Massive Thurston County tax increase proposed for $300 million new courthouse scheme

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Last week, at the Thurston County Commissioner meeting held at Rochester Middle School, the Thurston County Commissioners, by a vote of two to one approved a massive 38.5% property tax increase to be placed on the April, 2020 ballot for Thurston County (see Board Agenda here – Item 6a).  In theory, this tax increase is for a new courthouse project that has been pushed for many years by Thurston County staff, Thurston County judges, and various other special interests.  However, in the rush to build a new $300 million (or more) courthouse in the City of Olympia, a lot of questionable steps have been taken, special interests are lining up for their payoffs, and the taxpayers of Thurston County are put far last on the priority list.  If you didn’t know this – don’t worry, you are not alone– neither does 64% of the rest of Thurston County according to a recent taxpayer funded survey (see summarized report here, supporting docs here and here).   

Independent Commissioner Gary Edwards made an impassioned and well-reasoned speech against the proposal last week.  Unfortunately, he was the lone dissenting vote against staff’s proposal.  Most observers predicted that recently elected Democrat Commissioner Tye “the High Tax Guy” Menser would support the tax increase because he supports most tax increases.  Menser has repeatedly admitted he is a protégé of former Commissioners Sandra Romero and Valenzuela who were also part of the max tax crew in Thurston County.  However, it was Independant Commissioner John Hutchings vote to support the tax proposal which disappointed most people, particularly those who voted him into office.  It now seems likely that this vote (along with a few notable others) have doomed his reelection chances in 2020. His political career is now in clear jeopardy.  Few supporters of Hutchings voted for him so he could ramp up their property taxes for more unnecessary building fiascos in Thurston County.

A massive tax increase and no guarantees

Several disturbing details surrounding this recent proposed tax increase have come to light.  These should concern all who live, pay taxes, and vote in Thurston County.  For example:

Normally, capital projects like buildings and new facilities are financed through a tax mechanism called “Revenue Backed Bonds.”  Read more about these funding mechanisms in state law at RCW 39.46.150 & RCW 39.46.160. These are a predictable method of ensuring that the funding exists for the life of the bonded debt, and it dedicates the funds so that they can’t be diverted to other uses.  However, under Washington State’s constitution, this type of debt requires a 60% voter approval. This is due to the fact that future generations are burdened by this decision to increase debt and this higher threshold was chosen to ensure that the projects being proposed are widely supported by the community.  Thurston County Manager Ramiro Chavez admitted this would be the normal path to financing a massive building project like this, but staff had determined that 60% of the voters of Thurston County would never support this size of a tax increase.  Therefore, staff wanted to push a financing method without this risky 60% voter approval hurdle.  Instead, staff wanted to push “General Obligation Bonds” which only have a 50% voter approval threshold (See RCW 84 for state law on property taxes)

Secondly, supporters of this proposed new courthouse admitted, repeatedly during the April 23, 2019 public hearing, that the vote for the proposed tax increase should be held on any special election date EXCEPT during the November 5, 2019 general election date so that fewer voters would participate.  Supporters of the tax were demanding this explicitly because they admitted the majority of voters in Thurston County probably wouldn’t support this tax increase. These comments were largely directed at this author’s earlier comments at the same hearing that if the Commissioners were going to put this tax increase on the ballot they should give the largest number of voters the chance to vote on it in November.  Supporters of this tax increase are terrified that a large number of voters would vote to reject this proposal.  I can’t blame tax supporters for wanting to hide from the voters because they probably would lose at the ballot box if the voters of Thurston County realize what this boondoggle really is.  (From a policy standpoint, this is why I’ve always recommended eliminating the special election dates in Washington state law, and instead put all proposed tax increase votes on the November ballot.  Making this policy change would reduce the special interest gaming of the current special election system).

Which gets to the most disturbing aspect of this proposed tax increase.  The tax increase itself legally has nothing to do with building anything at all.  While it is being sold as a funding mechanism for some undefined courthouse project (nobody yet knows the true cost – $250 million?  $300 million?), the actual legal language of the tax increase doesn’t require Thurston County to build anything with these funds.  At first staff contested this fact, but when confronted by citizen Jon Petit with the actual language of the very proposal staff was pushing on the county commissioners, Thurston County Manager Ramiro Chavez was forced to admit Mr. Petit was correct.  There is no obligation that Thurston County build anything.  The only legal guarantee is if the voters are suckered into approving this scheme, they will be paying much higher property taxes.

Another policy impact of this tax proposal, if passed by the voters, is the fact that General Obligation Bonds take funds from the general budget of Thurston County.  While this tax proposal is an increase of 38.5% over the existing rate of general obligation funds, it also means that if the staff of Thurston County start down the project path to build this building and they go over budget (a common occurrence in Thurston County), those increased tax dollars will be extracted and diverted from services like the sheriff’s office.  It is a near certainty that taxpayers in Thurston County would be blackmailed into even higher tax increases in the near future to pay for the mistakes and the predictable budget fiasco of this undefined “new courthouse” project.

Finally, most disturbingly, based on the testimony of the Mayor of Olympia, Cheryl Shelby at the April 23^rd public hearing, some type of “partnership” arrangement has been hatched for the undefined courthouse boondoggle (and the taxpayers already have paid $200,000 for this “partnership” according to minutes from the August 14, 2018 commissioner meeting minutes (linked here see item 5a. Note Item 5b was the $300,000 cost of this draft feasibility report linked here) This is terrifying to anyone who has bothered to pay attention to local government in Thurston County. The only Thurston County local government with a worse track record and has demonstrated even more incompetence in building projects and financial mismanagement than Thurston County itself is the City of Olympia.  Their bloated, overbudget City Hall (true cost of $52 million) was just the most glaring example, but they also like to give away multi-million dollar buildings for free (to organizations where councilmember spouses work), spend $350,000 on one-stall restrooms, and generally waste taxpayer funds on homeless camps and other fiascos. 

Conveniently, the theoretical location of this “new courthouse” in downtown Olympia will also help the City of Olympia attempt to escape the consequences of their impactful planning policies which have managed to chase businesses away from downtown as fast as business leases expire.  Local political “leaders” believe this Thurston County courthouse project might help mask the urban decay and postpone any local political reckoning for the failures of the past and current Olympia City Council.  Thurston County voters have every reason to be concerned. In the recent survey – Thurston County voters were almost five times more concerned about the proposed courthouse costs and taxes than they were about any other issue related to this proposed scheme.

Thurston County – A history of building fiascos

Thurston County has a long and colorful history of incompetence, failure, and waste when it comes to building government facilities of any kind.  Some have attributed these repeated failures to the planning department, which is often plagued with scandal and questionable leadership.  A general government staff infection seems to exist in Thurston County upper management.  Some of these failures have also been due to poor political leadership which has afflicted the county on a frequent basis over the years.  Another theory involves concerns over the undue influence of special interests who always profit from these decisions like the architecture company and other vendors who stand to profit greatly from the mistakes of Thurston County staff.  These special interests also appear to have great influence over the decision making at the staff level and tend to control and direct staff to do their bidding.  Conveniently, this bidding always results in hefty sums of taxpayer cash which always end up with these special interests.  Regardless of the theory, the result has often been the same –

Let’s look at just a few of the more recent examples:

Thurston County’s jail fiasco made state-wide news for half a decade as the brand new $61 million jail that was rejected by the voters, built by Commissioners Romero, Valenzuela, and Wolfe anyway (under the direction of former Thurston County Manager Don Krupp), and then sat empty for five years because nobody bothered to plan a budget to operate the facility.  We’ve written about this fiasco over the years (see here, here, and here).  Like most failures of Thurston County “planning,” this one began as an effort to circumvent the voters.  A failed effort to build a $102 million jail/justice center was soundly rejected by Thurston County voters in 2004 (see election results here – 61% opposed).  An effort to impose a different excise tax was also rejected later.  As is frequently the case, Thurston County planning staff was certain they knew best and they colluded with the old Commission, put the debt on future generations by taking out more general obligation bonds without a vote of the people and then built the jail anyway.

Of course, they didn’t call it a “jail,” but instead used the Orwellian term “Accountability and Restitution Center” or “ARC” for short.  Once the jail was completed, it sat empty for five years, costing the county $250,000 or more in annual maintenance costs while the county struggled to find some money to run the facility.  It wasn’t until the failed Democrat incumbents Valenzuela, Romero and Wolfe were replaced by Independent Commissioners Blake, Edwards, and Hutchings that the empty jail was finally put to use.

Another classic example of Thurston County’s planning incompetence was the sad saga of the 3400 building (read more written at the time here).  This embarrassment existed for many years as another monument to local government incompetence and failure in Thurston County.  Originally a commercial fish cannery purchased by Thurston County in 1998 for $3.4 million with the expectation it could be turned into a jail.  Those expectations were dashed by reality (nobody at the time bothered to verify whether it could be converted to this use), and Thurston County gradually squandered over $8 million on this empty building.  After 18 years during which time the 3400 building sat mostly unused and empty, the brilliant staff of Thurston County found ways to destroy the value even further by giving away the parking lot for a homeless camp project called Camp Quixote, and then finally dumping the failed money pit for a fraction of the purchase cost 18 years earlier.

Thurston County always seems to need a new courthouse.

The current Thurston County Courthouse was built in 1978.  A casual review of newspaper articles from that era along with a review of archives demonstrates that the promises made to taxpayers back then remain identical to the promises made today for the “new” courthouse in downtown Olympia.  The Thurston County Commissioners and planning staff in the 1970s promised that the new courthouse would be energy efficient, have plenty of parking, be sustainable long term, and have the ability and room to expand to accommodate future needs.  Staff promised to maintain the facility.  Many of those promises went unfilled – particularly the parking plans and building maintenance.  However, the need to escape the problems of downtown Olympia like traffic, parking, and other related issues were real to the citizens of the community at the time. 

In my next article on this subject, I plan to discuss better alternatives than this proposed fiasco.  The biased process used to get this pre-determined outcome also merits more attention.  Additionally, the special interests pushing this boondoggle for their own selfish ends, regardless of the harm inflicted on the community should be closely examined and studied.

Based on a 1975 Environmental Impact Statement, which this author found in the state archives, the Thurston County Commissioners at that time were defensive about the public criticism of the high costs for “marble palaces” and they were moving forward with the project regardless.  It is worth noting, every Thurston County Commissioner who voted for the proposed courthouse project at the time were removed from office by the voters at the next election.  History has a tendency to repeat itself and both Commissioner Tye “the big tax guy” Menser, and Commissioner Hutchings should take note. 

Unfortunately, if this massive tax increase is approved, nobody will remember today’s politicians who hurt us, but the taxpayers, including tens of thousands yet unborn will still be paying for it. 

Note: the Original Draft of this article referenced a “39.5%” increase, but it is actually a 38.5% increase and has been changed in the article accordingly

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Background articles and documents:

Thurston County Commission Minutes – August 14, 2018 – see Item 5a and 5b for a $200,000 City of Olympia “Interlocal Agreement for new courthouse” and $300,000 for New Courthouse “Consultant”

Thurston County Commission Agenda – April 30, 2019 – see Item 6a for new tax proposal

Thurston County Elway Poll Survey (conducted March-April 2019) summary

Thurston County Elway Poll Survey supporting doc – crosstab banners

Thurston County Elway Poll Survey supporting doc – topline

Thurston County Courthouse Draft Feasibility Report – 12-14-18

SouthSoundBiz – “Thurston County to Place New Courthouse Request on April 2020 Ballot”

The Olympian – ” Vote to pay for Thurston County’s new courthouse not coming until April 2020″

The Olympian – “County commissioners vote 2-1 to move courthouse to downtown Olympia”

Thurston County demonstrates how NOT to build a jail

Thurston County spends $8 million and 18 years to make a $4 million empty building worth $2 million

Childish political leadership in Thurston County is costing taxpayers millions

Thurston County staff create fraudulent data to justify tax increase

A plague of Consequences

Jon Pettit – Plan A – proposed in July 2019 as better, more cost effective option

Document detailing Life Cycle Engineering and Budgeting for Public Facilities (Hint: Thurston County building maintenance doesn’t even come close to this)