Spokane Port District

Here’s How to Write Alternative Port District Legislation

Greater Spokane, Inc (GSI) intends to press our state legislature in the upcoming session to adopt legislation that will create an alternative port district for Spokane County. For those unaware of what port districts do within Washington State, they are (more or less) the premier economic development entities on a county by county basis. Spokane County does not have a port district, which is a significant disadvantage for us from an economic development perspective.

If there’s going to be a push from GSI to forego voter approval of a Spokane County port district, as the law presently mandates, any legislation that is composed by GSI aimed specifically to maximize GSI’s power within Spokane County will go down in a ball of flames within the corridors of Olympia – such fiction won’t even make it to committee, much less get out of it.

However, if the proposed legislation is crafted with an eye toward the front windshield based on three foundational ingredients – economic development best practices, transparency, and organizational integrity – then maybe we’re onto something.

Here are five critical elements for GSI’s alternative port district legislation that, taken together, might stimulate support from the likes of SpokanePlanner, local leadership circles, community advocates, and perhaps even a state legislator or 147.

 

1) Legal Status

The new district must be a public body politic – like cities, established port districts, transit entities, and public development authorities – subject to the very same transparency and public disclosure laws that all other public bodies are subject to. (Sorry GSI, this precludes your non-profit legal status from becoming the new district.) Sunshine, or lack thereof, will make or break the legislation. For instance, the public may attend board meetings, review budgets, read the minutes, request emails, and whatever else they are allowed to do pursuant to Washington’s sunshine laws. Anything less isn’t gonna’ cut it.

 

2) Board of Directors

The legislative language that establishes the board of directors will either lend itself to organizational integrity or not. “Arms’ length relationships” is the key phrase for this section. The district’s board of directors must maintain an arms length relationship with both the business community and local elected officials because the district will have to negotiate with both from time to time.

Being a public body, either the board of directors is elected by the public itself or appointed by other public bodies. Being elected or appointed ensures an arms’ length relationship with the business community because the best interest of the metro may not always be in the best interest of one of our larger local businesses. An arms’ length relationship will ensure that, more often than not, it’s the community’s interest being served over individual business interests.

Although compelling arguments can be made to establish the board of directors via elections, I’m more sympathetic to appointing the board of directors conditioned on the following stipulations:

  1. A five-member board of directors is not enough. A nine-member board is too many. (And 11 is right-out!) A seven-member board of directors is perfect. Seven members is small enough for agility and large enough to provide adequate representation.
  2. Here’s how the directors should be appointed: Three members appointed by the largest municipality within the county, two members appointed by the second largest municipality within the county, one member appointed by the county itself, and one member appointed by the county’s ancestral Native American tribe (yep, Indians get a seat at the table, too).
  3. Members of the board of directors must reside within the county the district serves.
  4. Members of the board of directors shall not be elected officials – the appointers may not be the appointed. This will maximize organizational integrity by establishing an arms’ length relationship with other jurisdictions because the new district will have to negotiate with other local jurisdictions from time to time. Similarly, in terms of organizational integrity, because the leading local jurisdictions do the appointing, the district’s board of directors will be held accountable should any shenanigans occur.

 

3) Powers

The district may levy a property tax or charge public facility fees (more on this later), may sue or be sued, execute contracts, take out debt, write their own administrative policies, construct public improvements, buy and sell property, write grants and funding applications, hire staff, hire lobbyists, and do whatever it is other port districts can legally do. Here’s the trick, though: if the new legislation is written to provide the new districts with more flexibility than established port districts, the old port districts may rise up in mutiny. For all practical purposes, mirroring established port district law where possible will help skid the politics of the conversation.

 

4) ADO Designation

The new district will automatically become the county’s associate development organization. (Sorry GSI, there is no good reason to have a private entity with no economic development tools be the ADO when a new public entity with all the tools is created.)

 

5) The First 10th-of-a-Mill the State Will Approve, the Rest Is Up to the Voters

Now we’re down to the heart of the matter – how much will a new district cost the public? Port districts must be approved by a public vote primarily because they have the authority to levy taxes and fees.

Spokane County’s total taxable assessed value (after exemptions) for 2017 was about $41 billion. If a 1/10 mill levy were imposed upon that $41 billion, it will generate, you guessed it, $4.1 million in annual revenue – that’s plenty of resources for a new district to launch and be effective. (For perspective, a 1/10 mill levy for a home valued at $100,000 will cost the owner $10/year in new taxes or $0.83 cents/month.)

A property tax, as opposed to a sales tax, engages with more segments of the market than a sales tax because not all business operations levy a sales tax, but they all pay property tax. Thus, a property tax is a far better market driven mechanism to underwrite the district’s activities than a new sales tax. Furthermore, property taxes are a better source to leverage than sales taxes because those with larger homes and businesses – the wealthier amongst us – will pay more into the district than those with smaller homes and businesses.

Finally, launching with a 1/10 mill levy is just that, but future increases local voters must approve.

 

Closing

Port districts are a good economic development tool, probably the most powerful within the Revised Code of Washington. Looking through the front windshield, if GSI is going to take a stab at building a new economic development entity for Spokane County via a state legislative pathway, incorporating best practices, transparency, and organizational integrity into the proposed legislation will increase their chances for adoption. Anything less will amount to nothing more than what we can already see through the review mirror (and we already know what that looks like).