Collaboration in Civic Spheres

Expert Review Panel To WA State: Aggressive Finance Plan Needed For 1-405/State Route 167 Mega-Project

by January 17th, 2011

SUMMARY: The 40-mile-plus Interstate 405/State Route 167 is already badly congested and will get worse as population grows over the next 20 years unless a planned $1.95 billion tolling and demand management mega-project is funded and completed. Even under tolling of the full corridor, there will be a funding gap of $685 million to $1.2 billion which policymakers must address. New taxes and/or borrowing or private investment would be needed as well.

The project would add electronic-only express toll lanes and manage peak-hour traffic demand. Aggressive tolling strategies are needed to help the project succeed – including few or limited toll exemptions for private vehicles unless they are carrying three or more passengers.

A new more pervasive approach to tolling technology is recommended, with photo enforcement to deter payment evasion and a requirement that all in-region drivers have “Good To Go” electronic tolling accounts and dashboard-mounted “transponders” which are read by overhead highway panels.

State Audit Critiques Seattle Port’s Property Management, Cargo Crane Oversight, And Under-reported Pilferage

by January 14th, 2011

SUMMARY: A State of Washington performance audit found the Port of Seattle: failed to sufficiently report to the state, as required by law, 41 instances of pilferage valued at $107,000; failed to monitor actual usage of its cargo cranes and related lease fees by lessees; and failed to monitor required maintenance of the cranes by lessees as specified in contracts; and sold a property for $4.1 million less than market value due to an accounting error. The audit also finds that The Port, lacking a risk assessment, paid $5.5 million for a property which was not ultimately used for a planned development project; allowed wide variances – of 20 to 70 percent – in lease rates for similar properties, with no explanation; and does not widely market its salable properties to get best bid competition. The audit found The Port also fails to obtain timely appraisals on many of its leased properties which would allow it to charge higher, market-rate lease fees.

Three of the Port of Seattle's 18 cargo cranes, seen from lower West Seattle Bridge, 12/3/10 - photo by Matt Rosenberg, Public Data Ferret

BACKGROUND: This state-led performance audit of the Port of Seattle was done under the authority of voter-approved Initiative 900. A previous state performance audit of The Port in 2006-2007 examined The Port’s construction project management, at Sea-Tac Airport. This audit examines the Port’s real estate management practices and other program areas.

KEY LINK: Port of Seattle: Real Estate Management And Selected Programs, Washington State Auditor’s Office, 12/13/10

KEY FINDINGS:

  • Between January 2006 and March 2009, various divisions of the Port of Seattle reported to Port Police 41 cases of property losses totalling $107,000 in value but that information was not also conveyed to Port executive management, internal auditors or – as required by state law – the state auditor. The losses included numerous items that went permanently missing while on Port property, including computers, copper wire, aluminum window frames, a pressure washer, drills, a projector, steel cables., copper pipes, handguns, blank security badges and digital cameras.
  • The Port leases its 18 cranes to private shipping operators, who use the cranes to handle cargo containers at Port terminal facilities. But contrary to recommended best practices, the Port does not seek to verify reported usage hours of the cranes by the customers/tenants, upon which lease payments by the operators to the Port are based. As a result, there is no protection against the possibility of under-reporting of crane usage hours and underpayments.
  • Crane lease agreements also require the tenants to pay for and perform regularly scheduled maintenance of the cranes and for The Port to inspect the cranes to verify the work has been done, and done properly. But no inspections of the cranes by The Port occurred in 2008 and only one in 2009.
  • The Port does not review crane maintenance records unless a mechanical problem arises, potentially putting crane durability and worker safety at risk.
  • Of the Port’s four major property transactions since 2004, two were well handled, under the current (new) administration and two (under the old administration) were not.
  • The Port in 2004 sold its Terminal 106E property for $4.1 million less than fair market value due, ultimately, to an accounting error – and also failed to market the property competitively to seek alternative (and better) bids from prospective buyers.
  • In April 2005, using an intermediary which was paid to $402,000 to hide The Port’s identity as a potential buyer, The Port bought for $5.5 million the 3.4-acre Tsubota Steel property without fully assessing or documenting the considerable risks, liabilities and costs of ongoing ownership of the property, which was slated for a larger development project including adjoining acreage, but which never materialized.
  • The State Auditor’s Office reviewed 21 of 244 leases overseen by The Port’s Seaport Real Estate Division and found that in some instances The Port’s property lease rates have been set at below fair market value and lacked documented justification. Rates for similar properties leased out by The Port to tenants have sometimes varied by between 20 percent and 70 percent, with no explanation.
  • The Port too often does not widely market its salable properties to promote competition. Lack of appraisals were also a concern for auditors. The Port’s Seaport division manages 45 leases but obtained only seven related property value appraisals from 2001 through 2009. Those appraisals indicated significant growth in market-value lease rates, from 14$ to $25 per square foot between 2001 and 2006, to between $28.50 to $32.50 per square foot in 2008 to 2009. This illustrates the need for “current market information specific to individual properties” leased by The Port, according to the state performance audit. Without that, “The Port is at risk of inconsistent rental lease rates that are less than fair market value.”

A Narrow Ray Of Sunshine In Nevada

by January 12th, 2011

A state audit in Nevada released Nov. 30, 2010 highlighted the problem of current state employees taking second jobs as state consultants while on the clock, and former employees being paid for work without contracts or disclosure. There were 250 instances of current or former employees in special consulting arrangements with the state totaling $11.6 million in 2008-2009. New laws were passed emphasizing value to taxpayers and more transparency. Assembly Bill 463 required consulting contracts to be approved by or reported to the state’s Interim Finance Committee if the consultant is a current state employee or had left state government less than a year ago, or if a contract with a consultant was extended for more than two years. But, the audit reports that the Interim Finance Committee has received “very little information” because the state Department of Administration “has narrowly defined the term ‘consultant’ to exclude individuals that provide any type of work product.”

So the legislative remedy has amounted to little. But there is a narrow ray of sunshine. In response to the audit, the Nevada Department of Conservation and Natural Resources is posting online all of its contracts with current or former state employees in 2008-2009 , the period examined in the state audit. The culture of resistance championed by the state’s Department of Administration erodes trust in government, which is inimical to government’s interests in the long term. Contracts are a key area for public disclosure, as are budgets, including actual year-end revenues and spending versus what was planned. Disclosure in these areas needs to be a cross-enterprise effort for governments.

Audit Targets Testing Of U.S. Army’s Body Armor

by January 11th, 2011

SUMMARY: Ballistic testing by oversight personnel of the U.S. Army’s Interceptor Body Armor vest components for five of six contracts, and quality surveillance procedures on four of the contracts, were not performed properly, according to an audit by the U.S. Department of Defense’s Inspector General.

Interceptor Body Armor

As performed in the specified instances, the ballistic testing and quality surveillance could provide only limited confirmation that the vest components provided the promised degree of protection.

BACKGROUND: A request from Congressman Louise Slaughter of New York led to audits of quality testing procedures for six Department of Defense contracts valued at $434 million with Point Blank Body Armor, Inc. of Pompano Beach, Florida for their Interceptor Body Armor. It is a modular system with an outer tactical vest, ceramic plates, and components which increase the coverage area. By stopping or slowing bullets or fragments, the body armor is intended to the number and severity of wounds and increase the likelihood of survival for combat personnel.

KEY DOCUMENT: Ballistic Testing And Product Quality Surveillance For The Interceptor Body Armor – Vest Components Need Improvement,” Inspector General, U.S. Department of Defense, 1/3/11

KEY FINDINGS:

  • On two contracts the Army’s Program Manager for Soldier Equipment lowered testing requirements after three tests of the Interceptor Body Armor vest components did not demonstrate a minimum standard of protection.
  • On five contracts the program manager waived a test of body armor vest components to gauge their performance after a simulated aging process.
  • Of 900 “lots,” or large batches of the body armor vest components delivered under those five contracts, 560 were classified as having met the lot acceptance test, but proper random sampling was not used and 207 of those lots were actually approved by contractor personnel, conflicting with regulations prohibiting contractors from performing an inherently government client function.
  • 340 more lots did not undergo lot acceptance tests because the materials had been previously approved or the program manager did not require insertion of new ballistics panels.
  • The audit states, “..if the ballistic testing requirements are not implemented in accordance with contract requirements, the Army cannot assure that the vest components meet the contract requirements, which were developed to provide an appropriate level of protection for the warfighter.”
  • The audit recommends that materials testing waivers should be justified and approved in writing; that risk assessment be re-done on the 560 lots; and that Defense Contract Management Agency Orlando, Florida personnel should provide training on a random sample generator tool so that valid random sample evaluations of materials can be regularly conducted during the course of lot acceptance tests.

Well Water Around Ephrata Landfill Poses “Low To Very Low” Added Risk Of Cancer; Vinyl Chloride Still A Concern

by January 10th, 2011

SUMMARY: In the nearly 70 years since it opened, management of potential environmental risks at and from the Ephrata landfill in Central Washington state has gradually improved. In recent years, public health authorities have been addressing the aftermath of the officially-sanctioned dumping in 1975 by Grant County there of about 2,300 barrels of industrial waste. A recent health consultation report from the Washington Department of Health finds concentrations at levels of concern in private well water within a mile of the site, of benzene, dicloroethane and especially vinyl chloride. DOH says there is a low to very low added risk of cancer for users of private wells within a mile of the landfill, but warns little is known about the combined effects of such chemicals. They recommend further monitoring and public education.

State Auditor Warns City of Ocean Shores About Finances

by January 6th, 2011

SUMMARY: According to a report from the office of Washington State Auditor Brian Sonntag, The City of Ocean Shores has been engaging in poor financial practices, including over-budget spending in its general fund, spending down city cash reserves, depletion of special funds, making inter-fund loans with no plans for repayment, and nearly doubling its debt from 2006 through 2009.

BACKGROUND: The Office of the State Auditor in Washington has raised concerns about expenditures in excess of appropriations and shrinking cash reserves in the City of Ocean Shores in 2006, 2007 and 2008 audits. A recently-released audit covering 2009 and including financial data up to 10/31/10, amplifies and adds to those concerns.

KEY LINK: Financial Statements Audit Report On City Of Ocean Shores, Washington, Washington State Auditor’s Office, 12/20/10

KEY FINDINGS:

  • The city’s long term debt has nearly doubled, from $37.9 million in 2006 to $72.9 million in 2009. Annual debt payments constitute 20 percent of the city’s budget.
  • The city projected higher revenues than were actually received. Turnover in the city’s Finance Director position resulted in the city not getting timely information to help it oversee the budget and coordinate expenditures with income; and led to unauthorized loans from one city fund to another. An example is unauthorized inter-fund loans, without required City Council approval by resolution, of $90,150 in 2007 and $40,870 in 2009 to the city’s Convention and Tourism Fund.
  • As of 10/31/10, the city had 10 special funds with negative balances totaling $1,183,265; the largest negative balance being $698,984 in the Storm Drainage Utility Fund. The deficit funds have been propped up with inter-fund loans from the city’s Water Capital Improvement Fund, but the city has failed to establish debt repayment schedules.
  • The city’s ending cash balance has dwindled from $2.28 million in 2007 to$1.18 million in 2008, to $680,480 in 2009 to $116,651 on 10/31/10. Expenditures have exceeded income in the city’s general fund for three years running, by $144,284 in 2007, $1.482 million in 2008, and $349,122 in 2009.
  • The city is at risk of failing to meet its obligations at current service levels, including inter-fund loan payments, and may have to borrow as a result, adding costs for rate payers and taxpayers. Failure to repay inter-fund loans would constitute permanent diversion of funds.
  • The city should develop a comprehensive, formal written plan to address it’s budgetary woes; to monitor the city’s financial condition to see that plan is followed; and should establish and maintain a debt repayment schedule for inter-fund loans.
  • The city concurs with the audit findings. Council, management and staff ‘”are also very concerned about the city’s financial condition.” The city will aim to boost revenues, cut expenditures and rebuild fund balances.In 2010 the city laid of 10 employees , and other non-public safety employees took 27 unpaid furlough days. In 2010 Ocean Shores voters approved new funding for emergency care and to sustain library operations through 2012. The city pledges to institute robust and transparent monthly financial reporting to improve oversight by staff and elected officials, and to avoid inter-fund lending or at least to formally adopt repayment schedules if it does continue to occur.

6,000 New Homes Mean Six New Schools In Black Diamond

by January 4th, 2011

SUMMARY: The Black Diamond City Council is poised to approve an agenda bill Jan. 6 granting final authorization to the mayor to sign a comprehensive school mitigation agreement between the city, the Enumclaw School District, and the developer of two new master planned communities which will result in 6,000 new dwelling units and require construction of six new schools, three elementary, two middle, and one high school. The developer will provide land for the schools in exchange for mitigation fee credits, but taxpayers will have to approve the issuance of public debt to pay for construction.

BACKGROUND: Following legally-required environmental analysis and public hearing, the Black Diamond City Council City in September 2010 approved two master planned developments which will result in construction of 6,000 new residential units, The Villages and Lawson Hills. Public schools in Black Diamond, a city in southeastern King County, are operated by the Enumclaw School District, which covers several municipalities in a large suburban-rural area. Under a Comprehensive School Mitigation Agreement approved by the city of Black Diamond and the Enumclaw School District, the developer, Yarrow Bay, will ensure properties are secured within the new communities for new schools that will be required to serve the new population. Yarrow Bay is ready to sign the agreement following final revisions.

KEY LINK: Agenda Bill Authorizing Mayor To Sign Comprehensive School Mitigation Agreement with Enumclaw School District and Yarrow Bay developers; Black Diamond City Council, 1/6/11.

KEY FINDINGS:

  • The two new master planned developments called The Villages and Lawson Hills will generate a substantial new population of school-age children who cannot be served at existing schools in the Black Diamond area.
  • Based on formulas predicting the number of students in various age groups who will reside in the 3,430 single-family homes and 920 apartments/town homes, there will need to be built: three new elementary schools with 450 students each; two middle schools with 550 students each; and one high school with 1,200 students.
  • To serve the new students, neighborhood schools are preferred so they can walk or bike to school and reduce transportation service needs and associated environmental impacts. Initial locations have been identified for the new schools, but may shift somewhat depending on various factors.
  • The developer Yarrow Bay will convey properties to the Enumclaw School District for construction of the needed new schools in exchange for credits against the so-called “mitigation fees” which are typically assessed in monetary form by cities on developers to compensate for the local government fiscal impacts resulting from new residential communities or units.
  • Paying for construction of the new schools will fall to taxpayers, who will be asked to support passage of school construction bond issues (the issuance of public debt to individual and institutional lenders). The city, school district and developer will “support and encourage” passage of necessary construction bond issues in the near and long-term. (Public entities cannot advocate a “yes” or “no’ vote on any ballot measure, but may provide objective information for the public, and public officials when they are “off the clock” may campaign directly).

King County Exec. To Recommend New Gov 2.0 Services

by December 15th, 2010

SUMMARY: Under an ordinance just approved by the King County Council, King County Executive Dow Constantine will by May, 2011 prepare for council review and approval a plan identifying his proposed top five proposed new county government services to be provided online. These may come from the executive or legislative branches of county government, or the county court system. A staff report accompanying the memo states that many more services could be provided online by the county, and more efficiently in that manner.

BACKGROUND: One of the officially adopted priorities of the King County Council is to make government more accessible and transparent, and deliver services more efficiently. The King County Council on 12/13/10 passed an ordinance introduced by Council Member Kathy Lambert directing the King County Executive (Dow Constantine) to by May 2, 2011 prepare a plan identifying his proposed top five priorities for county government services to be delivered electronically. In addition to already providing several customer service functions online, the county has also created an open data site which makes county data sets available to software developers to potentially fashion new applications for use by the general public.

KEY LINK: King County e-Government Initiative, Staff Report 12/7/10

KEY FINDINGS:

  • The Executive will identify and formulate a strategy for implementing the five most important services King County could provide the public through electronic means – this is primarily but not exclusively referring to the Internet. The plan will describe benefits, costs and milestones to provide the five services electronically, and be sent by 5/2/11 to the County Council for review, possible amendments, and approval.
  • Around the U.S. and in other nations, digital government is gaining strong traction. There are four main types of digital government services: government to citizens/residents; government to business; government to government; government to employees. Under the ordinance’s language, the more immediate emphasis is to be on the first two areas.
  • “King County has implemented a few e-government services, notably the payment of property taxes, certain permit processing services, the capacity for individuals to plan transit trips and the ability of individuals to find out if a person is incarcerated. However, many more County services could be more efficiently delivered to the public through the Internet and other electronic means. The subject motion provides an opportunity to pursue this path more robustly and strategically.”
  • “The Executive is requested to consider services in all branches of government so that the five services could end up being services offered by the courts, by the executive branch and by the legislative branch. This will of course require the cooperation of separately elected officials, but there has been an interest expressed by a number of these officials in the past regarding the electronic delivery of services.”