AN ORDINANCE establishing the health through housing fund; and adding a new section to K.C.C. chapter 4A.200.
That takes us to the next two items on the agenda that we'll take up together as they both relate to a proposed sales and use tax to be used for housing and associated services. April Sanders is here from the Council Central South to provide the staff report for these items. Ms.. Sanders, the line is yours. Thank you, Mr. Chair. For the record, April Sanders Council policy staff and item seven begins on page 13 in your packet and the Post Ordinance 2020 0337 would impose a 1/10 of a percent sales tax for housing and related services. Proceeds from the tax will be deposited into the health through Housing Fund, which would be created through proposed ordinance 2020 0319, which I'll brief later on, starting with a bit of background information. During the 2020 legislative session, the Legislature passed House Bill 1590, which amended provisions for the housing sales tax. Previously, the sales tax was required to go to the ballot for authorization from voters before an actual. The House bill, 59, provided the option for the tax to be council. Manic counties were given until September 20th 30th of 2020 to impose the tax countywide. After that, the cities could impose the tax in the county with no tax after one or more of the cities have already done so. The county must provide a credit to those cities for the full amount collected within their jurisdiction. At the time of this statute that I wrote the staff report. No cities had enacted the tax, however. Last night, at least four cities passed legislation imposing the housing sales tax within their jurisdiction, which will have revenue impacts should the Council pass a similar tax. State statute specifies the activities and services for which the tax may be used. Table one on page 14 provides an overview of spending allocation requirements. At least 60% of proceeds must go to the following three purposes. One Constructing affordable housing. Two, constructing mental, mental and behavioral health related facilities. And three, funding operations and maintenance of new affordable housing and facilities where housing related programs are provided or newly constructed evaluation and treatment centers. All remaining funds must be used for operation delivery or evaluation of mental and behavioral health treatment programs and services or housing related services. Additionally, the state statute requires that only the following population groups with at or below 60% area median income for King County may be provided affordable housing and facilities providing housing related programs generated using this tax revenue. Persons with behavioral health disabilities, veterans, homeless or those at risk of being homeless. Families with children accompanied homeless, unaccompanied homeless youth or young adults. Persons with disabilities and domestic violence survivors. Counties imposing the tax must consult with cities when siting facilities within jurisdictional boundaries, and the county must spend at least 30% of revenue collected within any city, with a population over 60,000 within that jurisdiction. Currently, the following cities have populations over 60,000. Seattle, Bellevue, Kent, Renton, Federal Way, Kirkland, Auburn, Redmond and Sydney image. Lastly, the state statute allows for counties to issue general obligation or revenue bonds and pledge up to 50% of the moneys collected for bond repayment. Bonded revenue may finance provision or construction of affordable housing facilities where housing related programs are provided or evaluation and treatment centers. Now, moving on to the proposed ordinance in front of you, it would impose a housing sales tax named the health through housing tax. Many of the provisions in the state code are reiterated in the proposed ordinance, so I'll not review those that I have discussed previously, but that it would prioritize those whose income does not exceed 30% ami of King County and who are in the population groups I described previously. Additionally, proceeds will be allocated with the objective of reducing racial and ethnic disproportionality among those experiencing chronic homelessness. The specification of 30% AMI and the objectives that I just mentioned are set forth in the proposed ordinance for the not required by state statute. The proposed ordinance would also provide the county with the authority to issue bonds and use up to 50% of the moneys collected for a repayment of those bonds. The executive has indicated through the biennial budget proposal an intent to develop a bond package for 400 million over the next biennium. Moving on to some timing considerations. State law requires that a local sales and use tax change may take effect no sooner than 75 days after the Department of Revenue receives notice of those changes. Executive staff indicate that final passage by council is sufficient to notify the department. Additionally, collection can only begin on the first day of January, April or July of any given year. Table two on page 16 reveals various scenarios for council passage. If Council passes legislation by October 17. Collections could begin in January of 2021. Alternatively, if council passes legislation by January 15th, collections would be in an April. I included revenue estimates for each collection date, but I would note that these estimates assume county action before any cities impose the tax. So it's slightly outdated as of last night. I want to touch briefly on the executive's proposal for these funds in the biennial budget, though these would not be decided in this legislation but rather in budget deliberations. The executive proposes the following distribution with the health or housing allocation across various appropriation units behavioral health at 8.7 million housing and community development with 446.7 million. That's the bonded revenue, plus an additional 46,000,000.7 million. The Healthier Housing Fund 96.7 million. And the Debt Service Fund 36.9 million. Not up for discussion today, but relevant to the conversation is proposed ordinance 2020 0338, which would require the executive to transmit a proposed initial health through housing implementation plan by next June 30th for approval by Council . This proposed ordinance details specific items to be included in the plan and is a mandatory tool for all that has been referred to both the Committee of the Whole and Regional Policy Committee. That brings me to the end of the week on this item. Mr. Chair, I'm happy to jump right into briefing 0319 or I can take a pause for this item and brief that that after the fact. And there are amendments. Why don't you go ahead and brief? 319. I think that'll be quick and won't add any questions. Perfect. So item eight begins on page 19 of your packet and its proposed ordinance 2020 0319, which would establish the health through housing fund and add a new chapter to King County Code. Chapter four A to codify the fund creation is ordinance only needs to be adopted if the Council adopts legislation to impose the housing sales tax . The Department of Community and Human Services would serve as the manager of the fund and proceeds would be spent in accordance with the authorizing state statute. Additional direction on allocations of these moneys would be through proposed ordinance on 33037 imposing the sales tax as well as proposed ordinance 2020 0338 directing the creation of the implementation plan and Loeffler floor and Mark Brooke are both on the line to take questions. Thank you, April, for briefing both ordinances 2023, three, eight and 319 colleagues. Other questions about the briefing. You be. Seeing no questions. I call on Councilmember Balducci to move adoption of 338. 0337 Mr. Chair. 337. Thank you, Mr. Chairman, of adoption of Proposed Ordinance 2020 337 with a good pass recommendation. Thank you, Councilmember Bell. She has moved adoption of Ordinance 2020 337 with a deposit recommendation. Thank you, Councilmember, for making that motion. I'll ask if there are any amendments, I guess, before we move to speeches on the ordinance as introduced. Councilmember Lambert. You. So far. And I asked this before, but I asked if there's any chance that this will go on for ten years, 20 years, 30 years. And what would be the cost to each citizen? Average cost that 60%. Median income, 80%. 100% median income. So we know what this costs, the people who will be paying for it. Sure. So this is an ongoing tax council member. So there's not a sunset date in it. And as far as the expected cost for each individual and it vary greatly, I can try to ask the wife about possible per per individual costs. And then I'd follow up with you offline. That would be great. Thank you. Dombrowski. Councilmember Dombrowski. Thank you, Mr. Chair. I distributed two possible amendments for the purpose of surfacing them, but I am just by way of background. Maybe Kendall Moore would need to advise on this, but the ordinance here makes a couple of appall, I think makes at least it makes two policy calls. One is under the state statute, I think these funds are restricted to 0 to 60% ammo. We we're deciding here today to limit it to 0 to 30. I want to say I support going into that space. Our regional affordable housing plan said we should use public resources to fill the 0 to 50% niche as much as possible because that's that's where there's, you know, the deepest need. And we thought we could do the most good. And I think there's 44,000 units of need there. We're going even deeper here with the 0 to 30. So I'm not objecting at all to the to the policy. I just you know, we have a regional policy committee. And to the extent this is a making a regional policy, it may be the safer place since we're going to be asking bond counsel to issue an opinion letter on this, to issue 400 plus million dollars of debt would be to make sure we're being very true to our our processes with respect to referral to the regional committee. So I had an amendment that would read the intent was, although I don't think it's quite there was to make sure we're just true to the statute in the in the ordinance that adopts the tax and we don't have any problem. I don't from a policy perspective, I will say again, I think that it's right with respect to the Executive's proposal to prioritize the 0 to 3. I know there's some issues around that, but that's where I am on that. The other amendment I, I want to again, I think it's probably more appropriate over in the implementation plan, but the statute has this 60,000 city population provision where it says in those cities the county will spend not we don't turn the money over to the cities, but the county will spend 30% of the funds raised in those jurisdictions, in those jurisdictions. I think maybe all of us except Councilman Rocco Health and Councilmember Rizal, I have cities in whole or in part that are under that. The North End is a collection of cities less than 60,000. And they, in my discussions with them, want to be a regional team player and everything and have looked at adopting the tax like some cities are doing, that they would rather partner with the county but have some return on the money raised in their cities to help house folks and provide housing in the communities. So my my Second Amendment let me it's the First Amendment, but maybe I'll call it the second councilmember. Lambert You might like that better. Councilmember Dunn two Anyway, sorry. The amendment would say, hey, if it's, if cities want to or more want to get together such that their population would exceed 60,000 to for the purposes of partnering to provide these services and housing in the community that we would spend that 30% we treat them like a 60,000 population city. And I, I think, you know, one, it's kind of a regional distribution of fairness. Issue two, there's needs. Countywide three, I think it will force us to not, frankly, go provide all of this housing in a very few communities. And we'll kind of share the share the benefits and the burdens, if you will. So I don't know that any cities would would do it. It doesn't dilute the county's big picture spending in any way or anything else, but it says, hey, let's let's provide resources. County, county wide. I think it probably needs some more discussion and dialog. So I don't intend to offer it today. And again, I'm not sure this is even the right vehicle under our rules, but I want to service it with you all, let you know because this is moving so quickly and you're seeing that by cities adopting some of the tax locally. But maybe there's an opportunity to strengthen the regional partnership here, but giving a little more another path for some of our smaller cities to come together and be participants. So I want to surface those to you today. I will say, well, I have the floor, so maybe I can just speak once, Mr. Chair, that I'm very supportive of this initiative I introduced in 2017, the 10th of a penny sales tax under the statute when it took the voters approval, it wasn't just council magic then. So I really do. Even though this is a regressive tax, I think that it's the right thing to do and we adopted it then. We have been collecting revenues for three years and be well on our way. But. It. It really could if if it works out, if we were able to bring on 2000 units, make a real dent in the 4500 to 6500, depending on which number you look at after the third door coalition's identified need. And I like, I like the acquisition notion. I know we have to go down to Olympia and get a change there. At least I think we do because it shrinks the time from four or five years to design and permit and construct the unit down to something a lot less. The costs are lower. They could be half as much as the $450,000 a unit that we pay for permanent supportive housing today. So I like the notion a lot have been pushing all year to use Cares Act money to acquire hotels. So I think that could be good in my district. I want to say, you know, these aren't easy. We are supporting the city of shoreline and they can get a housing authority to acquire a care facility with a little over 60 rooms to bring on shelter service, but in a permanent and supportive way with Lake City Partners . So I'm pretty excited about this because I think it can make a big dent in it. But I'm going to ask my colleagues to take a look. Even if you don't have a lot of little cities, you might have a smaller city that would like to partner with one of your bigger cities and do that. So I wanted to service that. I appreciate you giving me the chance to do that today, Mr. Chairman. I look forward to supporting this legislation. Thank you, Councilmember Dombrowski. And as the sponsor of this legislation before us today, I share your excitement for the opportunity it presents to us. It truly gives us the opportunity to address chronic homelessness, people experiencing chronic homelessness, and move them into not only housing, but supportive housing in ways that we don't have the resources identified elsewhere to do. And I agree that the sales tax is not a progressive tax form. But the most regressive thing about the conversation we're having today is 4500 to over 6000 people living in chronic homelessness on the streets of our communities throughout King County. That's the most regressive thing we will consider all day. And the progressive response is to move them into housing with the support they need to be successful in doing that. The plan brought before us from the executive and as introduced, would allow us to bond against the sales tax for about $400 million in the first year and be able to take care, take advantage of market conditions to buy single room occupancy style housing, be it motels or nursing homes. Given the current market conditions offered for sale and particularly affordable and gives us the ability to strike fast, to move fast with a sense of urgency and nimbleness that we have lacked, frankly, in our response to chronic homelessness. Since the emergency for Homelessness was declared in November 2015 by the then mayor of Seattle and the county executive. This gives us the opportunity to respond and invest. And in one count of those who are chronically homelessness, there's a particular need, I think, to cite and be aware of the disproportionality that we'd be addressing because of that population. Fully 23% are Native American or Alaska Natives, and 12% are black or African American. The disproportionality within homelessness in general, but particularly within this chronic homelessness population, is critical, and this is a key opportunity for us to have a coordinated response and address moving people into home housing in which they can be successful . Other discussion questions. Debate. Colleagues. Councilmember Dombrowski. I'll just jump in I think because some folks may be looking at in the executive prepared a helpful infographic summarizing the proposal and I just want to know they did not I think by accident missed in these authorized populations veterans. But your legislation as introduced, Mr. Chair, does include all of the groups in the statute, including veterans. Very much. Very much so, yes. Having no further discussion. I asked the clerk to please call the roll. And. Q Mr. Chair, Councilmember Pelosi, I. Councilmember Dombrowski. I. Councilmember done. Councilmember Caldwell's. Councilmember Lambert No. Councilmember Autograph. Councilmember one right there. I. Council members online. By. Mr. Chair. I count council member Dundas and I. Mr. Chair, the vote is eight eyes. Council member Lambert wants no. Thank you. By your vote, we have given a do pass recommendation to ordinance 2020 337, and we will expedite that to full council a week from today. That takes us to. Ms.. Sanders is it pardon me? 0319 Which is the fun creation ordinance. In ordinance 2020 319. Councilmember Belushi. A move adoption of the Duke's recommendation. Council Member LDC has moved adoption of Motion Ordinance 2020 319 with the Duke Pass recommendation. This creates the fund both through housing. Seen no discussion. Wait, can we have a clarification? These two are coming fast. Mr. Chair, I just want to. Hear a summarization of what this one is. Of course, Ms.. Sanders. Or so this proposed ordinance would create the health through housing funds. That's where the money would be deposited or after collections of the sales tax. So you'll see the healthier housing fund in the proposed biennial budget. And this it actually adds it to code as a fund. Further questions. Madam Clerk, if you please, call the roll. Thank you, Mr. Chair. Councilmember. Thank you. I. Councilmember Domanski. I. Councilmember Dunn. I. Council member Coles. Councilmember Lambert. Council member of the girl. I. Councilmember Vaughn. Mike, there were five. Council members online. Hi. Mr. Chair. Hi. Mr. Chair. The vote is 990 now. By. By your vote, we've given a do pass recommendation to ordinance 2020 319. We'll send it to full council, will expedite it to next week's agenda. And given we have the previous motion, we will not put this one on consent. Pardon me. Council member Belushi. You're a mute councilmember. Thank you, Mr. Chair. I ask the court to send me on as a co-sponsor on both of those last few ordinances. Please. Me too. I will do that for both of you. Thank you. Thank you both. That takes us to item. Nine and my Mr. you can add DEMBOSKY on the tax one. Well, they. The chair will happily pause for anybody else. All right. The next item for discussion in possible action is a motion that would improve the Metro Safety Plan structure. I'm so sorry to interrupt, but I would like to be added on to the 20319. To define the creation. Yes. And on that one. I'm sorry. Oh, 337. Miss Stedman. I have that added Council member Caldwell's 203 37 So here's what if you don't mind me just reiterating what I have, please do. Okay, three seven. I have council members. DEMBOSKY saw her line folded. She and Caldwell signing on. 403198 have council members song I don't do Chee. That's all I happen. Hopefully there were no additions. And I see no other movement. I apologize, Mr. Chair. I believe I was a co-sponsor of both of those originally. Is that correct? Can I confirm that the declare. That you are a co-sponsor for 0337 council member of the Grove. You are not currently a co-sponsor for 0319. I'll feel free to add my name. What the heck. Thanks. I won't do that. Thank you. Thank you, Mr. Chair. Again. My pleasure. Member. All right. Now we'll. Our next item is discussion and possible action on a motion that would approve the Metro's safety plan in accordance with the Federal Transit Administration regulations. Mary Bergen on council staff is here to provide the South report.