Council votes to launch investigation into Haines Wharf Park change orders

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Citing a desire to get to the bottom of whether former Edmonds Mayor Gary Haakenson violated city policy when he approved $725,000 in change orders for construction at Haines Wharf Park, the Edmonds City Council Tuesday night voted 6-1 to begin an independent investigation into the matter.

In an email following the vote, Haakenson described it as a political move during a contentious election year. Haakenson is openly backing candidates running against some of the current councilmembers (four are up for election this November) and is also supporting mayoral challenger Dave Earling’s bid to unseat incumbent Mayor Mike Cooper.

“Since it appears that the City Council and Mayor are interested in litigation, I will be happy to oblige them,” said Haakenson, who resigned last June to take a job as deputy Snohomish County Executive. “It’s a shame that in these difficult times, our appointed/elected leaders are spending their time and our tax dollars on a political agenda. Clearly they are making an attempt to discredit me and then, by association, those candidates that I support for election this fall. Any further comment on the matter will come from my attorney.”

Tuesday night’s council-approved ordinance authorizes Mayor Mike Cooper and a representative from the city council to recommend a process to select an independent investigator “who will evaluate and report back to the city council whether any civil or criminal laws or city policies were broken by elected officials or department directors” in connection with the Haines Wharf project.”

Concerns regarding cost overruns at the north Edmonds park came to a head during the Aug. 23 City Council meeting, when Public Works Director Phil Williams publicly apologized for what he described as “mistakes of communications” throughout the project. During his report, Williams — who started his job with the City shortly before the park was completed — explained that the change orders signed by Haakenson stemmed from a host of construction-related difficulties at the Haines Wharf site.

City Attorney Jeff Taraday told the Council during the Aug. 23 meeting that city policy limits the mayor to signing construction contracts up to $100,000 without Council approval. While the policy doesn’t specifically address change orders, “my opinion is, once you are over that $100,000 threshold, any change order on that contract would need to come back to city council,” he said.

Councilmember DJ Wilson, running for election to his second council term, said he believes that “there has been an organized and methodical effort to mislead the City Council.” Wilson sent out an email his supporters earlier in the day Tuesday calling for a formal investigation into what he called “unauthorized expenditures.”

The sole “no” vote came from City Council President Strom Peterson, who said that while he agrees “mistakes were made” during the Haines Wharf project, an investigation of this nature “is not the correct way to move this city forward.”

“Anytime you are dealing with elected officials, it’s always politics,” Peterson said. “I think now is not the time to be pointing fingers.”

Also Tuesday night, the council spent two hours in a workshop on the 2012 budget, hearing ideas from city department heads on ways to trim their respective budgets by 2 percent. That’s the gap that the city’s interim finance director is projecting between revenue and expenses in the 2012 budget.

Among the ideas presented by various departments: for police, eliminating patrol officers and/or animal control officers; for parks and recreation, charging non-residents park user fees; for the municipal court, eliminating passport processing.

The Power Point on the department budget presentations will be posted to the City’s website Wednesday morning, Cooper said, and My Edmonds News will link to it when it becomes available.

Alex Springer

In addition, the council:

– interviewed Mayor Mike Cooper’s choice for finance director, Shawn Hunstock, who is currently finance director for the City of Tukwila.

– was introduced to new Edmonds-Woodway High School student representative Alex Springer, a senior in the E-W International Baccalaureate program who is a three-sport athlete and carries a 4.0 GPA.

– listened to a proclamation from Cooper recognizing this Sunday, Sept. 11 as Patriot Day and National Day of Service and Remembrance, in honor of the 10th anniversary of the terrorist attacks on U.S. soil.

 

59 COMMENTS

  1. How unfortunate and disheartening that former Mayor Haakenson would not simply address whether or not State and/or City laws were violated in his email following last night’s vote. Instead he chose to accuse the current appointed/elected City leaders of spending time and tax dollars pursuing a Political agenda.

    In my opinion, this has little to do with politics. To the contrary, the investigation is simply a matter of ethics and following the law. I believe the City Council had little choice but to launch an investigation as I would think they have a duty to the public to make sure potential violations of laws are investigated. To do otherwise, would be to establish a precedent that not investigating possible violations of the law in Edmonds is acceptable.

    Let’s hope the investigation concludes nothing wrong took place. With three levy measures on this fall’s ballot, the six City Council members who voted to investigate are taking a reasonable and proper step before asking the public to provide the City with more taxpayer money to manage.

    I am also disappointed in current City Council President Peterson’s representation that an investigation of this nature “is not the correct way to move this city forward.”
    “Anytime you are dealing with elected officials, it’s always politics,” Peterson said. “I think now is not the time to be pointing fingers.” It concerns me greatly that Peterson stated this after the current City Attorney has already represented the following during the August 23, 2011 City Council Meeting:

    With regard to contracting authority and change orders in particular, Mr. Taraday reviewed State law authorization with regard to the Council and Mayor for contracts. RCW 35A.11.010 addresses the City Council’s powers and states in part each city governed under this optional municipal code, by and through its legislative body, may contract and be contracted with… This RCW states the Council is the city’s contracting authority. In the absence of any delegation of that authority to the mayor or administration, the City Council is the contracting authority of the city. There is no default mayoral contracting authority.

    I am disappointed that Peterson would not want to investigate the matter to determine conclusively whether or not any State and/or City laws were violated. In my opinion, to do otherwise is very irresponsible.

    On a more positive note, newly appointed Student Representative Alex Springer, a senior in the E-W International Baccalaureate program who is a three-sport athlete and carries a 4.0 GPA. Carrying a 4.0 GPA in the very demanding IB program while participating in three sports is extremely impressive. Thank you Alex for taking time out of your very busy schedule to serve our City in this fashion.

  2. There is no way I can disagree with our Council’s efforts to officially get to the bottom of the question: Did former Mayor Haakenson withold information from the Council concerning cost over runs involving the Haines wharf change orders?

    Our current Council and Mayor Cooper are making every effort to bring full disclosure and transparency to the actions of our city government. We have long wanted and need that in our city.

    Former Mayor Haakenson along with Earling/Wilcox/Stern etc. can grumble all they want to about “political” efforts by our Mayor and Council. Our city Council is simply approaching the question in a professional manner.

    CM Peterson’ solo no vote is a disappointment to me, as I have began to have some improving feelings about him. Is his no vote an indication that he is opposed to open transparent government as Earling/Haakenson believe?

    Secret or private stuff concerning costs we hold the council responsible for should never again be withheld from them by the real “political” behaving figure in this incident, the former non-transparent Mayor Haakenson.

  3. This decision to investigate isn’t political — trying to obfuscate the issue IS political.

    The issue is that former Mayor Haakenson approved change orders far in excess of what is allowed by city policy and state law. That needs to be investigated.

    It was always surprising to see what Mayor Haakenson thought he could do without oversight or accountability.

    On a related note, a city manager form of government would go a long way to preventing this sort of abuse of power by one elected official.

  4. Shouldn’t city council investigate why they, as a group, did not have a periodic formal review of the park project? All projects over a certain value should be reviewed, probably quarterly.

  5. It is interesting how some people having limited knowledge of the facts have already convicted former Mayor Haakenson. Former City Attorney Scott Snyder has stated that nothing improper was done; I’m betting on Scott being right.

  6. Thanks for your kind thoughts concerning my family’s situation Ron. However, the Haines Wharf issue has nothing to do with my experience, and I do not want to associate the two. I am trying to move on from that experience to the best of my ability….some days are better than others.

    My difficult experiences did result in many positives, however, as challenges often do. I have met many great people that I would otherwise never have met and I have a much greater interest in the City that I have loved since I was very young. I truly want Edmonds to be the very best that it can be.

    I will never again ignore significant City issues and live in blissful ignorance under the assumption that all is legal, ethical and well in my City. I hope many others will show greater interest in Edmonds. We would all benefit from a higher level of Citizen involvement.

    Back to the issue at hand, this two part project was lumped together as a “park” project and accounted for under Fund 125. I believe Fund 125 was funded with REET 2 funds.

    Per MRSC.org, regarding REET 2 funds:

    For this quarter percent of the real estate excise tax, “capital project” means those:

    public works projects of a local government for planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement of streets, roads, highways, sidewalks, street and road lighting systems, traffic signals, bridges, domestic water systems, storm and sanitary sewer systems, and planning, construction, reconstruction, repair, rehabilitation, or improvement of parks. RCW 82.46.035(5).

    Note that acquisition of land for parks is not a permitted use of REET 2 receipts, although it is a permitted use for street, water, and sewer projects.

    One thing that should be investigated is the use of REET 2 funds to acquire land for this “park”. On July 3, 2008, property was purchased for somewhere around $40,000 related to this two part project that apparently was treated as “park” project.

  7. Ron B.:

    The very nature of COLA’s is that they flucuate in line with the cost of living. Inflation is lower now, so COLA’s are correspondingly lower.

    As I told you several times before, I never voted for the COLA increases.

    You switched your preference for Dave Earling after reading about the park issue, an issue that he has no connection with. And you don’t think there’s any politics involved with the issue .Please!!

  8. While the legality is a serious issue… legal or not… Isn’t it the lack of financial transparency that’s really the concern?- And, sadly, that lack of financial transparency has now clearly been established.

    Mr. Reidy has shown examples when cost overruns were reported to council previously. Now we have an example when cost overruns amounting to $725,000 were not; an amount that approaches the entire annual general fund revenue increase sought in the current levy proposal (1 million). And let’s recall that the same administration that authorized payments for these excessive cost overruns without notifying council or the Edmonds citizens by extension- was the same that threatened to close Yost Pool and cut-off support for the Senior Center; amounting to much less $.

    One thing to consider, by analogy, is that if someone is caught speeding once… that does not mean that they speed all the time. Yet, most assuredly, they speed other times without being caught. We just don’t know the frequency. And a cunning driver knows how to reduce the risk (i.e. frequency) in getting caught.

    There were those citizens, council candidates, and council members that had been advocating for more financial transparency for a long time. Many of these were belittled for their concerns. Some may feel vindicated by this situation. But most will just feel sad that this is what it takes for folks to realize the importance of financial transparency and accountability, when it’s our money at stake.

  9. Undoubtedly council members are needed that will ask questions, but they also need to be worthwhile questions. Last night Ms. Buckshnis asked Mr. Tarte if he could report on the accuracy of projections on which budgets are based. She wanted a comparison of actuals to what was projected. Normally that would be a very worthwhile question. But that information is of no value at this time. And that’s probably why Mr. Tarte did not respond to her email to him requesting that info. It’s of no value because all of the people that had been involved in making those projections no longer work for the city. Gathering that information would be a waste of staff’s time.

    Many times Ms. Buckshnis has said how familiar she is with the city’s financial statements, yet last night Judge Fair had to tell her that jail costs are not in his budget they are in the Police budget

    Ron B.:Please tell us what floating ACTUAL columns are. And also tell us all specifically what are somel of the changes Ms. Buckshnis has caused to be made in the financial reports? The only improvement that I’m aware of is that the perodic reports now come out on time, but I credit Mr. Tarte for that. If Ms. Buckshnis wants to take credit for it, then she needs to also take credit for the year that they didn’t come out on time.

  10. I wonder what it would cost to get a permit to open a “pitchfork and torch” booth in the city hall parking lot? I would make a killing!

  11. If current Council wants to bring forward the ex-Mayor, then bring forward all the ex-Councilmembers who did not exercise their authority to look @ the project, ask questions and establish transparency. Seems like the political waters have gone under the bridge long ago. What will this Council do, now, to ensure that any significant project will be reviewed tomorrow and 5 years from now. Let’s first focus on prevention and then consider needless pilloring.

  12. A quick note in reference to Mr. Herzog’s Council/Manager comment #3.

    I agree that a Council Manager from of goverment would have likely prevented this incident from occuring.

    And guess who once told me he wouild support such a change ? Yep, none other than former Mayor Haakenson while he was Mayor.

    As I’ve previously noted, I think such a proposition should be placed on the ballot. Indeed, take these kinds of issues OUT OF POLITICS. I believe most cities our size now have such a style of govt, thus there has been a strong trend in that direction as virtually all cities stated out with the Mayor/Council form of government,

  13. Kurt (comment 3) and Ray,

    I agree that the issue of a City Manager form of government deserves a thorough discussion by the citizens of Edmonds. Our future economic health is at stake.

  14. Re the investigation: I think the investigation is good think for two reasons. The first reason is that we will know how things fell through the cracks and put measures in place to make sure it does not happen again. I think this is common sense. Secondly, if we find out that there is someone at fault here, we should be able to recover some money. My gut reaction is that there was not intent to fraud involved however, there may be a malpractice claim against our then City Attorneys who should have prevented the Mayor from signing off.

    Re politicking: Simply because this came up at campaign season, it should not be classified as politicking. It is common sense to figure out how one person could have approved this much money on his own. Something went wrong.

    Re; City Manager, I will never support any candidate who supports a City Manager. Our founding fathers set up our system of government as a system of checks and balances. A City Manager would simply be the yes man for the Council. Mr. Martin, et. al., who are pointing this issue as evidence for a City Manager are short sighted. Imagine a scenario that you would not support — a skyline with higher buildings. If Council decided that a a taller skyline would be appropriate, the City Manager would simply rubber stamp it. I support a representative government.

    Forgive any typos and grammar errors above. I’m still on pain medications from my knee surgery yesterday.

  15. One more observation by myself if you please:

    In the last few years of Mayor’s Haakenson’s term, it seemed to me that he was far too cozy with the former city attorney. I felt that this attorney was acting more like an attorney for the Mayor specifically than for the city and the Council and Mayor.

    One example occurred when I filed a PDC complaint against DJ Wilson, Peterson, Wambolt, and the Mayor a few years ago. It is against state law for city resources to be used in the defense of candidates on the ballot. Yet the city attorney was active in the defense of the accused and was no doubt paid for his services by the city in my opinion. That was wrong.

    Do I hate mayor Haakenson? No, on the contrary I admire and respect his managerial abiliites. My complaint is that he occasionally would exceed his authority with a bit of high handedness here and there resulting in some off track incidents.

    A very real Haines park investigation is needed. And it has nothing to do with politics, and everything with doing the right thing for our city. Let the chips fall where they may.

    .

  16. As I reexamine my own comments in light of Mr. Wambolt’s comments (#5), I have to agree with him on both counts — Mr. Haakenson shouldn’t be convicted without an investigation and I, as a busy citizen of Edmonds who doesn’t go to council meetings, have a limited knowledge of the facts.

    That’s is why I believe an investigation is warranted here. Let’s get the facts.

    Ms. Sinha — I don’t want to take us off topic with the city manager discussion, but I guess I already did that so…

    I agree with you that the city manager would be a sort of “yes man” of the city council’s in the sense that a city manager works for the city council and it is his/her sworn duty to carry out the legal directions of the elected representatives.

    They are also legally bound to be professionals and advise elected officials on what is legal and what is generally the “best practice” in managing city affairs based on research and professional education. A city manager has a great deal of education and training in the municipal law and finance — vastly more than your average medium to small-town part-time elected representative.

    A competent city manager in this case would have been less likely to exceed his authority and approve change orders far in excess of what is allowed by city policy and state law or he would have been immediately fired.

    I’m not sure our founding fathers set up a form of government that said, “There shall be The Seven vs. The One Mayor,” as is our current form of government in Edmonds. I think their general plan was to have a form of government that was efficient, legal and actually worked.

    Lastly, I’ve been lurking a little and have been keeping an eye on some of the online discussions about city politics on this site. I must be an idiot to jump into the political fray because I expect I’m gonna get the stuffing kicked out of me now.

    Oh well, have at me.

  17. The citizens of Edmonds have the right to know the facts.

    It is pure malarkey for the former Mayor to proclaim: “There was no clear policy…” On April 5, 2010, just prior to his signing the three very large Change Orders, all over the $100,000 spending limit, to the construction company, Mayor Haakenson placed on the Council Consent Agenda an amendment to the Design Contract for $43,200. This is clear evidence Haakenson knew the City’s policy that all contracts over $100,000 spending limit needed Council approval.
    This is about ethics and accountability. The former Mayor didn’t understand Political Science 101. He still doesn’t comprehend the doctrine Separation of Powers. Who sets the policies in the City of Edmonds? If Haakenson really thought there wasn’t a policy, then, why didn’t he go to the policymakers (THE COUNCIL) for their approval?
    The most interesting sidebar missing in this article is Mayor Haakenson first claimed the City Attorney approved the Change Orders. Typical Haakenson blame someone else! But at the same time, Haakenson admitted guilt by apologizing to the citizens of Edmonds for exceeding his spending authority.
    The days of the “King can do no wrong” are long gone. It’s time show everyone what a bad manager Haakenson was and is up at the County. Haakenson needs to retire. Haakenson can’t be trusted with public funds.

  18. Mr. Herzog,

    Your thoughtful comments make sense to me and not just because we seem to agree. You appear to me as an intelligent and knowledgable contributor to our city issues. Please stay involved.

    Oh yes, sooner or later you will get some guff. That happens, it’s simply normal people stuff. Listen to serious critics carefully and learn. And ignore the shrill and rude stuff.

    I believe we are all well served by this ability to make our views known via Edmondsnews.com.

  19. #14 RW….Mr Tarte can’t provide those examples of projections to actuals as they are ALL OVER the Board. You just don’t get it and go ahead and give Mr. Tarte the credit as Mr. Hines (who you were involved with in the hiring process) totally stonewalled any action to move forward on financial transparency and open government. Again, under your “Finance Director” review, you told me I had my profit and loss statement mixed up with my balance sheet when I was questioning the “modified working capital approach”. Seriously, the Finance Committee has done wonders since you have left as it was basically a rubber stamp of the Haakenson administration. There are many, many examples that we could bring up…but I am over defending myself with you. By the way, at Fluke, you weren’t in the area of Finance, so what makes you the expert?

  20. Ms. Buckshnis:

    Please give us a listing of those improvements you caused to happen, and please put them in commonly understood terms. I review the city’s financial reports each month, and just completed reviewing July’s. The “wonders ” that you claim to have achieved are well hidden.

    I have never claimed to have worked in “the area of Finance” in any company. But it would have been kind of hard to be the GM of a nationwide company, and to gradually progress to managing up to 20 companies worldwide for more than 20 years, without understanding financial statements.

  21. A reminder to the Council, that the investigation is only half the need, if @ the same time an ordinance (or some such legislative measure) is not passed the requires future significant public works project change orders, to be reviewed @ Council meetings. Set the threshiold for ‘significant’ place it on the agenda and discuss these matters before the public. Holding the investigation is not enough (how much will this cost by the way?) if you don’t address like future possibilities and stop this from happening again. This part is real easy and needs to be done now!

  22. Ordinance 3789 asked that all change orders and amendments are described and put through Finance Commitee.

    The last amendmen or the year-end is more transparent despite the fact that Mr Hines refused to answer the Finance Committee’s question about the bundling of Haines Wharf and the Inter-urban Trail for 200K

    Since Jim Tarte took over, the city is now reporting all revenues on it monthly and quarterly reports as wll as comaring actual numbers to budget.

    We are working to moving towards total transparency which will include the 2.2 millon in receivables that have never been reported on any forecasting or amendments. This accounting method is consistent with the Government Finance Officers Association and the Washington Finance Officers Association..

    Both Lora, Mr Tarte and I agree we will not be using the modified working capital terminology created by Mr Hines as I pressed him for a definition for the City’s made-up calculation. This working capital method or the dog and pony show that Mayor H and Mr Hines has on tape as a city council meeting trying to discredit me is bogus and inaccurate.

    I am tired of arguing with those individuals who don’t get it and think nothing has changed in the finance area. There has been tremendous progress and thank you Jim Tarte, Deb Sharp and Lora Petso for finally listening and understanding the issues.

    Open Government and Financial Transparency is now in our plans for the future.

  23. Diane, for a technical writer you need to do some proof reading before you hit the submit button.
    I did see Mr Hines last week and he looks so much happier.

  24. The April 6, 2010 City Council Meeting minutes document the City Council’s concerted efforts to improve Financial Reporting and Transparency at what appears to be the same time the first of the three $100,000 plus Haines Wharf related change orders was being processed. On that very evening’s City Council Agenda, the following Claim Check was approved as part of the consent agenda:

    March 25, 2010 – $248,383.92 (Voucher 117953 related to payment #7)

    It is probable that the $248,383.92 payment included Change order #6 for $131,547.

    The April 6, 2010 City Council Meeting Minutes available on the City’s website document the public hearing related to Ordinance No. 3789, which was passed unanimously that evening. Ordinance No. 3789 includes the following:

    3.04.030 Monthly updates.
    1. The city council requests that the staff provide to the city council’s finance committee monthly revenue reports. At a minimum, the following funds are requested to be provided: REET 1 and 2, sales and use tax, gas utility tax, telephone utility tax, electric utility tax. A monthly general fund analysis of comparing revenue budget to actual and expenditure budget to actual with the net balance is requested. After review by the finance committee, these reports will be available on the city’s website under the finance area. All proposed budget amendments or council-approved changes that will be included in future budget amendments are requested to be included in the monthly report. Graphs are requested to be integrated into a report to provide trend analyses. [Ord. 3789 § 1, 2010].

    The ordinance was published April 11, 2010, and became effective as law 5 days after prompt publishment on April 16, 2010. Hence, effective April 16, 2010, a monthly general fund analysis of comparing revenue budget to actual and expenditure budget to actual with the net balance is requested. After review by the finance committee, these reports are supposed to be made available on the city’s website under the finance area.

    My review of the City’s website under the finance area indicates that a monthly general fund analysis of comparing revenue budget to actual and expenditure budget to actual with the net balance, was not made available on the city’s website under the finance area for the following months, in apparent violation of Ordinance 3729:

    June 2010 General Fund Update
    July 2010 General Fund Update
    August 2010 General Fund Update
    October 2010 General Fund Update

    November 2010 General Fund Update
    December 2010 General Fund Update
    January 2011 General Fund Update

    I do not know if the four General Fund Updates provided during 2010 contained all of the information required by Ordinance #3789. Resolution No. 1226 states that the “Availability of and ensuring that the reports are available to the public in a timely manner will be a responsibility of the Mayor.”

    It appears likely that the reports dated February, 2011 forward were prepared by Mr. Tarte or his staff. The City of Lynnwood confirmed the hiring of Mr. Hines the evening of February 28, 2011.

    The general point I am trying to make is this is one example that the City Council was trying to improve financial transparency during the same time period that the three large Haines Wharf change orders were processed without first obtaining City Council approval.

    Resolution No. 1226 was also passed by the City Council on April 6, 2010. This was a Resolution of the City Council of the City of Edmonds, Washington, adopting a financial policy. Resolution No. 1226 was based on the City of Edmonds making a commitment to the highest standards of responsible financial management and a commitment between the City Council, Mayor and staff to work together to ensure all financial matters of the City are addressed with care, integrity and in the best interests of the City.

    City Engineer Rob English’s memo dated August 22, 2011 includes the following representation:

    On May 3, 2010, the Parks Director scheduled a meeting to brief the Mayor on the status of the project. The staff present at the meeting included the Parks Director, Public Works Director, City Engineer and Mayor. The Parks director led the meeting and discussion with the Mayor. The items covered during the meeting were the change order costs, construction problems and remaining work to be completed. The decision made during the meeting was to finish the project as quickly as possible to minimize additional costs. There was no direction given to prepare an agenda item for updating the City Council on the project at that time.

    As a taxpayer and citizen of Edmonds, it is very difficult to understand why the Parks Director, Public Works Director, City Engineer and Mayor apparently did not notify the City Council of the three very large Haines Wharf change orders during the same time period that Resolution No. 1226 was passed. Please recall, this Resolution was inspired by a commitment between the City Council, Mayor and staff to work together to ensure all financial matters of the City are addressed with care, integrity and in the best interests of the City.

  25. “Since Jim Tarte took over, the city is now reporting all revenues on it monthly and quarterly reports as wll as comaring actual numbers to budget.”

    I’d be very surprised to learn that all revenues were actually not previously reported. Acual numbers were always compared to budget – anyone can go back and look at earlier reports. The problem that remains is that the actuals are compared to the full year budget, so the percentages can be very misleading since seasonality has not been accounted for. This can be remedied by budgeting by month, as is currently being done for the Real Estate Excise Tax, Sales Tax, and the utility taxes. I don’t know if Finance has the resources to do this.

  26. Diane No arguiment just a question from a citizen who is not well versed in finicial termonology but are you saying that there is 2.200000 floating around out there that doesnt show on the books or bank statements I think it would help if you would explain this in non finicial terms just plain old english. thanks Don,, P.S. please just let Diane answer so I dont get confused

  27. The problem with the well-intentioned Resolution is is has no specific thresholds that require a response from the Mayor/staff a/o action by the Council. It’s language sounds nice but has little or no enforcement. Knowing that the park was underway and was risky and expensive, Council had every right to ask for reports @ any time. If they then knew or sensed that something was wrong, you go from asking to demanding, in writing, that they be informed. Again, going forward, this type of approach must govern the Council’s oversight of City projects and funding. Be specific about when you must be informed about use of taxpayers monies, no one will be offended.

  28. Diane,

    You have done a great job in leading the efforts to bring the citizens a more open and transparent government in Edmonds!

    With all the details you have been immersed in it is amazing to me that there is not more nitpicking of you on occasional small and irrevelant details.

    In fact, the current team of you, Mayor Cooper and staff, Lora, Steve, Michael, Adrienne, and Strom have and continue to serve our community well.

  29. Just one problem with Ms. Buckshnis is that she has a problem sticking to the facts. A statement on her recently updated website says: “I initiated the first disclosure of our quarterly financial on the website”. That is untrue. Statements were on the city’s website before she was appointed to city council in 2010.One example is the agenda for the Nov.10,2008 finance committee meeting; the report is there for the 3rd quarter of 2008.

  30. @32 Don. The accounts receivable of $2.2 million can be considered like your paycheck coming in to your account. These are known receivables that are measurable. They have not been included in any forecasting projections or amendment documents. Most cities utilize a 60 day time frame for their receivables. So, in layman’s terms the city was recording its “general fund balance” using only current liabilities and not its current accounts receivables (but is also muddied things a bit more and I will explain again in the aforementioned paragraphs). So, it would be like you reporting your working capital including only your accounts payable and not “measurable accounts receivable” or simply – you would be including your house payment and not your paycheck in your working capital calculation (current assets minus current liabilities).

    The “modified working capital approach”, a term Mr. Hines established truly defined how the city was calculating its “general fund balance” even though it is not really an accounting method. As stated the city did not recognize current and measurable receivables; but then they also have a Council Contingency Fund and an Animal Reserve Fund that are in the General Fund but not in a separate fund balance. To muddy the calculation more, the two non-current but recurring receivable and liability from the Edmonds Center for the Arts are also included.

    As Mr. Walmbolt highlighted, the City used to call this number a General Fund Balance but I have proven that this is incorrect. Why is this important? Well this calculation (2010 reported at $2.7MM) is then used throughout the year for amendments and projections. This is NOT what other cities and I have stated it is very misleading to the citizens of Edmonds.

    So, fast forward to when Mr. Tarte came on board in April 2011; he did in fact see that beginning and ending general fund balances did not reconcile or were easily traceable (as the general fund was always $2.2 million shy due to the fact the receivables). I provided Mr. Tarte with the same examples I provided Mr. Hines and then he too did some of his own research on four other cities and made calls to a few other finance directors.

    We then all sat down and discussed it with Lora who also wanted to explain it in a lay-person’s term. The city did in fact comply with modified accrual standards this year for its fiscal-year end 2010 and we will be moving forward to get rid of that “modified working capital calculation” as we are working on moving the Council Contingency Fund which is about $56K now (down from $126K a few years ago) into its own Council Contingency fund balance so citizens can see how much the Council is spending each year. We will also be moving the measurable accounts receivable back into what would now be known as the “General Fund Balance” ($4.8 million).

    However, our work is not done yet though as we still need to look at the reserves and reserve policies as the emergency “act of God” reserve is included in the General Fund Balance which is why at FYE 2011 our general fund had grown to $6.8 million. This number also doesn’t include the $1.3 million in public safety reserve. So we are looking at reserve policies and hope to create one before year-end.

    I hope this explains things and if you want to discuss this more off-line and I can send you some of the reports, let me know.

    What Does Modified Accrual Accounting Mean?
    An accounting method commonly used by government agencies that combines accrual-basis accounting with cash-basis accounting. Modified accrual accounting recognizes revenues when they become available and measurable and, with a few exceptions, recognizes expenditures when liabilities are incurred. This system divides available funds into separate entities within the organization to ensure that the money is being spent where it was intended. The Government Accounting Standards Board, which is recognized as the official source of generally accepted accounting principles (GAAP) for state and local governments, establishes modified accrual accounting standards. The idea that government agencies need a different type of accounting system is accepted because the purpose of government organizations is significantly different from the purpose of both for-profit businesses as well as not-for-profit non-governmental organizations.

    p.s. sorry for the typos and grammar…yes, I need to be more careful; but we are all human and I appologize for the insensitivity since I do not have a technical writer and blackberry typing on a small screen from now on is a no-no. Cheers, Diane

  31. #35 from website – copied pertinent information
    Finance and Information Services
    Jim Tarte
    Interim Finance Director
    jim.tarte@ci.edmonds.wa.us

    Financial Services is primarily responsible for budget monitoring and the City’s fiscal operations. Utility Billing, Payroll, Accounts Payable, and the City Treasurer operate within the Division.

    2011

    Quarterly Updates

    •Q2 2011
    •Q1 2011

    General Fund Update

    •July – 2011
    •June – 2011
    •May – 2011
    •April – 2011
    •March – 2011
    •February – 2011
    Budget

    •2011 Final Budget
    •2011 Proposed Budget
    ■2010 Legal Fees
    ■2009 Legal Fees
    ◦FAQ Nov 29th Wireless Device Usage
    ◦FAQ as of Nov 17th
    ◦FAQ as of Nov 15th
    ◦FAQ as of Nov 8th
    ◦FAQ as of Nov 5th
    ◦FAQ as of Nov 1st
    ◦FAQ as of Oct 18th
    ◦FAQ Oct 11th

    •Financial Forecast as of July 26, 2011
    •Financial Forecast as of May 5, 2011

    Previous Years

    2009-2010

    •2009 Annual Financial Report (CAFR)
    •Quarterly Budget Reports
    ◦Q4 2010 (final)
    ◦Q3 2010 (revised)
    ◦Q2 2010
    ◦Q1 2010
    ◦Q4 2009
    •General Fund Updates
    ◦September 2010 General Fund Update
    ◦May 2010 General Fund Update
    ◦April 2010 General Fund Update
    ◦March 2010 General Fund Update
    •Budget
    ◦2009-2010 Final Budget
    ◦2009-2010 Preliminary Budget
    •Executive Summary
    ◦Jun 08, 2010
    ◦Jan 25, 2010

    2007-2008
    •2008 Annual Financial Report (CAFR)
    •2007 Annual Financial Report (CAFR)
    •2007-2008 Final Budget

    2006
    •2006 Annual Financial Report (CAFR)
    •2006 Final Budget

    2005
    •Annual Financial Report (CAFR)
    •Quarterly Budget Reports – (no link provided)
    •Final Budget
    •Final Budget Summary

    Last modified: September 08, 2011

  32. Based on Teresa’s research, it now appears that the park was proposed in the1993-98 Parks Comprehensive Plan and approved then by City Council formal action. So, I probably should have said the park portion of the project was likely advanced (as opposed to introduced) sometime between June, 2006 and June, 2007.

    Thanks for researching this Teresa.

  33. Hi Teresa….that is interesting. If you go to the Edmonds City Council Agenda for the June 5, 2007 City Council Meeting, click on Item 1014 – Presentation regarding proposed 76th Avenue West/75th Place West Walkway and 162nd Street SW Park.

    Scroll down until you see the attachments and click on 162nd Park CIP Description. That is where you will find the Capital Improvement Project Description which states the following Project Benefit/Rationale: Provides need for a north Edmonds neighborhood park in the Meadowdale area. Connects with the existing public owned tidelands west of the site adjacent to Haines Wharf and along the BNSF railroad tracks.

  34. Just noticed more details about the April, 2007 Meeting:

    A public meeting was held regarding the proposed walkway and park on April 26, 2007. All citizens along the proposed walkway corridor were sent individual invitations to the meeting, and it was well attended. At the meeting, staff and the consultant received feedback regarding the concepts proposed and will incorporate citizen suggestions into the final design as practical.

    I don’t see the related public meeting minutes on the City’s website. They probably contain relevent information and it would be helpful if the City made those meeting minutes available.

  35. To Diane Buckshnis

    Thank you for all of the hard work and extra effort you have put in on the Edmonds City Council. I appreciate the fact that you have taken the initative to research and interview other City Finance Directors. Your efforts are paying off. The City’s financial picture is much clearer than prior to your term on Council.

    #38 Print out of the City’s Finance Department web page clearly supports my claim.

    Keep up your efforts. They are much appreciated.

  36. Teresa….Per Snohomish County’s Website, the City of Edmonds owns just one very skinny piece of tideland to the southwest of Haines Wharf….Parcel Number 00513900101200:

    MEADOWDALE TIDELANDS BLK 001 D-00 – LOT 12 BLK A

    This skinny piece of tideland is .44 acres

    Meadowdale Marina LLC owns 2.17 acres of tidelands immediately to the west of the park as follows:

    MEADOWDALE TIDELANDS BLK 001 D-00 – ALL LTS 7-11 INC BLK A

    My quick review of the Tidelands in that area indicates that the great majority of it is private. Furthermore, if somebody was on the beach there….how would they know to stay on the skinny piece owned by the city and to stay off private land? Could they even get to the City’s skinny tideland without crossing over private property?

    I wonder if the City Council approved this park in part because of the represented rationale that the park connects with the existing public owned tidelands west of the site adjacent to Haines Wharf and along the BNSF railroad tracks?

  37. Just one more clarification to my statement above: The City owns tidelands on either side of Haines Wharf but doesn’t have any legal access or crossing to get there without crossing the Haines Wharf property.

  38. Finis:

    Please tell us what’s now on the Finance Dept web page that hasn’t been there prior to Ms. Buckshnis term on council.

    I have experienced during my long working career that anyone who continually talks about how many hours they put in is generally not your hardest worker. I invite you to listen to the audio CD of the February 9, 2010 finance committee meeting. Near the end you can hear Ms. Buckshnis say that in preparation for the meeting she had intended to do some analysis but “it was too nice a day”. Much different than the public image she’s been pushing!

  39. Theresa…..my research indicates the City only owns a strip of Tideland to the South of Meadowdale Marina LLC’s tidelands adjacent to Haines Wharf. Have you determined otherwise?

    Furthermore….Snohomish County’s Property Tax records indicate that the Taxpayer related to the City’s .44 acres Tideland’s Parcel 00513900101200 changed on February 22, 2006 from ?? to the City of Edmonds.

    The remarks related to the taxpayer changed event are: Party/Property Relationship by strsjb

    I do not know what the remarks mean and I do not know who the previous taxpayer was.

    The February 2006 date is interesting as it looks like the City somehow obtained title to a skinny portion of Tidelands shortly before approving Haines Wharf Park.

    Let me know if you find evidence that the City also owns Tidelands to the north of Meadowdale Marina LLC’s tidelands adjacent to Haines Wharf. Thanks.

  40. Here’s my explanation of the General Fund Balance in simple, I hope easily understandable, terms.

    Several times each year staff produces what’s known as an “Executive Summary – Current Forecast”. This report shows the city’s various sources of revenues and expenses. A Balance remains after subtracting the total expenses from the total revenue. In the business world this document is known as an income statement, and the Balance is called profit. Unlike the business world where each year starts with an income statement that is totally independent of prior year results, in government accounting the Balance is carried forward to the following year.

    The report generally shows the revenues, expenses, and the Balances for a couple of past years, the budget for the current year, the outlook for the current year, and the outlook for 5 future years.

    The city has a policy of maintaining a Balance equal to one month of expenses. When the outlook predicts an amount that’s less than that, the city council cuts expenses and/or considers the need for a property tax levy.

    My view is that accounts receivable should have no affect on these numbers; receivables are a balance sheet item. If they were added to the Balance that would be double counting as the income has already been recognized as revenue.

  41. Ron:
    My explanation of the City’s Finance web page would most likely be too complex for you.
    But as long as you’re in an explaining mood, please show me, where I can find the 1 Million Dollars savings in contracting with Fire District One, either the most current Budget Report or Current Forecast.
    As I recall, Mayor Haakenson’s presentation on the Fire Sale was the Edmonds Fire Department cost 9 Million Dollars and the contract is for 6 Million Dollars? 9 – 6 = 3, last time I checked.

  42. Finis:

    The savings are reduced to about $1 million because the revenue for providing fire service to Woodway and Esperance is lost by Edmonds, as well as Edmonds having the expenses for maintaining the stations and, I think, retaining the Fire Marshall.

  43. Thanks to Ken Reidy for the following update on the Haines Wharf park, as he went to the site last night:

    “The June, 2007 Capital Improvement Project Description for the 162nd Street Park states the following Project Benefit/Rationale: Provides need for a north Edmonds neighborhood park in the Meadowdale area. Connects with the existing public owned tidelands west of the site adjacent to Haines Wharf and along the BNSF railroad tracks.

    I visited the park last evening….there is no Connection with the existing public owned tidelands west of the site. The area is all fenced off by BNSF and do not Trespass signs are prominently displayed.”

  44. Regarding Haines Wharf Park. Did the city own the site of the park before they developed it? Does anyone know who owns the dilapidated wharf now?

  45. re 57: “I visited the park last evening….there is no Connection with the existing public owned tidelands west of the site. The area is all fenced off by BNSF and do not Trespass signs are prominently displayed.””

    The fence was put in place just prior to the time they broke ground and began developing the park. Previously, it was very common for people to park and walk across the track, past the BNSF no trespassing signs, and down the large rocks, and down to the tidelands. It has been a real bummer to lose access to the tidelands between Brackets landing and Lund’s Gulch. Lund’s Gulch beach access is quite a walk and not always open due to creek flow and salmon spawning.

  46. Thanks Paul for the information about the beach/tidelands.

    I am concerned that the Council may have originally supported this park under the The June, 2007 Capital Improvement Project representation that the park would connect with the existing PUBLIC owned tidelands west of the site adjacent to Haines Wharf and along the BNSF railroad tracks. I see no evidence of public owned tidelands….other that the skinny piece that Snohomish County’s Property Tax records indicate changed hands on February 22, 2006….the City’s .44 acres Tideland’s Parcel 00513900101200. This piece of tidelands is not directly west of the park….it is south of the large, newer boat storage building.

  47. Barbara…..Phase 1 LTD apparently sold the MEADOWDALE MARINA property on
    5/30/2001 for $300,000 to STEPANOVIC SLOBODANKA.

    On 10/7/2002 STEPANOVIC SLOBODANKA apparently Quit Claim deeded the property to MEADOWDALE MARINA LLC, who is listed as the current owner on the Snohomish County Assessor’s website.

    I’ll try to research the park property ownership in a bit.

  48. Barbara….having trouble getting info on majority of the actual park land…..the Snohomish County Assessor’s website has the following comment:

    02/22/2006 02/22/2006 11:36 Taxpayer Changed Party/Property Relationship by strsjb

    Hence, similar to the skinny piece of tideland….it looks like the taxpayer changed on February 22, 2006, but it doesn’t indicate who the taxpayer was before that date.

    Barbara….can you request this info from the City? It would be interesting to find out who owned this property before February 22, 2006.

    There is one more smaller parcel that makes up a corner of the park property. I’ll see if I can find info on it.

  49. Barbara….okay, same thing for the tiny parcel that comprises the southeast corner of the actual park property:

    02/22/2006 02/22/2006 11:36 Taxpayer Changed Party/Property Relationship by strsjb

    So, the “Taxpayer Changed” on the following three parcels on February 22, 2006:

    Parcel #00513900101200 (tidelands)
    Parcel #00513105900800 (majority of park land)
    Parcel #00513105901000 (small southeast corner of park land)

    I have no idea if the previous Taxpayer was a private party or public entity.

    I also have no idea if any of these 3 parcels were purchased with taxpayer money, donated to the City or always public property of some sort.

  50. Just noticed the following related info on City Website….

    Finance Department

    Response to Council Budget Questions from 10-26-2010 – 11-05-2010

    Week of November 5, 2010

    Page 181

    Why was the professional services item so overspent?
    How was the construction projects item so overspent

    Answer: Both the Professional Services line and the Construction Projects line (next question) were overspent in 2010 primarily because a major construction project was delayed from 2009 until 2010 (the 75th/76th St. Walkway & 162nd St. Park project –now Haines Wharf Park). When the biennial 2009-2010 budget was
    being prepared in the summer/fall 2008, it was the anticipated that this project
    would be completed in 2009, but it became a 2009 carryover into 2010.

    This Finance Department representation makes me wonder if the Finance Department informed the Council if Change Orders were part of the reason the construction projects item was so overspent?

  51. I have been informed this afternoon that the City has investigated the employment of REET 2 funds to purchase real property needed for the Haines Wharf project. The City has been unable to identify any transactions since July 3rd, 2008 that reimbursed the REET 125 Fund for the $40,750 paid for the related real property.

    As a result, City Staff has asked for a transfer of that amount from the General Fund to make the 125 Fund whole again.

    As a taxpaying citizen, I appreciate staff’s diligence and committment to the proper use of REET 2 funds, as well as for attempting to make Fund 125 whole again.

    This is a positive in my eyes and provides an example of how the City is attempting to be a proper custodian of the taxpayer’s money. I am encouraged by this and will give it consideration when deciding how to vote on the levy measures that will be on the ballot.

  52. Following is an excerpt from Steve Bernheim’s Haines Wharf Narrative attached to the City Council Agenda for tomorrow evening. October 18, 2011:

    On April 19, 2010, the same day that mayor Haakenson approved a change order for
    $245,297, bringing the total change orders to over $500,000 – without telling the City
    Council – he wrote to Councilwoman Buckshnis, “There is no reason to have public
    meeting to get your questions answered Diane. Never mind. Why bother? My staff is
    busy and we tried to make Mr. Hines available to you on a personal basis but if you
    aren’t interested that’s fine with me. Gary”

    The next day, he continued, “Diane, with all due respect, your experience with city
    government is all of 110 days. And that has come AFTER you were rejected by the
    voters. My staff will not be participating in any public meeting at your request. …
    Our system has worked well for many years and through four different finance directors and I am sorry if it doesn’t make sense to you. … I don’t need to follow “industry standard” so “don’t even go there with me” !! I know you are a very wise woman…I heard you say so at last weeks Council meeting but maybe a truly wise woman, who is new to City government, who was defeated at the polls, would be more wise if she sat back quietly and learned how things worked before publicly berating city staff. Gary”

  53. Proponents of Open Government and Transparency may find these selected excerpts alarming . . . from Steve Bernheim’s memo….

    I also attempted to acquire information regarding the amount of legal fees the city had paid since January 1, 2009. Instead of providing the information, the Mayor’s response was to ask the city attorney to “weigh in on the amount of work a single councilman can demand of staff.”

    By May 18, (2010) the Mayor had still provided no information on the amount of money spent by the City for legal fees in response to my request. Mayor Haakenson assured me at the council meeting that “Mr. Hines would get to his request at some point but it could be several months.” After the city council passed a resolution asking for the information, Mayor Haakenson asked if he was required to abide by the motion and Mr. Snyder answered “no.”

    Once the information was produced (pursuant to a public document request), the records showed that thousands of dollars of duplicate checks had been written to pay the city attorney’s law firm. The Finance Director apologized on May 21, 2010, after he was informed of the error.

  54. Ken’s report is accurate. I recall being shocked by the former city attorney’s “no” answer when asked if the mayor was required to provide the financial info long requested.

    Can anyone think of a more potent reason for investigating a council/manatger form of government? Why should we have to tolerate such arrogance of power?

  55. Ray…the information is all available on the City’s website as attachments to tomorrow night’s Council Agenda. I strongly encourage all to read the documents. I read them early this morning. Much of the informaton was new to me.

  56. Ken,
    I have never requested the city to tell me whether the Haines Wharf Park was purchased or donated. However, I spoke with a former city official who said it was donated. Since the land was known for its instability the official was surprised it was built on. There are many questions unanswered. Here is hoping the investigation will get at the whole truth including past and present ownership.

  57. Hi Barbara,

    Thanks for the info. Let’s hope tomorrow is a solid step towards more transparency as it relates to Haines Wharf.

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