Letters to the Editor

Letter to the Editor | Competitive bidding, good for PenMet and the taxpayers

As I’ve said in a previous Letter to the Editor, I agree with PenMet’s position that any operating lease for Madrona Links Golf Course would need to be offered through competitive bidding. Competitive bidding is required by RCW 35.61.135 which says, in part:

• All work ordered, the estimated cost of which is in excess of $20,000, shall be let by contract and competitive bidding.

Clearly, any operating lease for Madrona or a simple management agreement (either is possible going forward) would result in the entity or person managing Madrona receiving well over $20,000. PenMet has already disclosed the substantial sums Stutsman has received since he took over Madrona. I support PenMet’s position with respect to ZTM in this regard. Whether ZTM would agree to participate in the competitive bidding is up to them. That said, given their ownership of the 14 acre parcel and their already expressed desire to manage Madrona, I am willing to bet they would participate.

The only question I have is: Why hasn’t PenMet already commenced solicitations for bids to manage Madrona? I understand the current operating lease runs to 2028, but I also know there are issues with how the course is being managed now (and who’s at fault appears to be a question to be answered in court). Given that, why wouldn’t PenMet commence competitive bidding now to be ready to move forward if the current operating lease with Stutsman is terminated by PenMet, by agreement or by court order?

But this is not the main point of this letter. RCW 35.61.135 applies to any “work ordered” if the cost is to exceed $20,000. So…

Legal fees

There is one expense that PenMet incurs annually in amounts far in excess of $20,000: Legal fees. PenMet has spent hundreds of thousands of dollars over the past few years on legal fees with various law firms. Some of these contracts may have been through the competitive bidding process — that I don’t know.

If ZTM would have to participate in a competitive bidding process as I believe they do, then why don’t law firms have to do the same? Isn’t the competitive bidding process designed to make sure that PenMet obtains the best value for the money it spends (more than 80% of which comes from taxpayers)? If so, then why has PenMet not provided that assurance to the taxpayers when it comes to a major six figure expense?

PenMet is about to adopt (and, by the time you read this, may have adopted) a new Purchasing Policy. In that amended Purchasing Policy, PenMet is bound by the following provisions:

3.1           Procurement Type – Goods and Services:  This Section 3 applies to the procurement of goods and services.  “Goods”, as used in this Section includes materials, supplies and equipment but does not include art.  “Services”, as used in this Section includes personal and professional services.  Services, as used in this section, does not apply to architectural, engineering land survey services, or technology.

3.4           Formal Procurements:  Any purchase of Goods or Services with an estimated cost of fifteen thousand dollars or more shall be made by competitive bidding following the procedure for letting contracts for projects under RCW 35.61.135(1).

I think we can all agree that the rendering of legal advice falls under the umbrella of “professional services” as set forth in Section 3.1.  I think we can also all agree that by any measure, the amount of legal fees incurred by PenMet over the last several years far exceeds the $15,000 limit in 3.4.

So, by statute and by PenMet’s own soon-to-be adopted Purchasing Policy, does not PenMet have to put any fee agreement between PenMet and any law firm through competitive bidding and only after doing so can PenMet then award a contract for legal services?

Just a thought…

Craig McLaughlin

Fox Island