PORT ANGELES — Clallam County should deny a request from the Quillayute Valley Park and Recreation District to forgive or defer a $225,000 loan it received in 2004, County Treasurer Selinda Barkhuis has recommended.
The loan was for the purchase of 4 acres of U.S. Forest Service land with four homes on it in the heart of Forks to provide more affordable housing on the West End.
The homes are now being managed as full-market rentals at an average of $800 per month instead of as affordable housing, and the district is four years late on paying back the $218,699 it still owes the county, Barkhuis said.
Barkhuis issued an eight-page memorandum on her recommendation with a stack of supporting documents in the public comment period of the county commissioners’ meeting Tuesday.
Commissioners took no action and did not discuss the issue last week.
Last month, commissioners heard impassioned pleas from district board members for the county to explore the ramifications of forgiving the loan or having the district delay payments until 2023, when the district will finish paying for its pool and community center.
Nedra Reed, district chairwoman and former Forks mayor, said Friday the situation is dire.
“Without the rental income from the houses, the entire operation of the park and recreation district will close,” she said.
“Without the revenue stream that the houses provide, we would not be able to keep the aquatic center open. We wouldn’t be able to keep the community center open,” Reed said.
County Administrator Jim Jones said after Barkhuis presented her memorandum that the Clallam County Prosecuting Attorney’s Office has been asked for an expanded legal opinion and recommendation.
“When we get that, then we will, in a timely manner, schedule it for another work session if necessary,” Jones said.
Commissioner Mike Doherty, whose district covers the West End, said: “The county Treasurer has researched the matter, as she should, per the statute for her office.”
“I think the board should value her opinion and consider her recommendation before it’s considered by the board again and a final decision is made by the board,” Doherty said after returning from meetings in Neah Bay late Friday.
The district, which operates the Quillayute Valley Aquatic Center at 91 Maple Ave. in Forks, received the interest-free loan from the county’s Opportunity Fund in 2004.
The Opportunity Fund is an eight-tenths-of-1-percent sales tax used for “construction of public facilities that promote economic development” in rural counties, according to the Revised Code of Washington.
“Additional affordable housing availability further fosters a climate of economic development in the [Forks] area,” stated a 2004 Clallam County resolution that authorized the loan.
Beginning in January 2005, the district began to transfer management of the properties to Lunsford Real Estate and Property Management, which now is managing all four as full market rentals with monthly costs between $600 and $1,100.
Barkhuis said the Quillayute Valley Park and Recreation District made a $6,430 payment to the county in 2007 and another $6,430 payment in 2010.
The district owes $212,140 in principal plus $6,559 in accrued interest.
The loan for the properties is separate from the $160,000 Opportunity Fund grant that the county issued in 2004 for aquatic center equipment.
Voters approved a $2.9 million bond issue to build the pool in 2005 but in 2006 rejected a tax levy to fund operations.
It was closed in 2007 and later reopened, becoming a magnet for residents, park board members said.
In Barkhuis’ memorandum, the third-year treasurer recommended that commissioners decline the district’s request to forgive the loan and proceed along one of two tracks:
■ Authorize the Prosecuting Attorney’s Office to initiate a foreclosure if the loan is not brought current by June 1.
Commissioners could sell or grant the property to the Peninsula Housing Authority so it would be managed for affordable housing in perpetuity.
This option assumes the district won’t simply deed the property to the housing authority.
■ Defer the loan, contingent on the district returning the management of the property for affordable housing.
Barkhuis noted that this option would not guarantee that the property would be managed for affordable housing in perpetuity because the district could change the status later.
Neither action would have “any bearing on the integrity or viability of the pool facility and community center,” Barkhuis said, because the homes are separate and distinct from the pool property, which contains the pool and community center.
But Craig Miller, a Port Angeles attorney who represents the Quillayute Valley Park and Recreation District, said the rental properties are the district’s only source of operating income, which is used to cover pool and community center expenses and insurance.
Miller said the district would have to close all activities if county commissioners side with the treasurer.
Miller issued a three-page response to Barkhuis’ memorandum Wednesday.
“This recommendation far exceeds the scope of authority and responsibility of the treasurer and is a blatant attempt to usurp the roles of the county commissioners and the prosecuting attorney,” Miller wrote.
“Further, the recommendation would result in the closing of the facilities operated by the district in Forks, which would completely stop the multiple and valuable services being provided to the Forks community by the district.”
Reed described that prospect as “devastating” to Forks and the surrounding area.
Reed outlined the impacts that the closure of district facilities would have on those who rely on the pool for exercise and swimming lessons, and for those who rely on the community center for CPR training and other classes, meals, civic events, memorial services and social gatherings.
“The simple fact is that absent the funds QVPRD receives from the rental of the houses, which is used to pay the insurance on the property and buildings, we would have no other option but to lock the doors and walk away,” Reed said.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.
