PORT ANGELES — Bob Lumens, board president of the Port Angeles Downtown Association, said Wednesday he could not guarantee the continued existence of the group after City Council members Tuesday night decided to withhold all but Christmas light funding from the organization.
“I have no idea,” Lumens, the group’s official spokesman, said when asked if the organization will survive past Dec. 31.
“It’s not up to me. It’s up to the board.”
Council members, speaking during Executive Director Barb Frederick’s presentation on the downtown association’s third-quarter operations, lambasted the nonprofit, publicly funded group for failing to live up to its promise.
The council, faced with the option of suspending all funding, decided 5-1 to allocate about $5,000 to reimburse the association for Christmas lights that already have been strung downtown and not make any further payments until breach-of-contract issues are resolved.
The group will not receive about $25,000 as a result of the continuing suspension of funds, city Chief Financial Office Byron Olson said Wednesday.
“A number of issues that were supposed to have been accomplished have not been accomplished,” Mayor Dan Di Guilio said.
Said Councilwoman Sissi Bruch: “I don’t believe the downtown association has met our needs.”
Councilman Lee Whetham voted against funding the group at all.
“We’ve had a lot of big ambitions and little delivery,” he said.
Councilman Brad Collins was out of town on non-council-related business, City Clerk Jennifer Veneklasen said.
Frederick’s presentation to the council is at http://tinyurl.com/PDN-Downtownreport.
PADA will make a presentation early next year on its fourth-quarter activities, Nathan West, city community and economic development director, said Wednesday.
“Based on the council discussion [Tuesday] night, it’s really important they work hard over the next six weeks and that they come back to the council with some additional achievements for the remainder of 2014,” West said.
Councilwoman Cherie Kidd said in voting to fund the lights that she hoped for “a more robust report” at that time.
Frederick told council members that those fourth-quarter accomplishments will include three new businesses opening downtown and one business that is expanding.
Council members focused on criticizing the group for not aggressively fulfilling the promise of the Main Street Program’s business-and-occupation (B&O) tax incentives and failing to better interact with its business-owning membership.
The B&O program allows entrepreneurs to devote a percentage of their B&O taxes to the Main Street Program administered by PADA.
The statewide program “helps communities develop their own strategies to stimulate long-term economic growth and pride in the heart of the community — downtown,” according to the state-sponsored website, http://tinyurl.com/PDN-Mainstreet, which also describes in detail the tax-credit option for businesses.
Frederick told council members PADA, which is eligible for up to about $133,000 in B&O proceeds in 2014, has pledges for $7,000.
The tax-credit program generated between $32,000 and $34,000 from PADA members in 2013.
“We got a late start this year,” Frederick said.
Letters about the program had been sent to about 40 of the organization’s 165 businesses, she said.
“We had a very challenging year and a lot thrown at us,” she added.
City officials declared the group in default of its funding agreement with the city earlier this year and demanded more financial accountability.
Its third-quarter funding was suspended July 8, and city officials threatened to terminate it if things did not improve.
In a preliminary audit, city staff said 46 percent of 2014 payments lacked adequate and justifying documentation.
“There were things that we kind of [had] to prioritize and almost put fires out as the fires came up,” Frederick said.
“We should have gotten an earlier start.”
The group’s failure to generate tax-credit proceeds was “very concerning,” Deputy Mayor Patrick Downie said.
Di Guilio said the organization’s top goal is to generate income from the tax credit.
“You chose to not pursue it,” he said.
Councilman Dan Gase said he had a “high level of concern” about the board’s relationship with its members.
“Communication is a two-way street,” Frederick responded.
B&O funding goes directly from the state to the organization.
PADA funds include money that passes through the city as taxes on downtown businesses, based on square footage, that are in the Parking and Business Improvement Area (PBIA).
In 2014, the PBIA generated about $62,000 and received $34,000 before funding was suspended in July.
Frederick said 58 invitations were sent to property owners in the PBIA at one meeting sponsored by PADA, and five showed up.
There are 87 businesses in the PBIA, West said Wednesday.
PADA revenue also includes event proceeds and membership fees from individuals and businesses outside the PBIA.
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.
