Taking fiscal irresponsibility to a new level

By DJ Wilson | Apr 15, 2010
Last night, the Edmonds City Council took fiscal irresponsibility to a whole new level.

As you know, we spent much of last year talking about the need for a levy - including 6 unanimous votes for a levy in 2009.  Ultimately, in a 4-3 vote, Council decided to put that levy off until 2010.

       
In the middle of last year, facing more than $1m shortfall in sales tax alone, we cut more than $1m from our budget in emergency measures.

This included furloughs and "give backs" from city employees of more than $400,000.

Within that context, following the lead of Councilman Michael Plunkett, the Council voted 5-2 to purchase the Skippers property for $1.1m.

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.

Councilman Strom Peterson and I were the only dissenting votes in what we both termed as "irresponsible" and "disrespectful" to the citizens and employees we have asked so much from.

Here are some key reasons why I voted no.

We simply don't have the money
The latest budget numbers, following this purchase, show us going bankrupt and running out of cash in the summer of 2012.  The Council had these numbers a month ago, and chose to ignore them.

We have huge debts in our retired employee pension system
I gave a presentation a few weeks ago outlining an $8.2m liability in our retired employee medical benefit fund.  Rather than contribute to that fund each year, past Councils have bet that future Councils would pick up the tab.  That bill has come due, and we are 2 or 3 medical emergencies away from financial disaster.
 
The property isn't worth that much
The truth is we don't know how much it's worth, because we haven't taken the time to appraise it!  However, we know the building there is scheduled to be demolished under a previous contract, which will immediately eliminate market value.  Waiting even a few weeks for that to occur would have likely saved us hundreds of thousands of dollars.
 
Our problem is cash flow
Strom and I are business owners.  We understand cash flow and the importance of working capital when you're running a business - or a city.  We've already made major cuts at the City, including selling our fire department.  Where else are we going to cut to be able to afford this purchase?

This makes a levy practically impossible
How do I ask voters to fund basic operations when we're spending these dollars on real estate?  I've asked my colleagues this question.  They don't yet have an answer.
 
This is a very trying time to be involved in city politics.
I am at a loss to explain how my colleagues think this answers our short term cash flow problems.


I will continue to try to push for economic development to support our retailers, keep our property taxes low, and to find resources to fund our parks and public safety.
I'll try to keep you in the loop as I do so.


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