More on the City Council vote to purchase Skippers property

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We promised additional information regarding the City Council’s 5-2 vote Tuesday night to purchase the vacant Skippers property across from the Edmonds Ferry Terminal. Here’s the latest on this topic, which has generated a healthy debate here and on our Facebook page.

Councilmember D.J. Wilson, who along with Councilmember Strom Peterson voted against the measure, sent an email to constituents Wednesday describing the decision as “Fiscal Irresponsibility Like I’ve Never Seen It.” Declaring that “we simply don’t have the money,” Wilson included a link to a spreadsheet that shows the city with a $500,00 budget deficit by 2012 and noted that the city council had to cut more than a million dollars from the budget last year and furlough employees.

“We’ve already made major cuts at the City, including selling our fire department,” he said. “Where else are we going to cut to be able to afford this purchase?”

In addition, Wilson said, since the city hasn’t had time to appraise the property, no one knows how much it is really worth. “There is no plan in place to develop the parcel. No pro forma to determine whether it makes sense financially. Absolutely no vision for turning that property into a useful asset,” he wrote.

Councilmember Diane Buckshnis, a former banker who has prided herself on fiscal accountability to taxpayers, voted for the measure and said in a phone interview Wednesday she sees no conflict between her vote and her desire to maintain a balanced budget for the city.

For starters, Buckshnis said, she can’t support Wilson’s assertion that city is going bankrupt – at least not yet. That’s because she is not confident that the financial data provided by city staff is accurate and she believes that the budget numbers offered to the council so far this year are “unsubstantiated.” In addition, because there were competing offers being made on the Skippers property, including one for a fast food restaurant, those supporting the measure felt it was important to act quickly to ensure that the property is under city ownership, Buckshnis said.

She said she is confident that the city will be able to find creative ways to fund the purchase, possibly through a bond sale or a public-private partnership or even grant money, depending on how the property is eventually developed. The bigger issue, Buckshnis said, is preserving that parcel of land “for future generations of Edmonds residents.” While there are no current plans to develop the property, Buckshnis said she supports the idea of using it as a cornerstone for an environmentally friendly development that could include parkland or other “ecotourism” features.

21 COMMENTS

  1. While I appreciate that Ms. Buckshnis has experience in the financial industry, I do not concur with her conclusion. It is the selective approval of data from the same source that is the dead giveaway of a council member attempting to justify action that is already done.

    In the real financial world, when there is uncertainty (such as unsubstantiated budget numbers), it is called “risk”, and that is not the time for a major capital outlay. Especially a major capital outlay without even a hint of a business plan. Unless, of course, you are in a position where you demand that people support your investment, or suffer consequences such as further service cuts, and unpaid furlough days for city workers.

    Some of us have families and budgets. We’re working people, not bankers. A million dollars, to us, is real money.

    On the bright side – the piece of property in question could be a “tipping point” in bringing positive change to the eyesore that is the waterfront activity center. So, while I don’t approve of how this was done, no responsible citizen would attempt to sabotage efforts to turn this irresponsible and arrogant display into success for the City.

    Reminds one of Atlas Shrugged, actually….. guess who’s not in the part of Dagny Taggart.

  2. DJ:

    While your unpleasant email charging five of us on the city council with “fiscal irresponsibility” was based on the Mayor’s most recent five-year projection (attached), you failed to disclose in your broadcast that those projections include annual, year-to-year labor cost increases of 6.7% (2011), 4.4% (2012), 5.7% (2013), 4.4% (2014), 4.5% (2015) and 4.6% (2016).

    Put another way, your accusation of fiscal irresponsibility against five members of the city council assumes without question that the city’s annual labor budget of $16.5 million increases by 35% in five years, even though — due to the Fire Department sale — we’ll have 54 fewer employees !

    Put another way, based on your assumptions, ALL of the annual labor savings allegedly incurred by selling the fire department — $6.7 million per year — ALL of it is completely restored to the remaining labor budget (with 54 fewer employees) after only five years.

    FACT: Your posture is that the City should abandon plans to enhance the waterfront area in order to raise city payroll five percent per year, compounded annually. … “Fiscal irresponsibility” …. What’s your policy ?

    Steve Bernheim
    Edmonds City Council # 6
    http://www.ci.edmonds.wa.us/cp6.stm
    512 Bell St.
    Edmonds WA 98020
    Council Office Hours: after 4:30 p.m.
    425-744-3021 (desk/message)
    425 712 8418 (fax)
    206 240 5344 (cell)
    council@stevebernheim.com

  3. Steve:

    The budget Outlook assumptions are, of course, important to know. Considering that the labor expense line also includes benefits ( which typically have high annual growth rates), and that the labor line grew at a CAGR of 9.5% over the past 5 years, a CAGR of 5.1% over the next 6 years is probably not unrealistic – unless council is prepared to make some major changes in compensation practices.

    Since revenues are continuing to trend downward, isn’t more appropriate and responsible to budget conservatively? Ms Buckshnis says that she’s a fiscal conservative, but her actions say the opposite.

    Ron Wambolt

  4. Steve:

    I should also add that Ms Fraley Monillas is not thinking very clearly. She twice spoke Tuesday night about the mis-deeds of past councils – they didn’t live within their budgets. The truth is they did live within the budgets, thanks to the mayor’s expense cuts, but the real problem is that the 2007/2008 budget was flawed. She then proceeded to vote for a discretionary $1.1 million expense THAT HAS NOT BEEN BUDGETED!

    Ron Wambolt

  5. Steve:

    9.5% CAGR for labor over the past 5 years seemed too high, so I double checked it. I found that the figure I used for 2004 did not include benefits. The real CAGR was 3.9%; there were several high-paid positions unfilled in 2009 compared to 2004.

    Ron Wambolt

  6. Ron:

    Thank you. This is the same question I have been asking? It is common knowledge that we are asking labor to renegotiate their contracts ANOTHER year. It is also common knowledge that the firefighters insurance is underfunded. How are we going to make the numbers work?

    I always leave it to you to have the numbers. Thanks.

  7. Well, how about a cakewalk? People purchase a ticket to participate in one round of a cake walk, and the winner gets to select a cake. How many cakes go into $1.1 million?

  8. Mr. Bernheim;

    No-one is against revitalizing the disaster that is the waterfront activity center. The question at hand is the methodology, and the “revisionist history” being employed now, to try to make it look like there was a plan prior to this purchase.

    There was no public plan, and no public input, before we citizens were put on the hook for over a million dollars. Compounding this problem is that the city budget numbers simply look terrible in their current form, and can’t bear this expense.

    Your post above belies the fact that you do not know what the city budget is. By saying the labor cost numbers are too high, you’re saying that you don’t know the bottom line with any accuracy. You need a revised bottom line FIRST, then you can assess the wisdom of outlaying a million dollars.

    Once again, to accentuate the positive, just because this was done in a way that the citizenry finds distasteful, we’re not going to let this effort fail now. That property is pivotal to revitalizing the waterfront – so we’ve got some more work to do to figure out how to best leverage our new position as property owners. Oh, and we’ve got to figure out where to get a million dollars.

  9. Steve,

    With all due respect, I disagree with your key assertions.

    First, those are not my numbers or my assumptions. Those are the City’s numbers, and the City’s assumptions, produced by our Finance Director. If you have produced other numbers, I’d happily look at them. If the Council majority doesn’t trust those numbers, I understand that. But does that meant the majority is making decisions without any numbers?

    Second, you know that it is not my policy to abandon development down there. I have put in a good deal of time – with you in many cases – trying to figure out how we can pus.h redevelopment there. I am even open to the idea of purchasing the property, under the right circumstances – the most important of which is that we have stabilized our finances.

    We just don’t have the money to be making this purchase, and the Council majority – contrary to your efforts to prod them, which I appreciate – still has yet to come to terms with a levy or with any identified cuts to address our fundamental problem.

    I’m sad to say that it appears, contrary to some of your efforts and comments, that this Council simply doesn’t understand cash flow or the financial state we’re in.

  10. DJ:

    How can you say, “We just don’t have the money” – When if fact you don’t know.

    Both the City Council and citizens are in the DARK. Show me the 1st Quarter 2010 and 4th Quarter 2009 Budget Reports. Tell us what financial figures you base this assertion on. The City’s check book has never been balanced. Those of us that have studied the City’s Financial Forecast spreadsheets discovered both mathematical errors and missing money. We have brought those errors and inaccurate figures to your attention only to be ignored.

    The City of Edmonds Financial Forecast is a trumped up, inaccurate spreadsheet of numbers for the sole purpose of floating a levy. DJ Wilson enjoys digging deeper and deeper into the pocketbooks of the Edmonds citizens. DJ Wilson supported tax, after tax. All the utility taxes (Telephone, Cable, Water and Sewer) were increased in 2008. DJ Wilson supported the Transportations Benefit District adding vehicle license taxes. Even after receiving 1 Million dollars in Federal Stimulus money for road projects. The City needed the additional tax money. The Financial Forecast document is a fabricated set of numbers to make the City’s financial position appear broke, again only to pass a new property tax levy.

    Another example of your fiscal irresponsibility, the Council in December 2008 voted to float 4 Million dollar Council Bond for the unnecessary Fiber Optic Network. Both your financial and legal advisors claimed the Fiber Optic Project would be revenue “neutral”. From my looking at the bi-weekly warrants and a couple of public record requests, the City is losing money. How much money has been spent on this project? What are the savings and income? Give the citizens the bottom line figure.

    You supported the Mayor’s March 13, 2009 message and autocratic decision to close Yost Pool, cut funding to the Senior Center and cancel the Dare Program based on false numbers. You supported the poorly negotiated contract with Fire District 1. What are your priorities Mr. DJ Wilson?

    Vacant tall buildings on the Edmonds waterfront with For Sale/For Lease signs plastered all over them, great real, is this concept really a priority.

  11. Finis: Maybe the city would have more money if I and the rest of the citizens were not paying for defending the frivolous lawsuits and numerous freedom of information requests you pull.
    Your logic makes no sense. According to you we don’t know how much money we have so we should spend a million bucks. And then you devolve into personal attacks. This is not being a gadfly, it is being a noisy jerk.

  12. Finis;
    The issue at hand is that the City Council (which is no longer led by DJ Wilson, I might add), obligated us for over a million dollars, without any citizen input, and without a clear picture of the City’s financial outlook.
    You are dead-on in asserting that our City’s financial numbers require more work in order to reflect our best estimates of future costs and incomes. The City Council has a Finance Committee, purportedly led by Mr. Plunkett, that is responsible for the oversight of these financial projections.
    If the current numbers are, indeed, “trumped up”, then it is Mr. Plunkett who is to blame, for once again being too busy, seemingly campaigning for Mayor now, to do his day job of oversight. We deserve better.
    I’m glad that you and I are on the same page, again, about the need for financial discipline and transparency in the City, especially in tough times like these. When we don’t know the balance in our checkbook, that’s not the time to write a big check!

  13. I do have a pending lawsuit. The City had every opportunity to provide me the documents I requested and choose not act according to the letter and rule of law.

    I might add I gave the City every opportunity to comply with law prior to filing this lawsuit. In prior to going to the Court House to file this case Gary Haakenson requested I do so.

    You again have demostrated you don’t know anything. May I suggest you relocate yourself to a different planet.

  14. Finis, thank you for proving my point. I may not know a lot, but then again I haven’t spent time fielding PDC compaints over the last 20 years.
    People like you who revert to nasty name calling, let alone borderline voter fraud, dilute the process of citizen interaction in government affairs. How can we have intelligent debate when one side doesn’t bring their big people words to the table? Your noise pollution contributes little to the debate other than comic relief.
    Good day sir.

  15. As I sit here on my favorite day of the year – Tax Day, I am still stunned by the City council’s latest ‘gift’ to us taxpayers.

    When we do not have enough money to keep our own fire department, when we nearly lose our swimming pool due to budget cuts (saved by the public’s donations), when we have a city wide hiring freeze because we can’t afford to hire anyone, when we have to furlough city staff to save money, when those same employees took pay cuts so could still pay them, when essential maintenance of roads and other projects in town is put off to budget constraints, our council by a 5-2 vote this week decided to buy a piece of real estate for over $1,000,000!

    What were they thinking? We don’t know because they have not told us. During a council meeting that was meant for committees to meet, they somehow miraculously came up with a plan to buy this land that has not been appraised & WE HAVE NO USE FOR. It is going to cost us many thousands of dollars (that we can’t afford) just to do a feasibility study & to have it appraised. Pretty fast work for people who took months of meetings with tons of public comment to decide about leashing cats!

    It is bad enough that our citizen’s voices count for next to nothing with Congress & Olympia, but one would expect (foolishly it seems) that something this costly & unnecessary & local would have at least some public input. We have an Economic Development Commission. Why were they not consulted? Why were we (you know, the people who have to pay for this) not consulted? Why were no public meeting scheduled?

    So, instead of a business person buying the property, whether for a fast-food restaurant (as rumored) or another type of business that would be contributing badly needed sales & property tax dollars, the council seems to think taking a supposedly million dollar property OFF the tax rolls is a good idea?

    Maybe we can rise up and defeat this idea & then use some of that money to hold a recall election for the Fiscally Foul Five? Lets get a petition going.

  16. Chris and all other concerned citizens- FYI: I just got the draft agenda for the next City Council meeting (April 20th), and it contains a public comment period regarding the “potential” purchase of the Skippers property.

    While the FFF, as you call them, have clearly acted in error in moving forward without a plan or public support, there is still the opportunity to derail this deal (30 days, and it will only cost us tens of thousands of dollars vice millions). And, based on the carefully worded agenda item, I think we might, finally, be making inroads on this matter with the Council.

    If you do make it to the Council meeting – I propose the following messages:

    1. Purchases this big require public input before making a decision. You did this on a night normally reserved for Committee meetings, and without even consulting the Council’s appointed Economic Development Commission. The way the Council executed the purchase made it look like they were trying to do it on the sly. Don’t do that again.

    2. Our City’s finances, according to four of the “FFF” who have spoken on the matter, do not accurately reflect reality. You get out of it what you put into it. You have a Finance Committee, chaired by Mr. Plunkett, that provides fiscal oversight. If the budget numbers aren’t right, and you haven’t had them fixed, it is his fault. Accountability is not a four letter word.

    3. Hanging Mr. Wilson out to dry may be an acceptable sport for some on the Council – but it is ungentlemanly and unproductive. The Council appointed a subcommittee to investigate and report. It was an outright lie to then paint that subcommittee’s work as somehow secret and without mandate. All this has done is confuse the issue – there are people now who actually BELIEVE that the FFF bought the property to “save us” from Mr. Wilson’s evil designs. Some Council members (ok, just Mr. Plunkett, if you must know) even used their campaign lists to send out smearing emails to whip up emotions. Stop campaigning and get some damn work done. For once.

    By keeping our messages aligned, we might hit the same spot on their thick skulls enough times that they might actually hear us.

  17. Given the current state of economics that the city finds itself in I find it incomprehensible that the City Council could be so irresponsible as to spend one million dollars without having the resources to do so.

    And to come to this decision during a committee meeting night without any input from the constituents (who will be forced to pay for this reckless behavior) is anything but transparency in government.

    Further whether you wind up buying the property or not you will have to spend considerable resources just to obtain the environmental and feasibility studies as well as other due diligence reports.

    The City needs revenue making projects and the council should be attending to those responsibilities first and foremost. The tax payer should not be treated like a “line-of-credit” that you dip into spending tomorrow’s equity.

    I do appreciate the two common sense” no” votes on the council.

  18. Mr. Orvis – just read your blog, but wanted to post a public response here.

    Dave:
    Thank for elaborating on your reasoning for the Skippers site purchase. Your explanation is about the clearest of all of the released statements thus far. However, I had hoped that you would avoid the Plunkett-ism of painting every disagreement as “DJ Wilson and his cabal vs. the good people of Edmonds”. That’s absurd.
    The entire country has already rejected the “You’re either with us, or against us” mentality. I recommend you do the same.
    I’m not writing for DJ, I’m writing for the people of Edmonds you’ve just defrauded. When this purchase was made, you Five aye-voters had no financial plan to make this happen. Several have already confirmed this.
    Your floating of the idea of “easily paid for with a bond” is BS. You know that there are no bond plans in place. Please don’t make things like this up on the spot. I’m an engineer, too, I can easily see patch-up jobs.
    Tell me when the wall in the picture was scheduled to go up. You can’t. There were no plans in place for construction by anyone. Just like the Fire Department sale, you exploit an undue sense of urgency to take action without due diligence.
    You claim that we are getting a bargain on this land due to a depressed real estate market. Wrong! That only works if you negotiate down from the assessment price. Please explain the negotiations that took place to bring the price down. This claim is another revisionist history myth…. or you’re a terrible negotiator for paying retail.
    You stated that this purchase was in line with the “citizens vision” of the waterfront. It’s not on the water, it’s next to the railroad tracks. And there was no “citizens vision”, as we haven’t been allowed input. Unless you count the staged meeting with 15 of Mr. Plunkett’s friends as “the public”.
    I’ve said this elsewhere, but I’d like to tell you as well. Regardless of how screwed over I feel by this action, I am committed deeply to the success of this city. And without tall buildings on the waterfront!! (I do favor taller buildings along the 99 corridor) If this purchase stands, I’ll do whatever it takes to make the best use of this land for our community. I will NOT try to cause damage to the City in order to spite the Council for what I consider inappropriate action. We’re on the same page there, I hope.
    You still haven’t figured out why the entire working population is up in arms over this. It’s not that we don’t want to see this property used wisely, it’s that you did this under cover of a Week 2 meeting (no-one attends those, they’re Committee meetings), with no public mandate, with no money to cover your offer, and with no plan on how to move forward. This action was incredibly arrogant and self serving.
    Nice try here with this essay, but so clearly riddled with lies and attempts to whip up emotion, that it’s transparent. See you Tuesday night. I recommend that you retract the purchase offer while there’s still time.

  19. I would like to know what the council’s plans are. If there was a clear vision and plan for the property, I’d be more open minded about the decision to purchase the property. However, with that said, the city should stabilize finances before investing its money.

    I hear over and over in this heated online debate that the numbers could be wrong, so they don’t give a reason to NOT purchase the property. My feeling on the matter is that if they are wrong, fix them FIRST. Once the budget is accurate, then make a decision.

    Finally, it seems to be that the prudent thing is to have a source of money to use to purchase the property before making an offer. People talk about unwise choices the city government has made in the past, and that may be true, but it doesn’t justify another unwise choice now.

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