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Recap of 2024Q3

Analysis

Date Range: July 1, 2024 – September 23, 2024

Executive Summary (≈200 words)

In the third quarter of 2024, the Jefferson County Board of Commissioners confronted a widening gap between its capacity to manage core services and its ambition to solve long-term structural problems. The board’s governance was defined by a reactive struggle to fund basic infrastructure and a strategic push to create new taxing districts for future projects. While celebrating a major $35 million federal Recompete Grant award, the commissioners were forced to advance a Transportation Benefit District to avert the insolvency of the county Road Fund, signaling a looming fiscal crisis in a foundational service.

The board’s most significant strategic pivot was to realign the county’s tourism promotion strategy, redirecting Lodging Tax funds away from marketing and toward seed money for a new Public Facilities District to build a mid-county aquatic center. This move, executed via memo to an advisory committee, advances a major capital project but sidelines established tourism stakeholders. Concurrently, the board approved a $990,000 annual behavioral health budget, prioritizing publicly funded school mental health programs while zeroing out requests from providers with access to other funding streams.

Winners this quarter were proponents of a new aquatic center and local governments set to benefit from the Recompete Grant. Losers were taxpayers facing new proposed taxes for roads, the county’s tourism marketing apparatus, and behavioral health providers deemed ineligible for local funds. The dominant pattern is one of a county government increasingly reliant on external grants for strategic wins while turning to new, voter-approved taxes to backfill collapsing core services.

Individual Action Analysis

1. Board Proposes New Taxes to Rescue Insolvent Road Fund

Topic

The board directed staff to schedule a public hearing to form an unincorporated Transportation Benefit District (TBD) as a mechanism to fund the county’s failing Road Fund.

Context

  • Fiscal Pressure: The Road Fund faces a projected deficit of over $1 million in 2025. According to Public Works, revenues are growing at 1.6% annually while costs for salaries, fleet, and materials are rising much faster, creating a structural crisis.
  • Service Demands: The county is responsible for maintaining 395 miles of roads. The proposed TBD would generate approximately $1 million annually through a $20 vehicle tab fee and a 0.1% sales tax, dedicated to road maintenance and preservation.
  • Grant Dependency: The county’s six-year, $47 million transportation improvement plan for new projects is 97% grant-funded. The TBD is required to cover the basic operational costs of maintenance, which are ineligible for most grants.

Public Input

  • Who testified: A resident identified as Tom.
  • What they represented: Taxpayer concern.
  • Substance of testimony: The commenter warned residents to "hang on to your wallets," noting the TBD was one of three potential new taxing districts being advanced by the county, alongside proposals for a pool and flood control.

Deliberation Insights

  • Crisis Framing: The board and staff framed the TBD as a necessary response to an unavoidable fiscal crisis driven by inflation. The alternative was presented as a significant degradation of the county road system.
  • Phased Implementation Discussed: Commissioners discussed a gradual rollout, potentially starting with the vehicle tab fee and adding the sales tax later, to soften the financial impact on residents.
  • Acknowledging Political Risk: The deliberation acknowledged the political difficulty of asking voters for new taxes but concluded it was unavoidable to maintain a core government service.

Decision & Vote

Approved a motion to set a future public hearing to consider the formation of a Transportation Benefit District. (Approved 3-0 on September 23).

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: The Public Works road division, which gains a potential path to fiscal solvency.
  • Losers: County residents and businesses, who face the prospect of a new sales tax and vehicle fees.
  • Fiscal Impact: If approved by voters, the TBD would create a new, dedicated ~$1 million annual revenue stream for road maintenance. The immediate action has no fiscal impact beyond staff time.
Strategic Implications
  • Reactive vs. Proactive: The action is a reactive, crisis-driven measure to solve a long-developing structural deficit.
  • Alignment with Stated Priorities: The decision aligns with the core government responsibility of maintaining infrastructure. However, it exposes the county’s failure to proactively fund this priority through existing revenue sources.
  • Connection to Fundamental Tensions: This decision is a direct result of the tension between tax base limits and service demands. With property tax growth capped at 1%, the county must create new, dedicated taxing authorities to fund essential services.
Critical Gaps & Risks
  • What was not discussed: A comprehensive review of the Road Fund’s historic spending and cost-control measures. The board accepted the premise that external inflation was the sole cause of the crisis.
  • Vulnerabilities Created: The board is now politically committed to a tax-increase proposal. If voters reject the TBD, the Road Fund will face insolvency, forcing drastic service cuts and creating a significant political failure for the board.

2. Commissioners Redirect Tourism Funds to Seed Aquatic Center District

Topic

The board formally directed its Lodging Tax Advisory Committee (LTAC) to prioritize funding for a new Public Facilities District (PFD) to develop a mid-county aquatic center, and to internalize the staffing of the Tourism Coordinating Council (TCC).

Context

  • Economic Development vs. Service Demands: This action represents a major strategic shift, redirecting funds traditionally used for marketing the county to tourists toward the creation of a permanent public facility. Proponents argue a new pool will become a tourist draw.
  • Urban Growth vs. Rural Preservation: Following a task force recommendation, the board endorsed a mid-county location for the pool, a move intended to serve 82% of the population within a 20-minute drive and overcome the urban-rural divide that has stalled past proposals.
  • Tax Base Limits: A county-wide PFD, funded by a 0.2% sales tax, is presented as the only viable mechanism to fund a new pool. The LTAC funds are required to pay for the market studies, outreach, and ballot measure costs needed to launch the PFD.

Public Input

  • Who testified: Dan Ventura (TCC member) and Shelley Arnell.
  • Substance of testimony: Commenters criticized the decision as abrupt and lacking transparency. They argued that redirecting funds from the TCC was done without TCC input, lacked data, and circumvented a broader public discussion about priorities.

Deliberation Insights

  • Systemic Reform Narrative: Commissioner Brotherton framed the decision as the culmination of five years of failed incremental attempts to reform a dysfunctional tourism promotion system. He stated the TCC had provided no useful strategic advice.
  • Facilities-First Strategy: The board endorsed a "destination development" strategy, prioritizing the creation of infrastructure (like pools) that attracts visitors over direct marketing expenditures.
  • Control Over Advisory Committees: The action, executed through a formal memo to the TCC and LTAC, demonstrates the board's authority to set strategic direction for its advisory bodies, even against their objections.

Decision & Vote

Approved and transmitted a memo directing the TCC and LTAC on 2025 funding priorities. (Approved 3-0 on September 9). A joint workshop with the Port Townsend City Council affirmed support for the PFD strategy. (September 16).

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: Proponents of a new aquatic center, who now have a defined funding path for the initial planning stages. The county government, which gains direct control over tourism promotion staffing.
  • Losers: The Tourism Coordinating Council, whose marketing budget and autonomy are significantly reduced. Traditional tourism businesses that rely on county-funded advertising.
  • Fiscal Impact: The decision reallocates up to $200,000 in 2025 lodging tax revenue from TCC marketing programs to PFD start-up costs. It also commits the county to funding a new 0.5 FTE staff position.
Strategic Implications
  • Proactive vs. Proactive: This is a proactive and high-risk strategic maneuver to achieve a long-stalled capital project by overhauling the county's entire tourism promotion apparatus.
  • Budget Trade-offs: The board explicitly traded marketing and promotion for capital facility development.
  • Pattern Recognition: This action fits a pattern of the board creating new, dedicated authorities (like a PFD) to fund major projects that the general fund cannot support.
Critical Gaps & Risks
  • What was not discussed: A detailed analysis of the economic impact of defunding tourism marketing. The board assumed that a new pool would be a more effective tourism driver than current marketing efforts.
  • Stakeholder Exclusions: The decision was made with minimal input from the TCC and the broader tourism industry, creating significant political alienation.
  • Vulnerabilities Created: The board has tied its political capital to the success of a future pool ballot measure. If the PFD fails at the ballot box, the county will have dismantled its tourism marketing system for nothing.

3. County Secures $35M Federal Grant, Reinforcing Grant-Dependent Model

Topic

The board announced Jefferson County was a finalist for a $35 million federal Recompete Grant, awarded over five years to support workforce development, education, and social services.

Context

  • Economic Base: The grant targets the county's narrow and vulnerable economic structure by investing in workforce training and removing barriers to employment. It is one of the largest economic development grants in the county's history.
  • Grant Dependency: Securing this grant is a major victory for the county's governance model, which relies on attracting external state and federal funds to execute strategic initiatives that its own tax base cannot support.
  • Partnerships: The award was the result of a multi-organizational effort involving Jefferson EDC, the North Olympic Development Council, Peninsula College, and others.

Public Input

No public comment was offered.

Deliberation Insights

  • Celebratory Announcement: The board announced the award as a major, highly competitive win, noting the application was one of six selected from a field of 652.
  • Focus on Collaboration: Commissioners credited the success to the collaborative work of multiple regional partners, reinforcing the importance of partnerships in their grant acquisition strategy.

Decision & Vote

Informational announcement; no vote required. (August 5).

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: The county’s social service providers, educational institutions, and economic development agencies who will receive and administer the funds. Residents who will benefit from the new programs.
  • Losers: No direct losers are identified.
  • Fiscal Impact: The grant injects $35 million in new federal spending into the local economy over five years, with no local match requirement specified in the record.
Strategic Implications
  • Proactive vs. Proactive: The grant is the result of a proactive, long-term effort to secure a transformative federal investment.
  • Pattern Recognition: This success validates and entrenches the county's reliance on grant funding. It demonstrates that the most significant new investments in the county are driven by external priorities and funding cycles, not local tax revenue.
  • Connection to Fundamental Tensions: The grant directly addresses the tension between the county's limited tax base and high service demands. It provides a massive, temporary infusion of cash to fund services the county could not otherwise afford.
Critical Gaps & Risks
  • What was not discussed: A plan for sustaining the new programs and positions created by the grant after the five-year funding period ends.
  • Vulnerabilities Created: The grant creates a "funding cliff." When the five-year grant expires, the county and its partners will face the challenge of either finding replacement funding for popular programs or discontinuing them, a common problem in grant-dependent systems.

4. Board Updates Permitting Fees and Joins Lawsuit Against State Agency

Topic

The board approved an updated Department of Community Development (DCD) fee schedule to achieve 100% cost recovery and separately authorized joining a statewide lawsuit against a state agency for failing to accept juvenile offenders.

Context

  • DCD Operational Failure: The new fee schedule, which raises the hourly rate from $111 to $123.20, is a direct response to the DCD’s ongoing operational crisis. The department is subsidized by the general fund after a 2022 ordinance led to mass resignations and a severe permit backlog. The fee increase is intended to make the department more financially self-sufficient.
  • External Mandates: The decision to sue the Department of Children, Youth, and Families (DCYF) was a reaction to the state agency’s suspension of intake at juvenile rehabilitation facilities. Because Jefferson County has no detention facility, this state-level failure created an immediate public safety and liability crisis locally.

Public Input

  • DCD Fees: Public comment from builders and consultants focused on the need for "guardrails" to prevent unpredictable costs, expressing a lack of trust in the department's efficiency.
  • DCYF Lawsuit: No public comment was offered.

Deliberation Insights

  • Focus on Capacity: In both decisions, the board’s goal was to restore or enforce government capacity. The DCD fee increase is meant to fund adequate staffing. The lawsuit against DCYF is meant to compel the state to fulfill its mandated function.
  • Acknowledging Inefficiency: During the fee schedule workshop, the board heard public testimony about DCD’s inefficiency but ultimately adopted the new rates based on a consultant’s cost-of-service study without adding the "guardrails" requested by the public.

Decision & Vote

  • Approved an ordinance and resolution updating the DCD fee schedule. (Approved 3-0 on August 19).
  • Approved participation in the WSAC lawsuit against DCYF. (Approved 3-0 on August 5).

Impact & Analysis

Immediate & Long-Term Consequences
  • Winners: The DCD budget, which will receive increased revenue. The county’s Prosecuting Attorney and Sheriff, who gain legal leverage to address the juvenile detention crisis.
  • Losers: Builders, developers, and residents applying for permits, who will now pay higher hourly rates for a service they have publicly criticized as inefficient.
  • Fiscal Impact: The new DCD fee is projected to increase revenue, reducing the department's reliance on the general fund subsidy. The lawsuit has no direct fiscal impact noted in the record.
Strategic Implications
  • Reactive vs. Proactive: The DCD fee update is a reactive attempt to financially stabilize a department still recovering from a self-inflicted crisis. The lawsuit is a reactive defense of county interests against a failure by a state partner.
  • Pattern Recognition: These actions show a board willing to use both fiscal tools (fees) and legal tools (lawsuits) to address operational failures, whether internal or external.
Critical Gaps & Risks
  • What was not discussed: For the DCD fees, the board did not impose performance metrics or efficiency standards as a condition of the rate increase, risking that applicants will pay more for the same level of service.
  • Vulnerabilities Created: The lawsuit against DCYF places the county in an adversarial position with a key state partner, which could have long-term implications for future cooperation.

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