Finance, Native Communities and Tribal Governments Committee 1/20/2026

Wonderful, the January 20th Finance Native Communities and Tribal Governments Committee will come to order at 9.30 a.m.

I'm Dan Strauss, Chair of the Committee.

Council Member, Vice Chair Rivera is excused.

Will the clerk please call the roll?

Council Member Kettle.

Here.

Council President Hollingsworth.

Council Member Saka?

Here.

Chair Strauss?

Here.

That is three present, one or two excused currently.

Thank you.

And council president is excused until she arrives.

We have one item on the agenda today.

It is an ordinance related to the Seattle social housing tax, which was approved by voters last February and is the interlocal agreement to be able to pass the funding from the tax collector, which is the city of Seattle to the entity, which is the Seattle housing development.

Sorry, I did not have these notes with me.

The Seattle Social Housing Developer, SSHD.

I can see the acronym and sometimes you gotta spell it out.

So if there are no objections, the agenda will be adopted.

I also wanna note it is Council Member Rob Sacco's birthday.

Happy birthday, Council Member Sacco.

We also have here with us today Jamie Carnell, who is our Finance Director.

This will probably be your last meeting with us here.

Director Carnell is the first woman to hold the position of Director of Finance in our city.

Beyond that, Director Carnell has had 29 years, is the way I'll put it, 29 years of history with our city working in almost every different position within the Department of FAS, specifically within the Finance Department of FAS.

Director Carnell, thank you for your service to our city.

You've made us a better place.

And we'll get into this in just a moment.

If not for the urgency of the legislation before us, we would have canceled committee because as part of my Association of Washington City's board member position, I have to be at a board meeting in 117 minutes from now in Olympia.

And so we will move through this.

This is not the last time this will be in committee.

We will have this in committee again.

and I want to thank Council Member Foster, not a member of the committee joining today.

She and I have partnered in getting this work across the finish line and Director Carnell has been working on this at least with me since October, November.

And so we just wanted to make sure that there were no beats missed in all of the transitions in our city.

The interlocal agreement cannot be changed.

The ordinance can be changed.

Either way about it, there are not many options on how to produce this interlocal agreement because it's very straightforward.

We'll get into that in just a moment.

I wanna see if there's anyone signed up in person.

No one signed up in person for public comment.

Do we have any remote participants today?

There are also no remote participants.

Wonderful, so we will not open public comment today unless either of you would like to speak today.

Seeing none, thank you.

So we have Tiffany and James from the Seattle Social Housing Developer and spell it out with you now.

Thank you for being here today.

I know we caught up briefly before committee and I'm looking forward to connecting with you again soon.

With that, we will move right into the first item of business.

Clerk, will you please read the first item into the record?

Item one, Council Bill 121153, an ordinance relating to the social housing tax.

This item is for briefing and discussion.

Presenters include Director Jamie Carnell and Andrew Robertson of the Office of City Finance, along with Jennifer Labreck of Council Central Staff.

Thank you.

And we have at the table, I'll let you introduce yourselves, run right into the presentation.

At the end of the presentation, Council Member Foster, I'll pass it over to you as co-sponsor of this legislation, as I've already made my opening remarks.

Please, over to you.

Andrew Robinson, Office of City Finance in the Partnership and Policy Group.

Jamie Carnell, Office of City Finance, 31 years here at the City of Seattle.

Good morning, Jennifer LeBrec, City Council Central Staff.

All right, Megan, we might need a little bit of help.

We'll take a little bit of technical help.

As we're doing that, Council Member Foster, anything you'd like to share off the bat?

Otherwise, I could say a few things.

Sure, I'm happy to.

Thank you, Councilmember Strauss.

I'm really excited for this presentation today and this important work to make sure that we are continuing to move the ball forward on what we need to do to get social housing online, namely making sure that we have this interlocal agreement that allows the city to begin transferring funds to the developer so that the developer can continue and be successful implementing the will of the voters.

So really excited, Director Carnell, to hear from you and your team.

Very well said, over to you.

Great, thank you.

So one point of clarification, the initiative 173 cannot change, but the amendment, and we'll talk about this during this, can be amended as necessary.

So just wanted to get that clarification there.

So first slide, so social housing tax.

Social housing tax passed through initiative 137 was passed February of 25. It's retroactive to January 1 of 25 and the city is bound by I-137 to transfer the proceeds to the developer.

This initiative is about a 5% tax which is imposed on employees doing business in Seattle for any annual employee compensation above a million.

The 25 tax filing is due January 31st of this year and future filings will be made quarterly.

We are responsible, the city of Seattle is responsible for implementing and administering the tax, including the collections and transfers to the developer.

The ILA that we are discussing here is the mechanism for the city to complete the collection and the transfer of the funds to the developer and up to 5%, but no more than 2 million of the annual tax revenue may be allocated to the city for administrative purposes.

Because the 25 tax proceeds will not be collected until January 31st of this year, the City and the developer entered into an agreement for a loan of up to $2 million for the developer to allow to continue its operations in 25. The loan principal on that is not to exceed $2 million.

The interest accrues at the City's cash pool rate, and both the principal and interest of the loan will be reimbursed through the first tax collection this year.

So just wanna go through the timeline quickly on the ILA.

We sent the initial draft term sheet to the developer in July of last year.

In August, the developer proposed changes to the terms.

The first draft was sent back to all involved parties in October of 25. And the city and the social housing representatives met several times from October to early December to discuss and update the ILA.

On December 3rd, Housing Developer CEO at that time approved the draft and then the Housing Developer Board of Directors approved the draft ILA on December 18th.

The ILA does state that the first transfer of the tax proceeds will be initiated by March 2nd and this ILA must be approved and in place by the date of that transfer.

So the purpose of this interlocal agreement, it's really the main purpose to establish the terms and conditions under which the tax will be collected and transferred outside of what's already mandated by I-137.

The ILA defines the city's administrative support, including how the city is reimbursed, the eligible reimbursement costs, and how the city tracks the administrative support costs and reports those to the developer.

This agreement more clearly defines the roles and responsibilities of both the city and the developer, including how the developers use the funds to accomplish the goals of initiative 135 and 137, and how the city is acting as the applicable tax authority and responsible only for the administration collection and distribution of the tax proceeds.

Finally, with this analytical agreement, we will set the dispersing tax proceeds schedule and the reporting requirements and deadlines for the city and the developer.

So just a little bit about the terms included within the ILA.

It's a five-year term with an automatic renew, and there are procedures and timelines for either amending or terminating the agreement.

The tax volumes for all of 25 are due January 31st of this month.

The city anticipates receding those taxes around February 20th.

and then the next step is that the city will transfer funds from the gross proceeds in the following order.

So the loan interest reimbursement, the loan principal reimbursement and then the administrative implementation cost reimbursement.

Finally, we will initiate, the city will initiate the transfer of the net proceeds to the developer on March 2nd and this agreement as we have stated must be in effect before that time.

The process for 26 will be likely, it's going to be mostly the same except for a couple of different changes.

In 26 these filings are due quarterly and then one month following the end of each quarter we will receipt the tax proceeds in the similar fashion and then the administrative expense reimbursement will then be made with the net quarterly tax proceeds being transferred one month after each filing deadline.

So that's the basis of the agreement and happy to take any questions.

Wonderful, thank you.

I'm gonna start with just a few questions to orient all of us.

Council President Hollingsworth was with us as this presentation started, and so I just wanted to note that for the record.

Understanding that I-137A passed by the will of the voters within the last two years, that bill, that cannot be changed for two years from the certification of that election.

Is that correct?

and the interlocal agreement that we have before us today can be changed but it would restart the entire timeline and maybe if you could pull up that timeline again.

Is that a correct understanding?

I think it doesn't, I would say that it wouldn't change the disbursement timeline.

I think what you would be changing is probably some of the administrative sides around that.

Andrew, do you have anything?

You're a little bit more in the weeds than I am on this one.

I'm gonna refocus my question on this timeline here.

If we were to change the interlocal agreement at this committee here, that would restart the process that you have on the screen right now.

Is that correct?

Great, but then the ordinance that is before us that we are passing that has this interlocal agreement, the ordinance can be changed even if the ILA, and this is a great time.

Jennifer Labreck, council central staff, I forgot to call on you to give us a rounded presentation.

Here you are.

I think I will just address your question.

So you are correct.

So I-137 was passed by voters in February of 2025. And so it cannot, just as you say, it cannot be changed for two years, which means that The city cannot, council or the executive cannot impose additional conditions on the transfer of I-137 proceeds from the city to the Seattle social housing developer.

We are essentially collecting the funding, the taxes on their behalf and then passing them over.

In terms of the ILA, I think maybe the way that I would put this is that the ILA is a negotiated document between the executive and the Seattle social housing developer that was approved by their executive board.

And so the ILA council could have an amendment that changes the ILA, but what is good to know is that that would involve going back to the social housing developer and getting approval or negotiating with both the director, the CEO and the board about those new terms.

So it's possible, but it does add time to the process as you state here.

There is essentially an ordinance that authorizes the executive to enter into this ILA and then an attachment, which is the ILA itself.

The ordinance itself can be amended without having to go back to the social housing developer and negotiating that.

So I think that's the distinction you were trying to make.

Thank you, Jennifer.

Anything else that we should consider from your central staff analysis on this bill and interlocal agreement?

No, I think just as we covered here in terms of understanding sort of where the options are to make changes where they aren't and then what the implication is on the timeline.

Wonderful.

I have one more question then I'm going to pass it over to Council Member Foster.

As co-sponsor of this bill, you'll have the next round of questions and we'll open it up to the floor.

Colleagues, I would love to end this committee by 10.30 at the latest.

Last question here right now is, Director Carnell, can you help me understand what different I guess, flavors of an interlocal agreement like this are there?

I mean, how many different options really are there?

Because it's my understanding that this is a very straightforward document that is essentially outlining our roles and responsibilities as the tax collector that passes those proceeds on to the developer as outlined by voters.

Yeah, I would say there's really no different flavors in this.

This is very straightforward.

It's about how we collect the tax, how the loan proceeds are reimbursed back to the city, and then the schedule of collecting that and dispersing those funds that truly do belong to the social housing.

We are just the vessel by which those taxes are given to the social housing developer.

Wonderful.

Anything to add, Andrew?

No.

Wonderful.

Jennifer.

I will just add exactly to what Director Carnell said, which is there are many different flavors of ILAs, right?

I mean, we have some very complicated ones.

I worked on the case RHA one last year, but in this particular case, I-137 sets the conditions for how we transfer the funding and council cannot at this point in time impose any additional conditions upon the transfer of that money.

So really, just as Director Carnell says, the ILA covers kind of the nuts and bolts, like how do we collect the money, when do we transfer it, how do we process, how do we deal with appeals if a filer has an appeal on a decision, how do we do refunds and credits, right?

It is truly the nuts and bolts of how you transfer money from the taxing entity to the social housing developer and while we're in this two-year period where initiatives can't be changed, there's really not a lot of other options there.

There might be a few, but just to be clear, a lot of the conditions are just established under I-137.

Thank you.

Councilmember Foster is co-sponsor of this legislation.

You are recognized to ask questions.

Thank you so much, Chair, and I appreciate you having me in your committee today and a pleasure to work with you on this.

Appreciate your leadership with FAS and all the collaboration that was taking place over the last few months before I got to council.

And I will say again, thank you director for your presentation today.

No further questions, just a brief statement, you know, coming in as chair of the housing committee to say, I think this is a really important moment for our city and a really important moment for the work that's been done to advance social housing in Seattle.

And I look forward to being able to collaborate with the developer and appreciate the Interim Director's presence here today from the Seattle Social Housing Developer and I believe also the presence of the Director of Acquisitions here as we go into this next phase between the City, the Seattle Social Housing Developer to make sure that this project is successful and does deliver on what we all want here on Council and what all of our residents want, which is an expansion in the availability of affordable housing for residents all across Seattle.

So we are looking forward to making this a success and working collaboratively.

And I think, colleagues, you can expect to see the developer in my committee in very short order.

So thank you so much.

Thank you.

Colleagues, any questions?

I see Council Member Kettle.

Thank you, Chair Strauss.

Ms. Carnell, thank you.

Director Carnell, thank you for being here and thank you for your service to our city.

It's been fantastic, just to be blunt.

Ms. LeBrecq, thank you for your basic point of nuts and bolts.

That's what we need with the social housing developer program.

We need to learn from the KCRHA experience.

and we need to keep the focus on just getting the nuts and bolts done.

So I'm glad that this is straightforward, that we're not giving a loan where the developer needs to give us a million dollars back in interest.

You know, all these little pieces We have to learn from the experience of KCRHA and I'm glad, Ms. Lebrack, you mentioned the other agreement with KCRHA.

I'm glad we're in a better place now with KCRHA and that we're moving forward.

But I hope and I believe that the developer represented today by our interim director, that they will step forward and take those lessons learned and make sure that we're doing it right.

and my hope too for them to engage with us.

We had a statement of legislative intent in the fall during the budget process where we're updating our Seattle Housing Investment Plan.

We had one that focused on us in terms of the city, in terms of affordable housing.

But now we're looking a little bit broader in terms of what is happening with permanent supportive housing on one side.

And now we have social housing.

And so my ask for KCRHA as well, but for the SSHD, if I said that right, is for them to engage with OH, Housing Office, to ensure that we're not being duplicative, that we're working well together, and there's a strategy that shows how social housing blends in with affordable housing in addition to the permit supportive.

And so that's my ask, and so I guess it comes down to, let's keep this to nuts and bolts.

Basic, good governance, and getting the job done.

So thank you.

Thank you.

Colleagues, any further questions, comments?

Nothing further.

With that, this is the second piece of Seattle Social Housing Developer legislation that has come to this committee.

This will be the last piece of Seattle Social Housing Developer legislation that will come to this committee.

The first was our loan that we passed last year and the second is this financing interlocal agreement and then Council Member Foster as Chair of the Housing Committee.

You will be taking the lead and I look forward to following in your footsteps there.

So with that, colleagues, any final questions, comments?

Seeing none to the committee table, anything else to share today?

With that, this bill will be back before committee on Tuesday, February 3rd, where we expect a vote.

Great.

Well, with that, there's no further business, and this does conclude the Tuesday, January 20th Finance Native Communities and Tribal Governments Committee meeting.

Our next committee meeting will be on Tuesday, February 3rd.

Thank you, Director Carnell, for your few decades of service to our city.

Thank you so much.

Seeing no further business to come before the committee, we are adjourned.

Happy birthday, Councilmember Saka.