>> GOOD MORNING. THE MARCH 3rd,
2026 FINANCE, NATIVE COMMUNITIES
AND TRIBAL GOVERNMENTS COMMITTEE
MEETING WILL COME TO ORDER, IT
IS 9:30 A.M., I AM DAN STRAUSS,
THE CHAIR OF THE MEETING. WILL
THE CLERK PLEASE CALL THE ROLL?
>> COUNCIL PRESIDENT
HOLLINGSWORTH?
>> HERE.
>> COUNCILMEMBER KETTLE?
>> HERE.
>> COUNCILMEMBER SAKA? VICE
CHAIR RIVERA?
>> PRESENT.
>> CHAIR STRAUSS?
>> HERE.
>> FOUR PRESENT, ONE EXCUSED.
BEFORE WE GET GOING TODAY, TODAY
IS MEGAN'S LAST DAY WITH THE
CITY, SHE IS GRADUATING INTO A
BIGGER AND MORE IMPORTANT
POSITION, SO JUST TAKING A
MOMENT OF APPRECIATION FOR ALL
THE WORK YOU HAVE DONE OVER CITY
COUNCIL FOR THE LAST THREE
YEARS. THANK YOU, MEGAN. AND --
YEAH, THANK YOU!
>> [ APPLAUSE ]
>> AND WITH THAT, WE ARE GOING
TO MOVE INTO THE TWO ITEMS THAT
WE HAVE ON THE AGENDA TODAY,
BOTH ARE PRESENTATIONS, THERE
ARE NO VOTES. AND WE HAVE
COUNCILMEMBER SAKA WITH US IN
PERSON, WE HAVE THE SEATTLE
LEVEE CAPACITY UPDATE, AND THE
SECOND IS THE 2019-2026 BUDGET
OVERVIEW OR REVIEW. IF THERE IS
NO OBJECTION, THE AGENDA WILL BE
ADOPTED. HEARING NO OBJECTION,
THE AGENDA WILL BE ADOPTED. WE
NOW OPEN THE HYBRID PUBLIC
COMMENT PERIOD. WE HAVE TWO
PEOPLE SIGNED UP, PUBLIC
COMMENTS SHOULD RELATE TO ITEMS
ON THE AGENDA TODAY AND WITHIN
THE PURVIEW OF THIS COMMITTEE.
CLERK, HOW MANY SPEAKERS ARE
SIGNED UP TODAY?
>> CURRENTLY, WE HAVE ONE IN
PERSON AND ONE ONLINE.
>> WONDERFUL. IF THE PERSON IN
PERSON WANTS TO COME UP TO THE
MICROPHONE? AS WE ARE READING
THE INSTRUCTIONS -- ALTHOUGH, I
SEE REDUCED ARTERIAL, THIS IS
NOT THE TRANSPORTATION
COMMITTEE, SO JUST MAKE SURE YOU
ARE TALKING ABOUT THE LEVEE
CAPACITY, OR HOW WE HAVE SPENT
OUR MONEY OVER THE LAST SEVEN
YEARS. I AM GOING TO READ THE
INSTRUCTIONS, AND THEN I WILL
CALL YOUR NAME. THIS YEAR, WE
HAVE NEW RULES REGARDING PUBLIC
COMMENT, IF THERE ARE LESS THAN
30 PEOPLE SIGNED UP, EACH PERSON
WILL RECEIVE TWO MINUTES. SO, IN
THIS CASE, WE WILL PROVIDE TWO
MINUTES. WE HAVE TWO PEOPLE
SIGNED UP TO FOR PROVIDE PUBLIC
COMMENT, EACH PERSON WILL BE
PROVIDED TWO MINUTES IN PUBLIC
COMMENT WILL BE MODERATED IN THE
FOLLOWING MANNER, PERIOD UP TO
60 MINUTES, SPEAKERS WILL BE
CALLED IN THE ORDER IN WHICH
THEY WERE REGISTERED. SPEAKERS
WILL HEAR A TIME WHEN THERE IS
10 SECONDS LEFT ON THEIR
ALLOTTED TIME AND SPEAKERS'
MICROPHONES WILL BE MUTED IF
THEY DO NOT FINISH COMMENTS IN
ALLOTTED TIME. WITH THAT, THE
PUBLIC COMMENT PERIOD IS NOW
OPEN. WE HAVE SHELLEY MORRISON
IN PERSON AND LOOM G, I'M SORRY
IF I AM NOT PRONOUNCE YOUR NAME
CORRECTLY. BUT, WITH THAT,
SHELLEY, WELCOME. WITH THAT,
JUST BE SURE YOU ARE TALKING
ABOUT THE BUDGET.
>> IT DOES IMPACT THE CITY
BUDGET. YES. SO, APOLOGIZE, IF
WE WEREN'T INFORMED THAT IT HAS
TO BE ON SPECIFICALLY ON A
SPECIFIC TOPIC.
>> MEGAN, PAUSE THE TIME REALLY
QUICK? I WILL PROVIDE ADDITIONAL
CONTEXT. THIS AFTERNOON, THE
FULL CITY COUNCIL MEETS AT 2:00
P.M. AND THAT IS WHERE WE
RECEIVE COMMENT ON ANYTHING,
REALLY, UNDER OUR PURVIEW.
>> OH, I'M SO SORRY.
>> FOR OUR COMMITTEES, WE ASK
THAT PUBLIC COMMENT IS RELATED
TO ITEMS ON THE AGENDA OF THE
COMMITTEE, SO THERE ARE A COUPLE
DIFFERENT OPTIONS -- BE MET CAN
I COME BACK AT 2:00?
>> YEAH, BUT I WILL ALSO GIVE
YOU THE REST OF YOUR TIME IF YOU
WOULD LIKE TO SPEAK ON WHATEVER
YOU ARE SPEAKING ABOUT AS LONG
AS IT RELATES BACK TO THE
BUDGET, THAT'S ALL I'M ASKING.
>> SO, I AM SHELLEY MORRISON AND
I AM SPEAKING FOR COEXIST LAKE
WASHINGTON, IT'S AN ALL
VOLUNTEER GROUP OF RESIDENTS AND
BUSINESSES WHO RELY ON LAKE
WASHINGTON BOULEVARD. THE OTHER
MAJOR ROADS IN DISTRICT 2. WE
ARE CONCERNED ABOUT SDOT USING
MISLEADING DATA AND IN BALANCED
OUTREACH TO PUSH THROUGH PLANS
THAT ARE NOT COMMUNITY-BASED,
BUT DRIVEN BY WELL-FUNDED
ADVOCACY GROUPS. BARELY USED
BIKE LANES HAVE REDUCED OUR
ARTERIALS AND CREATED CONGESTION
-- PARDON?
>> THE BUDGET?
>> YES, OKAY, GOING TO -- WE ARE
ASKING THE COUNCIL TO SLOW DOWN
BEFORE CONVERTING MORE ARTERIAL,
EXPENSIVE BIKE LANES ON
ARTERIALS AND DEMAND ACCURATE
DATA AND ENSURE COMMUNITY
OUTREACH. WE HAVE SEEN NO
COST-BENEFIT ANALYSIS OF WHAT
HAS ALREADY BEEN BUILT. AND SO,
WE ARE JUST ASKING THE COUNCIL
TO BE THOUGHTFUL, AND SLOW DOWN,
BEFORE USING MORE CITY MONEY TO
MAKE MORE MAJOR CHANGES, WHICH
IS CAUSING MORE POLLUTION, IT'S
CAUSING MORE CONGESTION, MORE
STRESS, AND MASS TRANSIT ISN'T
ALWAYS THE ANSWER, BUT WE ARE
HOPING THAT MORE OF THE
COMMUNITY WILL BE INVOLVED
INSTEAD OF JUST THESE SPECIAL
INTEREST GROUPS THAT ARE
ADVOCATING FOR MORE BIKE LANES.
THAT IS NOT WHAT I WROTE. BUT,
OFF THE CUFF, IS IT ENOUGH ON
THE BUDGET? MY CONCERN IS, THE
NEW BIKE LANES AREN'T BEING
MONITORED, SO WE DON'T EVEN
REALLY KNOW WHAT IS BEING SPENT
ON COLUMBIA, AND McCLELLAN, ON
THAT ASPHALT AND WE DON'T KNOW
HOW MANY PEOPLE ARE USING IT,
BUT WE DON'T SEE ANY. SO, THANK
YOU. SHOULD I COME BACK AT 2:00?
>> THANK YOU, SHELLEY. WE HAVE
ANOTHER PUBLIC COMMENT PERIOD AT
2:00 AND I BELIEVE COUNCILMEMBER
SAKA AND I SWITCHED TIME SLOTS,
SO THIS USED TO BE THE TIME SLOT
FOR TRANSPORTATION COMMITTEE, IT
IS NOW THE BUDGET COMMITTEE, SO
THAT MIGHT BE PART OF THE
CONFUSION.
>> THANK YOU FOR THE
INFORMATION.
>> WE WILL NOW MOVE ON TO ONLINE
PUBLIC SPEAKERS, AS A REMINDER,
I WILL SAY, TRY TO BE A LITTLE
BIT MORE TIED INTO BUDGET. MR.
LOOM, I SEE YOU ARE BEING
PROMOTED NOW, STAR 6 TO UNMUTE.
THERE YOU ARE, YOU ARE OFF MUTE.
TWO MINUTES, TAKE IT AWAY AT
YOUR CONVENIENCE.
>> OKAY, I THINK I ALSO SHOULD
COME BACK AT 2:00 BECAUSE MINE
DOESN'T RELATE TO BUDGETS, IT
RELATES TO HOUSING. SORRY.
>> OKAY. NOT A PROBLEM. THANK
YOU. I REALLY APPRECIATE
EVERYONE'S ATTENTION TO THE
COMMITTEES PURVIEW AND WITH
THAT, SEEING THAT WE HAVE NO
ADDITIONAL PUBLIC SPEAKERS
PRESENT, WE WILL MOVE ON TO THE
NEXT AGENDA ITEM. THE FIRST
AGENDA ITEM BEFORE US IS
REGARDING THE CITY OF SEATTLE
LEVEE CAPACITY. WE HAVE DIRECT
DIRECTOR ALLIE PETRUCCI, JOE
RUSSELL, AND ALEX ZHANG FROM THE
BUDGET OFFICE, WE HAVE DWIGHT
DIVELY, OUR CITY DIRECTOR OF
FINANCE, AND THEN ALLEN FROM
CENTRAL STAFF HERE, TO DO A
JOINT PRESENTATION ACROSS ALL
THREE DEPARTMENTS. IF YOU WANT
TO HELP THEM GET THE
PRESENTATIONS SET UP, I WILL
TURN IT OVER TO THE COMMITTEE
TABLE FOR INTRODUCTIONS.
COLLEAGUES, AS WE SHARED
YESTERDAY DURING COUNCIL
BRIEFING, WE ARE GOING TO KEEP
FOCUSED ON OUR LEVEE CAPACITY,
SPECIFIC LEVIES, SUCH AS THE
LIBRARY LEVY, MAY BE TOUCHED ON,
JUST BECAUSE IT IS RIGHT BEFORE
US, BUT POTENTIAL LEVEES, SUCH
AS SEATTLE LEPER OR PIKE PLACE
MARKET, WE SHOULD SAVE FOR AN
ADDITIONAL BRIEFING BECAUSE
TODAY'S INTENT IS TO GIVE US
ALL AN EQUAL, FOUNDATIONAL
UNDERSTANDING OF WHERE WE ARE AT
WITH OUR LEGAL LEVEE CAPACITY.
AND SO, I SEE WE HAVE THE SCREEN
SHARED, SO I AM GOING TO TURN IT
OVER TO DIRECTOR PENNUCCI FOR
THE TABLE. DIRECTOR?
>> HI, ALY PENNUCCI, CITY
DIRECTOR.
>> HI, ALEX ZHANG, CITY BUDGET
OFFICE.
>> JOE RUSSELL, BUDGET OFFICE.
>> DWIGHT DIVELY, INTERIM
DIRECTOR.
>> CALVIN CHOW, CENTRAL STAFF.
>> TOM SIKESELL, ALSO CENTRAL
STAFF.
>> GREAT. I WILL GIVE EVERYONE
TIME TO ASK QUESTIONS AT THE END
AND WITH THAT, TAKE IT AWAY.
>> I WOULD JUST LIKE TO SET THE
TABLE A LITTLE BIT, WHICH CHAIR
STRAUSS MOSTLY ALREADY DID BUT
WE ARE HERE TODAY TO TALK
GENERALLY ABOUT PROPERTY TAXES
AND LEVEE CAPACITY. THIS IS TO
INFORM DECISIONS THAT WILL OR
MAY BE BEFORE YOU THIS YEAR, AND
SO WE WANT TO DO SORT OF ALL
START FROM A SHARED
UNDERSTANDING OF WHERE WE ARE,
IN TERMS OF PROPERTY TAX LEVIES
AND THE CAPACITY THE CITY HAS
LEFT. I JUST WANT TO TAKE A
MOMENT TO SAY THANK YOU TO THE
COLLABORATION, I THINK THIS HAS
BEEN A GOOD EXAMPLE OF WHAT WE
TALKED ABOUT WITH MY
CONFIRMATION THAT THE CITY
BUDGET OFFICE, CENTRAL STAFF,
AND CITY FINANCE HAVE WORKED
COLLABORATIVELY TO COME TO AN
AGREEMENT, SHARE OUR
ASSUMPTIONS, THINK ABOUT
DIFFERENT WAYS OF GOING ABOUT
THE ANALYSIS, SO REALLY
APPRECIATE THE ENGAGEMENT AND
THANK YOU FOR CHAIR STRAUSS FOR
HELPING FACILITATE THAT. TODAY,
WE ARE JUST GOING TO GO OVER
SOME PROPERTY TAX MECHANICS AND
THEN TALK ABOUT THE CITY
REMAINING LEVEE CAPACITY
INFORMED BY PREVIOUS DECISIONS
THAT HAVE BEEN MADE FOR SOME OF
OUR OTHER LEVEES. WITH THAT, I
WILL HAND IT OVER TO JOE AND
THEN I WILL JUST INVITE MY
COLLEAGUES OVER AT THE TABLE
FROM ALL OF THE DIFFERENT
OFFICES, WE WILL TRY TO PAUSE
BUT ALSO, IF YOU JUST WANT TO
ADD SOMETHING, PLEASE JUMP IN,
STOP US, THAT SORT OF THING.
THANK YOU.
>> THANK YOU. SO, I AM GOING TO
SPEAK TO THE FIRST HALF OF THIS
DECK AND THEN I AM GOING TO PASS
IT TO MY TEAMMATE, HERE, ALEX,
FROM BUDGET OFFICE, TO TAKE US
THROUGH THE SECOND HALF. SO, IN
THE FIRST HALF OF THIS
PRESENTATION, I AM GOING TO
FOCUS ON JUST THE MECHANICS.
SOME BASIC PROPERTY TAX
MECHANICS, PARTICULARLY FOCUSING
ON THE CITY'S REGULAR LEVY AND
THE CAP THAT WE FACE UNDER STATE
LAW FOR THAT LEVY. WE ARE ALSO
GOING TO GET INTO SOME MATH,
HERE, ABOUT HOW IT IS CALCULATED
BECAUSE THAT IS WHAT WE
UNDERSTAND, AS WE ARE REACHING A
LEGAL CAP ON THOSE LEVIES. AND
THEN I WILL PASS IT TO ALEX FOR
AN ESTIMATE, FOR EXACTLY HOW
MUCH CAPACITY WE BELIEVE WE HAVE
LEFT AND SOME ESSENTIAL
ASSUMPTIONS TO GET TO THAT
POINT. AND I WILL REITERATE THAT
THESE SLIDES WERE PREPARED IN
CONVERSATION WITH OUR COLLEAGUES
FROM CENTRAL STAFF, SO I INVITE
THEM TO CUT ME OFF OR CHIME IN
ANYTIME THEY HAVE A COMMENT OR A
CLARIFICATION. SO, LOOKING NOW
AT THIS LOVELY PIE CHART, I
WANTED TO START HERE BECAUSE I
THINK THIS GROUNDS US IN EXACTLY
WHAT WE ARE TALKING ABOUT UNDER
THE CITY REGULAR LEVY. I WILL
DRAW YOUR ATTENTION TO THE ONE
THIRD HERE, WHICH THAT GRAY AREA
IS ABOUT ONE THIRD OF THIS PIE,
WHICH IS THE CITY'S GENERAL
EXPENSE LEVY, THAT IS GENERAL
FUND FOR ANY PURPOSES THE CITY
SEES FIT. IT IS ABOUT A THIRD OF
OUR REGULAR LEVY, THEN THE REST
IS MADE UP OF THESE FIVE SPECIAL
LEVIES, THAT WE CALL DEADLIFTS,
AND I WILL GET INTO THAT
TERMINOLOGY ON THE NEXT SLIDE.
YOU CAN SEE THE LARGEST OF THOSE
FIVE IS FAMILIES IN ED, FOLLOWED
BY TRANSPORTATION, HOUSING, AND
THEN THE SMALLER LIBRARY, AND
MUCH SMALLER ELECTION VOUCHERS
LEVY. THIS PIE REPRESENTS 2026
PROPERTY TAX COLLECTIONS, SO
THIS IS A MOMENT IN TIME, THE
CURRENT MOMENT WE ARE IN, NOW.
SO, AGAIN, ONE THIRD OF THAT PLY
IS THE GENERAL EXPENSE LEVY.
THIS IS NON-VOTED, MEANING IT
PERPETUALLY RENEWS. HOWEVER,
UNDER STATE LAW, IT IS CAPPED AT
1% GROWTH. 1%, PLUS THE VALUE OF
NEW CONSTRUCTION IN THAT YEAR.
THE LID LIFTS -- OR, THOSE OTHER
FIVE LEVIES -- ALLOW US TO
SURPASS THAT 1% GROWTH MARK. AND
THOSE FIVE LEVIES ARE LISTED
AGAIN, HERE. THEY ARE CALLED
"LID LIFTS" BECAUSE THE 1%
GROWTH CAP IS CONSIDERED THE
LID, AND IT ALLOWS US TO SIMPLY
LIFT THAT BID -- LID ANY GIVEN
YEAR, SO THAT IS WHY WE CALL
THEM "LID LIFTS" -- HOWEVER,
THERE IS A LIMIT AND THAT IS THE
FOCUS OF THIS PRESENTATION.
STATE LAW LIMITS US TO $3.60 PER
$1000 OF ASSESSED VALUE FOR OUR
CITY'S REGULAR LEVY. IN 2026,
WE WERE AT $3.02. SO, THAT
SUGGESTS THAT WE ARE NOT AT THE
LIMIT, BUT WE ARE SOMEWHERE
APPROACHING IT, AND SO WE WANT
TO FOCUS ON HOW MUCH WE HAVE
LEFT AND WHAT CAN BE DONE. THIS
DOES NOT INCLUDE -- THE BOTTOM
BULLET, HERE -- THIS SAYS, THERE
ARE OTHER CITY IMPOSED LEVIES
THAT ARE NOT INCLUDED UNDER WHAT
WE CALL THE CITY'S REGULAR
LEVY, THAT INCLUDES THE ALASKAN
WAY SEAWALL BOND, AND THE
SEATTLE METROPARK DISTRICT LEVY.
THAT IS A SPECIAL LEVY THAT IS
ALLOWED TO BE OUTSIDE THE CAP,
UNDER STATE LAW. SO, THOSE ARE
NOT INCLUDED IN THIS REGULAR
LEVY, THAT WE ARE SPEAKING TO.
SO, I WANT TO GO THROUGH SOME OF
THE FINE PRINT, IF YOU WILL, ON
HOW THESE LID LIFTS WORK AND
WHAT IS REQUIRED OF THEM. THEY
REQUIRE A SIMPLE MAJORITY OF THE
SEATTLE VOTERS TO PASS. THEY CAN
BE USED FOR ANY REASON,
OPERATING OR CAPITAL EXPENSES.
THE ANNUAL AMOUNTS THAT WE
RAISE, THE INFLATION OF THESE
SPECIAL LEVIES EACH YEAR, IS
DEPENDENT UPON THE DURATION OF
THOSE LEVIES. SO, THESE LEVIES
CAN INFLATE BY MORE THAN 1% EACH
YEAR, IF THE DURATION IS SIX
YEARS OR LESS. IF THE DURATION
OF THE LEVIES IS LONGER THAN SIX
YEARS, WE ARE LIMITED TO THE 1%
GROWTH CAP. THE CITY HAS
GENERALLY OPTED FOR THE LATTER,
TO DO LEVIES THAT ARE LONGER
THAN SIX YEARS, AND LIMIT THEIR
GROWTH EACH YEAR, TO 1% OR LESS.
THE CITY HAS GENERALLY DEFINED,
IN OUR ORDINANCES, THAT WE ARE
GOING TO COLLECT, ESSENTIALLY, A
FLAT AMOUNT EACH YEAR OF THESE
SPECIAL LEVIES AND OUR LEVIES
CURRENTLY ARE SOMEWHERE BETWEEN
SIX YEARS AND 10 YEARS. THE
FACT, I BELIEVE THEY ARE ALL
LONGER THAN -- THEY ARE ALL
UNDER THIS PARADIGM OF A
RELATIVELY FLAT COLLECTION
AMOUNT EACH YEAR. SO, AND THEN,
WE STATE IT AGAIN HERE -- AND
YOU WILL HEAR ME SAY IT ON THE
NEXT SLIDE, TOO, THAT WE ARE
CAPPED AT A GROWTH RATE OF $3.60
PER $1000 OF ASSESSED VALUE. YOU
MIGHT SAY, WELL, WE ARE
COLLECTING MILLIONS OF DOLLARS,
HOW DO WE CONVERT THIS $3.60
INTO SOMETHING MEANINGFUL FOR
US? AND THAT IS WHAT WE WILL GET
INTO, IN THIS NEXT SLIDE. SO,
THERE IS SOME MATH ON THIS SLIDE
-- I DON'T MEAN TO TRAUMATIZE
YOU WITH ALGEBRA, HERE -- BUT,
IT IS IMPORTANT TO UNDERSTAND
HOW THAT $3.60 IS CALCULATED.
THIS IS THE FORMULA, HERE, FOR
THE TAX RATE. WHAT IS IMPORTANT
TO UNDERSTAND HERE, IS THAT THE
TAX RATE IS REALLY AN OUTPUT. IT
IS THE RESULTS OF THE RIGHT SIDE
OF THIS EQUATION. THERE ARE TWO
VARIABLES ON THAT RIGHT SIDE --
THE COLLECTION AMOUNT, AND THE
ASSESSED VALUE. THE COLLECTION
AMOUNT IS REALLY PREDETERMINED.
IT IS CAPPED, GENERALLY, AT THE
1% GROWTH, AND IT IS DETERMINED
BY AN INFLATION RATE THAT IS
PUBLISHED BY THE DEPARTMENT OF
REVENUE EVERY YEAR AND ASSUMING
THAT INFLATION RATE IS HIGHER
THAN 1%, WE ARE CAPPED AT 1%, SO
IT IS RELATIVELY STABLE, IT IS
RELATIVELY PREDICTABLE. THE
ASSESSED VALUE IS THE LESS
PREDICTABLE VARIABLE. AND SO, WE
WANT TO SPEND SOME TIME BOTH
HERE, AND IN THE BOTTOM HALF OF
THIS SLIDE, AND ON THE NEXT
SLIDE, TALKING ABOUT THE
VARIABILITY AND UNPREDICTABILITY
OF ASSESSED VALUE AND WHAT THAT
DOES TO POTENTIAL FOR THE TAX
RATE TO MOVE UP AND DOWN. SO,
ASSESSED VALUE IS DETERMINED BY
THE COUNTY ASSESSOR EVERY YEAR.
GROWTH IN THE ASSESSED VALUE --
AND THIS IS WHERE THE ALGEBRA
COMES IN -- GROWTH IN THAT
ASSESSED VALUE MEANS A DECREASE
OF A TAX RATE, WHICH MEANS WE
HAVE MORE ROOM UNDER THE CAP. IT
MEANS WE HAVE MORE LEVY
CAPACITY, IF AN ASSESSED VALUE
GOES UP. IT IS THE DENOMINATOR,
SO IT'S GROWTH ACTUALLY MEANS
THE TAX RATE GOES DOWN. BUT, IT
DOESN'T AFFECT COLLECTION
AMOUNT. AGAIN, THOSE TWO ARE
SORT OF INDEPENDENTLY
DETERMINED. SO, IF OUR ASSESSED
VALUE TAKES A BIG JUMP UP, WE
DON'T SUDDENLY GET MORE
COLLECTIONS. AND REVENUE, THAT
YEAR. HOWEVER, IT DOES AFFECT
THIS TAX RATE AND THEREFORE, IT
AFFECTS HOW CLOSELY ARE TO OUR
LIMIT, OUR LEGAL LIMIT.
LIKEWISE, A BIG DROP IN ASSESSED
VALUE DOESN'T AFFECT OUR
COLLECTION AMOUNTS. BUT, IT WILL
CAUSE THE TAX RATE TO SUDDENLY
INCREASE. AND THAT DECREASES
ROOM UNDER OUR COP AND IF WE ARE
CLOSE TO OUR CAP, IT COULD,
POTENTIALLY, CAUSE US TO CAPPED
THAT LIMIT, SO FOR THIS REASON,
WE ADVISE THAT THE CITY KEEP A
BUFFER, OR SOME RESERVE, SO WE
ARE NOT AT RISK OF GOING OVER
THAT $3.60, SUDDENLY, BECAUSE
ASSESSED VALUE IS OUT OF OUR
CONTROL, AND WE WILL SHOW YOU
SOME OF THE HISTORICAL
VARIABILITY IN IT AND HELP YOU
UNDERSTAND WHY A SUDDEN CHANGE
IN ASSESSED VALUE COULD HAVE
RISK FOR IF WE GET CLOSER TO
THAT LEGAL LIMIT. SO, I'M GOING
TO PASS IT HERE, TO ALEX, WHO IS
GOING TO WALK US THROUGH
ASSESSED VALUES, LEGAL LIMITS,
AND THEN TALK ABOUT THE
CALCULATION. SORRY, I'M GOING
TO PAUSE, HERE.
>> I JUST WANT TO UNDERLINE,
ESPECIALLY FOR PEOPLE WHO ARE
VIEWING IN, WASHINGTON STATE,
UNLIKE OTHER STATES WHERE YOU
INCREASE THE RATE AND GAIN MORE
REVENUE THAT WAY, WE ARE
INCREASING THE AMOUNT OF
COLLECTIONS AND THE RATE IS
BACKED IN, THAT IS PARTLY WHY IT
IS MORE DIFFICULT FOR US TO
EXPLAIN THIS CONCEPT AND ALSO
WHY IT IS SO IMPORTANT, BECAUSE
A LOT OF THIS IS OUT OF OUR
CONTROL, IN TERMS OF HOW THE
RATE AFFECTS US. WE CAN CONTROL
WHAT WE COLLECT, BUT THE AV
CALCULATION IS NOT.
>> GO AHEAD.
>> OKAY, SO, MOVING ON TO THE
CRUX OF THIS TOPIC, WHICH IS THE
CAPACITY. SO, FIRST, ASSESSED
VALUE PLAYS AN OUTSIDE ROLL IN
DETERMINING LEVY CAPACITY. WE
WANTED TO SHOW KIND OF HOW AV
GROWTH HAS LOOKED HISTORICALLY,
IN RECENT HISTORY. SO, THERE IS
A LOT GOING ON IN THIS CHART,
SO, BEAR WITH ME. THE DARK BLUE
LINE THAT TURNS DOTTED IN THE
LATER YEARS IS THE ACTUAL AMOUNT
OF ASSESSED VALUE, PER YEAR. AS
YOU SEE IN 2026, THE ASSESSED
VALUE IN SEATTLE IS $306
MILLION, OR, SORRY, DILLION.
$306 BILLION. AND THEN, THE
ORANGE BARS ARE SHOWING THE
PERCENT GROWTH, YEAR OVER YEAR.
SO, YOU CAN SEE IN THE EARLY
2010s AND IN 2024 AND '25, IS
WHEN WE EXPERIENCED SOME AV
DECLINES. IN BETWEEN THOSE TWO
PERIODS, HOWEVER, WE HAVE SEEN
REMARKABLE AV GROWTH, AND THE
POINT -- ONE POINT WE ARE TRYING
TO MAKE HERE IS BECAUSE AV
DETERMINES OUR CAPACITY, WE DID
SEE TREMENDOUS GROWTH IN OUR
CAPACITY IN THOSE LOOK LATER
2010s. HOWEVER, WE MAY BE
ENTERING A NEW NORMAL, RIGHT
NOW. AND SO, THE OTHER TWO KEY
POINTS I WANTED TO MAKE THROUGH
THIS SLIDE IS, FIRST, WE DON'T
AND PRINCIPATE -- ANTICIPATE
SEEING THAT GROWTH FORWARD WE
EXPERIENCED AT LEAST IN THE NEAR
TERM, SO THAT IS GOING TO START
CONSTRAINING OUR LEVY CAPACITY.
WE WILL SHOW A BIT MORE OF THAT
IN THE NEXT COUPLE SLIDES, AS
WELL. AND THIS IS -- I MEAN,
THIS IS -- GIVEN THAT THERE HAVE
BEEN PRESSURES WEIGHING ON REAL
ESTATE MARKET, HIGH CONSTRUCTION
COSTS, HIGH VACANCY RATES, THOSE
REALLY ARE DRAGGING DOWN THE
COMMERCIAL SECTOR IN PARTICULAR,
SO THE OFFICIAL CITY FORECAST
RIGHT NOW IS ABOUT 5% IN THE OUT
YEARS, WHICH AS YOU CAN SEE IS
QUITE A BIT LOWER THAN
HISTORICALLY. THE SECOND MAIN
POINT IS BECAUSE WE ARE GETTING
SO CLOSE TO THE CAP, AND WE DO
SEE THESE ECONOMIC SHOCKS, SO
THE FINANCIAL CRISIS AS WELL AS
THE PANDEMIC, HAS LED TO DROPS
IN AV. TO MITIGATE WHAT DECLINES
MAY HAPPEN IN THE FUTURE -- AND
THEY PROBABLY WILL -- BOTH CBO
AND COUNCIL CENTRAL STAFF
RECOMMEND ADDING A 10% CAPACITY
RESERVE, WHICH IS ESSENTIALLY A
BUFFER, IN CASE, AS JOE SAID, AV
DROPS AND THAT PUSHES US UP EVEN
CLOSER TO THE LIMIT OF 360. AND
I CAN GO A LITTLE BIT MORE INTO
THE LIMIT OF ABOUT HOW WE
CALCULATED THIS 10%.
>> AND MAYBE IT JUST BEARS
ITERATING THAT IF WE DO SUDDENLY
SURPASS THAT LIMIT, WE WOULD
HAVE TO REDUCE OUR COLLECTIONS,
OUR FORECAST COLLECTIONS FOR
THESE LEVIES, SO WE WOULD
SUDDENLY BE SEEING SUBSTANTIAL
CUTS TO WHAT WE HAD PLANNED TO
SPEND FOR THESE PROMISED LEVIES.
>> OKAY, GOING TO THE NEXT
SLIDE. WE HAVE DONE SOME
MODELING TO ESTIMATE HOW MUCH
CAPACITY WE MIGHT HAVE IN THE
MEDIAN TURN, IN THE NEXT ABOUT
SEVEN YEARS, OR SO. SO, WE HAVE
CALCULATED REMAINING LEVY
CAPACITY OF APPROXIMATELY $780
MILLION OVER THE NEXT SEVEN
YEARS. THAT IS ABOUT AN AVERAGE
OF $111 MILLION, PER YEAR. THERE
ARE SOME KEY ASSUMPTIONS THAT WE
NEED TO MAKE, TO BE ABLE TO
FORECAST WHAT WE MIGHT HAVE
UNDER OUR CAPACITY, SO THE FIRST
ONE IS, OF COURSE, AV GROWTH,
RIGHT? SO, THAT IS, AGAIN, WHAT
DETERMINES BOTH OUR CAPACITY AND
OUR CURRENT TAX RATE FOR THE
REGULAR LEVY. SO, AS I SAID, THE
CITY'S OFFICIAL FORECAST IS 5%
OUT HERE GROWTH, WE HAVE DECIDED
TO BE A LITTLE BIT MORE
CONSERVATIVE HERE, AND USE 3%.
GIVEN WHAT I HAVE MENTIONED
ABOUT THE ECONOMIC PRESSURES
THAT ARE DAMPENING THE REAL
ESTATE SECTOR, COMMERCIAL, IN
PARTICULAR. SO, THIS IS JUST
TRYING TO MINIMIZE THE DOWNSIDE
OF RISK TO US IN THE NEXT FEW
YEARS. THE SECOND KEY ASSUMPTION
IS OUR CURRENT LEVIES WILL SOON
BE UP FOR RENEWAL. THE HOUSING
LEVY IS GOING TO BE THE FIRST
ONE AND THAT WOULD BE IN 2031,
IN THIS PARTICULAR SCENARIO WE
HAVE ASSUMED ALL OF OUR CURRENT
LEVIES WOULD RENEW AND WOULD
ONLY KEEP UP WITH INFLATION IN
THE NEXT RENEWAL CYCLE. SO,
THERE ARE OBVIOUSLY INFINITE
DIFFERENT WAYS WE COULD MODEL
THIS, WE COULD MODEL THIS BY
ASSUMING THEY CAN KEEP UP WITH
BOTH INFLATION AND POPULATION
GROWTH, WE CAN DOUBLE THEM, WE
CAN TRIPLE THEM. OBVIOUSLY, IT
IS IMPORTANT TO NOTE, DURING THE
LAST RENEWAL CYCLE, ALL OF OUR
LEVIES HAVE RENEWED, AT LEAST
TWICE THE AMOUNT, IF NOT MORE.
SO, THIS IS CERTAINLY A
CONSERVATIVE ASSUMPTION THE
OTHER WAY AROUND, AND THAT IS
ALWAYS A POSSIBILITY, IF THEY
WOULD RENEW FOR HIRE. HOWEVER,
THE IMPORTANT THING TO NOTE IS,
AGAIN, AV GROWTH IS MAINLY
OUTSIDE OF OUR CONTROL. AT WHAT
POINT THE EXISTING LEVIES RENEW,
IS PURELY A POLICY DECISION. AND
THEN, THE THIRD RECOMMENDATION
DECISION THAT WE HAVE ALREADY
TALKED ABOUT A LITTLE BIT IS
THIS CAPACITY RESERVE OF 10%, SO
WE HAVE BUILT THAT INTO THIS
MODEL, AS WELL. AND 10% IS
ESSENTIALLY THE LARGEST AV
DECLINED WE EXPERIENCED DURING
THE FINANCIAL CRISIS, SO THAT IS
THE BENCHMARK WE USED. ANOTHER
KEY POINT IS THAT THIS RAINY
REMAINING CAPACITY OF $780
MILLION WOULD BE NEEDED TO COVER
ANY RENEWAL OF THE LIBRARY LEVY.
SO, THE LIBRARY LEVY IS NOT
OUTSIDE OF THESE ASSUMPTIONS.
FOR EXAMPLE, IF THE LIBRARY LEVY
RENEWED AT $500 MILLION, THERE
WOULD ONLY BE $280 MILLION LEFT
FOR OTHER NEEDS.
>> I WILL JUST ADD HERE, IT IS
JUST AN ILLUSTRATIVE EXAMPLE.
THIS IS NOT A PROPOSAL OF THE
LIBRARY LEVY, I JUST WANT TO
MAKE THAT EXTRA CLEAR, GIVEN
THAT PROPOSAL WILL BE COMING
FORWARD VERY CLICK -- QUICKLY,
SO WANT TO MAKE SURE THAT IS
CLEAR FOR THE RECORD.
>> TOM?
>> I JUST WANT TO POINT OUT,
WITH REGARD TO THE ASSUMPTIONS
BEING MADE HERE, SO, BY WAY OF
ONLY ASSUMING INFLATIONARY
GROWTH, SAY AN EIGHT-YEAR LEVY,
YOU ARE NOT INCLUDING --
ACCOUNTING FOR THE FACT THE
POPULATION WILL GROW EACH YEAR
OVER THOSE EIGHT YEARS, SO WHEN
YOU ARE RENEWING -- THE AMOUNT
YOU CAN RENEW ON A ANNUAL BASIS,
IS LOWER. SO, IT INTUITIVELY
MAKES SENSE, BUT I JUST WANT TO
POINT OUT THAT THERE ARE MORE
CONSERVATIVE APPROACHES THAT CAN
BE TAKEN IN THIS EXERCISE AND
THIS IS JUST ONE. ONE
POSSIBILITY.
>> AND THAT LIKELY DROVE WHY THE
RENEWALS WERE AS HIGH AS THEY
WERE, AT LEAST IN PART. SO --
>> OKAY, AND THIS IS SORT OF A
VISUALIZATION OF WHAT I HAVE
TALKED ABOUT, THERE IS ALSO SOME
GOING ON HERE, SO I WILL WALK
THROUGH IT. THE COLORED SECTION
OF THE BARS REPRESENT THE PARTS
OF THE REGULAR LEVY. THE GREEN
AT THE VERY BOTTOM IS THE
GENERAL ASKED DENSE -- GENERAL
EXPENSE, IT IS ABOUT ONE THIRD
OF THE LEVY, AT LEAST FOR NOW.
YOU HAVE FAMILIES AND ED, LOW
INCOME HOUSING, TRANSPORTATION,
LIBRARY. YOU DO SEE THAT, FOR
EXAMPLE, GOING FROM '23 TO '24,
THE PURPLE SECTION THAT
REPRESENTS HOUSING, YOU CAN SEE
THAT GET MUCH BIGGER. AND THAT
IS A RESULT OF SIMPLY THE
RENEWAL THAT HAPPENED IN 2023.
THE SAME GOES FOR FAMILIES AND
ED IN 2026, AND TRANSPORTATION
IN '25. SO, YOU CAN SEE, UP
UNTIL ABOUT 2024 -- WHICH WAS
THE LAST RENEWAL CYCLE -- WE HAD
A GOOD AMOUNT OF SPACE UNDER OUR
CAP. SORRY, SO, OUR CAP IS
REPRESENTED BY ACTUALLY THE
PURPLE LINE. THE TOP PURPLE LINE
IS THE $3.60 PER 1000 AV. THE
BLUE LINE WHICH JUST BUMPS THAT
DOWN A LITTLE BIT, THAT IS THE
-- WHAT WE ARE SAYING IS SORT OF
THE CAP, IN PRACTICE. THAT IS
INCORPORATING THAT 10% BUFFER
THAT WE TALKED ABOUT, SO THAT
SIMPLY SHIFTS THE CAP DOWN TO
AGAIN MITIGATE THAT RISK OF AV
DROPPING. AND SO, YOU CAN SEE,
STARTING IN '24 AND '25, OUR
LEVY -- OR, SORRY -- OUR GROWTH
IN THE REGULAR LEVY HAS FAR
EXCEEDED THE GROWTH IN THE CAP.
AND SO, WE ARE NOW QUICKLY
APPROACHING THE CAP, AND THE
GRAY DOTTED LINE THAT KIND OF
DEVIATES FROM THE BLUE IS
ACTUALLY SHOWING THE ASSUMPTION
OF 5% AV GROWTH, SO IF YOU HAVE
HIGHER AV GROWTH, YOU DO HAVE
INCREASED GROWTH IN THE CAP AND
THAT IS JUST THE LESS
CONSERVATIVE ASSUMPTION, JUST TO
SHOW YOU WHAT THAT LOOKS LIKE.
AND SO, THAT GROWTH OBVIOUSLY
COMPOUNDS, YEAR-TO-YEAR. SO, THE
SCREEN, SORT OF LIGHT GREEN
HATCHED SECTION AT THE TOP, IS
REPRESENTING THIS REMAINING
CAPACITY WE HAVE, WHICH
BASICALLY BUMPS UP AGAINST THAT
BLUE LINE AND THAT REMAINING
CAPACITY IS ABOUT $780 MILLION
OVER SEVEN YEARS. AGAIN, SOME OF
THIS WILL BE USED FOR THE
LIBRARY LEVY.
>> SO, I WILL JUST REITERATE
SORT OF BUILDING ON WHAT ALEX IS
SAYING AND WHAT TOM SAID, THERE
ARE A LOT OF DIFFERENT WAYS WE
COULD SORT OF PRESENT THIS, IN
TERMS OF THE ASSUMPTIONS. WE ARE
BEING MODERATELY CONSERVATIVE,
AS TOM DESCRIBED. WE COULD BE
MUCH MORE CONSERVATIVE, SORT OF
BASED ON PAST PRACTICES OF LEVY
RENEWALS AND POPULATION, TAKING
INTO CONSIDERATION, POPULATION
GROWTH. A LOT CAN CHANGE BETWEEN
NOW AND 2033 IN EITHER
DIRECTION, SO WE WILL CONTINUE
TO MONITOR THIS, YEAR OVER YEAR,
BUT THE SHORT TERM, WE JUST
ADVISED SORT OF KEEPING THIS IN
MIND AS WE ARE MAKING DECISIONS
ABOUT ANY LEVIES THAT ARE BEFORE
YOU OR NEW IDEAS, BECAUSE WE ARE
SORT OF -- NO MATTER HOW WE CUT
IT, IT LOOKS LIKE WE ARE AT RISK
OF BUMPING UP AGAINST THAT CAP,
UNLESS WE SEE A SIGNIFICANT,
CONSISTENT JUMP IN OTHER
FACTORS.
>> THE 5% UNDERLINES THAT EVEN
IF THAT WERE TO OCCUR, IT WOULD
TAKE YEARS FOR THAT GROWTH TO
ACTUALLY MOVE THE NEEDLE
SIGNIFICANTLY. IN NEAR-TERM, WE
ARE UNDER THE SCAFFOLD.
>> AND THEN, THIS FINAL TABLE IS
JUST SIMPLY, ALSO SIMILAR TO THE
PIE CHART SET SHOWING THE
RELATIVE SIZES OF OUR LEVY. THE
FIRST COLUMN IS THE LEVY NAME,
THE SECOND IS THE ANNUAL AMOUNT
FOR 2026. AND THIS IS ORDERED BY
BIANNUAL AMOUNT, SO THE ANNUAL
EXPENSES THE LARGEST, FOLLOWED
BY FAMILIES AND ED, LIBRARY, AND
ELECTION VOUCHERS. WE ALSO SHOW
THE TOTAL AMOUNT OF THE LEVY,
OVER THE DURATION OF THE LEVY.
SO, YOU CAN SEE THAT
TRANSPORTATION IS ACTUALLY THE
LARGEST LEVY AT $1.5 BILLION.
HOWEVER, DUE TO THE FACT THAT
FAMILIES AND EDUCATION IS ONLY A
SIX-YEAR LEVY, THAT JUST
INCREASES THE ANNUAL AMOUNT, AND
SO, TRANSPORTATION LOOKS A
LITTLE BIT SMALLER. AND THEN, WE
HAVE THE DURATION IN YEARS AND
THE NEXT RENEWAL DATE. OF
COURSE, LIBRARIES IS UP THIS
YEAR, AND THEN WE HAVE SORT OF
THIS RESPITE BEFORE HOUSING GOES
UP AGAIN IN 2030. THEN, THIS IS
JUST A BRIEF CALCULATION OF THE
REMAINING LEVY CAPACITY OF $780
MILLION, THAT IS ABOUT $109
MILLION IN THE FIRST YEAR, IF WE
ARE ASSUMING THE SEVEN YEAR LONG
LEVY, OR MULTIPLE SEVEN-YEAR
LEVIES, I GUESS. AND WE DO HAVE
THIS FINE PRINT AT THE BOTTOM,
JUST EMPHASIZING THAT WE -- YOU
KNOW, THESE ARE ALL ESTIMATES,
THERE ARE A LOT OF VARIABLES IN
HERE THAT CAN CHANGE, EVEN BY
THE APRIL FORECAST, BECAUSE WE
WILL GET A NEW ASSESSED VALUE
FORECAST AT THAT TIME. THIS IS
THE INFORMATION -- WORKING FROM
THE INFORMATION WE HAVE, NOW.
>> I WILL JUST SAY THAT THESE
ARE LONG-TERM DECISIONS,
OBVIOUSLY. THESE ARE DIFFICULT
TO FORECAST, EVEN TWO YEARS
AHEAD. BUT, SEVEN YEARS AHEAD IS
A WHOLE OTHER KETTLE OF FISH, SO
TO SPEAK. SO, YES, AS ALEX SAID,
THERE ARE A LOT OF VARIABLES
THAT CAN CHANGE, EVEN
YEAR-TO-YEAR, BUT WE THINK THESE
ARE REASONABLE ASSUMPTIONS TO
MAKE AT THIS MOMENT IN TIME, TO
GIVE IT A REASONABLE SNAPSHOT OF
WHERE WE THINK CAPACITY IS.
THAT'S ALL THAT WE HAVE FOR OUR
SLIDES TODAY. I THINK WE ARE
READY FOR ANY QUESTIONS THAT
COUNCILMEMBERS MAY HAVE?
>> WONDERFUL. AND WHILE WE HAVE
OPENED UP THIS MEETING,
CONGRATULATING MEGAN ON MOVING
TO HER NEXT POSITION, TODAY IS
ALSO THE FIRST DAY THAT DIRECTOR
PENNUCCI IS HERE AS A FULLY
CONFIRMED DIRECTOR OF THE CITY
BUDGET OFFICE, AS WELL AS THE
FIRST TIME THAT WE HAVE MR.
DWIGHT DIVELY BACK WITH US. I
BELIEVE THIS IS THE FIRST TIME
AT THE COMMITTEE TABLE YOU HAVE
HAD IN A NUMBER OF YEARS. BEFORE
WE MOVE ON TO THE QUESTIONS AND
ANSWERS, JUST WANT TO CHECK IN
AND SEE IF THERE ARE ANY OTHER
CLOSING REMARKS FROM CENTRAL
STAFF, MR. DIVELY? NO?
WONDERFUL. I AM JUST GOING TO
ASK SOME QUESTIONS OFF THE TOP
FOR FRAMING AND THEN,
COLLEAGUES, I WILL GIVE YOU THE
REST OF THE TIME AND I HAVE MORE
QUESTIONS TO ASK AT THE END, IF
TIME PERMITS. FIRST, IF WE COULD
GO BACK TO SLIDE 11? REGARDING
AREA VALUE -- COLLEAGUES, AREA
VALUE, AS WE HAVE JUST HEARD, IS
WHAT DETERMINES OUR ABILITY TO
COLLECT. SO, IF THE VALUE OF
LAND IN OUR CITY GOES UP, WE
HAVE MORE ABILITY TO COLLECT. IF
THE VALUE OF THE LAND IN OUR
CITY GOES DOWN, WE HAVE LESS TO
COLLECT. I APPRECIATE THAT THE
PROJECTIONS ARE MADE AT 3%,
WHICH IS LESS THAN THE FORECAST.
HOWEVER, I AM CONCERNED THAT
GROWTH MAY BE CLOSER TO 2%, AND
THAT IS JUST IN THE LAST YEAR
AND A HALF, TWO YEARS, WE
EXPECTED SLOW GROWTH TO BEGIN,
AND THEN, INSTEAD, WE GOT
TARIFFS FROM THE TRUMP
ADMINISTRATION, RIGHT? SO, WE
WERE EXPECTING SLOW GROWTH TO
BEGIN, MUCH, LIKE, A FEW YEARS
AGO, AND THEY ARE JUST NOW
STARTING TO GET TO IT. SO, MY
CONCERN IS THAT 3% MIGHT EVEN BE
TOO HIGH. SO, I GUESS THIS GETS
TO MY -- I GUESS I ONLY HAVE TWO
QUESTIONS -- IF WE HAVE NEGATIVE
LAND VALUE, LIKE, DOWNTOWN HAS
BEEN LOSING LAND VALUE OVER THE
LAST SIX YEARS BECAUSE OF THE
OFFICE SPACE VACANCIES, WE ARE
ONLY BUOYED BY OUR RESIDENTIAL
AREAS. WHAT HAPPENS, IF AREA
VALUE DROPS TO A POINT -- AND WE
HAVE EXISTING LEVIES THAT ARE
ALREADY AT WORK, SEEN IN THE CAB
-- HOW ARE REDUCTIONS MADE TO
LEVIES?
>> SO, THE REDUCTION, IT FOLLOWS
A PRETTY FORMULAIC APPROACH.
THAT DOR WE CAME OUT WITH, IT IS
CALLED "PRO RATIONING."
ESSENTIALLY, IT RANKS CERTAIN
LEVIES, SO THAT IF YOU EXCEED
YOUR LIMIT, IT STARTS SORT OF
WITH SPECIAL DISTRICTS. SO, FOR
EXAMPLE, THE METROPOLITAN PARK
DISTRICT WOULD ACTUALLY BE HIT
FIRST, AND THEN IT SORT OF GOES
DOWN THE LINE. WHEN IT GETS TO
THE REGULAR LEVY, THERE IS A
CHOICE AS TO HOW WE SPREAD IT
AMONG THE DIFFERENT PARTS OF THE
LEVY. BUT, WE WOULD SIMPLY GET
KNOCKED DOWN TO $3.60.
>> I WOULD SAY IT ESSENTIALLY
BECOMES A BUDGET DISCUSSION,
BECAUSE WE HAVE CHOICES WITHIN
THESE WHERE WE WOULD HAVE TO
DECIDE, WHERE DO WE WANT TO TAKE
REVENUE, NEXT?
>> JUST AT A COMPLICATION -- NOT
TO GET INTO ALL OF THIS -- THERE
ARE ALSO LIMITS IN THE STATE
CONSTITUTION AND IN STATE
STATUTE, ON HOW LEVIES IMPOSED
BY DIFFERENT GOVERNMENTS ADD
TOGETHER. AND SO, THERE BECOME
POSSIBILITIES, IF ASSESSED VALUE
DECLINED SIGNIFICANTLY, WHERE
THE SUM OF LEVIES FROM THE CITY,
THE COUNTY, AND ANY OTHER
SPECIAL DISTRICTS LIKE THE
METROPOLITAN PARK DISTRICT, GET
TO SOME OF THESE OTHER STATE
IMPOSED LIMITS. AND SO, THAT IS
WHEN THE STATE LAW, PRO
RATIONING THINGS, COME INTO
PLAY. BECAUSE IT SETS AN ORDER
OF WHO HAS THE ABILITY TO
MAINTAIN THEIR LEVY, AND WHO HAS
TO START GIVING AWAY SOME OF
THEIR CAPACITY? IF IT IS ONLY
THE $3.60 LIMIT THAT IS
EFFECTIVE, AS MS. CATTLEMAN
SAYS, IT IS UP TO THE MAYOR AND
THE COUNCIL TO PRIORITIZE HOW
YOU PRIORITIZE BETWEEN THE
GENERAL FUND AND THE LEVY LID
LIFTS.
>> THANK YOU. AND JUST AS A
REMINDER -- THIS IS MY LAST
QUESTION AND THEN I WILL TURN IT
OVER TO COLLEAGUES -- CURRENTLY,
IT SAYS, ON SLIDE NUMBER 10, THE
CITY HAS REMAINING LEVY CAPACITY
OF ABOUT $111 MILLION PER YEAR,
THAT IS THE ASSUMPTION OF A 3%
GROWTH. DO WE KNOW WHAT A 2%
GROWTH IS? IS IT JUST $75
MILLION? AND WITH THAT, WHAT IS
THE REQUIRED BUFFER OF THAT? IS
IT THEN JUST $10 MILLION, OR $11
MILLION? IS IT REALLY JUST THAT
SIMPLE? WHAT IS THE GROWTH? WHAT
IS OUR AMOUNT LEFT, IF WE HAVE
LESS GROWTH AND WHAT IS THE
BUFFER REQUIRED FOR IT?
>> SO, OUR RECOMMENDATION OF THE
CAPACITY RESERVE OF 10% DOESN'T
CHANGE, BECAUSE IT IS
BENCHMARKED TO SORT OF THE WORST
WE HAVE EXPERIENCED, WHICH WAS
DURING THE FINANCIAL CRISIS.
BUT, YES, BUMPING IT DOWN TO 2%
GROWTH WOULD CERTAINLY SHRINK
THE REMAINING LEVY CAPACITY. WE
CAN DEFINITELY RUN THOSE
NUMBERS.
>> OKAY, SO, I GUESS THAT IS MY
CALL OUT TO COLLEAGUES, THEY ARE
SAYING 111 AND I AM SAYING,
UNTIL WE SEE OUR ECONOMY REALLY
START MOVING AGAIN, I THINK THAT
IS EVEN THE -- I WOULD PUT A
MORE CONSERVATIVE NUMBER TO
THAT. BUT, WITH THAT, I SEE
COUNCIL MEMBER RIVERA AND THEN
COUNCILMEMBER KETTLE.
>> THANK YOU, CHAIR, THANK YOU,
ALL, FOR BEING HERE. THANK YOU,
DIRECTOR DIRECTLY, FOR TALKING
ABOUT THE OTHER LEVIES FOR OTHER
MUNICIPALITIES BECAUSE THAT WAS
GOING TO BE MY QUESTION. I KNOW
KING COUNTY, FOR INSTANCE, HAS
THE LEVY AT THE SAME TIME WE DO,
SO I WOULD LOVE TO GET MORE
INFORMATION ABOUT HOW THOSE
LEVIES THAT THE COUNTY ASSESSES
THAT OUR FOLKS PAY FOR, AS WELL,
BECAUSE WE HAVE CITY LEVIES THAT
OUR CONSTITUENTS PAY FOR AND
THEY PAY INTO THE KING COUNTY
LEVIES, AS WELL. SO, WOULD LOVE
TO SEE A LIST OF THE KING COUNTY
LEVIES, BECAUSE THEY DO HAVE AN
IMPACT ON OUR CONSTITUENTS, AND
I THINK WE NEED TO BE ABLE TO
HAVE THAT INFORMATION IN THE
CONTEXT OF OUR LEVY CONVERSATION
AT THE CITY.
>> SO, CAN I JUST SPEAK TO THE
LIBRARY? IF SO, THE KING COUNTY
LIBRARY IS ACTUALLY NOT PART OF
KING COUNTY GOVERNMENT. IT IS A
SEPARATE GOVERNMENT AND IT
PROVIDES LIBRARY SERVICES
EVERYWHERE IN THE COUNTY EXCEPT
SEATTLE, AND EXCEPT AT THE POINT
OF CITY'S, WHICH HAVE NEVER
OPTED IN, BECAUSE THEY DON'T
FEEL LIKE THEY NEED A LIBRARY.
AND SO, THAT TAX IS ACTUALLY NOT
PAID BY SEATTLE TAXPAYERS
BECAUSE THEY DON'T GET ANY
SERVICES FROM THE KING COUNTY
LIBRARY SYSTEM. BUT, YOUR POINT
ABOUT KING COUNTY, THE ACTUAL
COUNTY GOVERNMENT LEVY, SO,
THINGS LIKE THE NEW PARKS LEVY
AND THE VETERAN, SENIORS, AND
HUMAN SERVICES LEVY, WE HAVE
THAT DATA AND WE CAN PROVIDE
THAT, BECAUSE THOSE ABSOLUTELY
ARE PAID BY SEATTLE RESIDENTS,
AS WELL.
>> THANK YOU, DIRECTOR. AND I --
SORRY, MAY I?
>> PLEASE, TAKE IT AWAY. WE ARE
GOING TO DO CONVERSATIONS TODAY.
>> THANK YOU. I DID NOT WANT TO
RUN AFOUL OF OUR RULES. THANK
YOU FOR THAT. THANK YOU FOR THE
EDUCATION ON THE KING COUNTY
LIBRARIES LEVY, BECAUSE I
WASN'T SURE HOW THAT WORKED.
>> IT'S CONFUSING.
>> YEAH, BUT, WE DO PAY INTO
OTHER COUNTY LEVIES. LIKE, I
THINK THE -- I'M GOING TO CALL
IT MEDIC ONE, BUT I DON'T THINK
THAT IS WHAT IT IS CALLED.
>> MEDICAL SERVICES?
>> YEAH, THE HUMAN SERVICES
LEVY, THERE IS A VETERAN'S
SERVICES LEVY, THERE ARE A
NUMBER OF LEVIES. SO, I THINK
IT'S IMPORTANT FOR US TO LOOK
AT BOTH, AS WE ARE LOOKING AT
OUR LEVY CAP. BECAUSE THIS IS
SOMETHING THAT, YOU KNOW, WE ARE
ASKING TAXPAYERS TO TAX
THEMSELVES, AND I THINK -- LIKE
I SAID EARLIER -- THAT IS
IMPORTANT TO NOTE, AND SHOULD BE
PART OF THIS CONVERSATION, AS
WELL. AND THEN, IN TERMS OF THE
ASSESSED VALUE, WE DON'T -- I
AM GOING TO USE THE WORD,
"VOLATILE." [ LAUGHTER ] YOU
DIDN'T USE THOSE WORDS, BUT
THAT'S WHAT I'M GATHERING FROM
WHAT I AM HEARING, BECAUSE WE
DON'T CONTROL THAT. AND THERE
ARE A LOT OF THINGS HAPPENING
ACROSS THE WORLD THAT MAY HAVE
AN IMPACT, CURRENT AFFAIRS,
WORLD AFFAIRS, THAT MAY HAVE AN
IMPACT ON OUR ECONOMY, HERE IN
THE UNITED STATES, WHICH THEN
WOULD HAVE AN IMPACT ON OUR REAL
ESTATE MARKET IN THE UNITED
STATES. SO, NOT JUST THE
COMMERCIAL, AS MY COLLEAGUE,
CHAIR STRAUSS, JUST POINTED OUT
WITH THE SITUATION DOWNTOWN AND
ALL OF THE OFFENSE -- OFFICE
VACANCIES, WHICH I THINK ARE AT
35%. AND THEN, THERE ARE THESE
OTHER THINGS HAPPENING ACROSS
THE WORLD WHICH ALSO HAVE AN
IMPACT, SO I SAY THAT TO SAY, I
JUST WANT TO SAY IT OUT LOUD,
BECAUSE ALTHOUGH WE MAY USE THAT
10% BENCHMARKING, WE JUST DON'T
KNOW WHAT IS GOING TO HAPPEN.
SO, I THINK WE ARE IN A REALLY
DELICATE SPACE, WITH BUMPING UP
TO THIS CAP. AND I THINK WE NEED
TO BE REALLY MINDFUL, THIS IS
JUST, THANK YOU FOR THIS, TODAY.
IT'S VERY TIMELY, OBVIOUSLY.
AND WE NEED TO BE MINDFUL THAT
JUST BECAUSE WE HAVE THE $780
MILLION LEFT, DOESN'T MEAN WE
SHOULD ACTUALLY BE USING THE
$780 MILLION, EVEN THOUGH WE MAY
RESERVE THE 10, BECAUSE WE JUST
DON'T KNOW WHAT IS GOING TO
HAPPEN LATER. SO, I THINK I
ALWAYS ERR ON THE SIDE,
FISCALLY, MORE CONSERVATIVE, SO
WE ARE NOT RUNNING INTO A
SITUATION WHERE WE HAVE TO TAKE
MONEY AWAY FROM THE LEVIES, YOU
KNOW, AWAY FROM THESE THINGS
THAT WE ARE INVESTING IN,
BECAUSE THAT IS REALLY WHAT
WOULD HAPPEN, IF WE GO BEYOND
THE CAP, THE LEVY CAP LIMIT, IS
THAT THEN WE WOULD HAVE TO --
AND IT WOULD BE DETERMINED,
BASED ON WHAT YOU, DIRECTOR,
TALKED ABOUT, IN TERMS OF THE
OTHER LEVIES ACROSS THE STATE,
BUT HOW WE ARE GOING TO TAKE
AWAY FROM THE INVESTMENTS WE
MADE, AND WE NEVER WANT TO BE IN
THAT SITUATION. SO, THANK YOU,
CHAIR. JUST WANTED TO SAY THOSE
THINGS OUT LOUD, I THINK, FOR
THE RECORD, IT IS IMPORTANT, AS
WE WEIGH WHAT WE ARE TO DO, NOT
JUST WITH THE LIBRARIES LEVY,
BUT WITH ANY OTHER INVESTMENTS
THAT WE ARE CONSIDERING, THAT
MAY HAVE -- THAT MAY NEED A
LEVY, FOR INSTANCE.
>> AND I JUST MAKE ONE TECHNICAL
POINT?
>> PLEASE.
>> SO, THE 2027 ASSESSED VALUE,
SO THE VALUE FOR NEXT YEAR, WILL
BE DETERMINED BY THE ASSESSOR,
BASED ON PROPERTY VALUES ON
JANUARY 1 OF 2026. SO, ANYTHING
THAT HAPPENS THIS YEAR, AT LEAST
IN THEORY, WILL NOT BE REFLECTED
IN THE 2027 ASSESSED VALUE. IT
WOULD BE REFLECTED IN THE 2028
ASSESSED VALUE. THERE IS A ONE
YEAR LAG IN THE PROPERTY TAX
ASSESSMENT. AND SO, JUST AS YOU
THINK ABOUT THIS, YOU PROBABLY
AREN'T GOING TO GET A BIG
SURPRISE FOR 2027, THERE COULD
BE A BIG SURPRISE FOR 2028.
>> THANK YOU, DIRECTOR. THAT IS
REALLY IMPORTANT. AND SINCE
THESE LEVIES ARE MULTIYEAR
LEVIES, THE LEAST OF WHICH IS
SIX YEARS, IT WOULD PUT --
POTENTIALLY HAVE A HUGE IMPACT
ON THE 2028 ASSESSED VALUE. AND
I WILL SAY, THAT FOR THIS
YEAR'S ASSESSED VALUES, I HAVE
ALREADY HEARD FROM CONSTITUENTS
WHO HAVE STICKER SHOCK ON WHAT
THEY ARE GOING TO HAVE TO PAY,
BASED ON THE CURRENT LEVIES THAT
WE HAVE. THAT IS NOT INCLUDING
THE LIBRARIES LEVY COMING UP,
AND ANY OTHER LEVIES THAT ARE
BEING CONTEMPLATED. SO, I ALSO
WANT TO SAY THAT, FOR THE
RECORD. I ALSO WANT TO NOTE THAT
WE HAVE HEARD -- OR, AT LEAST, I
HAVE HEARD FROM CONSTITUENTS, I
COULDN'T HAVE BEEN THE ONLY ONE
THAT HEARD THAT FROM
CONSTITUENTS. SO, BE MINDFUL OF
THESE FACTS. THANK YOU. THANK
YOU, CHAIR.
>> THANK YOU, COUNCILMEMBER
RIVERA. COUNCILMEMBER KETTLE?
>> THANK YOU, CHAIR STRAUSS. I
WANT TO CONGRATULATE OUR NEW
DIRECTOR AND NEW CHIEF,
CONGRATULATIONS. ALSO, WELCOME
TO MR. RUSSELL AND MS. ZHANG,
GOOD TO HAVE YOU BACK. AND ALSO,
WELCOME TO INTERIM DWIGHT
DIVELY. IF I SAID "PROFESSOR," I
SHOULD BE GIVEN SOME GRACE.
PARTICULARLY WHEN THE TEAM
PRESENTS SLIDE SEVEN, I AM TAKEN
BACK TO OUR CLASS, THERE, AT THE
EVANS SCHOOL. SO, WELCOME, IN
THIS NEW CAPACITY FOR YOU. AND
OF COURSE, OUR OWN CENTRAL
STAFF, MR. CHOW, MR. MIKESELL.
YOU KNOW, WHEN I LOOK AT THESE
SLIDES, AND THIS IS SORT OF
LIKE, IT SHOULD BE AN ANNUAL
REQUIREMENT AS WE GO THROUGH
THESE FOR LEVIES. I AM THINKING
ABOUT THE IDEA OF GROWTH, AND
THEN, THE ABILITY TO HAVE
GROWTH. YOU KNOW, ASSESSED
VALUE, I SEE COMPARABLE VALUES,
LOCATION, PROPERTY
CHARACTERISTICS, IMPROVEMENT,
CURRENT CONDITION, MARKET
CONDITIONS, TAX LEVY RATES, SO
FORTH. BUT, A KEY THING IS
NEIGHBORHOOD DESIRABILITY, AND
SO, ONE QUESTION I HAD IS, LIKE,
WE ARE INVESTING AND HOW DOES
THE LEVIES IMPACT WHERE WE ARE,
NOW? SO, WE ARE INVESTING IN OUR
NEIGHBORHOODS WITH THE
TRANSPORTATION LEVY. THAT HAS
PUT MAJOR IMPROVEMENTS INTO OUR
LEVIES, INTO OUR TRANSPORTATION
NETWORKS, WHICH SHOULD IMPROVE
THE DESIRABILITY OF THOSE
NEIGHBORHOODS AND OUR CITY. YOU
KNOW, IS THERE A CONNECTION, OR
IS THERE A CONNECTION THAT WE
COULD DRAW, OR THAT WE COULD
MEASURE, OR THAT WE COULD AT
LEAST ASSESS, IN TERMS OF THE
INVESTMENTS THAT WE ARE DOING IN
OUR LEVIES, CURRENTLY? AND THEN,
PARTICULARLY IN TRANSPORTATION,
BUT ALSO, EDUCATION AND SCHOOLS
IS ALSO PARTICULARLY IMPORTANT
IN TERMS OF WHERE YOU ARE GOING
TO LIVE AND HOW MUCH YOU ARE
GOING TO PAY. MAYBE THE FED
LEVY, TOO. IS THERE A CONNECTION
THAT IS MEASURED? OR, AT LEAST,
CAN BE AN INFORMED ASSESSMENT,
THEN? THIS IS OPEN TO ANYBODY,
BY THE WAY. EITHER WAY, I
RECOGNIZE I WAS LOOKING AT
PROFESSOR -- I MEAN, DIRECTOR
DIVELY, THERE, FOR A SECOND, BUT
--
>> THAT IS A VERY INTERESTING
AND COMPLICATED QUESTION. I
DON'T KNOW IF I HAVE EVER SEEN
A DIRECT ANALYSIS OF DIRECT
INVESTMENT ON A CITY SCALE, NOT
JUST ON A NEIGHBORHOOD SCALE.
AND THEN, HOW THAT TRANSLATES
INTO CHANGES AND ASSESSED VALUE,
THAT WOULD GIVE YOU MORE LEVY
CAPACITY AND SO ON. LET'S
DISTINGUISH BETWEEN COMMERCIAL
PROPERTY AND RESIDENTIAL
PROPERTY, FOR A MINUTE. SO,
RESIDENTIAL PROPERTY, IF YOU
MAKE IT MORE ATTRACTIVE, SO, WE
HAVE BETTER SCHOOLS, WE HAVE
BETTER TRANSIT SYSTEMS, BETTER
PARKS, WHATEVER IT HAPPENS TO
BE, THEN PRESUMABLY, MORE PEOPLE
WANT TO LIVE IN THE CITY, AND
THAT WILL DRIVE UP HOUSING
PRICES, AND ASSESSED VALUE,
WHICH IS GOOD ON THAT SCALE, BUT
IT MEANS THAT YOU PRICE OUT A
WHOLE BUNCH OF PEOPLE WHO CAN'T
AFFORD TO LIVE HERE ANYMORE.
BUT, I THINK THERE IS A POSITIVE
CORRELATION, THERE. IT'S A
LITTLE HARDER, I THINK, WITH
COMMERCIAL PROPERTY, BECAUSE
DEFINITELY YOU CAN IMAGINE IF
YOU IMPROVE FREE TRANSPORTATION
THAT MAY BE, THE PORCH WOULD
BECOME MORE ATTRACTIVE AND WE
WOULD HAVE MORE COMMERCE HERE,
AND THAT WOULD ACTUALLY RAISE
VALUE OF COMMERCIAL PROPERTY.
BUT, IF YOU THINK ABOUT, LIKE,
THE DOWNTOWN OFFICE BUILDINGS,
THOSE INVESTMENTS ARE REALLY NOT
WHAT IS DRIVING THAT, THAT IS
BEING DRIVEN BY WHETHER THERE
IS, YOU KNOW, PEOPLE WHO WANT TO
LEASE OFFICE SPACE AND THE WAY
THEY USED TO. SO, I THINK AT
LEAST, FOR ME, THE CONNECTION IS
LESS CLEAR ON THE COMMERCIAL
SIDE. SO, YOU KNOW, WE COULD
PROBABLY DO SOME RESEARCH TO
SEE. I AM SURE SOMEONE,
SOMEWHERE, HAS STUDIED THIS IN A
DIFFERENT LOCATION. BUT, I
DON'T -- IN ALL THE YEARS I
HAVE BEEN WORKING EITHER AT THE
CITY OR THE COUNTY, I DON'T
KNOW IF WE HAVE EVER BEEN
LOOKING AT IT FOR OUR OWN CITY
INVESTMENTS.
>> I THINK I WOULD ALSO JUST
QUICKLY ADD, I BELIEVE THE
EXTRAORDINARY GROWTH EXPERIENCED
IN THE LATE 2010s, A LOT OF THAT
WAS DRIVEN BY NEW CONSTRUCTION,
SO A CONSTRUCTION BOOM. SO, TO
THE EXTENT THAT WE MAKE
INVESTMENTS IN A CITY THAT LEADS
TO MORE CONSTRUCTION, THAT WOULD
CERTAINLY LEAD TO ASSESSED
VALUE.
>> AND DOES ANYONE AT THE TABLE
REMEMBER THE ROUGH, SORT OF
BREAKDOWN OF RESIDENTIAL VERSUS
COMMERCIAL ON OUR ASSESSED TAX
BASE OR ASSESSED VALUE BASE?
>> SO, I BELIEVE THE
RESIDENTIAL-COMMERCIAL SPLIT IS
ABOUT 70-30 SO A LITTLE
INDUSTRIAL IN THERE. AND THEN,
OF COURSE, WE ALSO TOOK A LOOK
WITHIN COMMERCIAL, HOW MUCH OF
THAT IS OFFICE -- JUST OFFICE
BUILDINGS? AND I THINK THE SHARE
OF OFFICE BUILDINGS, OFFICE
BUILDINGS, IN THE SHARE OF TOTAL
ASSESSED VALUE WAS, I THINK,
BETWEEN 4% AND 5%. SO,
RESIDENTIAL DOES DRIVE A LOT OF
ASSESSED VALUE, AND I THINK THAT
IS WHY WE ARE NOW STARTING TO
SEE A BIT OF POSITIVE GROWTH,
EVEN THOUGH COMMERCIAL HAS STILL
BEEN PRETTY SLUGGISH.
>> JUST FOR HISTORICAL CONTEXT,
WHEN I FIRST STARTED WORKING FOR
THE SEATTLE CITY COUNCIL IN
1987, IT WAS EXACTLY 50-50. I
REMEMBER ASKING THIS QUESTION,
SO, 50% RESIDENTIAL, 50%
COMMERCIAL, AND THAT WAS BEFORE
A WHOLE LOT OF BUILDINGS THAT WE
SEE WERE BUILT. SO, THE WORLD
HAS REALLY CHANGED IN THAT
PERIOD OF TIME.
>> THANK YOU. I WAS CURIOUS
ABOUT THAT. AND SO, I AM
BASICALLY, IN SOME WAYS, GIVING
A HOMEWORK ASSIGNMENT BACK THE
OTHER WAY.
>> [ LAUGHTER ]
>> YOU KNOW, TRANSPORTATION IS
REALLY IMPORTANT. BY THE WAY,
IT'S NOT JUST THE CITY. YOU
KNOW? WE ARE INVESTING IN SOUND
TRANSIT AND THE IMPACT THAT HAS
NOT JUST ON OUR CITY BUT
NEIGHBORING CITY'S. THE IMPACT
ON BALLARD WITH THE BALLARD
REGIONAL CENTER THAT PS RC AND
THE STATE IS PUSHING US TO HAVE
ON THE LAND-USE SIDE, WITH THAT
LIGHT EXTENSION GOING THERE,
THAT WILL BE KEY IN TERMS OF
IMPROVING DESIRABILITY ON THAT
FRONT. BUT, TO YOUR POINT ABOUT
COMMERCIAL -- AND I GET IT,
BECAUSE I DO REPRESENT DOWNTOWN
-- THAT IS REALLY INTERESTING ON
THE COMMERCIAL SIDE. BUT, ALSO,
LIKE, THE LID. YOU KNOW? OUR
NEIGHBORS THAT ARE IMPACTED BY
THE LID WITH THIS BEAUTIFUL
WATERFRONT, THEIR VALUES
HAVEN'T GONE UP. SO, WHAT I
BRING BACK TO YOU, HERE, IS WE,
AS A COUNCIL, AND AS A CITY,
NEED TO BE MINDFUL OF ALL THINGS
IMPACTING THAT DESIRABILITY, TO
INCLUDE THE PUBLIC SAFETY PIECE.
I HAVE BEEN ACCUSED OF TURNING
EVERYTHING INTO PUBLIC SAFETY,
BUT IT IS SUCH A DIRECT
CONSEQUENCE, BECAUSE I CAN --
COUNTLESS COMMERCIAL PROPERTY
OWNERS, OR REPRESENTATIVES, OR
BUSINESSES, THAT HAVE LEFT
DOWNTOWN, THE GREATER DOWNTOWN,
BUT ESPECIALLY, YOU KNOW, OUR
NEW DOWNTOWN, THE BELLTOWN,
SOUTH LAKE UNION, UPTOWN,
BECAUSE OF THESE CHALLENGES. AND
I THINK IT IS REALLY IMPORTANT
FOR US TO BE MINDFUL OF THIS,
AND AS WE LOOK TO DO POLICY ON
THAT FRONT, BECAUSE THE IMPACTS
PLAY OUT IN SO MANY DIFFERENT
WAYS, TO INCLUDE ON THE
COMMERCIAL SIDE, AND THE POINT
YOU MADE. AND SO, I WAS GOING TO
LOOK TO TURN THAT INTO A
QUESTION, BUT, CHAIR, I FIGURED
I WON'T.
>> FAIR ENOUGH. THANK YOU,
COUNCILMEMBER KETTLE. I SEE
COUNCILMEMBER SAKA IS UP NEXT,
AND WE WILL TRY TO WRAP THIS
PART OF THE PRESENTATION UP IN
THE NEXT 10 TO 15 MINUTES, AT
MOST. SO, WITH THAT, OVER TO
YOU, COUNCILMEMBER SAKA.
>> THANK YOU, CHAIR, THANK YOU,
DIRECTOR PENNUCCI, THANK YOU TO
THE ENTIRE TEAM FOR BEING HERE
TODAY. THANK YOU FOR THIS
PRESENTATION. VERY INSIGHTFUL.
AND YES, THANK YOU FOR
TRAUMATIZING ALL OF US ON THAT
SLIDE SEVEN. AS A NONPRACTICING
LAWYER, I'M NOT PARTICULARLY
GOOD AT NUMBERS. I WENT TO LAW
SCHOOL ON THE IMPLICIT PROMISE I
DIDN'T HAVE TO BE GOOD AT MATH,
BUT I AM GLAD YOU ALL ARE
SMARTY-PANTS AND ARE ABLE TO
EXPERTLY CALCULATE THOSE NUMBERS
FOR US. SO, THANK YOU. AND I
APPRECIATE THE KIND OF, SORT OF,
LEVEL SETTING FROM A PURELY
FACTUAL PERSPECTIVE ON SORT OF
THE HISTORY OF WHY WE ARE HERE.
LET ME DOUBLE-CLICK, TALK A
LITTLE BIT MORE ABOUT THE
POLITICS OF THE ARTIFICIAL,
HIGHLY ARBITRARY, AND CAPRICIOUS
1% LIMITS ON OUR PROPERTY TAX.
EVERY SINGLE YEAR, THAT PASSES.
SO, THAT IS A RELIC AND A
CREATURE OF 10 MY MEN, THE STATE
LEGISLATURE TOTALLY CHOSE TO
CODIFY AND ENSHRINE INTO STATE
LAW, IN 2007-2008 TIMEFRAME AND
EVERY SINGLE YEAR, THAT PASSES,
AND WE CONTINUE TO DO NOTHING
AND CONTINUE TO BE SUBJECT TO
THAT. THE ARTIFICIAL, 1% TIM
NYMAN, OUR STATE IS SLAPPING TIM
NYMAN A HIGH FIVE, "GOOD JOB!"
WE ARE HANDING HIM A WIN ON A
SILVER PLATTER. MEANWHILE, OUR
ABILITY TO FUND CRITICAL
PROGRAMS AND SERVICES, IS
SEVERELY CONSTRAINED. OUR
ABILITY TO MEET THE NEEDS OF OUR
COMMUNITIES, SEVERELY
RESTRAINED. AND THANKFUL THAT WE
HAVE OTHER TOOLS, WHICH,
THEMSELVES, HAVE THEIR OWN
LIMITS, WHICH IS THE SUBJECT OF
THIS CONVERSATION, TO HELP
ADDRESS THE TOTAL NEED. BUT, WE
NEED RELIEF FROM THE STATE, AS
WELL. AND I'M HOPEFUL THAT,
SOONER, RATHER THAN LATER, WE
WILL GET THAT RELIEF. BECAUSE WE
ARE CONTINUE TO HONOR TIM NYMAN
WITH THIS ARBITRARY 1% CAP, PLUS
THE COST OF NEW CONSTRUCTION, WE
HAVE TO GO TO THE VOTERS EVERY
SINGLE TIME. WE NEED TO FUND THE
GAP BECAUSE, OBVIOUSLY, WITH
THIS 1% CONSTRAINED, OUR ABILITY
TO RAISE MONEY DOESN'T EVEN
KEEP UP WITH THE COST OF
INFLATION, THE COST OF GOODS,
THE COST OF SERVICES WHICH,
THEMSELVES, ARE ESCALATING AND
MOUNTING, THEREFORE WE NEED TO
GO TO THE VOTERS EVERY TIME FOR
THE PROPERTY TAX, AND RELY ON
THE GENEROSITY OF VOTERS TO MEET
THE NEED. SO, WE NEED RELIEF AT
THE STATE LEVEL. MY HOPE IS THAT
THERE WOULD BE SOME ADDITIONAL
RELIEF ON SENIORS AND OUR MOST
VULNERABLE, BECAUSE TO
COUNCILMEMBER RIVERA'S POINT A
MOMENT AGO, THESE DECISIONS, ALL
OF THEM, THE STATE LEVEL, AND
LOCALLY, HERE, ARE NOT WITHOUT
CONSEQUENCES. THEY DIRECTLY
IMPACT AFFORDABILITY. THEY
DIRECTLY IMPACT SENIORS ON FIXED
INCOMES, THE ABILITY TO AGE IN
PLACE. IT DIRECTLY IMPACTS RENT,
ALL OF WHICH CONTINUE TO MOUNT,
AND SO, BEING MINDFUL OF THE
VARIOUS FACTORS AT PLAY, THAT IS
WHY I HOPE, YOU KNOW, AT THE
STATE LEVEL AND AT THE LOCAL
LEVEL, WE CAN GET BETTER
PROPERTY TAX RELIEF PROGRAMS TO
SERVE OUR MOST VULNERABLE, WHICH
IS, IN PART WHY, DURING OUR
TRANSPORTATION LEVY A COUPLE
YEARS AGO, WE CREATED A NEW
PROGRAM, PROPERTY TAX RELIEF
PROGRAM, FOR OUR MOST
VULNERABLE. WHAT WE ACTUALLY
DID, IS WE AMPLIFY THE IMPACT OF
EXISTING STATE AND COUNTY
PROGRAMS, TO PROVIDE MORE
EDUCATION AND OUTREACH. BUT, IN
ANY EVENT, ALL OF THESE THINGS
WORK TOGETHER, AND THEY ARE
INCREASINGLY -- I WILL STOP
THERE. BUT, I DO JUST WANT TO
MENTION BONDING AUTHORITY VERSUS
LEVY, AND TALK A LITTLE BIT MORE
ABOUT THAT DISTINCTION. WE ARE
ABLE TO -- AND, WE HAVE, TODAY,
WITH THE -- THERE IS AN EXISTING
VOTER APPROVED BOND, THE ALASKAN
SEAWALL. WE DO HAVE THE ABILITY
TO RAISE MONEY FROM A BOND, BUT
A BOND IS NOT AT ALL NEW
REVENUE. A BOND IS THE CITY'S
150-YEAR-OLD SELF, BORROWING
AGAINST ITS 190-YEAR-OLD SELF.
AND IT IS A CREDIT CARD AGAINST
OUR FUTURE, SO WE WILL PAY
OURSELVES BACK. IT IS NOT NEW
REVENUE. SO, JUST WANT TO
CLARIFY, THERE. CAN YOU HELP ME
BETTER UNDERSTAND THE
PERMISSIBLE SCOPE OF
SPECIAL-PURPOSE DISTRICTS? SO,
EXCLUDED OR CARVED OUT FROM THE
LEVY CAP, ARE THESE
SPECIAL-PURPOSE DISTRICTS. WE
HAVE ONE FOR PARKS. UNDER
CURRENT STATE LAW, ARE THERE ANY
PARAMETERS THAT SORT OF GOVERN
THE CREATION AND UTILIZATION OF
THOSE SPECIAL-PURPOSE DISTRICTS?
>> TOWEL, GREAT, TAKE IT AWAY.
>> THERE IS A LOT, THERE. A
COUPLE THINGS I WANT TO
HIGHLIGHT, ONE, IF I COULD GO
BACK FIRST ON -- YOU ASKED ABOUT
SORT OF OUR ABILITY TO BOND AND
I JUST WANT TO HIGHLIGHT THAT,
YOU KNOW, WE DID KIND OF EXCLUDE
IT FROM THIS CONVERSATION, BUT
AS YOU POINTED OUT, BONDING IS
JUST FINANCING. SO, WHEN WE ASK
VOTERS TO APPROVE A BOND, WE ARE
ACTUALLY ASKING THEM TO RAISE
THEIR PROPERTY TAX OUTSIDE OF
THIS CAPACITY, TO BE ABLE TO
SERVE THAT BOND. SO, WE CAN DO
THAT, IF THE VOTERS APPROVE WITH
THE 60% VOTER APPROVAL, THEN
THEY ARE APPROVING US TO ISSUE A
BOND, AND PAY THAT WITH
INCREASED PROPERTY TAX FOR THE
LIFE OF THAT BOND WHICH, 30
YEARS, 20 YEARS, WHATEVER THAT
IS, THAT IS OUTSIDE OF THIS
CAPACITY CONSTRAINT. SO, WE HAVE
GONE OUT FOR THE SEAWALL, THERE
ARE OTHER THINGS WE HAVE DONE IN
THE PAST -- IT DOES HAVE TO BE
BONDABLE, IT DOES HAVE TO BE
SORT OF A CAPITAL PROGRAM. SO,
THAT IS ONE ISSUE. AND THEN, YOU
ASKED ABOUT SPECIAL TAXING
DISTRICTS, ALL OF THOSE ARE
UNDER AUTHORITY THAT THE STATE
GRANTS US. SO, THERE IS A
SPECIAL CARVEOUTS FOR THESE
DISTRICTS THAT WE HAVE TAKEN
ADVANTAGE OF. TO THE EXTENT THAT
THE STATE GIVES US MORE OR
THINKS ABOUT THINGS, THERE IS A
CONVERSATION ABOUT FIRE
DISTRICTS AND HOW THAT MIGHT
PLAY INTO THIS. I DON'T
ACTUALLY KNOW THE DETAILS OF
WHAT THAT WOULD NECESSARILY MEAN
FOR US, BUT IT IS LARGELY
WHATEVER THE STATE ALLOWS US TO
DO, THAT BECOMES OUR FINANCIAL
AND GOVERNING TOOLS THAT WE
MIGHT BE ABLE TO USE.
>> ANYONE ELSE?
>> I THINK, JUST A NOTE ABOUT
SPECIAL DISTRICTS, I KNOW
DIRECTOR DIVELY TALKED ABOUT THE
LIMITS THAT ARE APPLICABLE TO A
COMBINATION OF DIFFERENT
JURISDICTIONS. SO, WE, YOU KNOW,
THE CITY, FACES THIS $3.60 CAP,
BUT THE CITY, AND COUNTY, AND
SPECIAL DISTRICTS, FACE A $5.90
CAP, SO THE SPECIAL DISTRICTS
ARE NOT COMPLETELY EXEMPT FROM
ANY CAP, THEY ARE SIMPLY EXEMPT
FROM THE $3.60.
>> GOT IT. AND THE STATE
RATIONING, THOSE WOULD GET HIT
MORE, FIRST?
>> YES.
>> GOT IT. THANK YOU. AND
APPRECIATE THE CALLOUT ON SOME
OF THE PENDING LEGISLATION AT
THE STATE LEVEL TO EXPRESSLY
AUTHORIZE THE FIRE DISTRICT --
WHATEVER THE APPROPRIATE
TERMINOLOGY IS, THERE. ACTUALLY,
RIGHT BEFORE THIS MEETING, GOT
OFF THE -- HAD A GREAT CALL WITH
OUR LOCAL FIREFIGHTERS UNION,
AND WE ARE CLOSELY MONITORING
AND TRACKING THAT, AND THAT IS
DEFINITELY WORTHY OF -- IF THAT
COMES TO PASS, DEFINITELY WORTHY
OF A SUBSEQUENT, MORE FULSOME
CONVERSATION. ALL OF THAT IS TO
SAY, WE HAVE THESE TOOLS, THEY
ARE LIMITED, THEY ARE NOT
WITHOUT IMPACTS ON PEOPLE, AND I
SIT ON A NUMBER OF REGIONAL
COMMITTEES -- COLLEAGUES, AS I
KNOW YOU, ALL, DO -- AND OTHER
JURISDICTIONS AREN'T AS WELL
OFF, IN TERMS OF HAVING VERY
GENEROUS VOTERS THAT, FOR THE
MOST PART, APPROVE THESE
REQUESTS TO TAX THEMSELVES. SO,
THE SOLUTION, FOR ALL OF US, IS
RELIEF AT THE STATE LEVEL. WITH
OTHER THINGS, AS WELL. AND MAKE
NO MISTAKE, WE ALSO NEED TO
PRIORITIZE, YOU KNOW, AND ALIGN
OUR SPENDING WITH CURRENT
PRIORITIES, AS WELL. THAT
DOESN'T ABSOLVE US OF THAT, OF
THAT RESPONSIBILITY AND THAT
DUTY, AND BE DISCIPLINED, YOU
KNOW, WITH OUR SPENDING. BUT,
THE NEEDS ARE GROWING, THEY ARE
MOUNTING, AND THEY ARE VERY
COMPELLING, AND WE CAN'T IGNORE
THAT. SO, IN ANY EVENT -- JUST
TO BE CLEAR -- FIVE TOTAL LEVIES
IN OUR INVENTORY, FAMILY,
TRANSPORT, HOUSING, HEALTH, AND
VOUCHERS? IS THAT CORRECT?
>> YES POINT AN AWESOME.
AWESOME, THANK YOU, CHAIR, NO
FURTHER QUESTIONS.
>> THANK YOU, COUNCILMEMBER
SAKA. I SEE YOU HAVE YOUR HAND
UP, WE HAVE THREE MINUTES LEFT,
WE ARE ALMOST OUT OF TIME, I
GAVE 10 MINUTE WARNING SEVEN
MINUTES AGO, SO WITH THAT, YOU
WILL HAVE LAST COMMENTS AND THEN
I WILL TURN IT OVER TO THE
COMMITTEE TABLE FOR LAST
COMMENTS. SO, OVER TO YOU.
>> BOY, THAT'S NOT WITHOUT
PRESSURE! JUST KIDDING. LAST
WORD. THIS IS MORE JUST A
REQUEST. I WOULD LOVE TO SEE
WHAT I ASKED FOR EARLIER, ALL OF
THE COUNTY LEVIES THAT OUR
CONSTITUENTS ALSO PAY INTO, WHAT
PERCENTAGES. IT WOULD BE GREAT
TO HAVE -- YOU KNOW, I HAVE
NEVER SEEN IF YOUR AVERAGE HOUSE
IS VALUED AT X AMOUNT, THIS IS
HOW YOU PAY ON THE LOWEST END OR
THE HIGHEST END, OR IN THE MID-,
THAT WOULD BE, I THINK, HELPFUL,
BECAUSE IT IS HARD, LIKE I SAID,
FOR US TO SEE ALL OF THESE
LEVIES AND THEIR ACTUAL IMPACTS
AS THIS IS HAPPENING. AND THEN,
THE DISTRICT ONES AREN'T IN
HERE BECAUSE THEY AREN'T PART
OF THE CAP. WE TALKED ABOUT SOME
OF THEM, BUT I AM NOT CLEAR ON
ALL OF THE DIFFERENT DISTRICT --
SPECIAL DISTRICTS THAT OUR
CONSTITUENTS PAY INTO, AS WELL,
BECAUSE ONE THING IS, AND I KEEP
REMINDING MYSELF, YOU KNOW, WHEN
WE -- WE ARE ASKING
CONSTITUENTS, THE STATE SAME
CONSTITUENTS PAYING INTO ALL OF
OUR LEVIES, OR THEIR
CONSTITUENTS -- WELL, A GENERAL
FUND IS A LEVY -- BUT, THESE ARE
ALL THE SAME CONSTITUENTS THAT
ARE PAYING INTO THE KING COUNTY
ONES, THAT OUR CONSTITUENTS, YOU
KNOW, THAT ARE WITHIN THE CITY
OF SEATTLE'S HAVE TO PAY INTO.
SO, I SAY THAT TO SAY, EVERYONE
IS PAYING INTO EACH OF THESE
LEVIES. THAT IS THE POINT I AM
TRYING TO MAKE. SO, I AM MINDFUL
FOR THAT. AND THANK YOU,
COUNCILMEMBER SAKA, FOR YOUR
COMMENTS. THE NEED IS GREAT. WE
DO NEED TO PRIORITIZE, WHILE WE
ARE MEETING THE NEEDS, AND THEN
BE MINDFUL -- AND THIS IS WHY I
THINK IT IS SO IMPORTANT AND
THIS IS A CONVERSATION FOR
ANOTHER TIME -- TO MAKE SURE
THAT THE INVESTMENTS WE ARE
MAKING ARE WORKING FOR OUR
PEOPLE IN THIS CITY. BECAUSE IF
WE ARE COLLECTING ALL THIS MONEY
AND WE ARE NOT ACTUALLY MEETING
THE NEED, WE JUST NEED TO MAKE
SURE, IS IT THAT WE NEED MORE
MONEY? OR, IS IT THE CHOICES WE
ARE MAKING ARE NOT ACTUALLY
GETTING TO MEET THE NEED WE ARE
TRYING TO SOLVE FOR? SO, THAT IS
AN IMPORTANT PIECE OF ALL OF
THIS, AS WELL, GOES BACK TO
LOOKING AT OUR PROGRAMS AND HOW
WELL THEY ARE WORKING AND OUR
PRIORITIZATION'S THAT WE ARE
MAKING. SO, ANYWAY, I WOULD LOVE
TO SEE THE SPECIAL DISTRICTS
INSIDE ALSO BE A PART OF THIS
CONVERSATION, IF WE COULD GET
INFORMATION ON THAT, WE WOULD
SURELY APPRECIATE THAT. THANK
YOU, CHAIR.
>> REALLY WELL SAID, VICE CHAIR.
THE LAST THING I WILL SAY IS
THAT THIS IS THE FOUNDATION OF
MANY CONVERSATIONS TO COME, SO
THAT IS WHY WE DID NOT GET TO
EVERYTHING IN PANDORA'S BOX
TODAY, WE JUST OPENED THE LID.
WITH THAT, OVER TO THE COMMITTEE
TABLE FOR LAST COMMENTS, THEN WE
WILL MOVE ON TO THE NEXT AGENDA
ITEM.
>> WE WILL SAY THANK YOU, AND WE
WILL FOLLOW-UP WITH SOME
ADDITIONAL INFORMATION,
INCLUDING, WE CAN SORT OF
PRESENT ON -- AND I THINK SETH
CAN DO THIS, AS WELL -- BUT WE
CAN WORK TOGETHER ON THE SORT OF
OVERALL IMPACT OF THE LEVIES.
SOMETIMES, IT IS HELPFUL TO JUST
TAKE AN EXAMPLE PROPERTY TAX
BILL FROM A SAMPLE HOMEOWNER,
BECAUSE SOMEBODY GETS A PROPERTY
TAX BILL AND THEY JUST PAY THEIR
PROPERTY TAXES, YOU KNOW, THEY
AREN'T REALLY LOOKING,
NECESSARILY, AT SCHOOL, STATE,
THAT SORT OF COMBINATION. IT CAN
BE HELPFUL TO SORT OF LOOK AT AN
EXAMPLE AND SEE ALL OF THE
DIFFERENT PIECES THAT ARE
PLAYING INTO THAT, SO HAPPY TO
PRESENT THAT AND WE WILL FOLLOW
UP ON THE 2% ANALYSIS, AS WELL.
>> WONDERFUL, THANK YOU.
ANYTHING ELSE FROM THE COMMITTEE
TABLE? TOM?
>> THANK YOU, CHAIR. SO,
THROUGHOUT THIS CONVERSATION, WE
HAVE SORT OF REFERRED TO THE 10%
RESERVE. SO, THAT IS SORT OF
JUST AN INFORMAL PRACTICE THAT
STAFF USES REMODELING. GIVEN
KIND OF THE, I GUESS, SCARY
ISSUE SORT OF FUTURE PROJECTED,
IT MIGHT BE TIME TO CONSIDER
MAKING THAT A MORE FORMAL
STANDARD, KIND OF SIMILAR TO OUR
EMERGENCY FUND RESERVE AND OUR
REVENUE STABILIZATION RESERVE,
WHICH ALL HAVE COUNCIL ENDORSED
POLICIES AROUND THEM. SO, JUST
SOMETHING, I GUESS, TO TAKE
AWAY, TO CONSIDER FROM THE
INFORMATION WE HAVE SHOWN YOU
TODAY.
>> WONDERFUL, THANK YOU. ALEX?
>> JUST TO ADD TO TOM'S REMARK,
THE POINT CHAIR STRAUSS AND
COUNCILMEMBER RIVERA MADE ABOUT
THE UNCERTAINTY THAT WE ARE
FACING RIGHT NOW, THE POINT IS
WELL TAKEN. THERE IS -- I MEAN,
THERE IS CONTINUED ECONOMIC
POLICY UNCERTAINTY AROUND THIS.
AND SO, THE POINT OF THE BUFFER
IS TO MITIGATE THAT UNCERTAINTY
AND THAT RISK. I WOULD ALSO ADD
THAT THE 10% IS A NUMBER WE
ARRIVED AT BASED ON HISTORICAL
EXPERIENCE, THAT IS JUSTIFIABLE
AND REASONABLE. HOWEVER, IT
ALSO, AGAIN, IS A POLICY CHOICE
AND IT DEPENDS ON OUR RISK
TOLERANCE, SO WE COULD DECREASE
IT, WE COULD ALSO INCREASE IT.
>> WONDERFUL. WITH THAT, THANK
YOU FOR COMING. WE WILL HAVE YOU
BACK TO CONTINUE THE
CONVERSATION, AND AS WE
TRANSITION THE COMMITTEE TABLE,
I WILL TAKE THIS MOMENT TO PLUG
ASSOCIATION WASHINGTON CITY'S,
WHO HAS CONTINUED LEARNING
THROUGH THEIR CERTIFICATE OF
MUNICIPAL LEADERSHIP. SOME OF
THOSE WEBINARS TALK ABOUT TRYING
TO EXPLAIN THE RATE, BECAUSE
PROPERTY TAX RATES, AS CAL
ALLUDED TO, ARE NOT INTUITIVE,
AT BEST. SO, MY FOLLOW-UP
QUESTIONS WERE GOING TO BE ABOUT
THAT. SINCE WE DIDN'T HAVE
TIME, WE WILL COME BACK TO IT,
LATER. WITH THAT, CLERK, WILL
YOU PLEASE READ THE SECOND ITEM
OF BUSINESS INTO THE RECORD?
>> ITEM TWO, 2019-2026 BUDGET
REVIEW. THIS ITEM IS FOR
BRIEFING AND DISCUSSION,
PRESENTERS INCLUDE EDIN SISIC OF
COUNCIL CENTRAL STAFF.
>> WONDERFUL, WE HAVE EDIN, TOM,
AND CAL STILL WITH US AT THE
TABLE. COLLEAGUES, THIS IS MEANT
TO BE AN INFORMATIONAL MOMENT AS
WELL AS READING INTO THE RECORD
OUR SEVEN YEAR UPDATE THAT WE
HAVE CONTINUED THIS YEAR. I
ASKED CENTRAL STAFF TO BE
PROMPT, RIGHT AFTER BUDGET, SO
WE DIDN'T HAVE TO WAIT UNTIL
SEPTEMBER TO THINK ABOUT WHAT WE
DID IN NOVEMBER. THANK YOU VERY
MUCH FOR MEETING THAT QUICK
REQUEST. THIS IS THE FASTEST THE
TURNAROUND HAS EVER OCCURRED.
AND WAIT, THERE IS MORE, CENTRAL
STAFF HAS ALREADY PROVIDED A
DOCUMENT REGARDING THE CITY
COUNCIL CHANGES TO THE 2026
BUDGET THAT ALSO ILLUMINATE THE
CHANGES THE MAYOR MADE, OR THE
ENDORSED BUDGET, THAT THE MAYOR
MADE, THE CHANGES THAT THE
COUNCIL MADE, THIS IS VERY
HELPFUL. WHILE NOT AN AUDIT --
WHILE THIS IS NOT A
PERFORMANCE-BASED AUDIT ON
PARTICULAR PROGRAMS WITHIN THE
BUDGET, THIS IS THE MOST
IN-DEPTH BUDGET REVIEW THAT THE
CITY COUNCIL HAS DONE IN 20
YEARS, WHEN WE STARTED, AND EACH
YEAR AS WE ADD TO IT, IT GETS
EVEN BETTER. WITH THAT, I WILL
TURN IT OVER TO YOU, AT THEM.
THIS IS MEANT TO BE AN
INFORMATIONAL, HERE IS HOW TO
USE THE DOCUMENT, HERE IS, THE
DOCUMENTS WILL BE IN YOUR INBOX
SHORTLY. WITH THAT, OVER TO YOU,
EDIN.
>> THANK YOU, CHAIR. GOOD
MORNING, COUNCILMEMBERS. MY NAME
IS EDIN SISIC WITH COUNCIL
CENTRAL STAFF. SO, CENTRAL STAFF
HAS PRODUCED TWO BUDGET
DOCUMENTS, THAT WE HOPE WILL BE
HELPFUL FOR YOU, THROUGHOUT THE
YEAR. BY POPULAR DEMAND, WE
PRESENT NOT FIVE, NOT SIX, BUT
THE SEVEN YEAR BUDGET REVIEW.
AND THE SECOND IS THE 2026
LEGISLATIVE BUDGET REPORT, WHICH
I WILL COVER IN THE LAST TWO
SLIDES, BUT ESSENTIALLY, IT
LOOKS HIGHLIGHTS OF ALL THE
COUNCIL CHANGES IN THE 2026 MAY
USE PROPOSED BUDGET. SO, THE
2019-2026 BUDGET REVIEW DOCUMENT
IS AT AN UPDATE IN THE FIVE OR
SIX YEAR DOCUMENTS WE HAVE
PROVIDED OVER THE LAST FEW YEARS
INCLUDES UPDATED BUDGET
INFORMATION AND ADDED CONTEXT
THAT RESULTED FROM THE 2026
ADOPTED BUDGET. THE DOCUMENT
EXPLAINS RELEVANT, PROGRAMMATIC
EXPENDITURE CHANGES, FOLKS ARE
SEEING ON KEY DRIVERS OF GROWTH
THAT OCCURRED BETWEEN 2019 AND
2026, WITH THE INTENT TO PROVIDE
YOU WITH THE CONCISE OVERVIEW OF
THE CITY'S BUDGET, AS A
RESOURCE TO USE THROUGHOUT THE
YEAR, PARTICULARLY AT THE
UPCOMING BUDGET DELIBERATIONS
PROCESS. IT COULD BE A GREAT
TOOL FOR YOU TO DECIDE WHETHER,
YOU KNOW, CURRENT FUNDING LEVELS
OF THE CITY SERVICES AND
PROGRAMS ARE FUNDED AT THE
APPROPRIATE LEVELS. WHILE THE
REVIEW PROVIDES CONTEXT FOR ALL
CITYWIDE APPROPRIATIONS AND
FUNDS, SINCE THE PROJECTED
DEFICIT IS IN THE GENERAL FUND,
AND THE JUMPSTART FUND IS USED
TO HELP BALANCE THE GENERAL
FUND, THIS FOCUS, THE ANALYSIS,
IS REALLY FOCUSED ON THE
JUMPSTART FUND AND REVENUE FUND
WHILE ALL OTHER REVENUE SOURCES
ARE GROUPED TOGETHER. NO, THAT
IS NOT ALWAYS THE CASE, BUT AS
CERTAIN FUNDS ARE CALLED OUT,
FOR EXAMPLE, SINCE CITY LIGHT IS
FUNDED BY CITY LIGHT FUNDS, THAT
IS CALLED OUT, OR THE ARTS
FUNDS, SINCE THAT IS A
SIGNIFICANT SOURCE OF FUNDING
FOR THE ARTS DEPARTMENT, SO --
AND SO, THE ELEMENTS OF THE
REPORT ARE PRETTY
STRAIGHTFORWARD. THIS SLIDE
DEFINES THE ELEMENTS, BUT MAYBE
IF I CAN GO INTO THE NEXT SLIDE
TO SEE THE EXAMPLE -- SO, IT
STARTS AT THE TOP WITH THE
SUMMARY TABLE, WHICH HIGHLIGHTS
GROWTH OVER THE LAST SEVEN YEARS
AT THE BUDGET SUMMARY LEVEL. AND
THE BAR CHART BELOW THAT
VISUALIZES THE DEPARTMENT
CHANGES AT THE FRONT LEVEL, WITH
EMPHASIS ON THE GENERAL FUND,
THE JUMPSTART FUND. THE
NARRATIVE SUMMARY, WHICH
EXPLAINS THE DRIVERS OF BUDGET
GROWTH, AND PROVIDES CONTEXT FOR
THOSE ON THE CHARTS ABOVE. AND
LASTLY, WE HAVE DELAYED YOUR --
LATER BUDGET TO EXPLAIN ANY
NOTABLE CHANGES. SO, THE
EXECUTIVE PRESENTS THE ANNUAL
BUDGET, WITH DEPARTMENTS GROUPED
INTO THESE SIX POLICY AREAS, SO
FOR EASE OF REFERENCE BETWEEN
THE DOCUMENTS, WE HAVE ORGANIZED
OUR REPORTS USING THE SAME
POLICY GROUPINGS. JUST AS AN
EXAMPLE, PUBLIC SAFETY HAS, YOU
KNOW, POLICE, FIRE, MUNICIPAL
COURT, THAT ARE RELEVANT TO THAT
AREA. SO -- AT THE HIGHEST
LEVEL, THE CITY'S BUDGET HAS
INCREASED BY $2.9 BILLION OVER
THE SEVEN YEARS, OR 47%, WHICH
REPRESENTS AN INCREASE OF ABOUT
$400 MILLION, OR 6.7%, ANNUALLY.
ALTHOUGH, WE DO HAVE SOME DOUBLE
COUNTING IN THERE DUE TO, FOR
EXAMPLE, CENTRAL RATES, AND THE
BIGGEST ONE, HERE, IS THE
JUMPSTART FUND TRANSFERRED TO
THE GENERAL FUND, WHICH INFLATES
THIS NUMBER, SO IF WE ACCOUNT
FOR THAT TRANSFER, THE OVERALL
INCREASE WOULD BE ABOUT $2.7
BILLION, OR 43%. AND I HAVE SOME
SLIDES LATER THAT WILL EXPLAIN
THAT AND YOU CAN VISUALIZE IT A
LITTLE BIT BETTER. BUT, SO, MOST
OF THE PROGRAMS AND SERVICES
PROVIDED BY THE CITY RELY ON
CITY WORKERS TO DELIVER THOSE
SERVICES. AND PARTICULARLY,
THOSE FUNDED BY THE GENERAL
FUND. SO, THE PERSONNEL COSTS
FOR CITY WORKERS ACROSS ALL
DEPARTMENTS COMPRISE ONE THIRD
OF THE 2026 ADOPTED BUDGET, OVER
HALF, OF THE $2 BILLION GENERAL
FUND BUDGET AND THE LABOR FUND
BUDGET IS INCREASED BY 55% AND
THAT ACCOUNTS FOR THE ADDITION
OF 1241 NEW FTEs, WHICH IS A 20%
INCREASE IN STAFFING SINCE 2013.
SO, AT A HIGH LEVEL, WE HAVE
CATEGORIZED THE PRIMARY DRIVERS
OF GROWTH, IN THE THREE BUCKETS,
AS YOU SEE, HERE. THE FIRST IS
INFLATIONARY ADJUSTMENTS. THAT
IMPACTED THE COST OF DELIVERING
CITY PROGRAMS AND SERVICES. SO,
THIS INCLUDES INCREASES IN
PERSONNEL AND GENERAL SERVICES
COST, SO WAGES, HEALTHCARE
COSTS, I.T. FACILITIES, ET
CETERA. AND FOR CONTEXT, THE
CONSUMER PRICING FOR INFLATION
IS UP ABOUT 30% OVER THE SEVEN
YEAR PERIOD, AN AVERAGE OF ABOUT
4.3%, ANNUALLY. NEXT, WE HAVE
NEW AND EXPANDED PROGRAMS,
SUPPORTED BY NEW SOURCES OF
REVENUE. FOR EXAMPLE, JUMPSTART
FUND EXISTED IN 2015 AND
COMPRISED ABOUT 47% OF THIS
INCREASE. OVER THIS TIME PERIOD,
FURTHERMORE, NEW AND EXPANDED,
VOTER APPROVED FUNDING
PROPOSITIONS INCLUDING SEATTLE
PROP DISTRICT, EDUCATION,
TRANSPORTATION, AND HOUSING LEVY
RENEWALS, SIGNIFICANTLY
CONTRIBUTED TO THE INCREASE,
ADDING ABOUT $500 MILLION OF
ADDED RESOURCES. AND FINALLY, WE
HAVE ABOUT $125 MILLION OF
GENERAL FUND, ADDITIONAL GENERAL
FUND REVENUE DUE TO THE
RESTRUCTURING AND LOCAL SALES
TAX THAT WAS ADOPTED IN THE 2026
BUDGET. TO SUPPORT PUBLIC
SAFETY, SMALL BUSINESS TAX
RELIEF, HOUSING, HUMAN SERVICES,
AND WORKFORCE PROGRAMS, AND
GLASS GROWTH DRIVER IS EXPANDING
PROGRAMS AND SERVICES TO SERVE A
GROWING POPULATION. YOU GUYS
TALKED ABOUT POPULATION A LITTLE
BIT IN THE PREVIOUS
PRESENTATION, SO I WILL PUT SOME
NUMBERS TO THAT. THE STATE
OFFICE OF FINANCIAL MANAGEMENT
ESTIMATES THAT THE POPULATION
GREW FROM 734,800 16,000 IN
2025. WHICH IS A 13% INCREASE.
AND GROWTH IN POPULATION
DIRECTLY IMPACTS UTILITY BUDGETS
AND THE DEMAND FOR HOUSING CAN
ALSO INDIRECTLY IMPACT SERVICES
-- SERVICE QUALITY, IF PROGRAMS
ARE NOT EXPANDED TO MEET THAT
DEMAND AND NEED. SO, THIS IS
JUST A VISUAL CHARGE OF THE
SEVEN YEAR GROWTH, INCLUDING ALL
FUNDS, AS EXPECTED, UTILITIES,
TRANSPORTATION, ENVIRONMENT
REPRESENTS THE LARGEST BULK OF
THAT NUMERICALLY, BECAUSE THEY
COMPRISE ABOUT HALF OF THE TOTAL
CITY BUDGET. I WILL GO TO THE
NEXT SLIDE. SO, ON A PERCENTAGE
BASIS, LIVABLE AND INCLUSIVE
COMMUNITIES INCREASED MORE THAN
ANY OTHER POLICY AREA BY ABOUT
193%. THIS IS PRIMARILY DUE TO
THE INTRODUCTION OF THE
JUMPSTART FUND SPENDING, YOU
KNOW, FOR INCREASED INVESTMENTS
ON HOUSING, ECONOMIC
DEVELOPMENT, EQUITABLE
DEVELOPMENT, ET CETERA. AND THIS
IS FOLLOWED BY A 98% INCREASE IN
EDUCATION, AND HUMAN SERVICES
POLICY AREA, PRIMARILY DRIVEN BY
INVESTMENTS IN THE CITY'S
HOMELESSNESS RESPONSE PROGRAMS,
AND EXPANDED INVESTMENTS IN
EARLY LEARNING. AND EDUCATIONAL
SUPPORT, SUPPORTED BY THE LEVY.
I WON'T GO THROUGH ALL OF THESE
FOR THE PURPOSES OF TIME, BUT
THESE ARE ALL SUMMARIZED IN MUCH
MORE DETAIL IN YOUR REPORTS. AND
SO, THIS IS THE SAME CHART AS
WAS PREVIOUSLY SHOWN, EXCEPT TO
FOCUS ON THE JUMPSTART FUND AND
GENERAL FUND AND YOU CAN REALLY
SEE THE IMPACT OF THAT JUMPSTART
FUND TRANSFERRED TO THE GENERAL
FUND, AND THAT ADMINISTRATION
POLICY AREA. JUST TO EXPLAIN
THAT A LITTLE BIT, SO, TO
BALANCE THE GENERAL FUND, THE
2026 BUDGET REFLECTS A $211
MILLION TRANSFER FROM THE
JUMPSTART FUND TO THE GENERAL
FUND, WHICH IS ACCOUNTED FOR AS
AN EXPENDITURE IN FINANCE
GENERAL. IN THE JUMPSTART FUND.
BUT, THEN, THAT IS ALSO
PROGRAMMED INTO THE GENERAL
FUND, SO THE DARK BLUE LINES
THAT YOU SEE THERE ARE ALSO
PROGRAMMED FOR THAT $211
MILLION, HENCE THE DOUBLE COUNT.
AND SO, THIS IS JUST A DUPLICATE
OF THE ABOVE CHART, JUST TO
EXCLUDE THAT, SO YOU CAN SEE THE
CHANGE, YOU KNOW, IT GOES FROM
$293 MILLION, TO $82 MILLION IN
THAT ADMINISTRATION. I WON'T
SPEND ANY TIME ON THAT. SO,
SINCE 2019, THE TOTAL CITY
GENERAL FUND CITY BUDGET HAS
INCREASED BY ABOUT $646 MILLION,
AND OVER TWO THIRDS OF THAT,
THIS GROWTH, IS IN FOUR
DEPARTMENTS. HUMAN SERVICES
INCREASED ABOUT $165 MILLION,
MOST SIGNIFICANTLY FOR
ADDRESSING HOMELESSNESS, AND
CITY'S AND THRIVING COMMUNITIES
BUDGET DOUBLES. THIS IS FOLLOWED
BY PUBLIC SAFETY DEPARTMENTS,
INCLUDING FIRE, SPD, AND CARE.
AND IT IS PRIMARILY PERSONNEL
RELATED COSTS AND THE EXPANSION
OF CARE SINCE ITS CREATION IN
2021. SO, EXCLUDING THE
JUMPSTART THE GENERAL FUND
TRANSFER, FINANCE GENERAL, THE
OFFICE OF HOUSING, $142 MILLION
ALLOCATION, SO ROUGHLY TWO
THIRDS OF THEIR REMAINING
JUMPSTART FUND BUDGET THAT
SUPPORTS MULTI FAMILY HOUSING,
AND SUSTAINABILITY PROGRAMS. AND
I BELIEVE THAT CONCLUDES THE
SUMMARY OF THE SEVEN YEAR LOOK
BACK. SHOULD I JUST KEEP GOING
FOR THE LAST TWO SLIDES? OR, DO
YOU GUYS WANT TO PAUSE HERE?
>> JUST KEEP ROLLING.
>> OKAY, SO, BEFORE I COVER
THESE NEXT COUPLE OF SLIDES, I
WOULD JUST LIKE TO SAY THAT THIS
REPORT WILL BE PROVIDED TO YOU
VERY SOON, AFTER THE BUDGET IS
ADOPTED, SO YOU CAN EXPECT THIS
REPORT IN DECEMBER OF THIS YEAR.
BUT, SO, THIS 2026 LEGISLATIVE
BUDGET REPORT PROVIDES A
COMPREHENSIVE SUMMARY OF THE
CHANGES THE CITY COUNCIL MADE TO
THE MAYOR'S 2026 PROPOSED
BUDGET. AND THERE ARE THREE
SECTIONS, PRETTY MUCH, FOR EVERY
DEPARTMENT IN OFFICE, AND IT IS
APPROPRIATE POSITION CHANGES,
AND STATEMENTS OF LEGISLATIVE
INTENT. SO EVERY DEPARTMENT THAT
HAD CHANGES TO THE MAYOR'S
PROPOSED BUDGET IS INCLUDED,
WITH THE EXCEPTION OF 13
DEPARTMENTS WHICH HAD NO CHANGES
TO THE MAYOR'S PROPOSED BUDGET
AND THEY ARE LISTED AT THE END
OF THE SUMMARY SECTION OF THE
REPORT. AND JUST A QUICK SUMMARY
SLIDE ON THAT, THE ADOPTED
BUDGET REPRESENTS A FOUR PER --
4.4% INCREASE OVER THE 2025
ADOPTED BUDGET AND A 1.7%, OR
$181 MILLION INCREASE, COMPARED
TO THE 2026 ENDORSED BUDGET. OF
THIS INCREASE, $125 MILLION
RESULT FROM CHANGES IN THE
MAYOR'S PROPOSED 2026 BUDGET,
WELL THE $7 MILLION STEMS FROM
COUNCIL BUDGET ACTIONS. COUNCILS
BUDGET INCREASES WERE FUNDED BY
EXISTING CASH FUND BALANCES,
COUNCIL BUDGET ACTIONS AND, YOU
KNOW, THE GOOD NEWS FROM THE
OCTOBER REVENUE FORECAST, WHICH
WAS ABOUT OVER $30 MILLION, IF I
RECALL CORRECTLY. AND SO,
COMBINED, THESE ADJUSTMENTS
INCREASED TOTAL RESOURCES BY
ABOUT $8.77 BILLION TO $8.95
BILLION, FOR THE ADOPTED. AND
WITH THAT, I WILL CONCLUDE THIS
PRESENTATION POINT YOU THANK
YOU, EDIN. A LOT TO THINK ABOUT,
HERE. WANT TO JUST GIVE US SOME
BASELINE COMMENTS AND THEN I
WILL TURN IT OVER TO COLLEAGUES
IF YOU HAVE ANY QUESTIONS. THIS
IS A FOUNDATIONAL MOMENT IN THE
BUDGET COMMITTEE'S ANNUAL WORK,
SO WE WILL JUST CONTINUE ADDING
ONTO ALL OF THIS. THIS IS A
SEVEN YEAR LOOK BACK BECAUSE OUR
LAST BASELINE, PRE-PANDEMIC, WAS
2018. WE WILL EVENTUALLY MOVED
TO POST-PANDEMIC, BUT THE YEARS
BETWEEN 2020, AND DEFINITELY
2023, ARE A LOT MORE VOLATILE
AND DON'T NECESSARILY PROVIDE
US THE SAME BASELINE AS THOSE
PRE-PANDEMIC YEARS. AS EDIN HAS
PROVIDED US, THE CITY HAS GROWN
NEARLY 100,000 PEOPLE IN THE
LAST SEVEN YEARS, WHICH IS
NEARLY THE POPULATION OF A CITY
COUNCIL DISTRICT, RIGHT? SO, IF
YOU ARE THINKING OF POPULATION
IN CITY COUNCIL DISTRICTS, WE
WOULD ALMOST ADD ANOTHER ONE. I
WILL NOTE WITH YOUR COMMENTS
ABOUT THE JUMPSTART TRANSFERS,
WE HAVE ALSO TRANSFERRED GENERAL
FUND BACK TO THE JUMPSTART FUND,
WHEN THOSE DOLLARS ARE REDUCED.
MY QUESTION IS ABOUT THE
ADMINISTRATION CATEGORY, BUT
BEFORE I SAY THAT, I WILL JUST
SAY THE PHOTO, COLLEAGUES, IF
YOU WILL NOTICE THE PHOTO ON THE
FRONT OF THIS REPORT, IT IS VERY
BEAUTIFUL, TAKEN BY A WONDERFUL
PHOTOGRAPHER. WITH THAT, CAN YOU
PLEASE SHARE MORE? AND I WILL
SHARE MY CHALLENGE. IF YOU WANT
TO BRING UP A SLIDE -- SLIDE 11,
IF YOU WILL, BECAUSE THAT'S A
LITTLE BIT MORE STRAIGHTFORWARD.
THESE ARE CATEGORIES THAT WERE
DESIGNED MANY YEARS AGO BY THE
EXECUTIVE AND THE CBO. THEY ARE
INFLEXIBLE, IS THE BEST, KINDEST
WAY I WOULD SHARE THEM, AND THEY
ARE NOT NECESSARILY FOCUSED. AND
SO, WE OPERATE OUR BUDGET IN
MANY DIFFERENT WAYS. IT'S JUST,
CAN YOU GROUND US OUT, HERE?
THERE ARE BOTH JUMPSTART
DEPARTMENTS AND GENERAL FUND
DEPARTMENTS IN ALL THESE
CATEGORIES, IS THAT CORRECT?
>> IS CORRECT.
>> AND THEN, SPECIFICALLY WITH
AN ADMINISTRATION, CAN YOU SAY
MORE? WHAT DOES THAT MEAN? IS
THAT JUST FAS? IS THAT JUST
ADMINISTRATION OF THOSE
DEPARTMENTS? HELP US UNDERSTAND
A LITTLE BIT MORE, PLEASE?
>> ADMINISTRATION IS JUST THE
POLICY GROUP IN THAT CITY BUDGET
OFFICE USES FOR MANY DEPARTMENTS
-- AND I CAN LIST THEM FOR YOU,
HERE. CITY BUDGET OFFICE,
CIVIL-SERVICE COMMISSIONS, FAS,
EMPLOYEE RETIREMENT SYSTEMS,
ETHICS AND ELECTIONS, FINANCE
GENERAL, LEGISLATIVE
DEPARTMENTS, REVENUE FORECAST
OFFICE, INTERGOVERNMENTAL
RELATIONS, CITY AUDITOR,
LOMBARD, OFFICE OF THE MAYOR,
HR, AND SEATTLE I.T.
>> THANK YOU. VERY HELPFUL. AND
SOME OF THOSE, SUCH AS SEATTLE
I.T. AND FAS, SERVE THE ENTIRE
CITY.
>> IS CORRECT.
>> FUN FACT, WE ARE SITTING IN
COUNCIL CHAMBERS, AND THE
LEGISLATIVE DEPARTMENT IS
RENTING THIS ROOM FROM FAS. WITH
THAT, I SEE CAL AND I WILL TURN
IT OVER TO COLLEAGUES.
>> SOME OF THOSE OTHER
DEPARTMENTS DRAW ON OTHER FUNDS
MORE THAN WHAT IS SHOWN HERE, SO
JUST -- FAS, FOR EXAMPLE, HAS A
COMPLETELY DIFFERENT FUND AND
THAT IS FUNDED BY -- YOU GET THE
POINT.
>> YES, WONDERFUL. COLLEAGUES,
QUESTIONS AT THIS TIME?
COUNCILMEMBER RIVERA?
>> THANK YOU, CHAIR. THANK YOU,
ALL, FOR BEING HERE. I JUST HAVE
A POINT I WOULD LIKE TO MAKE
ABOUT THIS. FIRST OF ALL, THIS
IS REALLY HELPFUL, SO THANK YOU
FOR ALL THE WORK YOU DO YEAR
ROUND TO MAKE SURE WE ARE
WELL-EQUIPPED, LEADING INTO
BUDGET. WE ARE AT MARCH, SO THIS
IS A GREAT TIME, BUDGET COMES
HERE FASTER THAN YOU THINK IT
WILL, SO THANK YOU FOR THAT,
CENTRAL STAFF. AND I DID WANT TO
POINT OUT THAT, FROM 2019 TO
2026, IN THOSE SEVEN YEARS, OUR
POPULATION INCREASED BY 13%, BUT
OUR BUDGET INCREASED BY 47%.
THAT IS A HUGE INCREASE IN SEVEN
YEARS, AND I THINK SOME OF THAT
-- AND CBO CAN CORRECT ME IF I
AM WRONG -- BUT, MY RECOLLECTION
BECAUSE I WAS IN THE NEAR'S
OFFICE FOR THOSE YEARS -- IS
THAT WE GOT FROM FEDERAL FUNDING
BECAUSE OF COVID AND WE USED
SOME OF THAT MONEY TO START NEW
PROGRAMS, AND THEN WE HAD TO
FIND MONEY TO CONTINUE THOSE
PROGRAMS. SO, I'M NOT MAKING A
COMMENT AS TO WHETHER OR NOT WE
SHOULD HAVE CONTINUED THEM, BUT
IT IS IMPORTANT TO UNDERSTAND
PART OF WHERE THIS GROWTH IS
COMING FROM, IS THERE WERE NEW
PROGRAMS STARTED WITH MONEY THAT
WAS NOT ONGOING, AND THEN WE HAD
TO FIND ONGOING MONEY FOR THOSE
PROGRAMS. THESE ARE POLICY
DECISIONS, AND IT IS IMPORTANT
TO GROUND US AND MAKE SURE WE
UNDERSTAND HOW THESE DECISIONS
-- OR, WHAT THE DECISIONS THAT
WERE MADE, WERE AT THAT TIME,
AND HOW IT CAME TO HAVE SUCH A
HUGE BUDGET GROWTH IN WHAT I
THINK TO BE A SHORT AMOUNT OF
TIME, WHEN WE ARE TALKING ABOUT
CITY BUDGETING. SO, WANT TO KEEP
-- WANT TO -- THAT IS AN
IMPORTANT POINT TO RAISE. I HAVE
RAISED IT BEFORE, I WANT TO
RAISE IT AGAIN, BECAUSE IT IS AN
IMPORTANT ONE. SO, THANK YOU,
CHAIR, AND THANK YOU, ALL
APPEARED
>> THANK YOU. COUNCILMEMBER
KETTLE?
>> THANK YOU, CHAIR STRAUSS.
WELCOME TO THE TABLE, MR. SISIC,
AND OF COURSE, MR. CHOW, THANK
YOU FOR STILL BEING HERE WITH
US. I DO APPRECIATE THESE
BRIEFINGS BECAUSE IT IS GOOD
REMINDERS, BECAUSE WHEN YOU GET
CAUGHT UP IN THE DAY TODAY, IT
IS IMPORTANT TO BE REMINDED OF
WHERE THE BUDGET IS, AND TRYING
TO UNDERSTAND THAT DELTA, HOW
THINGS CAN CHANGE. YOU KNOW, AND
IT IS WORTHY TO NOTE, CPI, 30%,
THAT IS MASSIVE. AND, YOU KNOW,
IT REMINDS ME OF THE '70s. YOU
KNOW, AND THE POPULATION GROWTH,
YOU KNOW, THAT IS ALSO -- WE ARE
ABOUT TO TAKE OVER SAN FRANCISCO
IN TERMS OF SIZE OF CITY'S, IF
WE MAINTAIN WHAT WE ARE DOING.
SO, THANK YOU FOR THAT. ONE
QUESTION I WOULD ASK IS, YOU
KNOW, THERE HAS BEEN A LOT OF
TALK ABOUT PAYROLL EXPENSE TAX,
A.K.A. JUMPSTART. WHAT I HAVE
NOTICED, IS THAT THERE IS THE
JUMPSTART WE HAVE TODAY, AND
THEN THERE IS THE JUMPSTART THAT
PEOPLE DESCRIBE, WHICH IS THE
JUMPSTART OF YESTERDAY. CAN YOU
EXPLAIN, IN TERMS OF JUMPSTART
TODAY, AND HOW IT PLAYS INTO,
YOU KNOW, WHAT WE ARE SEEING ON
THESE SLIDES? BASICALLY,
REFLECTING THE CHANGES OVER THE
LAST NUMBER OF YEARS?
>> I SUPPOSE I CAN TAKE A TRY AT
THAT QUESTION. SO, ORIGINAL
JUMPSTART WAS DEVISED AS A SET
OF VERY SPECIFIC SPENDING
CATEGORIES, HOUSING, GREEN NEW
DEALS, ECONOMIC DEVELOPMENT, AND
-- AND IT WAS A SMALLER AMOUNT.
SINCE THEN, IT HAS GROWN, SIZE
OF LEE. WHICH HAS OFFERED THE
ABILITY TO USE SOME OF THESE
FUNDS FOR GENERAL FUND BACKFILL
FOR BASICALLY GROWTH IN GENERAL
FUND COSTS THAT ARE EXCEEDING
THE PORTFOLIO OF EXISTING
GENERAL FUND REVENUE. AND THAT,
YOU KNOW, HAS BEEN DONE LARGELY,
THAT WAS DONE IN THE '25 AND
'26 BUDGET PROCESS, BUT NOW WE
ARE AT THIS INFLECTION POINT,
WHERE JUMPSTART ISN'T GROWING
AS RAPIDLY, SO A LOT OF WHAT YOU
SEE IN THE SEVEN YEAR LOOK BACK
IS KIND OF THE INITIAL PHASE OF
JUMPSTART, AND THEN THE RAPID
EXPANSION, SO WHAT DOES IT LOOK
LIKE, GOING FORWARD? WHO IS TO
SAY? YOU KNOW, IT IS KIND OF
BASED ON PAYROLL, AND
CORPORATIONS, AND HOW THAT PLAYS
OUT, OF COURSE, REMAINS TO BE
SEEN. BUT, THAT'S -- BUT, IT IS
HEAVILY PRESENT, IN TERMS OF THE
GROWTH IN SPENDING OVER SEVEN
YEARS, IN TERMS OF BEING A
FUNDING SOURCE, OTHERWISE, CUTS
WOULD HAVE BEEN NECESSARY. I
DON'T KNOW IF THAT HELPS WITH
THE QUESTION, OR --
>> IT DOES. AND THERE ARE
QUESTIONS LIKE THE RESERVE THAT
WE PUT IN AND, YOU KNOW, THAT
FLEXIBILITY. I JUST SEE IT,
BECAUSE WE HAVE TO DEAL WITH THE
P.E.T. OF TODAY AND AS I HAVE
SAID BEFORE -- THE CHATTERING
CLASSES HAVE ALWAYS TALKED ABOUT
THE P.E.T. OF YESTERDAY, THEY
DON'T ACKNOWLEDGE THE CHANGE.
BUT, AS WE ARE DOING THE BUDGET
OF BUSINESS THIS YEAR, WE DEAL
WITH THE P.E.T. OF TODAY AND I
JUST WANT TO NOTE THAT, BECAUSE
I THINK IT IS IMPORTANT, BECAUSE
WE HAVE TO HAVE A BASELINE, YOU
KNOW, IN TERMS OF WHAT WE ARE
WORKING WITH AND THE LIKE. I
APPRECIATE THE POINTS ABOUT
PUBLIC SAFETY, AS WELL, REVIVALS
AND THOSE OTHER PIECES.
OBVIOUSLY, THE C.A.R.E.
DEPARTMENT, AND THEN THE WAGE
GROWTH, WHICH IS A BIG ISSUE
ACROSS THE BOARD, BUT
PARTICULARLY IN MULTIPLE
ELEMENTS OF THE PUBLIC SAFETY
WORLD. AND ONE OF THE THINGS
THAT I WOULD NOTE ON THIS IS
THAT WE HAVE NEVER -- WE HAVE
ALWAYS LOOKED AT WHAT REVENUES
WE COULD INCREASE OR NEW
REVENUES WE CAN DO, BUT THERE
HASN'T REALLY BEEN A STRONG
LOOK AT THE SPENDING. THERE IS A
REVENUE STABILIZATION TASK FORCE
BUT NOT A REVENUE VERSION OF IT.
YOU KNOW, SOMEONE WHO DOES
BELIEVE IN THESE PROGRAMS, I
BELIEVE IN PROGRESSIVE TAX
REVENUE, BUT THE LAYERING OF
THEM AND THEN NOT LOOKING AT THE
SPENDING PIECES, YOU KNOW, THESE
FACTORS ARE SOMETHING THAT WE
HAVE TO GRAPPLE WITH,
PARTICULARLY AS WE ARE
APPARENTLY, GOING TO BE FOR THE
FIRST TIME, REALLY TACKLING, YOU
KNOW, THE BUDGET STRUCTURE, YOU
KNOW, THE DEFICIT, YOU KNOW? AND
WITH OUR NEW DIRECTOR PENNUCCI
AND THAT IS GOING TO RESULT IN
SOME HARD DECISIONS AND IN ORDER
TO MAKE SMART, HARD DECISIONS,
GOOD GOVERNANCE, IS TO ALSO LOOK
AT THE SPENDING PIECES, AS WELL.
SO, NO QUESTION, THERE. JUST A
NOTE. BUT, I APPRECIATE THE HEAD
NODS AS I AM WALKING THROUGH
THAT LINE, SO THANK YOU.
>> THANK YOU, COUNCILMEMBER
KETTLE. TOM, OVER TO YOU?
>> IF I COULD JUST ADD ONE POINT
ABOUT KIND OF THE GROWTH OVER
THE SEVEN YEARS? AND SO, I
BELIEVE IT WAS VICE CHAIR RIVERA
WHO KIND OF MENTIONED THE GROWTH
OF THE POPULATION AND HOW THE
COSTS HAD OUTPACED THAT. ANOTHER
FACTOR -- AND I BELIEVE DIRECTOR
PENNUCCI COVERED IT IN THE HOW
WE GOT HERE ANALYSIS FROM THE
CONFIRMATION -- BUT, INFLATION
HAS GONE UP. I MEAN, WE HAVE ALL
LOOKED AT IT FAIRLY DRAMATICALLY
SINCE 2019. YOU KNOW, NOT QUITE
THE HIGHEST LEVELS IN HISTORY,
AS SOME MAY SAY, BUT PRETTY DARN
HIGH, SO THAT, PLUS THE
INFLATION, IS WHY WE HAVE THIS
KIND OF CHALLENGE OF MEETING THE
NEEDS OF THE COMMUNITY THROUGH
PUBLIC SPENDING, AND IT IS A
MATTER OF WHETHER OR NOT THE
REVENUE BASE THAT WAS BUILT CAN
KEEP UP WITH IT OR NOT AND THAT
IS KIND OF THE QUESTION, THAT IS
WHAT THE FORECAST SHOWS.
PERHAPS, THE ANSWER IS, NO,
REQUIRING DIFFICULT DECISIONS,
SO JUST WANTED TO ADD THAT PART
BECAUSE IT'S AN IMPORTANT PIECE
ABOUT WHY SPENDING HAS GROWN.
>> THAT WAS ROUGHLY 30%.
>> SO, BETWEEN THE INFLATION AND
NEW SERVICES WE HAVE GOTTEN
OURSELVES INTO OVER THE LAST
SEVEN YEARS, THAT IS THE
MESSAGE.
>> YES, AND ALL OF THIS FOLLOWS
10 YEARS OF HIGH GROWTH, LOW
INFLATION, WHERE WE HAD A LOT OF
ONE-TIME FUNDING AND LOW
INFLATION, SO THAT DECADE OF
HIGH GROWTH, LOW INFLATION, THEN
MET WITH THE PANDEMIC INCREASED
CPI OF 30%, INCREASED POPULATION
OF 30%, THAT IS WHERE WE ARE
TODAY. AND WITHOUT THIS TYPE OF
PAUSE AND LOOK BACK, IT'S EASY
TO FORGET THAT. COUNCILMEMBER
RIVERA, I SEE YOU HAVE YOUR HAND
UP, I WILL GIVE YOU LAST WORDS,
SO I'LL JUST MAKE MY COMMENTS
AND GO BACK TO YOU, WHICH IS THE
JUMPSTART CONVERSATION OVER THE
LAST SIX YEARS IS AN IMPORTANT
ONE, RIGHT? WHEN IT WAS
INITIALLY SET OUT, IT WAS TO
BUOY THE CITY DURING THAT
ECONOMIC RECESSION. WHEN WE WERE
THERE IN, GEEZ, WHAT WAS IT,
JUNE OF 2020? WE STILL THOUGHT
THAT -- YOU KNOW, IN MARCH OF
2020, WITHOUT THE PANDEMIC WITH
LAST TWO WEEKS. BY JUNE, WE
THOUGHT, MAYBE SIX MONTHS. SO,
WE THOUGHT, MAYBE WE COULD NOT
FORECAST THE LENGTH OF ECONOMIC
VOLATILITY AND DOWNSTREAM
IMPACTS FROM THE PANDEMIC IN
JUNE OF 2020. THAT SAID, IT IS
IMPORTANT THAT WE MAINTAIN AND
HOLD TRUE THE NORTH STAR OF
THOSE INITIAL INVESTMENTS,
BECAUSE HOUSING IN PARTICULAR IS
SOMETHING THAT WE, AS A CITY,
HAD NOT INVESTED IN, WE HAD
UNDER INVESTED IN, DURING A
HIGH-GROWTH TIMEFRAME. SO, WE
WERE ACTUALLY BACK A DECADE
WHICH REQUIRES, IN MY OPINION,
TWICE THE FUNDING. AS WE
CONTINUE THESE CONVERSATIONS
THROUGHOUT THE YEAR, WHETHER IT
IS HOUSING FUNDING, JUMPSTART
FUNDING, WHATEVER IT MIGHT BE,
WHAT I APPRECIATE ABOUT THIS, IS
THAT FOR ME, THIS IS BAKING
BUDGET REFORM BOTH IN PROCESS
AND CONTENT, INTO OUR ANNUAL
CYCLE, RIGHT? SO, THE CONTENT OF
LOOKING BACK SEVEN YEARS, THE
PROCESS OF HAVING THESE CHICKENS
FOR BUDGET, BECAUSE PROCESS HAS
DOUBLED WHAT WE THOUGHT IT WOULD
BRING IN FOR REVENUE, AND WE ARE
ALSO NEAR A PLACE WHERE WE CAN
DO FIVE-YEAR SMOOTHING. IT'S
RETURNS HAVE BEEN VERY VOLATILE
BECAUSE IT IS A NEW TAX. ALSO
MAKE THIS REMINDER, IT EXPIRES
IN 14 YEARS, WHICH MEANS THAT A
LARGE PERCENTAGE OF OUR BUDGET
RELIES ON A REVENUE SOURCE THAT
WILL EXPIRE IN 14 YEARS, SO WITH
THAT, I WILL GIVE IT OVER TO
YOU, COUNCILMEMBER RIVERA, FOR
LAST WORD. TAKE US HOME.
>> THANK YOU, CHAIR. I JUST WANT
TO SAY, BECAUSE WE OPERATE IN A
SOCIETY OF SOUND BITES, THAT
WHAT I SAID EARLIER ABOUT THE
FISCALLY CONSERVATIVE, I WAS
SAYING IT IN THE CONTEXT OF
ENSURING THAT WE HAVE OUR
RESERVES, TOM AND I, WE HAVE HAD
A LOT OF CONVERSATIONS ABOUT
ENSURING THAT OUR RESERVES ARE
ROBUST, BECAUSE OTHERWISE, WE
ARE FACED WITH A SITUATION WHERE
WE MIGHT HAVE TO CUT SERVICES,
BECAUSE WE DIDN'T -- WE
WEREN'T CONSERVATIVE ENOUGH IN
OUR RESERVES PIECE. AND ALSO,
ENSURING THAT THE INVESTMENTS
THAT WE ARE CHOOSING TO MAKE,
ARE ONES THAT ARE ACTUALLY
MEETING CONSTITUENTS' NEEDS,
COMMUNITY NEEDS ACROSS THE CITY.
SO, DEFINITELY WANT TO MAKE SURE
WE ARE MEETING THE COMMUNITY
NEEDS ACROSS THE CITY AND MAKING
SURE WE ARE NOT IN A SPOT WHERE
WE ARE CUTTING OFF OUR NOSE TO
SPITE OUR FACE, BECAUSE WE ARE
NOT BEING FISCALLY RESPONSIBLE
ENOUGH TO BE ABLE TO FORESEE IF
THERE IS A DOWNTURN TO BE ABLE
TO CONTINUE TO MEET THOSE NEEDS.
AND THAT IS WHAT I MEAN, ABOUT
THE FISCAL CONSERVATIVE PIECE,
BECAUSE THAT TERM IS BEING
THROWN ABOUT, AND I DON'T WANT
TO BE IN A SPACE WHERE SOMEONE
SAYS, "WELL, RIVERA DOESN'T
WANT TO MEET COMMUNITY NEEDS."
NOT TRUE! I WANT TO, AND THAT IS
WHY I WANT TO MAKE SURE WE HAVE
ENOUGH FUNDING AND RESERVES TO
BE ABLE TO WEATHER SOME
DOWNTURNS AND I THINK SOMETIMES,
WE LOOK AT HOW MUCH MONEY THIS
PIECE ABOUT THE LEVY CAP AND HOW
MUCH WE HAVE AT $780 MILLION AND
NOT BEING IN A SPACE WHERE WE
UTILIZE ALL OF IT, AND THEN IF
THERE IS SOMETHING THAT HAPPENS
IN THE FUTURE -- AND IT WILL
HAPPEN, SOMETHING ALWAYS HAPPENS
-- THAT WE ARE NOT LEAVING
OURSELVES THAT WIGGLE ROOM. IT
IS SORT OF LIKE HOW WE WERE
TAUGHT, GROWING UP -- [ LAUGHTER
] HOW TO MANAGE YOUR BUDGET, IS
MAKE SURE YOU ARE NOT, IF YOU
CAN -- AND I KNOW MY FAMILY,
LIKE MANY FAMILIES, LIVED
PAYCHECK TO PAYCHECK -- BUT, IF
YOU CAN AT ALL BE IN A SITUATION
WHERE YOU ARE TRYING TO MANAGE
IF SOMETHING HAPPENS, SOMEBODY
GETS SICK, ET CETERA, YOU ARE
GOING TO HAVE TO STILL PAY THOSE
BILLS, AND AS A CITY, WE SHOULD
BE MANAGING FOR THAT,
CONSTITUENTS CAN'T ALWAYS DO
THAT, WHEN THEY ARE LIVING
PAYCHECK TO PAYCHECK. BUT, WE,
AS A CITY, CAN, AND WE ARE ALSO
HERE TO HELP THEM WITH THAT,
BECAUSE WE HAD OF LOT OF
SERVICES TO HELP PEOPLE MEET
NEEDS WHEN THEY ARE NOT ABLE TO,
AS WE SHOULD. SO, THANK YOU,
CHAIR.
>> THANK YOU, COUNCILMEMBER
RIVERA. WITH THAT, COLLEAGUES,
LAST CHECK. ANY FINAL COMMENTS?
BACK TO THE COMMITTEE TABLE FOR
FINAL COMMENTS, AND THEN I WILL
CLOSE US OUT.
>> I WOULD JUST LIKE TO THANK MY
CENTRAL STAFF COLLEAGUES FOR
HELPING PRODUCE THESE REPORTS.
THEY ARE TIME INTENSIVE, AND A
PARTICULAR SHOUT OUT TO MY
COLLEAGUE, TOM, FOR HIS INFINITE
BUDGET KNOWLEDGE.
>> THANKS.
>> AND TRACY RADCLIFFE, WHO
HELPED PRODUCE THESE REPORTS,
AND PATTY, FOR MAKING IT LOOK
WAY BETTER THAN I WOULD. SO --
AND YOU WILL BE RECEIVING BOTH
OF THESE DOCUMENTS AND THE
MATERIALS IN YOUR INBOXES
SHORTLY, AS WELL AS YOUR STAFF.
SO --
>> WELL SAID. THANK YOU TO
PATTY, TOM, TRACY, AND EDIN.
WITH THAT, AND THANK YOU TO
MEGAN ON HER LAST DAY HERE WITH
US, THANK YOU FOR YOUR SERVICE
TO OUR CITY OF SEATTLE. THIS
DOES CONCLUDE TUESDAY, MARCH THE
THIRD FINANCE, NATIVE
COMMUNITIES AND TRIBAL
GOVERNMENTS COMMITTEE. THIS
COMMITTEE WILL MEET NEXT ON
TUESDAY, MARCH 17th. AND DON'T
WORRY, THE ST. PATRICK'S DAY
PARADE THAT COUNCILMEMBER KETTLE
IS LEADING IS NOT THAT DAY, IT
IS THE SATURDAY BEFORE, SO HE
WILL BE WITH US IN ATTENDANCE.
IS THERE ANY FURTHER