Whose County Is It, Anyway?

Sunlight is the best disinfectant.

All right, Pacific International Terminal, Bill Lyne, Gordon Thomas Honeywell, and all you bigwigs who play in the big leagues.  We get it.  You’re big and important, and Whatcom County is small and insignificant.  We are Hicksville, way up in corner of the state, with hardly any people and no significance to your great big important world. Well, other than the fact that our marine shoreline could support a deepwater port that you need for North America's largest coal export terminal. 

But really.  You’ve seen the movie "Braveheart,” right?  You may see us as the rebels with our faces painted blue, beyond the pale of civilization up here in the far reaches of Puget Sound, but do you really expect us to surrender our County to you without a fight?

Let me repeat a fact that sometimes seems to get lost the discussion:  Pacific International Terminal has proposed to locate North America’s largest export terminal in our County. This is one of the biggest projects in the country.  The entire U.S. of A.  Right here in Whatcom County.

When an enormous project descends on a small community, it is not unusual for the enormous project to take over the small community.  After all, project proponents need to make sure that local concerns don’t get in the way.  They have a lot at stake, and the last thing that they need is for the local yokels to putz about, putting big plans at risk with their petty concerns.  And the big guys have the know-how and the wherewithal to keep the locals out of the gears of the machinery.  Right?   

Well, maybe not.  Not necessarily.  That is, if Hicksville really turns out to be Pretty Smart Community With a Bunch of Active, Interested Citizens.

Last week, County Council Chair Carl Weimer proposed a minor amendment to the County Code.  The Code already states that contracts “entered into by the county” (that means the County Executive) over $10,000 must be reviewed and approved by the County Council.  The Council's approval authority currently excludes “pass-through moneys,” or contracts where an applicant reimburses the County.  The Executive may approve such contracts – even if the contracts are in the millions of dollars – without any Council review.

Mr. Weimer’s amendment simply states that contracts “which involve externally funded pass-through moneys” should be approved by the County Council.   That’s all it does.  It eliminates a loophole in the normal system of checks and balances that provides oversight of large contracts.

Why did this simple amendment result in this splenetic three-page bloviation from the lawyer for Pacific International Terminal, the applicant for the Gateway Pacific coal terminal? 

 Why would PIT, a project applicant, insert itself into a matter that’s strictly local, relating to the process for approving a contract?

If everything is on the up-and-up, why would the applicant care WHO reviews the contract, or HOW MANY people review the contract?  

In short, why is PIT afraid of transparency?

According to an article in the Bellingham Herald, Council member Sam Crawford believes that transparency about PIT’s “pass-through” contract would be harmful because citizens aren’t smart enough to understand the role of contracts.  Oversight of pass-through contracts “could create the false impression that the public will be able to convince the council to halt the process over a small change. ‘I think that's too much and that's unnecessary,’ Crawford said of the proposed change to county law. ‘The public may ultimately end up disappointed.’"

So Mr. Crawford and the coal terminal folks just want to protect us from ourselves, to keep us from being “disappointed.”  That’s one possible explanation.  If you agree that the County needs to act in loco parentis, or in the role of a parent that needs to protect its child-like citizens from information, then this makes sense.  I suppose. If that's how you view the role of government.

A letter that David Stalheim wrote to the County Council last week may provide another explanation.     From the information that’s available in public records, it appears that the "pass through" contract doesn't work.  

The County has not actually billed PIT for much time spent on its application.  The record indicates that no county attorney has reviewed any contracts or other documents, the Finance Department has not billed for any time involved in processing contracts or paying bills, and the Public Works Department – which is responsible for stormwater, water quality, and transportation impacts – has spent less than five hours on North American’s largest coal terminal.

What does that mean?  It could just mean that the County’s not very good about keeping time, and that this record-keeping failure means that we the taxpayers are subsidizing PIT.  That’s not very appealing.  

Or it could mean that the County is just rubber-stamping everything that PIT wants to have done, without actually reviewing it or raising any questions.  That is even less appealing. 

Sunlight, which Supreme Court Justice Louis Brandeis called "the best disinfectant," would reveal whether or not there is a reason for concern.  And sunlight, in the form of public transparency, could not conceivably hurt anyone involved in the contract – assuming that the contract is shipshape, aboveboard, well monitored, and in the public interest.    

So, if you think that it ought to be OK for the public and the County Council to see what’s happening in the contract between PIT and Whatcom County, please write to the County Council and support Council Chair Weimer’s resolution. The Council's e-mail address is council@co.whatcom.wa.us. 

Or attend the Council meeting on Tuesday, February 11th.  The Finance and Administrative Services Committee will consider the proposed amendment at 11:00 (the public may or may not be allowed to speak, but you can at least listen to your policy-makers debate the issue), and open session will start shortly after the meeting begins at 7:00 in the evening.  The agenda is here.   

If you think that PIT knows best how our County should be run, then by all means, support PIT.

Either way, we’ll know whose County this is.

Coal Terminal Update: We’re Throwing a Party!

Save the Date:  

March 20, 2012

Place:  Bellingham High School

Time:  TBD

Why:  Whatcom County Taxpayers are throwing a “pre-scoping” party for the Gateway Pacific Terminal!

Despite the fact that Whatcom County has not received completed applications for the Gateway Pacific Terminal, County staff are working very diligently to make sure that Gateway Pacific’s delay doesn’t cause Gateway Pacific any delay. 

Gateway Pacific has until March 19 to submit its applications to the County.  The County will officially roll out its environmental impact assessment process on March 20, the very next day.  Yee Haw! 

Whatcom County must have a crystal ball!  It can tell already that this version of the application will be complete and ready for scoping!   

This March 20 "pre-scoping" session is the culmination of more than a year of County staff work on behalf of the Gateway Pacific terminal.  Read through the e-mails posted on the County web site, and you’ll get a sense of the County’s painstaking attention to this matter.  Staff have been working with the state-sponsored Multiagency Permitting Team (the MAP team), staff have been working with the project applicant, staff have been working to make sure that the consultant team is ready to go. 

Staff travel, staff meetings, staff communication, staff review.  Hundreds and hundreds and hundreds of staff hours.

And who’s paying for staff time? Well, what a rude question.

But if we must talk about money -- it turns out that We the Taxpayers are footing the bill.  After the first $2,625.00.

Gateway Pacific’s payment for the preparation of the environmental impact statement is limited, by the County’s fee schedule, to $2,625.  That covers about 20 hours of staff time.  Everything above and beyond that time is a gift from all of us to all of them.  SSA Marine, Goldman Sachs, BNSF. . . .

After all, they need the money more than we do.

It used to be that the County’s fee schedule charged applicants $100 per hour for all staff time in excess of 20 hours.  But the County amended its fee schedule last year to eliminate those hourly payments (which other counties do charge).  (And of course, Whatcom County charges for staff time for many smaller projects that go across the permit desk.) 

So – we should all make sure to attend this “pre-scoping” party, since we’re paying for all of the County staff time that has gone into planning and preparing for it.   Party down!

Oh -- and if you want SSA Marine to help pay for the party, think about contacting County Executive Jack Louws.  He can change the fee schedule.  So can the County Council.

For the memo setting the date of the scoping session, see this set of e-mails  at page 33. 

For correspondence relating to the fee schedule, the application, and scoping, see my e-mails and Tyler Schroeder’s responses:This set of emails  at page 101,and this set of e-mails  at pages 2-4.

How will we pay for the jail?

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?

Great Questions

Some commenters on the Politics blog raised some great questions about growth.  I'm summarizing them and inviting discussion. 

1. Is rural development ever economically feasible?
2. Don't impact fees in a city work as a counter-productive penalty to urban development?
3. Planning isn't precise, so shouldn't there be room for errors in assumptions?
4. What part of this discussion is a regional planning issue, versus a local one?
5. How can we make existing development in the suburbs more cost effective?
6. How do we hold firm to zoning laws to protect our resource lands for generations to come?
7. How do we establish laws that ensure an equitable sharing of development costs?