I came away from the jail meeting last week knowing that the County is planning for a law and justice center facility less expensive than the $150 million in the Draft EIS. What we didn't learn at the meeting was how much it will cost taxpayers and where the funds will come from.
As several speakers noted, shouldn't we figure out how we are going to pay for it before we buy property and design a facility? Is the cart before the horse? The County has spent $1 million in the planning stages thus far without any public input. Whether those funds are wasted or useful depends on whether the jail proposal is the right size, in the right place, and at the right cost.
I was particularly perplexed by Deputy Administrator Dewey Desler's comment that the administration is committed to building the jail without raising taxes. I heard Dewey say many times that the only way that they can build the jail was to ask the voters for a voter-approved bond. In fact, Dewey has been saying it since 2005:
"The administration never anticipated that the one tenth of one percent sales tax was large enough to sustain the operating cost of the new jail. It will be a responsibility of the leaders in place to figure that out." Council minutes, January 11, 2005
About two months ago, the County adopted an updated 6-year Capital Facilities Plan that included the jail facility. That plan pegged the construction cost at $41 million with five sources of funds to pay for it: 1) General Fund; 2) Jail Fund; 3) Public Utilities Improvement Fund; 4) Real Estate Excise Tax (REET I); and 5) Bonds.
The General Fund of the County is on life support due to declining revenues and increased expenses. The jail and sheriff's office budget, along with other law and justice services, comprises 55% of the General Fund budget. The budget just proposed by Executive Kremen and adopted by the County Council, transfers over $5 million per year from the general fund to support the jail operations. Yet, the adopted expenditures in the jail fund exceed the revenue by $726,000 per year. Any additional burden on the General Fund will come at the expense of other services, such as planning, housing, alternatives to incarceration, etc..
If you recall, for the last two years Executive Kremen proposed a shift in the road and general fund levy, allowing for an increase in revenue to the County by $1 million per year. This levy shift meant that city property owners would pay higher taxes and those outside the cities would pay lower. Even Blaine's Mayor came out against this shift in taxes that was done without consultation or knowledge of the cities. Thanks to four county council members (Mann, Weimer, Brenner, Larson), this gimmick was stopped for this year. But, pay careful attention to next year's budget, because it might be back in order to help with jail and other county costs.
Voters approved a .1% sales tax increase for law and justice purposes. This is called the Jail Fund. This fund is budgeted to receive a little over $3 million in revenue each year. The funds are spent mostly on jail operations and whatever capital projects it can afford. The jail budget is over $12 million per year. After overspending the fund in the next two years, the Jail Fund is expected to end with only $2 million in reserves at the end of 2012.
The third source of funds that were identified to pay for the jail is the Public Utilities Improvement Fund. It took me a while to figure out what this fund is. I was shocked to learn that it is the "rural sales tax" fund that is specifically set aside for economic development purposes. In Whatcom County, it is called the "EDI Program" (Economic Development Investment Program).
EDI funds are specifically not allowed to be used for law and justice facilities, including jails. In 2007, the State Legislature amended the statute to declare "NO NEW PROJECTS FUNDED WITH MONEY COLLECTED UNDER THIS SECTION MAY BE FOR JUSTICE SYSTEM FACILITIES." (RCW 82.14.370(3)(b))
The fourth source of funds identified were Real Estate Excise Tax (REET 1) funds. Every time someone sells property in Whatcom County, there is an additional excise tax that is included to pay for certain public facilities and services. REET 1 funds can be spent on transportation systems, storm and sanitary sewer, parks, law enforcement, fire protection, trails, libraries and flood control projects. The problem is that the REET 1 fund is depleted. There is less than $1 million in that fund at the end of 2010.
The final source of funds identified were Bonds. Bonds are sold to investors who expect to be repaid. In order to repay the bonds, the County would need to guarantee a source of money for those bonds. Well, all the wells appear to be dry. The General Fund is empty. The Jail Fund can't sustain the Operational Costs, let alone any debt. The EDI fund can't be used for jails and justice facilities. And, the REET 1 fund is empty. The only way for Bonds to be an option is if they are Voter Approved bonds that increase your property taxes.
The second budget buster in this jail proposal will be the increased Operational Costs for the jail. There will be increased travel costs to the courtrooms. There is always increased maintenance and utility costs for newer, bigger buildings. And, if staff needs to increase, there are additional costs that must be borne by the General Fund or Jail Fund. The County cannot afford any increases in General Fund expenses without new revenues.
So, unless the County provides clearer information about how they will pay for this jail, I suspect that they will be coming to the voters to seek your approval. Having waited 7 years and spent $1 million without public input, I expect that the public might not be as kind to that request as they were when the .1% sales tax was requested. However, the jail does need to be replaced and I would vote for a property tax levy increase to replace the jail if it was the right size, in the right place and at the right cost.
It is time for leaders to lead. The current ones have failed us. Who will step forward to dig us out of a very deep hole?