The Kah Tai Valley, between the Straits of Juan de Fuca and Port Townsend Bay, once consisted of open prairies and estuaries. Development quickly transformed this landscape; however, due to benign neglect of a small area within Port Townsend Golf Course, a colorful relic of the last ice age still remains.
From the words of a native son of Port Townsend pioneers, James McCurdy, the valley once was a botanical delight: “Myriads of wild flowers transformed the valley floor into a many-hued carpet.”
— Washington Native Plant Society
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On a shortcut across the Port Townsend Golf Course, I suddenly found myself in the middle of a remarkable patch of wild flowers. They included some of the same diminutive species I had seen growing in the alpine meadows of the Olympic Mountains. I had seen none of these wildflowers anywhere else in town and wondered how they happened to be so abundant in this one place.
It felt like a secret garden that had fallen into neglect and ruin. The person who had once tended to the wildflowers was no longer with us. I took one last look, said my thanks and continued on my merry way.
Two weeks later I met Gerry Bergstrom, a local native plant enthusiast and member of the Washington Native Plant Society (WNPS). I asked Gerry about the wildflowers at the Golf Course. She had never seen them. Once she had, Gerry was equally curious about how they got there.
She contacted Nelsa Buckingham, one of the founding members of WNPS, who confirmed our suspicion that these were no ordinary wildflowers. They were a remnant of the northwest prairies that once dominated the regional landscape during the interglacial Ice Ages’ warm spells back when the mastodons and giant ground sloths roamed the prairies, and the skies were cloudy all day.
When the intermittent outbreaks of global warming became sufficient, shrubs and trees would start to squeeze out the prairies. The wildflowers and their grassy companions would hightail it back up to the mountains above the treeline.
With all their moving around, the northwest prairies adapted to a wide variety of conditions, but they never figured how to out-compete the trees and shrubs except in places that were especially rocky, wet or dry. When the Ice Ages ended, the northwest prairies were saved from extinction by the early northwesterners who kept the trees and shrubs at bay by their persistent burning of the grasslands.
These early North American pyromaniacs preferred the prairies over the magnificent old growth forest that swallowed up most of the land. In the grasslands a person could stretch out in the sun in the open park-like place. The grasslands provided better browse for game. They were where the locals grew their camas lilies, the staple vegetable crop of the region and the second most important trade item in the Northwest after smoked salmon. The bulbs were slow-baked in pits for a day and half until golden brown, then pounded into cakes.
From start to finish there was an art to making camas sweet cakes. A fire was started in the pit. At just the right time the fire was damped down with wet leaves and the bulbs were layered on top. Sometimes, herbs like lomatium root were added to the mix. The bulbs were covered with more wet leaves and wood. The pit was sealed with a layer of soil. The fire had to be carefully tended to damp out smoke spouts lest the bulbs become scorched. Other seasonings could be mixed in during the pounding of the cakes.
Our prairie remnant at Kah Tai Prairie Preserve is on a hilltop, not the best place to grow your favorite food crop. The lushest bulbs grew in rich, moist soils of the valley bottoms. Like everyone else the S’Klallam grew their staple crop in the wetland floodplain prairies. These wetland prairies were the first places settled by the agriculturalists who immigrated from Europe and Asia. They drained and filled the wet spots and soon erased all traces of the wetland prairie gardens. Tacoma, Seattle and Olympia were among the important sites of camas cultivation.
One Hundred Years of Neglect
Thanks to the efforts of our local chapter of the Native Plant Society, the prairie remnant at the golf course looks much better than it did when I first stumbled upon it. Back then, there was a ditch ripped through the middle of it; wild roses and the non-native grasses were crowding their way in. The wildflower patch appeared unkempt, unloved and run down. It’s not surprising that Nelsa Buckingham decided that the prairie remnant survived the management of the golf course by pure happenstance and benign neglect.
When the Kah Tai Prairie Preserve was inaugurated, it touched off a small brush fire war in the environmental battles of the time. Some of the older golfers claimed that it was Mark and Ann Welch’s grandfather George who planted the wildflowers at the golf course.
In the 1920’s there were no paved roads into the Olympic Mountains, and only the more adventurous souls made it into the remote areas of the future park. Among these adventurous souls were George and Lillian Welch.
Local environmentalists claimed that George and his buddies were the ones who brought the goats into what would later become the Olympic National Park. Try this for yourself sometime — bring up the folks who put the goats in the park with your environmentalist friends and wait for the spit to hit the fan.
We had better stuff to fight about back then, so the controversy was quickly forgotten with the opening of Prairie Preserve.
Anyone who has had experience with the various wildflower mixtures and herbal lawn recipes will realize how far fetched is the idea that George Welch or anyone else could have created a native prairie from scratch by bringing wildflowers down from the mountains.
On the other hand, I was skeptical that the prairie remnant could have survived for nearly a hundred years of neglect. Without burning, intense grazing or regular mowing it takes about twenty to thirty years for grasslands in the Kah Tai Valley to be replaced by wild roses, snowberries, oceanspray and oregon grape.
The golf course faced even greater challenges than the S’Klallam people in maintaining the prairie remnant. The plants that came over with the European settlers and the Asian sojourners tend to outcompete the Northwest native prairie plants. As the prairie remnant got smaller and more isolated it became more susceptible to competition from the non-native grasses and weeds, especially around the edges.
According to one Oregon State University Extension Service lawn and turf specialist, no matter what seed you plant, what kind of turf you roll out, no matter how well you take care of your lawn… in seven years it will revert to the same pasture and vacant lot grasses threatening to invade the prairie remnant at the golf course.
It would have taken some seriously potent benign neglect for the prairie remnant at the golf course to have survived for all that time.
Mr. Whiskers and the Golden Paintbrush
There was one plant growing in the prairie remnant that seemed a possible candidate to have made that trip down from the Olympics in George Welch’s rucksack. Geum triflorum or Old Man’s Whiskers is supposedly rare in lowland prairies. It behaved differently from its neighbors in the Prairie Preserve. While most of the other plants were dispersed throughout the prairie site, Mr. Whiskers was growing in clumps in a few places and appeared to propagate mostly vegetatively rather than by seed. If George helped put the goats in the Olympic Mountains, it didn’t seem so far fetched that he might have planted a few of his mountain favorites in the prairie remnant at the golf course.
Messing with mother nature is a very human trait. When the Makah tribe discovered the South American potato, they planted it in their prairies. The result of the tribe’s years of potato cultivation is the Ozette potato, an heirloom variety that is still grown in the Pacific Northwest.
Likewise in 2004 the Native Plant Society planted the seeds of the Golden Paintbrush, a rare and endangered species, in the Prairie Preserve.
Meanwhile: What about the Goats?
The internet is riddled with stories of the goats ravaging the Olympic alpine meadows and dramatic videos of helicopters airlifting them out of the park.
But it doesn’t have much about how they got there in the first place, other than an obscure 2009 interview in the Peninsula Daily News with Mary Ann DeLong and Ann Welch, “both fourth-generation descendants of pioneer Olympic Peninsula families”:
“My granddad [Jack Pike] was the Clallam County game warden who supervised the release of mountain goats in the Olympics in 1925,” DeLong said. [Ann Welch’s great-uncle Van Welch] “was game warden in 1929 when the second group of goats was released.” …
Ann’s grandfather, George Welch, was also present at one of the goat releases…
Both women said that while their ancestors often are blamed for introducing the goats into the Olympics, they were only carrying out instructions — others, including the Clallam County Game Commission and the U.S. Forest Service, made the decision to import them from the Canadian Selkirks and Alaska, they said.
“It was a time before they understood the devastation that a non-native species could cause,” Ann Welch said. “They thought the goats would look cool.”
Jack Pike, pictured in the photograph as a dark-haired man with a black mustache, was an avid hunter and fisherman who campaigned against the damming of the Elwha River because it would ruin the fish runs, DeLong said.
Her grandfather was also known as the game warden with a heart, she said, because he would look the other way if he came across a deer taken illegally by a man who had a family to feed.
George Welch’s early photographs of the mountains were one of the ways proponents of an Olympic National Park brought the Olympics to the attention of the average person.
The goats were another effort to draw attention. Not only would they “look cool,” they would attract the interest of hunters. In fact it was the Great White Hunter, Teddy “Bull Moose” Roosevelt who established our first national parks.
In 1937 Teddy visited the Olympic Mountains, and in 1938 Franklin Roosevelt established the Olympic National Park. Hopefully Teddy snagged an Olympic mountain goat along with a rack of Olympic bull elk antlers for his collection.
When the Olympic National Park was established, hunting was outlawed. Without predators to keep the population in check, the goats went on to become a real problem in the park.
Besides chewing the alpine meadows and rockeries down to the nubbins, they treated hikers like walking salt shakers and sometimes became aggressive in their pursuit of a scarce resource. In any case the experiment failed and the goats are now in the final phases of culling and relocation.
It seems a harsh judgment when two generations later, granddaughters feel they must apologize for an experiment done by forebears with good intentions and the understanding of the time.
Lillian and George’s Wildflower Garden
Ann says that the family believes that it was her grandmother Lillian who took care of the wildflowers at the golf course. In the seventies when Ann worked there, they still burned the prairie remnant every year, just like their S’Klallam predecessors.
It’s time to set aside the foolish notion of benign neglect, an idea that reflects an environmental ethos that nature is better off left to itself, free from human intervention. Our Northwest prairies represent an ecosystem that depends on the human touch for their continued existence.
We should honor Lillian and George Welch for their efforts in preserving the prairie remnant at the Port Townsend Golf Course.
Public Health said they knew the world needed to be locked down. But now Francis Collins, NIH Director at the time, regrets “we weren’t really thinking about what that would mean … we weren’t considering the consequences … the public health people have a very narrow view of what the right decision is … You attach zero value to whether this actually totally disrupts people’s lives, ruins the economy, and has many kids kept out of school in a way that they never quite recover from. So, yeah, collateral damage.”
Public Health said they knew everybody had to stay 6 feet apart to be safe, but last week Dr. Fauci admitted before Congress that was just made up, “not based on scientific data“.
When the warp speed mRNA jabs were rushed through testing and the controls were injected just weeks later so no longterm safety data was possible, Public Health nevertheless proclaimed they knew that jabs were “safe and effective”, even though they could not possibly know that at the time.
After all, the trials never even tested for protection against transmission; as covid coordinator Deborah Birx later admitted, such promises were just based on “hope that the vaccine would work in that way“, not knowledge.
Another thing Public Health didn’t know was recent revelations that the trials were a bait-and-switch, because vaccine manufacturers couldn’t produce to scale so used different methodology to make the jabs everybody took than what was tested in the trials.
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed…
Everybody knows that the boat is leaking
Everybody knows the captain lied
Everybody got this broken feeling
Like their father or their dog just died …
Everybody knows it’s now or never …
Everybody knows the plague is coming
Everybody knows that it’s moving fast…
Everybody knows, everybody knows.
Everybody knows — except Public Health and those they’ve bamboozled.
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Following my public comment, Dr. Allison Berry responded with the kind of disinformation that has consistently characterized her tenure as county health officer. Among her most egregious statements at the January 18 meeting were continuing to urge mRNA and other respiratory virus shots on infants and pregnant women, and suggesting permanent masking to prevent flu despite proven ineffectiveness.
Berry’s dangerous narrative was roundly discredited years ago, as reported in past Free Press articles. The evidence of deaths and injuries from the shots, as well as their negative efficacy, has only increased since those reports.
Previous articles detailing local Public Health disinformation include:
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.
What a mess. The $108 million Port Townsend Aquatic Center as proposed to City Council would default in its first year. To calm skeptical taxpayers, numbers are being juggled, massaged and manipulated. Millions of dollars magically disappear from cost entries in order to turn red ink black. Looking closely, one can see there is no money to pay for administration and management during and after construction, thus making the project appear less costly to taxpayers.
But under the pixie dust, above the smoke and mirrors, behind the curtain, the hard, cold reality remains unchanged: economically distressed Jefferson County simply cannot afford something so costly.
Red Ink Turned to Black Ink (Not Quite)
At the same time they were seeking City Council’s endorsement for their proposal, promoters of the aquatic project did not disclose that their calculations showed the aquatic center could default in its first year of operation.
On October 16, 2023, City Council was asked to endorse the proposal from the aquatic center Steering Committee for a $37.1 million aquatic center and county-wide sales tax to pay for it. $22.1 million would be borrowed through a bond supported by sales tax receipts. $5 million, council was told, would be raised by the Jeffco Aquatic Coalition, $5 million from state grants and $5 million from federal grants.
The impressive 30,000 square foot facility being proposed would greet visitors with a high-ceiling, gleaming atrium with expansive glass walls, leading to the natatorium.
There swimmers could choose from the cool water 25-yard, 6-lane competition pool (where their form and speed could be judged by those in bleachers built to hold 100 spectators), or they could dip in the warm water of the 3,000 square foot recreation pool, where they could also walk against the artificial current of a “lazy river” feature. Afterwards, they could kick back in the $106,000 whirlpool/spa.
On other occasions, they could rent out the “birthday room” or knock around a ball on the new pickleball courts outside. There would be very nice universal locker rooms, showers, offices, storage space and parking for about 130 vehicles.
Of course, neither the city nor the county has the money on hand to build this facility. Money must be borrowed — $22.1 million, according to the “final” report.
In our previous reporting, we examined the pro forma upon which the Steering Committee was operating. A pro forma is a projection of annual debt service payments (principal and interest) versus expected revenues from the new county-wide sales tax the committee is proposing. Its purpose is to determine if the bond can be repaid.
The city’s own analysis showed that the project would default its first year. Sales tax revenues would not be adequate to pay the project’s debt. The specter of default loomed even though the pro forma assumed a pollyannish interest rate of 4.5% — something we won’t likely see again for years.
The Steering Committee, City Manager and its Parks and Recreation Strategy Director knew this when they sought City Council’s endorsement of their proposal on October 16. I noticed that in the 316 pages of the Report and its appendices in council’s “packet,” there was no pro forma to show if the project could shoulder the debt load they were proposing. In all those pages not even a cumulative interest amount was stated. That is an important number.
In calculating the actual cost of the project, there’s more to it than just the construction costs. The cost of borrowing money must also be considered. That simple calculation was omitted from the material presented to City Council.
So I asked for it. Carrie Hite (Director of Parks & Recreation Strategy) sent the pro forma to me, accompanied by an email in which she wrote: “You ask some great questions and the pool’s financial viability is something we continue to explore.”
This was October 18, two days after the “Final Report” had been submitted to City Council with a request for their endorsement. I then wrote the article reporting that the city’s own internal analysis showed the aquatic center unable to pay its debts and going into default its very first year.
After that report, city staff and the Steering Committee got to work to come up with a more attractive financial picture.
They made stuff up.
What they did was run several new pro formas at 5.5% interest, since their unrealistic 4.5% rate was so obviously invalid. 5.5% is still a very favorable interest rate for a project like this. As of this writing, investment grade 30-year municipal bonds might merit that rate.
But the bond for the aquatic center could very well not enjoy that coveted rating and would have to offer a higher interest rate. How much higher is difficult to say as each bond would be priced according to its individual risk characteristics, and would not enjoy the benefit of a bond agency’s screening and rating.
Consider this: the bond would be floated by a brand-new Public Facilities District (PFD), with no track record, no assets, no money in the bank, nothing in the way of collateral.
The cost of the proposed aquatic center is so large and squeezed so tightly into the limitations of the county’s tax base there are no reserves. If there is a year when the economy hiccups, if costs shoot up unexpectedly, if something big breaks, if the aquatic center does not see the very optimistic 800% increase in use required the first year of operation — there is no cushion, no way to pay bills and no way to meet debt obligations.
This would be a risky bond for investors.
It would be a revenue bond, which would carry a higher interest rate than a general obligation, levy-guaranteed bond paid with property taxes. As the Municipal Research and Service Center explains, “Revenue bonds are not backed by the full faith and credit of the city, and therefore investors consider them somewhat less secure than general obligation bonds. As a result, the interest rate that bond buyers demand may be higher than those on general obligation bonds.”
It will also likely have to be guaranteed by the city or county. It is highly unlikely that anyone will hand over $22.1 million to an untested group of people with no security for the loan other than a guess at future sales tax receipts. Without the city or county putting their assets behind it, this bond could well be rated as below investment grade. That means creditors would demand to be paid a higher interest rate in exchange for accepting more risk.
Enough for a lightning primer in public finance. Let’s look at how $2.1 million has to disappear to turn red ink black.
In response to another request, Carrie Hite provided the latest pro formas they have been considering. You can open the PDF here.
The first 6 years of red ink from the Aquatic Center’s latest pro forma. Note “$20M Bond” is a typo in the city’s pro forma, which should read “$22.1M Bond, 30 YR, 5.5%”.
Now you see it, now you don’t.
There is no way the proposal submitted to City Council can work. Not at 4.5% interest over 25 years, as we have reported. And definitely not at 5.5% interest, when the deficit would swell to more than $246,000 in the first year!
The Steering Committee looked at stretching out the term of the bond to 30 years in the hope periodic payments would be affordable. That won’t work, either. The first year shortfall would still be more than $120,000, as shown in the image above.
So what they did was reduce the amount of money to be borrowed by $2.1 million, stretch out the term of the loan to 30 years and cross their fingers as they sat back and waited for Excel to do its thing. Voila! There’s enough money to make it work — just barely.
They’ve also played with cutting the amount financed to $17 million so the numbers look better.
But this project will still cost $37.1 million to build. It has not been redesigned. Nothing’s been cut. Where will that $2.1 million or $5.1 million in savings come from?
Manna from Heaven
In the “Final Report” (now you understand why we have put that between quotation marks) the Steering Committee told City Council they hoped to raise $15 million, with $5 million each coming from gifts, state grants and federal grants. Maybe now they will tell officials and taxpayers they are going to raise even more in order to have to borrow less. So where are those extra millions going to come from?
Regarding those state and federal grants, the minutes of Steering Committee meetings, found at the end of the appendices to the Final Report, are vague at best on this subject. “Maybe,” “could,” and “perhaps” are used a lot. The only state grants discussed are for work outside of the pool, like for a gym. But there is no gym in the proposed design. There is no state grant for building a pool mentioned in the minutes.
The federal grants discussed would only be for seismic resiliency, that is, covering the additional cost of building stronger for earthquakes. But minutes also reveal that the cost of adding seismic resiliency has been shown to exceed the extra money grants contributed in previous projects.
So much for the certainty of state and federal grants.
So maybe wealthy, generous people will give not only $5 million, but go as high as $7.1 million, maybe $10.1 million.
You Go First
The Jeffco Aquatic Coalition has shown no evidence it has raised $10,000, let alone $10.1 million for the aquatic center. According to minutes of the steering committee, they want a tax measure on the ballot before they start their capital campaign. So far, not enough money to buy some faucets has been raised from private giving or state and federal grants.
There is definitely a rush to get this on an April 2024 ballot.
They want taxpayers to go first. Raise taxes, start making most things more expensive in Jefferson County — from Amazon purchases to socks to home construction and improvement — and then they will start trying to get the rest of the money.
So what happens if taxpayers across the county agree to pay higher taxes, the taxes kick in, but the rest of the money needed doesn’t come through?
Seriously, what happens?
Umm, Didn’t You Forget Something?
The budget in the Final Report maxes out all possible sales tax revenue. The numbers are so tight there is no debt or operating reserve. As we have reported, we are being told that the operating costs for the proposed PT Aquatic Center will be about 40% lower than the comparable experience of the Shore Aquatic Center in Port Angeles, which sees about $2 million a year in operating expenses.
Hite suggested in The Leader that the difference in operating costs can be explained by the Shore Aquatic Center having four “tanks” or pools — a competition pool with diving area, a spa/whirlpool, a wellness pool and an activity pool with a “lazy river.” Port Townsend’s aquatic center would have only two, she said.
Actually, PT would have three pools: competitive, warm water with the “lazy river” and whirlpool. Both facilities have almost exactly the same square footage. The PT Aquatic Center would have a sauna, as does the Shore facility. One could predict that the design of the PT facility would be more expensive, with its higher roof line and graded slope, than that of the Shore center.
Regardless, having an additional small pool, the wellness pool, is only a difference in construction costs, not operating costs, and certainly does not explain how the PT Aquatic Center could operate on $742,000 less than the Shore center. Most operating costs are labor. As discussed below, the fact that there is no provision for administration and supervision of the PT Aquatic Center may go a long way to explaining why its projected operating costs are so low. If operating costs inch up just a bit, the PT Aquatic Center ship capsizes.
A closer inspection of the feasibility study provides some answers. We can see what’s been carved out so the PT facility will have lower operating costs than its counterpart not far away.
For one thing, the Shore facility has an executive director. He interacts with the board, manages the tax revenues and grants, oversees state-mandated audits and reporting, responds to public records requests, etc. He oversaw the $20 million upgrade and expansion in 2020. He supervises the facilities manager, head lifeguard, maintenance crew — everything from physical plant to hiring and firing to dealing with the public and government agencies. He has support staff to help him in this essential work.
The budget for the proposed “base” PT aquatics center, on the other hand, not only does not provide for an executive director, bookkeeper and other support staff, it does not even provide funding for a facility manager. (See p. 55 of Ballard*King feasibility study).
Shore’s 2023 financial reports shows $158,500 in salaries for administrative staff. The PT Aquatic Center budget is zero.
Shore spends $112,000 on its Front Desk supervisor and crew; the PT Aquatic Center is budgeted for only $66,378, with no supervisor.
Shore’s budget also includes salaries totaling $118,700 for janitorial and maintenance versus the PT Aquatic Center’s budget of only $71,868.
Shore sees janitorial and maintenance expenses for its new facility at the annual rate of $33,200; the PT Aquatic Center budgets only $18,000.
Shore has learned its insurance costs $93,900 annually; the PT Aquatic Center budget is only $20,000.
Shore spends $71,100 on childcare; the PT Aquatic Center budgets nothing for childcare.
Shore has learned from experience to budget $190,000 for materials needed to maintain and repair its 3-year old facility; the PT Aquatic Center budget is only $18,000.
The unexplained discrepancies go on and on until the PT Aquatic Center is budgeted to operate at about $742,000 less annually than the comparable Shore Aquatic Center.
How can such a large facility be run without anyone in charge?
Answer: local government would provide management and administration and bear the cost.
That is an explicitly stated assumption in the Ballard*King budget. (See p. 46). Accordingly, no costs associated with administration are entered into the aquatic center budget; these costs would be off the books in a local government budget. But neither the city nor county governments are going to manage the aquatic center. The city that is heading over a “fiscal cliff” certainly doesn’t have the money.
It is being suggested that the YMCA will manage the facility. But there is no money anywhere in the budget to pay the YMCA.
And who, pray tell, is going to build the new aquatic center?
Not the city. Not the county. It will be a brand new agency called a Public Facilities District (PFD).
This new agency will have to complete the design, engage architects, engineers, put together bid packages, solicit and analyze bids, negotiate contracts, hire and pay construction costs, inspect and approve work and change orders, seek and manage grants, meet state auditing and reporting requirements, comply with public records and open meetings law, serve the appointed board of the PFD, etc. They will need an office, telephones, copiers and lighting so they can see while they work.
The Port Hadlock sewer project needs a crew of about a dozen people to oversee construction.
There is no money in the budget for anyone to get the new aquatic center built and opened!
Even after construction, the PFD will have legal obligations and work that must be done as a governmental entity. But there’s no money to fund a PFD. None.
As If More Consultants Were Needed — Actually, They Are
The Final Report recognizes the work of seven consultants, including a “public engagement consultant.” Missing from the list is a much more critical consultant: the bond, or financial consultant. It is a wise and common practice for public agencies that will be seeking bond financing to engage the services of a bond consultant, such as Northwest Municipal Advisors, who have worked with local governments and public entities in Jefferson County.
They create pro formas using realistic market rates because they work in the bond market every day. They understand that bond financing is very different from, say, mortgage financing. An amortization schedule for a municipal bond will be quite different than the simple pro formas being considered by the Steering Committee. When it comes time, the bond consultant would be the debtor’s negotiator with lenders.
The bond consultant may arrange the short-term bond anticipation note — the equivalent of a line of credit to be used to keep the project going before the funds from the long-term revenue bond are available. That also has been overlooked in the Steering Committee’s calculations.
The interest that would start being due at the beginning of the project will likely be capitalized and rolled into the principal of the long-term revenue bond, raising the dollar value of the amount financed — another omission from the Steering Committee’s calculations, but something a bond consultant would catch.
Then there will be the bond underwriter who raises the capital for the bond.
State law and IRS regulations require engagement of bond counsel. They provide a professional opinion that everything is legal (to oversimplify matters) and that the bond would qualify as tax-exempt.
All of these people have to get paid. Their compensation will come out of a percentage of bond proceeds, which is accomplished by increasing the principal amount of the bond. Thus, a $22.1 million bond would be increased to, say, $22.5 million or maybe more to cover these fees. Taxpayers effectively borrow money to pay these people, as well as borrowing money to pay capitalized interest. That raises the periodic payments and increases the cumulative interest paid over the term of the bond.
None of this is factored into the calculations underlying the “Final Report” and Recommendation — most likely because the Steering Committee spent money on a “public engagement consultant” instead of a bond consultant. The operating and financing costs are thus seriously understated, as PR to sell this to the public was prioritized over crucial bond expertise
The work is hugely incomplete. There are holes in the budget, with necessary items not budgeted, and hopes and prayers plugging the gaping holes. Taxpayers are being rushed into taking the first leap into the murky waters with city councilors being herded into endorsements without getting a complete picture of how bad this thing is.
Cherry Street Project on Steroids
This really is a mess. It is much, much worse than what we saw with the Cherry Street Project. There are so many parallels with what went wrong with what was also a well-intentioned, but fatally flawed undertaking.
Faulty financials:
The Cherry Street Project was created with “bogus” numbers. The feasibility study for the aquatic center, on which everything must stand, is, frankly, garbage. The community is supposed to bet $108 million on the judgment of a consultant who thinks that Mountain View Pool is in Kala Point and Port Ludlow’s pools are on Bainbridge Island. That consultant, as we just discussed, wrote a budget for the aquatic center that has no one in charge.
Like the “bogus” numbers underlying the Cherry Street Project, the bogus numbers underlying the aquatic center are being ignored in a rush to get this on an April ballot.
No unbiased, non-vested confirmation of feasibility:
The Cherry Street Project was pitched and defended by consultants hoping to land a nice contract to execute the project. The same thing is happening here.
Only those who stand to gain a piece of the action — be it Opsis, the architect, or the YMCA — are presenting this project to the public and decision makers. There has been no independent double-checking of the (shoddy) work of the consultants — except by the volunteer citizen journalists of Port Townsend Free Press.
Rush to approve despite warning signs:
There is a rush to just get the money from taxpayers and figure it all out later. We saw this with the Cherry Street Project when hard, cold numbers spoke failure, but city councilors charged ahead out of a sense of haste and not wanting to get bogged down with details or appear to be a dissenter and nit-picker.
If Cherry Street taught a lesson it is this: it is a lot easier to avoid sliding into a project than it is to get out of one.
We were a voice crying in the wilderness when no one wanted to hear of any problems with the Cherry Street Project. Our analysis — which was always based on the very documents and data available to city council and city staff — proved correct. It was a tragedy that the Cherry Street Project ended in such a costly failure and that it dragged out so long.
City officials say they learned their lesson from that fiasco — but have they really?
Seven years later, chalking up a loss of $2 million, the City of Port Townsend has accepted a bid to tear down the never-rehabbed, asbestos-ridden Cherry Street “demonstration project”. That loss pales in comparison to the $100+ million gamble of the proposed aquatic center.
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For reports on the many other red flags and alarms in the critical feasibility study upon which this shaky edifice is built see:
The grasslands provided better browse for game. They were where the locals grew their camas lilies, the staple vegetable crop of the region and the second most important trade item in the Northwest after smoked salmon. The bulbs were slow-baked in pits for a day and half until golden brown, then pounded into cakes.
In the 1920’s there were no paved roads into the Olympic Mountains, and only the more adventurous souls made it into the remote areas of the future park. Among these adventurous souls were George and Lillian Welch.
It behaved differently from its neighbors in the Prairie Preserve. While most of the other plants were dispersed throughout the prairie site, Mr. Whiskers was growing in clumps in a few places and appeared to propagate mostly vegetatively rather than by seed. If George helped put the goats in the Olympic Mountains, it didn’t seem so far fetched that he might have planted a few of his mountain favorites in the prairie remnant at the golf course.
Likewise in 2004 the Native Plant Society planted the seeds of the Golden Paintbrush, a rare and endangered species, in the Prairie Preserve.
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.”
