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Recap of 2023Q4

Analysis

Date Range: October 2, 2023 – December 22, 2023

Executive Summary

In the final quarter of 2023, the Jefferson County Board of Commissioners locked in a new fiscal reality, adopting a record $109.8 million budget for 2024 that formalizes a taxpayer-funded bailout of its collapsed planning department while simultaneously pushing forward with a contentious, multi-million-dollar aquatic center proposal. The dominant pattern was one of managing the severe consequences of past policy failures with new infusions of general fund dollars, while relying on external grants and a potential new sales tax to fund future ambitions. The period exposed a widening gap between the county’s operational capacity and its strategic goals.

The board’s central action was the adoption of the 2024-2025 biennial budget. The plan directs a $300,000 increase in general fund subsidies to the Department of Community Development (DCD) to hire staff and consultants needed to manage a permit backlog created by a 2022 land use ordinance. This follows a year of departmental closures and staff resignations. The budget also funded significant 12% wage increases for union employees over three years.

While plugging internal holes, the board advanced two controversial external initiatives. It approved a $720,400 slate of tourism grants despite public accusations of procedural violations and conflicts of interest. More significantly, it voted 2-1 to authorize planning for a Public Facilities District to fund a new $37 million aquatic center in Port Townsend, a decision made over strong objections from residents concerned about an inequitable county-wide sales tax and a lack of outreach to southern districts.

The winners this quarter were county employees, who secured substantial wage increases, and the DCD, which received a financial lifeline. Losers were taxpayers now subsidizing the DCD crisis, residents facing a potential new sales tax for a geographically distant aquatic center, and the county’s road fund, whose structural deficit remains unsolved.

Individual Action Analysis

1. Board Adopts $109.8M Budget, Bailing Out Ailing Planning Department

Topic

The board unanimously adopted the 2024-2025 biennial budget, which allocates a record $109.8 million for 2024 expenditures and directs a significant increase in General Fund support to the Department of Community Development (DCD).

Context

  • Consequences of Prior Decisions: The budget directly addresses the DCD operational crisis that began in late 2022 after the board passed a complex land use ordinance without funding its implementation. The department suffered mass resignations and emergency closures in Q2 2023, creating a permit backlog of over 100 applications.
  • Fiscal Pressure: The budget grapples with a 21.5% inflation rate since the last biennial budget against a state-mandated 1% property tax levy limit. This required balancing new spending against rising costs for existing services.
  • Personnel Costs: The budget funds a new collective bargaining agreement providing a 12% wage increase over three years for UFCW employees, a move intended to address the staff retention and recruitment crises seen in DCD and other departments.

Public Input

  • No public testimony was offered during the formal budget hearing on December 4. Departmental budget workshops were held in October, where staff presented requests and answered commissioner questions.

Deliberation Insights

  • DCD Bailout as a Priority: During budget workshops, commissioners accepted the $909,000 General Fund transfer to DCD for 2024—up from $450,000 in 2023—as a necessity to restore core services. The $300,000 increase was framed as the cost of stabilizing the department.
  • Unsolved Structural Deficits: Deliberations for the six-year transportation plan, adopted alongside the budget, acknowledged that the Road Fund remains on a path to insolvency. The final budget halves the chip seal program to conserve cash but includes no long-term solution, implicitly prioritizing the DCD bailout and employee compensation over infrastructure maintenance.
  • Acceptance of Grant Dependency: The budget relies heavily on grants to fund major initiatives, particularly the $35 million Port Hadlock Sewer project and a $41.3 million transportation improvement program. This highlights the board’s strategy of using local funds for operations while seeking external money for capital projects.

Decision & Vote

Adopted Resolution 63-23, the 2024-2025 biennial budget, unanimously (3-0) on December 11.

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: County employees, who receive significant wage increases. The DCD, which receives the resources to hire staff and consultants to clear its backlog.
  • Losers: The Public Works road division, whose maintenance programs are reduced to keep the fund solvent. Taxpayers, who are now funding a $909,000 annual subsidy for a permitting system that is intended to be largely fee-supported.
  • Fiscal Impact: The budget commits the county to higher ongoing personnel costs and a near-doubling of the general fund subsidy to DCD. The Road Fund’s structural deficit is projected to worsen, with the ending balance dropping from $3.5 million in 2024 to $2.4 million in 2025.
Strategic Implications
  • Reactive vs. Proactive: The budget is a mix of reactive crisis management (funding DCD) and proactive strategy (funding new compensation agreements). It solves the immediate DCD staffing fire but defers the long-term Road Fund crisis.
  • Alignment with Stated Priorities: The budget aligns with the goal of being a competitive employer but reveals a conflict between stated priorities for housing and infrastructure. Funding the permitting department’s recovery supports housing, but defunding road maintenance undermines infrastructure.
  • Budget Trade-offs: The $300,000 increase for DCD and multi-million-dollar commitment to higher wages come at the direct expense of road maintenance and other potential service enhancements.
Critical Gaps & Risks
  • What was not discussed: A plan to make DCD financially self-sustaining and reduce its reliance on the General Fund in the future. The board treated the increased subsidy as the new baseline.
  • Connection to Fundamental Tensions: The budget is a direct manifestation of the tension between tax base limits (1% levy cap) and service demands (competitive wages, functioning permit center). The board chose to fund personnel and internal operations over physical infrastructure.
  • Vulnerabilities Created: The county remains fiscally vulnerable to rising costs for employee benefits and inflation. The failure to solve the Road Fund deficit ensures a future funding crisis that will likely require service cuts or a voter-approved levy.

2. Commissioners Advance Contentious Aquatic Center Plan, Deferring Key Decisions

Topic

The board authorized staff to plan for the formation of a county-wide Public Facilities District (PFD) and to split the cost of an independent financial review with the City of Port Townsend for a proposed $37 million aquatic center.

Context

  • Urban Growth vs. Rural Preservation: The proposal for a large, regional facility located in Port Townsend has become a focal point for the urban-rural divide. Rural residents question the equity of a county-wide sales tax funding a facility that is geographically distant for most of the population.
  • Tax Base Limits: With the existing Port Townsend pool failing, supporters argue a new tax district is the only viable funding mechanism. The PFD would be authorized to ask voters for a 0.2% sales tax, projected to cost residents $10-40 per person annually.
  • Service Demands: Proponents, including school officials and healthcare advocates, frame the project as critical public health infrastructure for an aging population and for youth services. The current city-owned pool requires a $400,000 annual subsidy and faces a high-risk $21 million renovation estimate.

Public Input

  • Who testified: Dozens of residents, including members of the Jefferson County Aquatic Coalition, the Port Townsend city manager, school officials, and residents from outside Port Townsend.
  • Substance of testimony: Supporters emphasized the urgent need for the facility for health, safety, and youth programs. Opponents criticized the Port Townsend-centric location, the PFD funding model, the scale of the project, and a perceived lack of public outreach and transparency from the steering committee.
  • Intensity: Public comment across multiple meetings was extensive, organized, and deeply divided, with passionate arguments on both sides.

Deliberation Insights

  • Deep Board Division: The 2-1 vote revealed a split on the board. Commissioners Brotherton and Dean supported moving forward to gather more information, framing the PFD as a neutral body to conduct due diligence. Commissioner Eisenhour voted no, citing insufficient outreach, unresolved questions about location and cost, and voter fatigue.
  • Location as a Sticking Point: Deliberations repeatedly returned to the fairness of the Port Townsend location. Commissioner Eisenhour advocated for a serious market analysis of a mid-county site in the Port Hadlock urban growth area. Supporters argued that starting over at a new site would kill the project's momentum.
  • PFD vs. MPD: The board debated the merits of a PFD (sales tax) versus a Metropolitan Park District (property tax). A community survey indicated a preference for the sales tax model, which also captures revenue from tourists.

Decision & Vote

Authorized staff to develop information on forming a PFD and an interlocal agreement with the city for a financial review. Approved 2-1 on December 11, with Commissioner Eisenhour opposed.

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: The project's steering committee and the City of Port Townsend, who secured county partnership to advance the proposal.
  • Losers: Residents in south and west county who feel their opposition was disregarded. Taxpayers who will now fund staff time and a financial review for a project whose viability and location remain highly contested.
  • Fiscal Impact: The immediate cost is for staff time and half of a ~$15,000 financial review. The long-term impact is the potential creation of a new taxing district with the authority to issue tens of millions of dollars in bonds backed by a county-wide sales tax.
Strategic Implications
  • Proactive vs. Proactive: This is a proactive attempt to address a long-term infrastructure need. However, the decision-making process has been criticized as insufficiently inclusive, creating a reactive political backlash.
  • Alignment with Stated Priorities: The project aligns with stated goals for public health and community amenities but creates direct conflict with the value of equitable service delivery across the county's distinct geographic areas.
  • Pattern Recognition: The decision to advance a project with deep community division and unresolved financial questions reflects a willingness by a board majority to take significant political and fiscal risks on large-scale initiatives.
Critical Gaps & Risks
  • What was not discussed: A detailed plan for ensuring equitable geographic representation on the PFD board. While mentioned as a goal, no mechanism was established.
  • Stakeholder Exclusions: Deliberations confirmed that outreach to south and west county communities was minimal during the initial steering committee phase, fueling distrust.
  • Vulnerabilities Created: By moving forward on a 2-1 vote, the board signals a fractured commitment to the project. This division, combined with organized public opposition, creates significant risk that a future ballot measure will fail, wasting the public resources invested in the planning process.

3. Board Approves Tourism Grants Amid Conflict of Interest Accusations

Topic

The board approved the Lodging Tax Advisory Committee (LTAC) recommendation to award $720,400 in tourism grants to 15 organizations, despite public testimony alleging procedural violations and conflicts of interest.

Context

  • Economic Base: The decision directs public funds intended to support the county's tourism-dependent economy.
  • Regulatory Process: State law governs the use of lodging tax funds and the composition of the LTAC, which makes funding recommendations to the board. The process is intended to be transparent and objective.
  • Constituent Demand: The hearing exposed a rift between established, well-funded organizations and smaller, emerging event organizers who felt the process was biased.

Public Input

  • Who testified: Alexa Serbido and Maria Baka.
  • What they represented: Critics of the LTAC process and advocates for smaller, community-based events.
  • Substance of testimony: Speakers alleged that 87% of the funds were directed to a few entities with representation on the LTAC, that some applications were incomplete, and that the process favored established groups over new ones.
  • Intensity: Comment was pointed and specific, presenting documents to the board and alleging ethical and procedural failures.

Deliberation Insights

  • Defense of the Process: Commissioner Eisenhour, who chairs the LTAC, defended the process. She stated that members with conflicts recused themselves from votes, that the committee prioritized organizations with year-round operations, and that all allocations complied with state code.
  • Acknowledging Flaws: While defending the outcome, commissioners acknowledged frustrations with the process and a desire for future reforms, including better coordination with the City of Port Townsend's parallel LTAC process.
  • Prioritizing Continuity: The board’s primary rationale for approving the grants despite the controversy was to avoid delaying the distribution of 2024 funds to recipient organizations.

Decision & Vote

Approved the full consent agenda, which included the LTAC grant awards, unanimously (3-0) on October 2.

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: The 15 funded organizations, particularly the Tourism Coordinating Council ($275,000) and the Gateway Visitor Center ($110,000), which received the largest awards.
  • Losers: Unfunded applicants and critics of the LTAC process, whose concerns were acknowledged but ultimately did not change the outcome.
  • Fiscal Impact: The decision obligates $720,400 in lodging tax revenue for 2024.
Strategic Implications
  • Reactive vs. Proactive: The decision was a reactive approval of a committee's recommendations. The board’s discussion of future reforms was proactive, but no concrete action was taken to change the process.
  • Alignment with Stated Priorities: The action aligns with the priority of supporting economic development through tourism. However, it creates tension with stated values of transparency and equitable access to public funds.
Critical Gaps & Risks
  • What was not discussed: A detailed, point-by-point rebuttal of the specific procedural allegations raised in public comment. The board’s defense was general rather than specific.
  • Vulnerabilities Created: By approving the recommendations amid unresolved accusations of bias, the board risks eroding public trust in its advisory committee system. It creates a perception that the process favors insiders, which could discourage future participation from new and diverse community groups.

4. County Approves Last-Minute Emergency Appropriations to Cover Operational Shortfalls

Topic

The board approved two separate emergency supplemental budget appropriations late in the year: $493,000 from reserves for road materials and a planned appropriation of $190,339 from reserves for the Public Health fund.

Context

  • Operational Failure: Both appropriations were necessitated by internal budget management failures. The roads overspend was attributed to staff turnover and oversight. The Public Health shortfall was caused by miscalculations and failing to include grant-related expenses in prior budget updates.
  • Fiscal Pressure: These emergency actions draw down fund reserves, reducing the county's financial cushion to respond to unforeseen events. They highlight a lack of rigorous internal controls.
  • Legal Mandates: State law (RCW 36.40.140) requires a public hearing for such emergency appropriations, signaling their significance and departure from the standard budget process.

Public Input

  • No public comment was offered during the hearing for the roads appropriation. A hearing for the Public Health appropriation was set for January 2024.

Deliberation Insights

  • Acceptance of Staff Explanations: The board accepted staff explanations blaming turnover and administrative error for the shortfalls. Deliberation focused on the necessity of the appropriations to close the books for 2023 without a deficit, rather than on accountability for the errors.
  • Focus on Process Improvement: In both cases, staff and commissioners committed to improved procedures to prevent recurrence. For Public Health, this included the hiring of new administrative staff. For roads, the cause was linked to the unexpected departure of key personnel.

Decision & Vote

  • Approved Resolution 47-23 for the roads emergency budget unanimously (3-0) on October 23.
  • Approved a resolution setting a public hearing for the Public Health emergency budget unanimously (3-0) on December 22.

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: The Public Works and Public Health departments, which avoided ending the year with illegal budget deficits.
  • Losers: County taxpayers and the respective fund reserves, which were drawn down by a combined $683,339 to cover unbudgeted expenses.
  • Fiscal Impact: The appropriations depleted reserves that could have been used for planned projects or future emergencies.
Strategic Implications
  • Reactive vs. Proactive: These decisions are purely reactive, driven by fiscal crises. They reveal systemic weaknesses in budget monitoring and management within key county departments.
  • Pattern Recognition: Coming in the same quarter, these two significant budget failures suggest a broader pattern of weak internal financial controls, a problem exacerbated by high staff turnover.
Critical Gaps & Risks
  • What was not discussed: A formal after-action review or audit to determine the precise breakdown in the budget process and implement specific, verifiable changes to internal controls.
  • Vulnerabilities Created: The incidents undermine confidence in the county’s financial management. The reliance on emergency appropriations to fix internal errors signals that the county's budget process is fragile and susceptible to disruption from staff turnover.

5. Board Delays Shoreline Rules for Geoduck Farming After Public Outcry

Topic

After extensive public testimony and split recommendations from its Planning Commission, the board voted to hold a new public hearing on proposed changes to the Shoreline Master Program (SMP), particularly concerning the permitting of geoduck aquaculture.

Context

  • Economic Development vs. Environmental Protection: The debate pits the economic interests of the local shellfish industry against the concerns of shoreline residents and environmental advocates regarding the aesthetic and ecological impacts of plastic-intensive geoduck farming.
  • Regulatory Complexity: The core dispute was whether expansions of existing geoduck farms should require a full, public Conditional Use Permit (CUP), or a less stringent, discretionary administrative permit. The Planning Commission’s 7-1 recommendation favored the less stringent path.
  • Land Use Law: The SMP is a critical regulatory document mandated by the state's Shoreline Management Act. The update is a multi-year process involving staff, consultants, a citizen task force, the Planning Commission, and final review by the state Department of Ecology.

Public Input

  • Who testified: Dozens of speakers including shoreline residents, environmental advocates, shellfish growers, and multiple Planning Commissioners.
  • Substance of testimony: Opponents of the Planning Commission recommendation argued that plastic geoduck tubes constitute industrial-scale pollution, harm viewsheds, and that the administrative permit process lacks transparency and public accountability. Supporters from the shellfish industry argued they are already heavily regulated by state and federal agencies and that onerous local permits threaten a key rural industry.
  • Intensity: The debate was highly organized and intense, with over 90 letters submitted and passionate testimony on both sides.

Deliberation Insights

  • Process vs. Substance: The board's deliberation focused more on ensuring a defensible public process than on the substance of the geoduck rules themselves. A majority felt that the level of public interest and the complexity of the issue warranted a full, board-level public hearing.
  • Deference to Public Demand: The decision to hold a hearing was a direct response to public pressure. The board chose to provide another venue for public input rather than adopting the Planning Commission's recommendation directly.

Decision & Vote

Voted 2-1 on December 11 to hold a public hearing on January 8, 2024. Dean and Brotherton voted in favor of the hearing; Eisenhour was opposed. Vote count not explicitly stated in record but implied by discussion.

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: Opponents of the proposed geoduck rules, who succeeded in securing a new public hearing and delaying adoption of the SMP update.
  • Losers: The shellfish industry and supporters of the Planning Commission recommendation, who now face further delays and uncertainty.
  • Operational Changes: The decision extends the already lengthy SMP update process, requiring additional staff time and public meetings.
Strategic Implications
  • Reactive vs. Proactive: The decision was reactive to public outcry. It demonstrates the board's sensitivity to organized constituent pressure on contentious land-use issues.
  • Connection to Fundamental Tensions: This issue is a classic conflict between economic development (aquaculture jobs) and environmental protection/preservation of rural character. The board’s decision to delay indicates an unwillingness to quickly resolve this tension in favor of either side.
Critical Gaps & Risks
  • What was not discussed: A clear timeline for a final decision following the January hearing. The action kicks the can down the road without a defined end point.
  • Vulnerabilities Created: By reopening the issue for a new hearing, the board risks further polarizing the community and prolonging an already costly and time-consuming planning process. It also signals that a well-organized campaign can override the recommendations of the county's appointed advisory commissions.

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