Today the Kitsap Sun begins a four-part series on the Kitsap County Consolidated Housing Authority (now Housing Kitsap), and how it nearly folded in 2008. That it nearly folded is not news. We reported on that as events unfolded. In the series, we attempt to give the back story, and to provide a comprehensive retrospective, now that the agency has moved on from its troubled past.
At the bottom of this post, you’ll find links to some of the key public records we accessed in the course of our research, including e-mails from elected officials and others, financial records and a meeting video.
The series, in the works for a year, tracks the housing authority’s financial woes related to its Harborside Condominium project and other factors, including the recession (days 1 and 2). The series moves on with a look at how the agency has gotten back on track and rededicated to its mission of affordable housing (day 3). Readers will also get a peek inside the lives of condo owners who reside in one of the most talked-about (and upscale) complexes in Kitsap County (day 4).
Delving into the cause of KCCHA’s financial meltdown, we found nothing illegal. We did find a culture of risk-taking within the agency that left it far more vulnerable than other Washington State housing authorities when the recession hit and the housing market imploded. The result is that public money will be paying off substantial debt on the private condo complex for what could be decades.
In the course of our research, we made public records requests for e-mails between and about housing authority board members and staff, financial records and a video of the 2005 meeting at which the county’s board of directors agreed to back a portion of financing on the condos.
State law provides for open access to public records. Three public records bills that would have made compliance with the law easier for local governments appear to be dead in the water in Olympia.
Without personally taking a position on the bills, I’d like to acknowledge the efforts of the public records officials who complied with our requests. The e-mail requests alone yielded well over 1,000 documents, each of which had to be reviewed for information to be redacted (as in attorney client privilege) before it was turned over to us.
The clerks and IT specialists who complied with our requests were just doing their jobs, as we were just doing ours in reporting the story. But it’s worth noting that the public’s access to records comes with a cost of time and energy within the agency asked to comply. That translates to public dollars. So the right to access public records is not one we at the Kitsap Sun take lightly.
Local governments and agencies complying with the Kitsap Sun’s public records request included: Housing Kitsap, the cities of Port Orchard, Bremerton, Poulsbo and Bainbridge Island, Kitsap County and Bremerton Kitsap Access Television.
In addition to our interviews conducted with elected officials, staff at Kitsap County and Housing Kitsap provided extensive information for the story.
Here are the public records:
KCCHA Condo Loan, Feb. 14, 2005
Condo Loan, Feb. 14, 2005
The Kitsap County Board of Commissioners on Feb. 14, 2005, entered into a contingent loan agreement with the Kitsap County Consolidated Housing Authority (now Housing Kitsap) to back a $22 million bond on the Harborside Condominiums.
KCCHA Condo Loan, Minutes, Feb. 14, 2005
Minutes of the Feb. 14, 2005 meeting of the Kitsap County Board of Commissioners, at which the board approved a contingent loan agreement with the Kitsap County Consolidated Housing Authority on the Harborside Condominium project. See item (8) a.
Video of Feb. 14, 2005 BOCC Meeting
KCCHA CondoConcerns, July 26, 2007
This is an e-mail from a couple who bought one of the Harborside Condominiums in Bremerton when the project was “just a dream.” Rick Shaver, the condo owner, writes to the contractor with multiple complaints about poor workmanship and delays. The e-mail is copied to Bremerton Mayor Cary Bozeman who forwards it to Kitsap County Consolidated Housing Authority Executive Director Norm McLoughlin. KCCHA was in charge of the projects. Bozeman writes, “You should be aware of this.”
KCCHA Operating Deficit, Jan., 2008
A financial summary for the Kitsap County Consolidated Housing Authority showing an operating deficit of nearly $300,000 per month.
KCCHA Spreadsheets, Nov., 2007 to April, 2008
Kitsap County Consolidated Housing Authority documents give financial “snapshots” of the agency’s fiscal profile from Nov., 2007 to April, 2008.
KCCHA bauer.eml, Aug. 29, 2008
This is an Aug. 29, 2008, e-mail from Kitsap County Commissioner Steve Bauer to a North Kitsap Fire and Rescue Chief in which Bauer shares the financial woes of Kitsap County Consolidated Housing Authority. Bauer writes that “the Bremerton (Harborside) condos are eating them alive.”
KCCHA countertop.complaint, Aug. 8, 2008
In this e-mail letter to Kitsap County Consolidated Housing Authority Executive Director Norm McLoughlin, condo owner, Patrick M. Rodgers complains about the material used in the countertops of his condo and threatens legal action if the problem is not remedied. The correct material was used, but the contractor applied the wrong finish, causing defects. All the countertops using this type of stone had to be replaced. The e-mail is copied to the agency’s board of directors.
KCCHA bauer.eml.Sept. 12, 08
Kitsap County Commissioner writes in a Sept. 12, 2008, e-mail to a financial consultant, that Kitsap County Consolidated Housing Authority Executive Director Norm McLoughlin has been using one of the agency’s lines of credit as a “private venture capital fund to cover ‘exploration’ of new ventures without telling the (housing authority’s) Board.”
KCCHA change/leadership, Oct. 2, 2008
In this e-mail exchange from early October 2008, among North Kitsap Commissioner Steve Bauer and the mayors of the North Kitsap cities of Poulsbo and Bainbridge Island, Bauer informs Kathryn Quade and Darlene Kordonowy that the county’s board of commissions wanted a “change of leadership” in the Kitsap County Consolidated Housing Authority.
KCCHA Next Steps, Oct. 9, 2008
In this e-mail exchange with members of the Kitsap County Consolidated Housing Authority Board of Directors, finance director Debbie Broughton lays out a fiscal strategy for keeping the agency from failing, as well as terms for her acceptance of the position of interim director. Last e-mail was sent just days before Executive Director Norm McLoughlin abruptly retired.
KCCHA mcloughlin retirement Oct. 14, 2008
This is an e-mail exchange between Port Orchard Mayor Lary Coppola, of the Kitsap County Consolidated Housing Authority Board of Directors, and attorney Will Patton of Foster Pepper law office, regarding the retirement agreement for Norm McLoughlin, the agency’s executive director. The agreement, copied to other members of the housing authority board, is in draft format and shows items under negotiation shortly before McLoughin announced his retirement. A draft of the press release that was to be sent upon announcement of his retirement is included in the e-mail.
KCCHA $40.5 million loan, May. 15, 2009
This is a copy of the loan agreement whereby Kitsap County bailed out Kitsap County Consolidated Housing Authority. Called the tri-party loan, it includes the Bank of America, lender, and provides for refinancing of debt, including more than $30 million related to the Harborside Condominiums.
KCCHA debt policy, May 18, 2009
This is a policy on debt approved by the Kitsap County Board of Commissioners days after they approved a $40.5 million bailout for the Kitsap County Consolidated Housing Authority. The policy set more strict standards for the county on contingent loan agreements, such as the one it entered into with KCCHA in 2005 on the Harborside Condominium project.