NAHCOTTA — Fallout continues to grow from the Port of Peninsula’s severe audit by the Washington State Auditor’s Office last year. The public entity was informed on June 2 it risks losing its insurance coverage due to the audit’s findings and ongoing financial mismanagement.

The port faces a new issue, as noted in its audit findings, which revealed a financial mess, including unaccounted-for funds, late payment of employee benefits, expired lease agreements and late financial reporting, along with numerous violations of the state’s Open Public Meetings Act.

Fuel bill

Wilcox and Flegal, a former fuel provider to the Port of Peninsula, is in the early stage of taking legal action against the port for an alleged $20,000-plus in outstanding bills — now over $25,000 counting late charges. Port Manager Jay Personius has remained adamant the bill is wrong, including having some sort of documentation to discredit the claim.

“Now comes the impact of ignoring the bill, which is now $24,584 if paid before the end of [Nov. 2024],” Commissioner Chuck Mikkola stated last November. “The collection agency has said they attempted to contact Jay, leaving messages but [there was] no return call. They were able to contact the port’s [financial officer], who said they would be sending documentation to resolve this, but nothing was sent by the port.”

As of June 12, the bill remains unpaid and continues to accumulate interest and fees.

Insurance

The newest development came via a June 2 letter to the port from Enduris Washington, which “focuses on providing financial stability and management services to its members” and is a “risk sharing pool for special purpose districts in Washington.”

According to the letter, Enduris Executive Director Sheryl Brandt held a phone call with Personius and subsequently issued a letter via email to him and the port, expressing the pool’s unease.

“The findings in the recent auditor’s report and the Port’s response concern Enduris,” the letter states. “The Port disagreed with the audit findings and did not offer proactive corrections. In our conversation, you mentioned the Port hired a new financial person but did not offer changes or corrections in financial operations, even when specifically asked.”

According to the letter, the port has been “habitually delinquent” in making its financial contributions to the risk pool.

“Enduris pays all the reinsurance costs for the entire risk pool up from for the upcoming policy year starting September 1,” the letter stated. “Enduris allowed the Port of Peninsula to enter a payment plan for their contribution. This payment plan is solely for the benefit of the Port, but unfortunately, even with this additional flexibility, the Port has struggled to make consistent payments on time.”

Enduris has a five-criteria method used to determine if a member of the risk pool can be terminated, with only one criterion needed to be met for termination. The letter stated that the Port is in trouble on two criteria — insinuating its membership could be at risk of being terminated.

“The criteria are undue exposure to the Pool, a loss history disproportionate to the member’s contribution, failure to comply with or cooperate with risk management requests, decision-making that is contrary to good government and/or professional behavior, and failure to conform to Enduris’ underwriting guidelines,” the letter stated.

“Delinquent payment alone is grounds for immediate termination,” it added.

Personius was not reachable for comment.