Treasurer Rejects Grant Warrants; Seeks Intervention by the State Attorney General
By Selinda Barkhuis, WSBA 24139, Clallam County Treasurer
Last month, I wrote about the Clallam County Commissioners’ attempt to give away $3 million from the County Opportunity Fund in unanticipated, non-budgeted, and no-strings-attached grants ($1 million to the Port of Port Angeles, $285,952 to the City of Port Angeles, and $1.7 million in “Undesignated Projects”), without holding prior public hearings to change the budget and without any written contracts to spell out what the County taxpayers are receiving back for these gifts of their public funds. The $3 million being used to pay for these grants had, up to then, been committed to repaying the $10 million debt to the State that will be incurred in the construction of the Carlsborg Sewer.
The bucks stops with the County Treasurer.
On June 18, 2015, I rejected payment of the $1 million warrant presented by the Port, and on June 19, 2015, I likewise rejected payment of the $285,952 warrant presented by the City. I rejected disbursement of these funds because once these funds leave the County Treasury, they will likely be lost to the County forever, regardless of whatever findings the State Auditor may produce at some later date.
And what if the State Auditor later finds that these funds were disbursed contrary to law? Then who will be held accountable for the loss of those funds?
RCW 36.29.020 specifically states that “the county treasurer shall keep all moneys belonging to the state, or to any county, in his or her own possession until disbursed according to law”. Considering the experience of predecessor Clallam County Treasurer Bob Clark, who spent “four years from hell” defending against a suit for personal liability for unknowingly making a bum investment, I believe I am well within my right to request a CYA written opinion from either the Attorney General or the Superior Court before I disburse $3 million under my fiduciary duty–without adequate written authorization.
Surely, if the $800,000 loss from the Clallam County Treasury as administered by Catherine Betts, was worth the extensive and expensive attention that it did by the State Auditor, the State Attorney General, and the County Superior Court (as well as the County Public Defender, a jury of local taxpayers, and the Court of Appeals), then so surely is a request by the duly elected County Treasurer for legal review to occur before this $3 million is lost forever from the County Treasury.
The March 19, 2013 Interlocal Agreement that obligates the County General Fund to repay the $10 million debt to the State Public Works Board bears the signature of two of the three current County Commissioners (Chapman and McEntire). Yet, during the last County Finance Committee meeting, Commissioner McEntire explained that the Commissioners are now counting on the State to forgive that debt.
But what if the State doesn’t forgive that debt? As a General Fund obligated debt, it will be the County taxpayers who will be responsible for paying back this $10 million, at the expense of the County’s ability to fund its mandatory and essential services.
The County Commissioners’ recent strategy of spending down the County’s reserves is simply not fiscally defensible, not while all of the other County Elected Officials and Department Heads opposing this strategy.
In turn, the County Administrator has admitted, in an email exchange between him and the Auditor’s Chief Accountant, that the Commissioners’ decision to forgive the Opportunity Fund loan to the Quillayute Valley Parks and Recreation District (Forks Pool) is “a political decision, not a fiscal decision.”
Also at risk of loss: The Integrity of County Government.
While the Commissioners have the benefit of a publicly funded and appointed County Administrator to provide them with “may or may not be correct” legal interpretations that “authorize” and “wish” away their compliance with state law and county policies, the County Treasurer has no access to any such resources to ensure that public funds are being “disbursed according to law” consistent with her statutory duty under RCW 36.29.020, her Charter oath of office, and, as a lawyer, her duty as an “officer of the court”?
Is the Treasurer’s decision to execute the functions of her office “according to law? now a “political decision” that is not supportable with public funds?
Yet the County Commissioners get to keep on spending public funds on an appointed County Administrator who misinterprets the law, bullies dissenting elected officials in closed-door tit-for-tat sessions, and facilitates political decisions? What public purpose does this serve exactly?
Because the County Treasurer lacks the resources to reach out to Superior Court, the intervention of the Attorney General is critical, not only to protect the County’s public funds, but also to protect the integrity of the constitutional check-and balance processes under which county governments are supposed to operate.
Because, in the absence of such intervention, what will stop other Washington State county commissioners from making $million gifts of public funds? What keeps them from disposing of public hearings and written contracts? What keeps them from speed-changing County Financial Policies that get in their way? What prevents them from eviscerating the role of the County Finance Committee? What’s to prevent them from spending public funds on a stooge of their own–to make all that possible?
While Review is Pending.
As I explained to the County Prosecutor via email, as a lawyer, with a fiduciary duty over $100 million in public funds, I insist on communicating in writing and on the record. As such, I will continue my long-standing policy of not participating in any closed-door meetings.
Yet it does beg the question: What exactly is it that the County Commissioners, County Administrator, and County Prosecutor want to discuss with me so desperately in private that cannot be discussed in public?