Seattle City Council members voted Wednesday to override Mayor Jenny Durkan’s veto of their plan to spend $86 million in emergency reserves on programs for residents and small businesses dealing with the COVID-19 crisis.

Then they immediately voted to scale back their spending plan in what they described as a potential compromise with the mayor.

Durkan hasn’t decided whether to allow the new version to move ahead or issue another veto, a spokesperson said.

The council’s new plan authorizes $57 million in spending from the reserves, rather than $86 million, with a clause acknowledging that logistical or budgetary challenges may prevent Durkan from moving all $57 million out the door this year.

Also new: $3 million from the reserves directed to community discussions about the city’s public-safety budget. The council is still counting on proceeds from a new Seattle tax on high salaries at large corporations to replenish the reserves in 2021.

“We can still have conversations with the mayor and her staff around additional amendments that might be needed” in the coming weeks, Council President M. Lorena González said during a remote meeting. “I believe that’s a reasonable position and a responsible path forward.”

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In a statement after the council’s votes, Durkan disagreed.

“While Council now acknowledges their original spending was unsustainable … I continue to have concerns,” she said. “I believe the City must be honest, transparent and realistic about who we can help and how we actually get money in people’s pockets.”

Emergency spending is one of several areas where the council and Durkan have clashed recently, Councilmember Andrew Lewis noted. The mayor opposed the tax passed last month and police cuts passed Monday; she and police Chief Carmen Best cited conflict with the council Tuesday as Best announced she would abruptly retire after 28 years with the Police Department.

“I don’t think I am personally shocking anyone from the viewing public or anyone on this council by saying there is very real friction between this virtual second floor and the virtual seventh floor … that is spilling over into everything we are doing,” Lewis said during the meeting Wednesday, referring to the floors at City Hall where the council and mayor usually work.

Durkan objected in July when council members passed their $86 million plan, asking them to leave the reserves alone, at least until an August update on the city’s economic trajectory and tax revenues. The mayor called the original spending irresponsible when she exercised her veto authority this month, noting it would leave Seattle with only $13 million in reserves.

The city began this year with about $128 million in its reserves.

“No one can responsibly project that Seattle will not have additional emergencies this year and next,” Durkan said at the time, warning of potential layoffs to city employees and adding in a letter: “Seattle needs a cushion to make it through the next 18 months.”

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The city is collecting less money during the pandemic, leading Durkan’s office this spring to project a 2020 budget gap of about $300 million. A rebalancing package proposed by the mayor this summer and passed by the council Monday should close that gap, thanks in part to $29 million in emergency reserves. But an update released by the mayor’s office Monday reduced the city’s projected revenues by another $26 million.

Hopes the economy and Seattle’s revenues would “bounce back” relatively quickly are “no longer realistic,” with lower levels of business activity now expected to continue well into 2021, Budget Director Ben Noble wrote in a memo. The city’s reserves are needed to help balance next year’s budget, which Durkan and the council are set to tackle starting in September, he wrote.

The council’s new plan accounts for the additional $26 million budget gap projected Monday, Councilmember Teresa Mosqueda said Wednesday, leaving $39 million in the emergency reserves, rather than $13 million.

Mosqueda described the new plan as an attempt to acknowledge the bad economic news, respond to Durkan’s points and still provide urgent assistance to community members who are struggling to pay rent, pay for child care, pay for groceries and keep their small businesses open.

“This has always been about 2020 and immediate relief” during the COVID-19 crisis, she said. “This is the rainy day. This is the emergency.”

The vote to override Durkan’s veto was 6-2, with Councilmember Debora Juarez absent. Councilmembers Lisa Herbold, Tammy Morales, Kshama Sawant and Dan Strauss joined González and Mosqueda in voting yes.

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Councilmembers Alex Pedersen and Andrew Lewis voted no. Pedersen said Noble’s memo was concerning, while Lewis said he worried Durkan might refuse to spend money allocated by the council for COVID-19 relief.

Pedersen and Lewis suggested they and their colleagues continue negotiating with the mayor in order to “lock in” a spending plan she could stomach and ensure the money would actually be spent right away.

Having spent months battling with Durkan, “I think we owe it to the people of Seattle to try for another week and a half” to reach an accord, Lewis said.

González said she had spent hours on the phone with the mayor and the mayor’s staff in recent days seeking common ground. She said Durkan wanted the council to sustain, rather than override, her veto. “It was made very clear to me that an agreement [on spending] could not and would not be reached without first agreeing to sustain the mayor’s veto,” said González, describing that move as inappropriate under the circumstances.

In a statement late Wednesday, Herbold said: “It’s inconceivable to me that the Executive would, because of a meaningless political standoff, deprive landlords from receiving rent assistance funds, small business from being awarded grants, scores of families and elders from receiving grocery vouchers.”

Durkan described the negotiations and the situation differently.

“In the spirit of the collaboration, I proposed creating a new bill” and a new spending plan, she said, not sharing the exact dollar amount she was willing to have Seattle spend on additional COVID-19 relief. “Council chose to reject that proposal and take a different path. I deeply hope that we can actually move towards meaningful collaboration and agreement … at this critical moment.”

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Wednesday’s vote to pass the new spending plan was 7-1, with Sawant voting no. She said Seattle leaders should be taxing big businesses more to deal with revenue gaps rather than using the reserves.

The new version of the council’s plan should allow Durkan to hold back some of the $57 million, if necessary, González, Mosqueda and Herbold said.

This is how the new plan calls for the money to be spent:

  • $22 million for rent assistance and homeless shelters
  • $12 million for grocery vouchers for immigrants and refugees
  • $10 million for small business assistance
  • $9 million for grocery vouchers for others
  • $2 million for child care assistance
  • $2 million for affordable housing providers, mortgage counseling and foreclosure prevention