CHINOOK — The Port of Chinook owes more money than it has in reserves.
As of Friday, the port owes at least $154,397 and certainly will owe more since other bills will be coming due soon. Meanwhile, there is only $110,937 in the port’s bank account. August, the port’s main money-making month, is over and revenues are expected to be low for the rest of the year.
It’s a situation the new port Manager John Demase inherited after former Manager Ashley Davis resigned last week. He organized a public meeting Sept. 12 with the port commissioners and the Pacific County Treasurer to try to formulate a plan to deal with current and future bills.
Currently, he says, crucial dredge work in the port’s marina will have to be on hold. That work would cost about $15,000 and there is no money to pay for it. The staff at the port has been reduced from five employees to two.
Demase told the commissioners he had called the meeting because he needed to know how they wanted him to proceed. It was his third day as port manager. Originally, he had been hired to handle maintenance projects for the port and run the dredge.
Deputy Treasurer Shelly Flematis — the county treasurer’s office basically is the bank for county agency’s like the port — and members of the public present at the meeting said the port commissioners need conduct a forensic audit to clear up the fuzzy accounting currently on the books.
Flematis added that they need to address the “elephant in the room” before they proceed: It isn’t clear if the disparity is due to fraud or if it is simply the result of the port taking on more expenditures than it has in the past and not sticking to or maintaining a clear budget.
She and Pacific County Treasurer Renee Goodin said there are items that are clearly budgeted for in the budget, but that money was never put aside and ended up going elsewhere.
The issues could pre-date Davis’ time as port manager, port commissioners and Flematis said.
Now the port must delve into what the costs were this year and “how you can sustain this port... because this port has always been pretty sustainable,” she said.
At the meeting Sept. 15, port commissioners said they had been told at the last meeting that the port had at least $160,000 in the bank — something Demase discovered was not at all true.
Davis announced her resignation at a regular meeting Sept. 10. In a phone interview Sept. 14, she said she resigned because, as the mother of three young children, she needs to spend more time with her family.
Davis said she had thought about resigning for a while, but wanted to wait until summer was over and the port was less busy.
The day after Davis resigned, Demase asked that the port’s financial books be checked to ensure that everything was in order as he took on management duties. He asked this as a matter of routine.
“I shouldn’t step into somebody else’s bookkeeping,” he explained in a phone interview Sept.14.
Davis is currently on paid administrative leave — a routine action, Flematis, Goodin and Demase said, when a person in a management position decides to resign. Her employment with the port ends Sept. 30.
Davis was first hired as the port’s secretary. She was asked to take on the duties of port manager in early 2014 after previous manager Chuck Whiteman was demoted. Whiteman had been hired in 2012 to replace former manager Daniel Todd who stepped down from the job because of poor health.
“It would come up at meetings that we’re running short on funds for certain items but there were never any clear reasons why,” said Chinook resident Kathy Hughes in phone interview Sept. 14. “It seemed like we weren’t getting answers.”
She and her friend Kathy Colvin have been worried about the port for some time now, Hughes said. At the meetings they attended she said she hasn’t received clear answers to questions regarding the port’s revenue.
Colvin, who was not available to comment, plans to run as a write-in candidate against Port Commissioner Les Clark, who is up for re-election.
“We just don’t want to see that port go away,” Hughes said. “Unfortunately, if you don’t keep it up, it will go away.”
Under Todd’s leadership, the Port of Chinook operated on an annual budget of approximately $1.1 million in 2010, according to an audit completed by the Washington State Auditor’s Office in 2012. (The port is audited every three years).
According to the SAO, in 2012, the auditors concluded that, “The past five audits as well as the current audit are free of any accountability findings.”
In other words: no red flags.
According to the most recent audit this year that looked at the years 2011-13, the port operated on a much smaller budget: $520,000 in 2011, $600,000 in 2012 and $640,000 in 2013. And in this audit, there were red flags related to cash receipting, issues the SAO identified in a management letter sent to the port, dated Jan. 21, 2015. These issues predated Davis’s time at the port, but she said they were issues she was in charge of fixing when she became manager. They had to do with how cash receipts were handled at the fuel dock.
The Chinook Observer has requested additional documents from the SAO relating to the Port of Chinook.