It was a teary trip down Memory Lane as the board of directors for the Fort Worden Public Development Authority resigned en-masse at their meeting Wednesday, June 30.
The mass exodus was expected.
Board members had said months earlier their departure was a necessary step in the transition of the PDA as the agency reinvents itself after hovering on the edge of financial collapse since the discovery of “financial improprieties” last year.
In an emotional online board meeting last week on Zoom, outgoing directors pointed to the great successes of the PDA before its financial meltdown and the heated public criticism that followed, and they cautioned the organization’s next set of leaders to learn about what they were inheriting.
Some stepping down criticized the city of Port Townsend, the PDA’s charter holder and its creator of more than a decade ago, for a lack of support from COVID-caused impacts.
They also blamed city officials, as well, for the code changes the Port Townsend council approved that provided greater control and oversight of the PDA.
The resignations came near the end of the meeting, after directors approved issuing three bonds — for
$1.8 million, $2.3 million, and $2.1 million — to restructure earlier bonds issued by the PDA and to restore money that had been obtained for capital projects such as the “glamping” camping set-up at the fort but was diverted instead to pay for the day-to-day operations of the development authority last year. The bonds, which will be sold to Kitsap Bank, carry an interest rate of 5.5 percent. Board directors agreed, as well, to set up two lines of credit for the PDA with Kitsap Bank, totaling $650,000.
Directors also gave David Timmons, the PDA’s executive director, the authority to sign a revised agreement with Fort Worden Hospitality, a nonprofit set up by the PDA, for it to take over lodging, food service and venues on the 95-acre campus.
The restructured version of the PDA will focus on managing the assets of the historic fort in a way that abides by its mission to be a lifelong learning center.
The operations of the Fort Worden PDA are currently being scrutinized by the Washington State Auditor’s Office, and an accountability audit will be released later this summer that is expected to detail the scope of the development authority’s financial irregularities as well as provide new details on alleged fraud that occurred within the agency last year.
At last week’s meeting, directors recalled the past success of the PDA, one that had grown by its fifth year of operations to an operating budget of $7.3 million and staff of approximately
175 employees in 2020.
The scaled-down version of the PDA approved by directors is expected to have five employees.
Some of those stepping down struggled to hold back tears as they read their resignation letters.
Director Jane Kilburn recalled joining the board in 2015 and the creation of “a thriving hospitality business, added food services, and upgraded guest and partner services.”
“At the end of 2019 and as 2020 began, I was prepared for our board to face our mounting financial issues. I was prepared to advocate for significant budget cuts and staffing decisions as necessary,” she added.
“Of course, then came COVID and we were in the crisis of our lives. I participated along with fellow board members in contributing financially to ease the burden on staff, and I was proud of the quick response to put that relief in place. However, I had no idea that behind the scenes there was utter chaos as staff scrambled to keep the fort from sinking.
“The rest is history, as we all have relived and been vilified for many times over,” Kilburn said.
Kilburn then criticized the city for steps it took in changing its municipal code that covers the PDA, a move city officials had said was needed to create greater oversight and to prevent another financial crisis at the PDA in the future.
“It is hugely disappointing to me that rather than step up as a true partner in our small community and try to help solve this complex situation together with us, the city took on an adversarial, even punitive role,” Kilburn said. “I wish the new board the best of luck in dealing with the new code provisions.”
Norm Tonina, co-chair of the PDA board, said he was proud of what had been accomplished at the fort.
“Working these last
10 years at Fort Worden has been challenging and, at times, frustrating but always incredibly rewarding,” Tonina said in his resignation letter.
“While the PDA has covered a lot of ground these last 16 months — from the impacts of COVID to financial irregularities to reorganization and lot in between — and endured unnecessary rumors, speculation and innuendo during this challenging time, I am proud of the role this board has played in not only overseeing PDA leadership and staff but also very often partnering with PDA leadership to share our various areas of expertise these last 10 years,” Tonina said.
Tonina noted the successes of the PDA, with revenues that grew from $1.4 million in 2014 to $7.0 million in 2019, as well as the $30 million investment in capital projects and upgrades.
The PDA also survived the COVID-19 pandemic as well as its financial troubles, he added.
“The PDA was forced to make it on our own with no pandemic federal relief or local support. David Timmons, his staff, and this board were able to execute against an all-or-nothing reorganization plan that will keep the fort solvent and under local control thanks to local financial institutions willing to work with us,” Tonina said. “Our board moves on, knowing that the sum of these achievements leave the property in far better shape than we inherited in 2014, even after the crushing impact of the pandemic.”
In his resignation letter, Tonina also offered advice to the new board of directors that will eventually be seated by the city of Port Townsend.
“Your board will be held to a different standard than the stakeholders you interact with — I trust you will continue the tradition that this board has leveraged and be transparent — share openly and deliberate under the public eye. Listen, but balance the needs of all stakeholders with the PDA’s financial sustainability imperative. Do not just listen to those who make the most noise and work the system,” Tonina said.
“Take the high road — lots of stories will be told, rumors will be spread, and fairy tales will be spun — but always deal in facts and truth,” he added.
As a final action item, directors approved a resolution that noted its transition objectives had been achieved, with two exceptions: the finalization of the current audit by the state, and the creation of a strategy that sets out the management of the fort’s assets.
On the management strategy, which will be the primary focus of the restructured PDA, the resolution noted: “Due to the time-sensitive nature of the other transition objectives, this objective has been delayed until the seating of the next PDA Board of Directors.”
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