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Poulsbo port commissioners told: Expenses must be authorized in advance
POULSBO — Commissioners of the Poulsbo Port District have been educated about the district’s policy regarding expenses: They must be authorized in advance.
The issue arose after Commissioner Stephen Swann asked the City of Poulsbo for reimbursement for expenses he incurred helping to promote the inaugural visit of American Cruise Lines in May.
The money he was owed was included in a check the city sent to the port. When Swann asked the port for his portion of the reimbursement, it raised Port Accountant Carol Tripp’s concerns that the reimbursement violates state law requiring expenses be authorized in advance. RCW 53.36.140 states, “Port commissioners shall not personally make such expenditures, or seek reimbursement therefor, except where specific authorization of such expenditures has been approved by the port commission. All payments and reimbursements shall be identified and supported on vouchers approved by the port auditor.”
Tripp was also concerned that one of Swann’s expenses — a gift certificate to Sogno di Vino in appreciation for a volunteer’s help — constituted a gift of public funds, which is illegal.
According to port documents, Swann said any “reckless or intentional violation” of the law was “unfounded.” His claim for reimbursement was to the city, to be reimbursed by Poulsbo Marketing Coalition funds, not port funds.
“I was not aware the City would confuse the reimbursement request by sending a check to the Port,” Swann wrote in a letter to the other commissioners.
According to port documents, Swann paid for two bands to perform at Muriel Iverson Williams Waterfront Park for the cruise ship’s first visit, and the gift certificate.
Swann submitted a $325 reimbursement request to the City of Poulsbo, which handles funds for the Historic Downtown Poulsbo Association and its marketing coalition. The city sent a check to the port for $466.80 for fuel for the city’s police boat, and Swann’s $325.
To rectify the reimbursement snafu, Poulsbo Finance Director Deb Booher said the port issued a check to the city in the amount owed to Swann, and the city then issued a check to Swann on behalf of HDPA. Booher said no port dollars were spent, but Swann should have billed the marketing coalition instead of going through the port.
Tripp said the matter of this type of expense — called “promotional hosting” — will be one of the focus areas for the new state auditor for this region. Carol Ehlinger is the new state auditor for Kitsap’s public facilities districts, public development authorities, large cities and counties, and ports and transit districts.
RCW 53.36.140 also states, “Port commissions shall adopt, in writing, rules and regulations governing promotional hosting expenditures by port employees or agents. Such rules shall identify officials and agents authorized to make such expenditures and the approved objectives of such spending.” The Poulsbo Port District updated its policy earlier this year.
The Port of Kingston does not have a policy regarding promotional hosting expenses. Any expenditures by port commissioners, for travel expenses or for conferences, are written into the annual budget, according to business manager Scott Coulter. Kingston Port Commissioner Walt Elliott said promotional hosting “doesn’t fit our business model.”
The Port of Bremerton’s promotional hosting policy states “industrial development, trade promotion and promotional hosting” are annually submitted as a part of the port’s budget.
Swann said he has other ideas to promote the port, such as making the multi-purpose room on E dock more available to the community.
“My view is more expansive” of promotional capabilities, Swann said. “I see [the port] as a facility to be used by nonprofits … extending to civic clubs and associations. I’m trying to make us more participants in the community … as a whole.”
The port is audited every two years for accountability and finances. Poulsbo Port will be audited later this year. Tripp said the Port of Poulsbo has had clean audits since 1998.