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City slapped for gift to Sidney Gallery

Port Orchard has been dinged by the state Auditor’s Office for unlawfully funnelling Hotel/Motel Tax money to the Sidney Art Gallery and Museum to help pay for the gallery/musuem’s outstanding utility bills.

This breaks the city’s 12-year record of finding-free audits.

In its report, the Auditor’s Office cited a Attorney General Opinion that prohibits cities from using Hotel/Motel taxes to pay the operating expenses of any facility the city does not own.

The opinion, issued in 2000 — two years before the city approved spending the money — stated “a city must have an ownership interest in a tourism-related facility before it can spend lodging tax revenues on its operations.”

The city owns no portion of the Sidney Art Gallery and Museum, a privately owned non-profit venture.

Representatives of the Sidney Museum first came before the city in 2002 to request financial help. They said the museum was in dire straits and could be in danger of closing down. In response, the council approved allocating from the lodging tax fund $8,753 in 2002 and $9,000 in 2003 to keep the facility afloat.

City Councilman Rick Wyatt, who chairs the Lodging Tax Advisory Committee, said the committee recommended the action only after checking to make sure the city was legally allowed to do so. Wyatt said city attorney Loren Combs gave him the clear go-ahead and raised to objection to the council’s final decision.

“The city attorney responded to me: ‘yes, this is allowable,’” Wyatt said.

Combs did not return calls seeking comment.

City treasurer Kris Tompkins said the Auditor’s finding is being taken very seriously by her department and the rest of the city staff. She said the museum may still get money from the city, but not for anything that isn’t specifically geared toward attracting tourism.

“We can give the museum money for advertising,” Tompkins said. “ We just can’t give them money for operations.”

Mary Peterson, president of the museum/gallery’s board of directors, said the decision should not create an impossible situation for the facility. Although the gallery does struggle to get by, she said, they have of late been able to find other donors to help offset the cost of remaining open. The Port Orchard Rotary, for instance, recently gave the board of directors $6,500 in matching funds to get the building rewired.

Peterson said the request for help was expected to be a one-time thing at a time when other funding sources failed to materialize.

“Getting the operating expenses was wonderful, but nobody expected it to happen again,” she said. “We’ll work around it.”

Tompkins said although the city is sorry to lose its long-running finding-free streak, the only real tangible impact — apart from that to the museum — will be a single black mark on the city’s record.

“Needless to say, this will not happen again,” she said.

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