State of the County Address

Presented on June 8, 2010

Pete Kremen, County Executive

Chairman Crawford, council members, fellow citizens and friends, thank you for joining me for my annual State of the County Address.

I’d like to take a moment to recognize the County employees who have been on active military duty over the past year, particularly those who have served in Afghanistan and Iraq. They include Ti Jay Morres and David Libby from the Sheriff’s office and Rob Boleak, with Public Works, Maintenance and Operations. I salute them and all the brave men and women, active and reserve, who have served our country.

I’d also like to acknowledge all of the employees of our County government organization. They protect the innocent, make our roads safe and passable, care for people with disabilities, and truly make a difference in all the lives they touch. These last two years have not been easy for our staff, losing over 70 co-workers through attrition, and yet, they still come to work each day to serve and protect the people of our communities. Our employees are the embodiment of loyal public servants, and I’d like to recognize and applaud them.

This is the time of the year when I provide insight into our County; a window into our financial health; a look at where we have been, where we are, and a vision into where we are headed. For over a quarter century, I’ve served as an elected official at both the state and county levels and I can honestly say I’ve never seen a time when people were more concerned about the future.

We are in extremely challenging economic times. States, local governments and people across the nation are facing the greatest economic challenges since the Great Depression.

Whatcom County is not immune. The past couple of years have been tough for the County. Our government revenues have fallen by literally millions of dollars.

Locally:

• Whatcom County’s unemployment rate earlier this spring at nearly 10%, was the highest it’s been since January 1993.
• There were nearly 5,000 fewer people employed in the County at the beginning of this year than one year prior; and
• The value of our homes has significantly declined in the past year.

Whatcom County’s General Fund sales tax receipts were the lowest we have seen in the past four years, dropping more than 1/2 million dollars just last year and preliminary receipts for the first quarter of this year continue to be down reflecting a decrease last year in sales throughout the county of $300 million. That represents a huge loss of both revenue to businesses and income to families.

Simply put, most of our residents have less money and net worth than they did five years ago. As difficult as this is, we all need to consider that economies have cycles. We’ve had recessions before, even depressions. Whatcom County has seen tough times before and has always returned stronger.

However, the harsh reality is we can no longer operate as we have in the past. We know that for our families and businesses to survive, let alone thrive, they must be able to adapt and reinvent. Government cannot be exempt from this creative approach, no matter how difficult the task or how unpopular the decisions. We must take a long, hard look at the core operations of County government, enhance those services that work and serve our residents, and divest our government of those services that are simply no longer cost-effective or possible.

Whatcom County government is a $180 million a year operation with just under 900 employees. We have three branches of government –executive, legislative and judicial, along with several elected officials. We run two jails to incarcerate and rehabilitate those who’ve broken the laws of our society. We run an extensive court and domestic relations operation to adjudicate, prosecute and protect people in both the civil and criminal realms. Our judges and judicial officers resolve disputes and administer justice to those who have broken the law and those who’ve been victimized by law-breakers. The county manages all the elections as well as the collection of the tax revenue that supports important public services like education, fire protection, law enforcement and safe roads. We oversee the delivery of a wide-range of services to care for the elderly, treat the mentally ill, and rescue kids from parents who fail to love and nurture them. We help to develop our economy, work to create jobs, maintain our public infrastructure, and improve the safety and quality of our roads, bridges, and neighborhoods. We provide parks, ball fields and trails for recreation and we protect farmland, forests, and shorelines for posterity. 

We have many accomplishments in the management of these operations. We have avoided much of the serious and significant budget cuts that other local and state governments have been forced to do because of the reserves we set aside. Once again, Moody’s Investors Service has given Whatcom County a higher bond rating that will save the county millions of dollars when we go to the market to finance major new capital projects or refinance debt.

In spite of these tough economic times Whatcom County government has many accomplishments. For instance,

The 2010 Olympic Coordination Center became a reality as result of a collaborative effort on the part of Local, State and Federal partners engaged in security planning for the 2010 Winter Olympic Games. Whatcom County played a central part in this process with regards to the concept and defining the role that local public safety partners can play, and the resources that they can provide, in a multi-agency effort. The Whatcom County Sheriff's Office and its Division of Emergency Management were able to secure access to a state-of-the-art facility and develop strategic partnerships and relationships that directly benefit the citizens of Whatcom County. We currently continue to play a part in the operation of the facility, and conduct daily DEM operations with no rental costs to the County. We have strengthened our position as a leader in the region recognized at the highest levels within the Department of Homeland Security.

Additionally, according to Sheriff Bill Elfo, preliminary data recently released by the Washington Association of Sheriffs and Police Chiefs reflected an overall decrease in the 2009 crime rate in unincorporated Whatcom County of 9.2% below 2008 levels. Overall the crime rate for all of Whatcom County dropped 3.8% for the same time period. This was well above the statewide average drop in the crime rate of 2.4%. 
The Administration successfully championed Congressional funding for stormwater capital improvements in the Lake Whatcom Watershed to the tune of $582,000. That Federal recognition will substantially leverage the County's commitment to reducing delivery of phosphorus, bacteria, and other pollutants into the Lake during the 2011/2012 fiscal year. This comes on top of $218,000 of State money to help build a stormwater bioinfiltration facility at Lahti Drive this summer.

Another example is the purchase of the northern 119 acres at Lily Point which was completed late last week, bringing the total protected area to 239 acres using $1.5 million in state grant funds. This acquisition provides a total of 1.4 miles of saltwater beach and tidelands, protecting shoreline and habitat for posterity.

There is the new District Court Online Infraction Program that will allow the public the convenience of processing many types of traffic infractions from any computer thus avoiding having to deal with downtown traffic, battle to find a parking space, go through security in the courthouse, or sit through a court hearing. Whatcom County is only the fourth District Court in the state to implement an on-line infraction program. I would like to commend Judge Grant and Elich as well as IT Manager, Perry Rice for their leadership on this initiative.

The Health Department led the process to see that over 50,000 doses of H1N1 vaccine were provided in the community last fall. The staff worked with the City of Bellingham, St. Joseph’s Hospital and many other agencies in a community-wide response to an international pandemic threat.

Whatcom County has again been recognized by Washington State as one of only a handful of governments that gets an “A” when it comes to public records requests. The accolades were contained in the State Auditor’s annual report on performance. 

On the financial side, rather than spend millions on a new county financial system, with some creativity, we were able to upgrade the existing system purchased in 1993 to the latest software release adding years to the systems’ life and saving taxpayers the cost of a new system.

All these achievements come from budgeting and managing in a conservative and creative manner. The credit goes to all of our elected officials, directors, managers, and our employees. I’d also like to recognize Deputy Administrator, Dewey Desler, and his administrative services finance team, led by Brad Bennett and Marianne Caldwell for their fine work and dedication.

Now, we need to closely examine every corner of our county operations to see where we can find more savings. This year, everything is on the table for review. We’ll do whatever is prudent and necessary to maintain financial stability and accountability. We simply can’t spend more than our residents can afford. As we prepare for the 2011-12 budget, which will be our toughest budget challenge in recent memory, my colleagues and I have the daunting task of producing budgets and delivering essential services in this environment of declining revenues and increasing costs. A challenge that’s shared by too many of our local businesses and residents.

Our story is no different than that of every county and city throughout the state or country. Government at every level must figure out how to operate more efficiently with less and provide core services to a larger community with greater needs. And we must do it while respecting the interests and wallets of all. These times clearly call for cooperation, collaboration and creativity. 

It’s imperative we work together to address our fiscal challenges. I encourage all council members to join my Administration at a work session next week to further delve into our fiscal situation and the difficult options we face. 

We estimate next year’s budget gap to be nearly $4.0 million. It is our responsibility to set budget priorities that fund essential services that directly impact the health and safety of our county residents. The key goals of my administration continue to be:

• Sound Financial Management
• Service Quality,
• An Engaged Workforce, and
• Active Public Involvement.

First and foremost is sound financial management. Management of the public’s money is multifaceted. Whatcom County consists of an incredible array of capital infrastructure projects we rely on to get to work, keep us safe, protect our environment, and utilize software to process valuable information. Taxpayers want these projects delivered on time and within budget. I intend to involve and work with all the offices and agencies which draw financial support from the beleaguered General Fund. 

Now, more than ever, we need every leader whose agency has a stake in the cash-strapped General Fund to be at the table, discussing the impacts of some hard choices on the services we collectively provide. The General Fund deficit is everybody’s problem – not just the Executive’s; not just the Council’s. Without exaggeration we have a monumental task ahead of us. 

Sales taxes, our second largest revenue source is down and what was our third largest revenue generator, interest income, is at levels not seen in decades. We are down over 2 million dollars in interest income compared with 2008. At the same time, our cost of doing business goes up 4 to 5 percent annually. Our government has to reduce its costs to below the level of inflation. That’s the level I propose our managers attain.

To achieve these goals, we look forward to participation and partnership with our employees and their representatives. We will negotiate our labor agreements in a manner that is fair to the taxpayers and fair to our workers -- that utilizes our employees’ experience and insight, and results in efficient services to the public. 

Second, we will focus on service quality. In collaboration with our employees, we will enhance our commitment to customer service where every resident, every business, every city and every community is treated as a valued client.

Third, we will develop and empower our workforce to join us in the process of innovation and improvement. Our greatest resource is our employees. They’re the ones on the front lines. They know how things get done and how they can be improved. If there are barriers to efficient delivery of service, we must work toward removing them. If there are operational practices that do not add value for our customers, they should be modified. If legislative mandates have been set, which now require more flexibility, let us discuss them, and if possible, change them. At the same time, we must also create a culture of accountability for the jobs we do.

Finally, I will call for even more public involvement that empowers the people of our community. For jail planning – working with the community to ensure that we have the right amount of jail capacity in the best location – not spending more than necessary, but doing what works best and makes the most sense for our shared constituency. For animal services – working with community organizations to reach a refined, cost effective model – again, doing what makes the most sense. For our rural areas – conducting regular meetings with city mayors, and unincorporated area planning committees, to improve our future land-use plans. 

We have much work ahead, but through strategic thinking and careful planning, we will meet the challenge. I am particularly proud of our remarkable leadership team. A team that will help us – the Executive and the Council – tackle the enormous challenges we face. They are a group of smart, capable, accomplished professionals who will aide us in achieving success. 

With your help and commitment — as true partners — we can create tangible results, with vibrant and sustainable communities in every part of Whatcom County. With sound financial footing we can protect our values and make our vision a reality.

The road ahead is not going to be easy, but I believe it is possible to improve the quality of services our residents rely on for their everyday existence, and at the same time realize the limitations of the taxpayers in the County who fund those services.

In preparing tonight’s comments, I wanted to keep them grounded in the stark realities we are all facing. But please let me share my own sense of optimism: when we are faced with adversity we must be tenacious and persevere. Since the Great Depression, Whatcom County has endured more than a dozen economic recessions and every time we emerged better and stronger. That’s not rhetoric, that’s our history. By working together, I believe we will repeat that history. Thank you, and God bless.