Another McEachin letter

from Rich McEachin, who prefaced it with “this is my final letter to the editor”:

Letter to Editor:

It’s ironic that anyone can possibly think one person, me, could cause the financial problems Ocean Shores is having today.  The reality is the blame lies with the taxpayers of the State of Washington. They are the ones that voted for a maximum property tax increase of not more than 1% per year, while the cost of doing business rose between 4 to 6% each year.

But in Ocean Shores specifically, the City Councils didn’t even take advantage of that 1% increase. I’m not sure why that occurred but you can ask Mr. Creighton why, he was sitting on those Councils. It worked for 10 years but has now caught up with us. If property taxes were raised by the 1% each year for the last 10 years, the general fund would be more than balanced today. Keep in mind; it is not the entire budget that has a shortfall. It’s only the general fund portion of the budget. The only revenue the general fund receives is sales tax, property tax, and cost allocation reimbursement. Today’s decline in  those revenues causes problems in the general fund. 

This doesn’t even get in to the taxpayers of Ocean Shores not renewing the street levy in 1999. That $0.45 cents per $1,000 assessment helped offset the general fund costs toward street maintenance. Today that would have accumulated to over $1.5M in the general fund. Instead the general fund today is subsidizing the entire cost of street maintenance. 

Apparently, an innovative Finance Director in 2001 found a way to balance the general fund in spite of the Council’s decisions. That entailed reimbursing the general fund from the utility accounts for the work done on behalf of the utilities by certain employees paid from the general fund. Yes, the cost allocation process. One can argue that process either way but the reality is the new Mayor did everything he could to stop over $600,000 from being transferred to the general fund from the utilities. He ran his campaign on the platform that too much money was being transferred and it needed to stop and reduce the utility costs for taxpayers.  Funny thing is, that money stopped being transferred in 2008 but I haven’t seen any reduction in my utility costs. All I see that it did was cause a large deficit to the general fund. 

I am also being blamed because City employees make too much money. Let me explain how the negotiations went with the Unions while I was City Manager. 

The Unions and the City Council agreed that employee wages should be compared with Cities that have the same ability to pay as Ocean Shores. That is, those Cities in Washington that had a similar population, sales tax revenue, and property tax revenue. When that analysis was done, it showed that the employees in Ocean Shores were making much less than those other Cities. The Unions agreed to forego an immediate raise to get in-line with those other Cities. They agreed to a cost of living increase only in 2007, one half of the raise in 2008, one half of the raise in 2009, and only a cost of living increase each year for 2010, 2011, and 2012. Everyone agreed, including Mr. Creighton, that it was fair and would save the City money in the 6 year contract period. In addition to the raises the Unions agreed to give up some long time benefits. The City used to pay for education incentives. That is, if an employee obtained a college degree, they were paid up to 10% more. The Unions agreed to resend that benefit, which saved the City a lot of money. They also agreed, for the first time ever, to contribute a certain percentage of their pay toward the cost of medical insurance, which reduced the total amount the City paid for that benefit. . This package seemed fair to me, seemed fair to the Unions, and seemed fair to the City Council. Also, I don’t care what some people say – Ocean Shores does not have too many employees for the amount of work that needs accomplished in our City.. I don’t know what price one can put on someone’s life, but I hope I’m not the one that dies because the Fire Department doesn’t have the staffing to respond to my medical issue.  Also, I hope I’m not the one that can’t get a police officer in a timely manner when I have someone break into my house in the middle of the night because they are short handed. 

Some people seem to be upset over my severance pay package. When I was asked if I was interested in the permanent City Manger position I explained the following: I had a secure position as Chief of Police. I could have worked in that position until I wanted to retire. Since I didn’t plan on retiring for at least 5 years – I would have made over $400,000 during that time. Since we were facing a possible change in government, which would eliminate the City Manager position, I had to have some safety net if I was to lose my job to anything other than “for cause”. The one year salary severance was agreed to as that safety net along with one year’s health insurance. The majority of the Council felt they were saving over $40,000 anyway by not having to conduct a process to search for a City Manager. They also knew they would save over $40,000 with me doing the Union negotiations instead of hiring an attorney like the previous City Manager did.  The severance package was no different than many other City Manager’s contract.

The bottom line is Ocean Shores doesn’t stand alone in today’s financial problems. Grays Harbor County has to take $2M dollars out of reserves to balance their budget. Montesano has a shortfall of $2M and can’t now fund the beacon park project and has to add an ambulance fee of $10.92 for each household. Aberdeen will not fill 12 employee positions because of their shortfalls. They will also increase their utility tax to make up a $16,000 shortfall in their EMS. Citizens will pay $59 more per $1,000 assessed value in property taxes. The only Cities doing OK in our area are the ones that still use the formula that Ocean Shores used to use in transferring money to the general fund from the utilities.   

There has been much discussion on my economics thoughts for the City, while the City Manager. My thoughts were that the majority of Ocean Shores’ citizens wanted growth. I truly believed that they wanted more economic development to help pay for the cost of water, sewer, and running the City. Maybe I was wrong in what I thought but not knowing that I proceeded to move forward. Myself and the then City Council thought the best way to accomplish that goal was 1) sell some City property to build the much needed infrastructure (permit center, fire department, library, downtown core, etc); 2) free up downtown land for development by moving some golf holes to an area of the Weatherwax that contained the majority of the wetlands. I was in the middle of negotiations on a large project coming to Ocean Shores for that downtown property when the Mayor form of government occurred. Those negotiations stopped when that happened as the buyers “changed their mind.” I think we could have got there – but we’ll never know now. If my beliefs for Ocean Shores’ growth were wrong, which apparently they were since the vote by the majority is to retain ALL the Weatherwax, I can only say – I was wrong! I think a lot about where would OS would be today if the then Council would have simply passed a resolution saving ALL the Weatherwax years ago? I also wonder who is really running the City.

I won’t be writing any more letters defending myself or giving my opinions. I have said all I can say on the subjects. 

Rich McEachin

Ocean Shores