Insufficient revenues. Increasing expenditures. Stagnant economy. Port Townsend is heading over its financial cliff fast.
Don a green eye shade and take a flinty-eyed look at the city budget just approved for 2024. There’s red ink everywhere. The vapid verbiage of John Mauro’s City Manager’s Report can’t cancel it. It is only erased by burning reserves unlikely to be replenished in the foreseeable future. At a time when significant growth is needed, city projections for next year see a contraction in business activity and tax revenue.
What is celebrated as growth over the years since the city emerged from pandemic restrictions owes much to recent high inflation. It is not real growth.
Since those restrictions ended, the city has lost 10% of its commercial utility accounts. Businesses are closing up and leaving town. I recently counted 18 shuttered businesses from upper Sims Way, down Water Street and along lower Washington Street.
The Public Works Director has stated that strong, steady growth and a “radical change” are needed. Instead we are seeing denial, business as usual and City Hall chasing grandiose projects it cannot afford, like an expensive new aquatic center.
The words “save money” and “austerity” are foreign to City Hall’s vocabulary. Instead, the city seeks to expand outlays and staffing. That means a more rapid depletion of reserves and an accelerated march over that financial cliff the city acknowledges is its future.
The Fiscal Cliff
The City’s Financial Sustainability Task Force predicts that city finances will launch over a “fiscal cliff” in a few short years. We reported on the city’s grim financial future here and here. The graphic from the Task Force’s final report shows the city eating reserves at a quickening rate beginning in 2025 and descending into municipal failure in 2028.
The city’s 2024 budget — just approved on December 4, 2023 — shows that the cliff is closer than the Financial Sustainability Task Force predicted. After less than two years of employment, the city’s finance director bid farewell with the last budget she would submit to city council.
The city has seen a number of resignations of other key personnel — including the city clerk, HR director, and other financial staff — a subject worthy of another report. In terms of fiscal impact, departures of critical employees translates into losses as money and time must be expended in recruiting and hiring replacements. Inefficiencies abound until replacement hires get up to speed and fit in.
The work of the outgoing finance director shows that the city currently lacks income sufficient to pay all its bills. To make the budget balance, it must take money out of reserves. A lot of money. The Financial Sustainability graphic projected very little change from 2023 to 2024. But the reality reflected in the approved 2024 budget shows the city has already begun its dive off that fiscal cliff.
Look at all the red ink in the following table from the city’s budget for the coming year.
The city had to reduce its General Fund reserve by 35% to produce a budget on paper that appears balanced. Its General Fund reserve is now just barely $4 million. That is down from $6.9 million at the start of 2023. That huge drop of more than a third of its reserves is due to the fact that the city overshot its projected 2023 expenses by almost $2.4 million. And more of its General Fund reserve will need to be withdrawn in the coming year.
Nearly $2.4 million, more than one third of the city’s reserves, were drained to meet expenses in 2023.
Where did all the money go?
Consultants got a huge chunk. And expenses related to the golf course “envisioning” and indulging expensive fantasies for a new aquatic center contributed heavily to a $4.7 million supplemental budget passed earlier in 2023.
The city has also been spending down its $2.755 million in federal Covid gift money (American Rescue Plan Act – “ARPA”). According to federal law, these funds were to be spent on water, sewer and other infrastructure, revenue replacement for the hit municipal finances took from Covid lock-down, assistance to small businesses, households and industries negatively impacted by Covid-related losses, or premium pay for essential workers. All of that money will be spent by the end of 2024; none will be left for 2025.
Judge for yourself whether these federal funds were spent properly. The largest single use of federal Covid funds — $741,500 — will, by the end of 2024, be spent on enhancing City Hall and council chambers, paying for such items as a new door, chairs and tables, carpet, and remodeling staff offices. (See page 12 of the 2024 budget report.) In his year-end message for 2023, City Manager Mauro elevated remodeling Council chambers to the level of a “core” municipal service.
The next largest use of Covid funds — $505,958 — went not to fixing sewers, water lines and other infrastructure, but to re-imagining the golf course and the pool. On top of that, another $255,000 went to parks.
Not a dime of these Federal funds was spent on fixing sewers and water lines or other infrastructure, with the possible exception of $59,000 for a mini-excavator.
The city expanded its payroll by adding a “Long Range Planner” for $240,000. Another $50,000 was spent on something called an “Engagement Survey.”
Rapid Growth and Expansion As More Red Ink Flows
Critical infrastructure — streets, water and sewers — show deficits in their capital and operating accounts. At the same time City Hall expenditures have been growing dramatically in other areas.
Comparing the city payroll in 2021 to the 2024 budget shows huge growth. Government, of course, is expanding after pulling back during the pandemic. But this robust ballooning comes in the face of that impending dive off the precipice just up ahead. City staffing is, thus, returning to and exceeding previously unsustainable levels.
Expenditures for the mayor and council have more than doubled.
The city attorney has seen a 32% increase.
Communications, a new PR department, has been created.
Human resources has grown by 260%.
Planning and Development Services has grown 250%.
Police administration — not to be confused with patrol officers — has more than doubled.
Police operations has also grown — by 45%.
The City Clerk has enjoyed a budgetary increase of 53%.
The city hopes to add six more employees in 2024.
The city manager budget has remained relatively constant, but Mauro has been hiring and expanding other departments that serve him, putting those numbers onto other budget lines. Positions like the new Communications & Marketing Manager make his office look good.
Let’s not forget that in November 2022 Mauro got a $12,500 retention bonus, a 10% raise and a car allowance large enough to cover driving 10,000 miles annually. His severance pay was doubled from 6 months to one year’s salary, and then he went on a 5 week vacation. This came at a time when he was boasting of implementing “lean thinking” at City Hall.
Feeble Economy, Diminished Revenues
The city’s utility account suggests a significant loss of businesses and commercial activity since 2021, with commercial accounts shrinking from 454 to 408.
To make matters worse, the city is forecasting a downturn in revenues for 2024 — even though it continues to increase its expenditures.
Business & Occupation tax receipts, a reflection of economic activity, have on average since 2021, been flat at $927,000, and are predicted to decrease in 2024. The Real Estate Excise Tax, which is generated by real estate sales, has declined steadily from 2022 and continues its downward trajectory in 2024.
The Lodging Tax, a proxy measurement for tourist activity, shows revenues pulling back to 2021 levels.
Sales tax receipts account for 40% of the city’s general fund tax revenues. They bounced back following the lifting of Covid restrictions but have stalled out.
Adjusted (decreased) for inflation, the picture grows more somber. The annual rate of All Items Consumer Price Index inflation in 2021 was 7%, in 2022 reached 9.1%, and in 2023 is estimated to be 3.1%. The columns in the graph immediately below would be, cumulatively, that much lower when inflated revenues are adjusted to show real dollar values.
Note that sales tax receipts are projected to decline for 2024, not a good omen when there’s already red ink in the budget.
Next Up: 2025
Where are desperately needed, steadily increasing revenues going to come from?
The lodging and sales tax graphs show that the tourist economy is effectively maxed out. THING, the music and arts festival which has been a big boost to the city’s tourist economy, will not be returning. Fort Worden, once a dynamic job creator, continues to struggle. An inadequate stock of hotel rooms — both in numbers and quality — is a serious bottleneck preventing expansion of the tourist economy and disqualifying PT as a convention or business meeting destination.
New businesses are not sprouting up in PT, nor are established businesses relocating here. As mentioned earlier, I recently counted 18 shuttered or darkened storefronts and offices from upper Sims Way through downtown on Water and Washington Streets.
There are always tax and utility rate increases to feed city coffers. But making Port Townsend an even more expensive place to live and do business is the opposite of what is needed.
The Tri-Area, by comparison, seems to be doing better economically. The office parks and retail centers appear to be fully occupied. A new Dollar Store is going into Port Hadlock and Henery’s has acquired and invested heavily in the old Hadlock Hardware. Carl’s Building Supply is expanding and adding a showroom. These are signs of confidence in what is emerging as a competitive, lower-cost economic hub slated to enjoy significant population growth in future decades. It was recently disclosed at a County Commission meeting that Jefferson County outside Port Townsend city limits already generates over 70% of the county’s total sales taxes.
Port Townsend depends heavily on retail sales. But it continues to lose out to Kitsap and Clallam Counties where many residents travel regularly to do much of their shopping. PT currently has a 9.4% sales tax. City leaders are pushing to raise it to 9.6% to fund a new aquatic center. Clallam County, in contrast, has an 8.6% rate in its unincorporated areas, and Sequim, where the big box stores patronized by PT households are located, has an 8.9% rate.
The Aquatic Center Fantasy
Cash-strapped Port Townsend already allocates $386,000 to subsidize the Mountain View pool. In an effort to persuade the rest of the county to accept higher sales taxes to pay for construction of a new $37-$48 million aquatic center, PT is promising to up its contribution to $430,000 annually for the next 30 years, and threatening to withhold its largesse unless the new pool is built at Mountain View Commons.
Baloney.
Port Townsend does not have the money to back up its words. When it falls off that fiscal cliff in a few years, will the city terminate police officers, engineers, sewage plant workers or city hall administrative staff in order to throw $430,000 at pool operations? And how can the current city council bind the hands of future city councils struggling to provide core municipal services? This city council cannot make the pool subsidy an untouchable sacred cow for the next three decades.
Spending on amenities, particularly recreation, is the first thing axed by struggling municipalities. Pools are money drains. When municipal budgets are pinched, recreation expenditures get cut. Every community that has a public pool faces this dilemma, and many have closed their aquatic facilities because they had no other choice.
Without the luxury of fat reserves and a booming economy, Port Townsend also will have no choice but to jettison its discretionary commitment to a recreational amenity. State law requires that municipalities fund core services; it does not mandate funding pools.
Water, Sewers and Streets
The city needs to spend $56 million keep its sewer system functioning by lining all asbestos, concrete and vitrified clay pipes. That is a conservative estimate. Plus, the sewage treatment plant is at capacity and showing its age. To accommodate future growth, it must be modernized and expanded. That cost has not been nailed down.
The city needs to spend, according to a 2019 analysis, $119 million to repair and sustain its sole water line from the Quilcene River. So far, the city has banked about $8 million towards this goal.
The Lords Lake dam above Quilcene that retains city drinking water requires seismic upgrades that could cost $4-5 million.
The city needs at least $30 million to get a grip on its rapidly failing city streets. Voters approved a .3% sales tax for streets, but that may not be enough. Completely and properly fixing the city’s streets is estimated to require the next thirty years and more money.
Leadership Deficit
Not only on financial ledgers does Port Townsend show a deficit. It suffers from a paucity of competent, responsible leadership. Those who exhibit and strive for financial sensibility are in a small minority on City Council. The city is mostly governed by seriously unserious people.
In their own words:
From City Manager John Mauro’s 2024 Budget Message:
Drawing together a responsible, disciplined, and strategic budget is somewhat like assembling a three-dimensional puzzle. There are many pieces, and each piece doesn’t really make sense on its own. It takes time to understand the shape and scale of the pieces and how they relate to each other. Once the pieces start clicking together, it takes the form of something more cohesive, stable, and sensible. It becomes something that keeps our community running and guides us.
We’ve put our heads together to puzzle over the 2024 budget, working out a series of inter-related puzzles at the same time – all while the pieces themselves actually morph and change. For instance, we’ve been working toward a more comprehensive vision for our streets and transportation that serves all of us. We’ve been working to increase the availability of attainable workforce housing. We’ve been envisioning the future of the golf course, and a regional aquatic center. And much more. While each of these things is, itself, substantive and complex, focusing only on one of them at a time misses a more honest discussion of tradeoffs and balance, as well as the strategic power of the whole.
All those words and not one mention of the fact the city is being forced to burn reserves again.
And then there’s this, when explaining “sensible streamlining”:
[W]e are sensibly streamlining policies to best optimize necessary checks and balances with desired efficiency and productivity.
What, if anything, did he just say?
There was hardly any discussion by city council when adopting the 2024 budget at their December 4, 2023 meeting. For clearer insights into the irresponsibility and lack of common sense of those in charge of the city’s troubled affairs, we can go to their more in-depth, more detailed and more thorough discussion of building a new pool.
The price tag, as we’ve reported here repeatedly, is huge, $37-$48 million. That $11 million spread represents the foreseeable cost overruns. We have reported on the worrisome problems with the aquatic center’s feasibility study that bode ill for the project’s long-term financial success. An expensive municipal pool can empty public coffers in a hurry and saddle taxpayers with a hungry beast that must be fed for decades to come.
How seriously have members of the ruling clique on City Council addressed this huge challenge?
Here’s City Councilor Aislinn Palmer, in her comments at the November 21, 2024 meeting where Council voted to express support for the aquatic center proposal:
The operating costs just don’t add up for me. But I think we just have to build it. We’re at the point where we have to build something, and some of that will just have to get figured out as that’s just how you get things done anywhere. (@2:19:43 of the video recording)
Councilor Libby Wennstrom got City Council chuckling. Here’s her response to concerns that problems with the aquatic center’s finances could spell trouble:
If we’re over our head in ten years, at least we’ll have a pool to dip in. (@2:31:55 of video recording)
Recently City Council devoted an entire meeting to working with a group therapist. They were told to write down things they felt they did correctly, then share how reflecting on a memory of a past success made them feel. Taxpayers were billed $1,300 for the ninety-minute session.
Gaping holes in the construction estimate for the proposed $37.1 million Port Townsend aquatic center translate into millions of dollars in future costs overruns, according to Mark Grant of Grant Steel Buildings and Concrete Systems, Inc. (see his bio below).
Mr. Grant grew concerned about the proposed Port Townsend aquatic center construction budget and did a deep dive as an act of public service. He discovered major omissions resulting in the project being seriously under-budgeted — meaning, additional costs and change orders down the road will result in significant cost overruns.
At the Brinnon public forum sponsored by the Port Townsend Free Press on November 21, 2023 he had the opportunity to brief County Commissioners Greg Brotherton and Heidi Eisenhour on his findings. Also in attendance at the meeting was Port Chairwoman Pam Petranek, Port Townsend City Council Member Ben Thomas and Quilcene Fire Commissioner Marcia Kelbon, as well as members of the public.
He later provided his analysis to County Commissioner Kate Dean in a separate letter.
Mr. Grant now shares his worrisome findings with the public. He begins by showing that the optimistic start and completion dates for the proposed aquatic center are years away from consultants’ estimates. This article is adapted from and expands upon his letter to Commissioner Dean.
— The Editors
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My budgetary concerns with the proposed new aquatic center project stem from my review of the current documentation available from both Opsis Architecture and DCW Cost Management (see report here). I am concerned that based on the current project site plans, floor plans, renderings and cost evaluation spreadsheets, this proposed project as currently estimated is significantly under-budgeted.
I have created an estimated schedule for this project based on my experience with projects that are municipally based, that require public and private funding, that require municipal bond acquisitions, and that are complex in nature. This schedule appears as the graphic at the top of this article.
A Realistic Construction Schedule
The DCW Cost Management Preferred Option – Cost Plan Update dated June 30th, 2023 doesn’t address the project schedule at all. On page 5 of this document, under the paragraph heading “Procurement,” there is a reference to “the start date is anticipated for Q1 2024,” with repeated references within the spreadsheet cost data of “Escalations to Start Date (Q2 2025).”
Their worst case scenario projects costs related to a delay in the start date to Q2 2025. The assumed start date information provided in the DCW report is not realistic given all the logistical steps needed to begin construction. It is my opinion that the political/voting, design, contractor procurement with contract negotiations, and permitting processes alone would push the potential start date out nearly two years.
For example, it is likely that the design approval process for the proposed Public Facility District (PFD) and the community approvals will take a full year. Likewise for the following phase which includes project bid solicitation with contractor selection, the submittal process, and contract negotiations.
The estimated schedule I show at top identifies that the realistic and likely start date for construction of the aquatic center as currently designed and proposed would not begin until late January to early February of 2027. This timeline is relative to my experiences with public works construction projects in general.
This would be followed by what I estimate to be a three-year construction process, moving the opening of the proposed facility out to early February of 2030. It may be possible to have an earlier completion date, but given the nature of public works projects in general, the complexity of the current design, as well as design elements that I feel are not represented appropriately with the current design information — i.e. site development — an estimated completion date in 2030 is justified and realistic.
The Budget
The current “for-construction” budget is listed as being $37.1 million. This amount includes both the soft costs at $9.2 million (for design, project management, permitting, third-party testing, etc.) and the hard costs at $27.9 million to construct the facility.
Underestimated Hard Costs
DCW’s $27.9 million includes contingency funds totaling $1.95 million (about $1.7 million for building-works line items plus $250K for sitework line items), leaving only $25.95 million in line-item construction hard costs. In reviewing the site plans, floor plans, and architectural renderings for the proposed facility, I found that the budgeted amount for hard costs was light. Based on my interpretation of the information provided by Opsis Architecture depicting a very complicated architectural design for the primary structure, with a complex clerestory multi-tiered timbered roofing design and elaborate finishes throughout, a difference of approximately $140 per square foot needed to be applied.
I also saw scope-of-work line-item omissions in the DCW cost analysis which I already assumed to be absorbed by the proposed contingency amount. These omissions should have been considered as line-item hard costs prior to any contingency money being applied.
The additional square footage costs and omissions in line-item hard costs effectively absorb the $1.95 million that had been included for contingency funds. That creates a $27.9 million base for hard costs before contingencies.
Inadequate Contingency Funding
The $1.95 million contingencies monies that DCW had allocated are significantly light; their 7.5% contingency is far below industry standards. With frequent material price escalations (now seemingly permanently embedded since Covid) as well as ongoing supply chain disruptions, the typical 10% contingency is becoming a thing of the past. It is being revised upwards to 12%-15% to manage the uncertainties and concerns of both owners and lenders.
Based on the project’s complexity and current design, I believe a contingency at a percentage basis of no less than 15% should be applied to the revised base construction costs of $27.9 million, which would be $4.185 million. This brings the project total estimated budget for hard costs to roughly $32.1 million.
Missing Hazardous Material Abatement Costs
To elaborate further, the demolition numbers are low in the DCW plan, especially in that no monies are allocated for hazardous materials abatement; the report states “No work anticipated” for this line item. This is a significant omission, as abatement will very likely apply given the age of the existing facility and the materials that were used back then for construction.
The hazardous materials abatement cost could be as much as $250,000 to $1 million, depending on the types and amounts of materials likely to be found. The higher amount added to the $32.1 million brings the hard costs up to $33.1 million.
No Stormwater Plan
Construction of the stormwater system needed to accommodate the large surface areas shown — for what would be considered to be impervious surface impacts for the parking, sidewalks, buildings, etc. — will require a substantial system design for stormwater management as required by the currently adopted Washington State Stormwater Manual. This system will require treatment/filtration, detention/retention, flow controls, and a design for overflows.
The existing soils at the Mountain View site are not conducive for infiltration, as glacial-till/hard-pan conditions are present below the thin layer of organic top-soil type material, which do not accommodate infiltration. The system designed could cost $1.25 million on the low side, and may even cost as much as $3.5 million.
The DCW plan shows a line item for storm sewer costs at $150,000 as an allowance. Note that any items in a cost analysis listed as an allowance imply there was not enough information/research done to determine the true costs, which makes these line items susceptible to huge change-order activity during construction, which would need to be paid for by the owner.
Therefore, a $3.5 million stormwater system added to $33.1 million brings the new total estimate for hard costs to $36.6 million.
Realistic Escalation Costs
The current budget also includes cost escalation funds (adjustments for future construction cost inflation) on materials and labor carried out only to 2025. As described above, that time frame is unrealistic.
The unrealistic 2025 start date indicates to me that the currently budgeted cost escalations are potentially significantly inaccurate and need to be revised to reflect a start date two years later than as proposed. There are too many issues that could significantly affect higher costs on materials and labor looking towards 2027, so it is reasonable to assume that costs will be higher.
Failure to adjust the cost escalations to match a realistic construction schedule means that likely construction cost increases are not included in the construction budget.
Escalation costs that are tied to the hard cost for construction are important to consider, but could/should be considered speculative. Although uncertain because the time the escalation occurs and economic factors are both unknowns, based on my experience it is reasonable to assess an additional $1.8 million for this project given a more realistic 2027 start date.
That makes the final total for hard costs $38.4 million.
Adding It Up: A $47.6 Million Pool
Adding the more realistic $38.4 million in hard costs and $9.2 million in soft costs brings the estimated total project cost to $47.6 million. That is a potential $10.5 million of extra costs to cover, which should be very concerning.
It is my opinion that the project feasibility should be based on this revised $47.6 million amount, not the $37.1 million as is currently proposed.
How does that amount figure into the proposed 0.2% increase in sales tax revenue needed to fund the facility construction, service the debt, and pay for some of the proposed operational expenses year over year?
Finally, money for contingencies in a project budget is not supposed to serve as a stop-gap for not performing thorough due diligence for the initial project design considerations. My concern is that this initial budget analysis (as provided to review project feasibility) has holes and does not present reliable project budget cost information for moving forward with a new capital facilities project/campaign, let alone the formation of a new taxing district to support it.
The best approach to complete this proposed project, or any project, is to ensure that there is enough money available without having to either make project cuts or go out for more funding resources, i.e. the taxpayers. If this project were to move forward based on the currently budgeted cost information, I am concerned that — with inevitable cost overruns and debt needing to be serviced — the only way out for the newly-formed Public Facilities District would be through a property tax increase, meaning the county-wide property taxpayers will have to serve as the guarantors for the initial debt secured.
Where else is the money for these potential construction cost overruns, debt servicing, and even operational expense shortfalls going to come from?
“There are two ways of being happy:
We may either diminish our wants or augment our means — either will do — the result is the same; and it is for each man to decide for himself, and do that which happens to be the easiest.
If you are idle or sick or poor, however hard it may be to diminish your wants, it will be harder to augment your means.
If you are active and prosperous or young and in good health, it may be easier for you to augment your means than to diminish your wants.
But if you are wise, you will do both at the same time, young or old, rich or poor, sick or well; and if you are very wise you will do both in such a way as to augment the general happiness of society.”
— Benjamin Franklin
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Once Port Townsend was a City of Dreams, a place of great opportunity for resourceful and creative young folks with big dreams and lean wallets. Right next to the nicest house in town you might find a ramshackle tract house with an unmowed lawn and a junker car rusting in the blackberries. There were plenty of empty rooms, sheds, garages, and places to park a trailer or pitch a tent. There wasn’t a lot of cash circulating around town, so the owners of these nooks and crannies welcomed a little help with the rent, some fixing up, or maybe just the opportunity to have someone around to talk to.
Of course most of these low budget, do-it-yourself housing solutions did not meet all of the requirements of the Uniform Building Code, Health Department Standards or Fish and Wildlife Guidelines. Survival in these situations depended on the goodwill of neighbors and the willingness of local officials to sometimes look the other way.
These low-rent situations were a godsend to folks in need, whether temporary or terminal, and a refuge for artists, musicians, New Age visitors from the beyond, tree planters, driveway auto mechanics, writers, do-gooders, jugglers, back-to-the-land, off-the-grid, hippy libertarians, zen monks, single mothers, organic gardeners and many others with aspirations too numerous to list who chose to diminish their wants in order to live out their dreams.
In Ben Franklin’s America, the pursuit of happiness replaces property as a foundational value. The wealth of the nation is measured by the happiness of the people rather than by land values and the accumulation of possessions.
Hard Times Kept PT Real
One of the best economic indicators of the times was the Food Co-op. Even in the early eighties on a typical weekday the Co-op might only net sixty-five dollars in sales. On the weekends receipts were usually over one hundred dollars. All of the labor was done by volunteers so that the prices could be kept low. Lots of folks depended on the low prices, especially single moms who could get the Co-op worker’s discount by babysitting for another mother while she worked at the store.
The food selection was pretty basic, lots of bulk foods and so not much produce. The organic growers were still sussing things out, so some of the produce in the coolers was wilted and disfigured. Co-op shoppers who didn’t know better often assumed that was how organic produce was supposed to be. There were times when the store would be out of basics like milk or bread, but there was always rice and beans and folks made do.
The winter’s winds and rains kept Port Townsend real. Most of the Victorian houses were in various states of disrepair, hard to heat and rented by the room. In winter the kitchens were curtained off with blankets and the housemates gathered around the wood stoves until it was time to trip upstairs to cold rooms to sleep in long johns under piles of blankets. The sheds and garages could be damp places in which to camp on wet winter nights.
After a day’s work it could feel too much effort to start a fire and better to go visiting instead, especially around dinner time. When the arctic winds whipped through the Port tossing boats every which way, a boat jockey might head to the Town Tavern and nurse a cheap beer or two into the wee hours of the night.
The Boomers Come to Town
America lacks generational continuity — our young people tend to graduate and get out of dodge as quickly as possible. In the seventies and early eighties, swarms of young people wandered up and down the West Coast looking for a place to land. Port Townsend had all of the essential amenities: lots of young folks, a sufficient number of tolerant townspeople, cheap food at the local co-op, cheap places to sleep and sometimes someone warm to share the night with.
It was an easy place to visit, but a hard place to stay. The regional economy was hard hit by the decline in jobs as the logging and fishing industries slowly went bust.In the dark of winter when the tourist dollars quit rolling around town there was never quite enough money to keep everyone working. Folks made do, worked for less than prevailing wages, rented out rooms at less than market value, helped each other out when they could.
The sixties didn’t arrive in most of America until the seventies. Along with the peace, love and rock and roll came the drugs, sex and rock and roll. As long as the young folks kept things on the down low, the town’s live and let live attitude prevailed. If things got “too messy”, “too loud” or there were “too many comings and goings at all hours”, the police would get a call and come restore the peace — usually without hauling anyone off to jail.
Dens of Iniquity and Community
Danny Yesberger’s place is probably the most famous of the seventies’ party houses. Back in the day his house was considered out in the country even though it is off San Juan not far from the golf course. It was a funky, yet charming A-frame, with rustic outbuildings and a natural amphitheater out back where local musicians played.
Danny’s house was also one of the early group houses. He shared the rooms in his house and his outbuildings with other young folks, some of whom had nowhere else to go. One of the most beautiful sights in his neighborhood was when Danny’s horses would break loose from their pasture, and five or six of them would race down San Juan Avenue as if there was no tomorrow.
The Town Tavern was more than just the den of iniquity it was sometimes made out to be. A group of psychology students from Oregon State founded the Tavern as a place to experiment in communal living. Community members worked twenty hours a week tending the bar and serving food in the deli in exchange for beer and room and board.
It was a sometimes dysfunctional family with a commitment to serving the community at large. The Tavern’s deli served an Everything Sandwich and a bowl of soup that made a substantial meal at an affordable price. The Tavern Co-op members tended to their share of the town’s drunks and had a couch upstairs for people with nowhere left to go. They kept the big old stoves in the tavern and deli cranking hot. They kept the beer flowing and the good times rolling, especially when the region’s best bands came to town.
In hindsight, free beer and rock & roll were not the healthiest long-term lifestyle choice, so it is not surprising that the Town Tavern experiment eventually ended.
Local Low-Rent Entrepreneurs
At best, Port Townsend’s low-rent entrepreneurs operated in a quasi-legal gray zone. Their lives were cluttered with midnight water heater floods, backed-up sewer pipes, leaky roofs, late rent checks, truckloads of left-behinds to haul away, doors coming unhinged… as they struggled to maintain the balance between things falling apart and things getting fixed up. There was always a fine line between the benevolent low-rent entrepreneur and the slum lord. In a matter of months renting to the wrong person could quickly turn a tolerably nice rental situation into a slum.
Fred “The Head” Epstein became a master of the art of dumpster diving. He distributed his ill gotten hoard of past-the-pull-date foods to friends and neighbors. Anyone who has never peeked into a dumpster would be surprised and appalled at the treasure trove of goods consigned to the local landfill.
There’s a magic to diving beneath the floor sweepings and rotting lettuce down to where the good stuff lies. It’s not enough to lean into the dumpster to fish things out — true dumpster divers go all in. Fred would surface from the dumpster with the most wonderful assortment of food that was perfectly good once you wiped away the sour milk and floor sweepings.
His friends and neighbors might be gifted with two dented cans of tuna, a loaf of bread, six quarts of yogurt and twenty pounds of mint-flavored chocolate where someone got careless with the mint extract. Fred’s friends would eat the tuna and find five other yogurt-eating friends. The mint-flavored chocolate would pass from house to house until it ended up in a two-gallon bucket on the other side of town where it sat for five years.
Fred’s dumpster diving career was cut short when the Port Townsend Safeway decided to protect Fred from himself by asserting its right to throw away perfectly good food. The mint-flavored chocolate finally went to the chickens who turned up their beaks at it.
Besides being a predecessor to the local Food Bank, Fred went on to become a Port Commissioner and one of the innovators in the low rent, do-it-yourself housing solutions. His two-story houseboat was one of the area’s most famous land yachts. He openly bragged about how he got around the building codes by planting his house on top of an old boat hull. It’s no wonder he got caught dumpster diving — Fred had his own ideas about how things should be and never hesitated to tell anyone what he thought.
Jan Anderson was a little man with a big heart. With his little trailer he moved big boats and put them in places where no one else could go. Whenever he got stuck in an impossible situation he would unhitch his trailer, go home, have a drink of wine and think his way through the next move. As for insurance, he would tell you, “The day I drop a boat that’s the last day I work. That’s your insurance.” He was the boat mover that working people could afford. Without Jan many boats would never have made into the water or to their final resting place.
Jan was also the founder of the Funky Boatyard. He rented property from the Port and sublet it to small businesses which otherwise would not have had access to space at the Port. He also had property with affordable rentals. In his later years he had the misfortune to attract meth addicts to his property. These were good people until they became afflicted with meth. Their souls turned black and they were no longer safe to have around. As the drugs have become more toxic, the risks of sharing your good fortune with others have become greater.
Bird on a Wire
There was no one quite like Niels Holm. He managed his brother’s property, which included the Ace of Cups, the old Food Co-op and Puffin Shoe Repair. Along with Aldrich’s and the library, these businesses formed the heart of the Uptown District. In the pre-internet days a lot of business and socialization took place in these establishments or out on the street where folks loitered drinking coffee.
Niels’ Zendo House was probably the most famous and sometimes infamous of the group households. In the front of the house was an austere meditation room with an adjoining tea room. The walls were lined with straw mat-covered benches with a narrow aisle in between. The meditators sat on extra-firm zafu pillows. With Niels, meditation was a serious business — not some groovy, lackadaisical, New Age experience. He had genuine Buddhist credentials. He was a personal assistant to Suzuki Roshi at Green Gulch Meditation Center.
When he was young, Niels traveled across India in a loin cloth with a begging bowl. He had a fabulous time. Everywhere he went people wanted to take him home and feed him. They had never seen a white sadhu before.
The hardest part of his trip was that he got fat from all the food. “When I got the other side of India I went to the port to ship out. The guys on the ship didn’t know what to think when they saw some long haired guy in a loin cloth come walking up the plank.”
Niels felt that houses built to code lacked character. He used to say to anyone who would listen, “I can’t build that way. Those houses are all the same, they have no soul. You know soul like the black musicians say, when someone has put everything they have into a song.”
He had a pet crow named Woody. Niels would get into his truck and drive the three blocks from his house to Lawrence Street, where he would wait on the street for Woody to “appear out of nowhere” and land on his shoulder. He loved to impress the innocent bystanders loitering on the street.
Woody’s devotion to Niels became a problem when the jealous crow started attacking Niels’ wife every time she tried to get close him. One day Woody would no longer put up with Niels’ attention to his wife and flew away.
Now and then, even years later, Niels would see a crow up in a tree or on a telephone wire and wonder if it was Woody.
Today’s Stories Are Not Yet Told
It is fine to reminisce about the times when Port Townsend was a place of greater opportunity, but what about now?
Housing costs have soared out of reach, rentals are nearly nonexistent, the sheds have been converted to bed and breakfasts, more requirements have been added to the building codes and city ordinances, and we seem to be plagued with a rash of emergency pandemic restrictions that never quite go away. Has happiness become as hard to catch and hold as the crow up in the tree?
It may seem that way because of the quasi-legal nature of do-it-yourself affordable housing. No one who cares will talk about it lest their friends or neighbors lose their right to a place to live.
Someday, the people who are out there catching happiness for themselves will tell their stories about today.
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“The Constitution only gives people the right to pursue happiness.
You have to catch it for yourself. ”
— Benjamin Franklin
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Top Photos:
Niels Holm in foreground at left works on one of his unconventional and soulful creations.
At right is the finished structure.
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New businesses are not sprouting up in PT, nor are established businesses relocating here. As mentioned earlier, I recently counted 18 shuttered or darkened storefronts and offices from upper Sims Way through downtown on Water and Washington Streets.
These low-rent situations were a godsend to folks in need, whether temporary or terminal, and a refuge for artists, musicians, New Age visitors from the beyond, tree planters, driveway auto mechanics, writers, do-gooders, jugglers, back-to-the-land, off-the-grid, hippy libertarians, zen monks, single mothers, organic gardeners and many others with aspirations too numerous to list who chose to diminish their wants in order to live out their dreams.
Community members worked twenty hours a week tending the bar and serving food in the deli in exchange for beer and room and board.
Niels felt that houses built to code lacked character. He used to say to anyone who would listen, “I can’t build that way. Those houses are all the same, they have no soul. You know soul like the black musicians say, when someone has put everything they have into a song.”