The city of Olympia’s former city manager must pay a $5,000 fine after the city last fall sent residents a mailer urging them to reject Initiative 976, a Tim Eyman-sponsored measure to cut car-tab taxes. State law bars public employees from using public resources to promote or oppose ballot measures. 

The flyer hit mailboxes in the final weeks before the November election during a heated campaign over I-976 in which local officials across the state issued dramatic warnings that the initiative would decimate their budgets for pothole repair and other transportation services. Eyman, a serial initiative promoter, has long fought to lower car-tab taxes, which fund those projects as well as mass transit in the Puget Sound region. 

The Olympia mailer quickly drew complaints to the state Public Disclosure Commission (PDC) with an open-government advocate at the time calling it “absolutely, positively, without a doubt, a blatant violation” of state law.

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Steve Hall, the Olympia city manager at the time who has since retired, acknowledged the violations in a stipulation signed with the state and agreed to pay $5,000 with the potential for an additional $5,000 fine if he commits similar violations in the next four years. 

In an investigation, the PDC found lower level staff developed the content of the mailer but that Hall was “ultimately responsible,” said Chad Standifer, an assistant attorney general representing the PDC. The investigation did not find evidence that the Olympia mayor or City Council were aware of the contents of the mailer, Standifer said.

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Hall said he accepted “full responsibility,” though he said he did not see the final language for the mailer before it was sent to voters.

The mailer was sent only to registered voters. It cost about $9,900 to produce, including $7,200 for printing and mailing and the rest in about 70 hours of city staff time, the investigation found.

PDC guidance allows cities to provide a “fair and objective presentation of the facts” about an initiative.

“It’s not the factual information itself that was in the mailer that is objectionable but rather the use of city resources to specifically urge the public to vote a certain way,” Standifer said.

In a hearing Thursday, PDC commissioners questioned the claim that Hall alone should bear responsibility and wondered whether the “hammer” of another potential $5,000 fine in the future would really do much good as a deterrent since Hall is retired.

“There is a general perception among us that there is culpability to be shared both up and down the line in the city of Olympia,” said Commissioner William Downing, though he called it “commendable” that Hall took responsibility.

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PDC commissioners also expressed concern and confusion that it was unclear exactly which city employees read and approved the “vote no” language.

Hall said he did not see the final draft of the mailer including language urging readers to “vote no.” However, another city staffer, Public Works Director Rich Hoey, told the PDC the language was discussed at a meeting where Hall and the Olympia city attorney were present. PDC staff couldn’t “delve deeper” into the meeting involving the city attorney because of attorney-client privilege, Standifer said.

Hall said he could have given the mailer a final review, but “if I choose not to, I am still responsible.”

Hall said city staff initially believed the mailer was legal because it conveyed the effects of I-976 and the opposition to I-976 expressed by a resolution passed by the Olympia City Council.

“That initiative had far reaching impacts on our community and as a city staff we felt we had a duty to let our citizens know that this is a big deal … Our intent was to follow the law,” he said. 

Hall was an experienced city manager and was aware of state law about using city resources to support or oppose ballot measures, the PDC wrote in the stipulation.

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I-976 attempts to lower state car-tab fees to $30, get rid of local car-tab fees and roll back some taxes that fund Sound Transit. The measure passed a statewide vote in November with 53% of voters supporting it. 

Local and state lawmakers warned of dire financial consequences from I-976, but the state Legislature has since largely offset the state’s losses temporarily. The coronavirus pandemic has now plunged state and local budgets into a new kind of crisis.

Seattle, King County and others are suing to try to block I-976 and allow cities to continue collecting local car-tab fees. The case awaits a decision from the state Supreme Court.