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Audit critical of Clark County fee waiver

Program championed by Madore is not cost-effective, it finds

By Tyler Graf
Published: November 6, 2014, 12:00am

A Clark County program that nixed development fees typically used to maintain infrastructure is unsustainable and not cost effective, according to a draft report from the county’s auditor’s office.

County commissioners first received the report on Oct. 6 and were given 10 days to respond to it. They have yet to complete their response, with the top proponent of the program, Commissioner David Madore, saying at an Oct. 22 meeting that he’d like more information so he can provide a detailed response to its findings.

“Minimal eligibility requirements for applicants and unclear outcomes for the program allowed approximately $4.6 to $6.9 million in fee waivers to be awarded to projects that, according to national studies and past fee waiver recipients, would have occurred anyway,” the report says.

At best, the report continues, the fee waiver program may have accelerated the timing of the projects.

Commissioners approved implementing the program in June 2013 as a way of encouraging development and adding jobs to Clark County.

More than a year later, the audit report recommends eliminating the program entirely, saying the impact of fee waiver programs on construction “appears to be minimal.” Since the program was put in place, the county has awarded $7.8 million in fee waivers to 153 projects, many of which would have occurred without the waivers, according to the audit.

County officials originally declined a public disclosure request to release the audit, citing that it’s a draft and still under review by commissioners. The Washington state Public Records Act exempts draft documents from being released.

However, a copy of the audit was made available to The Columbian on Wednesday.

The audit is critical of the program, approved by Republican commissioners Madore and Tom Mielke in June 2013, that eliminated all traffic impact and permit fees for nonresidential development. Former Commissioner Steve Stuart did not vote for the program, saying at the time that he was skeptical it would create new jobs.

Other elected officials — including Auditor Greg Kimsey and Assessor Peter Van Nortwick — shared concerns that the program might not spur job growth and could end up costing the county money if the “mathematical exercise” of creating enough jobs to pay for the waivers wasn’t met. Unlike past fee holidays the county has implemented, the “Job Creation — Fee Waiver Program,” as it’s officially known, did not include a job-creation requirement.

Madore has pointed to recent economic reports showing the county has generated 5,100 jobs in the past year. The audit said that a majority of the county’s new jobs are in low-paying sectors, primarily fast food, retail and consumer services, however.

“(These) retail and service jobs are unlikely to measurably reduce the number of out-of-county commuters,” the report says.

The commissioners’ office has been careful not say too much about the audit, except to acknowledge its existence. The political ramifications of its findings have not been lost on the commissioners, or their employees. In an Oct. 6 email to the commissioners, County Administrator Mark McCauley said he expected the audit to cause a “feeding frenzy” and advised discussing how to respond to it.

Kimsey said he is awaiting the commissioners’ response to the audit. The response was due on Oct. 16 but has been pushed back to Nov. 12.

The audit was spurred by a desire among commissioners to measure the impacts of the program, more than a year after it was put in place.

“We are conducting this audit prompted by comments on a couple of different occasions that expressed interest in having the program measured,” Kimsey said.

Madore is spearheading the commissioners’ response, according to an Oct. 22 board time meeting.

Commissioner Ed Barnes, who has been critical of the fee waiver program, said he has already drafted his own response to the program’s audit. He said he wasn’t sure whether he would sign off on the commissioners’ official response to it.

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