Whatcom County needs cities, voters to approve sales tax for new jail to be built

Whatcom County Executive Jack Louws is “laser-focused” on getting a new Whatcom County Jail to replace the current facility, which is packed beyond capacity and quickly deteriorating.

But he’ll have to work out a deal among at least eight legislative bodies in the county in just a few weeks if he wants to put a local sales tax increase before voters this fall to pay the more than $100 million price tag.

Over the last month, Louws, Sheriff Bill Elfo, and other county staff members have met with city councils and mayors to plug their plan to fund the jail: Raise the local sales tax by 0.2 percent, which would add 20 cents to the sales tax for a $100 purchase.

In November 2013, the Whatcom County Council agreed to spend $6.1 million for the new jail site — a 39-acre property at LaBounty Drive and Sunset Avenue in Ferndale.

The county estimates that to build the 521-bed facility, demolish the old building and construct temporary holding cells in the county courthouse, the county will need about $104 million.

That would make the yearly payments on the bonds $7.75 million, which means the county needs each city’s support in ink to ensure it can pay off the largest capital project in county history.

Currently, Louws is trying to get agreement from all of the cities in time to bring a package to the Whatcom County Council for a vote in late April. That would allow staff to get the measure on the August primary ballot by the May 8 deadline.

“I’m trying to do the best I can to make something that’s acceptable for all jurisdictions,” Louws said. “But ultimately everybody needs to decide whether this decision is best for all of Whatcom County.”

Under a draft of the proposal, the county would get the lion’s share of the sales tax proceeds, and each city would get a portion of the remainder based on that city’s population.

If approved by voters, the tax would be collected starting in 2016. In 2017, the county estimates only $7.3 million, less than the bond payments, would be brought in that year, assuming a 2.5 percent annual increase in sales tax revenue.

“We’re anticipating inflation to be able to cover that difference,” Louws said.

Using a sales tax rather than a property tax also capitalizes on purchases made by visitors to the county, Louws told Bellingham City Council during a special meeting on the topic March 18.

Though the cities all tend to agree the county needs a new jail, there is discord over the plan. Some cities such as Bellingham are concerned about limiting their options to pay for future public safety needs if everyone agrees to max out their sales taxing ability and use it for the jail. Other cities have questioned how much say they’ll have on operating costs, and how much of the sales tax they might get back if their city doesn’t house as many people in the jail.

Ferndale Mayor Gary Jensen said he thinks the various groups might be able to reach an agreement at least in time to get the tax on the ballot this year, but the negotiating might take longer than Louws and the county have hoped.

“We realize the clock is ticking, we realize we want to work, so we’ve said let’s get in a room and start wrestling over these things,” Jensen said. “Every city has to defend their taxpayers. ... All of us are fighting for pennies and dollars.”

Under state law, sales taxes for public health and safety may be levied at a maximum of 0.3 percent. County voters already approved 0.1 percent, so levying an additional 0.2 percent would max out everyone’s capacity under that law. It would not impact the cities’ ability to levy property tax for that purpose, but the sales tax increase requires only a simple majority voter approval, while a property tax levy requires 60 percent approval.

During the March 18 meeting, Bellingham City Council member Terry Bornemann questioned why the cities were being asked to approve the agreement before the County Council had signed off on it.

“Time is of the essence,” Louws said. “Maybe it’ll end up on the November ballot, and if so, so be it.”

In meetings with the cities as recently as Thursday, March 26, Louws heard requests that the cities want to ensure that 0.1 percent of the sales tax would sunset once the county is done paying off the bonds. Louws said he agreed with that change, and was working on the wording to ensure the tax wouldn’t sunset before paying off potential future bonds that may be needed if the jail needs to expand or have work done.

Some community members question whether the county needs a jail as large as the one proposed, and multiple jurisdictions, including County Council, are concerned with making sure there are alternatives to deter and prevent people from being incarcerated in the first place and to help those who do wind up in jail reintegrate into society.

Louws said he hopes to hear final comments from the cities by April 3, so he and the rest of the county staff planning the jail can return an updated agreement to the cities and County Council by April 10. County Council would talk about the details April 14, then if the cities have all signed on, the council could vote on whether to put the tax on the ballot at its regular April 28 meeting.

County staff members have built a 13 percent wiggle room into the project’s cost, based on inflation for building projects that is rising much faster than inflation, Louws said.

“The math on that means for every month of delay we have, it costs about $480,000,” Louws said. “It’ll work if we pass it this year. Unfortunately if we wait two years, we’ve added $12 million to the project. ... This window of opportunity to use the sales tax to pay for the project is closing on us fast.”

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