The Spokane Record

As I watch the Spokane City Council meeting tonight the word “cant” comes to mind.  There seems to be a language used by our leaders.  One hears words like partnering, collaborative, public private partnership, moving forward and so on.  I bristle.  I suppose I am experiencing the insincerity of cant.

Some definitions of the word cant –  insincere, esp. conventional expressions of enthusiasm for high ideals, goodness, or piety; the phraseology peculiar to a particular class, party, profession, etc.: the cant of the fashion industry.

The proposed Mobius / Spokane Park Department lease includes this provision”

Third- Party Subleases on Lots A, B, & C. Tenant’s initial intent is to develop Lots A, B, and C of the Premises only for parking uses. Landlord’s prior reasonable approval is required if Tenant desires in the future to grant subleases, licenses agreements, concession agreements or the like on such lots for uses other than those directly related to science center purposes (e.g., office or retail uses that are not directly related to or in support of the operation of the science center) (collectively, “Third Party Subleases”).. Except as otherwise provided in Article 9 above, any audited net revenues from such Third Party Subleases shall be shared between the parties as follows: fifteen percent (15%) to Landlord (”Landlord’s Sublease Share”); and the remaining eighty-five percent (85%) to Tenant.

 Section 23.3 Mobius / Park Department Draft Lease.

This may be where Mobius gets to use park land for its non-M0bius purposes.  This is probably, or at least should be, a violation of Wash. Const. Art. VIII, Section 7 — gift of public assets or credit to private party.

Not long ago, the Spokane Park Department acquired more real estate on the north bank of the Spokane River for the expansion of Riverfront Park.

There are discussions taking place regarding the use of this land. A science museum organization, Mobius, wants to use some of the land for a science center. Mobius also wants the Park department to make parkland available to it so that it can construct and operate private office buildings and parking lots. The argument is that they need this gift of land so that for-profit operations can be constructed and so that from the for-profit operations they will be able to pay build and operated their science center.

There is nothing wrong with the Park department leasing land to an entity which will conduct a park purpose or park use on the land. The Mobius science center would be a permissible park land use. The problem has to do with the lease of land for the for-profit operations. This is where things go wrong — two things go wrong.

Number one, the lease presumably for a dollar a year of this for-profit operation would be considered a violation of Washington Constitution Art. VIII, Section 7. This constitutional provision says that city governments are not supposed to use public funds for private purposes and that they are not supposed to make gifts of public funds, or loan public assets for private purposes, or extend credit of the public for private purposes. Here is the exact language:

SECTION 7 CREDIT NOT TO BE LOANED. No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation.

In the early 1990’s Spokane Transit Authority wanted to create a downtown transit center in a 16 story office building. Its plan was to pre-pay a lease by several millions of dollars it was going to enter into with the developer of a 16 story office building for a transit center on part of the main floor. Litigation was brought By Spokane Research and Defense Fund saying that the transaction could not be entered into because it would be a violation of Washington Constitution Art. VIII, Section 7. The Washington State Attorney General agreed. The AG intervened on the side of Spokane Research and Defense Fund. The developer and STA abandoned the plan.

So, it would seem that use of the land for the private for-profit aspect would be a gift of public funds or a lending of credit in the form of lending the use of these valuable assets of the land for the private for-profit aspect. Despite the Seattle Mariners case what the Spokane Park department seeks to do regarding Mobius would, one would think, still be a violation of Art. VIII, Section 7.

The second reason why the Mobius plan should not be workable (is unworkable) is that the property to be leased for the private office building and private parking area is not going to be used for park purposes. Spokane City Charter Section 48clearly provides that all park property is to be used for park purposes, park uses. Putting the property in question in the hands of Mobius for a profit-making private operation would be in violation of the charter.

The Mobius deal as proposed is illegal.

The Washington state Office of Financial Managment has some useful information regarding the economic impacts of Fairchild Air Force Base in Airway Hights, Washington (a few miles west of Spokane).  Go here.

Today I did some shopping. I went to a bookstore and bought some books. I paid $59.99 for the books and in addition I paid a sales tax of 8.7% or $5.22. We are used to paying sales taxes in the state of Washington. I was struck by the amount, though. These days I am on a fixed income so I am watching my expenditures.

Next, I went to the grocery store and bought some food — some buns, dog bones, potatoes, sausage – and I got a bag refund of five cents. My bill was $17.47. No taxes, no sales taxes were due. Food is a necessity. People have to have food so there is no tax, at least in Washington and at least for now.

But then walking home from the store I got to thinking. Thinking about taxes – this is where it all fell apart.

I remembered that the city of Spokane, where I live, is going to significantly increase fees for sewer services. My guess is that the cost of my sewer services will go up by about $20 a month. But that’s not the whole of it. My city taxes are also going to go up – up by $5.00.

The city charges a utility tax on sewer services. The tax is $.20 on the dollar. However, since the city also charges a tax on that tax, and then a tax that tax, and then pay tax on that tax, the tax is really $.25 on the dollar. The calls this “grossing up the tax.” The utility tax, really a sales tax, is a 25% sales tax.

How does the city get away with this? It balances its budget by taxing city utility services as high as it possibly can do so without creating a revolution. Right now, my fellow citizens in the city of Spokane must be content to pay the city of Spokane a sales tax of $.25 on the dollar for all city utility services.

When I think of it, I can hardly believe it. What a generous group of people we are – probably half of us would be called poor. I would estimate that over 40% of the 81,000 households in the city of Spokane have an annual income of $35,000 or less. About 22% have incomes of less than $24,000 a year.  We can afford the new expenses, the new taxes, I guess.  Go here.

Several months ago the city Council called for a highest and best use study of the YMCA site. Well, now we have it, and here it is.

You remember the city and the county want to use conservation futures tax revenues for the purchase of the YMCA. Such taxes are to be used for only certain purposes such as the acquisition of open space so as to preserve the open space for future public park use. Regarding the YMCA the County and the city want to use the money, some $4.3 million to purchase the YMCA building which was a functioning YMCA not too long ago and which can be continued to be used for the purposes the YMCA was being used for and for other office purposes. The highest and best use study came to the conclusion that the YMCA property should be used as open space. That is that the YMCA should be torn down.

Think of it, the tax money is to be used to acquire open space but instead the tax money is going to be used to buy a building which is functioning and is going to cost some $5.3 million and then the city is going to spend an additional $830,000 to tear the building down to create open space.

If this goes through the city and County will have wasted about $6 million so as to acquire about three quarters of an acre of land in the city center. If the building is not worth $5.3 million then why would one spend so much money for. If the highest and best use is as open space then why would one not wait until such time as it would be sold as open space.

The only thing that makes sense is that elected officials are going to use public funds probably in violation of the law in order to generate money for the YMCA and in order to spend more money in order to get rid of what is they have purchased. How strange.

Mayor Verner is calling for substantial increases to the Spokane utility rates.  Not surprising.  The increases pay for new capital expenditures in the city utilities.  But, they also call for substantial increases to the amount of utility tax to be collected by the city.  Normally, the increases in utility fees to pay for capital improvements would not be subject to utlity taxes.  That changed last year when the city said that the utility tax would be applied to money coming in for “rate stabilization” that is, captital expenses for infrastruture.  No one complained.  So now rates for capital expenditures are subject to the utility tax.  Wallaaa — increased utility fees and increased utility taxes for the city.  You might be interested in the rate of the utility tax.  That’s easy.  Hang on to your shorts — it is 25% of every dollar you spend for utilities.