CHINOOK — At a public meeting Sept. 21 — and at the urging of their new port manager as well as many of the 30-plus Chinook residents who attended the meeting — two Port of Chinook commissioners voted to request a state accountability audit of current finances.
Resignation of previous manager Ashley Davis on Sept. 10 and the promotion of her replacement revealed the port owes more money than it currently has in the bank. As new Manager John Demase sorts through records and pays the bills, he has found more questions than answers. He hopes a state audit can identify where, when and why the port’s accounting went wrong.
Meanwhile, the Washington State Auditors Office, which conducts audits of the port every three years, says it has already launched a preliminary investigation to see if a citizen’s allegations of fraud warrant a deeper and more probing investigation into the port’s finances.
SAO spokesperson Thomas Shapley said he couldn’t provide many details on this first step, but said the office received several calls from concerned citizens regarding the Port of Chinook last week.
The SAO has yet to talk to the port about the audit port commissioners approved Demase to request on Sept. 21.
In the meantime, Shapley said, “We are continuing with our preliminary assessment over whether or not a fraud investigation is required.”
As of this week, Demase said he has paid off current bills and worked out a payment plan with Wilcox & Flegel Oil Co., where the port still owes approximately $133,000. Demase also now plans to dredge the marina as planned in October. Last week, this dredge work was put on hold as there appeared to be no money to spare.
Starting next year, Demase plans to raise moorage and boat-launch rates — something he would be doing, he said, “even if I had a million dollars in the bank.” Even with the higher rates, Port of Chinook will remain competitive with the other Pacific County ports, he said. The port will also start charging for parking at its parking lot and will not continue to operate its boat hoist. The hoist is a huge expense for the port, Demase said.
It is clear, Demase said at the Sept. 21 meeting, that since at least 2013 (before Davis came on as manager), the port has been spending more than it has been earning on a small scale, and not hewing close to a detailed budget. The budget Davis drew up for 2015 is short, both in length and on detail. It provides a simple list of revenue items and expenditures, but important projects like dredge work aren’t included — an apparent accidental omission none of the commissioners appear to have caught when they approved the document.
The port’s financial problems could reflect years of mismanagement, say port commissioners and others. The port’s records are generally in disarray and Demase says it has been difficult to track down information dating from both before and during Davis’ time as manager.
“You’d be amazed at how much money is gone due to mismanagement [over the years],” said Demase. He was hired in January to handle maintenance projects at the port and run the dredge, but was asked to take on manager duties after Davis resigned. Since this promotion, he has urged the commissioners to seek an audit.
(Davis, who was promoted from office assistant to manager last year after then-manager Chuck Whiteman was demoted, resigned to spend more time with her young children, she said.)
Initially, the two commissioners present at the Sept. 21 meeting, Ken Greenfield and Corky Wilson, appeared reluctant to pursue a state audit for the current books. (Commissioner Les Clark was not present.)
“Not at this time,” Greenfield said in response to questions about whether or not the port would ask for an audit.
“Why?” multiple people asked at once.
“We’re going to do that but we’re going to do that when it’s time to do that,” he replied.
“Only you gentlemen can do that,” pointed out Kathy Colvin, who is running as a write-in candidate against Clark in this year’s election.
“I wouldn’t mind knowing what’s missing myself,” Greenfield said to Wilson.
Demase asked them if they wanted to make and second a motion to ask for a state audit. Wilson made the motion; Greenfield seconded it. The most recent, regular accountabilty audit cost the port approximately $13,000, according to a budget Davis drew up for 2015. Shapley says the SAO charges $88.60 per hour for such audits.
Prior to the public portion of the meeting, port commissioners held an executive session “to evaluate the qualifications of an applicant for public employment or to review the performance of a public employee.” The two port commissioners and Demase met with historian and state legislator candidate Jim Sayce and Port of Peninsula economic development consultant Jay Personius. Also in the room were Pacific County Commissioner Steve Rogers (the port falls within his district), Colvin, the Port of Chinook’s only other employee at this time, Andy Beckford, and Frances Clark, who was there taking notes for her husband, port commissioner Les Clark. In Washington, executive sessions are closed to the public and the media.
After the public meeting, Greenfield said he was skeptical about the benefits of an audit. An audit, he said, is not going to bring money back to the port. He said he is confident Demase can help move the port forward.
In a phone interview Sept. 18, Dwight Eager of Bell Buoy Crab Company, which is located at one end of the Port of Chinook’s marina, was also unsure about the benefits of an audit, and worried about the port’s ability to pay for it.
“If the commissioners or the state feel they need an audit, I say go forward,” he said. “But I think the immediate need is getting a budget turned in on time… dredging and working on what to do with dredge spoils.”
In order to continue receiving property tax monies through a levy, the port must submit next year’s budget to the county by the end of November.
Bell Buoy itself relies on the port’s continued existence in several ways: the company leases the dock where the hoist is located and ice dock where the ice plant is (Bell Buoy owns the equipment and maintains the buildings); it relies heavily on a locally-based fleet of commercial fishermen, and these fishermen use the port’s marina and rely on the port to dredge the marina and maintain the docks.
“We’ve got probably more skin in the game as far as anyone,” Eager said. “… The Port of Chinook is vital to Bell Buoy, vital to the town, vital to the whole community. When things start going haywire in one spot, there’s spillover in another.”
The Port of Ilwaco formally assists the Port of Chinook to land dredging for the federally managed channel that leads into Chinook’s marina.
“Although our two ports are each independently governed, this cooperative spirit amongst us best serves our communities and overall region,” wrote Port of Ilwaco Manager Guy Glenn, Jr., in an email responding to questions from the Chinook Observer. Ilwaco sold Chinook its old dredge in 2014.
“The recent news of their financial condition came as somewhat of a surprise to many of us and we want to see them move forward and be operationally viable,” Glenn wrote. “I am confident in the community of Chinook and believe they will see this through both in the short and long term.”