2020 Proposed Budget Seattle City Council September 25, 2019 Date (xx/xx/xxxx) 25, Department Name September 2019 September 25, 2018 Page Number CityCity Budget Office Budget Office 1 U.S. Economy – Modest Growth but Risk of Recession Increasing Growth Rate of US Gross Domestic Project • Growth of economy projected to slow in 2020. • Ever increasing risk of recession due to trade conflict. Recent Federal Reserve move to reduce interest rates is designed to mitigate recession risk. Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 2 Regional Economy: Strong but Trade Dependent Employment Growth: 2010-2019 (Through July) • State and regional economy have experienced strong growth since the “Great Recession” • Seattle has led this growth, with significant expansion across all sectors, but strongest in technology, on-line retail and construction. • But key sectors of the regional economy – technology, on-line retail and aerospace are trade dependent. • And construction sector ultimately depends on the health of overall local economy. Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 3 Seattle Metro Area – Employment Forecast • We expect moderate employment growth in 2019; and revenue data to date suggest this forecast is accurate. • The forecast anticipates a fairly steep slowdown in 2020 and 2021. This deceleration is driven by weakness in U.S. economy, which will slow as benefit of 2018 tax wears off, the trade war continues, and world economy slows generally. • At the local level, the forecast assumes Amazon’s growth will continue to slow and that construction employment will fall gradually. • Boeing’s 737 Max challenges are another specific risk on the employment front. Job Growth (# of jobs) in Seattle Metro Area Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 4 General Fund Revenue Forecast General Fund Property Taxes Sales Taxes Business Taxes Public Utility Taxes Private Utility Taxes Business License Fees Court Fines Parking Meters Other General Subfund Revenues General Fund - Grand Total Other Notable Revenues Sweetened Beverage Tax Short-term Rental Tax Admission Tax Real Estate Excise Tax Commercial Parking Tax School Zone Camera Fund TNC Tax 2018 Actuals $311,330,000 $276,270,000 $274,770,000 $159,070,000 $55,780,000 $17,310,000 $26,660,000 $39,010,000 $151,070,000 $1,311,290,000 $22,250,000 $0 $11,620,000 $76,940,000 $42,980,000 $12,270,000 $0 Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 2019 2020 August Chg from Apr $320,700,000 $0 $289,420,000 $1,700,000 $289,660,000 $1,890,000 $163,440,000 $380,000 $56,170,000 -$1,890,000 $18,160,000 $0 $27,030,000 $630,000 $39,120,000 -$1,830,000 $147,790,000 $1,640,000 $1,351,500,000 $2,510,000 $23,970,000 $10,500,000 $11,580,000 $82,210,000 $44,270,000 $9,820,000 $0 5 $0 $1,700,000 -$10,000 $3,870,000 $0 -$340,000 $0 August Chg from Apr $345,890,000 -$1,160,000 $296,270,000 $1,310,000 $296,940,000 $310,000 $173,010,000 $1,520,000 $55,540,000 -$1,960,000 $18,600,000 $0 $27,130,000 $810,000 $39,020,000 -$860,000 $205,210,000 $72,660,000 $1,457,590,000 $72,640,000 $24,330,000 $10,500,000 $11,690,000 $82,960,000 $45,600,000 $9,670,000 $9,660,000 $0 $0 -$10,000 -$170,000 $0 -$220,000 $9,660,000 Budget Summary 2018 Actuals 2019 Adopted 2020 Endorsed 2020 Proposed $ Change % Change General Fund 1,374,424 1,365,856 1,374,503 1,483,625 109,122 7.9% Other Funds 4,145,366 4,604,410 4,812,946 4,995,997 183,051 3.8% Total 5,519,790 5,970,266 6,187,449 6,479,622 292,173 4.7% Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 6 New Resources for Affordable Housing Mercer Megablock Proceeds • $15 million for Equitable Development Initiative (EDI) projects • $15 million for Affordable Homeownership • $6 million for Affordable Accessory Dwelling Units (ADUs) • $42 million for Strategic Investments/Acquisitions Local Option Housing Bill • Up to $4.5 million per year for the next 20 years • Will fund 175 units of affordable housing, including associated O&M costs Real Estate Excise Tax (REET) II • $25 million for affordable housing - $5 million per year 2021-2025 • Balancing need for major maintenance investments and resources for affordable housing Transportation Network Company (TNC) Tax • ~$52 million through 2025. Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 7 Sweetened Beverage Tax – Resources for Early Education and Food Access Available Resources • Approximately $10.1 million in “new” ongoing Sweetened Beverage Tax (SBT) Resources - Budget eliminates ~$6.3 million in general fund “swaps” - Revenue forecast update adds ~$3.8 million in annual, on-going revenues. • Additional $4.3 million of unspent fund balance from 2018 and 2019 Proposed Uses - Ongoing • $3 million per year to expand Child Care Assistance Program (CCAP) - Expand income eligibility to 350% of federal poverty (approx. $90K for a family of four) - Increase minimum subsidy from 10% to 25% - Provide financial incentives for providers to participate in CCAP, and also invest ~$2 million from other sources to provide one-time capital funding to help further expand supply - Expect to provide vouchers to 600 additional children Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 8 Sweetened Beverage Tax - continued Proposed Uses - Ongoing • $2.5 million per year for an “Healthy Food Fund” grant program to support food access - Administered by the Department of Neighborhoods (DON) - Fund will invest in community-led activities to increase access to healthy food • $2+ million to expand the City’s Fresh Bucks program • Approximately $1.1 million to expand support to food banks and additional staff at HSD to administer the program expansions funded by the Department’s SBT allocations • $150,000 to expand summer recreational programming for youth at the Parks Department Proposed Uses – One-time • $3 million one-time grant fund to support capital investments in P-patches and community gardens • $2 million for a financial reserve in the newly created Sweetened Beverage Tax Fund Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 9 New Funding to Address Homelessness Emergency Mercer Megablock - $5 million donation – uses include: • $2 million for start-up costs of the King County Regional Homelessness Authority • $1.2 million to address potential re-siting of tiny home villages • $840,000 to continue funding of pilot program(s) at Mount Baker Family Center • $515,000 to complete SHA rental assistance pilot • $125,000 to support the pilot safe parking program. Microsoft - $5 million donation • Replenish the region’s Central Diversion Fund (CDF). The CDF was initially funded from Pearl Jam “Home Shows” donations. • Note that these funds will not flow through the City budget, but are an important element of overall homelessness response Other Human Service Funding Priorities • Continued funding for Navigation Team Expansion • Inflationary adjustments for provider wages • King County Domestic Violence Hotline Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 10 Public Safety – Redirecting Available Funding Seattle Police Department • $1.6+ million for recruitment and retention strategies • $800,000 for hiring incentives • $850,000 for continuation of emphasis patrols and force augmentation • $1.2 million to expand Community Service Officer program from 12 to 18 staff • Additional mental health providers for SPD’s Crisis Response Unit • Add dedicated position as liaison to Native American community Implement Recommendations of High Barrier Work Group ($2 million capital, $1.2 million for pilot programming) • New residential treatment facility located at unused portion of King County Jail – funding for both capital and operating shared 50/50 with King County • Targeted Re-entry pilot • High Barrier probation pilot Strategies to Address Low-Acuity Calls for Assistance • Expand/augment newly created “Health One” response unit • Fund on-site nurses for locations responsible for largest number of low-acuity calls, and a dedicated nurse call line Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 11 New Transportation Resources – Megablock, STBD and TNC Tax Mercer Megablock Proceeds - $50.7 million • Mercer West Construction Loan Repayment - $12.2 million • South Lake Union Streetcar Operating Loan Repayment - $3.6 million • Center City Connector Streetcar Capital Loan Repayment - $9.0 million • Commercial Parking Tax Revenues Offset - $9.2 million • SDOT Vision Zero Priorities - $16.7 million Seattle Transportation Benefit District (STBD) - $14.5 million • Operations – $7 million to fund additional transit hours, including first and last mile service • Capital – $7.5 million, including - Transit lanes and Multimodal Corridor investments - Transit corridor facilities – benches, shelters, landing pads, etc. - Downtown mobility projects – anticipating impacts of SR 99 tolling Transportation Network Company (TNC) Tax • Capital Funding for the Center City Connector Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 12 2019 Library Levy Levy approved by voters in August will provide for a significant expansion of library services in 2020: • Elimination of Overdue Fines ($1.1 million) • Increased investment in e-materials ($630,000) • Addition of 10,000 hours of operation at library branches ($673,000) • Expand Play and Learn Program ($260,000) • Add Community Resource Specialist for Youth ($150,000) • Technology upgrades ($500,000) Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 13 Using One-Time Resources to Invest in Community Assets Available Resources • Washington State Convention Center street vacations • Community Development Block Grant (CDBG) Funding • Real Estate Excise Tax (REET) Resources Proposed One-time Uses • Chief Seattle Club • Lambert House • International Community Health Services (ICHS) • Outdoors for All – redevelopment of former fire station at Magnuson Park • Residential treatment facility at King County Jail • Additional funding for Round 3 of Equitable Development Initiative (EDI) Grants • Capital resources for childcare facilities – complement funding to expand CCAP voucher program with resources to help enhance supply of childcare as well Date (xx/xx/xxxx) 25, Department Name September 2019 Page Number City Budget Office 14