Knowing the Waters- August 2021 column by WPPA Counsel Frank Chmelik

updated Sept. 20, 2021

RCW 53.12.260, which sets port commissioner per diem and monthly salary, received an amendment in 2020 that warrants some consideration; we believe this amendment may require a resolution before year end.[1] Before we outline the possible concerns and outcomes about this amendment, let’s review the RCW and its amendments.

RCW 53.12.260. RCW 53.12.260 sets port commissioner per diem and monthly compensation. Section 1 sets the per diem compensation. Section 2 sets a monthly compensation. Section 3 allows the port commission to override the amounts in sections 1 and 2 and set a different number. Finally, since 2007, section 4 provides for an inflationary adjustment every five years as determined by the Office of Financial Management (the “OFM”).

The 2007 Amendment. In 2007, the Legislature amended RCW 53.12.260 in Engrossed Substitute House Bill 1368 (Chapter 469, Laws of 2007) to (i) increase the per diem compensation in section 1 from $75 to $90 per day and (ii) to index all the compensation numbers (both per diem and monthly compensation) to inflation with an adjustment every five years with a base date of July 1, 2008. The statute as amended in 2007 provided:

The dollar thresholds for salaries and per diem compensation established in this section must be adjusted for inflation by the office of financial management every five years, beginning July 1, 2008.

This resulted in an increase in the compensation numbers on July 1, 2008, July 1, 2013, and again on July 1, 2018, to the amounts paid today. [2] The next increase was scheduled for July 1, 2023.

The 2020 Amendment. The 2020 Legislature passed House Bill 2449 (Chapter 83, Laws of 2020) by unanimous vote. The bill was originally entitled An Act Relating to Water-Sewer District Commissioner Compensation. I think it’s fair to say that the intent was only to change the date for the next inflationary adjustment of water-sewer district commissioners from July 1, 2023, to January 1, 2024, to sync up with municipal government calendar year budget (instead of the State budget calendar which runs from July 1st). Along the way the bill was amended to add in twelve special purpose municipal governments, including port districts. The 2020 amendment made a simple change to RCW 53.12.260 as follows (deletions are strikethroughs and additions are underlines).

Unfortunately, the adjustment date was changed but the original $90 per diem and the $200/$700 monthly payments set in the 2007 version of RCW 53.12.260 were not updated. The “plain reading” is now $90 per diem and the $200 or $500 monthly payments adjusted for inflation on January 1, 2024. It seems the Legislature, in effect and most certainly accidentally, rolled back the numbers to 2007 levels wiping away the inflation adjustments implemented in 2008, 2013 and 2018. The best thought about how this happened is that it was a legislative drafting oversight.

The Potential Problem. It seems to me that the “plain meaning” of RCW 53.12.260 now says the per diem compensation is $90 per day, the monthly compensation is $200 or $500, and these numbers will be adjusted on January 1, 2024. As a quick exercise, go to https://app.leg.wa.gov/rcw/default.aspx?cite=53.12.260 and give RCW 53.12.260 your own “plain meaning” reading and see what you think. As amended in 2020, RCW 53.12.260 seems to rollback commissioner compensation (again unintentionally) for commissioner terms (elected or re-elected) that will start on January 1, 2022.[3]

The View of the Office of Financial Management. I reached out to the assistant director- legal and legislative affairs at the Office of Financial Management (the “OFM”). The assistant director was very responsive and noted that the purpose of the 2020 amendment was (as I previously noted) to merely change the date from July 1st to January 1st. Beyond that, OFM could not provide an opinion other than it thinks the correct number will remain at the inflation adjusted amounts.

The View of the State Auditor’s Office. Victoria Lincoln at the WPPA reached out to the State Auditor’s Office (the “SAO”) port district liaison. After her inquiry, the liaison consulted with the SAO legal counsel. The liaison indicated that after looking at the issue the SAO would not make this an audit issue. In essence, the SAO is saying “we all know what the Legislature intended.”

A Potential Fix for a Court or Attorney General. Courts generally apply the “plain meaning” rule for a statute and only resort to the Legislative history to resolve an ambiguity. Sometimes our Supreme Court deviates from the “plain meaning” rule to reach a desired conclusion. One might hope it would do so here but that would require a lawsuit involving a port district which is not good even if the port prevails. Perhaps the Attorney general will weigh in and issue an opinion which, while not legally binding, would go a long way to solving the problem. The SAO, the OFM or a state legislator would need to seek that opinion.

My View. Despite the practical view of the SAO and the OFM, I am concerned that a member of the public may read RCW 53.12.260 and come to your commission meeting to claim that anyone elected after 2020 should only receive the $90 per day and the corresponding monthly pay. True, ports can rest easy knowing that neither the OFM nor the SAO will raise the issue but try explaining this to a member of the public. I have often said that we lawyers are “paid paranoids.” As such we tend to worry about potential lawsuits or citizen claims in public meetings that commissioners elected or appointed after 2020 are being overpaid. [4]

Potential Port Actions. I think the Legislature could correct this ambiguity in the next session or it may otherwise be clarified by the Attorney General, or it may be ignored. With that said, port districts should consider the following actions after your port counsel has reviewed this issue.

Do nothing. It may be fixed or clarified in 2022 or 2023 before the next port district elections in 2023 with new terms of office starting January 1, 2024, and the SAO is not going to take any action. Even if it went to court, the Supreme Court may very well clarify the issue. As a “paid paranoid”, I do not recommend this course of action because the resolution fix discussed below is relatively easy and guards against lawsuits or complaints. However, if your port elects this course of action, I recommend that a factual explanation of this issue be held at the ready to answer the citizen questions.
Pass a Status Quo Resolution Fixing Compensation at Current Levels. Use Subsection 3 of RCW 53.2.260 to adopt a resolution before year end affirming the current compensation numbers (including per diem, total annual per diem and monthly compensation) for all commissioners.[5] This resolution would not change compensation for the sitting commissioners but rather only provide that the commissioner(s) taking office on or after January 1, 2022 (newly elected or re-elected) would receive the same compensation as the other commissioners. Since the compensation for sitting commissioners is not changed there is no Article XI, section 8 issue. The resolution would provide that RCW 53.12.260 increase on January 1, 2024 be implemented.
Model Resolution. WPPA staff and general counsel are working on a model resolution which your port counsel can customize for commission consideration. Expect to see it in the next few weeks. The “model resolution” will address both the per diem compensation and the monthly compensation but could be modified if, for example, your port has already set a different monthly compensation.

Meanwhile, this is one issue that I think each port ought to seek guidance on from their attorney. As always, please contact your port counsel with any questions regarding this topic. And, if you have a particular question for a Knowing the Waters, please email me at fchmelik@chmelik.com.

Access the draft resolution for your commission here

[1] I say “we” because this column is the result of work by several lawyers within our firm, James Thompson and Victoria Lincoln at the WPPA and Lisa Lowe, the general counsel for the Port of Vancouver, USA .

[2] Today, they are $128 per diem and $285 per month for ports with gross operating revenue between $1 million and $25 million or $713 for ports with gross operating revenue of $25 million or more.

[3] Article II, section 25 of the Washington Constitution prohibits raising or lowering an elected official’s salary during a term of office so this issue will not affect current commissioner compensation but only take effect when a commissioner is elected or re-elected.

[4] Because Article XI, section 8 of the Washington constitution prohibits increasing or decreasing compensation during a term of office, the 2020 “rollback” would only apply to a commissioner elected or re-elected in 2021 with the new term starting January 1, 2022.

[5] If there is an election to fill an unexpired term, that elected commissioner takes office when the election is certified. In such a case the resolution would have to be passed before the November 2021 election is certified.