More Information on Ferry Lease Costs

Carl Weimer, Whatcom County Councilmember, sent us this latest Whatcom County press release outlining the primary components of the ferry lease agreement, which has been tentatively agreed upon by the County and Lummi Nation.

click to read:  2011/05/18_Whatcom County Press Release

Carl’s email also included a link to this evening’s KGMI story on the County’s press release.

7 thoughts on “More Information on Ferry Lease Costs

  1. Secret Deal Reached!
    Maybe, pending approval.

    A 35 year lease with a CPI adjustment required by the BIA? Can the BIA even approve a 35 year lease? If not, why should their requirements apply?

    By all means improve traffic safety, but those are not legitimate ferry expenses.

    “Across lands owned by the Lummi Nation?” Hmmm. You sure about that? Which lands? Uplands, yes, lease what is necessary. TIdelands? Islanders should have as much right to use federal waters for navigation as the Tribe may have for building a marina.

    If the County wants to pay for the right-of-way, so be it, but please call it a diplomatic expense. It is hardly fair to append unnecessary costs to the ferry.

    What’s really missing is a reserve fund to hire competent legal counsel in 2046.

  2. Good news (well, hopeful news) that the ‘road safety’ improvements will be charged to the county road fund (i.e., not part of the lease cost, to be paid out of ferry fares). But I remain cautious. Until all the details are worked out, voted on, signed by the county exec and LIBC AND the BIA, I will curb my enthusiasm. This contrasts with the PLIC Board’s enthusiastic recent “We’ve got a deal!!!” email. The PLIC Board’s enthusiasm is a lot more fun than my caution.

    Presuming a lease goes forward, let’s hope that (elected Chief Prosecuting Atty McEachran gets it right this time. He was in charge at the last lease, too, when the County failed to get the requisite BIA signature. We need to follow this through to the end, so we don’t find ourselves in another round of ‘the lease isn’t legal’ nonsense that’s cost so much time, energy, anguish and money.

  3. Hear, hear, Tip! I wonder if 35 years is long enough for the county to address and solve the underlying legal questions… “Diplomatic expense”… well said!

  4. And the $69 dollar question?

    Whatcom County Charter 6.9
    …but real property shall not be leased to the County for more than one year, unless it is included in a capital budget appropriation ordinance. (Ord. 97-042, 1997; Ord. 2005-075 Exh. A).

    Let’s hope McEachran get’s it right?

  5. I was bored and sitting in a hotel room halfway around the world and decided to look up the old lease to see what the old rate was compared to this new rate. For a while there I was getting comfortable with the idea of this new lease and was almost ready to congratulate the counties negotiations team on a job well done. After all, the improvements for safety will come all from the road fund (via reservation taxes) and therefore not from ferry fares, and they avoided any lump sum to pay for a marina or associated expenses. The link to the consumer price index was at first a bit troubling but in actuality it would be only fair with such a long lease in order to not have the value of the payment to the Lummi Nation decrease over time. I mean, if we must pay rent we would expect to pay a fair price for the tidelands and not gouge the Lummi Nation, right? So, I was ok with the CPI adjustments. Accurately increasing price over time for a property is only fair, right?

    But then I looked up the amount of the old lease (forgive me for not being very well informed and for being a newbie). It was in effect $13,400 a year (based on a $335,000 piece of land given to the tribe in 1985 and spread out over 25 years). Land values from 1985 to 2011 have increased about 250% nationwide (I could not find any Whatcom County figures). If the 1985 lease price were carried into 2011 and linked to property values, that price would be $29,500 and if the lease price were linked to CPI adjustments the price today would be $28,000. …a year.

    I don’t know how this figure of $200,000 a year came about for an interim payment but it is quite a jump from 13K to 200K. I hope the annual $13,400 was not mistakenly construed as a monthly payment and increased to $16,000 a month just for the interim payments. Unfortunately the LIBC has gotten used to that figure and seems to think it is fair.

    If the LIBC believes in CPI adjustments, and is adamant that they are the only fair way to establish price over time, and if the BIA requires CPI to be used, it seems that it would not take too much logical honest reasoning to make a stand of establishing the new lease price based on CPI applied to the past lease amount. I would encourage the county to not sign the 35 year lease with the $200,000 a year price. If the LIBC wants CPI, it seams only fair to apply it to the past, present as well as the future.

    The ferry fares in 2001 were $3, now they are $12 and will probably need to go higher if this $200,000 deal is signed.

    I just think everyone should be aware of how extremely high the lease rate is, and maybe not celebrate too quickly on a 35 year deal.

    • I had earlier rounded this out to $14,000 per month for the first 25 year term based on the value of the land conveyances, not including appreciation over the term.

      The context must be understood in terms of the consent decree that stipulated the lease terms.

      The consent decree regarding the ferry lease was a side platter in a civil action initiated by the tribe against the county, the state and the feds, officially and personally, including everyone, perhaps even god, but definitely aimed at then County Commissioner Terry Unger.

      The original issue of action had nothing to do with the ferry but was focused on the county’s willful interference with the Tribe’s authority to purvey water and sewer on reservation lands. Additionally, the County and Tribe had previously worked out unofficial accords on the permitting of subdivisions on fee lands within the reservation, obviously hand-in-glove with utility purveyance. Terry Unger unilaterally abrogated these accords, approving controversial subdivisions on the reservation over Tribal objections. He led the charge interfering with the Tribe’s right to purvey utilities. He testified before the Indian Civil Rights Commission that the County should abrogate the Treaty of Point Elliot.

      As this whole mess was disgorged at the foot of federal judge Barbara Rothstein, I believe that under the circumstances she saw some justice in returning these central lands to the Tribe and made it so, because she could and because the County Commission were such schleps.

      However, I also believe she intentionally set the second 25 year term to revert to fair market value, as was carefully provided for in the lease, because the right of the tribe to collect rents over a right-of-way was questionable and because reasonable fares, based upon true costs of service provision have longstanding precedence in law.

      In essence, the judge set the rate high for the first 25 years – say $14,000 a month, though no out-of-pocket expense – and then to fair market – shown to be about $5,000 to 6,000 a month based on the tribe’s own appraisal of subject tidelands.

      So when you consider how far off $16,667 a month is, use $6,000 per month as the comparison. That’s what the Judge signed under the consent of all parties.

      Incidentally, the judge, still on the bench, reserved jurisdiction over the consent decree. One might wonder why the County never availed themselves of this resource.

    • Mea culpa, I goofed and kept goofing.

      Last June, at, I miscalculated the monthly rate based on value of land conveyed, overstating it by roughly an order of magnitude. I stuck to my story but Klayton’s numbers are probably closer to being correct.

      I believe there were other lands also conveyed, including possibly the site of the retirement center and the school, but I can’t find any details in my notes at this time.

      The actual escalation of charges to the ferry system remains an interesting and important question.

      At this moment, I realize I was in error, but don’t have better information to offer.

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