Initiative aims to give citizens a say over Federal Way spending on PAEC

Published 4:33 pm Thursday, September 24, 2015

If you are outraged the City Council approved the largest project in city history last year without your official say — get your pens ready.

Federal Way residents Matthew Jarvis and Byron Hiller filed a citizen’s initiative with the city on Tuesday that would prevent the cost of operating the nearly $33 million Performing Arts and Events Center from becoming a financial burden to the city, according to the measure. If approved, the initiative would limit the amount the city can spend on subsidizing the project to no more than $100,000 annually.

The city attorney has five days to approve the legality of the citizen’s initiative. If approved, Hiller and Jarvis will have six months to collect all the required signatures, which they estimate to be 3,500. The measure would then go before voters on the general election ballot in November 2016.

“Despite the city’s assurances that the [events center] will be self funding, we are concerned that this will become yet another City Council pet project that diverts huge amounts of money from public safety and infrastructure,” Jarvis and Hiller said in a media release.

However, Mayor Jim Ferrell said they lack evidence.

“That’s baseless. That is baseless,” he said during a phone interview, as sirens blared in the background while he walked to his next meeting in downtown San Francisco during a business recruitment trip on Friday.

Ferrell said he hasn’t been provided “anything other than just pure conjecture and assumptions on the part of Byron Hiller and Matthew Jarvis in regard to this. [The city is] not approaching this with assumptions.”

In fact, Ferrell said that is the reason why he put together his Blue Ribbon Panel of experts to examine facts and decide whether the events center project was feasible. Based on those findings that the panel presented in May 2014, the council unanimously approved the events center.

The mayor emphasized the city has already spent $8 million of taxpayer money to move forward with the events center.

“We have accumulated $16 million of money — $16 million of money,” Ferrell said, noting the project will bring jobs and economic development to Federal Way. “And I have to tell you that if there was an effort to try and rollback or stop this project now, it would be the worst financial calamity in the history of the city.”

However, Jarvis said this citizen’s initiative does not aim to shut down the project.

“We’re not trying to stop [the events center] construction,” he said. “We just want to say, hey, go ahead and build it but let’s just make sure it doesn’t become a money pit and we can’t really trust you at this point to make accurate projections because your first ones have been so wrong.”

Examples of the city’s alleged inaccurate projections include the city’s operation of the Federal Way Community Center and the Knutzen Theatre that both “went hugely over budget for years,” Jarvis said.

The most recent example Jarvis cited is the federal funds from New Market Tax Credits allocations the city hoped would help fund at least $7 million of a $5-9 million shortfall for the events center. The city was passed over for the federal funding last summer and, again, in the first wave of allocations in June. The mayor is still hopeful the city may receive the funding during a second wave of federal allocations by next week.

“It’s really a matter of, we don’t want to see police and public safety further cut,” Jarvis said. “In fact, the city already cut one roads project to fund the construction of the [events center] and so they’re showing that there is no sacred money when it comes to the [events center] and we’re really concerned with that.”

However, Ferrell said Jarvis is wrong in regard to the 352nd Connection Project. The project was temporarily put on hold “but if Mr. Jarvis had done his due diligence, he would know that we are literally in the process of moving forward on that project. And I have to tell you, his facts are provably wrong.”

The project, which will connect Enchanted Parkway to Pacific Highway South, was included in the last budget.

“These are wrong facts and facts matter,” the mayor said. “As a prosecutor for 19 years, I put people in prison based on facts.”

Ferrell added that while he respects the citizen’s initiative process, he “fundamentally disagrees” with Jarvis and Hiller’s approach.

“What they are trying to say with essential services is they are trying to scare the public that if we build the [events center] that it’s going to undermine public safety. I have spent a career protecting the public, we have been adding police officers and that is a false argument that appeals to people’s fears. And the city administration and the City Council are appealing to the hope of this community and to sound financial planning to move forward and to make this a better city.”

He also vehemently disagrees with Jarvis about the goal of the citizen’s initiative.

“Make no mistake. This effort is to not only to delay, but to kill the project,” Ferrell said, noting the initiative appears to include both debt service and ongoing operations. “To say this is not intended to kill the project is not a true statement. It is meant to obstruct and delay and stop this project.”

However, as far as that really happening, “I don’t think there’s community support for that,” he said. He noted aside from Jarvis and Hiller’s concerns, “I can’t tell you the last time I heard from somebody opposed to the [events center] or upset about the direction of the [events center]. I think we have widespread support from the community.”

But during the last council meeting on Sept. 15, Councilwoman Susan Honda made a motion for the city to discuss exploring public-private partnerships for the events center. She also asked the council to postpone the construction bid award from Oct. 6 to Oct. 20 to allow time to get more information on this. Both Honda and Councilwoman Kelly Maloney voted in favor of the motion, which failed 5-2.

“I made the motion so that as a council we could have a discussion on the funding for the [events center],” Honda said in an email. “As you know, we do not have all of the funding needed to build the facility. We have not been successful in obtaining the New Market Tax Credits and I would like to explore other options of funding this project.”

Honda said partnerships will be “vital” in making the project successful, which can include the school district, Chamber of Commerce, businesses and citizens. Honda said she does believe that “most of our citizens really do want this to be built. It will be an important part of our redeveloped downtown. But we need to always be mindful of how we use the resources that we have.”

Maloney said that because the city was not awarded New Market Tax Credits, the city is now relying on an inter-fund loan that expires in three years. After that, she said the idea is to bond the balance, which could cost up to $15 million. The interest on the loan could potentially be upwards of $1 million per year.

“As I have always said, I oppose this way of funding the completion of the project and support partnering with a private entity instead,” Maloney said in an email. “There have been initial conversations around the public-private partnership concept and I support taking the time to see if they develop further. It is my hope they do so the [events center] is built in a collaborative way between the city and private entity for the enjoyment of all.”

Both Honda and Maloney said they received an email about the citizen’s initiative but need more time to study the issue.

Ferrell emphasized that both council members voted in support of the events center last year and city officials made it “abundantly clear” that the city could move forward with the project without the federal funding. However, he admits the city may have “over-emphasized and put our expectations too high” on the tax credits.

“The lesson I’ve learned if I go back in time is that I don’t think that we should have put so much emphasis on New Market Tax Credits,” the mayor said. “We were attempting to be transparent about what our efforts were but we can proceed and I believe there is support among council to proceed, even without New Market Tax Credits. But we are still working on those and they are not a foregone conclusion.”

During the same council meeting, Hiller’s wife Julie, who is a council candidate, also implored the council not to proceed with the events center ground breaking on Oct. 21 until the city either waits until all of its funding is secured, builds the project in phases and has firm plans in place to add phases as funding is in place, or explores partnerships with private investors.

She said she is excited about the idea of a vibrant downtown core, but she believes the city’s first responsibility in this effort “is to our citizens and if we don’t have the funding needed and have to borrow money to build, that means citizens are going to pay either in increased costs at some point in time down the road, or decreased services. But the money has to come from somewhere. I believe that this is important enough that if the citizens are going to have to bear the responsibility of that decision, they have a right to have input and it should go to a vote before proceeding.”

During the next council meeting on Oct. 6, the council will vote to approve the most responsive responsible bidder for the project’s construction. The city received eight bids from local bidders.

During that meeting, Jarvis and Hiller plan to ask the council for their support on the measure and also invite residents to join them.

“This is probably ignorantly optimistic, but we’re going to present it to the City Council and ask for their support on it because the $100,000 was their number,” Jarvis said. “If you believe this is the right number, then you shouldn’t have any problem backing it into law.”

More information

To sign the petition, email betterfederalway@gmail.com for more information.