Two complaints were filed against the City of Newcastle alleging violations of RCW 42.17A.555 by using city facilities to produce and distribute electronically and to post on the cities website two sets of Frequently Asked Questions (FAQ) in support of Referendum 2, a City of Newcastle ballot measure concerning utility taxes on the November 3, 2020 general election ballot.
Pursuant to RCW 42.17A.555 no public facilities can be used by or authorized to be used directly or indirectly by any local elected or appointed official or public employee, to support or oppose any candidate or ballot proposition. In addition, WAC 390-05-271(2) states that “RCW 42.17A.555 does not prevent a public office or agency from… (b) making an objective and fair presentation of facts relevant to a ballot proposition, if such action is part of the normal and regular conduct of the office or agency."
Staff reviewed the September 18, and October 1, 2020, versions of the FAQ which provided information concerning: (1) why the Newcastle City Council felt a three percent utility tax was needed at this time; (2) the cities revenue forecast projected future budget shortfalls; (3) that the City of Newcastle was one of only three municipalities in King County without a utility tax; (4) which at utilities would be subject to the utility tax and how the utility tax would be applied; and (5) the impacts of approving and rejecting the utility tax.
The FAQ information discussed the city currently has three primary sources of revenue, property and sales taxes, and development fees, that the costs of city services, are rising especially for public safety like police and fire departments, and the existing revenues are not adequate to keep pace. The FAQ stated: (1) the three percent tax would apply to electricity and natural gas, water, sewer, garbage, cable TV and phone voice fees; (2) the average household in the City of Newcastle would pay between $8 to $14 per month in utility fees; (3) cable internet, stormwater, mobile phone text, data and non-voice fees were not subject to the utility tax; and (4) that if Referendum 2 was approved, the utility tax was estimated to generate approximately $880,000 in revenue annually, to pay for fire and police services and the projected costs increases for those contracted services in the future.
The FAQ stated if Referendum 2 was rejected, “it is projected that the City will have an approximately $1 million shortfall in the 2021 budget alone and will need to consider cutting public safety (police and fire) and other services."
Dawn Reitan, an attorney with Inslee Best submitted the response on behalf of the City of Newcastle stating that the complainants did not discuss the "normal and regular" exemption found in the statute RCW 42.17A.555, the PDC rules and interpretation which provides the City of Newcastle with the authority to post the FAQ information about Referendum 2. She included Attachment 6 to the response letter which listed the city’s “News Items Dealing with Utility Tax, Budget or Fiscal Sustainability” that included information dating back to March 20, 2018 to present.
Ms. Reitan stated that the City of Newcastle was not required to provide information in the FAQ about other financial alternatives to the utility tax, as noted by the complainants who were opposed to the utility taxes, and who “preferred alternatives to addressing fiscal sustainability.” She stated that the FAQ provided fair and objective information to citizens about the City of Newcastle proposed utility taxes, that the information was consistent with the Ordinance findings the Fiscal Sustainability Plan, and the 2020 budget adopted by the City Council which forecasted deficit spending.
Ms. Rietan stated that the FAQ provided information related to the potential impacts to the City of Newcastle operations if the Ordinance is approved or rejected under the Referendum, and added that the information included in the FAQ was consistent with PDC Guidelines found in PDC Interpretation #04-02, and the information distributed informed residents of the City of Newcastle public safety needs and costs.
Staff found that the content of the two versions of the Frequently Asked Questions (FAQ) concerning the City of Newcastle’s Referendum 2, to be a fair and objective presentation of the facts. The FAQ was part of the cities normal and regular conduct for communicating information about the maintenance and operations of the city to its residents. In addition, the two versions of the FAQ were produced and distributed in accordance with PDC Interpretation #04-02 Guidelines for Local Government Agencies in Election Campaigns.
Based on these findings, PDC staff found no evidence of a violation that would require conducting a more formal investigation into the complaint or pursuing enforcement action in this instance. The PDC has dismissed this matter in accordance with RCW 42.17A.755(1).Disposition: Case Closed with No Evidence of Violations (Resolved 11/20/2020)