RECOMMENDED WERE THE ONES WHERE
WE HAD STRONG BELIEF THAT THE
BASELINE SCENARIO IS OUTDATED.
SOME EVENTS HAD OCCURRED WHICH
PUSHED THE ECONOMY TO THE DOWN
SIDE. MOST RECENTLY, GOING BACK
TO 2020 WHEN THE PANDEMIC HIT,
WHEN WE WERE DEVELOPING THE
APRIL FORECAST, WE ALREADY KNEW
COVID IS GOING TO HAVE A MAJOR
IMPACT ON THE ECONOMY OVERALL,
EVEN MORE SO ON SEAT WHICH
DEPENDS QUITE A BIT ON LEISURE
AND HOSPITALITY AND TOURISM. IN
APRIL OF 2020, PESSIMISTIC
SCENARIO WAS RECOMMENDED BECAUSE
AGAIN, THERE WAS A BELIEF THAT
CERTAIN EVENTS THAT HAVE
TRANSPIRED SINCE THE NATIONAL
FORECAST TO MAKE THE NATIONAL
FORECAST OUTDATED AND THE
PESSIMISTIC SCENARIO REPRESENTS
THE LIKELY OUTCOME. SAME SORT OF
THING FOR THIS YEAR. IN APRIL,
THE PESSIMISTIC SCENARIO WAS
RECOMMENDED NOT BECAUSE WE
BELIEVE THAT THE ECONOMY IS
GOING TO NECESSARILY END UP IN
THE RECESSION AND THE APRIL
PESSIMISTIC SCENARIO WAS NOT A
RECESSIONARY SCENARIO. IT WAS
SLOWER GROWTH BUT NOT RECESSION.
THERE IS A FUNDAMENTAL
DIFFERENCE BETWEEN THE
PESSIMISTIC SCENARIO NOW ENTAILS
WHICH IS A RECESSION AND WHAT
THE PESSIMISTIC SCENARIO LOOKED
LIKE IN APRIL WHICH WAS JUST
SLOWER GROWTH. AGAIN, THAT WAS
BECAUSE THE APRIL FORECAST WAS
PREPARED AFTER THE ANNOUNCEMENTS
AND THOSE TARIFF ANNOUNCEMENTS
WERE NOT INCORPORATED IN THE
FORECASTS. SO WHEN IT COMES TO
THE FORECASTS, THE SECOND PART
OF THE QUESTION WAS CHANGE
RELATIVE TO --
>> THE BASELINE FORECAST, THE
ACTUALS. THAT'S MAYBE THE PIECE
YOU DON'T HAVE.
>> ESSENTIALLY THE ACCURACY OF
THE FORECAST?
>> YES, THE FALL ONE, THAT IS
USUALLY WHAT I HEARD YOU SAY
DIRECTOR IS -- YOU USUALLY
RECOMMEND BASELINE FORECASTS IN
THE FALL AND THEN WHAT THE
ACTUALS HAVE BEEN RELATIVE TO
THAT.
>> YEAH. SO LAST YEAR THE
DIFFERENCE WAS SMALL. FOR SALES
AND B&O TAXES IN PARTICULAR, IT
WAS AROUND 0.5% DIFFERENCE.
THAT'S OCTOBER 2024 RELATIVE TO
ACTUAL 2024 REVENUES. THAT WAS
SIMILARLY SMALL DIFFERENCE FOR
THE GENERAL FUND AS A WHOLE.
WHEN IT COMES TO PAY ROLL
EXPENSE TAX, FOR EXAMPLE, THERE
WAS A QUITE SIGNIFICANT
DIFFERENCE BETWEEN THE 2024
ACTUALS AND THE 2024 FORECAST
FROM OCTOBER. THAT WAS ONE OF
THE MAIN REASONS FOR A DOWNWARD
REVISION IN APRIL. SO IT DEPENDS
ON THE REVENUES, PAY ROLL
EXPENSE TAX. WE ONLY HAVE A FEW
YEARS OF DATA SO IT IS MORE
VOLATILE THAT RESULTS IN GREATER
VARIANCE. BUT FOR WELL
ESTABLISHED BUSINESS AND
OCCUPATIONAL TAX, THE VARIANCE
IS SMALL. 2026 MAY BE DIFFERENT.
>> ON A HIGH LEVEL, ONE OF THE
THINGS WE WORK ON IN THE
FORECAST OFFICE WAS LOOKING AT
THE ACCURACY QUESTION FROM A
HISTORIC PERSPECTIVE. WHAT WE
GENERALLY FOUND IS THERE IS AN
APRIL FORECAST, AUGUST, OCTOBER
FORECAST. SURE ENOUGH IN
GENERAL, THE OCTOBER IS CLOSER
TO REALITY THAN THE OTHER TWO.
THE DIFFERENCE IS SMALL, 1% OR
2% ON AVERAGE. THERE WAS A BIAS
TOWARDS UNDERFORECASTING. WE
REALIZED THAT THAT COMES FROM
THE NATIONAL FORECAST. THEY HAVE
A BIAS TOWARDS UNDERFORECASTING
ECONOMIC PERFORMANCE. AS A GROUP
COLLECTIVE HAVE MOVED TO CORRECT
THAT BECAUSE SOMETIMES
UNDERFORECASTING SEEMS LIKE A
REASONABLE APPROACH BECAUSE IT
IS BETTER TO BE ON THAT SIDE
THAN THE OTHER IS THE THEORY.
BUT IT IS QUITE ACCURATE. AND TO
REITERATE WHAT JAN SAID, THE
P.E.T. IS A WHOLE NEW REVENUE
STREAM. THE OTHERS, ONE REASON
WE ARE SO ACCURATE IS WE HAVE 30
, 40 YOURS OF HISTORY TO
UNDERSTAND THE ECONOMIC FORECAST
AND REVENUE. TO HIGHLIGHT AS JAN
MENTIONED ALREADY, THE STATE
JUST THE PAST SESSION CHANGED
WHAT IS SUBJECT TO B&O TAX AND
WHAT IS SUBJECT TO SALES TAX.
THAT CHANGES THE TAX BASE AND
THAT WILL CHANGE YOUR FORECAST
TOO. IF YOU GOT REALLY GOOD AT
UNDERSTANDING THE BASE, THAT
CHANGE WILL TAKE A WHILE TO WORK
THROUGH AND WILL GET A BETTER
UNDERSTANDING OF THAT WITH TIME
AS WELL. GENERALLY VERY GOOD,
P.E.T., COMPLETE CHALLENGE, AND
THEN SOME RECENT CHANGES THAT
WILL MAKE B&O NOISIER THAN IN
THE PAST.
>> THAT IS A BUILD UP WITH LOWER
CONFIDENCE.
>> I APPRECIATE THAT. I
APPRECIATE KNOWING THAT THE
CHANGE HAS BEEN SO SMALL THAT
THE FALL FORECAST IS FAIRLY
ACCURATE FOR INTENTS AND
PURPOSES OF OUR BUDGET. AND
THAT'S REALLY IMPORTANT.
BECAUSE WE CAN'T EXPECT SOME
KIND OF WIND FALL. AND WITH THE
JUMP START TAX, WE ARE SEEING
SOME DIPS WHICH AREN'T
ADVANTAGEOUS. THIS IS REALLY
HELPFUL TO KNOW IN TERMS OF WHAT
WE HAVE NOW SEEMS FAIRLY, WITH
FAIR CERTAINTY WHAT WE'RE GOING
TO HAVE. THANK YOU, THANK YOU
CHAIR.
>> THANK YOU VICE CHAIR RIVA,
EXCELLENT QUESTIONS, I MEAN
REALLY, EXCELLENT, WELL THOUGHT
QUESTIONS. COLLEAGUES, OTHER
QUESTIONS RIGHT NOW? I KNOW A
LOT OF THIS IS IN YOUR REPORT
WHICH IS IN -- AND DIRECTOR
DURAS DOES A GOOD JOB OF
CREATING THE NARRATIVE IN THE
REPORT. YOU DON'T NEED TO ASK
QUESTIONS BUT THIS IS THE
OPPORTUNITY. I AM SEEING NO
FURTHER QUESTIONS AND MY BEST
GUESS IS THAT BECAUSE PEOPLE
WANT TO ASK EACH OTHER FOR
COSPONSORSHIPS AHEAD OF
TOMORROW'S MEETING DEADLINE, SO
WITH THAT, DIRECTOR DURAS, IF
YOU HAVE ANYTHING ELSE TO SHARE
WITH THE COMMITTEE, NOW IS THE
TIME. SEEING NONE, I'M JUST
GOING TO PULL BACK UP MY SCRIPT
TO GET US BACK ON TRACK. SO
THANK YOU ALL FOR YOUR
PRESENTATION TODAY. THIS DOES
CONCLUDE THE MONDAY, OCTOBER 20,
2025 SELECT BUDGET COMMITTEE.
SELECT BUDGET COMMITTEE WILL
MEET NEXT TUESDAY, OCTOBER 28 AT
9:30 A.M. TO DISCUSS
COUNCILMEMBER BUDGET PROPOSALS,
VERBAL AND WRITTEN PUBLIC
COMMENT WILL BE ACCEPTED ON
TUESDAY, OCTOBER 28. AS A
REMINDER , INITIAL COUNCILMEMBER
PROPOSALS ARE DUE TO CENTRAL
STAFF BY TOMORROW AT NOON,
THERE'S A WEB FORM A STRICT
DEADLINE. DO COME TALK TO ME IF
YOU ARE HAVING TROUBLE FINDING
COSPONSORS. IF YOU GET SIGNED UP
FOR SOMETHING YOU DIDN'T AGREE
TO OR YOU WANT TO BACK DOWN, WE
HAVE UNTIL THURSDAY TO WORK
EVERYTHING OUT. SO TOMORROW IS
THE FIRST DEADLINE. THURSDAY IS
THE HARD DEADLINE. SO BETTER TO
SUBMIT SOMETHING THAT YOU DON'T
HAVE FULLY WORKED OUT RATHER
THAN NOT SUBMIT ANYTHING AT ALL.
THANK YOU AGAIN FOR ATTENDING ON
A HISTORIC DAY FOR THE MARINERS
FRANCHISE. AND TOMORROW, I HOPE
IS MORE HISTORIC THAN TODAY. IF
NOTHING ELSE, I'M EXCITED TO
SEE WHAT DAN WILSON DOES WITH
OUR TEAM. SEEING NO FURTHER
COMMENTS, WE ARE NOW ADJOURNED.
I HOPE YOU ALL