Case #77362
Respondent name: Newcastle Watchdogs
Complainant name: Allen Dauterman

A complaint was filed alleging that Newcastle Watchdogs violated RCW 42.17A.205, .235, and .240 by failing to register and report as a political committee with the PDC as a political committee in support of Referendum 2, a local ballot measure on the November 3, 2020 general election ballot concerning a utility tax in the City of Newcastle. 

Newcastle Watchdogs (NW) was founded in 2016 by Nola Coston and Bill Erxleben as a “volunteer group of concerned citizens, who came together because of a deep concern about mismanagement of city funds, deficit budgets, and a vote on a proposed new 4% utility tax. We exchanged email addresses for communication purposes, and that was the beginning of the NW email list.”  NW is not a regularly scheduled publication, there are no subscribers or members, and  she and Mr. Erxleben randomly distribute information by email as issues and/or needs arise. 

Ms. Coston stated that since June 2, 2020, “our position papers have focused on the City's budget deficit, PDC RCW violations by the City Manager, and the money behind a well-funded Newcastle PAC supporting the utility tax.”  She stated that NW’s most recent position paper is entitled “FAQ’s Not Found on Newcastle City’s Website” which was distributed on October 23, 2020. 

Ms. Coston stated NW is a group of Newcastle residents who spend and use their own personal funds and resources to promote NW.Ms. Coston stated a local resident created a NW Facebook page where people can subscribe to our email list, and in 2020 a resident assisted her in setting up an email service with MailChimp for $55 a month, which expires at the end of each month. She stated other citizens have also assisted in helping pay for the monthly email service to continue and added that is the only ongoing NW expense. She stated after the City of Newcastle’s June 2, 2020 passage of the utility tax, citizens circulated petitions and collected 1,138 signatures to force a referendum, and that NW communicated with residents and provided links to residents concerning registering to vote, voting and how to track their ballot.

Ms. Coston stated that NW informed citizens how to obtain a copy of the referendum petition, the city ordinance, and “informed citizens how to gather signatures in compliance with city requirements. Then, we informed citizens that 1665 signatures were submitted to city hall and later, we informed citizens that King County Elections placed Referendum 2 on the ballot.” 

Ms. Coston stated that the complaint filed with the PDC included “copies of fliers printed by citizens, distributed by citizens, and email communications distributed free via Gmail and social media.” .”  She stated that the complaint filed with the PDC included “copies of fliers printed by citizens, distributed by citizens, and email communications distributed free via Gmail and social media.”  She stated those activities were not undertaken by NW, that NW did not make expenditures or pool any monies with any individuals to assist in any of those activities and added NW “did not print nor distribute any petitions concerning Referendum 2.” She stated NW did not incur any expenses for the petitions, and that “As a private citizen, expressing free speech rights, I collected a few signatures, but not many, for I was busy monitoring city council meetings and answering questions from citizens.”   

Ms. Coston stated concerning the Glen Morgan/We the Governed digital publication entitled “Is the City of Newcastle on an Unsustainable Financial Path” that it was an issues-oriented publication which did not mention any candidates or ballot propositions.  Staff reviewed the August 31, 2020, publication produced and narrated by Mr. Morgan which began by stating “Newcastle Citizens are concerned about the City of Newcastle’s tax increase proposals and unsustainable spending”, and discussed he had been born and raised in Newcastle on a 20-acre parcel/farm.

The publication went on to state the following: “In Newcastle today, the bloat of bureaucracy is ascendant, and (as always) they want to raise taxes to cover their unsustainable expansion. A city like Newcastle has only one viable sustainable option – keep taxes low by restraining the bloat of bureaucracy. Don’t hire more central planners, stop hiring consultants for every whim and fancy the City Manager cooks up, and reduce the paid staff to the bare minimum.” Mr. Morgan stated that the City of Newcastle contracts with the City of Bellevue for fire and police services, and the City of Mercer Island for district court services, and added that there was “no need for a large paid staff, yet the bureaucracy from the City Manager to the feeding frenzy of consultants are always pushing for more hires, more plans, and more escalating costs.”  While critical of the City of Newcastle and its elected officials, the information did not support or oppose any candidates.

Staff also reviewed a document entitled “FAQ’s Not Found on Newcastle City’s Website” which she indicated was NW most recent position paper, and staff’s review found the document did not state, reference or infer that recipients should either vote yes or no on Referendum 2.  The FAQ began with the question of “Are Newcastle property taxes high, and then compared the property taxes on a $700,000 home in Newcastle with that of Bellevue, Renton and Issaquah, which staff noted was not a fair or balanced comparison.  The FAQ went on to discuss the City Newcastle’s taxes, the utility tax, and that the Newcastle Golf Club is the city’s largest employer, and whether or not the Golf Club was paying “...its fair share of taxes.” 

The FAQ also discussed the salary of the Newcastle City Manager and compared his salary with that of the Renton City Administrator, the Bellevue City Manager, and Governor Inslee.  The FAQ did mention that the “Friends for Newcastle PAC” were supporting the utility tax and that the committee about 30 people, that included four of the councilmembers who voted for the utility tax.  The FAQ stated one of their political advertisements stated, “that the opposition to the utility tax was from a small group of anti-tax activists” and questioned whether or not that was true.  The FAQ discussed the city’s 2021 budget, and that if the utility tax is defeated “the preliminary plan is the deplete the general fund reserve to cover the deficit rather than make any cuts.”

No evidence was found that NW solicited or accepted contributions in order to make expenditures in support of any candidate or ballot proposition, including Referendum 2 and thus did not meet the definition of a political committee in accordance with RCW 42.17A or WAC 390.  Staff’s review of the 2020 FAQ sponsored by Newcastle Watchdog and the publication “Is the City of Newcastle on an Unsustainable Financial Path” by Mr. Morgan found that the content did not indicate opposition or a “No Vote” for Referendum 2.   The NW position papers previously posted or distributed by Newcastle Watchdog while critical of some of the City of Newcastle policies, elected officials, and budgetary decisions, those papers did not directly appear to support or oppose any candidate or ballot proposition. 

Based on this information, PDC staff found no evidence that would constitute a material violation that would require conducting a more formal investigation into the complaint or pursuing any enforcement action in this instance. The PDC dismissed the complaint in accordance with RCW 42.17A.755(1).

Disposition: Case Closed with No Evidence of Violations (Resolved 11/20/2020)
Date opened: 09/30/2020
Area of Law: RCW 42.17A.205, RCW 42.17A.225, RCW 42.17A.235, RCW 42.17A.240

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