Port fails to declare open meetings, land sale hearings

QUINCY — The Port of Quincy has to dot its "i"s and cross its "t"s a little closer in the future, says a commissioner.

That sentiment follows a report from the state auditor's office, which found several areas for improvement in its accountability and financial statements and federal single audit reports.

The reports, dated May 4 and issued last week, found the port complied with state laws and regulations and its own policies and procedures, and internal controls were adequate to safeguard public assets.

But the report found the port did not comply with the Open Public Meetings Act (OPMA) or with state laws regarding sales of port property. The office also ruled in its federal audit findings the Port of Quincy did not obtain a required federal single audit.

Port commissioner Brian Kuest said the findings of the report mean "We obviously need to be a little more diligent in how we're in compliance."

Kuest said the port dropped beneath the radar screen since its last state audit in 2001.

"Some of those findings we thought we were in compliance, obviously we weren't, and we need to adjust accordingly, and I think we've made those adjustments," he said.

During the audit, auditors found the port had not published notices for any of its public meetings, which are held the second and fourth Thursday of each month. The Board of Commissioners frequently continue regular meetings to another date and time without public notice and meeting minutes were not available for 22 meetings held from Jan. 1, 2004 through March 31, 2006.

According to the report, on Dec. 28, 2005, the port also approved the sale of industrial development port properties, in its industrial parks 2 and 3, to a corporation wishing to build a data center, with no notice of sale provided to the public and no public hearing held prior to approval.

The port obtained one appraisal of the property prior to negotiating the sale price and approving the sale. The appraised value was $1,270,000. The sale was completed in April 2006; the sale price was $1,087,000.

The port negotiated the sale prices of properties with two other purchasers, a property sized at approximately 60 acres. The port obtained one qualified appraisal prior to negotiating the sale price and approving the sale in February and March 2006. The properties were appraised at $954,000. The negotiated sale price was $800,000. Public hearings were held after commissioners made a decision to sell the property.

Kuest said the corporation was Microsoft Network, but the finding does not impact the sale.

"The issue with the state is behind us, and when it comes to property evaluations," he said. "Some of this is new to us because of the amount of interest in development that we've had from the intermodal site to Microsoft to Yahoo! that there's a learning curve in there for us, too. Not looking for excuses, but we've got three commissioners that have other jobs and sometimes we work on the fly. We need to dot the 'i's and cross the 't's a little closer."

Kuest said it's still business as usual

In 2004, according to the report, the port spent more than $500,000 in federal funds, with total reported federal expenditures at $3,448,852.

The report states the port is required to obtain and submit a federal single audit report to the Federal Clearinghouse by Sept. 30, 2005. A federal single audit is also required in conjunction with an audit of the port's financial statements. The port did not obtain an extension of the report submission deadline, failed to obtain an audit of its 2004 federal expenditures and failed to submit required audit reports to the Federal Clearinghouse by the deadline.

Kuest said the port acknowledges the findings and is adjusting how it conducts open hearings and how it markets the port's assets. But he said the commissioners feel good about the report.

"To only have a couple findings based on the amount of activity we've had, we feel pretty good about that," he said. "We'll take those findings and use that as a learning basis to make sure we stay in compliance."

Auditor's office spokesperson Mindy Chambers said the findings point out some mistakes the port district made in compliance, but in both cases the response was very positive, with the port ensuring they meet the requirements in the future.

"I think for our office and probably for the citizens as well, those kinds of responses are the best outcome of an audit," she said.

Chambers said the auditor's office will follow up during the next audit to see that the port is in compliance. There are no legal consequences for the port, she said, noting the office is a reporting agency and not an enforcement agency.