HomeMy WebLinkAboutFinance April 9 20021
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
WHATCOM COUNTY COUNCIL
Finance and Administrative Services Committee
April 9, 2002
The meeting was called to order at 12:00 p.m. by Committee Chair Sam
Crawford in the Council Chambers, 311 Grand Avenue, Bellingham, Washington.
Present: Absent:
Dan McShane None
Sharon Roy
Also Present:
Laurie Caskey- Schreiber
COMMITTEE DISCUSSION AND RECOMMENDATION TO COUNCIL
1. ORDINANCE AMENDING ORDINANCE NO. 98 -057, DELETING THE
SUNSET PROVISION FROM THE CODE OF ETHICS FOR WHATCOM
COUNTY ELECTED PUBLIC OFFICIALS AND MANDATING ONLY ONE
ANNUAL MEETING OF THE COMMISSION (AB2002 -159)
McShane moved to recommend approval.
Motion carried unanimously.
2. DISCUSSION WITH WHATCOM COUNTY AUDITOR SHIRLEY FORSLOF
REGARDING PROPOSED PRECINCT CONSOLIDATIONS (AB2002 -176)
Shirley Forslof, Auditor, propose to reduce number of precincts by 20
percent, to 119 precincts. The change would provide efficiency and save $5,000 in
printing costs alone this fall. There would also be a savings in the number of poll
workers that would be needed. More voters are choosing to vote absentee. There
are about 600 poll voters per precinct. Some of the changes are because of Council
district changes or legislative district changes. She would bring this back next
month with legal descriptions.
Crawford asked if this would be a proposed ordinance that the Council would
have a hearing on and consider. Forslof stated the Council could choose to have a
hearing. She doesn't want to do this work if there isn't Council consensus.
Crawford asked how often the Council has made a change historically.
Forslof stated the last change was a few years ago. No one objected. She's
contacted the Democratic and Republican party chairs, so they are aware of it.
Finance and Administrative Services Committee, 4/9/2002, Page 1
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
Crawford asked how the precincts were originally formed. Forslof stated they
were formed when the State formed, in the late 1800's. There used to be fewer
precincts. When the population grew, the County has had to increase precincts up
to a maximum of 175. When voters chose to vote by absentee, the County only
has to look at the number of poll voters, and can subtract the number of absentee
voters. There is a threshold of 900 poll voters per precinct.
Roy asked if it would affect the polling places. Forslof stated the precinct
consolidation has nothing to do with polling places. She has to ask if it makes
sense for a polling place to pay rent for 30 voters. She will be doing that. She has
that authority, without Council involvement. Another reason she will do that is
because the federal law will require a voting device in each polling place to
accommodate those with disabilities. They are expensive. If every polling place
has to have a device, it will cost the County a lot of money. She distributed
precinct maps.
Crawford stated it seems appropriate to have a hearing on it. He asked how
voters are notified if there is a change in polling place. Forslof stated the voters are
notified, and there is a sign posted at the former polling place. An added benefit is
that, as they send out notices, they can get address change information to use to
clean up address records.
The committee concurred to go forward with precinct consolidation.
COUNCIL "CONSENT AGENDA" ITEM
1. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO AWARD BID
NUMBER 02 -33 FOR CRUSHED AGGREGATE AT VARIOUS SITES TO
THE LOWEST RESPONSIVE BIDDER, AGGREGATES WEST, FOR THE
TOTAL AMOUNT OF $681,494.24 (AB2002 -170)
Roy moved to recommend approval to the full Council.
Motion carried unanimously.
2. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO AWARD BID
NUMBER 02 -34 FOR CRUSHED AGGREGATE AT POINT ROBERTS TO
THE LOWEST RESPONSIVE BIDDER, AGGREGATES WEST, FOR THE
TOTAL AMOUNT OF $82,252.17 (AB2002 -171)
McShane moved to recommend approval to the full Council.
Motion carried unanimously.
3. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO ENTER INTO A
PROFESSIONAL SERVICES CONTRACT BETWEEN WHATCOM COUNTY
Finance and Administrative Services Committee, 4/9/2002, Page 2
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
HEALTH AND HUMAN SERVICES AND THE EVERGREEN AIDS
FOUNDATION TO PROVIDE FOR THE SUPPORT OF VOLUNTEER
SERVICES AND THE SUPERVISION OF CASE MANAGEMENT SERVICES
FOR CLIENTS INFECTED WITH HIV AND /OR DIAGNOSED WITH
AIDS, IN THE AMOUNT OF $21,000 (AB2002 -172)
McShane moved to recommend approval.
Roy asked if there has to be matching funds or services.
Crawford stated there does not, as indicated by the Health and Human
Services Department staff in the audience.
Motion carried unanimously.
4. REQUEST AUTHORIZATION FOR THE EXECUTIVE TO ENTER INTO A
CONTRACT AGREEMENT BETWEEN WHATCOM COUNTY HEALTH AND
HUMAN SERVICES AND REGION 3 AIDS SERVICE NETWORK TO
PROVIDE FUNDING FOR HIV /AIDS PREVENTION ACTIVITIES IN THE
AMOUNT OF $126,310 (AB2002 -173)
McShane moved to recommend approval to the full Council.
Motion carried unanimously.
COMMITTEE DISCUSSION
1. DISCUSSION REGARDING COUNTY EXECUTIVE PETE KREMEN'S
ACTION PLAN FOR MAINTAINING A BALANCED BUDGET (AB2002-
169)
Dewey Desler, Deputy Administrator, stated the revenue in 1989 was
approximately $26 million. County government has changed over time. There has
been growth in the general fund since that time. The administration projected
revenue for 2002, and found itself with a modest revenue reduction. The changes
are such that the County will receive approximately two percent less revenue in
2002 than in 2001. Other counties have similar revenue projection issues. The
City of Bellingham revenues will increase six percent from 2001 to 2002. Their
general fund is about the same size. When they project into the future through
2005, the administration sees that the revenue sources will flat line or there will be
a modest reduction.
The County Executive wants to move the County forward, properly pay its
people, and provide a certain set of services. There is a series of eight points the
Executive wants to address. He will recap the eight points the Executive presented.
Finance and Administrative Services Committee, 4/9/2002, Page 3
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
The administration proposes that each department of the general fund
develop a plan for instituting a two percent reduction in their current, approved
budget. The administration will attempt to reduce general fund expenditures by
approximately $1,150,000 this year. They are trying to give the department heads
and managers tools by which to operate. The administration proposes a targeted
selective hiring freeze. They are developing the criteria for what that means.
Starting later this month or in May, the administration would issue that freeze by
Executive order. The administration wants to reduce the number of positions if it
doesn't have an adverse impact on the operation. There are certain criteria the
administration would use to determine that.
Crawford asked if a department head would not be able to fill a position
vacant due to attrition. The County is left up to the whims of who comes, goes,
and retires to decide how staffing occurs. Desler stated that is correct. The
administration doesn't want to lay off currently employed personnel. It is the
appropriate time to look at whether or not the County can save money by not filling
a position. The County is self- insured under the unemployment compensation
program. There are anywhere from 26 to 52 weeks of eligibility that someone has,
with an approximate cost to the county of $500 per week for every week that a
person is seeking unemployment compensation. When they add those costs
together, there is an extensive amount of money associated with reducing
personnel. There would also be a morale issue. The administration would ask a
series of questions to the department, including what results would not be obtained
if the position goes unfilled, what other alternatives were considered to filling the
position, whether another person currently employed could be transferred or if
duties could be reassigned, what work would not be done, how long the position
has been vacant, the funding source for the position, and other questions. At this
point, the administration will look at whether this has been successfully applied in
other situations. The County has an eight to eight and a half percent turnover rate
every year. The administration wants to review that rate.
Another issue for saving money is to mitigate health insurance costs. The
administration is negotiating with employee unions and looking at other options to
acquire health insurance, such as pooling with other counties or consolidating to
one plan. They want to permit voluntary unpaid furloughs. If an employee and
manager feel that that employee can be gone, the employee would be gone
through the furlough system. Policies are under review for how to do that. That
doesn't create a long -term savings, but it lets the employee know that he or she
has a job to come back to. It would have a budgetary impact, but they can't count
on it from year to year.
Roy asked if they are going to have to work out procedures to standardize
approval of unpaid time off, so employees feel as if they are being treated fairly.
Desler stated some departments could allow furloughs easier than other
departments. It depends on the workload and the time of the year. It will be a
department -by- department provision. Some departments won't be able to do it.
Finance and Administrative Services Committee, 4/9/2002, Page 4
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
Some managers may have other money- saving ideas. Employees have to make a
request for it, because it isn't mandatory.
The administration will propose streamlined purchasing and contract
procedures. It will reduce some of the workload in the Council's operations.
Simplifying the procedure for smaller contracts would save time and money. Right
now, it takes weeks and weeks to implement a contract.
Crawford asked for information on what the other counties are doing. Desler
stated he would provide that information.
Desler stated the administration wants to slow equipment purchases for
vehicles, copiers, computers, and printers. There aren't huge savings there, but
there are some savings.
Crawford stated that when the County replaces vehicles, the ones being
replaced have a high mileage and the useful life is gone. It might be more effective
to analyze how the County is using the vehicles to begin with. Desler stated that is
an issue they discuss annually with the managers of the ER &R fund. They don't
want to spend more on maintenance and replacement. The Executive would like to
try buying program cars with miles on them already. The County wouldn't pay for
that initial depreciation. Computers is another thing they are exploring. The
County has been trying to bring everyone up to a certain capacity. Now, they need
to be sure they don't replace the computer and peripheral equipment too quickly.
Exploring technology to save resources on copiers and printers.
Crawford asked how close they are to a paperless County government.
Desler stated they would like to do that, but they don't need to be on the cutting
edge of doing that. It requires an investment in imaging. It can be very expensive
to do. The County generates a great deal of paper. There is a high expenditure for
microfilming and storing the paper they already have. That will continue to be a
challenge.
They want to reduce rental and lease costs. The County does lease some
buildings, such as the State Street Health Department building. They are thinking
about moving that staff to other existing County buildings. There is also storage
space that is leased. The administration is exploring whether or not to use existing
County buildings for storage. That is not a large cost to the County.
McShane asked if any thought has been given to County -owned buildings
that are under - utilized, such as the Forest Street Annex. Desler stated the
administration would like to move Cooperative Extension from the upper floor to
the lower floor, and have them use the entire floor exclusively. The upper floor
would be devoted to two key Health Department divisions, the Human Services and
Environmental Services divisions.
(Clerk's Note: End of tape one, side A.)
Finance and Administrative Services Committee, 4/9/2002, Page 5
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
Desler continued to state the administration is exploring the best way to use
the space at the Girard Street building. That is where the people who work at State
Street may move. It has been the County policy to bring the Health and Human
Services Department together into one building. That is still in the administration's
vision. Significant savings could occur. It would also be an improvement to
customer service.
They are still three years away from a solution to the master facilities
planning work. In the meantime, they will use the existing buildings to house those
people with the least amount of cost. The lease cost for the State Street building
today is around $180,000.
Another administrative action would be to limit overtime. Most of the
overtime is spent in the Sheriff's Office, Jail, and Juvenile Detention. Some is also
spent in other departments. The administration is working with the Sheriff and his
managers in figuring out ways in which the overtime costs can be reduced.
Approximately $600,000 per year is spent on overtime.
Caskey- Schreiber asked if the Sheriff's Office overtime is something the
deputies get on a regular basis, and if it will be considered a salary cut by staff.
Desler stated overtime is not guaranteed. Some people don't like it and don't want
it. There may be a reaction to reducing it. For some, overtime can be as much as
$500 per month.
Roy asked if the added eight deputies impacted the amount of overtime that
is being spent. Desler stated he is not sure if there has been any impact on that
yet. The sheriff and undersheriff are trying hard to get that reduced. Four or five
jail staff members were called to active duty since September 11. Now, the jail is
trying to deal with the loss of those people through overtime.
The administration is still talking with the unions about reducing the
workweek. A one -hour reduction in the 40 -hour workweek would generate about
$500,000 in savings in the general fund. Over the coming weeks, they'll decide
whether or not this will work.
When the County is looking at no revenue and increasing expenses, they
must revisit the County's priorities. The administration will propose having a couple
of half -day work sessions to discuss these issues. It will allow the administration to
build a budget based on the higher - priority issues they will discuss. The two
percent reduction applies to everyone right now. It's a simple, direct method to
address the issue now. They are looking at a four percent reduction in 2003, and
another four percent reduction each in 2004 and 2005. That requires more scrutiny
and decisions that will be difficult. In some cases, they may not be able to continue
non - mandated services. In other cases, they might have to provide mandated
services at a lower level of service. Don't build new programs. Don't add capacity.
Maintain current capacity. Revenue can become a key factor in whether the cut is
Finance and Administrative Services Committee, 4/9/2002, Page 6
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
one percent, two percent, or nothing at all. When they talk about the two percent
reduction this year, it could be made up with adjustments in fees or additional
revenue.
The approved budget is what the Council adopted in November. There were
some continuing appropriations, which are carryovers from 2001. The contracts
are under way, and those expenditures were to finish up those contracts. In the
intervening three and a half months, there have been $570,000 in supplemental
budgets that have been approved. The two percent is built only on the initial
approved budget from November. It's not built on anything else.
The two percent reduction column would be composed of both increased
revenues and reduced expenses. The bottom line is the fund balance. They have a
$15 million fund balance today. They are looking at a fund balance, even with the
two percent reduction, of $13.5 million by the end of 2002.
With the changes in the budget at this level, they will have to rethink how
they build the budget. In the past, departments and programs are given a base
budget and asked to explain anything new. The administration can't give the
departments their base budgets this year. The administration needs to know what
the departments can do with a certain given amount of money.
Roy stated they need serious discussion about where the priorities are.
Desler stated the general fund reserve is about $15 million. The
administration proposes to use part of the general fund to bring the level of
spending down to a lower level. They would still maintain the County's bond rating,
and budget for emergencies. They have laid out projections for where that level
would be. In three years, the fund balance would come down to $7.5 million. Half
of the reserves would be used through 2005.
Regarding revenues, the administration wants to recover all direct and
indirect expense from grant funds and fee - related services. They want to know
whether or not a fee for a certain service actually pays for the entire cost of the
service. They are moving toward a policy to maximize fee for services. Many times
that requires Council approval. Make sure they capture the money necessary to
support the full cost of that service. There are grant funds that allow administrative
costs. Otherwise, they use the grant funds to pay for a part of the service and the
general funds to pay the remaining cost of the service.
The County received some real estate excise taxes, which they used to pay
bond payments on the construction cost of the courthouse. There is enough
resource there to increase the payment amount on that bond payment. Currently,
the payment amount is from a portion of the Real Estate Excise Tax (REET) and
general fund expense. The administration will propose to use more of the REET
funds and less of the general funds. Currently, REET receipts are $1.1 million. The
bond payment is about $1.1 million. They are now using about $800,000 in REET
Finance and Administrative Services Committee, 4/9/2002, Page 7
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
funds to make the payment. They have been building a reserve in the REET fund.
The administration will propose to use a larger proportion of the REET fund to pay
the bond. The REET can only be used for certain capital expenses.
Crawford asked if REET monies are affected by annexations. Desler stated
they probably are.
Desler stated the administration wants to maximize interest income for the
general fund.
Caskey- Schreiber stated it would be devastating to the conservation futures
fund if they get into a situation of buying development rights on a long -term basis.
Part of that income is dependent upon the interest still generating revenue. Desler
stated the conservation futures fund interest currently accrues to the general fund.
Caskey- Schreiber stated that for a successful purchase of development rights
(PDR) program, they dispense the payments over a long term. Part of keeping the
fund going is that interest that is going back into it. She didn't realize that the
interest amount isn't growing in that fund. Desler stated it does not receive
interest back from the conservation futures fund itself. The interest income from
that fund goes back into the general fund. There are a lot of things the County
does to support the conservation futures fund that is paid through the general fund.
The administration of the fund is paid for through the general fund.
McShane stated that is true of a lot of other funds.
Desler stated the districts have their own funds. They accrue interests from
those funds. The only time the County collects interest is when the district submits
money into the Treasurer's accounts so it can write checks off of it. The Flood fund
and Solid Waste fund interest accrue to those funds, not the general fund.
Taxation options has been an issue the Council asked the administration to
address. He is not prepared to talk about the details. It might be a rate
adjustment that the Council controls. It might be a change in the way they
currently tax certain kinds of things. At some point, the administration will provide
a list of the County's limited options for addressing taxation.
Crawford stated historically they have gone without raising property taxes. A
State legislator recently said that the County wouldn't receive help from the State
because it hasn't raised property taxes. There is some merit to not raising taxes,
but the councilmembers would not rule it out if a certain level of services is
expected, and also if it would have a major impact. He asked the impact that
raising taxes will have. Desler stated the administration hasn't proposed raising
property taxes, other than the proposal to increase the flood fee, which is similar to
a property tax. That increase has been significant.
Finance and Administrative Services Committee, 4/9/2002, Page 8
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
The Council and Executive have been careful of the needs of the citizens.
They have not wanted to add to the property tax burden when they know in real life
how difficult it is to pay taxes. They have chosen to help citizens by trying to
maximize services without increasing taxes. In some ways, it is easy to address
the challenges that come from people who want more from their government by
just charging others. It has been difficult to keep taxes level while realizing the
expected level of services. A one percent property tax increase would generate
$180,000 for the general fund.
Crawford asked what the one percent raise would be on. Desler stated it
would be a raise on the levy on the property values across the county. Property tax
is a complicated arrangement. It relates to assessments and rates. Eleven percent
of a property tax bill goes to the general fund. Schools, the State, fire districts, a
city, and the road fund all are funded from the property tax. A one percent
increase for a $100,000 home is about $.25 per month.
Caskey- Schreiber stated they talked about establishing a stormwater utility
assessment to get some of the service paid for. Desler stated they would look at all
the options that might exist and come back with some ideas.
Crawford asked if their primary concern now is the general fund. Desler
stated it is the fund with the greatest stress.
Crawford stated he assumed a stormwater fund would have little impact on
the general fund. They are Public Works dollars.
Desler stated there are too many different sources of support that come to
the County. The County doesn't have a lot of flexibility to use some of the funds for
things that are needed. There are limitations the legislature has placed on the
County. The State has handcuffed the County's ability to act with mandates and
requirements on using sources. The total County budget is approximately $120
million. The public assumes that the money the County has can be used in any way
it needs, but that's not the case. Most of the services the public sees are funded
from the general fund, which is $55 million out of the $120 million total budget.
Look at charging fees that equal the cost of the service. Look at fees on the basis
of providing good quality service.
Finance large capital expenses. They are identifying $1.5 million to $3
million in capital costs that they ought to think about to protect the assets of the
County over a long period of time. If there is a capital cost in which the benefit
accrues over many hears, then look at financing with the low interest rates. Don't
spend all the capital expense money in today's dollars with the current reserves.
(Clerk's Note: End of tape one, side 8.)
Desler stated the State's bond rating was just lowered. The administration
will have to look at that effect on the County.
Finance and Administrative Services Committee, 4/9/2002, Page 9
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
For the life of the Health Department, the cities contributed to its operation.
It was a health district for many decades. The County took over the health district
in the 1980's. The cities continue to contribute monies to support the Health
Department, because they are regional services that don't know a boundary. The
cities should continue to support a countywide health department. In response to
city governments' requests, the County took over the obligation to pay for public
health for the cities. Through no choice of the County's, the cities decided to use
the motor vehicle excise tax to pay their portion of the service. Three years later,
the public repealed the motor vehicle excise tax. The State will no longer replace
those funds as of June 2003. The administration desires to raise the cities'
obligation to support the service, just like they share other regional services, such
as Medic One and the 911 dispatch. They are not formally discussing it with the
cities yet.
Crawford stated he's been under the impression that the smaller cities have
been struggling financially, more so than the County, and for a longer time. He
asked if that burden would be shared equally by all cities on a per capita basis.
Desler stated one fair way to do it might be a combination of population and
property tax. It's premature to announce a plan. The budget for the Health
Department is $9.5 million. The cities would contribute about $1 million. Out of
that $9.5 million, a substantial portion comes from grants. They need the $1
million to cover the basic discretionary needs.
McShane stated the Health Department issue is pretty scary. Another similar
issue is the emergency medical services. The County contributes significantly to
the service run by the City of Bellingham, without a lot of control on how that
service is run. They should maybe think about changing the relationship of the
Board of Health to get the cities more active in the issues. It will be an issue of
giving up a little power. Desler stated Whatcom County is the only county in the
state that pays for emergency services with its general fund. Medic One services
are very important. They want to make sure it is a viable operation for the future.
Other counties have chosen to finance it without having to compete with other
mandated services that they are required to perform. It is not one of the mandated
services that the County is charged with by the legislature. It is an option. Most
counties have created an emergency medical services (EMS) district. A group of
people is working on that for the future of this community. It would require a vote
of the people, depending on the plan.
Crawford asked about independent contractors and reduction of their
services. Desler stated the administration will approach all contractors with similar
reductions in requests for a similar two percent. In some cases, they might be able
to accomplish that. In other cases, the contracts are fixed and the County is
committed to those amounts. There is nothing common among all the contracts.
Increase the fees that people pay for those contractor services.
Finance and Administrative Services Committee, 4/9/2002, Page 10
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DISCLAIMER: This document contains the Whatcom County Council or Committee
minutes, as approved. However, unless an attested signature page is attached, they
are not the final approved minutes.
Caskey- Schreiber asked if, in some instances, the County puts forward
money so that contractors can go out and get more money.
Crawford stated that is his next point. Look at revenue - producing and self -
sustaining programs versus those that are not. Have a good comparison of the
two. Look at the revenue that programs produce in addition to the expenses that it
costs.
Crawford asked for a time frame for the next few months. Desler stated
departments come up with their two percent reductions by the end of this month.
The administration is asking them to do this to construct a change in the budget,
which will come forward in May.
Union negotiations are going to play out in the next few weeks. Work
sessions with the Council and administration are scheduled in May. Also in May,
they will have a better sense of the revenue projections. Continue this discussion
at the next few Finance Committee meetings.
OTHER BUSINESS
There was no other business.
ADJOURN
The meeting adjourned at 2:00 p.m.
Jill Nixon, Minutes Transcription
ATTEST:
Dana Brown - Davis, Council Clerk
WHATCOM COUNTY COUNCIL
WHATCOM COUNTY, WASHINGTON
Sam Crawford, Committee Chair
Finance and Administrative Services Committee, 4/9/2002, Page 11