PORT TOWNSEND — Each member of the Fort Worden Public Development Authority board will resign now that the board has deemed its job in the restructuring to be completed.
Last Wednesday’s board meeting ended with the adoption of a resolution announcing material completion of the board’s “transition objectives” associated with the organization’s restructuring, according to a press release.
Each board member planned to submit a letter of resignation to the Port Townsend City Council. The city plans to seat a new board by the PDA’s July 28 meeting.
Shortly after the June 30 board meeting, board co-chair Norm Tonina stated:
“As a result of the PDA’s restructuring strategy required due to the devastating impact of COVID on the PDA’s financials and operations along with financial irregularities that had to be addressed, Executive Director David Timmons, his staff, and the board have worked to keep the PDA solvent and functioning, serving our customers, partners, and the Port Townsend community.”
Financial issues for the PDA were brought to light in February 2020 before the COVID-19 shutdowns began. The state auditor’s office released a report that stated the PDA had finance-management issues to correct based on reviews in 2016 and 2017.
Issues included late submissions of the annual financial reports, failure to disclose debt and that staff members tasked with preparing the financial statements lacked the technical experience needed to perform their duties.
While the PDA began to address the internal financial issues, the pandemic hit, and Fort Worden was forced to close due to the subsequent shutdown. The agency received no funding through the Coronavirus Aid, Relief and Economic Security (CARES) Act, Timmons said previously.
The PDA lost what it computed to be millions in potential revenue.
As part of the reorganization strategy, the PDA is finalizing an agreement with Fort Worden Hospitality, a newly formed nonprofit, to run the campus lodging, venues, and food and beverage operations.
In addition, the outgoing board has worked with the Fort Worden Foundation to secure the Makers Square certificate of occupancy, close out the project’s historic tax credits, and recommend final lease terms to the foundation, as well as approved bond restructuring while securing additional financing to aid the recovery process.
“We believe this restructuring strategy now implemented will result in a more resilient and collaborative operation moving forward, one that partners the PDA with the nonprofit Fort Worden Hospitality and Fort Worden Foundation to deliver the services and customer experience the Fort has become known for these last eight years,” Tonina said.
“As we worked on this restructuring during the pandemic, campus partner organizations were creative and resilient in their programming and helped keep the lifelong learning center mission alive and well.”
The PDA’s operations shut down due to the pandemic for four months in 2020. After reopening, the reorganization effort began in October.
The board’s transition objectives were announced on Jan. 27 in a board meeting and reviewed Feb. 1 by the city council. Board members had committed to remain in their positions until about June 1 to complete the objectives.
The future PDA is estimated to employ about five employees. The focus will be on managing the assets of the 95-acre campus and its historic buildings and furthering the lifelong learning center mission that is embodied by the partner organizations on campus.
Through the reorganization strategy, the non-charitable nonprofit Fort Worden Hospitality was formed to manage hospitality operations.
The change allows a board composed of hospitality experts to focus on hospitality, limits constraints on customary hospitality practices stemming from being operated by a government entity and separates routine maintenance needs from capital needs.
Todd Hutton, PDA board co-chair, said, “These have been extremely challenging times, but the PDA’s staff, partnering with this board, have persevered, accomplishing what many had thought was impossible in a very transparent manner amid much criticism and disinformation.
“The board’s gratitude for the efforts invested by Executive Director Timmons and the PDA staff to work through these challenges and to our fellow board members for their tireless commitment to seeing the organization through these transition objectives have been invaluable.
“Norm and I believe that, five years down the road, people will look at what this team has been through and consider it a bump in the road on the way to an even more vibrant Fort Worden, more lifelong learning programs, a Makers Square that is fully occupied, and a campus benefitting from even greater investment.”
While existing board members could have applied to sit on the next PDA board, none chose to do so.
In addition to the co-chairs, they are Jeffery M. Jackson, treasurer; Jane Kilburn, secretary; Cindy Finnie, past chair; and board members Gee Heckscher, Herb Cook, Lela Hilton and Terry Umbreit.
“The PDA has been active in self-reporting issues and irregularities uncovered during the COVID crisis,” Jackson said.
“While the PDA had policies and controls in place, they were not being routinely followed. Through the herculean efforts of our current finance team, all policies and controls are now being adhered to, the PDA’s reporting has been converted to an accounting standard recommended by the state Auditor’s Office, and the financial reporting the PDA board has been reviewing these last several months is produced directly from the accounting system, ensuring greater accuracy.
“The next PDA board will be able to start their work with the confidence that all known issues as of today have been addressed with solutions that are operational.”
