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State snafu stifles county spending

Capital budget stalemate hurts water district finances
Natalie St. John

Published on November 21, 2017 5:28PM

A salmon habitat restoration project sponsored by the Pacific Conservation District was completed last year at Fred Johnson’s Naselle farm, but many other projects hang in the balance as legislative capital funding runs out.

OBSERVER FILE PHOTO

A salmon habitat restoration project sponsored by the Pacific Conservation District was completed last year at Fred Johnson’s Naselle farm, but many other projects hang in the balance as legislative capital funding runs out.


PACIFIC COUNTY — Bill Neal, general manager of the North Beach Water District, usually tries not to get caught up in politics. This year, he hasn’t had a choice because dysfunction in Olympia is creating costly problems.

After a record 193 days in session, state lawmakers adjourned in July without approving the two-year capital budget that would have provided about $4 billion statewide for construction and improvement projects.

Four months later, legislative leaders are still bickering about the budget, and locals are paying the consequences. With impending layoffs, stalled school plans, canceled projects and shrinking savings for smaller public agencies, the effects of abandoning the capital budget have hit home.


Legislators dig their heels in


Legislators agreed on a proposed capital budget that included around $60 million for projects in Pacific County and other parts of the 19th Legislative District. The state House passed it by a 92 to 1 vote, but the budget stalled out in the Senate.

Republicans decided to use the budget as a bargaining chip in the battle over the “Hirst decision,” a state Supreme Court ruling that effectively prevents many rural landowners from drilling new wells. Opponents fear it could bring development to a halt in rural communities.

Senate Republicans wanted to overturn the Hirst decision, but leading House Democrats refused to hold a vote. The deadline passed and the politicians were still deadlocked, so the legislators went home without passing a capital budget — or dealing with the Hirst issue.

Now, lawmakers are unlikely to come up with a new budget until the next legislative session in early 2018.


The waiting game


South Bend School District leaders were elated last spring when they learned lawmakers had set aside about $7.7 million for the new elementary school they badly need, but can’t afford to build.

“I’ve never seen anything like it before,” Superintendent Jon Tienhaara said on Nov. 17. “For a community like South bend, in a place like Pacific County, it’s just a huge opportunity.” With assurances that the state money was a sure thing, district officials completed the early stages of planning and began talking about running a bond to raise the rest of the money for the $16 million project. Then the budget fiasco put the school project on indefinite hiatus.

“Nothing has happened. We’re still waiting,” Tienhaara said. Legislators say the money will still be there when a budget is finally passed, but no one knows when that will be. In the meantime, South Bend officials have to decide whether to go ahead with the bond.

“The tricky thing is that to have a bond initiative on the Feb. 18 ballot, we need to have a resolution to the auditor’s office by December 15th,” Tienhaara explained.

Legislators could call a fourth special session in December. With a new Democratic majority in the Senate, they might even be able to get the budget passed, but Tienhaara doubts they’ll go back to work before the new regular legislative session.


Conserving money isn’t enough


Mike Nordin runs the Pacific County and Grays Harbor County conservation districts. In a typical year, the districts work with local farmers, foresters, shellfish growers and others to complete about 90 environmentally friendly projects. Most of the money comes from the capital budget.

It’s fair to say it’s a labor of love for Nordin. When the budget deal was threatening to fall apart last summer, he voluntarily worked some days without pay to save money.

Now, no amount of penny-pinching can forestall big trouble for the conservation districts when they reach the end of the budget cycle on Dec. 31.

“If we don’t have a capital budget by then, about 70 percent of my staff will be cut,” Nordin said on Nov. 15. That’s about six employees, including Nordin.

“The staff is freaked out,” Nordin said. “This has never happened before.”


Hurry up and wait


“I can’t even tell you how many projects we’re not getting going,” Nordin said. His staff has been working on projects paid for during the previous budget cycle. But as those wind down, the districts are caught in a stalemate. There are plenty of people who want their help. Cranberry growers want to develop more environmentally sound farming practices. Shellfish growers want to continue researching the effects of sediment on oysters.

“There are some fish projects we can’t even start looking at,” Nordin said. With no money, they can’t get them going.

“We’re having to tell people, ‘Well, sorry, we can’t do anything right now,’” he said. He worries that good employees will be forced to find jobs elsewhere, taking their institutional knowledge with them. Their replacements will have to be trained too. That takes time and money. Meanwhile, projects that benefit local communities will fall by the wayside.

“It’s going to set us back a long way,” he said.


Wells running dry


During the last few years, the North Beach Water District has used a $3 million loan from a state drinking water fund to install a new treatment plant, a new well field and more than a mile of new water main. By this summer, the tiny district had just one loan-funded project left — about $500,000 worth of improvements to a well field. With around $750,000 in the loan account, Neal expected to complete the project with money to spare. Then the capital budget went down in flames.

“[State officials] suspended payments in July,” Neal said. “They called us and told us, ‘You’ve got 10 days to turn in your last invoices.’” Because work on the project was already underway, the district received about $250,000 in invoices from its contractor after the state stopped reimbursing. The district had to pay the contractor out of its roughly $1.2 million reserve fund, with no guarantee that the state would reimburse them. They also had to suspend the project and send the contractor home.

“We are frustrated beyond belief about this,” Neal said.

The Pacific County Department of Community Development has also dipped into savings to keep its code-enforcement program going, according to director Tim Crose. He said the state won’t reimburse the department for the months it covered to get by while waiting for lawmakers to pass a capital budget.


Contingency planning


Tienhaara, the superintendent, and Nordin, the conservation district manager, said state Sen. Dean Takko and Reps. Brian Blake and Jim Walsh have communicated with them frequently about the budget process, and have expressed willingness to compromise on a fix for Hirst.

“I don’t blame them at all. They are on the side of trying to solve this,” Nordin said. But, like the others interviewed for this story, he is angry that schools, ports and other public entities have become casualties in the nasty battle over rural wells.

“I guess the lightest way I can put this is that what’s going on is irresponsible,” Nordin said. “I see the viewpoints on both sides, but we’re supposed to be adults. We should be able to come to a compromise.”

Neal put it more bluntly. “I feel used,” the water district manager said. “Extremely used.”

Without much hope of an 11th-hour budget, local leaders are planning for contingencies.

Tienhaara’s district could run the new school bond in April instead of February, but that might delay the start of construction, which was scheduled for fall 2018.

“It’s kind of hard to navigate forward progress when there are so many variables,” Tienhaara said.

Crose is facing the possibility that Community Development will have to further curtail its limited code enforcement and close the Long Beach facility that helps people safely deal with hazardous waste.

Nordin told an Observer reporter he didn’t know if he would be able to give an update on the Conservation District.

“If it’s after January first, and there is no capital budget, I won’t be here,” he said.

The Observer’s county reporter Amy Nile contributed to this story.



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