1 00:00:19,486 --> 00:00:22,655 FRIDAY, APRIL 10th, 2026, THIS 2 00:00:22,655 --> 00:00:24,524 IS THE MEETING OF ECONOMIC 3 00:00:24,524 --> 00:00:25,692 FORECAST COUNCIL, MAY THAT 4 00:00:25,692 --> 00:00:28,461 MEETING COME TO ORDER. I AM DAN, 5 00:00:28,461 --> 00:00:31,264 CHAIR OF THE EC, OR PREVIOUS 6 00:00:31,264 --> 00:00:32,866 CHAIR, I GUESS CURRENTLY UNTIL 7 00:00:32,866 --> 00:00:35,935 WE NOMINATE NEW CHAIRS, I AM 8 00:00:35,935 --> 00:00:37,971 HERE WITH MY FORECAST 9 00:00:37,971 --> 00:00:38,872 COLLEAGUES, CITY COUNCIL 10 00:00:38,872 --> 00:00:40,573 PRESIDENT JOY HOLLINGSWORTH, 11 00:00:40,573 --> 00:00:43,309 DEPUTY DIRECTOR OF CITY 12 00:00:43,309 --> 00:00:48,848 OPERATIONS, MARK ELERBROOK, AND 13 00:00:48,848 --> 00:00:49,883 CITY FINANCIAL DIRECTORER, 14 00:00:49,883 --> 00:00:51,451 REPRESENTATIVES FROM THE CITY 15 00:00:51,451 --> 00:00:53,887 BUDGET OFFICE, AND SEATTLE CITY 16 00:00:53,887 --> 00:00:54,988 COUNCIL CENTRAL STAFF. THERE ARE 17 00:00:54,988 --> 00:00:56,256 A COUPLE SUBSTANTIVE ITEMS WE 18 00:00:56,256 --> 00:01:00,260 FEED TO ACT ON TODAY, SELECTION 19 00:01:00,260 --> 00:01:02,495 AND CHAIR AND VICE CHAIR, 20 00:01:02,495 --> 00:01:03,296 PRESENTATION REVIEW OF THE 21 00:01:03,296 --> 00:01:05,331 ECONOMIC FORECAST AND THE 22 00:01:05,331 --> 00:01:08,601 APPROVAL OF THE 2026 WORK 23 00:01:08,601 --> 00:01:09,936 PROGRAM. BEFORE MOVING ON, LETS 24 00:01:09,936 --> 00:01:12,205 ADOPT AGENDA AND COPY HAS BEEN 25 00:01:12,205 --> 00:01:13,406 CIRCULATED AND THERE ARE COPIES 26 00:01:13,406 --> 00:01:14,574 HERE ON THE COMMITTEE TABLE, 27 00:01:14,574 --> 00:01:18,178 MOVE TO ADOPT THE AGENDA. IS 28 00:01:18,178 --> 00:01:18,545 THERE A SECOND? 29 00:01:18,545 --> 00:01:18,845 >> SECOND. 30 00:01:18,845 --> 00:01:21,614 >> IT HAS BEEN MOVED AND 31 00:01:21,614 --> 00:01:23,082 SECONDED. TODAY'S AGENDA IS 32 00:01:23,082 --> 00:01:23,683 BEFORE THE FORECAST COUNCIL. 33 00:01:23,683 --> 00:01:25,385 THIS IS THE OPPORTUNITY FOR 34 00:01:25,385 --> 00:01:28,588 MEMBERS TO AMEND OR ADD AN ITEM? 35 00:01:28,588 --> 00:01:29,355 IF YOU WOULD LIKE TO, PLEASE 36 00:01:29,355 --> 00:01:32,792 RAISE YOUR HAND ON ZOOM SO WE 37 00:01:32,792 --> 00:01:36,196 ARE ABLE TO SEE YOU POP UP. I AM 38 00:01:36,196 --> 00:01:39,666 SEEING NO AMENDMENTS AT THIS 39 00:01:39,666 --> 00:01:41,434 TIME. TODAY'S AGENDA WILL BE 40 00:01:41,434 --> 00:01:42,936 ADOPTED. HEARING NO OBJECTION, 41 00:01:42,936 --> 00:01:44,003 TODAY'S AGENDA IS ADOPTED. 42 00:01:44,003 --> 00:01:45,371 FIRST ITEM OF BUSINESS, WHICH IS 43 00:01:45,371 --> 00:01:48,208 SELECTING A CHAIR AND VICE CHAIR 44 00:01:48,208 --> 00:01:50,009 FOR THE FORECAST COUNCIL FOR 45 00:01:50,009 --> 00:01:50,743 2026, PER THE ORDINANCE THAT 46 00:01:50,743 --> 00:01:52,278 CREATED THE FORECAST COUNCIL WE 47 00:01:52,278 --> 00:01:55,482 NEED TO ELECT A CHAIR, ELECTING 48 00:01:55,482 --> 00:01:57,750 VICE CHAIR IS OPTIONING BUT I 49 00:01:57,750 --> 00:01:59,018 FIND IT USEFUL, SINCE THE CHAIR 50 00:01:59,018 --> 00:02:00,386 MIGHT NOT ALWAYS BE ABLE TO 51 00:02:00,386 --> 00:02:02,655 ATTEND THE MEETINGS, SO AT THIS 52 00:02:02,655 --> 00:02:03,523 POINT I WOULD ENTERTAIN 53 00:02:03,523 --> 00:02:08,595 NOMINATIONS FROM THE FLOOR. LETS 54 00:02:08,595 --> 00:02:09,195 START WITH THE CHAIR. 55 00:02:09,195 --> 00:02:10,163 >> 56 00:02:10,163 --> 00:02:15,201 >> I MOVE TO NOMINATE COUNCIL 57 00:02:15,201 --> 00:02:15,969 MEMBER DAN STRAUSS. 58 00:02:15,969 --> 00:02:17,170 >> IS THERE A SECOND? 59 00:02:17,170 --> 00:02:17,770 >> SECOND. 60 00:02:17,770 --> 00:02:18,071 >> SECOND. 61 00:02:18,071 --> 00:02:24,677 >> MOVED AND SECONDED TO ADOPT 62 00:02:24,677 --> 00:02:30,016 STRAUSS AS THE CHAIR. DOUBLE 63 00:02:30,016 --> 00:02:31,584 CHECKING MY SCRIPT. SEEING NONE, 64 00:02:31,584 --> 00:02:33,419 -- WILL THE CLERK PLEASE CALL 65 00:02:33,419 --> 00:02:34,320 THE ROLL? CAN YOU? NO. I WILL 66 00:02:34,320 --> 00:02:37,790 CALL THE ROLL. WE ARE STILL 67 00:02:37,790 --> 00:02:40,927 WORKING OUT WHO IS CLERKING 68 00:02:40,927 --> 00:02:42,262 THIS. COUNCIL PRESIDENT 69 00:02:42,262 --> 00:02:42,629 HOLLINGSWORTH,. 70 00:02:42,629 --> 00:02:47,300 >> AYE. 71 00:02:47,300 --> 00:02:47,901 >> OPERATIONS DIRECTOR MARK? 72 00:02:47,901 --> 00:02:53,740 >> 73 00:02:53,740 --> 00:02:56,209 >> SORRY, DID YOU NOT HEAR ME? 74 00:02:56,209 --> 00:02:58,845 >> HOW WOULD YOU LIKE TO VOTE? 75 00:02:58,845 --> 00:03:03,883 >> I VOTED AYE. 76 00:03:03,883 --> 00:03:05,852 >> WONDERFUL . DWIGHT? 77 00:03:05,852 --> 00:03:06,719 >> AYE. 78 00:03:06,719 --> 00:03:10,056 >> FOUR IN FAVOR, NONE OPPOSED. 79 00:03:10,056 --> 00:03:12,158 MOTION CARRIES, STRAUSS IS 80 00:03:12,158 --> 00:03:13,593 CHAIR, APPRECIATE EVERYBODY. WE 81 00:03:13,593 --> 00:03:14,327 WILL ENTERTAIN NOMINATION FOR 82 00:03:14,327 --> 00:03:15,395 VICE CHAIR, THE FORECAST 83 00:03:15,395 --> 00:03:17,697 COUNCIL, I WOULD LIKE TO 84 00:03:17,697 --> 00:03:18,665 NOMINATE MARK ELERBROOK. IS 85 00:03:18,665 --> 00:03:19,299 THERE A SECOND? 86 00:03:19,299 --> 00:03:19,966 >> SECOND. 87 00:03:19,966 --> 00:03:20,833 >> SECOND. 88 00:03:20,833 --> 00:03:23,570 >> MOVED AND SECONDED TO ADOPT 89 00:03:23,570 --> 00:03:25,805 MARK ELERBROOK AS VICE CHAIR, I 90 00:03:25,805 --> 00:03:27,907 WILL CALL THE ROLL. COUNCIL 91 00:03:27,907 --> 00:03:28,207 PRESIDENT? 92 00:03:28,207 --> 00:03:29,909 >> AYE. 93 00:03:29,909 --> 00:03:31,544 >> MR. ELERBROOK? 94 00:03:31,544 --> 00:03:31,878 >> AYE. 95 00:03:31,878 --> 00:03:33,313 >> MR. DWIGHT? 96 00:03:33,313 --> 00:03:34,581 >> AYE. 97 00:03:34,581 --> 00:03:37,050 >> STRAUSS VOTES AYE, NONE 98 00:03:37,050 --> 00:03:39,619 OPPOSED. FIRST ITEM OF BUSINESS 99 00:03:39,619 --> 00:03:41,120 HAS BEEN ADDRESSED IN SHORT 100 00:03:41,120 --> 00:03:42,388 ORDER. MOVE ON TO THE SECOND 101 00:03:42,388 --> 00:03:45,325 ITEM OF BUSINESS, I WILL READ 102 00:03:45,325 --> 00:03:47,193 IT, APPROVAL OF MINUTES FROM 103 00:03:47,193 --> 00:03:49,028 OCTOBER 20th, 2025 MEETING, COPY 104 00:03:49,028 --> 00:03:55,568 OF THE MINUTES HAS BEEN 105 00:03:55,568 --> 00:03:56,436 CIRCULATED. I WOULD SEEK-- I 106 00:03:56,436 --> 00:03:59,072 WILL MOVE AND SEEK SECOND FOR 107 00:03:59,072 --> 00:04:00,573 APPROVAL OF THE MINUTES. I MOVE 108 00:04:00,573 --> 00:04:02,175 THE APPROVAL OF THE MINUTES. IS 109 00:04:02,175 --> 00:04:02,742 THERE A SECOND? 110 00:04:02,742 --> 00:04:03,042 >> SECOND. 111 00:04:03,042 --> 00:04:05,878 >> IT HAS BEEN MOVED AND 112 00:04:05,878 --> 00:04:08,514 SECONDED. IF NO OBJECTIONS, THE 113 00:04:08,514 --> 00:04:11,184 MINUTES WILL BE APPROVED. 114 00:04:11,184 --> 00:04:12,652 HEARING NO OBJECTIONS, MINUTES 115 00:04:12,652 --> 00:04:12,952 AAPPROVED. 116 00:04:12,952 --> 00:04:15,588 >> MOVING ALONG TO THE MEAT OF 117 00:04:15,588 --> 00:04:20,693 THE AGENDA, PRESENTATION OF 2026 118 00:04:20,693 --> 00:04:23,496 ECONOMIC AND REVENUE FORECASTS, 119 00:04:23,496 --> 00:04:26,132 AND RECOMMENDATION REGARDING THE 120 00:04:26,132 --> 00:04:27,233 2026/2027 AND 2028 REVENUE 121 00:04:27,233 --> 00:04:28,401 FORECASTS. THAT WAS ME READING 122 00:04:28,401 --> 00:04:30,637 IT INTO THE RECORD. IF THERE WAS 123 00:04:30,637 --> 00:04:32,572 ANY CONFUSION THERE. SO MOVING 124 00:04:32,572 --> 00:04:35,141 ON TO THIS ITEM, WHICH IS THE 125 00:04:35,141 --> 00:04:36,876 PRESENTATION OF THE ECONOMIC AND 126 00:04:36,876 --> 00:04:39,579 REVENUE FORECASTS LED BY STAFF 127 00:04:39,579 --> 00:04:41,347 FROM THE FORECAST OFFICE. THIS 128 00:04:41,347 --> 00:04:43,816 APRIL FORECAST IS THE FIRST OF 129 00:04:43,816 --> 00:04:45,685 THREE FORECASTS THAT OCCUR THIS 130 00:04:45,685 --> 00:04:48,521 YEAR, WE WILL RETURN IN AUGUST 131 00:04:48,521 --> 00:04:52,125 AND THEN IN OCTOBER TO RECEIVE 132 00:04:52,125 --> 00:04:53,860 THE REVISED FORECASTS. APRIL 133 00:04:53,860 --> 00:04:58,131 REVENUE FORECAST TAKES INTO 134 00:04:58,131 --> 00:04:59,365 ACCOUNT 2025 YEAR END ACTUAL 135 00:04:59,365 --> 00:05:01,834 REVENUE, AN IMPORTANT DATA POINT 136 00:05:01,834 --> 00:05:02,635 FOR US BECAUSE IT PROJECTIONS 137 00:05:02,635 --> 00:05:04,704 UNTIL WE GET THE MONEY IN THE 138 00:05:04,704 --> 00:05:06,572 DOOR AND SERVES AS AN 139 00:05:06,572 --> 00:05:08,307 OPPORTUNITY CHECK IN REGARDING 140 00:05:08,307 --> 00:05:09,475 REVENUE ASSUMPTION UNDERLYING 141 00:05:09,475 --> 00:05:12,445 THE 2026 BUDGET ADOPTED BY CITY 142 00:05:12,445 --> 00:05:13,980 COUNCIL LAST NOVEMBER. MOREOVER 143 00:05:13,980 --> 00:05:15,848 THE FORECASTS FOR 2027 AND 2028 144 00:05:15,848 --> 00:05:16,783 PROVIDE THE PRELIMINARY OUTLOOK 145 00:05:16,783 --> 00:05:21,621 FOR THE YEARS AS WE BEGIN TO 146 00:05:21,621 --> 00:05:23,489 PLAN FOR THE BUDGET AS WE ONLY 147 00:05:23,489 --> 00:05:25,992 NEEDED TO BALANCE ONE YEAR LAST 148 00:05:25,992 --> 00:05:29,595 YEAR WE WILL NEED TWO YEARS IN 149 00:05:29,595 --> 00:05:31,464 THE UP COMING YEAR. TODAY'S 150 00:05:31,464 --> 00:05:33,800 PRESENTATION WILL BE LED BY THE 151 00:05:33,800 --> 00:05:36,235 STAFF, AS A REMINDER, THE OFFICE 152 00:05:36,235 --> 00:05:38,338 WAS ESTABLISHED IN 2021 AND 153 00:05:38,338 --> 00:05:39,739 MODELED BASED ON SIMILAR 154 00:05:39,739 --> 00:05:41,841 INDEPENDENT FORECASTING OFFICES 155 00:05:41,841 --> 00:05:44,677 OPERATING IN KING COUNTY, AND 156 00:05:44,677 --> 00:05:47,814 WASHINGTON STATE, PURPOSE TO 157 00:05:47,814 --> 00:05:48,881 INCREASE TRANSPARENCY AND 158 00:05:48,881 --> 00:05:49,849 ACCOUNTABILITY AND TO INSURE THE 159 00:05:49,849 --> 00:05:50,550 FORECAST COUNCIL IS FULLY 160 00:05:50,550 --> 00:05:56,889 INFORMED AND ABLE TO HAVE FULL 161 00:05:56,889 --> 00:05:59,492 RANGE OF QUESTIONS ADDRESSED, 162 00:05:59,492 --> 00:06:03,429 STAFF WILL PARTICIPATE IN THE 163 00:06:03,429 --> 00:06:04,664 BRIEFING. STAFF FROM THE BUDGET 164 00:06:04,664 --> 00:06:06,365 OFFICE IS PRESENT TODAY WITHIN 165 00:06:06,365 --> 00:06:08,167 THE PURVIEW OF THE REVENUE 166 00:06:08,167 --> 00:06:09,936 FORECAST, OR CITY BUDGET OFFICE, 167 00:06:09,936 --> 00:06:12,238 EXCUSE ME. FORECAST OFFICE WILL 168 00:06:12,238 --> 00:06:15,375 PRESENT THREE ECONOMIC AND 169 00:06:15,375 --> 00:06:16,576 REVENUE SCENARIOS, BASELINE, 170 00:06:16,576 --> 00:06:17,543 PESSIMISTIC, OPTIMISTIC AND 171 00:06:17,543 --> 00:06:19,979 RECOMMENDATION OF WHICH SHOULD 172 00:06:19,979 --> 00:06:23,149 BECOME THE FORMAL FORECAST FOR 173 00:06:23,149 --> 00:06:24,951 THIS YEAR. AGAIN, REVISED 174 00:06:24,951 --> 00:06:26,285 AUGUST, REVISED IN OCTOBER, AND 175 00:06:26,285 --> 00:06:29,622 BEFORE WE JUMP IN, BEFORE I TURN 176 00:06:29,622 --> 00:06:31,924 IT OVER TO DIRECTOR DURAS, I 177 00:06:31,924 --> 00:06:33,326 WANT TO BRING US WHERE WE WERE 178 00:06:33,326 --> 00:06:36,028 ONE YEAR AGO TODAY, AND ONE YEAR 179 00:06:36,028 --> 00:06:38,631 AGO TODAY WAS THE FIRST FOUR 180 00:06:38,631 --> 00:06:39,766 MONTHS OF THE CURRENT FEDERAL 181 00:06:39,766 --> 00:06:43,636 ADMINISTRATION AND WEEK TWO OF 182 00:06:43,636 --> 00:06:44,871 THE THREE-WEEK TARIFF WAR, AND 183 00:06:44,871 --> 00:06:47,807 SO I SAY THAT BECAUSE LAST 184 00:06:47,807 --> 00:06:49,575 YEAR'S REVENUE FORECAST IN 185 00:06:49,575 --> 00:06:52,345 APRIL WAS VERY DIFFICULT TO 186 00:06:52,345 --> 00:06:54,480 PREDICT. I BELIEVE WE ADOPTED 187 00:06:54,480 --> 00:06:57,950 THE PESSIMISTIC SCENARIO AT THAT 188 00:06:57,950 --> 00:06:58,851 TIME BECAUSE THE VOLATILITY 189 00:06:58,851 --> 00:07:04,590 INDEX WAS HIGHER THAN IT WAS 190 00:07:04,590 --> 00:07:05,425 DURING THE PANDEMIC. REALLY 191 00:07:05,425 --> 00:07:06,759 QUITE INCREDIBLE, AND NOT A 192 00:07:06,759 --> 00:07:08,060 POSITIVE WAY, ALL OF THE 193 00:07:08,060 --> 00:07:13,199 CHANGES, ALL OF THE VOLATILITY, 194 00:07:13,199 --> 00:07:16,202 BACK TO APRIL, AND LAST APRIL WE 195 00:07:16,202 --> 00:07:19,138 WERE EXPECTING SLOW, STEADY 196 00:07:19,138 --> 00:07:20,907 GROWTH, BUT WE GOT VOLATILITY. 197 00:07:20,907 --> 00:07:22,141 THIS YEAR, YOU HAVE BEEN PLACED 198 00:07:22,141 --> 00:07:23,843 IN A SIMILAR POSITION WITH THE 199 00:07:23,843 --> 00:07:26,979 WAR IN IRAN JUST STARTING A FEW 200 00:07:26,979 --> 00:07:28,247 WEEKS AGO. WE ARE NOT SURE IF 201 00:07:28,247 --> 00:07:33,419 THERE IS CEASE-FIRE TODAY OR NOT 202 00:07:33,419 --> 00:07:34,720 AND WE RECOGNIZE YOU HAVE TO 203 00:07:34,720 --> 00:07:35,888 MAKE THE FORECAST IN SHORT ORDER 204 00:07:35,888 --> 00:07:38,057 AND THIS IS THE SECOND YEAR IN A 205 00:07:38,057 --> 00:07:42,662 ROW THAT YOU HAVE BEEN TASKED 206 00:07:42,662 --> 00:07:45,464 WITH DOING SO AMONGST 207 00:07:45,464 --> 00:07:46,566 INTERNATIONAL INSTABILITY. I 208 00:07:46,566 --> 00:07:49,802 JUST WANT TO SHARE THAT FOR 209 00:07:49,802 --> 00:07:51,304 EVERYBODY BECAUSE WHILE WE WILL 210 00:07:51,304 --> 00:07:51,971 RECEIVE YOUR PRESENTATION TODAY, 211 00:07:51,971 --> 00:07:54,040 AND YOU HAVE DONE THE BEST JOB I 212 00:07:54,040 --> 00:07:57,109 KNOW YOU CAN DO, THERE ARE JUST 213 00:07:57,109 --> 00:07:58,578 FACTORS OUTSIDE OF ANY OF OUR 214 00:07:58,578 --> 00:08:00,780 CONTROL THAT ARE UNKNOWN AT THIS 215 00:08:00,780 --> 00:08:01,881 MOMENT. SO THANK YOU FOR DOING 216 00:08:01,881 --> 00:08:02,982 THAT TOUGH JOB. I AM SORRY THIS 217 00:08:02,982 --> 00:08:05,084 IS THE SECOND YEAR IN A ROW THAT 218 00:08:05,084 --> 00:08:07,353 THE FEDERAL ADMINISTRATION HAS 219 00:08:07,353 --> 00:08:09,488 CAUSED SO MUCH DISRUPTION FOR 220 00:08:09,488 --> 00:08:10,423 US, BUT WITH THAT, AS THE 221 00:08:10,423 --> 00:08:12,525 PREFACE, I WILL TURN IT OVER TO 222 00:08:12,525 --> 00:08:15,661 YOU UNLESS MARK, AS VICE CHAIR, 223 00:08:15,661 --> 00:08:17,196 OR OTHER, WANTS TO SAY ANYTHING 224 00:08:17,196 --> 00:08:18,097 BEFORE WE JUMP IN. 225 00:08:18,097 --> 00:08:22,435 >> NO, THANK YOU VERY MUCH, 226 00:08:22,435 --> 00:08:23,569 CHAIR STRAUSS, I THINK YOU 227 00:08:23,569 --> 00:08:24,837 INCAPSULATED IT WELL, THIS IS A 228 00:08:24,837 --> 00:08:25,838 CHALLENGING TIME TO FORECAST 229 00:08:25,838 --> 00:08:30,643 ANYTHING Y. AM INTERESTED IN 230 00:08:30,643 --> 00:08:33,079 SEEING WHAT WE HAVE BEFORE US. 231 00:08:33,079 --> 00:08:34,747 OVER TO YOU, DIRECTOR DURAS. 232 00:08:34,747 --> 00:08:37,149 >> THANK YOU, CHAIR STRAUSS, 233 00:08:37,149 --> 00:08:39,919 GOOD MORNING, FOR THE RECORD I 234 00:08:39,919 --> 00:08:41,053 AM INTERIM AND DIRECTOR AND 235 00:08:41,053 --> 00:08:43,890 CHIEF AT THE OFFICE OF ECONOMIC 236 00:08:43,890 --> 00:08:44,857 AND REVENUE FORECASTS. 237 00:08:44,857 --> 00:08:48,494 >> HELLO, THIS IS SHAUN 238 00:08:48,494 --> 00:08:49,495 THOMPSON, REGIONAL ECONOMIST. 239 00:08:49,495 --> 00:08:51,264 >> GOOD MORNING, JOSEPH RUSSELL, 240 00:08:51,264 --> 00:08:52,632 MANAGER OF THE ECONOMIC AND 241 00:08:52,632 --> 00:08:54,934 REVENUE TEAM IN THE CITY BUDGET 242 00:08:54,934 --> 00:08:55,167 OFFICE. 243 00:08:55,167 --> 00:08:56,469 >> MY APOLOGIES, AS WE ARE 244 00:08:56,469 --> 00:08:58,437 GETTING IN HERE, WE WILL DO 245 00:08:58,437 --> 00:08:59,238 OPERATIONS, IF YOU CAN PULL THE 246 00:08:59,238 --> 00:09:00,806 MICROPHONE AS CLOSE TO YOU AS 247 00:09:00,806 --> 00:09:03,175 POSSIBLE, AND THEY ALSO MOVE UP 248 00:09:03,175 --> 00:09:06,312 AND DOWN, IT WILL HELP 249 00:09:06,312 --> 00:09:06,913 EVERYBODY, INCLUDING MYSELF. 250 00:09:06,913 --> 00:09:07,146 THANK YOU. 251 00:09:12,184 --> 00:09:15,755 >> GOOD MORNING, I AM ALEX ZHANG 252 00:09:15,755 --> 00:09:16,289 WITH THE CITY BUDGET OFFICE. 253 00:09:32,371 --> 00:09:38,611 >> ALL RIGHT. TRYING TO SHARE 254 00:09:38,611 --> 00:09:39,111 THE SCREEN. HAVING SOME 255 00:09:39,111 --> 00:09:39,478 DIFFICULTIES HERE. 256 00:09:45,318 --> 00:09:46,352 >> FOR THE VIEWING PUBLIC, WE 257 00:09:46,352 --> 00:09:49,555 ARE GOING TO TAKE A MOMENT WHILE 258 00:09:49,555 --> 00:09:50,122 WE UNSHARE AND RESHARE THE 259 00:09:50,122 --> 00:09:50,289 SLIDES. 260 00:10:09,742 --> 00:10:11,777 >> THIS IS AN APRIL FORECAST 261 00:10:11,777 --> 00:10:13,379 UPDATE. WE WILL PRESENT IT IN 262 00:10:13,379 --> 00:10:18,217 THE USUAL FASHION, FIRST, IT IS 263 00:10:18,217 --> 00:10:20,319 GOING TO BE DEVELOPED SUMMARY OF 264 00:10:20,319 --> 00:10:22,588 ECONOMIC CONDITIONS AND THE 265 00:10:22,588 --> 00:10:23,789 ECONOMIC OUTLOOK FOR U.S. AND 266 00:10:23,789 --> 00:10:24,824 FOR THE SEATTLE METRO AREA, AND 267 00:10:24,824 --> 00:10:31,297 IN THE SECOND PART WE WILL MOVE 268 00:10:31,297 --> 00:10:33,299 ON TO THE REVENUE FORECAST, 269 00:10:33,299 --> 00:10:37,169 FIRST LOOK BACK AT THE ACTUAL 270 00:10:37,169 --> 00:10:39,305 REVENUE FOR 2025 AND GENERAL 271 00:10:39,305 --> 00:10:41,974 FUND REVENUE AND FINISH UP WITH 272 00:10:41,974 --> 00:10:45,211 SUMMARY OF THE FORECAST RISKS 273 00:10:45,211 --> 00:10:48,381 AND RECOMMENDATION OF THE 274 00:10:48,381 --> 00:10:50,016 FORECAST SCENARIO. SO AS A 275 00:10:50,016 --> 00:10:51,417 REMINDER FOR, WELL, I THINK WE 276 00:10:51,417 --> 00:10:57,223 HAVE THREE NEW PEOPLE ON THE 277 00:10:57,223 --> 00:10:59,425 FORECAST COUNCIL, SO, FOR THOSE 278 00:10:59,425 --> 00:11:01,427 NEW FORECAST COUNCIL MEMBERS AND 279 00:11:01,427 --> 00:11:02,728 THE THE PUBLIC VIEWING THE FIRST 280 00:11:02,728 --> 00:11:03,829 TIME, THE REASON WE ARE 281 00:11:03,829 --> 00:11:05,231 PRESENING THIS WAY IS REVENUE 282 00:11:05,231 --> 00:11:08,167 FORECASTS ARE DEVELOPED IN TWO 283 00:11:08,167 --> 00:11:10,569 STEPS, THE FIRST STEP IS 284 00:11:10,569 --> 00:11:11,671 DEVELOPING REGIONAL ECONOMY 285 00:11:11,671 --> 00:11:13,606 FORECAST, THE MAIN INPUT THERE 286 00:11:13,606 --> 00:11:15,474 IS U.S. FORECAST FOR THE 287 00:11:15,474 --> 00:11:17,843 NATIONAL ECONOMY, AND THEN THE 288 00:11:17,843 --> 00:11:19,412 SECOND STEP IS TAKING THE 289 00:11:19,412 --> 00:11:20,279 REGIONAL ECONOMY FORECAST 290 00:11:20,279 --> 00:11:21,781 TOGETHER WITH THE FORECAST FOR 291 00:11:21,781 --> 00:11:24,350 U.S. ECONOMY AND USING THOSE AS 292 00:11:24,350 --> 00:11:28,054 INPUTS FOR A COUPLE OF REVENUE 293 00:11:28,054 --> 00:11:29,522 FORECAST MODELS THAT WE MAINTAIN 294 00:11:29,522 --> 00:11:34,727 AND DEVELOP, WE USE THOSE MODELS 295 00:11:34,727 --> 00:11:37,029 TO FORECAST THE REVENUES. WHILE 296 00:11:37,029 --> 00:11:39,732 DEVELOPING THOSE FORECASTS, WE 297 00:11:39,732 --> 00:11:42,301 ARE TASKED TO DEVELOP THREE 298 00:11:42,301 --> 00:11:43,669 FORECAST SCENARIOS, BASELINE, 299 00:11:43,669 --> 00:11:45,371 OPTIMISTIC, AND PESSIMISTIC ONE, 300 00:11:45,371 --> 00:11:47,706 AND THEN EACH FORECAST UPDATE 301 00:11:47,706 --> 00:11:49,375 APRIL AND AUGAND SAY OCTOBER 302 00:11:49,375 --> 00:11:50,609 WILL BE MADE RECOMMENDATION 303 00:11:50,609 --> 00:11:56,015 WHICH SCENARIO SHOULD BE ADOPTED 304 00:11:56,015 --> 00:11:59,452 AS THE OFFICIAL FORECAST WHEN WE 305 00:11:59,452 --> 00:12:00,219 ARE FORECASTING IN APRIL, ONE 306 00:12:00,219 --> 00:12:01,754 THING TO KEEP IN MIND HERE IS 307 00:12:01,754 --> 00:12:04,390 EVEN THOUGH IT IS ALREADY THE 308 00:12:04,390 --> 00:12:06,225 FOURTH MONTH OF THE YEAR, BY 309 00:12:06,225 --> 00:12:11,097 THIS POINT IN THE YEAR WE HAVE 310 00:12:11,097 --> 00:12:12,431 COLLECTED LITTLE REVENUE FOR THE 311 00:12:12,431 --> 00:12:14,166 CURRENT YEAR. MOST REVENUE COME 312 00:12:14,166 --> 00:12:16,168 IN THE FIRST TWO MONTHS ARE 313 00:12:16,168 --> 00:12:17,069 ACCRUED THROUGH THE PREVIOUS 314 00:12:17,069 --> 00:12:22,808 YEAR BECAUSE THEY ARE PAYMENTS 315 00:12:22,808 --> 00:12:23,642 FOR OBLIGATIONS FOR 20 TWOIB, 316 00:12:23,642 --> 00:12:26,378 AND THAT SHARE OF REVENUE WE 317 00:12:26,378 --> 00:12:27,947 COLLECT OUT OF OVERALL TOTAL, 318 00:12:27,947 --> 00:12:29,648 GOES UP WITH EACH FORECAST 319 00:12:29,648 --> 00:12:31,450 UPDATE SO WE WILL HAVE MORE 320 00:12:31,450 --> 00:12:32,852 INFORMATION TO INFORM THE 321 00:12:32,852 --> 00:12:34,487 FORECAST ITSELF. BUT IT IS 322 00:12:34,487 --> 00:12:35,988 IMPORTANT TO KNOW EVEN BY THE 323 00:12:35,988 --> 00:12:41,760 TIME WE GET TO THE OCTOBER 324 00:12:41,760 --> 00:12:43,929 FORECAST, THAT WE PRESENT MID 325 00:12:43,929 --> 00:12:44,997 OCTOBER, WE ONLY HAVE 326 00:12:44,997 --> 00:12:49,702 INFORMATION HALF OF WHAT WILL 327 00:12:49,702 --> 00:12:51,103 BECOME OVERALL GENERAL REVENUE. 328 00:12:51,103 --> 00:12:52,638 SO HERE ON THE RIGHT SIDE, TRIES 329 00:12:52,638 --> 00:12:53,839 TO SUMMARIZE HOW MUCH REVENUE IS 330 00:12:53,839 --> 00:12:56,142 COMING IN AND WHAT IT IS THAT WE 331 00:12:56,142 --> 00:12:57,843 SEE WITH EACH FORECAST, AS YOU 332 00:12:57,843 --> 00:13:00,946 CAN SEE, IT VARIES QUITE A BIT 333 00:13:00,946 --> 00:13:03,516 WITH REVENUE STREAMS, FOR SOME 334 00:13:03,516 --> 00:13:09,155 OF THEM WE RECEIVE THOSE 335 00:13:09,155 --> 00:13:09,788 PAYMENTS FOR OBLIGATIONS WITH 336 00:13:09,788 --> 00:13:11,090 LITTLE DELAY, REAL ESTATE TAXES 337 00:13:11,090 --> 00:13:13,192 ONE OF THE REVENUE STREAMS WHERE 338 00:13:13,192 --> 00:13:16,128 WE HAVE MOST INSIGHT INTO, 339 00:13:16,128 --> 00:13:17,663 ALREADY IN APRIL, AND WE GET 340 00:13:17,663 --> 00:13:20,232 CLOSE TO 75% OF THE REVENUES BY 341 00:13:20,232 --> 00:13:22,802 THE TIME WE PRESENTING THE 342 00:13:22,802 --> 00:13:25,037 OCTOBER FORECAST. ON THE OTHER 343 00:13:25,037 --> 00:13:26,238 END, BUSINESS AND OCCUPATION 344 00:13:26,238 --> 00:13:31,877 TAXES AND PAYROLL EXPENSE TAXES, 345 00:13:31,877 --> 00:13:33,045 WE HAVE PRETTY MUCH NO INSIGHT 346 00:13:33,045 --> 00:13:35,281 INTO THE CURRENT YEAR, BY THE 347 00:13:35,281 --> 00:13:37,016 TIME WE GET TO THE OCTOBER 348 00:13:37,016 --> 00:13:40,719 FORECAST, THERE IS USUALLY LESS 349 00:13:40,719 --> 00:13:42,655 THAN HALF OF OVERALL REVENUES 350 00:13:42,655 --> 00:13:43,455 COLLECTED, DLIFBEN THE DELAY 351 00:13:43,455 --> 00:13:45,224 BETWEEN THE TIME IT TAKES PLACE 352 00:13:45,224 --> 00:13:49,261 AND WHEN PAYMENTS ARE DUE AND 353 00:13:49,261 --> 00:13:50,296 PROCESSED. SO THAT IS IMPORTANT 354 00:13:50,296 --> 00:13:51,864 TO KEEP IN MIND, AGAIN, BECAUSE 355 00:13:51,864 --> 00:13:54,533 THE APRIL FORECAST IS GOING TO 356 00:13:54,533 --> 00:13:58,237 BE MOSTLY INFORMED BY THE 357 00:13:58,237 --> 00:13:59,238 CURRENT ECONOMIC CONDITIONS, THE 358 00:13:59,238 --> 00:14:00,272 OUTLOOK FOR THE ECONOMY, AND 359 00:14:00,272 --> 00:14:02,041 THEN WHAT WE HAVE COLLECTED IN 360 00:14:02,041 --> 00:14:06,111 THE PREVIOUS YEARS, THOSE ARE 361 00:14:06,111 --> 00:14:11,483 THE MAIN THINGS BUILDING FOR THE 362 00:14:11,483 --> 00:14:12,251 APRIL FORECAST. TURNING TO THE 363 00:14:12,251 --> 00:14:14,386 FIRST ONE, LOOKING BACK AT THE 364 00:14:14,386 --> 00:14:15,621 PREVIOUS YEAR, HOW WILL THE 365 00:14:15,621 --> 00:14:18,691 SEATTLE AREA ECONOMY PERFORM IN 366 00:14:18,691 --> 00:14:21,527 2025? THE CHART ON THE RIGHT 367 00:14:21,527 --> 00:14:23,128 SHOWS THE FORECAST AND ACTUAL 368 00:14:23,128 --> 00:14:29,034 VALUES FOR A COUPLE OF MAIN 369 00:14:29,034 --> 00:14:30,469 INDICATORS, SUMMARIZING THE 370 00:14:30,469 --> 00:14:32,137 ECONOMY PERFORMANCE, STARTING 371 00:14:32,137 --> 00:14:34,006 WITH EMPLOYMENT, THAT IS OUR 372 00:14:34,006 --> 00:14:37,142 MAIN INDICATOR TO ASSESS THE 373 00:14:37,142 --> 00:14:39,745 OVERALL HEALTH OF THE REGIONAL 374 00:14:39,745 --> 00:14:43,449 ECONOMY, OUR FORECAST IN 375 00:14:43,449 --> 00:14:45,150 OCTOBER, 2025, SLIGHTLY DARKER, 376 00:14:45,150 --> 00:14:47,786 GRAY BAR, THAT FORECAST 377 00:14:47,786 --> 00:14:49,355 PREDICTED DECLINE IN REGIONAL 378 00:14:49,355 --> 00:14:53,125 EMPLOYMENT, ROUGHLY 0.6, HALF A 379 00:14:53,125 --> 00:14:56,662 PERCENT DECLINE IN REGIONAL 380 00:14:56,662 --> 00:14:58,864 EMPLOYMENT, THE ACTUAL OUTCOME 381 00:14:58,864 --> 00:15:00,966 WAS SLIGHTLY BETTER, MINUS 0.1%, 382 00:15:00,966 --> 00:15:02,868 THE EMPLOYMENT, TOTAL EMPLOYMENT 383 00:15:02,868 --> 00:15:04,436 OF DECLINE, BUT SLIGHTLY, ONLY 384 00:15:04,436 --> 00:15:06,772 SLIGHTLY, THE MAIN REASON HERE 385 00:15:06,772 --> 00:15:09,108 IS THAT THE WASHINGTON STATE 386 00:15:09,108 --> 00:15:10,576 EMPLOYMENT SECURITY DEPARTMENT 387 00:15:10,576 --> 00:15:14,580 HAS REVISED REGIONAL EMPLOYMENT 388 00:15:14,580 --> 00:15:18,584 ESTIMATE DATA. THEY DO THAT 389 00:15:18,584 --> 00:15:20,185 REGULARLY AND OCCASIONALLY QUITE 390 00:15:20,185 --> 00:15:22,187 SIGNIFICANT CHANGES IN THIS 391 00:15:22,187 --> 00:15:23,355 FORECAST REVISED EMPLOYMENT 392 00:15:23,355 --> 00:15:25,557 ESTIMATES DOWN FOR 2024 AND 393 00:15:25,557 --> 00:15:29,528 SLIGHTLY UP FOR 2025, SO THAT 394 00:15:29,528 --> 00:15:33,299 MEANS THE JOB GROWTH LAST YEAR, 395 00:15:33,299 --> 00:15:35,567 2025 JOB GROWTH, CAME IN 396 00:15:35,567 --> 00:15:38,504 SLIGHTLY ABOVE OUR FORECAST, THE 397 00:15:38,504 --> 00:15:40,506 TRADITION HAPPENED LAST MONTH, 398 00:15:40,506 --> 00:15:42,441 BEFORE THAT REVISION, THE 399 00:15:42,441 --> 00:15:45,311 ESTIMATES WERE THAT THE 400 00:15:45,311 --> 00:15:48,013 EMPLOYMENT DECLINED BY 0.8% IN 401 00:15:48,013 --> 00:15:53,752 SEATTLE AREA ECONOMY. SO, AGAIN, 402 00:15:53,752 --> 00:15:55,154 OCCASIONALLY QUITE SIGNIFICANT 403 00:15:55,154 --> 00:15:56,388 CHANGES. THAT IS CONSIDERED 404 00:15:56,388 --> 00:15:57,790 GENERAL GOOD NEWS. LITTLE MORE 405 00:15:57,790 --> 00:15:59,858 GOOD NEWS INFLATION SIDE, 2025 406 00:15:59,858 --> 00:16:02,728 WAS VERY VOLATILE YEAR, LOT OF 407 00:16:02,728 --> 00:16:04,830 UNCERTAINTY, LOT OF MOVING 408 00:16:04,830 --> 00:16:09,668 PARTS, IN THE END, INFLATION 409 00:16:09,668 --> 00:16:10,903 CAME IN BELOW EXPECTATIONS. THAT 410 00:16:10,903 --> 00:16:12,871 IS 2.4%, IT WAS ACTUALLY ALSO 411 00:16:12,871 --> 00:16:15,007 LOWER THAN THE INFLATION THAT 412 00:16:15,007 --> 00:16:17,209 WAS SEEN ON THE NATIONAL LEVEL, 413 00:16:17,209 --> 00:16:20,746 AND IT WAS ROUGHLY WHERE WE WERE 414 00:16:20,746 --> 00:16:24,149 EXPECTING IT TO BE EVEN BACK IN 415 00:16:24,149 --> 00:16:29,254 OCTOBER OF 2024, BEFORE ALL OF 416 00:16:29,254 --> 00:16:31,490 THE UNCERTAINTY THEY BROUGHT AND 417 00:16:31,490 --> 00:16:36,061 ALL THE CHANGES AND THE 418 00:16:36,061 --> 00:16:37,663 DIFFERENT REVISIONS IN THE 419 00:16:37,663 --> 00:16:40,099 FORECASTS. THEN MOVING ON TO THE 420 00:16:40,099 --> 00:16:41,700 TAXABLE SALES, AGAIN, GOOD NEWS 421 00:16:41,700 --> 00:16:43,902 THERE, OUR FORECAST FOR THE 422 00:16:43,902 --> 00:16:47,272 PREVIOUS YEAR, THE FINAL ONE 423 00:16:47,272 --> 00:16:50,209 FROM OCTOBER, 2025, WAS TAXABLE 424 00:16:50,209 --> 00:16:52,644 SALES WILL GROW BY 1.25%, WHICH 425 00:16:52,644 --> 00:16:54,313 WOULD MEAN DECLINING IN REAL 426 00:16:54,313 --> 00:16:56,315 TERMS, ADJUSTED FOR INFLATION, 427 00:16:56,315 --> 00:17:01,620 BUT THE DECLINE WAS ONLY SMALL, 428 00:17:01,620 --> 00:17:06,358 DEFINITELY SMALLER THAN WE 429 00:17:06,358 --> 00:17:07,226 EXPECTED. TAXABLE SALES, 2.2%, 430 00:17:07,226 --> 00:17:08,394 EVEN THOUGH CONSUMER SPENDING IN 431 00:17:08,394 --> 00:17:10,462 THE CITY WAS WEAKER THAN THE 432 00:17:10,462 --> 00:17:12,264 NATIONAL ECONOMY, AND EVEN 433 00:17:12,264 --> 00:17:18,270 THOUGH TAXABLE SALES IN 434 00:17:18,270 --> 00:17:18,837 CONSTRUCTION SECTOR HAVE 435 00:17:18,837 --> 00:17:20,973 DECLINED 4.4%, WAY DOWN ON TOTAL 436 00:17:20,973 --> 00:17:24,943 SALES TAX REVENUE. WE DID SEE 437 00:17:24,943 --> 00:17:27,146 STRONG PERFORMANCE LAST QUARTER 438 00:17:27,146 --> 00:17:29,281 OF 2025. THEN FINALLY, FOR 439 00:17:29,281 --> 00:17:30,182 PERSONAL INCOME, THERE IS ONLY 440 00:17:30,182 --> 00:17:32,684 TWO BARS IN THE CHART, THE 441 00:17:32,684 --> 00:17:37,222 REASON HERE IS THAT ACTUAL 442 00:17:37,222 --> 00:17:39,024 PERSONAL INCOME FOR 2025 WILL BE 443 00:17:39,024 --> 00:17:41,026 ON THE RELEASE BY BEA IN 444 00:17:41,026 --> 00:17:42,895 DECEMBER OF THIS YEAR, SO WE 445 00:17:42,895 --> 00:17:44,830 DON'T HAVE ANY INSIGHT INTO 446 00:17:44,830 --> 00:17:46,465 PERSONAL INCOME FOR SEATTLE 447 00:17:46,465 --> 00:17:49,034 METRO AREA, WE DO KNOW THAT FOR 448 00:17:49,034 --> 00:17:53,906 WASHINGTON STATE AS A WHOLE, 449 00:17:53,906 --> 00:17:55,441 PERSONAL INCOME AND WAGES 450 00:17:55,441 --> 00:17:58,243 SALARIES GREW SLIGHTLY ABOVE 5%, 451 00:17:58,243 --> 00:17:59,211 SO THAT GIVES US CONFIDENCE FOR 452 00:17:59,211 --> 00:18:02,948 SEATTLE AREA, WE ARE GOING TO BE 453 00:18:02,948 --> 00:18:04,550 CLOSE TO THAT 5% FORECAST FOR 454 00:18:04,550 --> 00:18:06,085 PERSONAL INCOME ONCE THE DATA IS 455 00:18:06,085 --> 00:18:11,290 EVENTUALLY RELEASED AT THE END 456 00:18:11,290 --> 00:18:15,194 OF THIS YEAR. LOOKING A LITTLE 457 00:18:15,194 --> 00:18:19,364 MORE CLOSELY AT EMPLOYMENT DATA, 458 00:18:19,364 --> 00:18:24,169 KIND OF TRYING TO SEE WHERE THE 459 00:18:24,169 --> 00:18:25,838 JOBS ARE, THESE APPEARING IN 460 00:18:25,838 --> 00:18:31,877 WHICH PARTS OF THE ECONOMY, WE 461 00:18:31,877 --> 00:18:33,112 ARE SEEING EMPLOYMENT DECLINES. 462 00:18:33,112 --> 00:18:36,815 THE BAD NEWS HERE IS THAT IT IS 463 00:18:36,815 --> 00:18:38,717 PRETTY MUCH ACROSS THE BOARD, WE 464 00:18:38,717 --> 00:18:41,186 EXPECT THE EXCEPTIONS FOR 465 00:18:41,186 --> 00:18:44,656 GOVERNMENT AND EDUCATION AND 466 00:18:44,656 --> 00:18:46,425 HEALTH SERVICES AND WE ARE, AND 467 00:18:46,425 --> 00:18:50,229 TRANSPORTATION AFTER THE LAST 468 00:18:50,229 --> 00:18:53,132 REVISION, WE ARE SEEING DECLINES 469 00:18:53,132 --> 00:18:56,935 IN ALL MAIN PARTS OF THE 470 00:18:56,935 --> 00:18:59,304 REGIONAL ECONOMY, NUMBER OF 471 00:18:59,304 --> 00:19:02,107 REASONS FOR THAT, SPECIFIC TO 472 00:19:02,107 --> 00:19:02,708 DIFFERENT INDUSTRIES. FOR 473 00:19:02,708 --> 00:19:07,913 CONSTRUCTION THERE IS LOW DEMAND 474 00:19:07,913 --> 00:19:12,684 FOR OFFICE SPACE, INTEREST RATES 475 00:19:12,684 --> 00:19:13,352 DON'T HELP EITHER. SIGNIFICANT 476 00:19:13,352 --> 00:19:15,487 DECREASE, WE HAVE SEEN THAT FOR 477 00:19:15,487 --> 00:19:16,622 A COUPLE OF YEARS. MANUFACTURING 478 00:19:16,622 --> 00:19:19,725 EMPLOYMENT HAS DECLINED BECAUSE 479 00:19:19,725 --> 00:19:21,693 OF SOME LAYOFFS AT BOEING EARLY 480 00:19:21,693 --> 00:19:24,096 2025, YOU ARE ABLE TO POINT OUT 481 00:19:24,096 --> 00:19:25,430 THE SEATTLE METRO DIVISION, SO 482 00:19:25,430 --> 00:19:28,901 KING AND SNOHOMISH COUNTY, THIS 483 00:19:28,901 --> 00:19:31,870 IS NOT CITY OF SEATTLE 484 00:19:31,870 --> 00:19:32,704 EMPLOYMENT. THEN FOR LABOR 485 00:19:32,704 --> 00:19:35,407 DEMAND THERE IS JUST WEAK, THERE 486 00:19:35,407 --> 00:19:37,442 IS LITTLE HIRING, COMPANIES ARE 487 00:19:37,442 --> 00:19:40,112 EXPECTING WIDER ADOPTION OF AI 488 00:19:40,112 --> 00:19:42,447 AND FOCUSING ON NEW INVESTMENT 489 00:19:42,447 --> 00:19:49,188 IN AI, EXPECTING TO MEET FEWER 490 00:19:49,188 --> 00:19:54,393 EMPLOYEES, THEY ARE HOLDING ON 491 00:19:54,393 --> 00:19:56,228 TO HIRING. BECAUSE OF THE 492 00:19:56,228 --> 00:20:00,432 LAYOFFS, THERE ARE DECLINES IN 493 00:20:00,432 --> 00:20:05,771 THE SECTOR, PROFESSIONAL, THE 494 00:20:05,771 --> 00:20:08,006 COMPANIES IN SEATTLE AREA. 495 00:20:08,006 --> 00:20:12,411 MOVING ON TO MORE RECENT 496 00:20:12,411 --> 00:20:13,679 DEVELOPMENTS HERE, SUMMARIZES 497 00:20:13,679 --> 00:20:19,151 THE IMPACT OF WHAT HAS BEEN 498 00:20:19,151 --> 00:20:20,519 GOING ON SINCE, LATE FEBRUARY, 499 00:20:20,519 --> 00:20:23,088 WAR IN IRAN LED TO A LARGE SPIKE 500 00:20:23,088 --> 00:20:26,592 IN OIL PRICES AND GAS PRICES, 501 00:20:26,592 --> 00:20:30,262 THE CHART ON THE RIGHT SHOWS 502 00:20:30,262 --> 00:20:32,864 TEXAS INTERMEDIATE OIL PRICES 503 00:20:32,864 --> 00:20:34,700 WAS AT SLIGHTLY LIGHTER GRAY 504 00:20:34,700 --> 00:20:40,072 LINE, THE ONE BELOW, AND THE ONE 505 00:20:40,072 --> 00:20:43,442 ABOVE, VALLEY ON THE RIGHT, THE 506 00:20:43,442 --> 00:20:46,044 SIDE, SHOWS THE SEATTLE AREA GAS 507 00:20:46,044 --> 00:20:47,646 PRICES WHICH ARE REACHING LEVELS 508 00:20:47,646 --> 00:20:54,653 THAT WE HAVE LAST SEEN IN 2022, 509 00:20:54,653 --> 00:20:55,721 WHEN RUSSIA ATTACKED UKRAINE. SO 510 00:20:55,721 --> 00:20:58,023 QUITE A SIGNIFICANT INCREASE IN 511 00:20:58,023 --> 00:21:00,959 GAS PRICES THAT ARE EXPECTED TO 512 00:21:00,959 --> 00:21:04,930 LEAD TO HIGHER OVERALL INFLATION 513 00:21:04,930 --> 00:21:09,001 AND CREATE HEAD WINDS FOR THE 514 00:21:09,001 --> 00:21:11,136 ECONOMY. THIS INCREASE IN 515 00:21:11,136 --> 00:21:14,006 UNCERTAINTY HAS LED TO RISING 516 00:21:14,006 --> 00:21:16,141 RECESSION RISKS, WE HAVE SEEN 517 00:21:16,141 --> 00:21:19,845 SOME DECLINES THERE, AND WE WERE 518 00:21:19,845 --> 00:21:20,979 CERTAINLY EXPECTING LESS 519 00:21:20,979 --> 00:21:26,084 UNCERTAINTY THIS YEAR, BUT HERE 520 00:21:26,084 --> 00:21:28,220 WE ARE. SO IN MARCH, SURVEY OF 521 00:21:28,220 --> 00:21:29,755 WALL STREET JOURNAL OF ECONOMY, 522 00:21:29,755 --> 00:21:31,857 THE WALL STREET JOURNAL CONDUCTS 523 00:21:31,857 --> 00:21:33,525 EVERY QUARTER, AND ASK ABOUT 60 524 00:21:33,525 --> 00:21:34,960 ECONOMISTS WHAT THEY BELIEVE IS 525 00:21:34,960 --> 00:21:39,064 THE PROBABILITY OF RECESSION IN 526 00:21:39,064 --> 00:21:43,935 THE NEXT 12 MONTHS, THAT SURVEY 527 00:21:43,935 --> 00:21:45,637 AVERAGE OF THE PROBABILITY WAS 528 00:21:45,637 --> 00:21:50,409 32, IT WAS UP FROM 27% IN 529 00:21:50,409 --> 00:21:51,276 JANUARY, SO, AGAIN, RECESSION 530 00:21:51,276 --> 00:21:53,111 ARISING, NOT AS HIGH AS LAST 531 00:21:53,111 --> 00:21:55,647 YEAR, AT LEAST THAT IS WHAT THE 532 00:21:55,647 --> 00:22:00,185 SITUATION WAS IN MID MARCH, THE 533 00:22:00,185 --> 00:22:02,487 TIME OF THAT SURVEY. LAST YEAR 534 00:22:02,487 --> 00:22:04,256 AFTER THE TARIFFS WERE 535 00:22:04,256 --> 00:22:08,460 ANNOUNCED, THE RECESSION 536 00:22:08,460 --> 00:22:09,928 PROBABILITY JUMPED TO 45%. SO, 537 00:22:09,928 --> 00:22:14,433 OVERALL, RIGHT NOW MARKETS ARE 538 00:22:14,433 --> 00:22:17,636 UP BEHAVING IN AN ERRATIC WAY 539 00:22:17,636 --> 00:22:22,107 BUT THERE IS LESS VOLATILITY 540 00:22:22,107 --> 00:22:24,543 THAN LAST YEAR. LAST YEAR, 541 00:22:24,543 --> 00:22:27,312 S&P500 INDEX FELL BY MORE THAN 542 00:22:27,312 --> 00:22:29,948 15%, I BELIEVE CLOSE TO 18%, 543 00:22:29,948 --> 00:22:32,651 BETWEEN THE WEAK AND THE BOTTOM 544 00:22:32,651 --> 00:22:33,885 AFTER THE TARIFF ANNOUNCEMENT. 545 00:22:33,885 --> 00:22:35,887 THIS YEAR DECLINE WAS ABOUT 9%, 546 00:22:35,887 --> 00:22:36,955 BUT SINCE THE BOTTOM MARKETS 547 00:22:36,955 --> 00:22:39,057 HAVE RECOVERED MOST OF THE 548 00:22:39,057 --> 00:22:43,028 LOSSES RIGHT NOW THEY ARE-- THE 549 00:22:43,028 --> 00:22:45,464 S&P500 IS ONLY ABOUT 2.3% DOWN. 550 00:22:45,464 --> 00:22:46,631 SO THE EXPECTATION IS HERE THAT 551 00:22:46,631 --> 00:22:47,933 THIS CONFLICT IS NOT GOING TO 552 00:22:47,933 --> 00:22:50,669 LAST LONG, THE STRAIT OR HORMUZ 553 00:22:50,669 --> 00:22:52,037 IS GOING TO BE REOPENED BECAUSE 554 00:22:52,037 --> 00:22:55,307 IT IS IN THE BEST INTEREST OF 555 00:22:55,307 --> 00:22:57,309 THE ADMINISTRATION FOR THESE TO 556 00:22:57,309 --> 00:23:02,280 NOT TO DRAG ON FOR TOO LONG. 557 00:23:02,280 --> 00:23:06,251 NOW, MOVING ON TO THE ECONOMIC 558 00:23:06,251 --> 00:23:10,055 OUTLOOK FIRST, FOR THE U.S., THE 559 00:23:10,055 --> 00:23:11,757 FORECAST PRESENTED HERE IS 560 00:23:11,757 --> 00:23:14,526 WEIGHTED AVERAGE OF THE TWO 561 00:23:14,526 --> 00:23:17,596 FORECASTS THAT WE HAVE OBTAINED 562 00:23:17,596 --> 00:23:20,832 FROM S&P GLOBAL AND ANALYTICS, 563 00:23:20,832 --> 00:23:21,666 WE ARE CONSTRUCTING AVERAGE 564 00:23:21,666 --> 00:23:25,504 FORECAST OF THE TWO TO KIND OF 565 00:23:25,504 --> 00:23:26,671 MITIGATE THE RISKS, SOMETIMES 566 00:23:26,671 --> 00:23:28,540 ONE OF THEM MIGHT BE MORE 567 00:23:28,540 --> 00:23:30,242 OPTIMISTIC, SOMETIMES THE OTHER 568 00:23:30,242 --> 00:23:31,309 MIGHT BE TOO OPTIMISTIC. BY 569 00:23:31,309 --> 00:23:36,348 AVERAGING THAT WE ARE TRYING TO 570 00:23:36,348 --> 00:23:38,984 DEAL WITH THAT. THOSE FORECASTS 571 00:23:38,984 --> 00:23:40,018 WERE RELEASED IN EARLY MARCH, 572 00:23:40,018 --> 00:23:43,755 AND SINCE THEN THERE HAS BEEN 573 00:23:43,755 --> 00:23:45,757 QUITE A SIGNIFICANT DEVELOPMENT, 574 00:23:45,757 --> 00:23:47,993 THE CONFLICT IN IRAN LASTED 575 00:23:47,993 --> 00:23:51,630 LONGER AND THE OIL PRICES 576 00:23:51,630 --> 00:23:52,664 CLIMBED HIGHER THAN EXPECTED. SO 577 00:23:52,664 --> 00:23:54,633 WHILE DEVELOPING THAT FORECAST, 578 00:23:54,633 --> 00:23:57,169 WE DID SOME ADJUSTMENTS THAT ARE 579 00:23:57,169 --> 00:24:00,038 SLIGHTLY MORE TECHNICAL AND THE 580 00:24:00,038 --> 00:24:01,840 DETAILED FORECASTS ARE AVAILABLE 581 00:24:01,840 --> 00:24:04,543 ON OUR WEBSITE, THE SPREADSHEET 582 00:24:04,543 --> 00:24:07,779 THERE EXPLAINS HOW EXACTLY WE 583 00:24:07,779 --> 00:24:10,081 CONSTRUCT THAT AVERAGE FOR THE 584 00:24:10,081 --> 00:24:12,617 BASELINE SCENARIO, AND FOR THE 585 00:24:12,617 --> 00:24:13,285 PESSIMISTIC SCENARIO. THE BOTTOM 586 00:24:13,285 --> 00:24:17,556 LINE HERE IS THAT WE ARE 587 00:24:17,556 --> 00:24:22,561 ACTUALLY TAKING A COMBINATION OF 588 00:24:22,561 --> 00:24:24,095 WHAT S&P GLOBAL CALL PESSIMISTIC 589 00:24:24,095 --> 00:24:25,664 SCENARIO AND WE ARE CONSTRUCTING 590 00:24:25,664 --> 00:24:27,199 THE THING THAT IS CALLED 591 00:24:27,199 --> 00:24:29,568 BASELINE HERE IN THE AVERAGE 592 00:24:29,568 --> 00:24:31,136 FORECAST BY ACTUALLY 593 00:24:31,136 --> 00:24:34,506 INCORPORATING SOME OF THOSE MORE 594 00:24:34,506 --> 00:24:36,708 PESSIMISTIC ASSUMPTIONS FROM 595 00:24:36,708 --> 00:24:37,809 EARLY MARCH. THE POINT HERE, THE 596 00:24:37,809 --> 00:24:40,245 MAIN GOAL HERE IS TO TAKE INTO 597 00:24:40,245 --> 00:24:42,747 ACCOUNT FOR THE FACT THAT THE 598 00:24:42,747 --> 00:24:45,083 OIL PRICES HAVE CONTINUED TO 599 00:24:45,083 --> 00:24:51,723 CLIMB HIGHER THAN WHAT THOSE 600 00:24:51,723 --> 00:24:52,357 INITIAL EXPECTATIONS WERE WHICH 601 00:24:52,357 --> 00:24:54,826 EXPECTED THE STRAIT OR HORMUZ TO 602 00:24:54,826 --> 00:25:02,701 OPEN BY EARLY APRIL, THAT MEANS 603 00:25:02,701 --> 00:25:04,069 COMPLETELY REOPEN BY EARLY 604 00:25:04,069 --> 00:25:06,738 APRIL. HERE IS WHAT THAT CURRENT 605 00:25:06,738 --> 00:25:08,073 MARCH BASELINE SCENARIO LOOKS 606 00:25:08,073 --> 00:25:15,080 LIKE, IT IS AVERAGE AND IT IS 607 00:25:15,080 --> 00:25:16,481 WEIGHTED AVERAGE TAKING INTO 608 00:25:16,481 --> 00:25:20,151 ACCOUNT WHAT S&P REFERRED TO AS 609 00:25:20,151 --> 00:25:21,786 BASELINE AND PESSIMISTIC 610 00:25:21,786 --> 00:25:23,521 SCENARIO. THER RED LINE THAT 611 00:25:23,521 --> 00:25:25,023 SHOWS THE CURRENT BASELINE 612 00:25:25,023 --> 00:25:27,626 AVERAGE FORECAST FOR THE U.S., 613 00:25:27,626 --> 00:25:33,932 AS YOU CAN SEE, IS ABOVE THE 614 00:25:33,932 --> 00:25:35,700 LINE FROM OCTOBER. OVERALL, U.S. 615 00:25:35,700 --> 00:25:37,135 ECONOMY STILL EXPECTED TO GROW 616 00:25:37,135 --> 00:25:43,441 AT SOLID BASE, THERE IS LOTS OF 617 00:25:43,441 --> 00:25:44,709 INVESTMENT IN AI, THERE IS SOME 618 00:25:44,709 --> 00:25:48,079 STIMULUS EXPECTED TO BOOST THE 619 00:25:48,079 --> 00:25:51,316 ECONOMY THE FIRST HALF OF 2026, 620 00:25:51,316 --> 00:25:54,085 SO EVEN WITH THOSE HEADWINDS 621 00:25:54,085 --> 00:25:57,722 CREATED BY THE WAR IN IRAN, THE 622 00:25:57,722 --> 00:26:04,429 ECONOMY IS STILL EXPECTED TO 623 00:26:04,429 --> 00:26:06,231 GROW WITH A SOLID ROUGHLY 624 00:26:06,231 --> 00:26:08,099 2-POINT% BASE IN THE BASELINE 625 00:26:08,099 --> 00:26:09,301 SCENARIO. THAT MIGHT BE REVISED 626 00:26:09,301 --> 00:26:11,670 DOWN A LITTLE DEPENDING ON HOW 627 00:26:11,670 --> 00:26:13,471 LONG THE CONFLICT IN IRAN LASTS 628 00:26:13,471 --> 00:26:18,076 BUT THE BASELINE DOES NOT EXPECT 629 00:26:18,076 --> 00:26:19,210 THE RECESSION, THE PESSIMISTIC 630 00:26:19,210 --> 00:26:20,812 SCENARIO DOES&IT WOULD BE A 631 00:26:20,812 --> 00:26:24,115 STEEP DECLINE INTO A RECESSION 632 00:26:24,115 --> 00:26:25,817 IN THE SECOND HALF OF 2026 IF 633 00:26:25,817 --> 00:26:27,819 THE OIL PRICES STAY HIGH FOR A 634 00:26:27,819 --> 00:26:30,422 PROLONGED TIME, THERE IS JUST 635 00:26:30,422 --> 00:26:37,662 NOTHING THAT CAN BE REALLY DONE 636 00:26:37,662 --> 00:26:39,164 TO AVOID THE RECESSION. THE 637 00:26:39,164 --> 00:26:45,670 RISING COST, THERE WILL BE LESS 638 00:26:45,670 --> 00:26:47,605 SPENDING, EXPECTED TO TUMBLE AND 639 00:26:47,605 --> 00:26:53,478 OVERALL ECONOMY DOWN DRIVEN AND 640 00:26:53,478 --> 00:26:57,949 RECESSION WOULD ENSUE. SO THAT 641 00:26:57,949 --> 00:26:59,351 IS THE EXPECTATION REGARDING THE 642 00:26:59,351 --> 00:27:00,952 ECONOMY. THE CHART ON THE RIGHT, 643 00:27:00,952 --> 00:27:03,321 THE RIGHT PANEL SHOWS THE 644 00:27:03,321 --> 00:27:05,223 EXPECTATION REGARDING 645 00:27:05,223 --> 00:27:06,424 EMPLOYMENT, AGAIN, GOING BACK 646 00:27:06,424 --> 00:27:07,993 SLIGHTLY, LOOKING AT WHAT THE 647 00:27:07,993 --> 00:27:09,894 EXPECTATIONS WERE BACK IN 648 00:27:09,894 --> 00:27:11,763 OCTOBER, IN THE BASELINE 649 00:27:11,763 --> 00:27:13,765 SCENARIO, VERY LITTLE GROWTH WAS 650 00:27:13,765 --> 00:27:17,635 EXPECTED BELOW 0.5% YEAR OVER 651 00:27:17,635 --> 00:27:20,238 YEAR INCREASES IN EMPLOYMENT. 652 00:27:20,238 --> 00:27:22,140 THAT HAS BEEN REVISED EVEN 653 00:27:22,140 --> 00:27:23,508 FURTHER DOWN, THERE IS THAT 654 00:27:23,508 --> 00:27:25,644 ASYMMETRIC HERE BETWEEN THE 655 00:27:25,644 --> 00:27:29,080 CHANGES IN REAL GDP AND 656 00:27:29,080 --> 00:27:32,150 EMPLOYMENT, THE OUTLOOK FOR JOB 657 00:27:32,150 --> 00:27:34,319 GROWTH IS VERY, VERY WEAK. THERE 658 00:27:34,319 --> 00:27:36,888 IS BOTH LESS LABOR SUPPLY AND 659 00:27:36,888 --> 00:27:40,025 LESS LABOR DEMAND, SO THE 660 00:27:40,025 --> 00:27:42,694 OVERALL PICTURE IS JUST VERY 661 00:27:42,694 --> 00:27:45,063 LITTLE HIRING AND VERY LITTLE 662 00:27:45,063 --> 00:27:47,766 FIRING, THE EMPLOYMENT WILL STAY 663 00:27:47,766 --> 00:27:49,667 ROUGHLY CHANGED. IN THE BASELINE 664 00:27:49,667 --> 00:27:51,603 SCENARIO, PESSIMISTIC SCENARIO, 665 00:27:51,603 --> 00:27:54,372 RECESSION, AGAIN, THERE WILL BE 666 00:27:54,372 --> 00:27:57,442 SIGNIFICANT WIDESPREAD LAYOFF SO 667 00:27:57,442 --> 00:27:59,411 EMPLOYMENT WIM DECLINE, 668 00:27:59,411 --> 00:28:02,981 EMPLOYMENT WOULD DECLINE IN THE 669 00:28:02,981 --> 00:28:04,816 ALTERNATIVE SCENARIO. WHEN IT 670 00:28:04,816 --> 00:28:08,887 COMES TO EXPECTATIONS FOR 671 00:28:08,887 --> 00:28:10,922 INFLATION, THIS IS YET ANOTHER 672 00:28:10,922 --> 00:28:14,459 SUPPLY, FED WAS FIRST FACING, 673 00:28:14,459 --> 00:28:16,728 VERY CHALLENGING SITUATION 674 00:28:16,728 --> 00:28:20,699 REGARD ING THE IMPACT OF TARIFFS 675 00:28:20,699 --> 00:28:21,666 AND IMMIGRATION RESTRICTIONS, 676 00:28:21,666 --> 00:28:24,536 NOW WITH OIL PRICE SHOCKS, THEY 677 00:28:24,536 --> 00:28:27,105 HAVE YET ANOTHER THING TO DEAL 678 00:28:27,105 --> 00:28:29,374 WITH. SEEMS UNLIKELY AT THIS 679 00:28:29,374 --> 00:28:33,545 POINT THERE WILL BE SIGNIFICANT 680 00:28:33,545 --> 00:28:35,980 RATE CUTS, BEFORE THE CONFLICT, 681 00:28:35,980 --> 00:28:38,116 TWO OR THREE INTEREST RATE CUTS 682 00:28:38,116 --> 00:28:40,318 EACH A QUARTER OF A PERCENTAGE 683 00:28:40,318 --> 00:28:42,887 POINT PEREXPECTED THROUGHOUT THE 684 00:28:42,887 --> 00:28:44,456 YEAR. RIGHT NOW IT SEEMS MORE 685 00:28:44,456 --> 00:28:46,224 LIKELY THE FED WOULD WAIT AND 686 00:28:46,224 --> 00:28:48,626 SEE HOW THESE PLAY OUT AND KEEP 687 00:28:48,626 --> 00:28:51,496 THE INTEREST RATE UNCHANGING, 688 00:28:51,496 --> 00:29:01,806 3.5 TO 3.75 TRYING TO GET 689 00:29:01,806 --> 00:29:03,541 INFLATION DOWN TO ITS TARGET. 690 00:29:03,541 --> 00:29:05,410 FOR THE BASELINE SCENARIO, AS 691 00:29:05,410 --> 00:29:08,580 YOU CAN SEE, THERE ISN'T A 692 00:29:08,580 --> 00:29:12,517 NOTICEABLE INCREASE IN THE 693 00:29:12,517 --> 00:29:14,385 EXPECTED INFLATION FOR 2026, FOR 694 00:29:14,385 --> 00:29:17,088 CURRENT YEAR, AT LEAST FOR THE 695 00:29:17,088 --> 00:29:19,524 FIRST HALF THE DARKER RED LINE 696 00:29:19,524 --> 00:29:22,193 IS NOT REALLY ABOVE THE PREVIOUS 697 00:29:22,193 --> 00:29:24,295 FORECAST FROM OCTOBER, THE 698 00:29:24,295 --> 00:29:26,531 REASON HERE IS THAT THE OVERALL 699 00:29:26,531 --> 00:29:30,201 PASS THROUGH OF TARIFFS WAS MUCH 700 00:29:30,201 --> 00:29:31,402 SLOWER THAN EXPECTED AND ONLY 701 00:29:31,402 --> 00:29:38,009 EXPECTED TO REALLY KICK IN AND 702 00:29:38,009 --> 00:29:39,978 CAUSE HIGHER INCREASES THIS 703 00:29:39,978 --> 00:29:43,047 YEAR, AND BIGGER IMPACT WOULD BE 704 00:29:43,047 --> 00:29:45,083 FELT SOMEWHERE AROUND SUMMER. SO 705 00:29:45,083 --> 00:29:46,751 PREVIOUS YEAR, SO INFLATION 706 00:29:46,751 --> 00:29:48,953 COMING IN BELOW THE PREVIOUS 707 00:29:48,953 --> 00:29:50,488 FORECAST, THAT MEANS EVEN WITH 708 00:29:50,488 --> 00:29:52,524 ADDITIONAL IMPACT OF HIGHER OIL 709 00:29:52,524 --> 00:29:55,026 PRICES, THE BASELINE SCENARIO 710 00:29:55,026 --> 00:29:59,831 HERE IS ROUGHLY WHERE IT WOULD 711 00:29:59,831 --> 00:30:02,467 HAVE BEEN PREVIOUSLY, FOR, 712 00:30:02,467 --> 00:30:04,669 AGAIN, FIRST HALF OF 2026. NOW, 713 00:30:04,669 --> 00:30:07,138 AGAIN, DEPENDING ON HOW LONG THE 714 00:30:07,138 --> 00:30:09,107 CONFLICT WILL LAST, HOW HIGH THE 715 00:30:09,107 --> 00:30:12,143 OIL PRICES WILL GO, AND HOW LONG 716 00:30:12,143 --> 00:30:14,612 THEY WILL STAY THERE, THE 717 00:30:14,612 --> 00:30:17,549 OUTLOOK CAN BE SIGNIFICANTLY 718 00:30:17,549 --> 00:30:20,852 WORSE AND INFLATION CAN 719 00:30:20,852 --> 00:30:22,387 POTENTIALLY REACH 4% IN THE 720 00:30:22,387 --> 00:30:23,521 PESSIMISTIC SCENARIO FROM MARCH, 721 00:30:23,521 --> 00:30:27,826 AGAIN, THIS WAS CONSTRUCTED AS 722 00:30:27,826 --> 00:30:31,129 THE AVERAGE OF WHAT S&P GLOBAL 723 00:30:31,129 --> 00:30:36,434 EXPECT. AND THAT CAN BE, AGAIN, 724 00:30:36,434 --> 00:30:38,937 REVISED UPWARDS, SO EXCEED 4%. 725 00:30:38,937 --> 00:30:42,207 WE JUST GOT RATE FOR MARCH 726 00:30:42,207 --> 00:30:45,743 TODAY&THE INFLATION CAME IN AT 727 00:30:45,743 --> 00:30:47,011 3.3%. SO, AGAIN, SOME INITIAL 728 00:30:47,011 --> 00:30:47,979 IMPACTS ARE ALREADY SEEN IN 729 00:30:47,979 --> 00:30:51,683 ENERGY PRICES BUT IT WILL TAKE A 730 00:30:51,683 --> 00:30:52,917 LITTLE BIT LONGER FOR THE 731 00:30:52,917 --> 00:30:55,019 OVERALL PRICES TO REACT TO 732 00:30:55,019 --> 00:30:57,388 HIGHER OIL PRICES, AND HOW MUCH 733 00:30:57,388 --> 00:30:59,390 THEY WILL, WE WILL HAVE TO WAIT 734 00:30:59,390 --> 00:30:59,591 AND SEE. 735 00:31:03,061 --> 00:31:05,029 MOVING ON TO OUTLOOK FOR SEATTLE 736 00:31:05,029 --> 00:31:06,631 METRO AREA, FOR INFLATION, WE 737 00:31:06,631 --> 00:31:12,670 HAVE VERY SIMILAR SORT OF A 738 00:31:12,670 --> 00:31:14,105 STORY, UPWARD REVISION, 739 00:31:14,105 --> 00:31:18,676 DEPENDING WHICH SCENARIO WE ARE 740 00:31:18,676 --> 00:31:24,282 LOOKING AT, 4% IN THE BASELINE 741 00:31:24,282 --> 00:31:25,550 SCENARIO, OR THE 4.5% IN 742 00:31:25,550 --> 00:31:28,987 PESSIMISTIC SCENARIO, THEY ARE 743 00:31:28,987 --> 00:31:32,490 BOTH SIGNIFICANT INCREASES 744 00:31:32,490 --> 00:31:34,592 RELATIVE TO OUR PREDICTIONS FROM 745 00:31:34,592 --> 00:31:36,861 OCTOBER, BUT AS A REMINDER BACK 746 00:31:36,861 --> 00:31:39,097 IN 2022, THE PROBLEM WITH 747 00:31:39,097 --> 00:31:44,335 INFLATION WAS EVEN WORSE AND 748 00:31:44,335 --> 00:31:46,137 INFLATION PEAKEDED AROUND 9%, 749 00:31:46,137 --> 00:31:46,871 EVEN WITH THE CURRENT 750 00:31:46,871 --> 00:31:49,707 DISRUPTIONS, AS OF NOW, THE 751 00:31:49,707 --> 00:31:50,541 SPIKE IN OVERALL INFLATION WOULD 752 00:31:50,541 --> 00:31:56,114 NOT BE ANYTHING LIKE WHAT WE 753 00:31:56,114 --> 00:32:02,220 HAVE SEEN COUPLE YEARS AGO. 754 00:32:02,220 --> 00:32:05,723 FINGERS CROSSED. MOVING ON TO 755 00:32:05,723 --> 00:32:06,991 EMPLOYMENT GROWTH, LOOKING AHEAD 756 00:32:06,991 --> 00:32:07,625 TO BASELINE SCENARIO. GIVEN WHAT 757 00:32:07,625 --> 00:32:11,229 WE HAVE SEEN IN THE DATA AND 758 00:32:11,229 --> 00:32:15,500 GIVEN THE ANNOUNCED LAYOFFS BY 759 00:32:15,500 --> 00:32:18,102 AMAZON, WE HAVE BEEN COMPELLED 760 00:32:18,102 --> 00:32:19,170 TO REVISE THE EMPLOYMENT 761 00:32:19,170 --> 00:32:24,375 FORECAST DOWN, AS YOU CAN SEE, 762 00:32:24,375 --> 00:32:25,943 THE EMPLOYMENT WOULD NOT REALLY 763 00:32:25,943 --> 00:32:28,946 GROW OR LAST THE NEXT TWO YEARS, 764 00:32:28,946 --> 00:32:31,582 THERE IS ESSENTIALLY NO NET JOB 765 00:32:31,582 --> 00:32:33,318 INCREASES OVER THE NEXT TWO 766 00:32:33,318 --> 00:32:38,256 YEARS, AND WE WILL BE, STILL, 767 00:32:38,256 --> 00:32:39,991 ROUGHLY THE SAME POSITION MOVING 768 00:32:39,991 --> 00:32:42,460 INTO 2028 IN THE BASELINE 769 00:32:42,460 --> 00:32:43,194 SCENARIO. IN THE PESSIMISTIC 770 00:32:43,194 --> 00:32:44,829 SCENARIO, THINGS WOULD GET 771 00:32:44,829 --> 00:32:50,234 WORSE, AND THE RECESSION WOULD 772 00:32:50,234 --> 00:32:53,037 RESOLVE IN CUMULATIVELY 2.7% 773 00:32:53,037 --> 00:32:55,640 EMPLOYMENT LOSSES BY MID 2027, 774 00:32:55,640 --> 00:32:57,775 AND THE RECOVERY WOULD BE UNTIL 775 00:32:57,775 --> 00:33:00,511 2029, AT WHICH POINT, WE WOULD 776 00:33:00,511 --> 00:33:02,714 BE WHERE WE ARE RIGHT NOW, ONE 777 00:33:02,714 --> 00:33:06,851 THING I WOULD WANT TO POINT OUT 778 00:33:06,851 --> 00:33:09,454 HERE IS THE FORECAST HERE WAS 779 00:33:09,454 --> 00:33:10,822 DEVELOPED BEFORE ESD RELEASED 780 00:33:10,822 --> 00:33:15,827 THE NEW DATA THAT I WAS TALKING 781 00:33:15,827 --> 00:33:19,163 ABOUT EARLIER, SO WITH THE NEXT 782 00:33:19,163 --> 00:33:23,501 FORECAST, THERE IS SOME UPSIDE 783 00:33:23,501 --> 00:33:25,336 RISK TO THE EMPLOYMENT FORECAST, 784 00:33:25,336 --> 00:33:27,205 POTENTIALLY WILL BE REVISED 785 00:33:27,205 --> 00:33:31,142 SLIGHTLY JUST BECAUSE OF 786 00:33:31,142 --> 00:33:32,610 TECHNICAL THINGS THAT PAST 787 00:33:32,610 --> 00:33:33,411 HISTORICAL DATA LOOKS REALLY 788 00:33:33,411 --> 00:33:34,412 DIFFERENT THAN PREVIOUSLY 789 00:33:34,412 --> 00:33:37,682 REPORTED WHEN WE WERE WORKING ON 790 00:33:37,682 --> 00:33:43,020 THE FORECAST THAT HILL HERE WILL 791 00:33:43,020 --> 00:33:44,188 ESSENTIALLY BE GONE AND 792 00:33:44,188 --> 00:33:46,524 EMPLOYMENT IN THE NEXT CHART, 793 00:33:46,524 --> 00:33:48,760 UNLESS BIG CHANGES, WOULD 794 00:33:48,760 --> 00:33:50,995 ROUGHLY HOVER AROUND THE SAME 795 00:33:50,995 --> 00:33:59,737 LEVEL, NO NEW JOBS ADDED SINCE 796 00:33:59,737 --> 00:34:07,245 2023, ESPECIALLY. THOSE LOW JOB 797 00:34:07,245 --> 00:34:08,746 GROWTH PROSPECTS ARE IMPORTANT 798 00:34:08,746 --> 00:34:13,718 FOR REVENUE, IMPORTANT FOR ALL 799 00:34:13,718 --> 00:34:15,653 SORTS OF THINGS, INDIRECTLY, 800 00:34:15,653 --> 00:34:17,955 THROUGH VACANCY RATES CAN HAVE 801 00:34:17,955 --> 00:34:19,624 QUITE MEANINGFUL IMPACT ON THE 802 00:34:19,624 --> 00:34:22,660 REVENUES CTE IS RECEIVING. THE 803 00:34:22,660 --> 00:34:23,928 CHART HERE SHOWS THE VACANCY 804 00:34:23,928 --> 00:34:26,164 RATES, OFFICE VACANCY RATES IN 805 00:34:26,164 --> 00:34:30,134 THE U.S., SEATTLE, AND THEN IN 806 00:34:30,134 --> 00:34:35,039 THE REST OF KING COUNTY. WE HAVE 807 00:34:35,039 --> 00:34:36,841 SEEN THIS CHART A COUPLE OF 808 00:34:36,841 --> 00:34:38,342 TIMES IN PREVIOUS PRESENTATIONS, 809 00:34:38,342 --> 00:34:39,477 THERE WAS SIGNIFICANT INCREASE 810 00:34:39,477 --> 00:34:41,879 IN VACANCY RATE IN SEATTLE, 811 00:34:41,879 --> 00:34:45,149 DEMAND FOR OFFICE SPACE IS VERY 812 00:34:45,149 --> 00:34:47,685 LOW, WORK ARRANGEMENT, LOW 813 00:34:47,685 --> 00:34:48,986 EMPLOYMENT GROWTH, AND HYBRID 814 00:34:48,986 --> 00:34:52,123 WORK ARRANGEMENTS, THERE IS AN 815 00:34:52,123 --> 00:34:53,257 INDEX THAT IS RELEASED EACH 816 00:34:53,257 --> 00:34:55,993 QUARTER FOR HOW MUCH DEMAND 817 00:34:55,993 --> 00:34:59,564 THERE IS FOR OFFICE SPACE BY 818 00:34:59,564 --> 00:35:02,500 REAL ESTATE, BUT FOR BDS, OFFICE 819 00:35:02,500 --> 00:35:04,335 DEMAND INDEX, THEY TRACK A 820 00:35:04,335 --> 00:35:06,971 COUPLE OF CITIES AND SEATTLE IN 821 00:35:06,971 --> 00:35:08,906 RECENT YEARS HAS BEEN THE LOWEST 822 00:35:08,906 --> 00:35:11,008 ONE, CURRENTLY DEMAND FOR OFFICE 823 00:35:11,008 --> 00:35:14,812 SPACE IS ROUGHLY HALF OF THE 824 00:35:14,812 --> 00:35:16,581 PRE-PANDEMIC AVERAGE IN SEATTLE, 825 00:35:16,581 --> 00:35:19,951 WHEREAS IT IS ABOUT 36% IN U.S., 826 00:35:19,951 --> 00:35:22,153 SO AS YOU CAN SEE IN THE CHART, 827 00:35:22,153 --> 00:35:25,523 THE OFFICE VAC ANCY RATES ARE 828 00:35:25,523 --> 00:35:27,792 NOT EXPECTED TO DECLINE REALLY 829 00:35:27,792 --> 00:35:31,028 MEANINGFULLY, EVEN BY 2030, WE 830 00:35:31,028 --> 00:35:35,666 ARE STILL, EXPECTING THE OFFICE 831 00:35:35,666 --> 00:35:41,205 VACANCY RATES TO BE ABOVE 20% IN 832 00:35:41,205 --> 00:35:42,206 SEATTLE. THAT HAS IMPLICATIONS 833 00:35:42,206 --> 00:35:42,807 DIRECTLY AND INDIRECTLY FOR 834 00:35:42,807 --> 00:35:43,941 REVENUES, LIKE I SAID, ONE OF 835 00:35:43,941 --> 00:35:45,977 THE THINGS THAT WE HAVE BEEN 836 00:35:45,977 --> 00:35:49,547 LOOKING AT, AND SHAUN DID SOME 837 00:35:49,547 --> 00:35:52,950 WORK HERE, WAS THE IMPACT ON 838 00:35:52,950 --> 00:35:53,351 ASSESSED VALUE. 839 00:35:53,351 --> 00:35:55,686 >> THANK YOU. WITH ALL THE 840 00:35:55,686 --> 00:35:57,455 DISCUSSION AROUND NEW LEVEES AND 841 00:35:57,455 --> 00:35:58,489 HOW CRITICAL PROPERTY TAX IS TO 842 00:35:58,489 --> 00:36:02,793 SEATTLE BUDGET, WANT TO TAKE A 843 00:36:02,793 --> 00:36:04,262 MOMENT TO TALK ASSESSED VALUE 844 00:36:04,262 --> 00:36:07,632 THE LAST FEW YEARS. TO START 845 00:36:07,632 --> 00:36:09,700 FROM THIS TABLE, TO THE RIGHT, 846 00:36:09,700 --> 00:36:12,303 TOTAL SEATTLE ASSESSED VALUE HAS 847 00:36:12,303 --> 00:36:15,406 GROWN 25% SINCE 2019, $244 848 00:36:15,406 --> 00:36:17,074 BILLION UP TO $306. HEADLINE 849 00:36:17,074 --> 00:36:19,377 NUMBER CAN BE KIND OF MISLEADING 850 00:36:19,377 --> 00:36:24,615 ABOUT WHAT THE UNDERLYING FORCES 851 00:36:24,615 --> 00:36:25,716 ARE HAPPENING HERE WE SEE 852 00:36:25,716 --> 00:36:27,184 RESIDENTIAL IS THE ANK FOR THE 853 00:36:27,184 --> 00:36:29,720 VALLEY FOR SEATTLE, IT WAS THE 854 00:36:29,720 --> 00:36:31,689 MAJORITY BACK IN 2019 ABOUT 52% 855 00:36:31,689 --> 00:36:39,330 OF TOTAL ASSESSED VALUE, GROWN 856 00:36:39,330 --> 00:36:44,001 TO 57.5% CHANGE 4.8%, THIS IS 857 00:36:44,001 --> 00:36:45,069 GOOD FROM BUDGET STANDPOINT, 858 00:36:45,069 --> 00:36:46,337 RESIDENTIAL ASSESSED VALUE TENDS 859 00:36:46,337 --> 00:36:51,142 TO BE STICKIEST DURING A DOWN 860 00:36:51,142 --> 00:36:52,443 TURN. LIKEWISE, MAJOR OFFICE, 861 00:36:52,443 --> 00:36:53,811 FOURTH FROM THE LEFT, THAT HAS 862 00:36:53,811 --> 00:37:03,387 BEEN ON DOWN TURN THE LAST SIX 863 00:37:03,387 --> 00:37:07,124 OR SO YEARS, A THE SHARE OF 864 00:37:07,124 --> 00:37:10,728 MAJOR OFFICE BUILDINGS 11% TO 865 00:37:10,728 --> 00:37:12,663 6.8, THIS IS FOLLOWING WITH THE 866 00:37:12,663 --> 00:37:13,264 SLIDE BEFORE SHOWING THE 867 00:37:13,264 --> 00:37:14,865 STRUGGLES MAJOR OFFICE HAS BEEN 868 00:37:14,865 --> 00:37:17,401 DEALING WITH, BUT LUCKILY FOR US 869 00:37:17,401 --> 00:37:21,872 THIS ISN'T NECESSARILY A WORRY 870 00:37:21,872 --> 00:37:22,640 FOR THE FORECAST, THE DECLINE 871 00:37:22,640 --> 00:37:24,709 HAS HAPPENED AND BAKED IN THE 872 00:37:24,709 --> 00:37:25,843 NUMBERS HERE. OUTSIDE THE TWO 873 00:37:25,843 --> 00:37:27,078 GROUPS THERE ARE SOME 874 00:37:27,078 --> 00:37:29,080 HIGHLIGHTS, INDUSTRIAL AND 875 00:37:29,080 --> 00:37:31,482 MEDICAL BUILDINGS HAVE GROWN 876 00:37:31,482 --> 00:37:33,618 63%, 80% RESPECTIVELY FROM 2019 877 00:37:33,618 --> 00:37:34,952 UP TO 2026. APARTMENTS, THEY 878 00:37:34,952 --> 00:37:36,821 HAVE GROWN MORE MODEST AT 15% 879 00:37:36,821 --> 00:37:39,056 BUT WHAT IS INTERESTING IS THEIR 880 00:37:39,056 --> 00:37:42,526 SHARE OF TOTAL AV HAS GONE DOWN 881 00:37:42,526 --> 00:37:46,430 SLIGHTLY 1.3% NEGATIVE FROM 2026 882 00:37:46,430 --> 00:37:48,399 TO 2019. THIS SHOWS YOU 883 00:37:48,399 --> 00:37:49,033 MULTIFAMILY VALUE FOR ASSESSED 884 00:37:49,033 --> 00:37:51,168 VALUE ARE NOT NECESSARILY 885 00:37:51,168 --> 00:37:55,573 GROWING AS STRONG AS RESIDENTIAL 886 00:37:55,573 --> 00:37:56,607 VALUES. BUT OVERALL, THE BOTTOM 887 00:37:56,607 --> 00:37:58,509 LINE IS BASE IS LARGER BUT MORE 888 00:37:58,509 --> 00:38:00,378 ALIGNED ON RESIDENTIAL THAN IT 889 00:38:00,378 --> 00:38:03,080 WAS SEVEN YEARS AGO AND THAT 890 00:38:03,080 --> 00:38:04,448 SHIFT HAPPENED, LARGELY, BECAUSE 891 00:38:04,448 --> 00:38:05,483 COMMERCIAL, PARTICULARLY MAJOR 892 00:38:05,483 --> 00:38:07,318 OFFICE, DIDN'T KEEP PACE. THAT 893 00:38:07,318 --> 00:38:12,356 IS PRETTY MUCH THAT FOR ASSESSED 894 00:38:12,356 --> 00:38:12,590 VALUE. 895 00:38:12,590 --> 00:38:16,627 >> BEFORE MOVING ON TO REVENUE, 896 00:38:16,627 --> 00:38:19,096 LAST PIECE OF INFORMATION 897 00:38:19,096 --> 00:38:19,764 PREVALENT TO REVENUE FORECAST I 898 00:38:19,764 --> 00:38:23,367 WANTED TO SHARE WITH YOU. WE 899 00:38:23,367 --> 00:38:25,202 HAVE PRESENTED THE OUTLOOK FOR 900 00:38:25,202 --> 00:38:28,739 NUMBER OF INTERNATIONAL VISITORS 901 00:38:28,739 --> 00:38:31,409 AND IN GENERAL. LAST YEAR THERE 902 00:38:31,409 --> 00:38:33,244 WAS A WORRY FEWER INTERNATIONAL 903 00:38:33,244 --> 00:38:35,680 VISITORS COMING IN, IN 904 00:38:35,680 --> 00:38:38,382 PARTICULAR, FROM CANADA, 2025, 905 00:38:38,382 --> 00:38:45,656 WILL NOT BE PARTICULARLY STRONG 906 00:38:45,656 --> 00:38:50,594 YEAR, AND GIVEN THE SALES TAX, 907 00:38:50,594 --> 00:38:53,364 HOSPITALITY DEPEND ON REV FEW, 908 00:38:53,364 --> 00:38:55,466 THAT WAS CONCERNING. THE GOOD 909 00:38:55,466 --> 00:38:58,302 NEWS IS OXFORD ECONOMICS, 910 00:38:58,302 --> 00:38:59,570 PARTICULARLY, THEIR SUBSIDIARY 911 00:38:59,570 --> 00:39:01,572 TOURISM, ECONOMICS, THEY PREDICT 912 00:39:01,572 --> 00:39:04,942 THAT AFTER THAT LARGE DECLINE IN 913 00:39:04,942 --> 00:39:06,944 2025, 2026, WILL LOOK MUCH 914 00:39:06,944 --> 00:39:09,246 BETTER, THE NUMBER OF 915 00:39:09,246 --> 00:39:10,347 INTERNATIONAL OVERNIGHT VISITORS 916 00:39:10,347 --> 00:39:12,316 COMING TO SEATTLE IS EXPECTED TO 917 00:39:12,316 --> 00:39:15,786 GO UP BY 15%, AND THE SPENDING 918 00:39:15,786 --> 00:39:17,421 BY INTERNATIONAL VISITORS IS 919 00:39:17,421 --> 00:39:20,358 EXPECTED TO GO 14% THIS YEAR AND 920 00:39:20,358 --> 00:39:22,426 SPENDING BY DOMESTIC VISITORS 921 00:39:22,426 --> 00:39:24,261 GROW BY ROUGHLY 18% THIS YEAR. 922 00:39:24,261 --> 00:39:26,163 SO THAT CERTAINLY IS GOOD NEWS, 923 00:39:26,163 --> 00:39:28,833 AGAIN, FROM A STANDPOINT OF 924 00:39:28,833 --> 00:39:32,970 SALES TAX, REVENUES, ADMISSIONS 925 00:39:32,970 --> 00:39:33,537 TAX REVENUES, AND GENERAL, 926 00:39:33,537 --> 00:39:36,240 GENERALLY GOOD NEWS FOR THE 927 00:39:36,240 --> 00:39:37,375 BUSINESSES THAT RELY ON THOSE 928 00:39:37,375 --> 00:39:42,580 VISITORS AND SPENDING THAT THEY 929 00:39:42,580 --> 00:39:44,014 BRING TO THE CITY. SO, FINALLY, 930 00:39:44,014 --> 00:39:48,185 MOVING TO THE REVENUE PART OF 931 00:39:48,185 --> 00:39:53,824 THE CURRENT, OF TODAY'S 932 00:39:53,824 --> 00:39:54,458 PRESENTATION. LOOKING BACK AT 933 00:39:54,458 --> 00:39:55,793 2025, THIS IS THE REASON WHY WE 934 00:39:55,793 --> 00:39:58,462 ARE DOING IT, BECAUSE THAT IS 935 00:39:58,462 --> 00:40:00,731 WHAT WE KNOW ABOUT REVENUE 936 00:40:00,731 --> 00:40:02,166 COLLECTION, THERE IS VERY LITTLE 937 00:40:02,166 --> 00:40:05,436 REVENUE WE HAVE RECEIVED FOR 938 00:40:05,436 --> 00:40:07,405 CURRENT SO SO FORECAST IS 939 00:40:07,405 --> 00:40:09,507 LARGELY BASED ON WHAT HAPPENED 940 00:40:09,507 --> 00:40:12,843 2025 PLUS THE ECONOMIC OUTLOOK 941 00:40:12,843 --> 00:40:14,779 THAT WE JUST WENT OVER. SO QUICK 942 00:40:14,779 --> 00:40:18,149 SUMMARY FOR 2025, AS YOU CAN SEE 943 00:40:18,149 --> 00:40:20,384 AT THE VERY BOTTOM, IF YOU LOOK 944 00:40:20,384 --> 00:40:24,155 AT THESE TWO NUMBERS, THE VERY, 945 00:40:24,155 --> 00:40:30,628 VERY BOTTOM, THEY SUMMARIZE THE 946 00:40:30,628 --> 00:40:31,762 TOTAL GENERAL FUND EXCLUDING 947 00:40:31,762 --> 00:40:32,696 FUNDS BALANCE TRANSFER AND 948 00:40:32,696 --> 00:40:37,101 PROVIDE THE BEST INSIGHT INTO 949 00:40:37,101 --> 00:40:41,071 THE OVERALL REVENUE COLLECTED 950 00:40:41,071 --> 00:40:42,306 FOR THE GENERAL FUND. EVEN WITH 951 00:40:42,306 --> 00:40:44,308 ALL THAT VOLATILITY WE HAVE BEEN 952 00:40:44,308 --> 00:40:45,676 THROUGH, AND THERE CERTAINLY 953 00:40:45,676 --> 00:40:47,812 HAVE BEEN LARGE REVISIONS IN THE 954 00:40:47,812 --> 00:40:50,447 FORECAST, LAST YEAR, EVEN WITH 955 00:40:50,447 --> 00:40:53,384 ALL THAT THE FINAL REVENUES CAME 956 00:40:53,384 --> 00:40:55,452 VERY CLOSE TO OUR OCTOBER 957 00:40:55,452 --> 00:40:57,621 FORECAST, 7.1 MILLION ABOVE THE 958 00:40:57,621 --> 00:41:02,159 FORECAST, TO THE GOOD SIDE. SO 959 00:41:02,159 --> 00:41:03,561 ROUGHLY 0.4% VARIANCE FROM 960 00:41:03,561 --> 00:41:05,663 OCTOBER FORECAST. WE HAVE SEEN 961 00:41:05,663 --> 00:41:09,533 AN INCREASE IN 3.5% YEAR OVER 962 00:41:09,533 --> 00:41:11,502 YEAR LAST YEAR, SO, 963 00:41:11,502 --> 00:41:13,737 ADDITIONALLY, ABOUT $55 MILLION 964 00:41:13,737 --> 00:41:17,675 MORE IN THOSE REVENUES EXCLUDING 965 00:41:17,675 --> 00:41:20,144 GRANTS AND FUND BALANCE 966 00:41:20,144 --> 00:41:21,846 TRANSFERS. THE TABLE HERE 967 00:41:21,846 --> 00:41:22,880 PRESENTS ALL THE DIFFERENT 968 00:41:22,880 --> 00:41:23,881 REVENUES UNLESS THERE IS 969 00:41:23,881 --> 00:41:24,682 PARTICULAR QUESTIONS, I WOULD 970 00:41:24,682 --> 00:41:27,351 NOT GO TOO MUCH INTO THE 971 00:41:27,351 --> 00:41:31,956 DETAILS, JUST WANT TO POINT OUT 972 00:41:31,956 --> 00:41:33,290 THE FORECAST OFFICE IS 973 00:41:33,290 --> 00:41:36,994 FORECASTING THE REVENUE 974 00:41:36,994 --> 00:41:38,128 HIGHLIGHTED WITH BLUE BARS, 975 00:41:38,128 --> 00:41:43,234 HIGHLIGHTED IN BLUE, THE REST OF 976 00:41:43,234 --> 00:41:46,270 THE REVENUES, THE CBO FORECAST 977 00:41:46,270 --> 00:41:49,440 OVERSEES THE FORECAST FOR THOSE 978 00:41:49,440 --> 00:41:50,074 REVENUE STREAMS. SO, AGAIN, IN 979 00:41:50,074 --> 00:41:53,143 GENERAL, GOOD NEWS AS YOU CAN 980 00:41:53,143 --> 00:41:57,882 SEE, SALES TAX AND BUSINESS 981 00:41:57,882 --> 00:41:59,717 OCCUPATION TAX OUTPERFORM THE 982 00:41:59,717 --> 00:42:01,785 EXPECTATIONS ROUGHLY BY 1%. IN 983 00:42:01,785 --> 00:42:03,721 GENERAL, AGAIN, QUITE CLOSE TO 984 00:42:03,721 --> 00:42:05,155 THE EXPECTATIONS, CERTAINLY GOOD 985 00:42:05,155 --> 00:42:08,292 NEWS GIVING THE VOLATILITY AND 986 00:42:08,292 --> 00:42:08,926 UNCERTAINTY WE HAVE FACED LAST 987 00:42:08,926 --> 00:42:09,059 YEAR. 988 00:42:12,663 --> 00:42:14,565 FOR NON-GENERAL FUND REVENUE, 989 00:42:14,565 --> 00:42:16,834 MOSTLY GOOD NEWS, EXPENSE TAX 990 00:42:16,834 --> 00:42:19,203 REVENUE CAME IN MORE THAN $20 991 00:42:19,203 --> 00:42:22,006 MILLION ABOVE THE FORECAST, THAT 992 00:42:22,006 --> 00:42:26,076 IS ROUGHLY 5% VARIANCE FROM THE 993 00:42:26,076 --> 00:42:28,178 FORECAST, GIBBON HOW VOLATILE 994 00:42:28,178 --> 00:42:30,915 AND HOW LITTLE HISTORY WE HAVE, 995 00:42:30,915 --> 00:42:32,650 I WOULD PERSONALLY CONSIDER THIS 996 00:42:32,650 --> 00:42:36,253 PRETTY ACCURATE, AS A REMINDER 997 00:42:36,253 --> 00:42:39,056 LAST YEAR, WE HAD SIGNIFICANT 998 00:42:39,056 --> 00:42:41,992 SHORTFALL, REVENUES CAME IN $40 999 00:42:41,992 --> 00:42:45,829 MILLION BELOW THE FORECAST. 1000 00:42:45,829 --> 00:42:46,864 CERTAINLY GOOD NEWS HERE, ONE 1001 00:42:46,864 --> 00:42:54,138 THING, LITTLE BIT OF CAVEAT IS 1002 00:42:54,138 --> 00:42:56,707 TOTAL REVENUE, 20 MILLION OF 1003 00:42:56,707 --> 00:42:59,209 THAT ARE NOT REALLY PAYMENTS FOR 1004 00:42:59,209 --> 00:43:02,279 2025 OBLIGATIONS BUT LATE 1005 00:43:02,279 --> 00:43:03,514 PAYMENTS FOR PREVIOUS YEARS, 1006 00:43:03,514 --> 00:43:05,416 THAT IS RELEVANT BECAUSE CHANGE 1007 00:43:05,416 --> 00:43:09,720 IS THE BASE THAT THE FORECAST 1008 00:43:09,720 --> 00:43:12,189 STARTS AND THE GROWTH EXPECTED, 1009 00:43:12,189 --> 00:43:14,024 REALLY APPLIED TO THOSE TAX 1010 00:43:14,024 --> 00:43:15,893 OBLIGATIONS, NOT REALLY THE PAST 1011 00:43:15,893 --> 00:43:17,995 PAYMENTS, LATE PAYMENTS WE HAVE 1012 00:43:17,995 --> 00:43:20,631 RECEIVED FOR, LETS SAY, 2022 AND 1013 00:43:20,631 --> 00:43:22,967 2023, CERTAINLY IMPROVE THE 1014 00:43:22,967 --> 00:43:25,536 OUTCOME FOR 2025, BUT LESS 1015 00:43:25,536 --> 00:43:28,973 RELEVANT FOR THE OUTLOOK FOR 1016 00:43:28,973 --> 00:43:29,773 NEXT COUPLE OF YEARS. AGAIN, 1017 00:43:29,773 --> 00:43:32,743 UNLESS THERE ARE QUESTIONS I 1018 00:43:32,743 --> 00:43:33,377 WILL MOVE ON. 1019 00:43:33,377 --> 00:43:35,646 >> THANK YOU, I WILL TAKE THIS 1020 00:43:35,646 --> 00:43:37,915 OPPORTUNITY TO PAUSE FOR JUST A 1021 00:43:37,915 --> 00:43:40,551 MOMENT SO THAT FOLKS CAN FINALLY 1022 00:43:40,551 --> 00:43:42,486 SOAK IN ALL OF THE, WHAT 1023 00:43:42,486 --> 00:43:44,188 ACTUALLY OCCURRED IN 2025, AND I 1024 00:43:44,188 --> 00:43:45,956 WILL REPEAT BACK SOME OF THE 1025 00:43:45,956 --> 00:43:48,225 THINGS I HEARD YOU SAY, WHICH 1026 00:43:48,225 --> 00:43:54,598 IS, YOU KNOW, AGAIN, LAST APRIL, 1027 00:43:54,598 --> 00:43:56,266 INCREDIBLE AMOUNT VOLVOLATILITY 1028 00:43:56,266 --> 00:43:58,102 AND YOU GOT THIS WITHIN ONE 1029 00:43:58,102 --> 00:44:00,871 POINT, 1%, YOU GOT THIS VERY 1030 00:44:00,871 --> 00:44:02,473 ACCURATE, I REALLY APPRECIATE 1031 00:44:02,473 --> 00:44:03,440 THAT. JUMP START PAYROLL EXPENSE 1032 00:44:03,440 --> 00:44:05,442 TAX, A NEW TAX, WE DON'T HAVE A 1033 00:44:05,442 --> 00:44:08,812 LONG HISTORY WITH IT, IT IS ALSO 1034 00:44:08,812 --> 00:44:10,114 VOLATILE, YOU CAME VERY CLOSE TO 1035 00:44:10,114 --> 00:44:13,984 THAT NUMBER AS WELL. WHAT I AM 1036 00:44:13,984 --> 00:44:15,686 SEEING HERE IS THAT TOTAL 1037 00:44:15,686 --> 00:44:17,755 GENERAL FUND WITHOUT GRANTS AND 1038 00:44:17,755 --> 00:44:19,223 TRANSFERS, PLUS THE PAYROLL 1039 00:44:19,223 --> 00:44:24,962 EXPENSE TAX, WE CAME INTO THE 1040 00:44:24,962 --> 00:44:26,363 POSITIVE AT $27.2 MILLION. 1041 00:44:26,363 --> 00:44:28,098 ACROSS BOTH FUNDS. IS THAT 1042 00:44:28,098 --> 00:44:28,365 CORRECT? 1043 00:44:28,365 --> 00:44:30,200 >> YEP. YEP. PLUS, AS YOU CAN 1044 00:44:30,200 --> 00:44:38,742 SEE, THERE IS ALSO A LITTLE BIT 1045 00:44:38,742 --> 00:44:39,476 MORE READ SLIGHTLY MORE TAX. 1046 00:44:39,476 --> 00:44:43,914 >> I JUST WANT TO SAY THIS IS 1047 00:44:43,914 --> 00:44:45,315 REALLY GOOD. THIS IS REALLY 1048 00:44:45,315 --> 00:44:47,017 ACCURATE. I APPRECIATE THAT. I 1049 00:44:47,017 --> 00:44:49,186 THINK FOR THE GENERAL PUBLIC, 1050 00:44:49,186 --> 00:44:51,822 HEARING PLUS $27 MILLION, IT IS 1051 00:44:51,822 --> 00:44:55,592 A LOT OF MONEY, HOWEVER, IN 1052 00:44:55,592 --> 00:44:58,362 CONTEXT OF OUR $6 PLUS BILLION 1053 00:44:58,362 --> 00:45:01,065 BUDGET, IT IS NOT, SO I JUST-- 1054 00:45:01,065 --> 00:45:02,332 IT VERY GOOD. I WANT TO TAKE 1055 00:45:02,332 --> 00:45:03,801 THIS MOMENT TO THANK YOU, AND 1056 00:45:03,801 --> 00:45:06,136 CHECK IN WITH MY COLLEAGUES TO 1057 00:45:06,136 --> 00:45:10,741 SEE IF THERE ARE ANY FURTHER 1058 00:45:10,741 --> 00:45:14,812 QUESTIONS ABOUT 2025, BEFORE WE 1059 00:45:14,812 --> 00:45:19,850 MOVE INTO THE 2026 THROUGH 2028 1060 00:45:19,850 --> 00:45:21,218 FORECAST. I SEE PANELIST WITH 1061 00:45:21,218 --> 00:45:22,252 THEIR HAND RAISED, HOWEVER, I 1062 00:45:22,252 --> 00:45:26,523 CAN'T SEE WHOM IT IS. 1063 00:45:26,523 --> 00:45:27,691 >> DEPUTY DIRECTOR. 1064 00:45:27,691 --> 00:45:28,225 >> MARK, TAKE IT AWAY. 1065 00:45:28,225 --> 00:45:30,627 >> I WILL JUST START TALKING. 1066 00:45:30,627 --> 00:45:33,630 THANK YOU VERY MUCH. THANKS FOR 1067 00:45:33,630 --> 00:45:35,132 THE PRESENTATION. EXCELLENT AND 1068 00:45:35,132 --> 00:45:36,033 VERY EASY TO FOLLOW ALONG. THON 1069 00:45:36,033 --> 00:45:39,103 PRIOR SLIDE TO THE ONE THAT IS 1070 00:45:39,103 --> 00:45:40,537 PRESENTLY UP, AND I KNOW YOU 1071 00:45:40,537 --> 00:45:42,139 IDENTIFIED WHERE THE FORECAST 1072 00:45:42,139 --> 00:45:43,440 COUNCIL SORT OF HAS THE 1073 00:45:43,440 --> 00:45:45,242 FORECASTING PURVIEW, WHICH ARE 1074 00:45:45,242 --> 00:45:47,544 THE BLUE LINES, I DID NOTICE, 1075 00:45:47,544 --> 00:45:48,178 OBVIOUSLY, THE DISCREPANCY IN 1076 00:45:48,178 --> 00:45:53,450 THE GRANT AND YOU MAY OR MAY NOT 1077 00:45:53,450 --> 00:45:55,986 BE ABLE TO SAY WHAT THAT, THE 1078 00:45:55,986 --> 00:45:58,889 REASON BEHIND SORT OF THE $32 1079 00:45:58,889 --> 00:45:59,490 MILLION DIFFERENCE THERE IS. 1080 00:45:59,490 --> 00:46:05,395 >> I CAN JUMP IN AND SPEAK TO 1081 00:46:05,395 --> 00:46:06,196 THAT. THIS IS SIMPLY AN 1082 00:46:06,196 --> 00:46:07,364 INDICATION WHAT MANY OF THE 1083 00:46:07,364 --> 00:46:09,733 GRANTS HAVE NOT BEEN SPENT DOWN 1084 00:46:09,733 --> 00:46:11,034 YET. WE GET REVENUES REIMBURSED 1085 00:46:11,034 --> 00:46:13,370 WHEN SPENDING HAPPENS, AND A LOT 1086 00:46:13,370 --> 00:46:15,572 OF THESE GRANTS, SPENDING OCCURS 1087 00:46:15,572 --> 00:46:17,975 OVER MULTIPLE YEARS. SO YOU WILL 1088 00:46:17,975 --> 00:46:22,146 SEE A VERY SIMILAR NUMBER IN THE 1089 00:46:22,146 --> 00:46:24,848 2026 FORECAST, TO THE POSITIVE, 1090 00:46:24,848 --> 00:46:25,916 BECAUSE ALL OF THAT 1091 00:46:25,916 --> 00:46:28,552 APPROPRIATION HAS BEEN CARRIED 1092 00:46:28,552 --> 00:46:29,720 OVER FROM LAST YEAR. 1093 00:46:29,720 --> 00:46:31,722 >> ALL RIGHT. THANK YOU VERY 1094 00:46:31,722 --> 00:46:32,956 MUCH. APPRECIATE IT. NO FURTHER 1095 00:46:32,956 --> 00:46:33,257 QUESTIONS. 1096 00:46:33,257 --> 00:46:33,590 >> THANK YOU. 1097 00:46:33,590 --> 00:46:36,093 >> YOU WILL NOTICE AT THE BOTTOM 1098 00:46:36,093 --> 00:46:37,161 OOF THE TABLES WE GENERALLY 1099 00:46:37,161 --> 00:46:40,330 REMOVE GRANTS AND TRANSFERS IN 1100 00:46:40,330 --> 00:46:43,634 THE FINAL LINE, JUST TO HELP YOU 1101 00:46:43,634 --> 00:46:46,703 SEE THE TOTALS WITHOUT THOSE 1102 00:46:46,703 --> 00:46:47,437 RELATIVELY TECHNICAL LINES 1103 00:46:47,437 --> 00:46:47,971 INCLUDED. SO, NOTHING TOO 1104 00:46:47,971 --> 00:46:49,773 ALARMING IN THAT LINE ABOUT 1105 00:46:49,773 --> 00:46:51,842 GRANTS. IT IS MOSTLY THE 1106 00:46:51,842 --> 00:46:53,377 TECHNICALITIES OF HOW THE GRANTS 1107 00:46:53,377 --> 00:46:58,182 ARE SPENT AND SUBQUENT REVENUES 1108 00:46:58,182 --> 00:46:58,815 COME IN FOR THEM. 1109 00:46:58,815 --> 00:47:00,984 >> I WILL ADD THERE IS SIMILARLY 1110 00:47:00,984 --> 00:47:03,587 BIG CHANGES WHEN WE SEE THE 1111 00:47:03,587 --> 00:47:05,355 TABLES FOR THE FORECAST ITSELF, 1112 00:47:05,355 --> 00:47:06,256 IN A COUPLE OF SLIDES. BEFORE 1113 00:47:06,256 --> 00:47:13,864 THAT, THERE IS ONE MORE THING I 1114 00:47:13,864 --> 00:47:14,398 FORGOT. FOR BUSINESS AND 1115 00:47:14,398 --> 00:47:15,332 OCCUPATION TAX, ONE REASON 1116 00:47:15,332 --> 00:47:17,167 REVENUE CAME HIGHER ABOVE THE 1117 00:47:17,167 --> 00:47:19,570 FORECAST, ROUGHLY 6 MILLION IN 1118 00:47:19,570 --> 00:47:21,471 REFUNDS WE EXPECTED TO BE 1119 00:47:21,471 --> 00:47:22,706 FINALIZED AND PROCESSED AND 1120 00:47:22,706 --> 00:47:26,510 POSTED BY THE TIME THE BOOKS 1121 00:47:26,510 --> 00:47:29,713 CLOSE FOR 2025. THOSE REFUNDS 1122 00:47:29,713 --> 00:47:31,615 HAVE NOT BEEN FINALIZED, SO $6 1123 00:47:31,615 --> 00:47:34,518 MILLEN, TO THE PLUS SIDE, WILL 1124 00:47:34,518 --> 00:47:39,256 BE THAT DEDUCTED FROM NEXT YEAR, 1125 00:47:39,256 --> 00:47:41,758 REFUNDS ARE STILL EXPECTED TO BE 1126 00:47:41,758 --> 00:47:44,628 PAID THIS YEAR, AGAIN, ROUGHLY 1127 00:47:44,628 --> 00:47:45,529 $6 MILLION THERE, THAT WE HAVE 1128 00:47:45,529 --> 00:47:50,000 TO TAKE OUT HERE TO KIND OF GET 1129 00:47:50,000 --> 00:47:53,170 THE OVERALL PICTURE FOR THE 1130 00:47:53,170 --> 00:47:54,771 REVENUE. THE MAIN POINT HOLDS, 1131 00:47:54,771 --> 00:47:56,340 GIVEN ALL THE VULTILITY, IN THE 1132 00:47:56,340 --> 00:48:03,280 END IT HAS NOT BEEN A BAD YEAR, 1133 00:48:03,280 --> 00:48:07,751 REVENUES GROW, ABOVE THE RATE OF 1134 00:48:07,751 --> 00:48:09,219 INFLATION, 3.5% INCREASE THERE, 1135 00:48:09,219 --> 00:48:11,054 EVEN IF YOU ADJUSTED FOR THE $6 1136 00:48:11,054 --> 00:48:13,023 MILLION, STILL GOING TO BE ABOVE 1137 00:48:13,023 --> 00:48:15,259 THE RATE OF THE INFLATION, 1138 00:48:15,259 --> 00:48:16,960 CERTAINLY THERE WASN'T ANY BIG 1139 00:48:16,960 --> 00:48:20,497 SHORTFALL IN REVENUE, COMPARED 1140 00:48:20,497 --> 00:48:21,732 TO OUR OUTLOOK IN OCTOBER. 1141 00:48:21,732 --> 00:48:24,568 >> BEFORE YOU MOVE ON, JUST TO 1142 00:48:24,568 --> 00:48:25,802 SUMMARIZE THAT NEW INFORMATION 1143 00:48:25,802 --> 00:48:28,205 FROM YOU, IT SOUNDS LIKE THAT 1144 00:48:28,205 --> 00:48:30,540 BRINGS TOTAL GENERAL FUND 1145 00:48:30,540 --> 00:48:34,177 WITHOUT GRANTS FOR TRANSFERS 1146 00:48:34,177 --> 00:48:35,946 DOWN TO MORE ACCURATE $1.1 1147 00:48:35,946 --> 00:48:39,583 MILLION FROM, AS A VARIANCE, 1148 00:48:39,583 --> 00:48:40,751 BETWEEN THE FORECAST AND THE 1149 00:48:40,751 --> 00:48:40,984 ACTUAL. 1150 00:48:40,984 --> 00:48:42,953 >> THAT IS YES, PRETTY MUCH 1151 00:48:42,953 --> 00:48:46,256 THERE ON THE MARK, I WANT TO 1152 00:48:46,256 --> 00:48:47,758 THANK ALL OF THE MEMBERS, NOT 1153 00:48:47,758 --> 00:48:49,059 JUST MY TEAM, BUT THE CBO, 1154 00:48:49,059 --> 00:48:50,727 BECAUSE, AS YOU CAN SEE, THERE 1155 00:48:50,727 --> 00:48:53,263 IS LOTS OF LINES WHERE THEY ARE 1156 00:48:53,263 --> 00:48:53,997 PROVIDING INPUT INTO THE 1157 00:48:53,997 --> 00:48:54,264 FORECAST. 1158 00:48:54,264 --> 00:48:56,433 >> SO I AM GOING TO ASK YOU TO 1159 00:48:56,433 --> 00:48:58,268 BRING YOUR MICROPHONE CLOSER TO 1160 00:48:58,268 --> 00:48:59,503 YOUR MOUTH, BECAUSE JUST IN THIS 1161 00:48:59,503 --> 00:49:02,606 ROOM YOU CAN HEAR MY VOICE 1162 00:49:02,606 --> 00:49:06,209 BOOMING, BUT YOURS IS 1163 00:49:06,209 --> 00:49:06,977 WHISPERING, SO, JUST MICK 1164 00:49:06,977 --> 00:49:09,379 JAGGER, PRETEND YOU ARE IN THE 1165 00:49:09,379 --> 00:49:10,480 ROLLING STONES, MY FRIEND. 1166 00:49:10,480 --> 00:49:12,249 BEFORE WE MOVE ON, LAST COMMENT, 1167 00:49:12,249 --> 00:49:17,054 THAT IS REALLY ACCURATE. IF YOU 1168 00:49:17,054 --> 00:49:20,457 GOT THIS DOWN TO A $1.1 MILLION 1169 00:49:20,457 --> 00:49:21,758 DIFFERENCE GENERAL FUND WITHOUT 1170 00:49:21,758 --> 00:49:24,027 GRANTS TRANSFER AND $20 MILLION 1171 00:49:24,027 --> 00:49:26,129 VARIANCE ON JUMP START, REALLY 1172 00:49:26,129 --> 00:49:27,864 WELL DONE. NOW, FOR THE NEWS 1173 00:49:27,864 --> 00:49:30,767 EVERYBODY IS PINING FOR, OVER TO 1174 00:49:30,767 --> 00:49:31,234 YOU, DIRECTOR DURAS. 1175 00:49:31,234 --> 00:49:34,137 >> RIGHT, FINALLY GETTING TO THE 1176 00:49:34,137 --> 00:49:36,807 MOST INTERESTING PART OF THE 1177 00:49:36,807 --> 00:49:41,244 TALK, THE OUTLOOK FOR CURRENT 1178 00:49:41,244 --> 00:49:43,513 YEAR AND THEN FOLLOWING TWO, 1179 00:49:43,513 --> 00:49:45,549 FIRST, FOCUSING ON THE BOTTOM 1180 00:49:45,549 --> 00:49:49,653 LINE BEFORE WE LOOK AT 1181 00:49:49,653 --> 00:49:53,323 INDIVIDUAL ITEMS IN THE TABLE. 1182 00:49:53,323 --> 00:49:55,892 THE BOTTOM LINE, FIRST COLUMN 1183 00:49:55,892 --> 00:49:58,729 HERE SHOWS THE 2025 ACTUALS AND 1184 00:49:58,729 --> 00:50:04,101 THEN THE NEXT THREE ARE 2026 1185 00:50:04,101 --> 00:50:05,569 REVENUES, 2027, AND 2028 1186 00:50:05,569 --> 00:50:06,803 REVENUES. PRIMARILY FOCUSING ON 1187 00:50:06,803 --> 00:50:08,205 THE LINE TOTAL GENERAL FUND WAS 1188 00:50:08,205 --> 00:50:12,709 OUT GRANTS AND TRANSFERS BECAUSE 1189 00:50:12,709 --> 00:50:13,877 OF THE TECHNICALITIES AROUND 1190 00:50:13,877 --> 00:50:15,812 GRANTS AND THE FUND BALANCE 1191 00:50:15,812 --> 00:50:16,913 TRANSFERS ARE NOT REALLY 1192 00:50:16,913 --> 00:50:20,450 REVENUES, PER SE, JUST MONEY 1193 00:50:20,450 --> 00:50:22,018 MOVED BETWEEN DIFFERENT FUNDS 1194 00:50:22,018 --> 00:50:25,889 CHT YOU CAN SEE HERE THAT THE 1195 00:50:25,889 --> 00:50:30,394 REVENUES ARE EXPECTED TO GROW 1196 00:50:30,394 --> 00:50:32,162 SIGNIFICANTLY IN 2026, 9.1% YEAR 1197 00:50:32,162 --> 00:50:37,267 OVER YEAR GROWTH IS LARGELY DUE 1198 00:50:37,267 --> 00:50:40,303 TO NEW REVENUES. NEW SALES TAX, 1199 00:50:40,303 --> 00:50:45,976 PUBLIC SAFETY SALES TAX, AND THE 1200 00:50:45,976 --> 00:50:46,643 ESSB5814, CLASSIFIED ACTIVITIES 1201 00:50:46,643 --> 00:50:50,447 IS GOING TO BOOST SALES TAX 1202 00:50:50,447 --> 00:50:54,551 REVENUES FURTHER. AND THEN FOR 1203 00:50:54,551 --> 00:50:55,852 BUSINESS OCCUPATION TAX, 1204 00:50:55,852 --> 00:50:57,587 RESTRUCTURE EXPECTED TO GENERATE 1205 00:50:57,587 --> 00:50:58,388 ADDITIONAL REVENUE, ANOTHER 1206 00:50:58,388 --> 00:51:01,625 REASON WHY THERE IS A BIG JUMP 1207 00:51:01,625 --> 00:51:03,460 IN THE GROWTH RATE OF REVENUE IN 1208 00:51:03,460 --> 00:51:05,562 THE CURRENT YEAR, STILL, THE 1209 00:51:05,562 --> 00:51:07,864 NEXT TWO YEARS OF THE PROJECTED 1210 00:51:07,864 --> 00:51:13,103 GROWTH IS 4.1% FOR EACH OF THOSE 1211 00:51:13,103 --> 00:51:16,473 YEARS SO THE RATE OF INFLATION, 1212 00:51:16,473 --> 00:51:18,909 WHICH IS SHOWN AT THE VERY 1213 00:51:18,909 --> 00:51:20,677 BOTTOM. WHEN IT COMES TO THE 1214 00:51:20,677 --> 00:51:25,615 CHANGES IN THE FORECAST AT THE 1215 00:51:25,615 --> 00:51:28,418 NEXT THREE COLUMNS, COMPARED TO 1216 00:51:28,418 --> 00:51:30,086 THE LAST FORECAST, THE ADOPTED 1217 00:51:30,086 --> 00:51:32,222 BUDGET, 2026, AND THEN THE 1218 00:51:32,222 --> 00:51:32,989 FORECAST FOR 2027 AND 2028, 1219 00:51:32,989 --> 00:51:34,825 WHICH ARE REALLY NOT PART OF THE 1220 00:51:34,825 --> 00:51:38,261 ADOPTED BUDGET BUT WE DID 1221 00:51:38,261 --> 00:51:39,696 FORECAST THOSE YEARS, THE 1222 00:51:39,696 --> 00:51:42,699 CHANGES ARE MINUS $10 MILLION 1223 00:51:42,699 --> 00:51:46,169 FOR THE CURRENT YEAR, AND THEN 1224 00:51:46,169 --> 00:51:51,174 ADDITIONAL $12.6 TO THE PLUS 1225 00:51:51,174 --> 00:51:53,777 SIDE FOR 2017, $27.4 FOR 28. 1226 00:51:53,777 --> 00:51:56,279 THOSE ARE THE TOTALS, NOW 1227 00:51:56,279 --> 00:51:57,214 LOOKING AT THOSE INDIVIDUAL 1228 00:51:57,214 --> 00:51:59,449 REVENUES AND WE WILL GO OVER 1229 00:51:59,449 --> 00:52:03,320 THEM ONE BY ONE TO KIND OF 1230 00:52:03,320 --> 00:52:06,022 EXPLAIN WHAT IS GOING ON HERE, 1231 00:52:06,022 --> 00:52:08,091 AGAIN, THE ROWS HIGHLIGHTED IN 1232 00:52:08,091 --> 00:52:09,593 BLUE ARE THE ONES THAT ARE 1233 00:52:09,593 --> 00:52:10,894 FORECAST OFFICE IS RESPONSIBLE 1234 00:52:10,894 --> 00:52:12,729 FOR, THE REMAINING ONES ARE IN 1235 00:52:12,729 --> 00:52:14,498 PURVIEW OF THE BUDGET OFFICE, SO 1236 00:52:14,498 --> 00:52:19,269 THEY WILL START WITH THE 1237 00:52:19,269 --> 00:52:19,736 PROPERTY TAX WHICH-- 1238 00:52:19,736 --> 00:52:21,671 >> YEAH, I AM GOING TO INVITE 1239 00:52:21,671 --> 00:52:23,940 ALEX TO SPEAK ON THAT ONE IF SHE 1240 00:52:23,940 --> 00:52:25,141 IS STILL WITH US REMOTELY. ALEX 1241 00:52:25,141 --> 00:52:27,043 AND I ARE GOING TO PING-PONG 1242 00:52:27,043 --> 00:52:29,813 BACK AND FORTH ON THE WHITE ROWS 1243 00:52:29,813 --> 00:52:33,617 OF THIS TABLE. ALEX, TAKE IT 1244 00:52:33,617 --> 00:52:33,817 AWAY. 1245 00:52:33,817 --> 00:52:37,254 >> YEAH, FOR PROPERTY TAX, THIS 1246 00:52:37,254 --> 00:52:39,789 IS, ESSENTIALLY, WE DISCOVERED A 1247 00:52:39,789 --> 00:52:42,792 DIFFERENCE BETWEEN OUR 1248 00:52:42,792 --> 00:52:46,363 METHODOLOGY AND KING COUNTY'S 1249 00:52:46,363 --> 00:52:54,838 METHODOLOGY FOR CALCULATING THE 1250 00:52:54,838 --> 00:52:56,673 ALLOWABLE LEVY FOR OUR GENERAL 1251 00:52:56,673 --> 00:52:59,609 EXPENSE. WE HAD TO CORRECT OUR 1252 00:52:59,609 --> 00:53:00,343 METHODOLOGY TO THEIRS, 1253 00:53:00,343 --> 00:53:05,749 UNFORTUNATELY THAT DID LEAD TO 1254 00:53:05,749 --> 00:53:06,850 REDUCTION $2 MILLION FOR 2026. I 1255 00:53:06,850 --> 00:53:08,251 HAD HAPPY TO GO IN THE MECHANICS 1256 00:53:08,251 --> 00:53:10,687 BUT IT IS A LITTLE BIT IN THE 1257 00:53:10,687 --> 00:53:13,423 WEEDS IN TERMS OF THE 1258 00:53:13,423 --> 00:53:15,292 CALCULATIONS. ON THE UPSIDE, EMS 1259 00:53:15,292 --> 00:53:20,964 LEVY, THIS INCLUDES BOTH GENERAL 1260 00:53:20,964 --> 00:53:22,799 EXPENSE PROPERTY TAX AND THE 1261 00:53:22,799 --> 00:53:25,735 MEDIC, EMS WAS REVISED UPWARD A 1262 00:53:25,735 --> 00:53:29,372 LITTLE IN 2026 BECAUSE 2026 1263 00:53:29,372 --> 00:53:32,175 ASSESSED VALUE PERFORM ED BETTER 1264 00:53:32,175 --> 00:53:32,509 THAN EXPECTATION. 1265 00:53:36,846 --> 00:53:39,482 >> MOVING ON TO A COUPLE OF 1266 00:53:39,482 --> 00:53:42,752 LINES THAT OUR OFFICE IS 1267 00:53:42,752 --> 00:53:45,355 FORECASTING, SALES AND USE TAX 1268 00:53:45,355 --> 00:53:46,723 FIRST, IN GENERAL UPWARD 1269 00:53:46,723 --> 00:53:49,492 REVISION, WE HAVE TRIED TO 1270 00:53:49,492 --> 00:53:54,331 INCORPORATE ESTIMATES IN, BACK 1271 00:53:54,331 --> 00:53:56,566 IN OCTOBER, ESTIMATES FOR 1272 00:53:56,566 --> 00:53:58,268 ADDITIONAL REVENUE CREATED BY 1273 00:53:58,268 --> 00:53:59,869 THE THREE CLASSIFICATION OFFICE 1274 00:53:59,869 --> 00:54:02,272 OF ACTIVITIES FROM SERVICE TO 1275 00:54:02,272 --> 00:54:03,039 RETAIL. WE ARE SEEN INITIAL 1276 00:54:03,039 --> 00:54:07,444 INFORMATION THAT COMPELLED US TO 1277 00:54:07,444 --> 00:54:11,047 REVISE THE FORECAST UP, TOGETHER 1278 00:54:11,047 --> 00:54:12,148 WITH MAYBE SLIGHTLY LESS 1279 00:54:12,148 --> 00:54:12,916 PESSIMISTIC OFFICE FOR 1280 00:54:12,916 --> 00:54:14,317 CONSTRUCTION SECTOR, WE ARE SEEN 1281 00:54:14,317 --> 00:54:16,820 LARGE PERMITS GO THROUGH AT THE 1282 00:54:16,820 --> 00:54:22,892 END OF THE LAST YEAR, JUST MORE 1283 00:54:22,892 --> 00:54:29,199 CONSTRUCTION ACTIVITY THAN 1284 00:54:29,199 --> 00:54:30,934 PREVIOUSLY EXPECTED, AND THEN 1285 00:54:30,934 --> 00:54:32,335 2026, 0.4 ADDITIONAL REVENUE, 1286 00:54:32,335 --> 00:54:36,940 THERE IS LOTS OF CROSS CURRENTS 1287 00:54:36,940 --> 00:54:38,608 THERE, CURRENT WEAKER ECONOMIC 1288 00:54:38,608 --> 00:54:40,043 OUTLOOK, PARTIALLY OFFSET BY 1289 00:54:40,043 --> 00:54:41,711 THOSE SLIGHTLY HIGHER THAN 1290 00:54:41,711 --> 00:54:46,449 EXPECTED REVENUES THAT WE HAVE 1291 00:54:46,449 --> 00:54:49,286 SEEN IN 2025, WHICH SUGGESTS 1292 00:54:49,286 --> 00:54:50,553 ADDITIONAL REVENUES GENERATED BY 1293 00:54:50,553 --> 00:54:53,990 THE CLASSIFICATION IS HIGHER 1294 00:54:53,990 --> 00:54:56,760 THAN WE PREVIOUSLY ESTIMATED. 1295 00:54:56,760 --> 00:54:58,328 FOR BUSINESS AND OCCUPATION TAX, 1296 00:54:58,328 --> 00:55:01,998 DOWNWARD REFLECT $6 MILLION IN 1297 00:55:01,998 --> 00:55:04,200 REFUNDS I MENTIONED, SO FOR 1298 00:55:04,200 --> 00:55:08,204 2026, $6 MILLION THERE IS REALLY 1299 00:55:08,204 --> 00:55:11,875 JUST REFUND AMOUNT MOVE FROM 1300 00:55:11,875 --> 00:55:16,546 2025 TO 2026, IN ADDITION TO 1301 00:55:16,546 --> 00:55:17,847 THAT, LAYOFFS IN THE TECH SECTOR 1302 00:55:17,847 --> 00:55:21,017 ARE EXPECTED TO WEIGH DOWN ON 1303 00:55:21,017 --> 00:55:23,987 REVENUE HERE, AND FINALLY, THE 1304 00:55:23,987 --> 00:55:27,190 CONSTRUCTION SECTOR FORECAST FOR 1305 00:55:27,190 --> 00:55:27,724 BUSINESS OCCUPATION TAX, 1306 00:55:27,724 --> 00:55:28,858 DEVELOPED SEPARATELY FROM THE 1307 00:55:28,858 --> 00:55:33,496 ONE IN THE SALES TAX SEEM TO BE 1308 00:55:33,496 --> 00:55:36,032 SLIGHTLY TOO OPTIMISTIC, THAT 1309 00:55:36,032 --> 00:55:38,268 WAS REVISED DOWN. THERE IS 1310 00:55:38,268 --> 00:55:39,202 ASYMMETRIC HERE BETWEEN THE 1311 00:55:39,202 --> 00:55:44,040 DIRECTION FOR SALES AND YOUTH 1312 00:55:44,040 --> 00:55:51,681 TAX AND BUSINESS AND OCCUPATION 1313 00:55:51,681 --> 00:55:53,483 TAX. SHAUN CAN PROVIDE 1314 00:55:53,483 --> 00:55:54,017 ADDITIONAL INFORMATION. 1315 00:55:54,017 --> 00:55:57,320 >> PRIMARILY TWO GROUPS, 1316 00:55:57,320 --> 00:55:59,689 TELECOMMUNICATION WHICH RELIES 1317 00:55:59,689 --> 00:56:00,557 ON TELEVISION AND THEN ENERGY 1318 00:56:00,557 --> 00:56:02,392 RELATED FOR STEAM AND NATURAL 1319 00:56:02,392 --> 00:56:05,295 GAS. THE PUDGET SOUND ENERGY 1320 00:56:05,295 --> 00:56:07,464 WHICH DOES THE RATE SETTING FOR 1321 00:56:07,464 --> 00:56:09,866 NATURAL GAS RAISED RATES LAST 1322 00:56:09,866 --> 00:56:11,601 YEAR, SO WE INCURRED $3 MILLION 1323 00:56:11,601 --> 00:56:12,469 YEAR OVER YEAR GROWTH, THIS 1324 00:56:12,469 --> 00:56:15,538 RAISES THE BASE LEVEL FOR THE 1325 00:56:15,538 --> 00:56:17,707 FORECAST SO WE HAVE SEEN FROM 1326 00:56:17,707 --> 00:56:18,975 THEREAT, LIKEWISE WITH THE 1327 00:56:18,975 --> 00:56:22,145 CONFLICT WITHIN THE MIDDLE EAST, 1328 00:56:22,145 --> 00:56:23,246 ENERGY PRICES INCREASED, OR 1329 00:56:23,246 --> 00:56:26,916 EXPECTATIONS HAVE IN THE SHORT 1330 00:56:26,916 --> 00:56:28,651 TERM, AND LIKEWISE WITH 1331 00:56:28,651 --> 00:56:29,152 TELECOMMUNICATION GREEP 1332 00:56:29,152 --> 00:56:31,087 UTILITIES FORECAST BEFORE WE 1333 00:56:31,087 --> 00:56:32,155 ALWAYS ASSUME, OR SAW, RATHER, 1334 00:56:32,155 --> 00:56:34,491 DECLINE IN YEAR OVER YEAR 1335 00:56:34,491 --> 00:56:36,192 PAYMENT, PEOPLE ARE CUTTING 1336 00:56:36,192 --> 00:56:38,561 CABLE, CUTTING USUAL METHODS OF 1337 00:56:38,561 --> 00:56:40,029 COMMUNICATIONS, BUT FOR 2025 WE 1338 00:56:40,029 --> 00:56:43,800 HAVE SEEN THE DECLINE KIND OF 1339 00:56:43,800 --> 00:56:44,734 EVAPORATED. LUCKILY, FOR US, 1340 00:56:44,734 --> 00:56:46,469 UTILITIES, PRIVATE UTILITIES ARE 1341 00:56:46,469 --> 00:56:47,203 IMPROVING NOW, TELECOMMUNICATION 1342 00:56:47,203 --> 00:56:50,306 S SEEM TO BE MODEST GROWTH, AND 1343 00:56:50,306 --> 00:56:52,842 ALLOW THE FORECAST FOR THE 1344 00:56:52,842 --> 00:56:54,077 DIFFERENCES OF $15 MILLION OVER 1345 00:56:54,077 --> 00:56:56,413 THREE YEARS PRIMARILY DRIVEN BY 1346 00:56:56,413 --> 00:56:57,881 THE FORCES. THAT IS PRETTY MUCH 1347 00:56:57,881 --> 00:56:58,915 IT FOR PRIVATE UTILITY TAXES. 1348 00:56:58,915 --> 00:57:05,588 >> ALL RIGHT. WE WILL HAND IT 1349 00:57:05,588 --> 00:57:06,790 OVER TO JOE AND HIS TEAM. 1350 00:57:06,790 --> 00:57:09,592 >> I WILL QUICKLY TALK PUBLIC 1351 00:57:09,592 --> 00:57:14,264 UTILITY TAXES, THAT INCLUDES 1352 00:57:14,264 --> 00:57:17,133 CITY LIGHT AND SPU TAX REVENUES, 1353 00:57:17,133 --> 00:57:20,303 IN 2026 THEY WERE, SORRY, THE 1354 00:57:20,303 --> 00:57:22,238 ELECTRIC TAX REVENUES WERE 1355 00:57:22,238 --> 00:57:23,072 REVISED DOWN SLIGHTLY, MOSTLY 1356 00:57:23,072 --> 00:57:25,575 ACCOUNTING FOR WARMER WEATHER AT 1357 00:57:25,575 --> 00:57:27,811 THE START OF THE YEAR, AND 1358 00:57:27,811 --> 00:57:29,112 OVERALL THEIR LOAD FORECAST OVER 1359 00:57:29,112 --> 00:57:34,150 THE NEXT FEW YEARS HAS BEEN 1360 00:57:34,150 --> 00:57:37,720 REVISED DOWN DUE TO LOWER THAN 1361 00:57:37,720 --> 00:57:40,590 EXPECTED EV ADOPTION AS WELL AS 1362 00:57:40,590 --> 00:57:41,925 LESS COMMERCIAL ACTIVITY. 1363 00:57:41,925 --> 00:57:43,893 HOWEVER, YOU CAN SEE IN 2027, 1364 00:57:43,893 --> 00:57:46,729 2028, THAT IS MORE THAN OFFSET 1365 00:57:46,729 --> 00:57:52,402 BY ANTICIPATED RATE INCREASES 1366 00:57:52,402 --> 00:57:55,672 FOR CITY LIGHT. GOING INTO OTHER 1367 00:57:55,672 --> 00:57:57,207 CITY TAXES, NOT SURE IF YOU HAVE 1368 00:57:57,207 --> 00:58:00,510 A PART TO ADD HERE, JOE, BUT 1369 00:58:00,510 --> 00:58:06,850 SOME OF THIS IS DEFINITELY 1370 00:58:06,850 --> 00:58:09,152 DRIVEN BY THE TAX, A FAIRLY 1371 00:58:09,152 --> 00:58:10,520 DIFFICULT TAX TO FORECAST 1372 00:58:10,520 --> 00:58:14,123 BECAUSE, ESSENTIALLY, THIS IS 1373 00:58:14,123 --> 00:58:19,462 REVENUES THAT WE RECEIVE FROM 1374 00:58:19,462 --> 00:58:21,431 ENTITIES THAT LEASE 1375 00:58:21,431 --> 00:58:22,065 PUBLICLY-OWNED PROPERTY. SO WE 1376 00:58:22,065 --> 00:58:22,866 HAVE LIMITED INFORMATION ON HOW 1377 00:58:22,866 --> 00:58:26,069 LONG THE LEASES ARE AND HOW 1378 00:58:26,069 --> 00:58:29,639 REGULARLY THE RENTS INCREASE ON 1379 00:58:29,639 --> 00:58:31,875 THE LEASES, SO IN 2025 THESE 1380 00:58:31,875 --> 00:58:32,876 REVENUES OUT PERFORMED 1381 00:58:32,876 --> 00:58:34,711 EXPECTATIONS BY QUITE A BIT. SO 1382 00:58:34,711 --> 00:58:37,580 THAT IS MOSTLY WHAT IS DRIVING 1383 00:58:37,580 --> 00:58:39,949 THE INCREASE IN THIS ONE. 1384 00:58:39,949 --> 00:58:42,285 >> YEAH, THAT IS THE DRIVING 1385 00:58:42,285 --> 00:58:45,088 FORCE UNDER OTHER CITY TAXES, 1386 00:58:45,088 --> 00:58:47,190 FOR SURE. PARKING METERS ARE 1387 00:58:47,190 --> 00:58:49,492 RELATIVELY FLAT, NOT TOO MUCH 1388 00:58:49,492 --> 00:58:51,828 HERE. THIS IS A COMBINATION OF 1389 00:58:51,828 --> 00:58:53,696 THE REVENUES WE RECEIVED FROM 1390 00:58:53,696 --> 00:58:56,699 FOLKS PAYING METERS, WHEN THEY 1391 00:58:56,699 --> 00:58:59,269 PARK ON THE STREET, AND ALSO THE 1392 00:58:59,269 --> 00:59:00,770 FEES PAID FOR METER HOODING, WE 1393 00:59:00,770 --> 00:59:02,605 CALL IT, WHERE YOU RESERVE 1394 00:59:02,605 --> 00:59:04,908 SPACES THAT WOULD OTHERWISE BY 1395 00:59:04,908 --> 00:59:06,242 PAID PARKING. THAT IS THE METER 1396 00:59:06,242 --> 00:59:10,146 HOODING IS ABOUT 10% OF THIS 1397 00:59:10,146 --> 00:59:12,548 ROW. WE CONTINUE TO SEE SOME 1398 00:59:12,548 --> 00:59:13,750 DECLINES IN PAID TRANSACTIONS 1399 00:59:13,750 --> 00:59:17,754 FOR METERS, BUT MOSTLY WE SEE 1400 00:59:17,754 --> 00:59:18,688 RELATIVELY FLAT OUTLOOK FOR THAT 1401 00:59:18,688 --> 00:59:21,457 AND SLIGHT-- THERE IS A SLIGHT 1402 00:59:21,457 --> 00:59:23,660 DOWNWARD REVISION HIDDEN HERE 1403 00:59:23,660 --> 00:59:24,994 FOR THE METER HOODING FEES, 1404 00:59:24,994 --> 00:59:26,763 LIKELY DUE TO SLIGHTLY LOWER 1405 00:59:26,763 --> 00:59:29,933 THAN EXPECTED CONSTRUCTION 1406 00:59:29,933 --> 00:59:32,035 ACTIVITY ON THE STREETS. MOVING 1407 00:59:32,035 --> 00:59:34,103 ON TO THE COURT FINDS ROW HERE. 1408 00:59:34,103 --> 00:59:37,507 THERE IS LOT UNDER THIS ROW THAT 1409 00:59:37,507 --> 00:59:43,079 ARE MOSTLY CITATIONS, PROCESSED 1410 00:59:43,079 --> 00:59:45,381 BY THE SEATTLE MUNICIPAL COURT. 1411 00:59:45,381 --> 00:59:48,751 THE LION'S SHARE ARE PARKING 1412 00:59:48,751 --> 00:59:53,890 TICKETS. ALSO UNDER HERE ARE 70% 1413 00:59:53,890 --> 00:59:55,692 OF RED LIGHT CAMERAS. THE REAL 1414 00:59:55,692 --> 00:59:58,328 ACTIVITY HAPPENING HERE IN 2026, 1415 00:59:58,328 --> 01:00:00,396 REVISION OF $5.5 MILLION 1416 01:00:00,396 --> 01:00:01,331 DOWNWARD, SEVERAL FACTORS 1417 01:00:01,331 --> 01:00:04,701 UNDERLIE THIS, ONE IS MUCH LOWER 1418 01:00:04,701 --> 01:00:05,601 THAN EXPECTED PARKING TICKETS 1419 01:00:05,601 --> 01:00:09,505 HANDED OUT IN THE FALL AND INTO 1420 01:00:09,505 --> 01:00:11,741 THE WINTER MONTHS. SOME OF THAT 1421 01:00:11,741 --> 01:00:13,610 CONTINUING INTO THE SPRING, SO 1422 01:00:13,610 --> 01:00:18,815 VOLUME IS LOWER THAN WE HAD 1423 01:00:18,815 --> 01:00:20,516 ANTICIPATED, THERE WAS ALSO SOME 1424 01:00:20,516 --> 01:00:22,785 EXPECTATION OF INCREASED HIRING 1425 01:00:22,785 --> 01:00:25,154 IN THE 2026 ADOPTED BUDGET FOR 1426 01:00:25,154 --> 01:00:30,293 PEOs, WE HAVE YET TO SEE THAT 1427 01:00:30,293 --> 01:00:30,994 MATERIALIZE. THE HIGHERING UP 1428 01:00:30,994 --> 01:00:34,664 HAS ONLY KEPT PACE WITH HOW MANY 1429 01:00:34,664 --> 01:00:35,999 PARKING ENFORCEMENT OFFICERS 1430 01:00:35,999 --> 01:00:39,168 HAVE BEEN LOST, SO WE HAVE 1431 01:00:39,168 --> 01:00:39,902 LOWERED THE EXPECTATION FOR 1432 01:00:39,902 --> 01:00:41,371 ADDITIONAL HIRING IN THIS 1433 01:00:41,371 --> 01:00:42,538 FORECAST AS WELL. THE OTHER 1434 01:00:42,538 --> 01:00:44,874 FACTOR THAT IS HAPPENING UNDER 1435 01:00:44,874 --> 01:00:47,977 THIS ROW IS THAT CHANGES TO 1436 01:00:47,977 --> 01:00:52,248 STATE LAW IN THE MOST RECENT 1437 01:00:52,248 --> 01:00:53,650 LEGISLATIVE SESSION LIMITED THE 1438 01:00:53,650 --> 01:00:56,619 ABILITY TO USE AUTOMATIC LICENSE 1439 01:00:56,619 --> 01:00:58,755 PLATE READERS AROUND SENSITIVE 1440 01:00:58,755 --> 01:00:59,389 BUILDINGS, ANDTHER PARKING 1441 01:00:59,389 --> 01:01:01,591 ENFORCEMENT OFFICERS HAVE RELIED 1442 01:01:01,591 --> 01:01:03,226 ON WHAT WE CALL ALPR TECHNOLOGY, 1443 01:01:03,226 --> 01:01:04,961 TO A SMALL EXTENT. IT IS NOT A 1444 01:01:04,961 --> 01:01:06,696 HUGE PORTION OF WHAT THEY DO, 1445 01:01:06,696 --> 01:01:07,530 BUT THEIR TECHNOLOGY DOESN'T 1446 01:01:07,530 --> 01:01:12,168 ALLOW THEM TO TURN IT ON AND OFF 1447 01:01:12,168 --> 01:01:13,503 AROUND THESE SENSITIVE BUILDINGS 1448 01:01:13,503 --> 01:01:14,804 AND CENTERS, SO THEY HAVE 1449 01:01:14,804 --> 01:01:16,639 ANTICIPATED NEEDING TO TURN THAT 1450 01:01:16,639 --> 01:01:18,741 OFF UNLESS THEIR TECHNOLOGY CAN 1451 01:01:18,741 --> 01:01:19,375 BE ADJUSTED. SO THIS FORECAST, 1452 01:01:19,375 --> 01:01:22,378 YOU CAN SEE IN THE OUT YEARS, 1453 01:01:22,378 --> 01:01:24,347 THERE ARE SOME TICKS DOWN IN 1454 01:01:24,347 --> 01:01:26,949 2027 AND 2028, THAT IS 1455 01:01:26,949 --> 01:01:28,384 ANTICIPATING THE ALPR TECHNOLOGY 1456 01:01:28,384 --> 01:01:32,722 WILL NOT BE AVAILABLE TO PARKING 1457 01:01:32,722 --> 01:01:33,723 ENFORCEMENT OFFICERS GOING 1458 01:01:33,723 --> 01:01:33,990 FORWARD. 1459 01:01:33,990 --> 01:01:40,129 >> JOE, I WILL JUMP IN WITH MY 1460 01:01:40,129 --> 01:01:40,830 THREE-TIMES-A-YEAR CAVEAT WHAT 1461 01:01:40,830 --> 01:01:42,498 YOU SAID, IN ADDITION TO ALL OF 1462 01:01:42,498 --> 01:01:44,767 THAT WHAT YOU SAID IN THE PAST 1463 01:01:44,767 --> 01:01:45,868 FEW YEARS WE ADJUSTED PARKING 1464 01:01:45,868 --> 01:01:47,236 RATES TO A HIGHER LEVEL BECAUSE 1465 01:01:47,236 --> 01:01:49,706 PEOPLE WERE CHOOSING NOT TO PAY 1466 01:01:49,706 --> 01:01:53,876 PARKING AND RATHER TICKET PRICE, 1467 01:01:53,876 --> 01:01:56,212 BECAUSE IT WAS CHEAPER THAN 1468 01:01:56,212 --> 01:01:57,346 PAYING FOR PARKING. THAT ADDED 1469 01:01:57,346 --> 01:01:59,749 VOLATILITY TO YOUR COURT FINDS, 1470 01:01:59,749 --> 01:02:00,883 IT ADDED VOLATILITY TO THE 1471 01:02:00,883 --> 01:02:02,885 PARKING RIGHTS, AND THEN ON TOP 1472 01:02:02,885 --> 01:02:05,788 OF THAT, WE PROMISED YOU THAT WE 1473 01:02:05,788 --> 01:02:08,291 WOULD BE ROLLING OUT THE 1474 01:02:08,291 --> 01:02:09,992 SPEEDING CAMERAS THROUGHOUT THE 1475 01:02:09,992 --> 01:02:12,528 CITY, SDOT AND SPD HAVE YET TO 1476 01:02:12,528 --> 01:02:14,864 GET THOSE DEPLOYED ON OUR 1477 01:02:14,864 --> 01:02:19,202 STREETS AND SO THERE ARE A 1478 01:02:19,202 --> 01:02:20,269 NUMBER OF OTHER VARIABLES, 1479 01:02:20,269 --> 01:02:21,003 LEGISLATIVELY AND 1480 01:02:21,003 --> 01:02:21,637 ADMINISTRATIVELY WITHIN THE CITY 1481 01:02:21,637 --> 01:02:22,238 OF SEATTLE THAT MADE IT 1482 01:02:22,238 --> 01:02:23,439 DIFFICULT TO PREDICT THE 1483 01:02:23,439 --> 01:02:23,706 NUMBERS. 1484 01:02:23,706 --> 01:02:25,541 >> YEAH, THANK YOU. THERE IS A 1485 01:02:25,541 --> 01:02:27,009 LOT GOING ON WITH TRAFFIC 1486 01:02:27,009 --> 01:02:28,211 CAMERAS. I WILL SPEAK TO THAT IN 1487 01:02:28,211 --> 01:02:31,114 THE NEXT SLIDE BECAUSE THOSE 1488 01:02:31,114 --> 01:02:32,148 SPEED CAMERAS ARE ALLOTTED AS 1489 01:02:32,148 --> 01:02:34,484 NON-GENERAL FUND, THEY COULD GO 1490 01:02:34,484 --> 01:02:39,155 TO AUTOMATIC TRAFFIC SAFETY 1491 01:02:39,155 --> 01:02:41,023 CAMERA FUND. I WILL SPEAK TO 1492 01:02:41,023 --> 01:02:42,792 THAT ON THE NEXT SLIDE. 1493 01:02:42,792 --> 01:02:43,893 GENERALLY SPEAKING, THE PARKING 1494 01:02:43,893 --> 01:02:47,363 TICKET FINES DID GO UP IN 2025, 1495 01:02:47,363 --> 01:02:52,702 WE DID SEE A MARK INCREASE IN 1496 01:02:52,702 --> 01:02:54,036 THOSE REVENUES, THIS DOWNWARD 1497 01:02:54,036 --> 01:02:55,404 $5.5 MILLION IS RELATIVE TO THE 1498 01:02:55,404 --> 01:02:58,908 EXPECTATION OF WHAT WE WOULD 1499 01:02:58,908 --> 01:03:01,844 BRING IN FOR 2026. YES, THE 1500 01:03:01,844 --> 01:03:04,080 OVERALL REVENUES ARE UP EVEN 1501 01:03:04,080 --> 01:03:05,248 THOUGH REVISED DOWNWARD. I AM 1502 01:03:05,248 --> 01:03:06,949 GOING TO MOVE ON HERE, UNLESS 1503 01:03:06,949 --> 01:03:14,090 THERE ARE OTHER QUESTIONS ON 1504 01:03:14,090 --> 01:03:16,025 COURT FINES. THIS ROW HAS A LOT 1505 01:03:16,025 --> 01:03:17,627 GOING ON AS WELL. THE DRIVING 1506 01:03:17,627 --> 01:03:20,696 FORCE IS INTEREST INCOME ON THE 1507 01:03:20,696 --> 01:03:22,398 GENERAL FUNDS CASH BALANCES. WE 1508 01:03:22,398 --> 01:03:24,367 HAVE ANTICIPATED A DOWNWARD 1509 01:03:24,367 --> 01:03:26,269 REVISION OF $1.9 MILLION IN 1510 01:03:26,269 --> 01:03:28,671 2026, AND THEN UPWARD REVISION 1511 01:03:28,671 --> 01:03:32,575 OF $3.2 MILLION IN 2027 AND 1512 01:03:32,575 --> 01:03:34,177 RELATIVELY FLAT IN 2028. OUR 1513 01:03:34,177 --> 01:03:36,746 CASH BALANCES ARE INVESTED IN 1514 01:03:36,746 --> 01:03:38,314 VERY LOW RISK TREASURY NOTES. 1515 01:03:38,314 --> 01:03:43,286 THOSE NOTES ARE SHORT TERM AND 1516 01:03:43,286 --> 01:03:44,820 SO THEY GENERALLY FLUCTUATE 1517 01:03:44,820 --> 01:03:46,622 QUITE A BIT. THIS IS A 1518 01:03:46,622 --> 01:03:48,658 CHALLENGING REVENUE STREAM TO 1519 01:03:48,658 --> 01:03:51,661 PREDICT, BUT RIGHT NOW THE 1520 01:03:51,661 --> 01:03:54,831 ANTICIPATION IS THAT WE WILL SEE 1521 01:03:54,831 --> 01:03:56,532 LOWER YIELDS IN 2026 BUT 1522 01:03:56,532 --> 01:03:58,267 INCREASE IN 2027 ANTICIPATING 1523 01:03:58,267 --> 01:03:59,602 INTEREST RATES IN GENERAL, THE 1524 01:03:59,602 --> 01:04:00,603 FEDERAL FUNDS RATE, THAT IS, 1525 01:04:00,603 --> 01:04:06,342 WILL STAY HIGHER THAN WE HAD 1526 01:04:06,342 --> 01:04:07,643 PREVIOUSLY ANTICIPATED. SO WE 1527 01:04:07,643 --> 01:04:08,945 ANTICIPATE THAT MEANS THAT 1528 01:04:08,945 --> 01:04:10,813 YIELDS THAT WOULD GENERALLY GO 1529 01:04:10,813 --> 01:04:13,349 UP FOR THE SHORT-TERM INTEREST 1530 01:04:13,349 --> 01:04:14,350 RATES SO IN 2027 WE ADJUSTED 1531 01:04:14,350 --> 01:04:16,652 THAT FORECAST UP A BIT FOR THAT 1532 01:04:16,652 --> 01:04:18,354 REASON. LETS SEE, I AM MOVING ON 1533 01:04:18,354 --> 01:04:22,692 NOW TO REVENUE FROM OTHER PUBLIC 1534 01:04:22,692 --> 01:04:26,128 ENTITIES. NOT TOO MUCH CHANGE, 1535 01:04:26,128 --> 01:04:28,497 $2.2 MILLION ADJUSTMENT IN 2026, 1536 01:04:28,497 --> 01:04:33,536 THESE ARE-- THIS LINE 1537 01:04:33,536 --> 01:04:36,505 ENCOMPASSES QUITE A FEW 1538 01:04:36,505 --> 01:04:37,206 STATE-SHARED REVENUES. SO THAT 1539 01:04:37,206 --> 01:04:39,575 INCLUDES TRANSFERS FROM THE 1540 01:04:39,575 --> 01:04:42,478 STATE FOR CRIMINAL JUSTICE 1541 01:04:42,478 --> 01:04:44,880 PURPOSES, AS WELL AS LIQUOR TAX, 1542 01:04:44,880 --> 01:04:46,816 SLIGHT ADJUSTMENT HERE FOR OVER 1543 01:04:46,816 --> 01:04:48,251 PERFORMANCE OF THOSE REVENUES IN 1544 01:04:48,251 --> 01:04:50,152 2025, SO THE MODEL HAS BEEN 1545 01:04:50,152 --> 01:04:52,688 ADJUST UPWARD ANTICIPATING 1546 01:04:52,688 --> 01:04:53,923 SLIGHTLY HIGHER IN THE OUT 1547 01:04:53,923 --> 01:04:56,125 YEARS. I AM GOING TO PASS IT TO 1548 01:04:56,125 --> 01:05:01,097 ALEX TO TALK SERVICE CHARGES AND 1549 01:05:01,097 --> 01:05:01,464 REIMBURSEMENTS. 1550 01:05:01,464 --> 01:05:03,699 >> SERVICE CHARGES, THIS 1551 01:05:03,699 --> 01:05:06,068 CATEGORY HASN'T CHANGED MUCH, 1552 01:05:06,068 --> 01:05:07,903 PRETTY STABLE OVER THE THREE 1553 01:05:07,903 --> 01:05:10,039 YEARS, JUST TO REFRESH 1554 01:05:10,039 --> 01:05:10,706 EVERYBODY, THIS CATEGORY 1555 01:05:10,706 --> 01:05:13,976 INCLUDES A LOT OF IT IS INTERNAL 1556 01:05:13,976 --> 01:05:17,847 SERVICE CHARGES AND COST SHARING 1557 01:05:17,847 --> 01:05:20,750 BETWEEN DEPARTMENTS. THIS ALSO 1558 01:05:20,750 --> 01:05:26,722 INCLUDES REVENUE THAT, FOR 1559 01:05:26,722 --> 01:05:28,925 EXAMPLE, SPD GETS FROM PROVIDING 1560 01:05:28,925 --> 01:05:31,394 SECURITY, FOR EXAMPLE, AT 1561 01:05:31,394 --> 01:05:33,095 SPORTING EVENTS LIKE THAT. THIS 1562 01:05:33,095 --> 01:05:34,196 CATEGORY IS USUALLY PRETTY 1563 01:05:34,196 --> 01:05:39,268 STABLE. GRANTS, LIKE I SAID ON 1564 01:05:39,268 --> 01:05:40,603 THE 2025 ACTUAL SLIDES, SO THIS 1565 01:05:40,603 --> 01:05:42,204 MIRRORS MORE OR LESS THE NUMBER 1566 01:05:42,204 --> 01:05:44,440 WHICH INDICATED A LOT OF THE 1567 01:05:44,440 --> 01:05:46,709 GRANTS WERE NOT SPENT DOWN, THAT 1568 01:05:46,709 --> 01:05:53,382 APPROPRIATION HAS BEEN CARRIED 1569 01:05:53,382 --> 01:05:57,286 FORWARD INTO 2026, AND REFLECTED 1570 01:05:57,286 --> 01:06:00,089 HERE, MOSTLY BUDGETED MECHANICS 1571 01:06:00,089 --> 01:06:04,727 THING WHERE WE ARE REFLECTING 1572 01:06:04,727 --> 01:06:07,963 THE REVENUE IN AGGREGATE OF THIS 1573 01:06:07,963 --> 01:06:09,832 YEAR IN ORDER TO BALANCE THE 1574 01:06:09,832 --> 01:06:13,369 FUND GIVEN ALL OF THE 1575 01:06:13,369 --> 01:06:16,839 APPROPRIATION AS WELL. AND THEN 1576 01:06:16,839 --> 01:06:18,541 FUND BALANCE TRANSFERS, THEY 1577 01:06:18,541 --> 01:06:22,144 ALSO HAVE NOT CHANGED MUCH. THIS 1578 01:06:22,144 --> 01:06:25,815 IS MOSTLY DRIVEN BY TRANSFERS 1579 01:06:25,815 --> 01:06:27,416 FROM THE PAYROLL EXPENSE TAX, 1580 01:06:27,416 --> 01:06:32,088 AND AS OF THIS APRIL FORECAST, 1581 01:06:32,088 --> 01:06:35,958 THOSE ASSUMPTIONS HAVE NOT 1582 01:06:35,958 --> 01:06:37,960 CHANGED. THESE ARE JUST MARGINAL 1583 01:06:37,960 --> 01:06:39,795 CHANGES OUTSIDE OF PAYROLL 1584 01:06:39,795 --> 01:06:40,262 EXPENSES, TAX TRANSFERS. 1585 01:06:41,497 --> 01:06:42,465 >> ALL RIGHT. I THINK WITH THAT 1586 01:06:42,465 --> 01:06:46,969 WE CAN MOVE ON TO THE 1587 01:06:46,969 --> 01:06:47,737 NON-GENERAL FUND REVENUES, 1588 01:06:47,737 --> 01:06:52,208 PAYROLL EXPENSE TAX, FIRST, AS 1589 01:06:52,208 --> 01:06:54,076 YOU CAN SEE, HERE IS WHERE THE 1590 01:06:54,076 --> 01:06:56,178 NEWS IS NOT SO GREAT. THERE IS A 1591 01:06:56,178 --> 01:06:58,814 DOWNWARD REVISION FOR CURRENT 1592 01:06:58,814 --> 01:07:00,683 YEAR AND THEN ALSO THE FOLLOWING 1593 01:07:00,683 --> 01:07:04,120 TWO, THE MAIN REASON HERE IS 1594 01:07:04,120 --> 01:07:11,193 THAT, WELL, THERE IS TWO, SO, 1595 01:07:11,193 --> 01:07:16,365 AMAZON ANNOUNCED 5,000, 4,000 1596 01:07:16,365 --> 01:07:17,533 PLUS LAYOFFS APECTING THE TAX 1597 01:07:17,533 --> 01:07:19,802 BASE THEN IN ADDITION TO THAT, 1598 01:07:19,802 --> 01:07:21,337 THE STOCK PRICES, GIVEN THE 1599 01:07:21,337 --> 01:07:22,571 RECENT DEVELOPMENTS, ARE NOT 1600 01:07:22,571 --> 01:07:25,841 WHERE THEY WERE EXPECTED TO BE 1601 01:07:25,841 --> 01:07:28,511 WHEN WE WERE GENERATING THE 1602 01:07:28,511 --> 01:07:30,813 FORECAST BACK IN OCTOBER, AS A 1603 01:07:30,813 --> 01:07:32,515 REMINDER, STOCK PRICES DO MATTER 1604 01:07:32,515 --> 01:07:34,784 FOR PAYROLL EXPENSE TAX BECAUSE 1605 01:07:34,784 --> 01:07:36,819 LARGE PART OF THE COMPENSATIONS 1606 01:07:36,819 --> 01:07:40,022 THAT SUBJECT TO THIS TAX IS IN 1607 01:07:40,022 --> 01:07:42,491 FORMAL DISTRICT, STOCK UNITS. SO 1608 01:07:42,491 --> 01:07:45,094 THE VALUE OF THAT FLUCTUATES 1609 01:07:45,094 --> 01:07:49,031 WITH CURRENT STOCK PRICES FOR 1610 01:07:49,031 --> 01:07:50,733 THOSE MAIN TAXPAYERS THAT DO 1611 01:07:50,733 --> 01:07:52,802 COMPENSATE THEIR EMPLOYEES IN 1612 01:07:52,802 --> 01:07:55,237 THE FORM OF RESTRICTED STOCK 1613 01:07:55,237 --> 01:07:57,406 UNITS. SO WITH LOWER CURRENT 1614 01:07:57,406 --> 01:07:59,175 STOCK PRICES AND, IN GENERAL, 1615 01:07:59,175 --> 01:08:01,544 LOWER OUTLOOK FOR THE REST OF 1616 01:08:01,544 --> 01:08:04,380 THE YEAR, COMPARED TO THE 1617 01:08:04,380 --> 01:08:05,981 OCTOBER FORECAST, THERE IS THAT 1618 01:08:05,981 --> 01:08:07,383 $STAEN MILLION DOWNWARD REVISION 1619 01:08:07,383 --> 01:08:10,619 FOR THE CURRENT YEAR, IT KIND OF 1620 01:08:10,619 --> 01:08:12,154 CARRIES OVER INTO 2027 AND 2028 1621 01:08:12,154 --> 01:08:18,160 AS WE ARE STARTING FROM A LOWER 1622 01:08:18,160 --> 01:08:20,062 BASE. FOR PAYROLL EXPENSE TAX 1623 01:08:20,062 --> 01:08:23,833 FUND REVENUE INTEREST INCOME 1624 01:08:23,833 --> 01:08:24,266 PART-- 1625 01:08:24,266 --> 01:08:29,872 >> I CAN SPEAK TO THAT. SIMILAR 1626 01:08:29,872 --> 01:08:32,007 STORY WE SEE DOWNWARD REVISION 1627 01:08:32,007 --> 01:08:35,077 AND BUMP UP IN 2027, ALL DRIVEN 1628 01:08:35,077 --> 01:08:37,880 BY PROJECTIONS FOR YIELDS ON THE 1629 01:08:37,880 --> 01:08:39,114 SHORT-TERM TREASURY NOTES, WHICH 1630 01:08:39,114 --> 01:08:43,486 IS WHERE WE INVEST OUR CASH 1631 01:08:43,486 --> 01:08:44,854 BALANCES. FOR THE MOST PART. I 1632 01:08:44,854 --> 01:08:46,222 WILL JUST HIGHLIGHT THAT BOTH 1633 01:08:46,222 --> 01:08:48,190 HERE AND IN THE GENERAL FUND 1634 01:08:48,190 --> 01:08:49,425 INTEREST INCOME, ON THE PREVIOUS 1635 01:08:49,425 --> 01:08:51,327 SLIDE, WE DO SEE A DOWNWARD 1636 01:08:51,327 --> 01:08:53,362 TREND IN THESE INTEREST INCOMES, 1637 01:08:53,362 --> 01:08:54,864 JUST BECAUSE WE ARE REVISING THE 1638 01:08:54,864 --> 01:08:56,098 FORECAST, I WANT TO HIGHLIGHT, 1639 01:08:56,098 --> 01:08:57,733 THOUGH, IN THAT SORT OF APRIL 1640 01:08:57,733 --> 01:09:00,035 FORECAST SECTION WE DO SEE THESE 1641 01:09:00,035 --> 01:09:04,807 DOWNWARD TICKS IN THIS FORECAST, 1642 01:09:04,807 --> 01:09:10,646 THAT IS BECAUSE OVERALL INTEREST 1643 01:09:10,646 --> 01:09:14,850 RATES ARE COMING OFF A HIGH 1644 01:09:14,850 --> 01:09:17,586 PERIOD. WE EXPECT TO SEE LOWER 1645 01:09:17,586 --> 01:09:18,521 ININTEREST INCOME IN COMING 1646 01:09:18,521 --> 01:09:21,056 YEARS THOUGH WE REVISED THE 1647 01:09:21,056 --> 01:09:21,924 FORECAST A BIT. 1648 01:09:21,924 --> 01:09:24,260 >> BEFORE WE MOVE ON, REGULAR 1649 01:09:24,260 --> 01:09:26,328 MOMENT WHEN WE START TALKING 1650 01:09:26,328 --> 01:09:31,300 ABOUT PAYROLL EXPENSE TAX, THANK 1651 01:09:31,300 --> 01:09:32,535 YOU, AGAIN, THANK YOU, YOU HAVE 1652 01:09:32,535 --> 01:09:33,903 BEEN TRYING TO FORECAST A TAX 1653 01:09:33,903 --> 01:09:35,471 THAT HAS NOT BEEN COLLECTED 1654 01:09:35,471 --> 01:09:38,607 BEFORE. WE ARE IN THE 5th YEAR 1655 01:09:38,607 --> 01:09:43,412 OF COLLECTION, 6th YEAR OFA 1656 01:09:43,412 --> 01:09:44,446 ESMENT, AND I WILL TAKE, THE 1657 01:09:44,446 --> 01:09:46,815 VOLATILITY OF THE TAX IN AND OF 1658 01:09:46,815 --> 01:09:48,083 ITSELF, BECAUSE IT IS DEPENDENT 1659 01:09:48,083 --> 01:09:49,652 UPON THE STOCK MARKET T CAN BE 1660 01:09:49,652 --> 01:09:52,688 HARD TO PREDICT, EVEN IF YOU HAD 1661 01:09:52,688 --> 01:09:54,123 THE HISTORY TO PREDICT IT WITH, 1662 01:09:54,123 --> 01:09:57,026 SO I APPRECIATE THE ACIACY IN 1663 01:09:57,026 --> 01:09:59,228 WHICH YOU ARE ABLE TO PROVIDE US 1664 01:09:59,228 --> 01:10:01,397 WITH THAT VOLATILITY. TO THE 1665 01:10:01,397 --> 01:10:02,331 SIDE OF THAT, THAT HELD 1666 01:10:02,331 --> 01:10:04,333 CONSTANT, THE FACT THAT WE HAVE 1667 01:10:04,333 --> 01:10:06,202 ONLY HAD SIX YEARS OF ASSESSMENT 1668 01:10:06,202 --> 01:10:07,203 AND FIVE YEARS OF COLLECTION, 1669 01:10:07,203 --> 01:10:08,237 MEANS THIS IS REALLY THE FIRST 1670 01:10:08,237 --> 01:10:12,942 TIME WE ARE ABLE TO DO A 1671 01:10:12,942 --> 01:10:14,877 FIVE-YEAR SMOOTHING ANALYSIS, IN 1672 01:10:14,877 --> 01:10:16,445 MY OPINION, THE BASELINE IN 1673 01:10:16,445 --> 01:10:17,513 WHICH, IT IS THE FOUNDATION IN 1674 01:10:17,513 --> 01:10:23,018 WHICH YOU NEED TO MOVE FORWARD 1675 01:10:23,018 --> 01:10:24,520 FROM THE. AND IN THE EARLY YEARS 1676 01:10:24,520 --> 01:10:25,654 ASSESSMENT AND COLLECTION, THERE 1677 01:10:25,654 --> 01:10:27,756 WAS NOT ENOUGH TIME FOR 1678 01:10:27,756 --> 01:10:30,159 BUSINESS-- AND IT IS COMMON 1679 01:10:30,159 --> 01:10:31,794 ECONOMIC PRACTICE, MOVE WITH 1680 01:10:31,794 --> 01:10:32,962 YOUR FEET, WHICH IS TO SAY IF 1681 01:10:32,962 --> 01:10:34,163 THERE IS A HIGHER TAX IN ONE 1682 01:10:34,163 --> 01:10:36,599 PLACE, THERE IS A WAY TO AVOID 1683 01:10:36,599 --> 01:10:39,902 THAT TAX BY MOVING TO ANOTHER, 1684 01:10:39,902 --> 01:10:41,904 RIGHT? THAT IS THE SUBSTITUTION 1685 01:10:41,904 --> 01:10:43,005 EFFECT OF THE LARGER THE 1686 01:10:43,005 --> 01:10:43,772 GEOGRAPHIC BOUNDARY, THE BETTER 1687 01:10:43,772 --> 01:10:45,741 FOR THE TAX, IN THIS CASE, 1688 01:10:45,741 --> 01:10:48,711 BECAUSE IT IS JUST WITH SEATTLE, 1689 01:10:48,711 --> 01:10:51,413 IT IS EASIER TO AVOID THAN IF IT 1690 01:10:51,413 --> 01:10:53,148 WAS FOR THE ENTIRE STATE, AND 1691 01:10:53,148 --> 01:10:55,150 WITH THAT, IN THE EARLY YEARS OF 1692 01:10:55,150 --> 01:10:56,018 ASSESSMENT AND COLLECTION, THERE 1693 01:10:56,018 --> 01:10:58,721 IS A LACK OF ABILITY TO AVOID 1694 01:10:58,721 --> 01:11:01,857 THE TAX, HOWEVER, FIVE YEARS 1695 01:11:01,857 --> 01:11:03,626 LATER, WE ARE STARTING TO SEE 1696 01:11:03,626 --> 01:11:06,729 HOW THAT CAN ACTUALLY BE 1697 01:11:06,729 --> 01:11:07,863 APPLIED. THERE ARE THREE REALLY 1698 01:11:07,863 --> 01:11:09,265 DISTINCT VARIABLES WORKING 1699 01:11:09,265 --> 01:11:11,233 AGAINST YOU BEING ACCURATE, 1700 01:11:11,233 --> 01:11:14,336 WHICH IS JUST TIME AND HISTORY, 1701 01:11:14,336 --> 01:11:15,604 TAX AVOIDANCE, AND THEN THE 1702 01:11:15,604 --> 01:11:18,674 VOLATILITY OF THIS. SO ALL OF 1703 01:11:18,674 --> 01:11:20,275 THAT TO SAY, THANK YOU. GOOD 1704 01:11:20,275 --> 01:11:21,110 WORK. I JUST WANTED TO SHARE 1705 01:11:21,110 --> 01:11:23,279 THAT CONTEXT BECAUSE I WOULD 1706 01:11:23,279 --> 01:11:27,182 LOVE TO WORK WITH YOU AND MAYBE 1707 01:11:27,182 --> 01:11:28,417 VICE CHAIR ELERBROOK, DWIGHT, 1708 01:11:28,417 --> 01:11:31,053 COUNCIL PRESIDENT SHOULD SHE 1709 01:11:31,053 --> 01:11:33,055 DESIRE, WHETHER OPEN SESSION OR 1710 01:11:33,055 --> 01:11:34,456 WORK GROUPS THAT DOESN'T BREAK 1711 01:11:34,456 --> 01:11:35,891 OPEN PUCKLIC MEETING ACT, IN A 1712 01:11:35,891 --> 01:11:36,992 WAY TO BETTER UNDERSTAND HOW WE 1713 01:11:36,992 --> 01:11:40,296 CAN USE THE LAST FIVE TO SIX 1714 01:11:40,296 --> 01:11:42,564 YEARS TO CREATE THAT FOUNDATION 1715 01:11:42,564 --> 01:11:47,002 IN WHICH WE ARE ABLE TO GO FROM 1716 01:11:47,002 --> 01:11:52,141 HERE. BECAUSE UNTIL NOW, WE HAVE 1717 01:11:52,141 --> 01:11:53,108 BEEN LACKING THAT CRITICAL DATA, 1718 01:11:53,108 --> 01:12:00,616 SO I JUST KIND OF MAKE THAT-- 1719 01:12:00,616 --> 01:12:01,617 ANY OTHER COMMENTS FROM 1720 01:12:01,617 --> 01:12:02,084 COMMITTEE MEMBERS? ? 1721 01:12:02,084 --> 01:12:03,452 >> THANK YOU. 1722 01:12:03,452 --> 01:12:06,188 >> THANK YOU, CHAIR STRAUSS. 1723 01:12:06,188 --> 01:12:11,860 VERY NICE TO HEAR THAT THE HARD 1724 01:12:11,860 --> 01:12:16,498 WORK IS APPRECIATED. SO, MOVING 1725 01:12:16,498 --> 01:12:17,800 ON, INTEREST RATES ARE EXPECTED 1726 01:12:17,800 --> 01:12:23,906 TO STAY HIGHER FOR A LONGER 1727 01:12:23,906 --> 01:12:27,443 PERIOD OF TIME. THERE ARE FEWER 1728 01:12:27,443 --> 01:12:30,345 HOMES EXPECTED TO BE SOLD THIS 1729 01:12:30,345 --> 01:12:31,880 YEAR THAN, AGAIN, NEXT YEAR, AND 1730 01:12:31,880 --> 01:12:33,015 THE ONE AFTER. IN ADDITION, THE 1731 01:12:33,015 --> 01:12:37,052 HIGH VACANCY RATES THAT WE HAVE 1732 01:12:37,052 --> 01:12:38,354 PRESENTEDER AND DECLINING 1733 01:12:38,354 --> 01:12:40,055 ASSESSED VALUES ALSO MEAN 1734 01:12:40,055 --> 01:12:44,359 WHEREVER A LARGE OFFICE BUILDING 1735 01:12:44,359 --> 01:12:47,196 IS SOLD, SOME COMMERCIAL 1736 01:12:47,196 --> 01:12:53,836 BUILDING IN GENERAL IS SOLD, 1737 01:12:53,836 --> 01:12:55,571 LOWER ASSESSED VALUES AND ALSO 1738 01:12:55,571 --> 01:12:58,540 IMPLICATIONS, THAT MEANS LESS 1739 01:12:58,540 --> 01:13:00,576 RATE REVENUES HERE. THE OVERALL 1740 01:13:00,576 --> 01:13:02,544 DOWNWARD REVISION IS IN EXCESS 1741 01:13:02,544 --> 01:13:07,516 $10 MILLION OVER THREE YEARS BUT 1742 01:13:07,516 --> 01:13:10,819 HEAVILY IMPACTING 2026, IN 1743 01:13:10,819 --> 01:13:11,920 PARTICULAR. THEN FOR THE 1744 01:13:11,920 --> 01:13:16,825 ADMISSION TAX REVENUES, WE HAVE 1745 01:13:16,825 --> 01:13:19,862 TRIED TO INTORPERATE THAT NUMBER 1746 01:13:19,862 --> 01:13:22,965 OF VISITORS COMING TO SEATTLE, 1747 01:13:22,965 --> 01:13:24,633 AS FORECASTED BY TOURISM 1748 01:13:24,633 --> 01:13:26,001 ECONOMICS AND RECENTLY THERE HAS 1749 01:13:26,001 --> 01:13:27,736 BEEN NEWS MAYBE HOTEL ROOMS ARE 1750 01:13:27,736 --> 01:13:31,673 NOT REALLY FILLING UP AS MUCH AS 1751 01:13:31,673 --> 01:13:34,243 EXPECTED, OR FOR WORLD CUP, THAT 1752 01:13:34,243 --> 01:13:36,044 IS CERTAINLY CONCERNING NEWS. 1753 01:13:36,044 --> 01:13:38,580 THE REVISION HERE IS NOT 1754 01:13:38,580 --> 01:13:42,217 PARTICULARLY LARGE, BUT, AGAIN, 1755 01:13:42,217 --> 01:13:43,252 GIVEN WITH OVERALL ECONOMIC 1756 01:13:43,252 --> 01:13:44,253 UNCERTAINTY IT IS HARD TO 1757 01:13:44,253 --> 01:13:47,189 PREDICT HOW THE MIDDLE EAST 1758 01:13:47,189 --> 01:13:48,490 SITUATION WILL EVOLVE. THERE IS 1759 01:13:48,490 --> 01:13:51,727 A POSSIBILITY THERE WILL BE 1760 01:13:51,727 --> 01:13:53,796 FURTHER DOWNWARD TRANSITION 1761 01:13:53,796 --> 01:13:57,900 THERE BUT IT IS RELATIVELY MINOR 1762 01:13:57,900 --> 01:13:58,200 ONE. 1763 01:13:58,200 --> 01:14:03,038 >> CAN WE GO BACK TO READ FOR A 1764 01:14:03,038 --> 01:14:05,607 MINUTE? THERE IS A VERY 1765 01:14:05,607 --> 01:14:07,342 SUBSTANTIAL GROWTH PROJECTED 1766 01:14:07,342 --> 01:14:10,913 BETWEEN 2026 AND 2027, AND 1767 01:14:10,913 --> 01:14:12,247 AGAIN, SUBSTANTIAL GROWTH IN 1768 01:14:12,247 --> 01:14:14,483 2028. IF YOU MAKE THE ASSUMPTION 1769 01:14:14,483 --> 01:14:16,018 THAT THE OFFICE MARKET ISN'T 1770 01:14:16,018 --> 01:14:18,453 GOING TO RECOVER, IN THAT 1771 01:14:18,453 --> 01:14:20,522 PERIOD, WHICH IS CONSISTENT WITH 1772 01:14:20,522 --> 01:14:22,524 EARLIER, THIS, I ASSUME, 1773 01:14:22,524 --> 01:14:26,028 PRESUMES A SIGNIFICANT INCREASE 1774 01:14:26,028 --> 01:14:27,229 IN RESIDENTIAL TRANSACTIONS, AND 1775 01:14:27,229 --> 01:14:29,198 I-- THAT GROWTH MAKES ME 1776 01:14:29,198 --> 01:14:30,799 NERVOUS. IT SEEMS LIKE A VERY 1777 01:14:30,799 --> 01:14:32,734 HIGH RATE OF GROWTH IN 1778 01:14:32,734 --> 01:14:33,335 RESIDENTIAL TRANSACTIONS. IS 1779 01:14:33,335 --> 01:14:33,969 THERE SOMETHING UNDERLYING THAT 1780 01:14:33,969 --> 01:14:34,570 THAT I AM MISSING? 1781 01:14:34,570 --> 01:14:37,272 >> NO, THAT IS A GOOD POINT. 1782 01:14:37,272 --> 01:14:38,474 YEAH, IT RELIES HEAVILY ON THE 1783 01:14:38,474 --> 01:14:42,344 FACT THAT THERE IS LOTS OF 1784 01:14:42,344 --> 01:14:43,745 PEOPLE WHO HAVE POSTPONED BUYING 1785 01:14:43,745 --> 01:14:47,583 A HOUSE BECAUSE MORTGAGE RATES 1786 01:14:47,583 --> 01:14:49,384 HAVE BEEN HIGH. SO THERE IS THAT 1787 01:14:49,384 --> 01:14:52,621 POTENTIALLY PENT UP DEMAND. ONCE 1788 01:14:52,621 --> 01:14:53,722 THE INTEREST RATES DO COME 1789 01:14:53,722 --> 01:14:56,191 DOWN,, NOT LIKELY THIS YEAR, NOT 1790 01:14:56,191 --> 01:14:58,594 LIKELY GOING TO MOVE, LONG-TERM 1791 01:14:58,594 --> 01:14:59,828 INTEREST RATES ARE HIGHER 1792 01:14:59,828 --> 01:15:03,832 BECAUSE OF THE UNCERTAINTY AND 1793 01:15:03,832 --> 01:15:05,534 THE CONFLICT IN THE MIDDLE EAST, 1794 01:15:05,534 --> 01:15:07,436 BUT ONCE LONGER TERM INTEREST 1795 01:15:07,436 --> 01:15:08,270 RATE AND MORTGAGE RATES COME 1796 01:15:08,270 --> 01:15:10,873 DOWN, THERE WILL BE MORE PEOPLE 1797 01:15:10,873 --> 01:15:13,242 FINALLY MAKING THE MOVE SELLING 1798 01:15:13,242 --> 01:15:15,944 THE HOME, I BELIEVE WHAT IS 1799 01:15:15,944 --> 01:15:19,948 UNDERLYING THE FORECAST FOR THE 1800 01:15:19,948 --> 01:15:21,049 SALES OF EXISTING HOMES. WE HAVE 1801 01:15:21,049 --> 01:15:25,120 SOME APPRECIATION OF HOME PRICES 1802 01:15:25,120 --> 01:15:27,523 AS WELL IN THE FORECAST, SO, P 1803 01:15:27,523 --> 01:15:30,325 TIMES Q AFFECTING THE OVERALL 1804 01:15:30,325 --> 01:15:33,328 REVENUE AND PRICES GOING UP, Q, 1805 01:15:33,328 --> 01:15:34,963 THE QUANTITY SOLD GOING UP, 1806 01:15:34,963 --> 01:15:35,998 SUBSTANTIAL IF CREASE. I DO WANT 1807 01:15:35,998 --> 01:15:38,300 TO POINT OUT THIS IS COMING FROM 1808 01:15:38,300 --> 01:15:41,436 VERY LOW POINT, WE HAVE SEEN 1809 01:15:41,436 --> 01:15:44,573 SUBSTANTIAL DECREASES COUPLE OF 1810 01:15:44,573 --> 01:15:48,110 YEARS, WE ARE RECOVERING. ALSO A 1811 01:15:48,110 --> 01:15:48,744 CONTRIBUTING FACTOR HERE. REASON 1812 01:15:48,744 --> 01:15:49,077 TO BE CONCERNED. 1813 01:15:52,981 --> 01:15:53,615 >> THANK YOU. 1814 01:15:53,615 --> 01:15:56,418 >> I THINK WE CAN MOVE TO THE 1815 01:15:56,418 --> 01:15:58,654 ROW LABELED SWEET AND BEVERAGE 1816 01:15:58,654 --> 01:16:00,756 TAX ON THIS TABLE. SINCE 2018, I 1817 01:16:00,756 --> 01:16:04,226 BELIEVE, THE CITY HAS HAD A TAX 1818 01:16:04,226 --> 01:16:07,996 ON THE DISTRIBUTION OF SUGAR 1819 01:16:07,996 --> 01:16:10,933 SWEETENED BEVERAGESISMT WE SEE-- 1820 01:16:10,933 --> 01:16:12,568 WE HAVE-- THIS IS RELATIVELY 1821 01:16:12,568 --> 01:16:16,505 MATURE REVENUE STREAM AT THIS 1822 01:16:16,505 --> 01:16:17,239 POINT. THE REVENUES HAVE 1823 01:16:17,239 --> 01:16:18,540 STABILIZED $21 MILLION A YEAR, 1824 01:16:18,540 --> 01:16:20,475 WE PROJECTED A SLIGHT BUMP IN 1825 01:16:20,475 --> 01:16:24,479 THOSE IN 2026 DUE TO WORLD CUP 1826 01:16:24,479 --> 01:16:26,415 ACTIVITY AND TOURISM, BUT 1827 01:16:26,415 --> 01:16:28,717 STABILIZING THEREAFTER IN 2027 1828 01:16:28,717 --> 01:16:30,252 AND 2028. SLIGHT REVISION UPWARD 1829 01:16:30,252 --> 01:16:36,325 TO THE FORECAST OF 0.4 MILLION 1830 01:16:36,325 --> 01:16:39,294 IN 2026, AS REALLY, BECAUSE 2025 1831 01:16:39,294 --> 01:16:41,697 REVENUES OVER PERFORMED JUST A 1832 01:16:41,697 --> 01:16:45,233 BIT. WE CARRIED THAT FORWARD 1833 01:16:45,233 --> 01:16:46,234 INTO THE MODEL. SHORT-TERM 1834 01:16:46,234 --> 01:16:48,503 RENTAL TAX, I WILL ASK ALEX TO 1835 01:16:48,503 --> 01:16:50,472 SPEAK TO THAT. 1836 01:16:50,472 --> 01:16:55,877 >> YEAH, SHORT-TERM RENTAL TAX, 1837 01:16:55,877 --> 01:16:57,245 ESSENTIALLY TAX ON AIRBNB, THIS 1838 01:16:57,245 --> 01:16:59,715 HAS BEEN REVISED DOWN A LITTLE 1839 01:16:59,715 --> 01:17:01,917 BIT IN THE NEXT FEW YEARS, 1840 01:17:01,917 --> 01:17:05,654 COMPARED TO THE ADOPTED, SIMILAR 1841 01:17:05,654 --> 01:17:08,256 TO ADMISSIONS TAX. THIS FORECAST 1842 01:17:08,256 --> 01:17:10,859 DEPENDS ON HOTEL OUTLOOK, 1843 01:17:10,859 --> 01:17:12,160 PARTICULARLY IN DOWNTOWN 1844 01:17:12,160 --> 01:17:13,762 SEATTLE, AND THAT OUTLOOK DOES 1845 01:17:13,762 --> 01:17:16,431 SEEM TO BE A LITTLE LESS ROSY 1846 01:17:16,431 --> 01:17:22,137 ABOUT TOURISM IN THE NEXT COUPLE 1847 01:17:22,137 --> 01:17:24,506 OF YEARS, ESPECIALLY THE REBOUND 1848 01:17:24,506 --> 01:17:26,341 OF VISITATION FROM CANADA. THAT 1849 01:17:26,341 --> 01:17:32,981 IS MOSTLY WHAT IS DRIVING THIS 1850 01:17:32,981 --> 01:17:33,515 SLIGHT DOWNWARD REVISION. 1851 01:17:33,515 --> 01:17:34,316 DIRECTOR, THE SALES TAX. 1852 01:17:34,316 --> 01:17:37,986 >> SO MOVING ON TO 1853 01:17:37,986 --> 01:17:39,921 TRANSPORTATION BENEFIT DISTRICTS 1854 01:17:39,921 --> 01:17:42,457 SPECIFIC SALES TAX, THERE IS 1855 01:17:42,457 --> 01:17:44,092 ONLY REVENUE IN 2026 AND 2027, 1856 01:17:44,092 --> 01:17:50,298 THERE IS NO REVENUE PROJECTED IN 1857 01:17:50,298 --> 01:17:52,100 2028 BECAUSE SALES TAX ENDS 1858 01:17:52,100 --> 01:17:54,002 APRIL 1, 2027. SO FOR THE NEXT 1859 01:17:54,002 --> 01:17:57,239 YEAR THERE IS ONLY ONE QUARTER 1860 01:17:57,239 --> 01:18:01,209 OF REVENUES THERE. THE CHANGE 1861 01:18:01,209 --> 01:18:02,511 COMPARED TO THE PREVIOUS 1862 01:18:02,511 --> 01:18:03,245 FORECAST IS NEGLIGIBLE, 1863 01:18:03,245 --> 01:18:04,880 ESSENTIALLY VERY LITTLE CHANGE 1864 01:18:04,880 --> 01:18:07,082 THERE. THAT IS WHY THERE IS 1865 01:18:07,082 --> 01:18:09,017 NOTHING IN THE PART, THE 1866 01:18:09,017 --> 01:18:14,589 DIFFERENCE FROM THE PREVIOUS 1867 01:18:14,589 --> 01:18:15,023 FORECAST IS SHOWN. 1868 01:18:15,023 --> 01:18:17,926 >> THE OTHER COM PONENT OF THE 1869 01:18:17,926 --> 01:18:22,130 SEATTLE TRANSIT BENEFIT DISTRICT 1870 01:18:22,130 --> 01:18:30,305 IS A FLAT $50 LICENSE TAB FEE. 1871 01:18:30,305 --> 01:18:32,174 THAT IS HERE. WE HAVE REVISED IT 1872 01:18:32,174 --> 01:18:34,376 DOWN, THOSE CAME IN 6% LOWER 1873 01:18:34,376 --> 01:18:36,211 THAN PROJECTED, EVEN IN THE 1874 01:18:36,211 --> 01:18:38,013 OCTOBER FORECAST. WE HAVE MADE 1875 01:18:38,013 --> 01:18:39,347 ADJUSTMENTS TO THE MODEL 1876 01:18:39,347 --> 01:18:41,349 ANTICIPATING LOWER REVENUES IN 1877 01:18:41,349 --> 01:18:42,350 THE OUT YEARS BECAUSE OF THAT. 1878 01:18:42,350 --> 01:18:45,954 >> CAN I ASK ABOUT THAT? IT IS-- 1879 01:18:45,954 --> 01:18:48,056 THE PATTERN IS A LITTLE ODD 1880 01:18:48,056 --> 01:18:48,924 ADMITTEDLY, THE NUMBERS ARE 1881 01:18:48,924 --> 01:18:51,960 SMALL, THAT IT GOES UP IN 2027 1882 01:18:51,960 --> 01:18:54,396 AND BACK UP IN 2028. IS THERE 1883 01:18:54,396 --> 01:18:54,996 SOMETHING DRIVING THAT? 1884 01:18:54,996 --> 01:18:56,665 >> YEAH, ADMITTEDLY, THIS IS A 1885 01:18:56,665 --> 01:18:59,134 BIT OF A HARD REVENUE STREAM TO 1886 01:18:59,134 --> 01:19:01,369 PREDICT, AS WE HAVE SEEN SOME 1887 01:19:01,369 --> 01:19:05,340 PATTERN S IN VEHICLE 1888 01:19:05,340 --> 01:19:06,441 REGISTRATIONS IN SEATTLE THAT 1889 01:19:06,441 --> 01:19:07,509 HAVE FLATLINED IN TERMS OF 1890 01:19:07,509 --> 01:19:08,510 POPULATION DOES CONTINUE TO 1891 01:19:08,510 --> 01:19:09,511 INCREASE BUT THE NUMBER OF 1892 01:19:09,511 --> 01:19:12,747 VEHICLES WE HAVE HAS MORE OR 1893 01:19:12,747 --> 01:19:15,851 LESS FLATLINED. I THINK THE BUMP 1894 01:19:15,851 --> 01:19:18,520 IN 2027 IS IN ANTICIPATION OF 1895 01:19:18,520 --> 01:19:20,422 LIKELY A VEHICLE PURCHASES THAT 1896 01:19:20,422 --> 01:19:24,526 HAVE BEEN PENT UP DUE TO HIGHER 1897 01:19:24,526 --> 01:19:25,594 INTEREST RATES. I WOULD HAVE TO 1898 01:19:25,594 --> 01:19:28,630 GET BACK TO YOU ON EXACTLY WHY 1899 01:19:28,630 --> 01:19:31,366 WE SEE THAT BUT I EXPECT THAT IS 1900 01:19:31,366 --> 01:19:35,670 WHAT THE MODEL IS PREDICTING 1901 01:19:35,670 --> 01:19:35,871 HERE. 1902 01:19:35,871 --> 01:19:36,138 >> THANK YOU. 1903 01:19:38,974 --> 01:19:41,243 >> FOR COMMERCIAL PARKING TAX, 1904 01:19:41,243 --> 01:19:43,512 THE UPWARD REVISIONS AND THESE 1905 01:19:43,512 --> 01:19:46,414 THREE YEARS ARE ESSENTIALLY 1906 01:19:46,414 --> 01:19:51,153 TAKING INTO ACCOUNT SLIGHTLY 1907 01:19:51,153 --> 01:19:52,854 HIGHER THAN EXPECTED PERFORMANCE 1908 01:19:52,854 --> 01:19:57,759 IN 2025, ABOUT $1 MILLION. AND 1909 01:19:57,759 --> 01:20:00,495 YOU WILL SEE THAT GROWTH THERE 1910 01:20:00,495 --> 01:20:03,732 IS NOT MUCH GROWTH BETWEEN 2026 1911 01:20:03,732 --> 01:20:06,568 AND 2027, GENERALLY REFLECTING 1912 01:20:06,568 --> 01:20:08,069 THE LITTLE GROWTH WE ARE 1913 01:20:08,069 --> 01:20:10,472 EXPECTED TO SEE IN THE REGIONAL 1914 01:20:10,472 --> 01:20:10,739 ECONOMY. 1915 01:20:10,739 --> 01:20:14,176 >> AND THEN FINALLY, LAST BUT 1916 01:20:14,176 --> 01:20:17,045 NOT LEAST, THE AUTOMATED TRAFFIC 1917 01:20:17,045 --> 01:20:18,079 SAFETY CAMERAS FUND, AS CHAIR 1918 01:20:18,079 --> 01:20:19,481 STRAUSS ALLUDED TO EARLIER, 1919 01:20:19,481 --> 01:20:23,018 THERE IS A LOT GOING ON HERE, 1920 01:20:23,018 --> 01:20:25,820 THIS BUMP&I DO WANT TO FLAG, 1921 01:20:25,820 --> 01:20:29,057 FIRST AND FOREMOST, THIS LINE 1922 01:20:29,057 --> 01:20:33,728 DOES NOT INCLUDE REVENUES FROM 1923 01:20:33,728 --> 01:20:34,296 ANTICIPATED SPEED CAMERAS. 1924 01:20:34,296 --> 01:20:37,799 COUNCIL DID APPROVE IN MAY OF 1925 01:20:37,799 --> 01:20:40,368 2025, THE ADDITION OF NON-SCHOOL 1926 01:20:40,368 --> 01:20:41,636 ZONE SPEED CAMERAS. THE TIMELINE 1927 01:20:41,636 --> 01:20:42,871 AND EXACT LOCATION FOR THOSE 1928 01:20:42,871 --> 01:20:45,874 INSTALLATIONS IS STILL UP IN THE 1929 01:20:45,874 --> 01:20:48,243 AIR A BIT, SO, AND THE 1930 01:20:48,243 --> 01:20:49,344 VARIABILITY OF THOSE REVENUES 1931 01:20:49,344 --> 01:20:50,745 BASED ON WHERE THE CAMERAS ARE, 1932 01:20:50,745 --> 01:20:52,047 IS QUITE HIGH. WE DID NOT WANT 1933 01:20:52,047 --> 01:20:54,049 TO VENTURE OUR FORECAST AT THIS 1934 01:20:54,049 --> 01:20:56,051 TIMEMENT WE DO COMMIT TO HAVING 1935 01:20:56,051 --> 01:20:57,986 SOMETHING TO A FORECAST IN THE 1936 01:20:57,986 --> 01:21:04,092 AUGUST UPDATE. FOR NOW, THIS 1937 01:21:04,092 --> 01:21:06,194 DOES NOT INCLUDE THOSE CAMERAS. 1938 01:21:06,194 --> 01:21:09,531 WHAT IS HAPPENING UNDER THIS ROW 1939 01:21:09,531 --> 01:21:12,701 RIGHT NOW IS AN ADJUSTMENT OF 1940 01:21:12,701 --> 01:21:19,007 $5.2 MILLION UPWARD IN 2026 DUE 1941 01:21:19,007 --> 01:21:20,942 TO THE INCREASE IN TWO DIFFERENT 1942 01:21:20,942 --> 01:21:23,578 CITATIONS UNDER THE BLOCK AND 1943 01:21:23,578 --> 01:21:24,813 BOX AND BUS LANE CAMERAS. IN 1944 01:21:24,813 --> 01:21:28,250 THAT SAME LEGISLATION IN MAY OF 1945 01:21:28,250 --> 01:21:32,887 2025 THAT I ALLUDED TO, COUNCIL 1946 01:21:32,887 --> 01:21:34,256 REMOVED THE FIRST-TIME WARNING, 1947 01:21:34,256 --> 01:21:35,991 FIRST-TIME WARNING REQUIREMENT 1948 01:21:35,991 --> 01:21:38,526 FOR THESE TWO CAMERA TYPES, AND 1949 01:21:38,526 --> 01:21:40,228 THAT, ESSENTIALLY, INCREASED THE 1950 01:21:40,228 --> 01:21:44,366 NUMBER OF CITATIONS BEING GIVEN 1951 01:21:44,366 --> 01:21:46,668 OUT. IF YOUR FIRST TIME YOU 1952 01:21:46,668 --> 01:21:48,803 VIOLATE THESE, ARE CAUGHT BY THE 1953 01:21:48,803 --> 01:21:51,773 CAMERAS, EITHER IN BUS LANE OR 1954 01:21:51,773 --> 01:21:53,275 BLOCKING THE BOX, YOU USED TO 1955 01:21:53,275 --> 01:22:00,649 GET A WARNING IN THE MAIL, AND 1956 01:22:00,649 --> 01:22:02,984 NOW YOU DO GET A CITATION. THOSE 1957 01:22:02,984 --> 01:22:04,653 HAVE DRIVEN UPWARD REVISION IN 1958 01:22:04,653 --> 01:22:08,757 THE REVENUE STREAM UNDER THIS 1959 01:22:08,757 --> 01:22:12,193 LINE GOING FORWARD. THIS LINE 1960 01:22:12,193 --> 01:22:13,695 ALSO INCLUDES SCHOOL ZONE 1961 01:22:13,695 --> 01:22:18,233 CAMERAS, AND 30% OF RED LIGHT 1962 01:22:18,233 --> 01:22:20,201 CAMERAS. SOME SLIGHT INCREASE TO 1963 01:22:20,201 --> 01:22:23,405 THE OUTLOOK FOR THOSE CAMERAS AS 1964 01:22:23,405 --> 01:22:25,907 WELL, PARTICULARLY AS SOME ARE 1965 01:22:25,907 --> 01:22:27,609 REPAIRED AND OTHER SCHOOLS, SOME 1966 01:22:27,609 --> 01:22:30,712 SCHOOL CONSTRUCTION COMPLETES, 1967 01:22:30,712 --> 01:22:35,050 SO CAMERAS ARE TURNED BACK ON. 1968 01:22:35,050 --> 01:22:36,051 OTHERWISE THOSE ARE RELATIVELY 1969 01:22:36,051 --> 01:22:37,385 STABLE. THAT CONCLUDES THIS 1970 01:22:37,385 --> 01:22:44,326 TABLE, I BELIEVE, UNLESS THERE 1971 01:22:44,326 --> 01:22:44,893 ARE QUESTIONS. 1972 01:22:44,893 --> 01:22:46,828 >> MANY. I WILL FIRST SEE IF 1973 01:22:46,828 --> 01:22:51,866 VOICE CHAIR MARK HAS QUESTIONS, 1974 01:22:51,866 --> 01:22:52,434 OR IF COUNCIL PRESIDENT HAS 1975 01:22:52,434 --> 01:22:52,667 QUESTIONS. 1976 01:22:55,437 --> 01:22:58,106 >> GO RIGHT AHEAD, CHAIR 1977 01:22:58,106 --> 01:22:58,373 STRAUSS. 1978 01:22:58,373 --> 01:23:01,276 >> THANK YOU. SO, THERE WE GO, 1979 01:23:01,276 --> 01:23:01,710 COUNCIL PRESIDENT. 1980 01:23:01,710 --> 01:23:03,578 >> NO, MR. CHAIR, I ACTUALLY 1981 01:23:03,578 --> 01:23:07,415 DON'T HAVE ANY QUESTIONS, I 1982 01:23:07,415 --> 01:23:07,916 APOLOGIZE. THANK YOU. 1983 01:23:07,916 --> 01:23:12,220 >> NO PROBLEM. I WILL JUST DIVE 1984 01:23:12,220 --> 01:23:15,223 INTO MY FAMILIAR TOPICS FOR MARK 1985 01:23:15,223 --> 01:23:17,392 AND DWIGHT, THIS IS-- I BRING UP 1986 01:23:17,392 --> 01:23:21,096 THE SAME THINGS EVERY TIME WE 1987 01:23:21,096 --> 01:23:22,697 MEET. TALKING ABOUT FIFA, I KNOW 1988 01:23:22,697 --> 01:23:27,202 IN THE PAST WE HAD DISCUSSED YOU 1989 01:23:27,202 --> 01:23:29,304 WERE PREPARING TO HAVE FIFA 1990 01:23:29,304 --> 01:23:30,105 NUMBERS INCLUDED IN THIS, 1991 01:23:30,105 --> 01:23:32,774 HOWEVER, THIS IS ANOTHER PLACE 1992 01:23:32,774 --> 01:23:34,376 OF VOLATILITY, IT SOUNDS LIKE 1993 01:23:34,376 --> 01:23:36,044 YOU ARE KIND OF HOLDING CONSTANT 1994 01:23:36,044 --> 01:23:37,545 WITH A SLIGHT DOWNWARD REVISION 1995 01:23:37,545 --> 01:23:39,848 FROM THE LAST TIME YOU PRESENTED 1996 01:23:39,848 --> 01:23:43,051 AS FAR AS YOUR FIFA ASSUMPTIONS, 1997 01:23:43,051 --> 01:23:44,853 IS THAT ACCURATE? 1998 01:23:44,853 --> 01:23:47,055 >> THAT IS PRETTY ACCURATE. FOR 1999 01:23:47,055 --> 01:23:49,557 A COUPLE OF FORECAST, WHAT WE 2000 01:23:49,557 --> 01:23:55,764 HAVE BEEN DOING IS ESSENTIALLY 2001 01:23:55,764 --> 01:23:58,466 RELYING ON TOURISM ECONOMICS AND 2002 01:23:58,466 --> 01:24:01,136 CO-STAR, BECAUSE THEY HAVE SOME 2003 01:24:01,136 --> 01:24:04,773 FORECASTS FOR HOTEL OCCUPANCY 2004 01:24:04,773 --> 01:24:06,541 RATE, AVERAGE DALEY RATE, 2005 01:24:06,541 --> 01:24:09,177 REVENUE PER ROOM IN THE HOTEL, 2006 01:24:09,177 --> 01:24:10,745 AND THOSE THINGS ARE USED AS 2007 01:24:10,745 --> 01:24:14,115 INPUT IN THE SALES TAX FORECAST, 2008 01:24:14,115 --> 01:24:15,817 SO, FOR LEISURE AND HOSPITALITY 2009 01:24:15,817 --> 01:24:19,554 COMPONENT OF THE SALES TAX, 2010 01:24:19,554 --> 01:24:20,755 THOSE ARE IMPORTANT FACTORS. THE 2011 01:24:20,755 --> 01:24:22,857 TRAVEL SPENT CHART, IT IS AN 2012 01:24:22,857 --> 01:24:26,761 INPUT IN INSALES TAX REVENUE 2013 01:24:26,761 --> 01:24:27,829 FORECAST PER LEISURE AND 2014 01:24:27,829 --> 01:24:29,264 HOSPITALITY, WHENEVER THERE ARE 2015 01:24:29,264 --> 01:24:30,865 ADJUSTMENTS TO THOSE, RECENTLY 2016 01:24:30,865 --> 01:24:33,134 THERE HAVE BEEN SOME CONCERNS 2017 01:24:33,134 --> 01:24:34,102 MAYBE FEWER INTERNATIONAL 2018 01:24:34,102 --> 01:24:37,172 VISITORS MIGHT BE COMING, HIGHER 2019 01:24:37,172 --> 01:24:38,440 GAS PRICES, PEOPLE WILL, IN 2020 01:24:38,440 --> 01:24:41,109 GENERAL, HAVE LESS MONEY TO 2021 01:24:41,109 --> 01:24:44,279 SPEND ON TRAVEL, ON LEISURE AND 2022 01:24:44,279 --> 01:24:47,248 HOSPITALITY, THEY MIGHT BE JUST 2023 01:24:47,248 --> 01:24:49,451 LESS INCLINED TO TRAVEL OR MORE 2024 01:24:49,451 --> 01:24:53,388 WORRIED TO TRAVEL. THAT IS 2025 01:24:53,388 --> 01:24:54,756 CERTAINLY A CONCERN. SO THERE IS 2026 01:24:54,756 --> 01:24:56,825 AN ASSUMPTION BUILDING TO THE 2027 01:24:56,825 --> 01:24:58,126 FORECAST FOR SALES TAX REVENUE, 2028 01:24:58,126 --> 01:25:01,963 THE CITY IS NOT GOING TO 2029 01:25:01,963 --> 01:25:05,533 DIRECTLY COLLECT ADMISSIONS TAX 2030 01:25:05,533 --> 01:25:09,037 ON THOSE GAMES, SO IT IS THOSE 2031 01:25:09,037 --> 01:25:09,938 INDIRECT AFFECTS, AGAIN, HOW 2032 01:25:09,938 --> 01:25:11,406 MANY PEOPLE ARE EXPECTED TO COME 2033 01:25:11,406 --> 01:25:12,974 IN, HOW MUCH THEY ARE EXPECTED 2034 01:25:12,974 --> 01:25:13,274 TO PAY. 2035 01:25:13,274 --> 01:25:15,243 >> HOW MANY PEOPLE WANT TO COME 2036 01:25:15,243 --> 01:25:17,178 INTO THE WATCH PARTIES, WANT TO 2037 01:25:17,178 --> 01:25:19,747 COME TO SEATTLE CENTER, WANT TO 2038 01:25:19,747 --> 01:25:20,281 COME TO WEST SEATTLE. 2039 01:25:20,281 --> 01:25:21,483 >> YEP. 2040 01:25:21,483 --> 01:25:24,586 >> COLUMBIA CITY, LAKE CITY, 2041 01:25:24,586 --> 01:25:25,620 BALLARD, TO EXPERIENCE THE, OR 2042 01:25:25,620 --> 01:25:28,122 EVEN SEE SOME OF THE PRACTICE 2043 01:25:28,122 --> 01:25:31,092 GAMES. I WAS TALKING TO SOMEBODY 2044 01:25:31,092 --> 01:25:34,295 THAT MENTIONED THE TICKETS ARE 2045 01:25:34,295 --> 01:25:35,163 EXPENSIVE FOR THEM, AS THEY ARE 2046 01:25:35,163 --> 01:25:36,331 FOR ME, BUT MAYBE A PRACTICE 2047 01:25:36,331 --> 01:25:39,467 GAME IS A BETTER WAY TO VIEW 2048 01:25:39,467 --> 01:25:40,935 BECAUSE YOU HAVE A CLOSER-- YOU 2049 01:25:40,935 --> 01:25:43,972 ARE CLOSER TO THE THE PITCH, IT 2050 01:25:43,972 --> 01:25:44,839 LESS EXPENSIVE. THERE ARE MANY 2051 01:25:44,839 --> 01:25:45,507 DIFFERENT WAYS. I APPRECIATE-- I 2052 01:25:45,507 --> 01:25:47,709 WOULD LIKE TO HAVE IT BOTH WAYS. 2053 01:25:47,709 --> 01:25:49,878 I WOULD LIKE TO HAVE A 2054 01:25:49,878 --> 01:25:51,579 PESSIMISTIC OUTLOOK AT THIS 2055 01:25:51,579 --> 01:25:53,715 MOMENT, AND THEN TO BE SURPRISED 2056 01:25:53,715 --> 01:25:55,350 LATER THIS YEAR WHEN THE ACTUALS 2057 01:25:55,350 --> 01:25:57,685 COME IN THAT WE HAVE, IN FACT, 2058 01:25:57,685 --> 01:25:58,820 WELCOMED MORE PEOPLE THAN WE 2059 01:25:58,820 --> 01:25:59,754 PREDICTED. IT IS ALWAYS BETTER 2060 01:25:59,754 --> 01:26:02,957 TO HAVE IT IN THAT WAY THAN THE 2061 01:26:02,957 --> 01:26:05,326 OPPOSITE. SO I APPRECIATE THAT. 2062 01:26:05,326 --> 01:26:07,729 WHEN WE ARE LOOKING AT-- I 2063 01:26:07,729 --> 01:26:09,163 APPRECIATE DIRECTOR DIVELY'S 2064 01:26:09,163 --> 01:26:10,131 QUESTIONS HERE REGARDING 2065 01:26:10,131 --> 01:26:13,468 INTEREST RATES AND YOUR FOLLOW 2066 01:26:13,468 --> 01:26:15,203 UP. FOR ME, AS ALWAYS, TELL TALE 2067 01:26:15,203 --> 01:26:18,773 OF ARE WE GOING TOWARDS OR AWAY 2068 01:26:18,773 --> 01:26:19,807 FROM POTENTIAL ECONOMIC 2069 01:26:19,807 --> 01:26:21,009 SLOWDOWN? I RECALL VERY 2070 01:26:21,009 --> 01:26:27,715 DISTINCTLY I BELIEVE IT WAS 2071 01:26:27,715 --> 01:26:29,450 2021, YEAH, 2021, WHEN RE AUL 2072 01:26:29,450 --> 01:26:39,861 MOE ALMOST TOOK A NOVEMBERDAUZ. 2073 01:26:39,861 --> 01:26:42,063 NOSE DIVE. P WHAT I AM HEARING 2074 01:26:42,063 --> 01:26:44,432 FROM YOU TODAY IS THAT WE ARE 2075 01:26:44,432 --> 01:26:46,668 STILL RECOVERING, HOWEVER, WE 2076 01:26:46,668 --> 01:26:48,903 ARE JUST NOT RECOVERING AS 2077 01:26:48,903 --> 01:26:50,505 QUICKLY AS WE PREDICTED LAST 2078 01:26:50,505 --> 01:26:51,639 YEAR. IS THAT CORRECT? WE ARE 2079 01:26:51,639 --> 01:26:53,508 STILL TRENDING THE RIGHT WAY, 2080 01:26:53,508 --> 01:26:56,377 JUST NOT AS FAST? OR HAVE WE 2081 01:26:56,377 --> 01:26:57,612 STARTED TRENDING THE RIGHT WAY? 2082 01:26:57,612 --> 01:26:58,012 OR STALLING? 2083 01:26:58,012 --> 01:27:00,915 >> GOOD QUESTION. IF YOU LOOK AT 2084 01:27:00,915 --> 01:27:04,619 THE NUMBERS ITSELF, NOT THE 2085 01:27:04,619 --> 01:27:07,622 REVISION PART, BUT THOSE 2086 01:27:07,622 --> 01:27:09,224 REVENUES FOR 2026, 2027, AND 2087 01:27:09,224 --> 01:27:11,826 2028, THEY DO GO UP. THERE IS 2088 01:27:11,826 --> 01:27:14,662 RECOVERY EXPECTED, THE BUMP ON 2089 01:27:14,662 --> 01:27:16,431 THE ROAD, BECAUSE OF HIGHER 2090 01:27:16,431 --> 01:27:19,701 INTEREST RATE IN THE CURRENT 2091 01:27:19,701 --> 01:27:24,939 YEAR AND BECAUSE OF FEWER HOMES 2092 01:27:24,939 --> 01:27:27,141 BEING SOLD AS A CONSEQUENCE. THE 2093 01:27:27,141 --> 01:27:29,811 GENERAL STORY IS THE SAME, 2094 01:27:29,811 --> 01:27:31,312 UNDERLYING, THE RECOVERY, YEAH, 2095 01:27:31,312 --> 01:27:31,980 UNFORTUNATELY, SLOWER RECOVERY. 2096 01:27:31,980 --> 01:27:35,917 >> I WILL TAKE THIS MOMENT TO 2097 01:27:35,917 --> 01:27:38,152 CONNECT THE DOTS BETWEEN THE 2098 01:27:38,152 --> 01:27:40,955 AREA VALUE WITH OFFICE SPACE OR 2099 01:27:40,955 --> 01:27:42,190 ASSESSED VALUE, SORRY, ASSESSED 2100 01:27:42,190 --> 01:27:43,625 VALUE WITH OFFICE SPACE IN 2101 01:27:43,625 --> 01:27:50,198 SEATTLE, IT IS NEGATIVE, I THINK 2102 01:27:50,198 --> 01:27:53,201 YOU SAID 12%, AND THE OUR OFFICE 2103 01:27:53,201 --> 01:27:56,137 SPACE-- WE ARE BEING BUIED BY 2104 01:27:56,137 --> 01:27:57,071 OUR RESIDENTIAL AND OTHER 2105 01:27:57,071 --> 01:27:57,839 MARKETS, APARTMENTS, ET CETERA, 2106 01:27:57,839 --> 01:27:59,907 BUT THIS OFFICE SPACE IS REALLY 2107 01:27:59,907 --> 01:28:02,410 STARTING TO CREATE A HOLE IN OUR 2108 01:28:02,410 --> 01:28:05,680 ECONOMY, WHERE IF WE WERE ABLE 2109 01:28:05,680 --> 01:28:07,382 TO JUMP START OR SPIN UP 2110 01:28:07,382 --> 01:28:09,217 SOMETHING THAT CAN CHANGE THE 2111 01:28:09,217 --> 01:28:11,552 WAY WE ARE USING OUR OFFICE 2112 01:28:11,552 --> 01:28:13,388 SPACE, IT NOT ONLY CREATES 2113 01:28:13,388 --> 01:28:16,491 CONSTRUCTION AND SALES TAX, IT 2114 01:28:16,491 --> 01:28:19,861 HELPS WITH SOME OF IT AND 2115 01:28:19,861 --> 01:28:20,595 IMPROVES OUR ASSESSED VALUE 2116 01:28:20,595 --> 01:28:21,596 NUMBERS. I AM NOT EXPECTING YOU 2117 01:28:21,596 --> 01:28:23,097 TO COME UP WITH THAT MAGIC 2118 01:28:23,097 --> 01:28:25,099 SOLUTION, BUT I AM NOTING IT FOR 2119 01:28:25,099 --> 01:28:27,568 MY COLLEAGUES, THAT IS THE 2120 01:28:27,568 --> 01:28:29,070 IMPORTANCE OF FINDING A USE FOR 2121 01:28:29,070 --> 01:28:31,806 THAT DOWNTOWN OFFICE SPACE, 2122 01:28:31,806 --> 01:28:33,174 BECAUSE IT CAN REALLY, IT COULD 2123 01:28:33,174 --> 01:28:35,043 GET US INTO THE PROPORTION OF 2124 01:28:35,043 --> 01:28:36,711 THE NEXT BOOM DOWN HERE. I AM 2125 01:28:36,711 --> 01:28:38,746 NOT SAYING IT WILL BE A BOOM 2126 01:28:38,746 --> 01:28:39,547 WHERE WE ARE THE FASTEST GROWING 2127 01:28:39,547 --> 01:28:41,349 IN THE CITY AND NATION AGAIN, 2128 01:28:41,349 --> 01:28:44,052 BUT IT WOULD AT LEAST GIVE A 2129 01:28:44,052 --> 01:28:47,288 BOOM FOR WHERE WE ARE AT RIGHT 2130 01:28:47,288 --> 01:28:51,092 NOW. JUST KIND OF CHECKING MY 2131 01:28:51,092 --> 01:28:53,795 NUMBERS HERE, WE HAD THE OVERALL 2132 01:28:53,795 --> 01:28:56,164 BETWEEN ALL FUNDS REMOVING 2133 01:28:56,164 --> 01:28:59,834 GRANTS AND TRANSFERS, WE ARE 2134 01:28:59,834 --> 01:29:02,537 DOWN $10 MILLION OR SO IN 2135 01:29:02,537 --> 01:29:05,306 GENERAL FUND, BUT THAT INCLUDES 2136 01:29:05,306 --> 01:29:09,043 THE $6 MILLION YOU WERE TALKING 2137 01:29:09,043 --> 01:29:11,879 ABOUT, WE THEN HAVE ALMOST $17 2138 01:29:11,879 --> 01:29:16,484 MILLION DOWN IN JUMP START, 2139 01:29:16,484 --> 01:29:20,121 ANOTHER $5.8 IN RETE. THAT 2140 01:29:20,121 --> 01:29:24,525 BRINGS ME TO ABOUT-- I DIDN'T 2141 01:29:24,525 --> 01:29:25,960 WRITE MY MATH CORRECTLY. LOOKS 2142 01:29:25,960 --> 01:29:29,764 LIKE $31 MILLION DOWN, BUT WE 2143 01:29:29,764 --> 01:29:33,501 CAME UP WITH ANOTHER $20 MILLION 2144 01:29:33,501 --> 01:29:36,738 ABOVE FORECASTED IN OUR ACTUALS 2145 01:29:36,738 --> 01:29:40,007 FOR THIS YEAR. SO IT FEELS LIKE 2146 01:29:40,007 --> 01:29:43,745 BETWEEN BOTH, WITH THIS UPDATED 2147 01:29:43,745 --> 01:29:45,847 FORECAST AND THE ACTUALS COMING 2148 01:29:45,847 --> 01:29:49,117 IN, THE PUNCHLINE HERE IS WE ARE 2149 01:29:49,117 --> 01:29:55,423 DOWN $10 MILLION IN 2026 ACROSS 2150 01:29:55,423 --> 01:29:56,591 ALL GENERAL USE FUNDS. IS THAT 2151 01:29:56,591 --> 01:29:58,626 ACCURATE? AM I GETTING THIS 2152 01:29:58,626 --> 01:29:58,893 CORRECT? 2153 01:29:58,893 --> 01:30:01,529 >> OKAY. I WILL TRY TO DO THE 2154 01:30:01,529 --> 01:30:05,967 MATH ON THE FLYISM I DIDN'T 2155 01:30:05,967 --> 01:30:06,267 ACTUALLY-- 2156 01:30:06,267 --> 01:30:07,769 >> I MIGHT SUGGEST IN THE FUTURE 2157 01:30:07,769 --> 01:30:09,170 WE DO A SLIDE THAT DOES 2158 01:30:09,170 --> 01:30:10,671 SOMETHING TO THAT DEGREE. 2159 01:30:10,671 --> 01:30:17,111 >> RIGHT, THERE IS 10 HERE FOR 2160 01:30:17,111 --> 01:30:23,151 26, 27, 33, BUT THEN THERE IS 2161 01:30:23,151 --> 01:30:27,622 PLUS 5 FOR ATSC CAMERAS, SO 2162 01:30:27,622 --> 01:30:32,093 ABOUT 27 DOWN FOR 2026, THERE IS 2163 01:30:32,093 --> 01:30:36,297 ABOUT SAME AMOUNT IN ADDITION TO 2164 01:30:36,297 --> 01:30:40,535 THE REVENUE FOR 2025 REVENUE, SO 2165 01:30:40,535 --> 01:30:46,274 24BET, 7 FOR GENERAL FUND, 27 2166 01:30:46,274 --> 01:30:53,881 PLUS 2 FOR 25. THEN YOU HAVE 27, 2167 01:30:53,881 --> 01:30:57,618 WHICH IS COUPLE OF NEGATIVE ONES 2168 01:30:57,618 --> 01:30:58,252 HERE, SO, YES-- 2169 01:30:58,252 --> 01:30:59,821 >> I WILL-- I GUESS WE ARE ALL 2170 01:30:59,821 --> 01:31:01,656 DESCRIBING THE POINT THAT I AM 2171 01:31:01,656 --> 01:31:04,258 MAKING, WHICH IS IT ABOUT A 2172 01:31:04,258 --> 01:31:06,260 WASH, RIGHT? AND I WOULD SAY 2173 01:31:06,260 --> 01:31:07,829 SAME COMMENTS I HAVE SHARED 2174 01:31:07,829 --> 01:31:08,963 PREVIOUSLY, DWIGHT AND MARK, 2175 01:31:08,963 --> 01:31:11,265 WHICH IS THAT WHILE THE NATION 2176 01:31:11,265 --> 01:31:13,534 HAS NOT BEEN IN A RECESSION, OUR 2177 01:31:13,534 --> 01:31:14,335 SEATTLE ECONOMY HAS ABSOLUTELY 2178 01:31:14,335 --> 01:31:16,871 BEEN STAGNATING FOR A NUMBER OF 2179 01:31:16,871 --> 01:31:19,373 YEARS, WE WERE REALLY HOPING TO 2180 01:31:19,373 --> 01:31:20,875 BEGIN THAT SLOW GROWTH AT A 2181 01:31:20,875 --> 01:31:23,010 FASTER PACE THIS YEAR, HOPING TO 2182 01:31:23,010 --> 01:31:27,215 START IT LAST YEAR, ALL OF THE 2183 01:31:27,215 --> 01:31:30,551 FEDERAL AND INTERNATIONAL ISSUES 2184 01:31:30,551 --> 01:31:32,053 HAVE CONTRIBUTED TO THIS, SO AS 2185 01:31:32,053 --> 01:31:35,122 I SEE, YOU KNOW, WE HAVE BEEN 2186 01:31:35,122 --> 01:31:38,993 IN-- LAST YEAR WAS A LITTLE MORE 2187 01:31:38,993 --> 01:31:39,961 SLOW GROWTH, EVEN WITH THE 2188 01:31:39,961 --> 01:31:42,296 VULTILITY, THIS IS FEELING MORE 2189 01:31:42,296 --> 01:31:43,464 LIKE A SECOND ERA OF TRUE 2190 01:31:43,464 --> 01:31:44,632 STAGNATION AND WHILE WE ARE NOT 2191 01:31:44,632 --> 01:31:46,067 GOING TO CALL IT A RECESSION 2192 01:31:46,067 --> 01:31:48,903 HERE, BECAUSE YOU TO-- THAT IS A 2193 01:31:48,903 --> 01:31:53,107 TECHNICAL TERM WITH OTHER 2194 01:31:53,107 --> 01:31:54,075 FACTORS, ET CETERA, I CALL OUT 2195 01:31:54,075 --> 01:31:55,910 HAVING A WASH IS PROBABLY THE 2196 01:31:55,910 --> 01:31:57,578 BEST WE COULD DO AND MAYBE-- I 2197 01:31:57,578 --> 01:31:59,413 AM NOT TRYING TO STEAL OTHER 2198 01:31:59,413 --> 01:32:03,317 PEOPLE'S TALKING POINTS, BUT 2199 01:32:03,317 --> 01:32:04,385 MIGHT BE A LITTLE MORE 2200 01:32:04,385 --> 01:32:05,586 OPTIMISTIC THAN WHAT COULD 2201 01:32:05,586 --> 01:32:07,989 OCCUR. I DON'T THINK IT IS 2202 01:32:07,989 --> 01:32:10,758 PESSIMISTIC ENOUGH WE ADOPT THE 2203 01:32:10,758 --> 01:32:13,961 PESSIMISTIC SCENARIO, BUT HERE 2204 01:32:13,961 --> 01:32:15,529 IS THE POINT, WHICH IS I AM GLAD 2205 01:32:15,529 --> 01:32:17,031 THE FORECAST IS ABOUT A WASH, 2206 01:32:17,031 --> 01:32:18,032 BECAUSE IT IS BETTER THAN BEING 2207 01:32:18,032 --> 01:32:19,800 NEGATIVE, AND I THINK WE AS THE 2208 01:32:19,800 --> 01:32:23,704 CITY NEED TO BE ACTING AS IF 2209 01:32:23,704 --> 01:32:24,805 THIS IS A NEGATIVE REVENUE 2210 01:32:24,805 --> 01:32:29,243 FORECAST. JUST SO THAT WE DO NOT 2211 01:32:29,243 --> 01:32:32,280 GET INTO A PLACE OF OVERSPENDING 2212 01:32:32,280 --> 01:32:39,487 OR STARTING TO TAKE ON MORE 2213 01:32:39,487 --> 01:32:40,521 OBLIGATIONS THAN WE CAN HANDLE. 2214 01:32:40,521 --> 01:32:42,456 THERE IS NOTHING TO BE READ IN 2215 01:32:42,456 --> 01:32:44,759 BETWEEN THERE, I DO THINK WE 2216 01:32:44,759 --> 01:32:45,626 NEED TO EXPAND OUR SHELTER. 2217 01:32:45,626 --> 01:32:47,528 SORRY, THAT IS NOT WHAT I AM 2218 01:32:47,528 --> 01:32:48,396 TALKING ABOUT, BUT BEYOND 2219 01:32:48,396 --> 01:32:49,530 ADDRESSING HOMELESSNESS AND 2220 01:32:49,530 --> 01:32:50,798 GETTING PEOPLE OFF THE STREETS T 2221 01:32:50,798 --> 01:32:54,168 IS TIME FOR US TO START BEING 2222 01:32:54,168 --> 01:32:55,269 CAREFUL AND TIGHTENING OUR BELT 2223 01:32:55,269 --> 01:32:57,471 WHERE WE WITH, WHILE WE ARE NOT 2224 01:32:57,471 --> 01:33:00,274 LOSING A LOT OF MONEY, AGAIN, IN 2225 01:33:00,274 --> 01:33:03,878 A $6 BILLION PLUS BUDGET, WE ARE 2226 01:33:03,878 --> 01:33:05,146 TALKING $20 MILLION, $30 2227 01:33:05,146 --> 01:33:07,782 MILLION, POSSIBLY $10 MILLION 2228 01:33:07,782 --> 01:33:09,617 HERE. BUT ALL OF THAT TO SAY, WE 2229 01:33:09,617 --> 01:33:11,085 SHOULD ACT LIKE THIS IS BAD 2230 01:33:11,085 --> 01:33:16,524 REVENUE FORECAST, PLEASE, AND I 2231 01:33:16,524 --> 01:33:20,428 AM GLAD IT IS NOT WORSE. 2232 01:33:20,428 --> 01:33:22,263 >> YEAH, VERY GOOD SUMMARY. 2233 01:33:22,263 --> 01:33:23,497 SLIGHTLY TO THE DOWN SIDE. 2234 01:33:23,497 --> 01:33:23,998 >> PLEASE. 2235 01:33:23,998 --> 01:33:25,299 >> DWIGHT HAS A QUESTION. 2236 01:33:25,299 --> 01:33:30,404 >> YOU KNOW, I KNOW IT IS NOT IN 2237 01:33:30,404 --> 01:33:31,572 THE TIMEFRAME THAT IS PRESENTED 2238 01:33:31,572 --> 01:33:34,508 HERE BUT COULD YOU BRIEFLY TELL 2239 01:33:34,508 --> 01:33:37,478 PEOPLE HOW THE MILLIONAIRE'S 2240 01:33:37,478 --> 01:33:39,880 TAX, ASSUMING IT ACTUALLY 2241 01:33:39,880 --> 01:33:48,356 SURVIVES, WILL ADVERSELY AFFECT 2242 01:33:48,356 --> 01:33:49,590 OUR REVENUE? 2243 01:33:49,590 --> 01:33:54,095 >> WE ARE FORECASTING 29 AND 30, 2244 01:33:54,095 --> 01:33:56,297 BUT MILLIONAIRES TAX BILL HAS 2245 01:33:56,297 --> 01:34:02,636 SOME IMPLICATIONS FOR SALES TAX 2246 01:34:02,636 --> 01:34:03,771 REVENUES AS WELL BECAUSE IT-- 2247 01:34:03,771 --> 01:34:09,610 UNTASKS SOME OF THOSE CHANGES TO 2248 01:34:09,610 --> 01:34:13,280 THE CLASSIFICATION OF SERVICES 2249 01:34:13,280 --> 01:34:17,385 INTO RETAIL. AND THAT STARTS IN 2250 01:34:17,385 --> 01:34:19,854 JANUARY 2029, SO WITH THAT, 2251 01:34:19,854 --> 01:34:22,223 THERE IS LESS SALES TAX REVENUE 2252 01:34:22,223 --> 01:34:23,858 BECAUSE SOME OF THOSE SERVICES 2253 01:34:23,858 --> 01:34:29,096 ARE NO LONGER GOING TO BE 2254 01:34:29,096 --> 01:34:32,900 SUBJECT TO THE SALES TAX, ON THE 2255 01:34:32,900 --> 01:34:34,668 PLUS SIDE, THAT COULD MEAN 2256 01:34:34,668 --> 01:34:35,903 ADDITIONAL BUSINESS AND 2257 01:34:35,903 --> 01:34:37,338 OCCUPATION TAX REVENUE BECAUSE 2258 01:34:37,338 --> 01:34:40,641 THE CLASSIFICATION THERE FOLLOWS 2259 01:34:40,641 --> 01:34:44,612 THE SALES TAX REVENUE 2260 01:34:44,612 --> 01:34:45,513 CLASSIFICATIONS IN GENERAL SO IT 2261 01:34:45,513 --> 01:34:47,014 IS LITTLE BIT HARD TO TELL HOW 2262 01:34:47,014 --> 01:34:49,884 BIG OF AN IMPACT IT IS GOING TO 2263 01:34:49,884 --> 01:34:51,952 BE BECAUSE WE HAVEN'T COLLECTED 2264 01:34:51,952 --> 01:34:54,488 THE ADDITIONAL REVENUE FOR LONG 2265 01:34:54,488 --> 01:34:58,459 ENOUGH, SO WE DID TRY TO 2266 01:34:58,459 --> 01:35:06,434 ESTIMATE THE IMPACT FOR 2029, 2267 01:35:06,434 --> 01:35:07,068 BUT IT IS RELATIVELY SMALL. IT 2268 01:35:07,068 --> 01:35:12,807 IS -- AGAIN, THERE IS A LOT OF 2269 01:35:12,807 --> 01:35:14,241 UNCERTAINTY, WE WILL TRY TO 2270 01:35:14,241 --> 01:35:16,844 IMPROVE THE FORECAST. ONE THING 2271 01:35:16,844 --> 01:35:18,412 TO KEEP IN MIND IS DIGITAL 2272 01:35:18,412 --> 01:35:19,346 ADVERTISING IS NOT CLASSIFIED 2273 01:35:19,346 --> 01:35:21,115 BACK AND NAT IS A SIGNIFICANT 2274 01:35:21,115 --> 01:35:22,116 PART OF THE ADDITIONAL REVENUE. 2275 01:35:22,116 --> 01:35:23,384 THERE IS A LEGAL CHALLENGE FOR 2276 01:35:23,384 --> 01:35:27,021 THAT ONE, OBVIOUSLY, SO THAT CAN 2277 01:35:27,021 --> 01:35:29,890 GO AWAY. LOTS OF MOVING PARTS IN 2278 01:35:29,890 --> 01:35:30,424 GENERAL HERE. 2279 01:35:30,424 --> 01:35:32,860 >> THERE WAS EXEMPTION FOR 2280 01:35:32,860 --> 01:35:34,095 HYGIENE PRODUCTS UNDER THE BILL, 2281 01:35:34,095 --> 01:35:35,696 THAT DOES ERODE SALES TAX BASE A 2282 01:35:35,696 --> 01:35:37,398 LITTLE. I WOULD THROW THAT IN 2283 01:35:37,398 --> 01:35:42,870 THERE AS WELL. IN GENERAL, I 2284 01:35:42,870 --> 01:35:46,307 THINK US AS A JURISDICTION ARE 2285 01:35:46,307 --> 01:35:47,575 SOMEWHAT UNIQUE IN OUR 2286 01:35:47,575 --> 01:35:49,643 COLLECTION, AND HAVING THAT AS 2287 01:35:49,643 --> 01:35:54,882 OFFSET TO THE DECLINE IN SALES 2288 01:35:54,882 --> 01:35:57,251 TAX BECAUSE OCH RECLASSIFICATION 2289 01:35:57,251 --> 01:35:58,486 OF SERVICES ISSUE, THAT OFFSETS 2290 01:35:58,486 --> 01:35:59,920 AND BUMPS IT UP. THERE ARE OTHER 2291 01:35:59,920 --> 01:36:00,955 JURISDICTIONS THAT ARE GOING TO 2292 01:36:00,955 --> 01:36:02,656 SUFFER MORE THAN WHAT SEATTLE 2293 01:36:02,656 --> 01:36:02,857 DOES. 2294 01:36:02,857 --> 01:36:07,895 >> YEAH, SO WE HAVE TRIED TO HOW 2295 01:36:07,895 --> 01:36:10,898 WE SEE THE IMPACT OF THE 5814 ON 2296 01:36:10,898 --> 01:36:15,369 THE SALES TAX TO THE ESTIMATES 2297 01:36:15,369 --> 01:36:16,170 FOR KING COUNTY. THEY ARE 2298 01:36:16,170 --> 01:36:18,572 ROUGHLY IN THE SAME BALL PARK, 2299 01:36:18,572 --> 01:36:20,574 KING COUNTY DOES NOT COLLECT 2300 01:36:20,574 --> 01:36:21,542 BUSINESS AND OCCUPATION TAX 2301 01:36:21,542 --> 01:36:23,978 REVENUE, SO A LOT TO THE 2302 01:36:23,978 --> 01:36:26,046 POSITIVE SIDE FOR COUNTY, NOT 2303 01:36:26,046 --> 01:36:31,886 THAT MUCH FOR SEATTLE BECAUSE OF 2304 01:36:31,886 --> 01:36:32,953 THE OFFSET IN FORCE. 2305 01:36:32,953 --> 01:36:38,893 >> ALL RIGHT, WITH THAT, THERE 2306 01:36:38,893 --> 01:36:40,294 IS A SECOND SCENARIO TO GO OVER. 2307 01:36:40,294 --> 01:36:42,429 >> DIRECTOR, I DON'T MEAN TO BE 2308 01:36:42,429 --> 01:36:43,931 THIS GUY, BUT WE HAVE GOT ABOUT 2309 01:36:43,931 --> 01:36:45,466 13 MINUTES LEFT BEFORE WE NEED 2310 01:36:45,466 --> 01:36:48,302 TO GET INTO THE WORKPLAN. 2311 01:36:48,302 --> 01:36:55,142 >> I KNOW. I WILL TRY TO BE VERY 2312 01:36:55,142 --> 01:36:59,280 QUICK HERE. THE MAIN TAKEAWAY 2313 01:36:59,280 --> 01:37:00,581 HERE, PESSIMISTIC SCENARIO 2314 01:37:00,581 --> 01:37:02,883 REALLY IS PESSIMISTIC, JUST AS A 2315 01:37:02,883 --> 01:37:04,051 REMINDER, BUILT ON ECONOMIC 2316 01:37:04,051 --> 01:37:05,119 FORECAST THAT ASSUMES RECESSION 2317 01:37:05,119 --> 01:37:08,189 STARTING SECOND HALF OF 2026, 2318 01:37:08,189 --> 01:37:10,658 AND GOING INTO 2027 . THAT WOULD 2319 01:37:10,658 --> 01:37:12,560 HAVE A SIGNIFICANT IMPACT ON 2320 01:37:12,560 --> 01:37:14,762 THOSE REVENUES WHICH ARE DRIVEN 2321 01:37:14,762 --> 01:37:16,130 BY ECONOMIC ACTIVITIES, TALKING 2322 01:37:16,130 --> 01:37:18,032 SALES TAX, BUSINESS AND 2323 01:37:18,032 --> 01:37:22,236 OCCUPATION TAX HERE, BUT ALSO 2324 01:37:22,236 --> 01:37:24,738 PARKING METERS, AND OTHER 2325 01:37:24,738 --> 01:37:27,808 REVENUES, HIGHER GAS PRICES WITH 2326 01:37:27,808 --> 01:37:31,478 JUST GENERALLY IMPACT THE 2327 01:37:31,478 --> 01:37:35,082 SPENDING BY HOUSEHOLDS AND 2328 01:37:35,082 --> 01:37:36,684 BUSINESSES AND THE LAYOFFS THAT 2329 01:37:36,684 --> 01:37:40,854 WOULD ENSUE AND SIGNIFICANT 2330 01:37:40,854 --> 01:37:41,956 REVENUE LOSSES FOR THE CITY. 2331 01:37:41,956 --> 01:37:43,924 AGAIN, IN THE INTEREST OF TIME I 2332 01:37:43,924 --> 01:37:47,394 WILL QUICKLY MOVE TO THE SECOND 2333 01:37:47,394 --> 01:37:51,298 PART OF THE PESSIMISTIC SCENARIO 2334 01:37:51,298 --> 01:37:53,300 FORECAST FOR NON-GENERAL FUND 2335 01:37:53,300 --> 01:37:57,905 REVENUES, THERE IS LARGE IMPACT 2336 01:37:57,905 --> 01:38:01,942 HERE ON EXPENSE TAX, THE 2337 01:38:01,942 --> 01:38:05,012 RECESSION WOULD MEAN LOWER STOCK 2338 01:38:05,012 --> 01:38:07,648 PRICES, LOWER EVALUATION OF 2339 01:38:07,648 --> 01:38:09,416 COMPANIES, AND ADDITIONAL 2340 01:38:09,416 --> 01:38:13,087 LAYOFFS WHICH WOULD NEGATIVELY 2341 01:38:13,087 --> 01:38:18,993 AFFECT THE BASE HERE. FOR RETE, 2342 01:38:18,993 --> 01:38:20,761 THAT PLUMMETS AND WOULD DECLINE 2343 01:38:20,761 --> 01:38:25,032 SIGNIFICANTLY IN 2026 AND 2344 01:38:25,032 --> 01:38:27,601 ADDITIONAL DECLINING IN 2027 AND 2345 01:38:27,601 --> 01:38:33,707 ABSOLUTE AMOUNT, NOT JUST 2346 01:38:33,707 --> 01:38:36,810 RELATIVE TO OCTOBER. FOR 2347 01:38:36,810 --> 01:38:37,611 ADMISSIONS TAX, SIMILARLY, 2348 01:38:37,611 --> 01:38:39,747 DOWNWARD REVISIONS AND JOE AND 2349 01:38:39,747 --> 01:38:46,654 ALEX CAN PROVIDE SOME SIGHT INTO 2350 01:38:46,654 --> 01:38:47,321 THE REMAINING ONES. 2351 01:38:47,321 --> 01:38:49,957 >> YEAH, I-- LET ME SEE WHAT TO 2352 01:38:49,957 --> 01:38:51,859 SPEAK TO HERE. I THINK GENERALLY 2353 01:38:51,859 --> 01:38:53,927 SPEAKING THE DECLINE IN SOME OF 2354 01:38:53,927 --> 01:38:56,764 THESE FORECASTS IS A LITTLE BIT 2355 01:38:56,764 --> 01:38:57,798 LESS THAN ECONOMICALLY-DRIVEN 2356 01:38:57,798 --> 01:38:59,366 ONES, THEY ALL HAVE SOME 2357 01:38:59,366 --> 01:39:02,836 ECONOMIC COMPONENT BUT MANY ARE 2358 01:39:02,836 --> 01:39:04,438 A LITTLE MORE-- THE WHITE ROWS 2359 01:39:04,438 --> 01:39:06,640 CBO FORECASTS ARE A LITTLE MORE 2360 01:39:06,640 --> 01:39:07,508 OPERATIONAL IN NATURE, GENERALLY 2361 01:39:07,508 --> 01:39:09,410 SPEAKING SO WE DON'T SEE THE 2362 01:39:09,410 --> 01:39:11,945 DECLINES QUITE AS HEAVILY AS WE 2363 01:39:11,945 --> 01:39:14,415 WITH IN THE RETE OR PAYROLL 2364 01:39:14,415 --> 01:39:15,349 EXPENSE TAX. I DON'T-- UNLESS 2365 01:39:15,349 --> 01:39:21,355 THERE ARE QUESTIONS, I WILL 2366 01:39:21,355 --> 01:39:21,755 LEAVE IT AT THAT. 2367 01:39:21,755 --> 01:39:25,359 >> ALL RIGHT. FINALLY, A QUICK 2368 01:39:25,359 --> 01:39:27,061 COMPARISON, HOW MUCH IS THE 2369 01:39:27,061 --> 01:39:28,495 PESSIMISTIC SCENARIO DIFFERENT 2370 01:39:28,495 --> 01:39:32,466 FROM A BASELINE, AND HOW MUCH OF 2371 01:39:32,466 --> 01:39:34,101 AN UP SLIGHT DURING THE 2372 01:39:34,101 --> 01:39:35,769 OPTIMISTIC SCENARIO THAT WE DID 2373 01:39:35,769 --> 01:39:37,104 DEVELOP AND WILL BE AVAILABLE IN 2374 01:39:37,104 --> 01:39:38,839 OUR WEBSITE AND WE HAVE SHARED 2375 01:39:38,839 --> 01:39:40,741 IT WITH THE STAFF, BUT IN THE 2376 01:39:40,741 --> 01:39:42,643 INTEREST OF TIME, KR DID NOT 2377 01:39:42,643 --> 01:39:44,878 REALLY GO OVER THE DETAILS HERE. 2378 01:39:44,878 --> 01:39:49,483 YOU CAN SEE THAT SPREAD IS QUITE 2379 01:39:49,483 --> 01:39:50,818 LARGE FOR 2026, PESSIMISTIC 2380 01:39:50,818 --> 01:39:52,953 SCENARIO WOULD MEAN $90 MILLION 2381 01:39:52,953 --> 01:39:54,088 LESS IN REVENUE, OPTIMISTIC 2382 01:39:54,088 --> 01:39:58,292 WOULD MEAN $30 MILLION TO THE 2383 01:39:58,292 --> 01:40:00,094 PLUS SIDE. THAT IS EITHER 3.7% 2384 01:40:00,094 --> 01:40:04,064 LESS IN REVENUE OR 1.3% MORE FRN 2385 01:40:04,064 --> 01:40:05,399 THE CURRENT YEAR. OVERALL, THE 2386 01:40:05,399 --> 01:40:07,101 DECLINE FOR COUPLE OF NEXT YEARS 2387 01:40:07,101 --> 01:40:10,704 WOULD BE ABOUT 5% OF THE OVERALL 2388 01:40:10,704 --> 01:40:13,307 REVENUES IN THE CASE OF 2389 01:40:13,307 --> 01:40:16,010 RECESSION. THE UPSIDE IS TO THE 2390 01:40:16,010 --> 01:40:21,181 TUNE OF 3-4%, DEPENDING ON THE 2391 01:40:21,181 --> 01:40:24,284 YEAR, 3 FOR THE AVERAGE. SO WITH 2392 01:40:24,284 --> 01:40:27,421 THAT, WE ARE COMING TO THE 2393 01:40:27,421 --> 01:40:29,590 SUMMARY AND RECOMMENDATION OF 2394 01:40:29,590 --> 01:40:31,125 THE FORECAST SCENARIO. SO, 2395 01:40:31,125 --> 01:40:32,893 OVERALL, THE OUTLOOK HAS BECOME 2396 01:40:32,893 --> 01:40:36,430 MUCHLESS CLEAR GIVEN THE 2397 01:40:36,430 --> 01:40:40,434 CONFLICT IN THE MIDDLE EAST. IT 2398 01:40:40,434 --> 01:40:42,669 HAS BEEN LONG MONTHS WITH LOTS 2399 01:40:42,669 --> 01:40:43,604 OF MOVEMENT IN THE FINANCIAL 2400 01:40:43,604 --> 01:40:45,606 MARKETS, LOTS OF CHANGES IN THE 2401 01:40:45,606 --> 01:40:48,842 OUTLOOK, AND WE HAVE TRIED TO 2402 01:40:48,842 --> 01:40:52,279 INCORPORATE SOME OF THOSE, SOME 2403 01:40:52,279 --> 01:40:55,015 OF THE INFORMATION INTO THE 2404 01:40:55,015 --> 01:40:55,682 BASELINE SCENARIO. WE FEEL 2405 01:40:55,682 --> 01:40:57,751 CONFIDENT WE HAVE MITIGATED SOME 2406 01:40:57,751 --> 01:41:00,120 OF THOSE RISKS ARISING FROM THE 2407 01:41:00,120 --> 01:41:04,057 FACT THAT THE ECONOMIC FORECAST, 2408 01:41:04,057 --> 01:41:05,392 BY S&P GLOBAL AND ANALYTICS WERE 2409 01:41:05,392 --> 01:41:08,996 DEVELOPED AT THE EARLY STAGES OF 2410 01:41:08,996 --> 01:41:10,230 THE CONFLICT. WE HAVE, 2411 01:41:10,230 --> 01:41:12,666 ESSENTIALLY, TAKEN SOME PARTS OF 2412 01:41:12,666 --> 01:41:13,634 THEIR PESSIMISTIC SCENARIOS, 2413 01:41:13,634 --> 01:41:16,003 WEIGHTED IT WITH THEIR BASELINE, 2414 01:41:16,003 --> 01:41:19,006 AND CREATED A BASELINE WHICH IS 2415 01:41:19,006 --> 01:41:20,307 ASSUMING SOME OF THOSE NEGATIVE 2416 01:41:20,307 --> 01:41:23,644 AFFECTS OF HIGHER OIL PRICES AND 2417 01:41:23,644 --> 01:41:31,085 HIGHER GAS PRICES, AND LESS 2418 01:41:31,085 --> 01:41:31,685 ECONOMIC ACTIVITY AND LESS 2419 01:41:31,685 --> 01:41:33,353 EMPLOYMENT. THAT SAID, WE DO 2420 01:41:33,353 --> 01:41:36,890 BELIEVE THE BASELINE SCENARIO IS 2421 01:41:36,890 --> 01:41:38,625 THE MOST LIKELY BEST FORWARD, AT 2422 01:41:38,625 --> 01:41:41,261 LEAST BASED ON THE INFORMATION 2423 01:41:41,261 --> 01:41:42,696 SO FAR, AND GIVEN THE RECENT 2424 01:41:42,696 --> 01:41:45,699 CEASE-FIRE, THERE IS SOME HOPE 2425 01:41:45,699 --> 01:41:48,035 WE WILL CERTAINLY BE THE CASE. 2426 01:41:48,035 --> 01:41:50,170 THERE IS STILL SOME OTHER RISKS 2427 01:41:50,170 --> 01:41:53,841 TO THE REGIONAL ECONOMY, IN 2428 01:41:53,841 --> 01:41:57,211 PARTICULAR, LAYOFFS ARE NOT 2429 01:41:57,211 --> 01:42:01,548 GOING TO GO AWAY. THE AI 2430 01:42:01,548 --> 01:42:04,852 ADOPTION OF AI AND LESS HIRING 2431 01:42:04,852 --> 01:42:06,553 IN THE TAX IS ANOTHER AREA WHICH 2432 01:42:06,553 --> 01:42:08,856 IS NOT GOING TO GO AWAY. THERE 2433 01:42:08,856 --> 01:42:11,425 ARE ALL THESE MOVING PARTS 2434 01:42:11,425 --> 01:42:16,063 REGARDING THE IMPACT OF THE 2435 01:42:16,063 --> 01:42:17,097 5814, THE BILL TO CLASSIFY 2436 01:42:17,097 --> 01:42:20,434 SERVICE TO SALES AND LIMITED 2437 01:42:20,434 --> 01:42:24,838 DATA FOR THAT. SO, LOTS OF RISK, 2438 01:42:24,838 --> 01:42:26,073 LOTS OF MOVING PARTS, WITH ALL 2439 01:42:26,073 --> 01:42:27,941 THAT IN MIND, WE BELIEVE THE 2440 01:42:27,941 --> 01:42:30,878 BASELINE SCENARIO IS THE ONE TO 2441 01:42:30,878 --> 01:42:33,380 BE RECOMMENDED AND WE HAVE 2442 01:42:33,380 --> 01:42:36,149 ACCOUNTED FOR SOME OF THOSE 2443 01:42:36,149 --> 01:42:38,385 RISKS DIRECTLY, NEVER THE LESS, 2444 01:42:38,385 --> 01:42:39,786 AND THIS IS SOMETHING I HAVE 2445 01:42:39,786 --> 01:42:42,756 BEEN SAYING A COUPLE OF TIMES 2446 01:42:42,756 --> 01:42:43,891 ALREADY, BECOME A LITTLE 2447 01:42:43,891 --> 01:42:46,193 REPETITIVE, THERE IS HIGH AMOUNT 2448 01:42:46,193 --> 01:42:50,430 OF UNCERTAINTY STILL HERE SO 2449 01:42:50,430 --> 01:42:51,365 THERE MIGHT BE SOME LARGE 2450 01:42:51,365 --> 01:42:56,537 REVISIONS IN THE FUTURE, THAT 2451 01:42:56,537 --> 01:42:58,005 SHOULD BE TAKEN INTO ACCOUNT 2452 01:42:58,005 --> 01:42:59,740 HERE. WER THAT WE HAVE COME TO 2453 01:42:59,740 --> 01:43:01,875 THE END. HAPPY TO TAKE QUESTIONS 2454 01:43:01,875 --> 01:43:04,711 REGARDING THE RECOMMENDATION OR 2455 01:43:04,711 --> 01:43:05,445 FORECAST IN GENERAL. 2456 01:43:05,445 --> 01:43:06,513 >> THANK YOU, DIRECTOR, WELL 2457 01:43:06,513 --> 01:43:10,784 DONE, I WILL CHECK TO SEE, I SEE 2458 01:43:10,784 --> 01:43:12,352 VICE CHAIR ELERBROOK, PLEASE. 2459 01:43:12,352 --> 01:43:14,354 >> YEAH, THANK YOU VERY MUCH. 2460 01:43:14,354 --> 01:43:16,423 BEING MY FIRST TIME, THIS IS A 2461 01:43:16,423 --> 01:43:17,190 LOT OF INFORMATION AND I 2462 01:43:17,190 --> 01:43:18,825 APPRECIATE ALL OF THE WORK THAT 2463 01:43:18,825 --> 01:43:21,762 GOES IN TO IT, AND, FRANKLY, ALL 2464 01:43:21,762 --> 01:43:24,565 THE DIFFERENT CONSIDERATIONS YOU 2465 01:43:24,565 --> 01:43:25,933 HAVE TO PUT IN TO THE 2466 01:43:25,933 --> 01:43:27,367 INFORMATION TO ARRIVE AT ALL 2467 01:43:27,367 --> 01:43:28,569 THREE SCENARIOS. THANK YOU FOR 2468 01:43:28,569 --> 01:43:30,070 THE TIME. IT IS VERY CLEAR, VERY 2469 01:43:30,070 --> 01:43:32,072 DENSE, OBVIOUSLY, BUT A LOT OF 2470 01:43:32,072 --> 01:43:36,076 REALLY GOOD INFORMATION. THANKS 2471 01:43:36,076 --> 01:43:38,712 FOR THE PRESENTATION AND THE 2472 01:43:38,712 --> 01:43:39,079 RECOMMENDATION. 2473 01:43:39,079 --> 01:43:39,479 >> FANTASTIC. 2474 01:43:39,479 --> 01:43:41,748 >> ANY OTHER QUESTIONS HERE? 2475 01:43:41,748 --> 01:43:45,719 OTHERWISE, WE CAN MOVE ON TO THE 2476 01:43:45,719 --> 01:43:46,820 ADOPTION OF THE RECOMMENDED 2477 01:43:46,820 --> 01:43:51,124 FORECAST. SO BY JUST A LITTLE 2478 01:43:51,124 --> 01:43:52,726 BIT OF BACKGROUND, IF THE 2479 01:43:52,726 --> 01:43:54,294 FORECAST COUNCIL IS APPROVED TO 2480 01:43:54,294 --> 01:43:55,495 APPROVE THE RECOMMENDATION, 2481 01:43:55,495 --> 01:43:59,299 WHICH IS THE BASELINE SCENARIO, 2482 01:43:59,299 --> 01:44:01,401 NO FORMAL VOTE IS REQUIRED. IF 2483 01:44:01,401 --> 01:44:03,704 WE WANT, SO THIS IS-- I AM DOING 2484 01:44:03,704 --> 01:44:05,606 A LITTLE BIT OF INTROSENSE IT IS 2485 01:44:05,606 --> 01:44:07,474 MARK AND DWIGHT'S FIRST TIME 2486 01:44:07,474 --> 01:44:09,109 BACK IN THE MEETING, AND THIS 2487 01:44:09,109 --> 01:44:11,745 FUNCTION HAS CHANGED IN THE LAST 2488 01:44:11,745 --> 01:44:12,813 NUMBER OF YEARS, RIGHT? AGAIN, 2489 01:44:12,813 --> 01:44:14,781 THIS USED TO BE AN OFFICE THAT 2490 01:44:14,781 --> 01:44:17,284 WAS HELD ONLY WITHIN CITY BUDGET 2491 01:44:17,284 --> 01:44:24,491 OFFICE, IT IS NOW A JOINTLY 2492 01:44:24,491 --> 01:44:26,026 OVERSEEN INDEPENDENT COUNCIL, SO 2493 01:44:26,026 --> 01:44:30,430 THE TEAM AND STAFF PROVIDE A 2494 01:44:30,430 --> 01:44:33,500 RECOMMENDATION, IT IS OUR JOB TO 2495 01:44:33,500 --> 01:44:34,635 ACCEPT OR OVERRIDE THIS 2496 01:44:34,635 --> 01:44:39,640 RECOMMENDATION. IT GIVES US THE 2497 01:44:39,640 --> 01:44:40,540 CHECKS AND BALANCES. SO TODAY 2498 01:44:40,540 --> 01:44:43,243 DIRECTOR DURES HAS RECOMMENDED 2499 01:44:43,243 --> 01:44:44,544 WE TAKE THE BASELINE 2500 01:44:44,544 --> 01:44:45,979 RECOMMENDATION, IF THAT IS THE 2501 01:44:45,979 --> 01:44:48,615 HOW WE WANT TO TAKE IT, I WILL 2502 01:44:48,615 --> 01:44:52,653 READ THE SCRIPT, WE WILL GO 2503 01:44:52,653 --> 01:44:54,655 THROUGH THE MOTION. IF WE, AS 2504 01:44:54,655 --> 01:44:56,089 THE FORECAST COUNCIL THOUGHT 2505 01:44:56,089 --> 01:44:57,924 THAT HE OR THE TEAM WAS 2506 01:44:57,924 --> 01:45:00,961 INCORRECT OR WE WANTED TO BE 2507 01:45:00,961 --> 01:45:02,496 MORE OPTIMISTIC OR MORE 2508 01:45:02,496 --> 01:45:04,665 PESSIMISTIC, THIS IS WHERE 2509 01:45:04,665 --> 01:45:08,035 SOMEONE CAN BRING A MOTION AND 2510 01:45:08,035 --> 01:45:08,935 OVERRIDE THAT RECOMMENDATION. 2511 01:45:08,935 --> 01:45:10,437 THAT IS JUST KIND OF THE 2512 01:45:10,437 --> 01:45:13,273 FUNCTIONALITY OF WHERE WE ARE IN 2513 01:45:13,273 --> 01:45:17,177 THE MOMENT. WANT TO DOUBLE CHECK 2514 01:45:17,177 --> 01:45:18,879 FURTHER QUESTIONS: I AM PREPARED 2515 01:45:18,879 --> 01:45:23,750 TO ACCEPT THE RECOMMENDATION. I 2516 01:45:23,750 --> 01:45:24,551 AM NOT SEEING ANY OTHER 2517 01:45:24,551 --> 01:45:24,851 OBJECTIONS. 2518 01:45:24,851 --> 01:45:27,454 >> WHILE I THINK IT IS TOO 2519 01:45:27,454 --> 01:45:28,622 OPTIMISTIC, I WILL ACCEPT IT AS 2520 01:45:28,622 --> 01:45:28,822 WEM. 2521 01:45:28,822 --> 01:45:31,324 >> WITH THAT, AS YOU HEAR FROM 2522 01:45:31,324 --> 01:45:33,427 THE FINANCE DIRECTOR, ACT&I KNOW 2523 01:45:33,427 --> 01:45:35,562 THE CBO IS WATCHING, PLEASE ACT 2524 01:45:35,562 --> 01:45:38,565 AS IF WE ARE IN A BUDGET PROBLEM 2525 01:45:38,565 --> 01:45:39,633 WITH THIS REVENUE FORECAST, 2526 01:45:39,633 --> 01:45:41,335 PLEASE. SO WITH THAT, PER THE 2527 01:45:41,335 --> 01:45:42,969 ORDINANCE THAT CREATED THE 2528 01:45:42,969 --> 01:45:44,671 FORECAST OFFICE AND THIS 2529 01:45:44,671 --> 01:45:47,341 FORECAST COUNCIL, ROLE OF THE 2530 01:45:47,341 --> 01:45:48,442 FORECAST COUNCIL TO APPROVE THE 2531 01:45:48,442 --> 01:45:49,576 FORECAST, IN TERMS OF APPROVING 2532 01:45:49,576 --> 01:45:51,445 THE FORECAST IF WE CAN CONCUR 2533 01:45:51,445 --> 01:45:52,679 WITH THE RECOMMENDATION OF THE 2534 01:45:52,679 --> 01:45:54,648 SCENARIO, NO FORMAL VOTE IS 2535 01:45:54,648 --> 01:45:55,582 REQUIRED. THE GOAL OF THE 2536 01:45:55,582 --> 01:45:57,451 LEGISLATION WAS TO REMOVE ANY 2537 01:45:57,451 --> 01:46:02,255 RISK OF POLITICAL INFLUENCE OVER 2538 01:46:02,255 --> 01:46:02,756 THE FORECAST. RECEIVING 2539 01:46:02,756 --> 01:46:04,257 RECOMMENDATIONS FROM A STAFF OF 2540 01:46:04,257 --> 01:46:05,625 INDEPENDENT EXPERTS IS THE BEST 2541 01:46:05,625 --> 01:46:12,566 WAY TO ACHIEVE THIS. THAT SAID, 2542 01:46:12,566 --> 01:46:14,668 WE REPRESENT THE ELECK LECT ED 2543 01:46:14,668 --> 01:46:17,671 LEADERSHIP AND HAVE THE 2544 01:46:17,671 --> 01:46:19,172 AUTHORITY TO OVERRIDE THE 2545 01:46:19,172 --> 01:46:20,974 RECOMMENDATION SHOULD WE JUDGE 2546 01:46:20,974 --> 01:46:22,008 IT MAKES SENSE. PER ESTABLISHING 2547 01:46:22,008 --> 01:46:24,444 THE ORDINANCE A DECISION WOULD 2548 01:46:24,444 --> 01:46:26,380 REQUIRE THREE-MEMBER VOTE OF 2549 01:46:26,380 --> 01:46:28,415 FOUR APPROVING ALTERNATIVE 2550 01:46:28,415 --> 01:46:32,419 SCENARIO. AS YOU HAVE HEARD, 2551 01:46:32,419 --> 01:46:33,720 DIRECTOR DURES RECOMMENDED THAT 2552 01:46:33,720 --> 01:46:35,322 WE-- THE BASELINE SCENARIO FOR 2553 01:46:35,322 --> 01:46:38,725 THE APRIL 2026 FORECAST TO BE 2554 01:46:38,725 --> 01:46:39,893 USED AS THE OFFICIAL FORECAST. 2555 01:46:39,893 --> 01:46:41,895 IS THERE, IN THE CASE THERE ARE 2556 01:46:41,895 --> 01:46:42,896 NO OBJECTIONS TO THIS 2557 01:46:42,896 --> 01:46:44,598 RECOMMENDATION, I AM SIMPLY 2558 01:46:44,598 --> 01:46:47,267 GOING TO REQUEST THE MEETING 2559 01:46:47,267 --> 01:46:48,435 MINUTES REFLECT CONCURRENCE 2560 01:46:48,435 --> 01:46:52,239 REGARDING THE RECOMMENDED 2561 01:46:52,239 --> 01:46:54,574 FORECAST PER BY LAW, THE FORMAL 2562 01:46:54,574 --> 01:46:59,246 STEP AS WAY TO RECORD OUR 2563 01:46:59,246 --> 01:46:59,780 APPROVAL. WITH THAT, ANY 2564 01:46:59,780 --> 01:47:00,514 OBJECTIONS? SEEING NO 2565 01:47:00,514 --> 01:47:02,349 OBJECTIONS, I AM GOING TO DIRECT 2566 01:47:02,349 --> 01:47:03,950 THE FORECAST OFFICE TO RECORD 2567 01:47:03,950 --> 01:47:05,752 OUR CONCURRENCE WITH THE 2568 01:47:05,752 --> 01:47:09,122 RECOMMENDED FORECAST IN THE 2569 01:47:09,122 --> 01:47:09,956 MEETING MINUTES. WELL DONE. WITH 2570 01:47:09,956 --> 01:47:12,759 THAT, WE ARE GOING TO MOVE ON TO 2571 01:47:12,759 --> 01:47:17,731 THE FINAL ITEM OF BUSINESS WITH 2572 01:47:17,731 --> 01:47:19,833 13 MINUTES LEFT. I WILL READ 2573 01:47:19,833 --> 01:47:21,001 THAT ITEM INTO THE RECORD. 2574 01:47:21,001 --> 01:47:22,836 PRESENTATION OF 2026 WORK 2575 01:47:22,836 --> 01:47:24,771 PROGRAM FOR THE OFFICE OF 2576 01:47:24,771 --> 01:47:28,308 ECONOMIC AND REVENUE FORECASTS, 2577 01:47:28,308 --> 01:47:29,443 DISCUSSION AND POSSIBLE VOTE. 2578 01:47:29,443 --> 01:47:31,011 PER THE ORDINANCE THAT CREATED 2579 01:47:31,011 --> 01:47:33,680 THIS OFFICE, EACH YEAR THE 2580 01:47:33,680 --> 01:47:36,149 COUNCIL MUST APPROVE THE 2581 01:47:36,149 --> 01:47:37,517 OFFICE'S WORKPLAN, DIRECTOR 2582 01:47:37,517 --> 01:47:38,452 DURES WILL REPRESENT THE WORK 2583 01:47:38,452 --> 01:47:42,956 PROGRAM, AFTER WHICH, WE WILL 2584 01:47:42,956 --> 01:47:44,758 HAVE THE OPPORTUNITY TO DISCUSS 2585 01:47:44,758 --> 01:47:50,297 AND APPROVAL OR TABLE THE 2586 01:47:50,297 --> 01:47:50,730 PROPOSALF. OVER TO YOU. 2587 01:48:01,141 --> 01:48:06,947 >> ALL RIGHT. SO THIS SHOULD NOT 2588 01:48:06,947 --> 01:48:10,116 TAKE TOO LONG. BUT IT IS A SHORT 2589 01:48:10,116 --> 01:48:11,051 OVERVIEW OF WHAT WE ARE EXPECTED 2590 01:48:11,051 --> 01:48:14,354 TO DO AND WHAT WE PLAN TO DO 2591 01:48:14,354 --> 01:48:15,255 THIS YEAR. THE BACKGROUND, I 2592 01:48:15,255 --> 01:48:16,990 DON'T THINK I HAVE TO SPEND TOO 2593 01:48:16,990 --> 01:48:20,193 MUCH TIME ON THIS, THIS OFFICE 2594 01:48:20,193 --> 01:48:23,396 IS BASICALLY ESTABLISHED IN 2021 2595 01:48:23,396 --> 01:48:24,764 AND FOLLOW SIMILAR STRUCTURE, 2596 01:48:24,764 --> 01:48:29,436 SIMILAR ARRANGEMENT IN KING 2597 01:48:29,436 --> 01:48:31,738 COUNTY AND WASHINGTON STATE. IT 2598 01:48:31,738 --> 01:48:34,808 OVERSEES AND FORECASTS NUMBER OF 2599 01:48:34,808 --> 01:48:40,247 REVENUES, LARGE ECONOMICALLY 2600 01:48:40,247 --> 01:48:42,282 DRIVEN REVENUES LISTED HERE. 2601 01:48:42,282 --> 01:48:43,283 ASSESSED VALUE FORECAST IS 2602 01:48:43,283 --> 01:48:45,819 PREPARED BY SHAUN AS INPUT INTO 2603 01:48:45,819 --> 01:48:47,687 PROPERTY TAX, WHICH PROPERTY TAX 2604 01:48:47,687 --> 01:48:54,661 FORECAST ITSELF IS DEVELOPED BY 2605 01:48:54,661 --> 01:48:56,529 THE CBO. WE DO PREPARE THREE 2606 01:48:56,529 --> 01:48:59,332 FORECASTS, SO THIS IS THE FIRST 2607 01:48:59,332 --> 01:49:01,568 OF THOSE REVENUE FORECAST, IT 2608 01:49:01,568 --> 01:49:05,005 WILL BE FOLLOWED BY AUGUST AND 2609 01:49:05,005 --> 01:49:06,539 OCTOBER UPDATE. TO DEVELOP THOSE 2610 01:49:06,539 --> 01:49:10,543 REVENUE FORECAST, AS I 2611 01:49:10,543 --> 01:49:14,614 MENTIONED, WE RELY ON OUR 2612 01:49:14,614 --> 01:49:15,215 IN-HOUSE DEVELOPED REGIONAL 2613 01:49:15,215 --> 01:49:16,249 ECONOMIC FORECAST. WE ACTUALLY 2614 01:49:16,249 --> 01:49:19,185 PREPARE FOUR OF THOSE, THERE IS 2615 01:49:19,185 --> 01:49:23,223 INITIAL ONE IN JANUARY, WHICH IS 2616 01:49:23,223 --> 01:49:28,995 USED TO INFORM THE OUTLOOK FOR 2617 01:49:28,995 --> 01:49:29,996 INFLATION. SO THERE ARE THOSE 2618 01:49:29,996 --> 01:49:33,700 FOUR ECONOMIC FORECASTS IN 2619 01:49:33,700 --> 01:49:38,838 ADDITION TO THE THREE REVENUE 2620 01:49:38,838 --> 01:49:39,573 FORECASTS, THERE IS THREE 2621 01:49:39,573 --> 01:49:40,440 PRESENTATIONS, THE NEXT IS 2622 01:49:40,440 --> 01:49:43,476 AUGUST 7th, AND THE LAST ONE 2623 01:49:43,476 --> 01:49:47,981 WILL BE AT SOME POINT IN 2624 01:49:47,981 --> 01:49:49,282 OCTOBER. WE ARE MONITORING 2625 01:49:49,282 --> 01:49:51,952 REVENUE AS THEY COME IN AND 2626 01:49:51,952 --> 01:49:52,619 PREPARE QUARTERLY REVENUE 2627 01:49:52,619 --> 01:49:54,688 REPORTS, THERE IS A DASH BOARD 2628 01:49:54,688 --> 01:49:57,390 ON OUR WEBSITE, WHICH I WILL 2629 01:49:57,390 --> 01:50:00,427 PLUG IN HERE, THAT SEAN HAS 2630 01:50:00,427 --> 01:50:01,061 DEVELOPED THAT PROVIDES EASY 2631 01:50:01,061 --> 01:50:03,363 ACCESS FOR BOTH THE STAFF AND 2632 01:50:03,363 --> 01:50:06,566 THE PUBLIC AS A WAY TO SEE HOW 2633 01:50:06,566 --> 01:50:10,971 THE REVENUES ARE SHAPING UP 2634 01:50:10,971 --> 01:50:12,272 THROUGHOUT THE YEAR. THEN TIME 2635 01:50:12,272 --> 01:50:14,808 PERMITTING, WE ARE-- WE WOULD 2636 01:50:14,808 --> 01:50:18,111 LIKE TO START AND UPDATE OF THE 2637 01:50:18,111 --> 01:50:19,312 FORECAST ACCURACY ASSESSMENT, 2638 01:50:19,312 --> 01:50:23,149 WHICH HAD BEEN PLANNED FOR THE 2639 01:50:23,149 --> 01:50:24,184 NEXT YEAR, SO THAT ASSESSMENT 2640 01:50:24,184 --> 01:50:25,585 WOULD LOOK BACK AT LAST FIVE 2641 01:50:25,585 --> 01:50:28,989 YEARS, IT WOULD BE AN UPDATE TO 2642 01:50:28,989 --> 01:50:32,425 A SIMILAR ASSESSMENT WE DID BACK 2643 01:50:32,425 --> 01:50:36,963 IN 2022, WHICH LOOKED AT THE 2644 01:50:36,963 --> 01:50:38,732 REVENUES THROUGH 2021, SO, LAST 2645 01:50:38,732 --> 01:50:42,335 FIVE YEARS, WOULD LIKE TO ASSESS 2646 01:50:42,335 --> 01:50:43,770 HOW GOOD THE FORECAST MODELS 2647 01:50:43,770 --> 01:50:45,705 ARE, IN THE SPACE FOR 2648 01:50:45,705 --> 01:50:48,074 IMPROVEMENT IS, AND THAT IS, 2649 01:50:48,074 --> 01:50:51,177 AGAIN, TIME PERMITTING GIVEN ALL 2650 01:50:51,177 --> 01:50:52,512 THE OTHER WORK. AND THERE WILL 2651 01:50:52,512 --> 01:50:56,082 BE A COUPLE OF THINGS TO DO 2652 01:50:56,082 --> 01:50:59,119 GIVEN THE RESTRUCTURE OF THE B&O 2653 01:50:59,119 --> 01:51:02,222 TAX, ESSENTIALLY NEW WAY HOW TO 2654 01:51:02,222 --> 01:51:05,392 FORECAST THE REVENUES HAS TO BE 2655 01:51:05,392 --> 01:51:07,661 DEVELOPED TO REQUEST FOR 2656 01:51:07,661 --> 01:51:09,029 CLASSIFIED ACTIVITIES, THE NEW 2657 01:51:09,029 --> 01:51:11,831 DEDUCTION, MODIFIED TAX RATES, 2658 01:51:11,831 --> 01:51:18,438 ON TOP OF THE CHANGES DUE TO THE 2659 01:51:18,438 --> 01:51:20,273 SENATE BILL 5814. WE ARE WORKING 2660 01:51:20,273 --> 01:51:22,275 TO DEVELOP THE SOCIAL HOUSING 2661 01:51:22,275 --> 01:51:25,545 TAX, WHICH DID NOT PRESENT HERE, 2662 01:51:25,545 --> 01:51:27,414 BUT WE ARE DEVELOPING FORECAST 2663 01:51:27,414 --> 01:51:29,215 FOR THAT, TAKING INTO ACCOUNT 2664 01:51:29,215 --> 01:51:33,319 RECENT REVENUES THAT THE CITY 2665 01:51:33,319 --> 01:51:36,356 HAS COLLECTED FOR 2025, AGAIN, 2666 01:51:36,356 --> 01:51:37,991 THE NEW TAX AND POTENTIALLY VERY 2667 01:51:37,991 --> 01:51:41,361 VOLTILE. LOT OF CONSIDER HAS TO 2668 01:51:41,361 --> 01:51:44,397 GO INTO DEVELOPING THE MODEL AND 2669 01:51:44,397 --> 01:51:47,300 CONSIDERING THE DATA SHOULD RELY 2670 01:51:47,300 --> 01:51:48,768 ON. THEN THERE IS ONGOING 2671 01:51:48,768 --> 01:51:50,270 IMPROVEMENTS THROUGHOUT THE YEAR 2672 01:51:50,270 --> 01:51:52,639 IN BETWEEN THE FORECAST WHENEVER 2673 01:51:52,639 --> 01:51:54,774 WE HAVE TIME, SHAUN HAS RECENTLY 2674 01:51:54,774 --> 01:51:57,977 WORKED ON SIGNIFICANT 2675 01:51:57,977 --> 01:52:00,146 IMPROVEMENTS TO THE ASSESSED 2676 01:52:00,146 --> 01:52:01,915 VALUE PAYROLL EXPENSE TAX, MORE 2677 01:52:01,915 --> 01:52:03,416 DATA AVAILABLE, WE ARE TRYING TO 2678 01:52:03,416 --> 01:52:08,254 SPEND MORE TIME LOOKING AT WHERE 2679 01:52:08,254 --> 01:52:09,355 WE CAN IMPROVE THE FORECASTS. 2680 01:52:09,355 --> 01:52:12,525 FINALLY, THERE IS SOME WORK WE 2681 01:52:12,525 --> 01:52:15,595 DO TO SUPPORT OTHER DEPARMS, WE 2682 01:52:15,595 --> 01:52:21,601 ARE HERE TO HELP IN ANY WAY WE 2683 01:52:21,601 --> 01:52:25,505 CAN, MOST LEGISLATIVE AND 2684 01:52:25,505 --> 01:52:27,674 EXECUTIVE STUFF CAN REQUEST 2685 01:52:27,674 --> 01:52:30,610 ANALYSIS, EITHER ESTIMATE OF 2686 01:52:30,610 --> 01:52:35,815 POTENTIAL REVENUE STREAM OR SOME 2687 01:52:35,815 --> 01:52:37,183 ECONOMIC ANALYSIS AND GIVEN THE 2688 01:52:37,183 --> 01:52:38,551 AVAILABLE STUFF AND WORKLOAD, WE 2689 01:52:38,551 --> 01:52:41,121 ARE HAPPY TO HELP AS MUCH AS WE 2690 01:52:41,121 --> 01:52:43,490 CAN HERE. IN ADDITION TO THAT, 2691 01:52:43,490 --> 01:52:49,696 OUR OFFICE ASSISTS THE CITY 2692 01:52:49,696 --> 01:52:50,230 FINANCE IN PREPARING AND 2693 01:52:50,230 --> 01:52:56,269 PRESENTING THE LIMITED TAX 2694 01:52:56,269 --> 01:53:01,307 GENERAL OBLIGATION RATING 2695 01:53:01,307 --> 01:53:03,510 PRESENTATION THAT TAKES PLACE IN 2696 01:53:03,510 --> 01:53:06,579 LATE MAY. WE WORK IN PROVIDING 2697 01:53:06,579 --> 01:53:08,148 THE INPUT FOR THAT AND ASSISTING 2698 01:53:08,148 --> 01:53:10,049 THE BUDGET OFFICE AND PROVIDING 2699 01:53:10,049 --> 01:53:15,221 THE ECONOMIC SECTION OF THE 2700 01:53:15,221 --> 01:53:16,556 BUDGET BOOKS AND ESSENTIALLY THE 2701 01:53:16,556 --> 01:53:19,292 PARTS THAT SUMMARIZE THE OUTLOOK 2702 01:53:19,292 --> 01:53:23,129 FOR THE REVENUES THAT REE IN 2703 01:53:23,129 --> 01:53:25,231 PURVIEW OF FORECASTING. SO THAT 2704 01:53:25,231 --> 01:53:28,668 IS IT. THAT IS THE GENERAL IDEA. 2705 01:53:28,668 --> 01:53:30,036 CONTINUING IMPROVEMENTS TO THE 2706 01:53:30,036 --> 01:53:31,638 FORECASTING MODELS, ANY AD HOC 2707 01:53:31,638 --> 01:53:34,407 ANALYSIS REQUESTED AND 2708 01:53:34,407 --> 01:53:35,975 CONTINUING SUPPORT TO THE OTHER 2709 01:53:35,975 --> 01:53:36,309 DEPARTMENTS. 2710 01:53:36,309 --> 01:53:39,579 >> THANK YOU, I WOULD SAY IN ITS 2711 01:53:39,579 --> 01:53:44,317 5th YEAR OF EXISTENCE, THE 2712 01:53:44,317 --> 01:53:47,053 FORECAST COUNCIL, IT IS ABOUT 2713 01:53:47,053 --> 01:53:49,956 TIME WE MIGHT STRENGTHEN BY 2714 01:53:49,956 --> 01:53:53,193 LAWS, REVIEW THEM, YOU WERE 2715 01:53:53,193 --> 01:53:54,527 TALKING THE ASSESSMENTS. IT 2716 01:53:54,527 --> 01:53:58,298 STANDS OUT TO ME THAT OUR 2717 01:53:58,298 --> 01:54:00,733 FORECAST MEETINGS TO RECEIVE THE 2718 01:54:00,733 --> 01:54:03,870 FORECAST ALWAYS TAKE TWO HOURS, 2719 01:54:03,870 --> 01:54:06,539 MINIMUM, AND IF WE ONLY MEET 2720 01:54:06,539 --> 01:54:08,641 WHEN WE RECEIVE THE FORECAST, 2721 01:54:08,641 --> 01:54:11,544 THAT LEAVES NO TIME FOR US TO 2722 01:54:11,544 --> 01:54:14,080 MEET IN OPEN PUBLIC SESSION TO 2723 01:54:14,080 --> 01:54:15,148 HAVE SOME OF THESE DISCUSSIONS. 2724 01:54:15,148 --> 01:54:18,451 SO MY SUGGESTION WILL BE THAT WE 2725 01:54:18,451 --> 01:54:20,687 MEET AGAIN MAYBE IN JUNE, OR 2726 01:54:20,687 --> 01:54:23,423 JULY, JUST TO HAVE A WORK 2727 01:54:23,423 --> 01:54:27,360 MEETING TO ATTEND TO SOME OF 2728 01:54:27,360 --> 01:54:28,962 THIS BUSINESS. JOINTLY TOGETHER 2729 01:54:28,962 --> 01:54:30,530 BETWEEN THE EXECUTIVE AND THE 2730 01:54:30,530 --> 01:54:31,664 LEGISLATIVE BRANCHES, BECAUSE I 2731 01:54:31,664 --> 01:54:33,933 THINK SH OF THIS-- I THINK WE 2732 01:54:33,933 --> 01:54:36,402 NEED TO HAVE FURTHER, MORE 2733 01:54:36,402 --> 01:54:37,370 ROBUST CONVERSATIONS IN WHICH 2734 01:54:37,370 --> 01:54:38,238 OUR REGULAR CADENCE OF MEETINGS 2735 01:54:38,238 --> 01:54:39,939 DOES NOT PROVIDE US THE TIME TO 2736 01:54:39,939 --> 01:54:45,678 DO SO. I WOULD LOVE TO ADD A 2737 01:54:45,678 --> 01:54:47,447 MEETING IN JUNE OR JULY. 2738 01:54:47,447 --> 01:54:49,616 >> I ABSOLUTELY AGREE WITH THAT 2739 01:54:49,616 --> 01:54:51,517 IDEA, AND AS AN EXAMPLE, THE 2740 01:54:51,517 --> 01:54:52,585 SOCIAL HOUSING TAX, WHICH IS 2741 01:54:52,585 --> 01:54:55,688 NEW, IS GOING TO BE A REALLY 2742 01:54:55,688 --> 01:54:56,456 COMPLICATED THING TO FORECAST. 2743 01:54:56,456 --> 01:54:58,925 AND HAVING YOU COME IN AND BRIEF 2744 01:54:58,925 --> 01:55:02,295 US ON WHAT YOU ARE THINKING AND 2745 01:55:02,295 --> 01:55:04,731 WHAT VARIABLES YOU ARE 2746 01:55:04,731 --> 01:55:06,666 INCLUDING, I WOULD FIND VERY 2747 01:55:06,666 --> 01:55:07,000 INTERESTING. 2748 01:55:07,000 --> 01:55:10,570 >> ANY OTHER COMMENTS FROM THE 2749 01:55:10,570 --> 01:55:10,970 COMMITTEE? MARK? 2750 01:55:10,970 --> 01:55:12,238 >> YEAH, I AGREE. I THINK IT 2751 01:55:12,238 --> 01:55:14,073 WOULD BE GOOD TO DIG IN TO THE 2752 01:55:14,073 --> 01:55:16,209 BALANCE OF THE WORKPLAN YOU HAVE 2753 01:55:16,209 --> 01:55:18,745 LAID OUT HERE. AND I THINK PART 2754 01:55:18,745 --> 01:55:20,847 OF THAT ALSO WOULD BE WHEN WHEE 2755 01:55:20,847 --> 01:55:22,348 MEET IN JUNE, TO TALK LITTLE BIT 2756 01:55:22,348 --> 01:55:23,549 ABOUT HOW THE WORK HAS BEEN 2757 01:55:23,549 --> 01:55:25,952 GOING, ARE YOU ABLE TO GET TO 2758 01:55:25,952 --> 01:55:30,256 PAST WORK PLANS? YOU KNOW, JUST 2759 01:55:30,256 --> 01:55:32,458 UNDERSTAND THE CAPACITY WHAT YOU 2760 01:55:32,458 --> 01:55:33,059 ARE CARE AING. I THINK THAT 2761 01:55:33,059 --> 01:55:35,094 SHOULD BE ONE OF THE THINGS WE 2762 01:55:35,094 --> 01:55:35,495 TALK ABOUT. 2763 01:55:35,495 --> 01:55:36,663 >> WONDERFUL. ANYTHING FROM YOU, 2764 01:55:36,663 --> 01:55:37,096 COUNCIL PRESIDENT? 2765 01:55:37,096 --> 01:55:41,935 >> NO, MR. CHAIR, THANK YOU, I 2766 01:55:41,935 --> 01:55:46,072 SUPPORT THAT PLAN, AND ALSO THE 2767 01:55:46,072 --> 01:55:46,939 SUGGESTION. GREAT IDEA. THANK 2768 01:55:46,939 --> 01:55:47,140 YOU. 2769 01:55:47,140 --> 01:55:48,641 >> WONDERFUL. WELL, WITH THAT, 2770 01:55:48,641 --> 01:55:52,612 WE MUST, AS THE FORECAST 2771 01:55:52,612 --> 01:55:55,315 COUNCIL, APPROVE THE OFFICE'S 2772 01:55:55,315 --> 01:55:56,449 WORK PROGRAM, INTERIM DIRECTOR 2773 01:55:56,449 --> 01:55:58,117 DURAS HAS PRESENTED IT SO I WILL 2774 01:55:58,117 --> 01:56:00,219 MOVE TO ADOPT THE 2026 WORK 2775 01:56:00,219 --> 01:56:00,887 PROGRAM. IS THERE A SECOND? 2776 01:56:00,887 --> 01:56:01,254 >> SECOND. 2777 01:56:01,254 --> 01:56:06,225 >> IT HAS BEEN MOVED AND 2778 01:56:06,225 --> 01:56:06,926 SECONDED. ANY LAST COMMENTS? 2779 01:56:06,926 --> 01:56:08,761 SEEING NONE, WE WILL DO A VOICE 2780 01:56:08,761 --> 01:56:10,096 VOTE. ALL IN FAVOR, SAY AYE. 2781 01:56:10,096 --> 01:56:10,763 >> AYE. 2782 01:56:10,763 --> 01:56:12,098 >> AYE. 2783 01:56:12,098 --> 01:56:13,066 >> AYE. 2784 01:56:13,066 --> 01:56:16,402 >> AYES, MOTION CARRIES, 2026 2785 01:56:16,402 --> 01:56:17,770 WORK PLAN HAS BEEN ADOPTED. WITH 2786 01:56:17,770 --> 01:56:19,806 THAT, MY SCRIPT SAYS THE NEXT 2787 01:56:19,806 --> 01:56:21,641 TIME WE WILL MEET IS FRIDAY 2788 01:56:21,641 --> 01:56:23,910 AUGUST 7th, I WILL JUST NOTE 2789 01:56:23,910 --> 01:56:26,045 THAT AUGUST BECOMES A DIFFICULT 2790 01:56:26,045 --> 01:56:28,314 MONTH, WE MIGHT SHIFT THAT 2791 01:56:28,314 --> 01:56:30,316 FORECAST DATE, BUT WITHIN THAT 2792 01:56:30,316 --> 01:56:32,552 WEEK BECAUSE THAT IS WITHIN THE 2793 01:56:32,552 --> 01:56:33,219 ORDINANCE. AND WE WILL LIKELY 2794 01:56:33,219 --> 01:56:34,087 MEET BEFORE THEN IN JUNE OR 2795 01:56:34,087 --> 01:56:35,455 JULY, SO THAT WE CAN HAVE A 2796 01:56:35,455 --> 01:56:38,424 LITTLE BIT MORE OF A WORKING 2797 01:56:38,424 --> 01:56:39,759 MEETING. IF THERE ARE NO FURTHER 2798 01:56:39,759 --> 01:56:40,593 QUESTIONS, WE WILL BE ADJOURNED. 2799 01:56:42,428 --> 01:56:44,297 HEARING NO FURTHER QUESTIONS, IT 2800 01:56:44,297 --> 01:56:47,467 IS 11:27, THANK YOU FOR YOUR 2801 01:56:47,467 --> 01:56:49,002 TIME, AND SEE YOU NEXT TIME.