City to make amends for Dally thefts

POULSBO — While fired Municipal Court Clerk Deborah Dally makes restitution for her embezzlement in prison, the City of Poulsbo will finally make amends of its own.

This time, in the form of a check.

On Aug. 27, Finance Director Donna Bjorkman received news from Zurich North America surety and financial claims that Poulsbo will receive a more than $306,000 settlement for the Dally’s thefts. Zurich is the company covering dishonest employee losses for cities in the Association of Washington Cities insurance pool, Bjorkman explained.

Dally, 44, a Silverdale resident, was sentenced April 18 to 57 months in prison following a March 12 guilty plea to 10 counts of first-degree theft. The former Poulsbo Municipal Court clerk was fired on Dec. 27 and arrested Feb. 4 after a State Auditor’s Office report confirmed that she had been stealing money paid to the Poulsbo Municipal Court from 1996 to 2002.

The City of Poulsbo should receive its settlement money by the end of September. About $17,000 of the amount will reimburse investigation costs and the other $290,000 will repay the actual stolen money.

Dally’s thefts centered on fines paid at the Poulsbo Municipal Court. She would take money paid and then indicate in court records that the person chose community service instead of paying the fine. Bjorkman said some of each ticket would have gone into city coffers and portions would have gone to different state and county accounts as well.

Court workers have been spending long hours since the misdeeds were discovered to rectify the Poulsbo court’s filing systems. Bjorkman said each false file now shows a fine is owed and once the settlement is received, a payment will be credited to each account.

“We’ve already gone back and set the system how things should be so we’ll be going back in and making those deposits and then the program will dole the money out to where it needs to go,” Bjorkman explained. “A couple more months and hopefully we’ll be back to normal. Hopefully, by the end of the year this will be all finished.”

One item Zurich declined to pay was Poulsbo’s claim for staff time that has been used to correct court documents. Bjorkman told the Finance Administration Committee this week that she estimates the city will spend about $14,000 by the end of the year in employee salary and benefits specifically related to the case.

“I plan to appeal the decision through the AWC. I think it’s a loss (to the city),” Bjorkman commented on the charge.

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