Initiative Measure 77

INITIATIVE 77 -- Quality childcare programs for Seattle's children AN ORDINANCE relating to early learning and care; imposing a tax on the privilege of engaging in the sale of espresso beverages within the City for the purpose of funding early learning and care; authorizing the establishment of an account; establishing an oversight committee; and authorizing implementing agreements.

WHEREAS, promoting the general health and welfare of children by providing early learning and care is a purpose of The City of Seattle, Washington (the "City"); and

WHEREAS, the availability of early learning and care has been demonstrated to have a significant impact on low-income families' ability to become economically self-sufficient, which is a proper City purpose; and

WHEREAS, the availability of quality early learning and care has been demonstrated to have a significant positive impact on children's social and emotional development, readiness to learn and success in school; to reduce delinquency rates; and to raise high school graduation rates (which in turn is linked to greater earning potential and economic contribution to the community and to producing a lower likelihood of engaging in criminal behavior); and generally contributes to the social welfare of the City; and

WHEREAS, based on data developed by the High/Scope Educational Research Foundation in the High/Scope Perry Preschool Study and cited by the State of Washington Early Childhood Education Assistance Program (ECEAP), for each dollar invested per child at risk of school failure, there is a potential savings to taxpayers of seven dollars in special education, crime and public assistance costs; and

WHEREAS, the activities to be funded pursuant to this ordinance are supplemental to the existing programs financed by the State of Washington and will not displace state funding to the early learning and care programs of the City or of the Seattle School District; and

WHEREAS, the City currently funds early learning and care programs for children including childcare services, early childhood education programs, out- of-school-time programs and other programs through the City's Department of Human Services acting as a youth agency under RCW 35.21.630 and through other departments, and currently allocates approximately Three Million Dollars ($3,000,000) of city general funds to these programs in addition to other funding they may receive from Federal and State sources, the Families and Education Levy, and other grants; and

WHEREAS, the People in their legislative capacity find that espresso beverages, as distinguished from other forms of coffee, are luxury items; and that in raising revenue it is appropriate to tax the privilege of engaging in the sale of a luxury item in order to allocate tax responsibility among persons who prefer a luxury item and can thus better afford to pay the tax; and

WHEREAS, an urgent need exists to provide early learning and care for children to be financed with the proceeds of a tax on the privilege of engaging in the sale of espresso beverages within the City;

NOW THEREFORE, BE IT ORDAINED BY THE CITY OF SEATTLE as follows:

Section 1. Legislative Findings and Intent. The People of The City of Seattle adopt and confirm the above recitals. In exercising their direct legislative authority, the People intend to make additional funds available for early learning and care programs in order to supplement but not supplant existing levels of funding to these programs. The People find that such programs contribute to the City's health and welfare by enhancing children's social and emotional development, readiness to learn and success in school; reducing delinquency and crime rates; raising high school graduation rates; and increasing young adults' earning potential and economic contribution to the community. The People intend to raise such funds through the exercise of the City's power to impose a tax on the privilege of engaging in the sale of espresso beverages within the City.

Section 2. Definitions. The definitions in this section apply throughout this ordinance unless the context clearly requires otherwise.

(a) "Account" means the Early Learning and Care Account established in Section 3 of this ordinance.

(b) "Career and wage ladder program" means any program approved or adopted by the Oversight Committee to fund education-linked wage increments for early learning and care workers who are employees of qualifying center-based providers. The Oversight Committee shall establish minimum standards for participation, which shall meet or exceed the State of Washington Department of Social and Health Services Division of Child Care and Early Learning's Early Childhood Education Career and Wage Ladder program standards.

(c) "Center-based provider" means a licensed provider of early learning and care services, and "qualifying center-based provider" means a center-based provider who meets such qualifications as the Oversight Committee may require, including but not limited to the requirements that: (1) the center must be located in the City, and (2) at least Ten Percent (10%) of the children served must come from low-income families.

(d) "Department" means the City of Seattle Human Services Department or its successor agency.

(e) "Early learning and care services" means services designed to support families and children to ensure that each child in Seattle has the opportunity for developing into a healthy, contributing member of our community, including but not limited to such services as childcare, early childhood education, out- of-school-time services and related quality assurance programs.

(f) "Espresso" means coffee brewed by forcing steam through ground coffee beans.

(g) "Espresso beverage" means any beverage prepared for immediate consumption containing half an ounce or more of espresso regardless of caffeine content, whether served hot or cold.

(h) "Family child day care home provider" means a person licensed to provide early learning and care services in his or her own residence, and "qualifying family child day care home provider" means a family child day care home provider who meets such qualifications as the Oversight Committee may require, including but not limited to the requirements that: (1) the provider's place of residence and service provision must be in the City, and (2) at least Ten Percent (10 %) of the children served must come from low-income families.

(i) "Low-income family" means at least one person with primary care responsibilities for at least one child under age thirteen (13), whose household income is at or below Eighty Percent (80%) of the median gross income adjusted for family size as determined by the Federal Department of Housing and Urban Development (or its successor) for the standard metropolitan statistical area in which Seattle is located.

(j) "Pre-kindergarten program" means a program of early learning and care services for children ages three (3) to five (5); "qualifying pre-kindergarten program" means a pre-kindergarten program that meets such qualifications as the Oversight Committee may require, including but not limited to the requirements that: (1) the program must be located in the City, and (2) at least Ten Percent (10%) of the children served must come from low-income families.

(k) "Professional education program" means any program approved or adopted by the Oversight Committee to fund compensation linked to educational attainment for qualifying family child day care home providers and their employees. The Oversight Committee shall establish minimum standards for participation which shall mirror and meet or exceed, where relevant, the State of Washington Department of Social and Health Services Division of Child Care and Early Learning's Early Childhood Education Career and Wage Ladder program standards.

(l) "Revenues" shall have the meaning provided in Section 3 of this ordinance.

(m) "Sale of an espresso beverage" means the furnishing of an espresso beverage for compensation, whether that beverage is consumed upon the premises or not.

(n) "Small Business" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, that has the purpose of making a profit, and which, together with any affiliated business, generates less than Fifty Thousand Dollars ($50,000) in annual gross receipts as calculated for the purposes of the State business and occupations tax.

Section 3. Creation of Early Learning and Care Account. The Early Learning and Care Account (the "Account") is established in the City Treasury. The revenues received from the collection of the tax authorized by this ordinance and any interest or other earnings from their deposit or investment (collectively, the "Revenues") shall be deposited in the Account and used solely as described in Section 4 of this ordinance. The Account shall be administered by the Department or by other City officials as designated by ordinance. Money in the Account may be temporarily deposited or invested in such manner as may be lawful for the investment of City money.

Section 4. Early Learning and Care Programs; Use of Account Revenues.

(a) Central administrative support (including but not limited to direct and indirect Department expenses) paid for from Account Revenues shall be limited to Five Percent (5%) of total Revenues collected annually.

(b) The remaining Revenues deposited in the Account under Section 3 of this ordinance shall be used solely for early learning and care services as follows:

(i) Fifty-five Percent (55%) per year for qualifying pre-kindergarten programs and related services for three (3) to five (5) year-olds;

(ii) Twenty Percent (20%) per year for grants to low-income families to subsidize the cost of purchasing early learning and care services;

(iii) Twenty Percent (20%) per year for career and wage ladder program contracts with qualifying center-based providers; and

(iv) Five Percent (5%) per year for professional education program contracts with qualifying family child day care home providers.

(c) The Oversight Committee shall establish guidelines for reallocating among the early learning and care services described in subsection (b) of this Section any unexpended Revenues remaining in the Account on each June 30 and December 31, and such unexpended Revenues may be reallocated consistent with those guidelines.

(d) Money available from the Account shall be in addition to any other funds that the City provides for early learning and care services, including but not limited to all programs, services and subsidies receiving money under this ordinance. The money available from the Account shall not supplant existing levels of funding from any other source. To the extent possible, the City Council shall, from such other sources, continue to fund these early learning and care services at an annual level approximately equal to or greater than the amount appropriated for such services in the 2002 budget as adopted in Ordinance No.120640 on November 26, 2001, and approved by the Mayor on November 30, 2001, adjusted for inflation using the annual average consumer price index for the metropolitan statistical area in which Seattle is located.

Notwithstanding the foregoing, if in any year, the City General Fund appropriations for the Divisions of Aging and Disability, Community Services, Family and Youth Services, and the Office of Domestic Violence (or their successor agencies within the Department) are each to be reduced below that division's General Fund appropriation for the previous year, the City Council may reduce the General Fund appropriation for early learning and care services by a maximum of the average percent decrease in the City's General Fund appropriations for each of those four specified divisions (or their successors).

Section 5. Early Learning and Care Agreements. The City through the Director of the Department, or his/her designee, may enter into agreements with the State of Washington Department of Social and Health Services and with such other public and private agencies and persons as may be appropriate to carry out the provisions of this ordinance.

Section 6. Oversight Committee. There is established an Oversight Committee to review and advise upon the expenditure of the Revenues and any reallocation of unexpended Revenues under this ordinance and to set standards governing implementation of the programs under this ordinance.

(a) The Oversight Committee shall consist of: the Director of the Department (or his/her designee), and fourteen (14) representatives ("Representatives") of the following interests and possessing the following qualifications: two (2) directors of center-based providers; two (2) teachers employed by center-based providers; one (1) family child day care home provider; one (1) parent who has a child under age six (6); one (1) administrator of a Head Start, Early Childhood Education Assistance Program (ECEAP), or similar program; one (1) representative of an institution of higher education offering a degree program in early childhood education; one (1) representative of a nonprofit childcare advocacy organization; one (1) representative of Seattle's business community; one (1) representative of Seattle's public schools; one (1) policy specialist in early learning and care; one (1) health care professional with expertise in child development; and one (1) representative of a community-based human services advocacy and/or service delivery organization.

(b) Qualifications, Terms. Except for the Director of the Department (or his/her designee), every Committee member shall be appointed by the Mayor with the consent of the City Council; shall be a resident of the City of Seattle; and shall, when appointed, possess the qualifications described in subsection (a) of this Section for the seat he or she fills. Members shall be eligible for reappointment.

The term of appointment shall be three (3) years commencing on January 1, except for the initial members of the Committee, who shall be appointed to staggered terms commencing on January 1, 2003 and expiring as follows:

(i) A director of a center-based provider, a teacher employed by a center- based provider, the parent, the representative of a community-based human services advocacy and/or service delivery organization, and the business community representative shall serve for one (1) year.

(ii) The family child day care home provider, the health care professional, the higher education representative, and the representative of a nonprofit childcare advocacy organization shall serve for two (2) years.

(iii) A director of a center-based provider, a teacher employed by a center- based provider, the Head Start/ECEAP administrator, the policy specialist, and the representative of Seattle's public schools shall serve for three (3) years.

(c) Selection. The directors of center-based providers, the teachers employed by center-based providers; the family child day care home provider, and the business community representative shall each be selected by the Mayor from such lists, containing at least three names, as may be submitted by associations or organizations representing the interests described by the position's qualifications. For the representative of Seattle's public schools, the Mayor shall give preference to a nominee from any list submitted by a public school district serving the City, if such a list is submitted. If, for any position, the Mayor determines that no submitted list contains a suitable nominee, the Mayor may request, and any association or organization that submitted a list for that position may provide, an additional list or lists from which the Mayor shall select the Representative. If no association or organization submits a list, the Mayor may select from the general public. The Mayor shall select all remaining Representatives to the Committee from the general public after calling for and accepting applications from or nominations of qualified persons.

(d) Termination/Removal; Vacancies. Representatives shall be removed only for two (2) or more consecutive unexcused absences from Committee meetings or for other cause. Unless removed for cause, each Representative shall serve until the appointment and confirmation of his or her successor. If a Representative ceases to be a resident of the City of Seattle, he or she shall resign his or her position. In the event of a vacancy on the Committee, the Mayor shall appoint a successor to fill the unexpired term of his or her predecessor in accordance with the foregoing plan of selection and qualifications.

(e) Compensation. Members shall serve without pay, but may be reimbursed their expenses, including but not limited to the reasonable cost of childcare while attending meetings. The costs incurred in obtaining a substitute for a teacher employed by a center-based provider or for a family child day care home provider while such Representative is attending meetings shall be a reimbursable expense. The Committee may adopt rules for its own procedures and organizational structure, including but not limited to the frequency of meetings. The Department shall provide staff and logistical support for the Committee.

Section 7. Imposition of Tax. Beginning on April 1, 2003, there is levied and shall be collected a tax on the privilege of engaging in the sale of espresso beverages within the City. This tax is levied upon and shall be paid by every person who sells espresso beverages within the City, whether his or her office or place of business is within or without the City. The amount of the tax levied shall be Ten Cents ($0.10) on each sale of an espresso beverage within the City, and the tax shall be collected in accordance with the provisions of Municipal Code Chapter 5.55, as it may be amended from time to time, and such regulations as may be issued by City officials to facilitate its collection. Notwithstanding the foregoing, the tax imposed by this section shall not apply to any Small Business as defined in this ordinance.

Section 8. No Entitlements Created. Nothing in this ordinance shall be construed to create an entitlement to services nor to create judicial authority to order the provision at public expense of services to any person or family where the Department has determined that such services are unavailable or unsuitable or that the child or family are not eligible for such services.

Section 9. Severability. In the event any one or more of the provisions of this ordinance shall for any reason be held to be invalid, such invalidity shall not affect any other provision of this ordinance or the imposition of the tax authorized herein, but this ordinance and the imposition of that tax shall be construed and enforced as if such invalid provisions had not been contained herein; and any provision which shall for any reason be held by reason of its extent to be invalid shall be deemed to be in effect to the extent permitted by law.

Section 10. Effective Date. This ordinance shall take effect and be in force thirty (30) days from and after its passage by the City Council and approval by the Mayor (but if not approved and returned by the Mayor within ten (10) days after presentation, then as provided by Municipal Code Section 1.04.020); or, in accordance with the City Charter Article IV, upon the proclamation of the Mayor within five (5) days after the election at which it is approved by the People, provided that any expenditure contemplated herein that is not included in the current budget shall become lawful and authorized on January 1, 2003.

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6/14/02