Money Mowdown

The Gristle

A Game of Inches

A GAME OF INCHES: Slow and hesitant marks the pace for a remarkably divided Bellingham City Council in 2014.

In a lengthy session on Monday, City Council acquiesced to neighborhood concerns about a dividing barrier along much of the length of the Alabama Street corridor, a major arterial with the highest incidence of collisions and pedestrian safety hazards in the city. Homeowners expressed concerns that an unbroken C-curb dividing the Alabama median could isolate much of Roosevelt neighborhood, preventing left turns along much of the corridor and potentially driving higher-speed through traffic on to quiet residential streets. Council duly shortened the length of the proposed C-curb and agreed to reduce speeds on Alabama to 30 miles per hour to address safety concerns.

Council similarly moved glacially toward a much-eroded licensing program for rental units in the city, wavering between a proposal that could not fully audit the city’s housing stock in less than a century and an option that would dispense with the audit altogether and produce little more than a telephone directory of landlords and property managers. The more robust program originally proposed to actively improve rental safety appears to have fading support on council. The problem, as the Gristle has noted, is there’s not a lot of information pro or con about the condition of rental housing stock in Bellingham, and even a random audit of just .5 percent of the city’s rental units would at least provide some useful indication of the magnitude of the problem. As council member Michael Lilliquist has observed, data collection is an appropriate step in responsive policymaking. Without data, policy is guesswork.

“We’ve been talking about this program for years,” Council veteran Gene Knutson observed. “We need to either approve something or move on.”

Council may select among three proposals later this summer.

In what might appear a pattern, City Council also nudged incrementally forward on another proposal that has also languished for many years, adding a public access component to the city’s government and educational programming on BTV10. Council authorized the mayor’s staff to prepare a plan that would permit public access programming on BTV10 on a trial basis.

In 2013, Mayor Kelli Linville made good on her pledge to seek bids for independent management of public access content, operated through cable franchise fee revenues; however, the city received only one bid that was found inadequate by a review panel.

Council and the administration have expressed great trepidation about government managing public portion of PEG broadcasting. Even assigning a time when such broadcasting might appear is a bias government should avoid, Council President Cathy Lehman noted.

“We have to start somewhere,” Knutson admitted. “We’ve been talking about this a long time, people have been asking about this for a long time.” Knutson said he had no fears of content produced by the public critical of Bellingham government. “Because that’s all that’s going to be on there,” he predicted.

In their deepest division, Council voted 4-to-3 to end the tax exemption PeaceHealth Saint Joseph Medical Center receives as a religious institution. In its place, the Catholic-affiliated hospital would join a much broader category of medical care providers, all of which qualify for medical care exemptions outlined in the state’s Business and Occupation Tax code policy.

Based on extensive public testimony, several council members expressed concerns—at times emotional—that increasing the tax burden of the city’s primary care center risks reducing the vital healthcare programs and services offered by PeaceHealth.

Under the proposed change, about 70 percent of the Medical Center’s care would remain tax exempt, that portion of care delivered by PeaceHealth that is supported and reimbursed through government programs like Medicaid and Medicare. The remainder is care supported by for-profit insurers, business that would be taxable under the proposal. That 30 percent would generate about $1.2 million in annual B&O tax receipts for the City of Bellingham.

The change creates equity for suppliers of medical care, Lilliquist said, because other care providers are also eligible for the same exemptions under the state’s tax code.

Council members admitted the absorption of even greater portions of formally for-profit medical care business by PeaceHealth prompted the change. The city forfeited $350,000 per year in tax revenue when the PeaceHealth juggernaut took over Madrona Medical in 2007 and North Cascade Cardiology in 2011.

Presumably the change better positions both the city and medical service providers to capture future changes in the delivery of medical care that may result from federal health care reform, the Patient Protection and Affordable Care Act (PPACA) passed by Congress in 2010. Forecasts suggest an increase in demand for routine medical care as millions of previously uninsured Americans seek coverage under ACA, with commensurate reduction in emergency hospital care. Expansion of Medicaid provided under the Act would remain tax exempt under the city’s proposed policy.

Ironically, council’s slow and methodical walking back of proposals—some decades old!—in search of deferential compromise has been met with a fair amount of public comment and criticism that the city is operating tyrannically, heedless of public opinion and process.

Sometimes you just can’t win for losing.


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