Economic Development, Technology & City Light Committee 7/13/22

[Music] council president juarez here councilmember salmond president councilmember nelson present uh or present by present greetings everyone there are two items on today's agenda the first is a presentation and discuss discussion of councilmember peterson's draft legislation regarding caps on delivery service fees and council member peterson will be joining joining us to discuss his legislation which is also sponsored by council member strauss he cannot stay for the whole discussion however the second item is our second discussion impossible vote on seattle city lights 2023-2028 strategic plan and rate path if there is no objection the agenda will be adopted seeing no objection the agenda is adopted we'll now move into public comment on items listed on the agenda let's roll them hello seattle we are the emerald city the city of flowers and the city of goodwill built on indigenous land the traditional territory of the coast salish peoples the seattle city council welcomes remote public comment and is eager to hear from residents of our city if you would like to be a speaker and provide a verbal public comment you may register two hours prior to the meeting via the seattle city council website here's some information about the public comment proceedings speakers are called upon in the order in which they registered on the council's website each speaker must call in from the phone number provided when they registered online and use the meeting id and passcode that was emailed upon confirmation if you did not receive an email confirmation please check your spam or junk mail folders a reminder the speaker meeting id is different from the general listen line meeting id provided on the agenda once a speaker's name is called the speaker's microphone will be unmuted and an automatic prompt will say the host would like you to unmute your microphone that is your cue that is your turn to speak at that time you must press star six you will then hear a prompt of you are unmuted be sure your phone is unmuted on your end so that you will be heard as a speaker you should begin by stating your name and the item that you are addressing a chime will sound when 10 seconds are left in your allotted time as a gentle reminder to wrap up your public comments at the end of the allotted time your microphone will be muted and the next speaker registered will be called once speakers have completed providing public comment please disconnect from the public comment line and join us by following the meeting via seattle channel broadcast or through the listening line option listed on the agenda the council reserves the right to eliminate public comment if the system is being abused or if the process impedes the council's ability to conduct its business on behalf of residents of the city any offensive language that is disruptive to these proceedings or that is not focused on an appropriate topic as specified in council rules may lead to the speaker being muted by the presiding officer our hope is to provide an opportunity for productive discussions that will assist our orderly consideration of issues before the council the public comment period is now open and we will begin with the first speaker on the list please remember to press star six after you hear the prompt of you have been unmuted thank you seattle all right we will start with our remote speakers and everyone will have two minutes to speak please state your name hello please state your name and the item to which you're speaking let's see we'll begin with steve hooper followed by anna powell steve press star six do we have him one moment please i'm here uh sorry councilmember there was a little bit of a technical difficulty there uh chair nelson thank you for for uh having me today my name is steve cooper i'm the president of the seattle restaurant alliance uh and uh share the same title at ethan's stole restaurants as part of my day job uh i wanted to speak to the third party delivery legislation that council member peterson and strauss are are presenting today as as i think many on the council know this was a critical lifeline for nearly every restaurant group across our great city through the bulk of the pandemic when restaurants were fully shut down however it was not just about the pandemic and the delivery only window there is a complete pricing power disparity when it comes to these third-party delivery services which existed before the pandemic but the pandemic only uh allowed us to actually see in very real terms uh the result of this uh new kind of business model with customers demanding delivery uh has been that restaurants have had to kind of change how they operate and the fact that there are only a handful of players in the delivery market means they can charge 30 or greater in many cases for a fundamental service that all should be able to access the second part of the equation is one of equity i know this council is completely committed to an equitable and just economic recovery and one of the things that the large third-party delivery platforms are able to do is price differentiate based on the size of the business restaurant groups like mine enjoy a very very steep discounts on those delivery services whereas the average immigrant owned small mom-and-pop restaurant is paying many multiples of what a restaurant group like ours would need to pay for the exact same service that's just fundamentally unfair and really just taking advantage of the situation so i encourage the council to support councilmember peterson and strauss's legislation and i appreciate everyone's time today thank you very much thank you very much our next speaker is anna powell hey karen nelson and members of the committee my name is anna powell and i am the government relations manager for doordash in the northwest bordash knows that price controls lead to higher costs for customers fewer orders for local restaurants and fewer earnings opportunities for our dashers that's why we're eager to work with the city council to find a better solution that won't hurt consumers and workers while we recognize that the pandemic is not over restaurants continue to reopen and restrictions on businesses have lifted seattle restaurants options when it comes to serving their customers including through our new tiered pricing system in april 2021 doordash debuted new pricing plans that give small and medium-sized sized restaurants the ability to choose the level of service they want which includes a 15 commission rate and the flexibility to change their plan whenever they want doordash does not support permanent price controls and we know it is imperative to get the details of this legislation right as to not hurt the very restaurants you're trying to protect we look forward to working with you to find a solution that works for everyone thank you thank you very much the last speaker that we have on our list is destiny sund and if anybody else out there would like to speak you can uh sign up using the link on the agenda yesterday welcome star six okay well we'll come back to you if uh after our in-person comment if uh if you'd like to speak one more chance right now though please press star six all right hang tight we'll get back to you okay our first um and only in-person commenter is alex zimmerman please begin okay where is my two minute oh so sorry uh let's make sure his mic is on and then start the timer my dirty damn nazi fascists my name alex zimmerman and please show my face stupid face but this is my face okay i want to speak about seattle light before damn nazi revolt you know what has been i come to seattle light commissioner every time for a couple years and give my opinion professional opinion about business about money only nothing political is they never listen to me never never and don't have sense because manager for example have approximately four hundred thousand dollar salary so for four hundred thousand dollar salary we possibly hire somebody who's smart not stupid or crook yeah same happen here for example people who cover the seattle light sometimes have a phd so they're supposed to be smart no nothing happened it's exactly what has happened here for many years and i come to this place three thousand times guys when you pay four hundred thousand dollars approximately four hundred thousand dollars for manager or you have a pg you possibly been also very stupid in exactly in business you know what this means because i don't understand and i'm a professional you know what has been consulted i don't understand who's this freaking idiot who steal money from us and acting like a psychopath and crook is stealing money from us so it's yet to lie steal money from us we're talking about this for many years nothing change and counsel her who have a phd nothing change this too so what is going on we're falling in seattle and falling and falling right now with total and bankruptcy totally in deep hold right now you cannot stop and says because you are crooked by definition thank you very much councilmember nelson uh destiny's son has joined the line again okay go ahead destiny you've got two minutes [Music] hi this is a destiny fund and i'm speaking on behalf of the food delivery services capping the feet of 15 and my apologies i do have my infant in the car and she has chosen this time to complain uh i am pulled over however um so my business is uh the confectional it's a small bakery in uh pike place markets and i i was closed the majority of the uh the roughest part of the pandemic and um food delivery services um taking 30 percent is is not an option for me so if it goes back to 30 percent i won't be able uh to to use them um i'm currently in debt like many businesses are over a hundred and fifty thousand dollars and it's my profits on one cheesecake are not 30 percent so it's not sustainable for me to use a food delivery service if they go back i've tried to negotiate with them in the past and they just won't negotiate with me and it's my understanding that they will with larger businesses um chains that sort of thing it just seems to me that a small business with one location uh should uh have the option of at least um you know being able to negotiate and i would like to use the food delivery platforms um so uh i i just i i am for keeping the the 15 cap okay i'll save everybody sorry thank you thank you for your time thank you destiny okay our public comment trade is now closed will the clerk please read item one into the record agenda item number one an ordinance relating to regulations of food delivery delivery platforms establishing requirements for food delivery platforms providing delivery services to restaurants and amending chapter 7.30 of the seattle municipal code for briefing and discussion all right i'll just tee this off briefly um there are over 4 000 active business licenses for restaurants and other businesses in the food industry which was one of the hardest hit when the pandemic began and many came to rely on delivery services services to stay afloat so um i was not on the council when the 15 cap was uh was imposed but it's now my my job to support uh to support small business recovery so i am uh hosting this item in this committee and um i will turn it over to uh councilmember peterson and let's see karina bull is also uh on central staff and she will be presenting as well all right councilmember peterson take it away thank you chair nelson thank you for making time during your economic development committee to discuss this draft bill which i believe is consistent with your steadfast support of seattle small businesses i appreciate your hearing this bill today as a draft on your agenda and then making room to vote on the bill at your next committee meeting on july 27 because we're we are racing to beat the clock to get this adopted so that seattle restaurants do not fall off a financial cliff and to support seattle's diverse restaurants and co-sponsoring the small business legislation with councilmember strauss to make permanent the 15 percent cap on fees that third party delivery companies can charge this legislation would add flexibility by enabling a restaurant to opt out of the 15 cap if it wants to receive additional services from the delivery companies a sensible 15 cap on fees was originally adopted as part of the mayor's civil emergency order in 2020 and has been helping many local restaurants survive the pandemic before the pandemic out of town delivery corporations were charging seattle restaurants delivery fees as high as 30 percent on each food order because the pandemic related civil emergency is likely to end soon our diverse local restaurants face a financial cliff unless we take immediate action let's adopt this legislation as soon as we can so seattle's diverse local restaurants can not only survive but also thrive in every neighborhood thank you thank you councilmember peterson and karina you're up thank you chair nelson i am karina bowle i am with city council central staff and i am going to put up a powerpoint presentation all right can everyone see that all right so this morning i am going to provide some background on food delivery services in seattle and also provide a summary of proposed legislation that is co-sponsored by council member peterson and council member strauss that would permanently cap delivery service fees the policy objective of the legislation would be to require food delivery platforms to engage in agreed upon reasonable and transparent business transactions when operating in seattle to protect the interest of consumers and restaurants and the way to achieve that goal would be to amend existing regulations on food delivery platforms and that is smc 7.30 as a reminder right now food delivery platforms are required to enter into an agreement with restaurants before the food delivery platform offers pickup and delivery services background on food delivery services is that consumer demand for food delivery services is steadily growing as a public commenter noted that growing demand started pre-pandemic but it did sharply accelerate during the pandemic food delivery platforms charge up to 30 or more for their delivery services although many restaurants are interested in providing delivery to their consumers and to their customers if they are not able to provide those services in-house because they don't have labor capacity then food delivery platforms help to bridge that gap so that they can provide that service restaurants do have narrow profit margins of 10 or lower with full-service restaurants having even more narrow profit margins of around three to five percent so if food delivery platforms are charging up to 30 or more restaurants have narrow profit margins you can do the math and understand that high fees can equal drastically reduced profits as restaurants are increasingly relying on food delivery and customers expect this kind of service it can add to struggles to stay in business for restaurants and also as noted in public comment there are about three major companies who are operating in the country for providing food delivery services and because of this marketplace dominance restaurants do have limited bargaining power to negotiate different fees as i mentioned the use of delivery services did sharply accelerate during the pandemic and noting the impact of these high delivery fees on companies the mayor issued a civil emergency order in april of 2020 that capped all fees for platform delivery services at 15 a number of months thereafter the washington governor issued a a proclamation for across the state to have a 15 on just delivery fees cap and then an 18 cap on all platform fees across the country there were numerous cities that were in states that had these emergency orders capping delivery service fees in june of last year the governor rescinded the state proclamation in anticipation of easing restrictions on in-house dining that happened later that month presently the mayor's civil emergency order is still in place but it will expire upon the impending termination of the civil emergency trends and recent developments is as i said earlier just some statistics on how food delivery platform services have grown from pre-pandemic through now and a similar growth is expected through 2026 food delivery platforms are becoming a standard business operation with 77 of restaurants this is national data offering services through these platforms and business resulting from these uh platforms facilitating delivery is 21 to 30 percent of current restaurant sales recognizing the need to address these problems four cities have enacted laws that permanently cap delivery service fees minneapolis new york city philadelphia and san francisco i understand that portland is also considering a permanent cap on delivery service fees this legislation would permanently cap delivery service fees it is similar to the emergency order but does have some unique provisions the first is that it would clarify that there must be an agreement between a food delivery platform and a restaurant for any fees related to delivery services so there is mutual consent there are no surprises next food delivery platforms would be required to provide delivery services for no more than 15 percent of the purchase price of each order what is different about this permanent cap is that there would be an option for restaurants to opt out of the feed limitations and pay higher fees for additional services there would be conditions for that opt out to pass legal muster food delivery platforms would need to offer a service package option that includes delivery services for no more than 50 so there would always be an option for restaurants to pay no more than 15 percent for delivery food delivery platforms would need to provide this option without penalty to the restaurant within 30 days of the restaurant's written request for it and then restaurants would only be allowed to charge higher fees for services in addition to delivery services which brings us to the question of what are delivery services the legislation provides a definition that delivery services at a minimum would need to include listing the restaurant and making the restaurant discoverable on the food deliveries platform and delivery services would not and also i'm sorry facilitate or perform the delivery of food and beverage orders and delivery services would not include other services provided by food delivery platforms such as advertising services search engine optimization business consulting or credit card processing quick note that the language on the slide does not exactly track the legislation so the legislation does says does say that the restaurant would need to be listed and discoverable on the food deliveries platform it doesn't specify all modalities enforcement would be the same enforcement protocol as exist for the existing regulations of food delivery platforms the consumer protection division would enforce it that division is in finance and administrative services it would be a civil infraction with a maximum penalty of 250 dollars to the food delivery platform each day a violation would be a separate violation restaurants could also have a private right of action so there could be an individual or class action lawsuit and then any penalty that is collected and retained by the city would be put into a an account in the general fund that would support outreach and education to restaurants on the regulations so that restaurants would be aware of the requirements the effective date of this legislation would be on the later of the mayor's termination of the civil emergency or 30 days after the mayor approves the legislation the idea is that the current regulations would stay in place as long as possible then the hope is that there would be a seamless transition from the end of the emergency to these permanent caps next steps is that the in the legislation would be introduced on july 26th it is not yet introduced this is just a draft that we're discussing today this committee would discuss and possibly vote on the legislation the very next day on july 27th and then council could vote on it as early as august 2nd if there was to be a second committee meeting to consider the legislation the earliest full council vote would be august 16th that is it for my presentation and i'm happy to answer questions thank you very much i am going to give the floor to council member strauss's co-sponsor thank you chair nelson uh thank you to councilman peterson for allowing me to co-sponsor this legislation i'm co-sponsoring this 15 cap on delivery fees uh that that can be charged to restaurants so that our restaurants are able to continue surviving and thriving so that residents of seattle are able to still order to go from their home and be able to afford the sandwich that they want as has been mentioned a couple times the 15 cap on delivery fees uh it was connected to the coveted state of emergency and it's important that as we continue transitioning out of this deep part of the pandemic that we are also able to keep this protection that has worked so well i want to thank steve hooper as well for bringing this forward sharon nelson i think i've spoken to you about the different case conferencing that we do in ballard for people who are homeless for people who are homeless and criminally involved and for people that are just committing crimes and this has a direct impact on our economic vitality our economic environment and it was actually steve hooper that brought this and started working with me on this last december and so steve i just want to thank you personally for continuing to keep your eye on the ball of the things that restaurants and small businesses need most this is one of those things and so we know that minneapolis new york philadelphia san francisco all have enacted laws that permanently cap delivery service fees and so we have model legislation to go off of so that we're not caught in litigation between small businesses and big businesses because we know that we need both types of businesses to have a very vibrant city and economy so thank you councilmember chair nelson for having this in committee i'm very excited about this legislation and thank you again to councilmember peterson for letting me join you in this i will need to excuse myself for uh another speaking event and then i'll be right back okay thank you i misspoke when i um mentioned uh that this morning you will be back oh you're great thank you thanks jim nelson okay councilmember peterson would you like do you have anything to add before we open it up to comments and questions from our colleagues no thank you okay councilmember herbald thanks so much uh yeah i do have a couple questions um so um the slide four um includes some some background information um just wondering if the data provided is focused on national numbers or or our local study and um also just wanting to ask whether or not the four cities identified here that have enacted laws to cap the delivery service whether or not that's uh limited to delivery fees or they conclude all fees that an app-based delivery company can charge a restaurant yeah thank you for those questions the data that i presented in today's slideshow is national data i couldn't find seattle-specific data for those items however there is some seattle-specific data in the findings in the legislation for example open table which is a reservation system online reservation system they are reporting that uh seattle's bookings are lower and they haven't rebounded and at the same rate as as is happening across the country which is indicating uh perhaps that more customers are maybe um still ordering from the restaurant are still eating at the restaurant but getting takeout or delivery or perhaps it's that there's fewer customers in general which again underscores that restaurants are struggling to stay in business and could need assistance as they navigate the post-pandemic world um also washington restaurant hospitality association did indicate that and this is in the findings too that restaurants incurred substantial debt during the pandemic and it will take a number of years for them to get back to the same starting place as they were before um as far as the other cities uh your question was about do they how do they distinguish between all fees and then delivery service fees and so um okay let me think about this well i know that new york city i believe caps all fees at 15 percent and then that's it and there's no opt out and our emergency order did as well correct correct our emergency order kept all fees uh the state order distinguished between delivery fees and then other fees 15 delivery fees uh only allowed to charge three percent more for other fees um this legislation would just have the 50 cap on delivery services so in in san francisco uh currently there is a 15 cap on all fees doesn't distinguish between delivery and other fees however there is an amendment that is moving through their board of supervisors right now that would define core delivery services with a definition that is very similar to the one proposed which is delivery services are listing the restaurant and then actually performing the delivery and then san francisco would also have a provision where the caps wouldn't apply to food delivery platforms that met certain conditions providing the 15 option and making it available to restaurants so that is distinguishing between delivery fees and other fees minneapolis and philadelphia both distinguish between delivery fees and marketing fees as well having a flat cap on delivery services and then allowing uh either restaurants to opt out or for the cap not to apply to platforms that at least offer that 15 option and then they can char the platforms can charge more for additional services so if san francisco's amendment goes through there will only be one city that doesn't distinguish between delivery fees and marketing fees that'll be new york thank you madam chair one more follow-up if i could sure go ahead thank you so much um just uh trying to correlate what my brain is telling me here um on slide five around the profit margins um and what we're proposing the cap to be um if profit margins are 10 or lower as indicated on uh slide two how are small businesses going to afford the cap of 15 or more it's a great question i think uh that it underscores that paying for delivery services is really hard for restaurants and in some cases restaurants may lose money on delivery and so restaurants may want to continue offering delivery because it could help the restaurant keep customers and get new customers that maybe eventually will dine in-house where there won't be this added fee to pay for them or to have them get their food and so i think your point is well taken that even with the 15 cap this is going to land hard or could land hard on restaurants but in the interest of maintaining a customer base and having customers still have access to food this is one way to address the situation thank you just a follow-up question from that is this a 15 cap we talk about it on on the on delivery but is this a 15 of the price of the food or is the tax and whatever tip somebody might have given and the um the 2.50 um hazard pay for drivers is that all what is it 50 of it is 15 of the purchase price of the food so it would not be 15 of those other uh charges that you just mentioned it would not include taxes fees or tips just the menu price of the food okay and um [Music] relatedly um has there been any so in the olden days restaurants if they wanted to deliver delivered on their own is there any information about self-delivery out there i have not been able to find information on self delivery i know that delivery what i've learned is that delivery is a tremendous part of restaurant sales across the board i think because there's things like pizza delivery which have been around for a very long time there's a lot of pizza delivered but i and i think a lot of pizza delivery staff could be employees in-house delivery but i i don't know those stats okay are there any other questions uh madam chair i do have a quick question just it might just be i might have missed it in the beginning um when councilmember peterson was discussing this legislation he in cash uh correct me if i'm wrong that there is a sense of urgency that we needed to do it soon i didn't really understand why that was so chair happy to speak to it go ahead uh thank you uh councilman uh council president juarez it's nice to sit in your old seat here i think i still have yeah i saw you in my chair you couldn't use my blanket it would have been fine glasses um anyhow the urgency here is that it's connected to the state of emergency and if the state of emergency is to end it at any time in the near future we want to make sure that there's not a gap betw for this type of legislation so that small businesses and restaurants aren't having an uneven playing field for those moments between a permanent regulation legislation and this civil emergency ending okay thank you um madame chairman i ask another question sure go ahead i was going to ask karina so did we get have we gotten any information in the last two years about when we've been doing the 15 cap back from any of the um restaurants or have we been collecting any other data did i think casper herbert's question did it kind of touch on that maybe i misheard that i'm sorry anecdotally uh what have heard about the 15 cap is that food delivery platforms are complying with it i haven't heard um complaints about it being violated i've heard that restaurants are very appreciative of it and i contacted seattle police department which is the part department that enforces the emergency order they do not have records of any reports of violation nor does finance and administrative services have any records of complaints for the existing food delivery platforms regulations requiring the agreement thank you thank you chair are there any other questions i have a couple okay so um how would it work is this because we mentioned uh council member juarez mentioned uh asked a question about um the civil emergency or what is uh what is the reason for urgency so would it work that restaurants have to renegotiate because i note that the legislation says opt out and not opt in so what are we anticipating for whatever existing agreements restaurants have with delivery services yeah so that's a great question the legislation does say that restaurants have to opt out which means that when this legislation goes into effect restaurants won't be charged more than 15 for delivery services unless they um unless they opt out and renegotiate their contract so there which would be the opposite of uh if food delivery if they had to opt in then there then there could be a bump in the in between and and so uh restaurants will need to renegotiate their contract if they want more than delivery services then they if the food delivery platforms meet all those conditions then they would need to renegotiate and um and sign up and pay for additional services if that's part of the um of the offer from the food delivery platforms i also wanted to mention in this presentation although it was shared during public comment that right now the three food delivery platforms that dominate the market making up about 96 percent of all food delivery platform sales all offer delivery services for 15 there's a tiered plan where it would be 15 for baseline delivery could go up to 25 or 30 for additional services this legislation would make sure that tiered pricing plans like that don't ever go above 15 for the baseline services for delivery so people could buy other services but they would have doubt okay all right um so it's hard for me to see you council member strauss with the reflections of all these guards do you have it looks like you have your hand up no i'm i'm good to go i have nothing further today okay sorry thank you chair okay so um i am uh and you mentioned you did an um a comparison and you spoke of other cities that have uh done this and there are other models that we can go with some which carry more legal risk than others so um i'll be looking at those issues and i know that you have spent a lot of time also with our law department so if there aren't any further questions or comments from anyone i'm i'm happy to move on i didn't i didn't put it together that that the actual legislation would be introduced the day before our next meeting for some reason i thought it might we might have a little bit more time and we know from pay up that we um that uh the proposal changed significantly between um the first discussion this year in committee and uh discussing the actual legislation so um i let's continue this conversation and um i am just saying i hope for a uh a second conversation and vote on the 27th and i look forward to um to talking about this more and seeing the actual legislation that is final chair if i may sure you raise a really important point here where payup had a lot more time that it needed before from introduction to final passage and that's in part because pay up was a first of its kind in the nation what we've seen is that this legislation's already been tried and tested in many other jurisdictions and with san francisco in particular they had initially crafted without the opt out and that created a lot of tension between restaurants and the delivery services and they have since gone back and added their opt out which has created a more seamless and uh it's allowed for coalescing around the legislation so i absolutely hear you that the similarity is delivery fees and the differences are pay pay-up was first of its kind in the nation and this is a tried and tested model thank you very much for that clarification it's good that we do have other cities that have done this uh that we can um that we can follow best practices thank you chair i'll be back in just a moment okay thank you all right if there's nothing else will the clerk please read item two into the agenda into the record agenda item number excuse me agenda item number two resolution three 32056 a resolution related to the city light department adopting a 2023-2028 strategic plan update for the city light department and endorsing the associated six-year rate path for discussion and possible vote okay this is um will the presenters please come to the table while i uh tee this off this is our second discussion of city lights 2023 to 2028 strategic plan which sets out the rate path uh that will um that will follow and this is not uh we are not um we're not discussing and possibly voting on a change of the rate today we are simply discussing uh the strategic plan that is the foundation of um the rate path going forward we will begin discussing uh the actual legislation uh to change the rates in august okay cutting to the chase to remind folks while people are assembling um at a last discussion the bottom line for rate payers is that the average animal rate increase was laid out and i believe that a six-year average was about 3.5 percent and the

seattle city light review panel um has recommended adoption of the proposed plan and endorsement of the rate path and so with that i will let our presenters introduce themselves and and continue thank you good morning my name is deborah smith and i'm the general manager and ceo of seattle city light and we're so pleased to be here and i'm happy to be here in person this time i was not able to be in person for the full uh the full item but we're here today and looking forward to hearing any comments i don't think we plan to do a full presentation so we're just really here to answer any remaining questions that any of our council member or your committee members may have and then hopefully be prepared to look for a positive vote so to my left uh good morning i'm kirsty granger city light's chief financial officer and good morning i'm leigh bareka the city lights manager of strategic planning and performance thank you for having us thank you for coming and of course eric mcconaughey from central staff please good morning i'm here and uh happy to be happy to uh to be a part of this and uh i will tune in thank you okay um so last time uh the uh the strategic plan uh laid out many of the uh initiatives and ongoing work that the utility is responsible for and in the intervening time i believe that city light has reached out to council members or solicited questions from any of my colleagues so i would like to now open the floor for any questions or comments i don't see anyone again this is a resolution adopting these the strategic plan and rate path so if there are no other questions or comments from anyone i have one and it is simply on um i think it was page i don't know 11 of the actual strategic plan i believe that one of the cost drivers incorporated into the rate path is uh inflation increases and i think that the uh the one that's noted there is 7.1 in 2023 uh and that is partially to adjust for higher 2021 and 22 inflation that we're currently experiencing my simple question is that after that from 2024 to 2028 average inflation um is projected to be 2.4 and i know that we have uh experts in our forecasting office and in your shop you do too but i just wanted to uh to ask um is that realistic very good question and certainly with this morning's news about 9.1 percent inflation and busting last month's uh record-breaking numbers uh or 40-year breaking numbers it's hard to know i think what we are very clear on and we are very committed to uh chair is that we intend to flatten the curve and i know we all talked about that during the pandemic but we we talk about that internally with respect to rate actions and we want subsequent future rate actions to uh to look like cost of living types of increases that our customers are experiencing elsewhere so in the plan that we brought forward last year before we had all these inflationary pressures we were moving towards that point and we have been using three percent as a placeholder for what traditionally cpi type increases have looked like and so that's why you saw us taking a couple of years to get to those kinds of increases in the outer years and our intention has never been to uh i guess do what we have done before which is to protect lower increases in out years and then come forward and in the early years have big bumps unfortunately with the inflationary pressures we're experiencing now we had to make an adjustment and it kind of looks that way and i'll be honest with you do i believe three percent or that we will be able to get there it depends on what happens but again the commitment that we've made which is to hold future rate actions close to or consistent with uh inflationary pressures that we are generally experiencing that is our commitment and it remains our commitment so i'm hopeful as we all are in talking with um folks around supply chain disruptions and some of our major vendors there seems to be a sense that at least those pressures will will hopefully flatten out uh in 2023 so we don't expect it to happen before then but we expect and talking to some of the general pacific and some of the folks that we buy a lot of commodity products from mid-2023 or so which would bring us back hopefully to more inflationary type numbers in 2024 and beyond so i can't read the future none of us can and we are absorbing some of those inflationary pressures and we will continue to do so and our commitment remain thank you um and and i have no idea how um how elastic our rates are to inflation changes you mentioned another one supply chain there's also climate which is you know uh changes infrastructure needs etc so maybe inflation is go ahead well and we have some significant project work ahead that we intend to talk to council and talk to committee about in coming years year coming months uh undergrounding is one area that's a pressure area and even as we start to think about is it fort lawton you know the infrastructure costs associated with a potential project there so there are there continues to be a lot of uncertainty but our commitment is to work with council to prioritize uh unforeseen uh expenditures or needs so that any rate impacts associated with those are fully supported by committee and council got it and my committee is always open for any revisions so thank you okay all right any other questions comments okay see none i believe that we are um about to uh go forward with the vote i move that resolution uh let's see just a second let me get to my resolution 32056 be recommended for passage at full council is there a second okay it's been moved and seconded will it clerk please call the role councilmember salwan yes councilmember strauss councilmember herbald yes council president juarez hi karen nelson aye for in favor okay the motion carries in the committee recommendation that the bill passed will be forwarded to the city council on july 2022 for final consideration thank you very much chair thank you thank you for all your work all right this concludes the july 30 13th meeting of the economic development technology and city light committee our next committee meeting is scheduled for july 27th at 9 30. if there are no there

are no other issues of business this meeting will adjourn it is 10 20 yes no i said thank you thank you all right meeting adjourned bye-bye bye recording stopped [Music] you

2022-07-17 11:43

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