Fort Worden PDA To Go Broke,
Lose Executive Director in Next 90 Days
Dave Timmons has had enough. The former Port Townsend City Manager (at left above, speaking to the city council at their June 12 meeting) came out of retirement in 2020 in response to requests he step in to save a collapsing Fort Worden Public Development Authority (PDA). He gave his contractually required 90-day notice to the PDA’s Board at its June 27 meeting. Ninety days out is also just about the time the PDA’s financial team says it will run out of money.
Timmons cannot be accused of fleeing from a sinking ship. He jumped onto one in 2020, only to learn that the PDA’s hull was riddled with rot and worm holes. As I wrote after watching his heroic efforts in that year, he worked miracles. He managed to steer away from the shoals an organization hobbled by nearly a decade of incompetent and less-than-honest management. He let it be known that the PDA was “a house of cards” ready to collapse from the weight of debt burdens impossible to bear and the misuse—as well as outright theft—of funds by former management and a senior employee now facing criminal prosecution.
He crafted a spin-off of the hospitality arm of Fort Worden’s operations, the only way the operations could survive. His leadership attracted incredibly generous donations. He secured additional credit from lenders already facing millions in losses. He persuaded vendors to be patient about being paid.
Before he stepped onboard to lend an assist and then to helm the PDA that organization had never—never—received a passing audit from the State Auditor. Timmons inherited incomprehensible financial records. He oversaw the gargantuan task of converting from accrual to cash-basis reporting. He did all this with a skeleton staff who joined him in working miracles.
But it may have been a hopeless cause all along. The costs of maintaining ancient, obsolete buildings, heating and electrical systems and plumbing has always been a millstone. Revenues have never been enough to keep up. And something major always breaks. The costs of repairs keep rising. There’s never enough money.
As PDA Board Chairman David King (in blue shirt in top photo) told Port Townsend’s city council on June 12, 2023, “We are not currently sustainable.” The maintenance costs are crippling. and the PDA has “no revenue source for debt” incurred by the prior PDA Board and Timmons’ predecessor.
This is a critical time for the PDA, but Timmons has decided he must leave the organization he has worked so hard to keep alive. It is clear from his letter of resignation and other comments that the impetus for his departure is a deteriorating relationship with Port Townsend City Manager John Mauro and City Council.
“We have reached the threshold that cooperation doesn’t exist,” he told council and Mauro at council’s June 12 meeting.
Inheriting a Nightmare
I went back and read my reports from 2020 about Timmons’ rescue mission. I had forgotten the details about the daunting challenges he faced.
“Fort Worden Out of Money…” led the headline for an article I wrote in December 2020. The opening paragraph explained:
“We really don’t have a future if we try to remain status quo,” David Timmons, Acting Executive Director of the Fort Worden Public Development Authority told its Board of Directors at their December 9, 2020, special meeting.
“The PDA will run out of money in several weeks. It needs over $1.5 million to cover operating and capital costs over the next six to seven months, and then it will face over $1 million a year in maintenance costs while the hospitality industry, its major source of funds, recovers from COVID lockdowns.”
Timmons found a way to keep PDA breathing another 2.5 years.
“Fort Worden Finances Plagued With Problems From Beginning” was the headline of a November 2020 article.
“Its financial reports have never been reliable, according to all the audits conducted of the Fort Worden Public Development Authority by the State Auditor. Every audit since the FWPDA opened its doors has found inaccuracies, omissions and failures to comply with required accounting practices. Recent discoveries, which will be addressed in upcoming audits, have uncovered massive malfeasance and irresponsibility that jeopardize the organization’s continued existence.”
Two other articles from 2020 reminded me of how bad was the mess that Timmons took on: “Fort Worden’s Promised Financial Oversight Never Happened,” and “Criminal Investigators Called Into Fort Worden PDA Mess.”
Then there was the laughable $2 million “glamping” fiasco Timmons inherited: “Fort Worden Glamping A Soggy Mess.”
$125,000 per “luxo tent”! None have ever been rented, not a dime has come back to the PDA.
There was probably no one else in our community up to the challenge.
What’s changed now to prompt Dave Timmons suddenly to submit his resignation?
Mauro versus Timmons
Timmons was Port Townsend’s first city manager. (Michael Hildt was the first “City Administrator.” Timmons was the first to hold the title “City Manager.”) According to a 2019 Peninsula Daily News (PDN) article reporting Timmons’ retirement as PT’s city manager, he graduated from Michigan State University with a degree in environmental studies, then went to work with the Michigan Department of Natural Resources as a zoning manager. In 1978 he was chosen as a city department manager for a town in Michigan’s Upper Peninsula then moved on to be the first township manager. He later declined an offer to be Marquette, Michigan’s first city manager and moved to Cochester, Vermont where he served as city manager for 12 years. In 1997 he consulted with FEMA to help the state with four disaster events and was nominated by then Vermont governor Howard Dean to be the state’s secretary of labor. In 1999 he was hired as Port Townsend’s city manager and served continuously for the next 20 years.
At the same time Timmons was asked to come out of retirement to save Fort Worden, John Mauro was stepping into Timmons’ shoes as PT’s second city manager.
Based on information presumably provided by Mauro, the PDN reported that he was coming to Port Townsend from a high-level, high-responsibility job for the City of Auckland, New Zealand. “Mauro currently reports to the Auckland Council CEO,” the PDN related. “He is directly responsible for 20 employees and has a budget of $211 million.”
That wasn’t true, as I reported in an October 2020 article (“Who Is John Mauro?“), I had contacted the city of Auckland seeking confirmation of the PDN story. The response contradicted these claims about Mauro’s qualifications. Auckland’s mayor had referred my inquiry to the Auckland Council CEO in whose line of command Mauro’s position would have been. Through a spokesperson he told me that Mauro did not report directly to the Auckland Council CEO. He was a mid-level bureaucrat in the planning department under a General Manager. He was not “directly responsible for 20 employees and a budget of $211 million.” Half that number of employees reported to him and the budget for which he was “directly responsible” was $1 million. That was in New Zealand dollars, which is about the equivalent of just over $600,000 US.
Mauro’s job in Auckland was “sustainability officer.” He and his small team, as a New Zealand publication reported, “provide thought leadership, drive strategic direction and champion change.” Change in terms of addressing climate change.
Mauro didn’t build anything, maintain or build roads and sewers or oversee police. He provided “thought leadership.”
Fast forward to 2023. The city now managed by Mauro, as we reported May 25, 2023, is heading over a financial cliff. Mauro overspent his current budget by millions due to hiring consultants for projects the city admits it cannot afford (e.g., a new $50 million aquatic center, a remake of the golf course, and the Evans Vista development). The city is eating into reserves and cannot maintain its failing streets. I recently learned from a source in the Sheriff’s Office that county law enforcement is still covering patrols for a city department lacking adequate staffing to do the job.
Mauro publicly defends the city’s “solid financial position” to continue providing basic services. But with Mauro’s unique hold on the English language, in the same breath he qualifies that the financially-solid city’s “ability to continue to do so is hindered by increasing costs in excess of revenues and a steady erosion of services and level of service.” Translated from Maurospeak, the city is heading “over a cliff,” the exact, unvarnished words used by the city’s Financial Sustainability Taskforce.
Mauro had followed his wife to Auckland where she had secured a teaching job. Before that he had been a bicycle activist in Seattle.
Power Play
Mauro wants more control and power over Timmons and the PDA.
The PDA has been slow on churning out financial reports to meet the city’s deadlines. This is being used as a reason to subject the PDA to direct city manager control over its financial affairs, strategic direction and other matters. The hook being used is the 2022 financial report. Under city code, it was due three months after the end of the fiscal year, in March. It was delivered in June. Other complaints have been raised, but in the “Draft Corrective Action Plan” written by Mauro and his staff, it is the annual report being 2-3 months behind that is the main justification for increasing city control over the PDA.
The financial reports provided to the PDA Board are matters of public record and easily available to Mauro and his staff, as well as members of the public. Financial reports were provided to the State Auditor. No request for information has been stonewalled.
Timmons operates with a skeleton staff. The woman described as “critical” to their accounting and reporting had been battling cancer and recently passed away, leaving a huge hole in the organization’s capabilities. As Timmons explained at his June 12 City Council dressing-down, the rest of his staff consists of a clerk at 32 hours/week, an administrative assistant at 32 hours/week, an accountant at 24 hours/week, and a contract CPA providing 10 hours of services weekly.
This is the entirety of Timmons’ staff for all PDA’s administrative, executive and accounting tasks. There is no money to hire anyone else. The services of the communications and public relations contractors, PDA Chair David King told Council, were ended because there is no money to pay them.
Mauro has also faced staffing shortages. He has filled gaps by hiring expensive outside consultants. City Council approved a $4.7 million supplemental budget to cover his overruns. Tax increases are looming ahead to get more money to run city operations. The PDA has no taxing authority. It cannot just demand that citizens give it more money, and it has no reserves to cover “supplemental” budget increases.
The PDA is currently required to provide quarterly and annual financial reports. Mauro is demanding that the PDA now provide monthly financial reports. At the June 12 Council meeting, Timmons explained that they do not have the staff to do that, unless those few staff people are taken off the other work they must do. Mauro was dismissive of the limited resources Timmons has, and somewhat mocked his vulnerability to losing any staff time.
(It must be noted that while Timmons was struggling with lingering problems from ten years of mismanagement and facility crises plus the loss of the full contribution of a key team member who was fighting cancer, Mauro took himself off on a five-week vacation after enjoying recent significant increases to his compensation package.)
Mauro’s “Draft Corrective Action Plan” would require the PDA to provide financial reports a week in advance of city oversight meetings, blaming past failures to do so on “struggles preparing the materials due to a lack of process and efficient financial reporting structure/form [that has been] hindering the FW PDA to meet required timelines.” Timmons and King tried to explain that the city’s meeting schedule does not align with the PDA’s own financial reporting schedules and creates huge problems for an understaffed accounting team. Their explanation fell on closed ears.
John Mauro (top left) responds to David King and Dave Timmons (at the podium) on June 12.
The rest of Mauro’s “Draft Corrective Action Plan” turns to inserting city staff in the business operations of the PDA. It would have the city get involved in utility cost allocation and negotiations with the “partners” (the tenants) at Fort Worden. The city would also direct the PDA in resolving billing disputes with the hospitality spinoff.
The PDA was recently forced to increase its line of credit to cover shortfalls caused by delays in the receipt of expected grants. Henceforth, under Mauro’s plan, the city will decide whether the PDA can increase its line of credit.
Mauro is demanding that the city have authority to approve or disapprove capital projects and capital planning.
Mauro wants the city to “monitor and coordinate on future PDA grant applications.” He wants to participate as a partner in strategic planning in order to “right-size the structure to meet future needs.”
Mauro wants to increase the PDA board to 9 members, with the mayor appointing at least three additional members.
All this to “correct” an annual report being delivered a few months late, even though nothing in the provided report was called out as being false, incomplete or incorrect.
It appears that the late financial report is being used as pretext, or at least an opportunity, to increase the city manager’s control over the PDA and its executive director. As Timmons pointed out to the Council on June 12, these are not “corrective measures. This is an enforcement action. We have reached the threshold that cooperation doesn’t exist.”
Timmons Resignation Letter Says More
Timmons submitted a lengthy letter of resignation. He reflected on his 45 years of public service and the challenges at the PDA that he, his staff and Board confronted together. He thanked the local institutions that stood by PDA and helped keep the ship from sinking. In that long letter, he provides more insight into his motivation for leaving now. He did not have much reason to recognize the city’s contribution to the fight.
Compared to the Herculean efforts of others, and the votes of confidence from lenders and vendors, the support of the City of Port Townsend pales in comparison. Banks extended hundreds of thousands of dollars in new credit. Private individuals donated half a million dollars. Lawyers donated valuable time. Architects, plumbers, construction companies, electricians and fuel suppliers did not act on overdue billings and “never wavered in supporting us with their patience….”
Jefferson County provided two grants, one for $378,000 to help secure debt restructuring and another of $150,000 towards restoring a critical building.
The Washington Department of Commerce helped the PDA secure and close out several grants, the last in the amount of $697,000.
The city, for its contribution, awarded “a competitive grant of $5,000 … and were cooperative with late utility billings.” But unlike the other players in this drama, the city acted to make life more difficult for the Fort Worden PDA, when “they passed code revisions more suitable to provide punishment for the past situation, not necessarily supportive of our current needs.”
Towards the end of his letter, Timmons said that he had learned in his long career not to take the path others would have you take when you know that is not the right path. “I believe we have reached the point where our paths are no longer in agreement.” For the “past several weeks,” indicating that this was a recent decision, he says he had been having discussions with some of the Board about “my desire to begin the process to transition to new leadership in the role of Executive Director.” He remains “open to discussions about serving in a limited role as an advisor to pass on institutional knowledge. But other events keep derailing this critical conversation while we continue putting out the most recent fire.” (Author’s emphasis.)
The PDA Board had nothing but effusive praise for Timmons, whose last day will be September 28, right about the time the PDA runs out of money. The hearing on Mauro’s plans to increase his control over the PDA is scheduled for August 21. A public hearing must be held before the plan can be voted on by Council.
For the video of the June 27 PDA Board of Directors meeting in which Timmons submitted his resignation, click here. The agenda packet for that meeting, containing Mauro’s Draft Corrective Action Plan and Timmons’ resignation letter may be viewed at this link. The resignation letter is attached as the very last document in the agenda packet.
