By Tom Hyde, The North Coast News, March 24, 1999
"City Manager Jack McKenzie and Community Development Director Sue Patnude should be fired and Pacific International Engineering (PIE) reinstated as the city's contractor for erosion," is the message local city council members in Ocean Shores say they have been getting from other local governments, and the contractor himself, for over a year.
Once only discussed in closed executive sessions, city council members have been more vocal in recent months over the pressure they have received from elected officials and staff from numerous other local governments. The pressure is ugly, inappropriate and unwarranted, councilmembers seem to agree.
"Every meeting we would go to, certain past consultants would say that we just had to fire Sue or Jack," Fred Winge said last month in a special city council study session. The meeting was held to determine whether the city still wanted to remain in the "coastal communities" group, a consortium of local governments dealing with erosion including Westport, Pacific County, Port of Willapa, the Port of Grays Harbor, and Grays Harbor County. For the time being, the city has decided to stay on board.
Councilmembers have stood by their staff throughout the process and city officials have tried to take the high road. But the issue has been frustrating and provoked disbelief and anger.
To sum up, Councilman Peter Jordan said, "It's none of their bloody business who our staff is."
The pressure on city elected officials started as far back as 1997. PIE was then under contract with the city to develop a plan to address the erosion at the southern end of the Ocean Shores.
Community Development Director Sue Patnude was working with the firm on the issue. As part of the process she pushed for an independent technical review committee with coastal scientists and participants from state agencies, a move which was initially opposed by Pacific International. Patnude also pushed for a permit process for the placement of geotubes on the beach, instead of the emergency action being proposed by the consultant, saying that the agencies would quickly kill anything less than a full permit process. Patnude then began asking PIE for more detailed billing information on expenses submitted to the city by PIE.
"Within days I was in an executive session with the city council," she said.
In December of 1997, Patnude was called before the city council in a special executive session and pitted against Harry Hosey, the principal at Pacific International Engineering. While neither staff nor city council members will discuss what happened in the closed meeting, Patnude remained as community development director and the project moved forward. But the independent technical review committee was soon disbanded.
A councilmember said at the time, on the condition of not being quoted, and a city official confirmed, that Hosey had initially requested a special unannounced meeting of the city council outside Ocean Shores to discuss city staff. The meeting was never held since it would have been a violation of the state open meetings act.
In sharp contrast to statements made by Patnude, McKenzie and several city council members, Harry Hosey denies ever pushing for anyone to be fired.
"I met with the city council in December of 1997 and said to them in executive session that I had done more than a few of these jobs...," Hosey said in a phone interview on November 24 of last year when still under contract with the city. "I told them Sue was not qualified...I never ever recommended to the city that Sue was an inappropriate employee of the city...."
"I never pushed for the removal of anybody, that is not our position.
What we are doing is advising the city on how to get a project done successfully, timely and with the least cost to the city. There was never anything personal about that."
The city released Pacific International Engineering from its contract late last year, ostensibly due to lack of funding, after PIE requested an additional $250,000 to continue work on the project.
Rather than cough up the money, which the city said it didn't have, Ocean Shores chose instead to enlist the help of the state and develop an environmental impact statement (EIS) on its own, a document which seeks to develop a long-term strategy to control erosion problems.
A draft of the document is set for release within a month.
"The state agencies came through for us in fine style. We've come a long way in a short amount of time," said McKenzie who also has high praise for the Governor's office.
Councilmembers are still expressing frustration and concern over spending large amounts of money on the project in the past and seeing little return. The issue came to a head when the firm, which had been paid about $175,000 for the development of an EIS, presented an interim report to the city council and requested an additional $250,000 to continue with the project.
"By the time we got to the $175,000 mark (on the EIS), all we had done is have three public meetings and some other meetings, and a document that had work that was already done," said McKenzie. "I think there is a feeling on the former consultant's part that he's missing out on a major cash flow. We're approaching the million dollar mark and we don't have a whole hell of a lot to show for it."
Councilman Jordan expressed his anger of the process saying, "we had a consultant telling us we had to give him more money, funds we didn't have," said Jordan. "I was very upset with Mr. Hosey to put us in that position. It was basically blackmail."
The issue of funding and the consultant have driven a firm wedge between the city and the other coastal communities, all of which have contracts with PIE.
Councilmembers say they have continuously been lambasted at coastal communities meetings by officials saying state agencies are using Ocean Shores as a wedge to drive the communities apart. Take control and get rid of senior staff is the standard advice they receive, say councilmembers.
By embarking on its own to do the EIS, and to take control of seeking funds, the city has been portrayed as a dangerous rogue and a threat to regional funding proposals.
New councilmember Terry Veitz attended her first coastal communities meeting on February 12. She called it a "very intimidating atmosphere." "I didn't feel a working together atmosphere in that meeting," she said.
Hosey sought to meet with Jordan personally on a number of occasions while still under contract with the city, Jordan said. "Harry Hosey told me what the coastal communities have told you," he explained to the city council. "That Ocean Shores was a rogue and we must listen to him about who its staff should be."
Ocean Shores and the other coastal communities have chosen opposite strategies in their quest to find solutions and funds to implement them.
While Ocean Shores has chosen to work with the agencies, other local governments have chosen to be antagonistic.
"The idea of the coastal communities is to have an adversarial relationship (with the state)," McKenzie said in the study session last month. "If we take the position of the coastal communities, then all the cooperation we've had will stop, all the work on the EIS will come to a grinding halt, unless you want to convert 25 percent of our budget into erosion."
McKenzie also noted that "of all the coastal communities, we're the only one that has spent substantial sums of our own money on this." He also pointed out that the Conner Creek fiasco, a proposal by PIE and the county to redirect the mouth of the creek, was a good example of taking an adversarial position and forcing the agencies into a position. "The agencies finally said no."
Councilmember Winge, one of Hosey's strongest local supporters in the past and not always a big fan of state agencies, agreed.
"Some of these people in the coastal communities treat these agencies as adversaries, whereas we've had a lot of cooperation from the agencies, and personal involvement from people like Tom Fitzsimmons (Director of the state Department of Ecology)," Winge said. "But they still want to have an adversarial relationship for whatever reason."
Mayor Harriette Hodgson agreed with the attitude assessment. "Coastal communities have a problem with CTED (state Dept. of Community, Trade and Economic Development), Ecology and the agencies, they don't want to work with them."
At one point during a coastal communities meeting last month, Hodgson said members were asked to write a letter to elected officials to get the U.S. Geological Survey out of the joint five-year study of coastal erosion being done with the Department of Ecology. "I asked why we were supposed to do this and was given to understand I wasn't supposed to ask those type of questions."
Jordan, a local contractor, says Ocean Shores holds all the cards and isn't sitting down for any parlor games.
"Of all the coastal communities, we're the biggest, have the highest profile and we're the only one that doesn't pray to the god of Harry Hosey," he said. "I think he's scared we can show we can do it without him."
While Ocean Shores may continue to have problems with its former consultant, Hosey is well respected with senior members in the Legislature and state Congressional delegation as someone who "gets things done."
In the late 1970's and early 1980's, Hosey had an environmental engineering company "that was known throughout North America for its ability to gain permits for environmentally sensitive projects, mostly hydroelectric plants," according to a 1991 article that appeared in the Wenatchee World. In 1984, Hosey was recruited to rejuvenate and head up the Early Winters' development project in the Methow Valley of Washington's Cascades. Hosey claimed to have taken up the project "more as a favor to high ranking state officials" than as something he sought, according to the article. Plans included a ski resort. The project went bust in 1994, although proposals for a scaled back version, without the ski resort, continue today. After Early Winters, Hosey got back into engineering and began working on coastal erosion issues in Westport.
Hosey is a registered lobbyist on the federal level, as is his wife, Judith Shulman of Pharos Corporation, which is often a joint venture partner with PIE on projects.
Hosey has described himself in the past as "an extension of Norm Dicks staff," the Congressman that represents Ocean Shores and Washington state's senior member of Congress. And Hosey's own statement of qualifications he submitted to the city several years ago states that Norm Dicks personally recommended Hosey's firm as a consultant to the Quileute Tribe to work on jetty repair issues at La Push.
The problems between Ocean Shores and the coastal communities became evident on a recent trip by local officials to Washington, D.C. the week of March 9. Councilmember Jordan and city planner Sue Patnude met with a number of state Congressional members and their staff. All of the meetings were positive except the one with Norm Dicks (D-WA), explained Councilman Jordan at Monday night's city council. He characterized Dicks as being "angry" over Ocean Shores' role in coastal erosion issues.
"We definitely have some fences to mend there," he said.
Dicks, saying he wanted to clear the air, asked Shores' delegates why the city had kept the coastal communities from getting $1.5 million from the Legislature last year. Jordan and Patnude explained that Ocean Shores had nothing to do with the demise of the package.
Dicks also reportedly said he couldn't understand why the city wasn't using PIE, but that he would work with the city whoever the consultant may be. City delegates explained that PIE had asked to be let out of its contract and that the city could not afford the firm.
Jordan said they left the meeting "on a semi-friendly basis but we acquired a staffer from Dicks' office when we went to the Pentagon (to meet with U.S. Army Corps of Engineers officials). There's no question we were being watched while we were back there."
"They really knew who Sue was," Jordan said of Dicks' office, "they were loaded for her."
The issue of last year's funding debacle in the Legislature has been a longstanding sore point between the city and the other communities.
Ocean Shores was the only community to get funded. And differing versions of history persist. Some in the coastal communities group maintain that Ocean Shores went behind their back, got their own funding, and scuttled the rest. But city officials here and Ecology staff tell a different version. They maintain Ocean Shores was the only community to provide detailed information and work with the state agency, while other communities simply demanded. Ocean Shores never opposed funding of other communities, city and state officials have said. In fact, city officials didn't even know about the budget package submitted by Hosey on behalf of the coastal communities, even though Ocean Shores was included, when it went to Ecology seeking funding.
Ultimately, Ocean Shores was the only community to receive funding and the city has borne the wrath of the other communities ever since.
According to Mayor Hodgson, the other coastal communities believe in the conspiracy theory that Ecology used the funding incident to step in and divide the communities. She was told as much by Hosey, she said in the public study session earlier this month.
Ocean Shores officials don't put much stock in the theory.
Ocean Shores has contributed $10,000 to be a part of the coastal communities network. It was set up to act as a clearinghouse on coastal erosion issues and to provide a united front when seeking funding.
The relationship remains rocky, to say the least.
An additional sore point with Ocean Shores this year was the funding package submitted to the Legislature by the coastal communities. Ocean Shores was left out. Gov. Gary Locke added language to the $1 million appropriation request that calls for a competitive grant process and a competitive contract award process, language that could open the door for Ocean Shores. The coastal communities group testified before the Legislature against the Governor's additional language.
For the time being, Ocean Shores plans to remain a member of the coastal communities group for the purpose of sharing information. But the bottom line expressed by the city is that it will put its citizens and needs first while trying to work with the other communities.
At the same time, the city is making substantial progress on doing its own EIS, with substantial help from state agencies. It has also contracted with the world-renowned Battelle corporation to conduct an economic analysis of the area at risk from erosion at the southern end of Ocean Shores, a very important part of the impact statement, say staff.
Patnude said Monday night that they have also expanded the scope of the impact statement to include overwash and flooding from the North Jetty.
Following the release of the draft impact statement, expected within a month, the city will hold public meetings, incorporate comments, and issue a final environmental impact statement which will identify a long-term strategy for erosion control. At that point, the city will be ready to detail out a plan, probably with outside assistance.
Both Patnude and McKenzie have survived attempts to have them removed from their positions, or pushed out of the development of an erosion strategy. As he often does, McKenzie expresses his position, and that of the city administration, in unequivocal terms.
"Every fifth of the month when I whip out that paycheck I sign to myself, it says the City of Ocean Shores on it. It doesn't say coastal communities,' it doesn't say PIE,' it doesn't say the State of Washington.' Ocean Shores is where our priority needs to be."
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