City plans to hire ethics officer, auditor to investigate events coordinator contract issues

Bob Larson

Snoqualmie will soon hire an ethics hearing officer, as well as an independent auditor to investigate whether two employees have violated the city’s ethics code, and whether the city was fraudulently billed for work not performed. The council reached these points of consensus after a lengthy discussion Oct. 30, on recent findings by Snoqualmie citizens.

The two employees in question are contract events coordinator and previous economic development consultant, Leslie (Lizzy) Billington, and her supervisor for the past year, Public Works Director Dan Marcinko.

Questions about Billington’s invoicing practices, as well as a private joint business venture between Billington and Marcinko, were raised at the Oct. 23 regular council meeting.

In reviewing the monthly invoices submitted by Billington, the city found that every invoice since January 2016 had been submitted and approved before the month being invoiced was completed. Events that had yet to occur in that month were on the invoice and Billington was compensated for them. Early payment of events that had yet to occur was not part of the contract, said City Administrator Bob Larson.

Billington’s contract states that the total compensation limit is $118,560, and in each month during her work as a contractor she has billed the maximum permitted by the contract.

The invoice submittal dates were consistently around the 21st of each month in 2016. In 2017, the invoices began to come in earlier, first around the 17th of each month, but eventually even earlier. The last two invoices were submitted on Sept. 11 and Oct. 9.

City Councilman Sean Sundwall, reviewing the submitted invoices going back 33 months, saw that, “In 2015, not one invoice amount is the same,” but starting with the January 2016 invoice, the monthly totals became uniform.

“What happened between December 2015 and January 2016?” Sundwall asked. “Was there a conversation had?”

There was, said Snoqualmie’s Community Development Director Mark Hofman, who supervised Billington until the start of this year when economic development activities were removed from her contract.

Hofman said he and Billington had discussed how some months were busier than others for Billington’s work and how the city could better track whether it had enough funding to continue events planning for the full year.

Billington, he said, requested the change to more uniform monthly invoices, and “that regularity comes out of that conversation,” Hofman told the council.

Administrator Larson, along with Hofman, approved Billington’s invoices until Marcinko was assigned to the task in 2017, with Billington’s transition away from economic development activities. Larson said such early payments were not happening with any other consultant that he was aware of, but also said he would review all invoices for all consultants.

“I also review and provide final approval on all invoices from consultants and it’s ultimately my responsibility to ensure that those invoices conform to the terms of the associated contract,” Larson said Oct. 23. “It did not occur with this contract and I apologize for that error.”

Paydays

In response to speculation from Marcinko that the mistake was made because the timing of the 21st of the month was similar to when employees payroll is processed, Larson said the city would not manage a contract in that way.

Councilmember Kathi Prewitt, calling in to the Oct. 23 meeting from Boston, said processing a contractor invoice as if she were an employee was unacceptable.

“This is a contact worker, she should not be being paid anywhere near payroll and payroll cutoff,” Prewitt said. “She is billing for services that have not been completed yet and so it’s false billing at the end of the day. Any auditor that is going to come in and look at this is going to have a cow, you cannot treat this as an employee position.”

Larson said Oct. 23 that he believed the city had received the services paid for, but councilmember Sean Sundwall and Snoqualmie business owner Anna Sotelo challenged that assumption. Sotelo said the Snoqualmie Ridge merchant meetings are listed on every month’s calendar attached to the invoice, but there has not been a meeting since June. Similarly, Sundwall said the calendar on the invoice for October included Billington attending that night’s meeting, but she was not there.

“I see that she submitted that she is supposed to be here at council,” Sundwall said. “So I want us to be really sure. If the calendar is not supposed to be what I’m looking at to determine whether or not she did her work, then it shouldn’t be in there… When we say we are confident that services have been rendered with the exception of this month that hasn’t happened, we already have one instance where she indicated she was supposed to be somewhere and she wasn’t.”

Larson repeated his belief Oct. 30, saying, that on the question of the quality of Billington’s work, “there are no concerns from our perspective but there was certainly a lack of documentation.”

He did raise several other concerns in addition to the early payments, including Billington’s lack of a city business license, inadequate work documentation which she has been directed to provide to city staff, her failure to pay the city business and occupation (B&O) taxes, questions about the adequacy of her insurance coverage and her compliance with the state B&O license requirements.

“According to Billington, her attorney has advised her that she does not owe B&O taxes and therefore was not required to submit a B&O statement as requested by city staff. The city’s position is that she does in fact owe B&O taxes,” Larson told the council Oct. 30. At a rough calculation of $20 per month over 30 months, he said the tax bill was approximately $600.

Process corrections

Newly appointed councilman James Mayhew said Oct. 23 that in his time working as an auditor and a CFO, he has seen similar situations arise and offered his help and expertise to city staff as they investigated.

“Let’s make sure we are fully satisfied, perhaps take a week or so to really follow through, obtain whatever additional documents so that you are sure of that.” Mayhew said. “Report back to us, the council, in some public way on the answers to those things so we can really feel that this is a closed matter and something we are clear on what remediation will happen to make sure that something like this doesn’t happen again.”

At the Oct. 30 meeting, he echoed his statements, saying the city must make sure the services they paid for had been received and to improve the process by which consultant invoices are processed.

In response to questions from The Record, Billington said the calendar attached to the invoice is not a time sheet, but a summary of various relevant events that she uses to plan her actual schedule.

“It’s an overview of what was on my calendar for that month,” she wrote. “There were times I shifted my attention due to demands that came from other parts of the job between Ridge and downtown merchants and events.”

Billington said that in December 2015, she was asked to bill a flat amount per month every month and says she works more hours than the contract allows to her to bill.

“I was asked by the City Administrator and Mark Hofman in December of 2015 to bill the city a flat amount per month every month. This was requested by the city to evenly distribute contract hours over the course of the year. The city pays me the same amount every month,” she wrote. “In the end, quite frankly, this is a far better arrangement for the city of Snoqualmie than it is for me.”

“Any review of my time, past or present, demonstrates that I have put in more time than the contract requires. There are many, many months when I work more than the allocated number of hours on any given invoice and unlike an employee, I do not get paid any overtime or extra for the extra time and effort,” she continued. “Again, I was asked to do this by the city to even out the expense month over month to the city over the course of the year. I was being flexible and responsive to the needs and requests of the city.”

Ethics investigation

In addition to the concern about improper payments, community members also discovered that in 2016 Billington had become involved in an outside business with Marcinko, Parks and Public Works Director at the city and Billington’s contract supervisor since 2017.

Mayor Matt Larson told the Record that in the preliminary investigation, the city sees the business connection between Marcinko and Billington as a violation of the city’s ethics code. Bob Larson noted that Marcinko was immediately removed from the role of supervising Billington’s contract, too.

Marcinko, who attended the Oct. 30 meeting, explained the venture from his perspective, saying he was approached by attorney Matt Mattson to invest in Pacific Northwest Wines and Spirits, which he did, until dissolving his partnership with the organization last Thursday.

He said he did not believe Billington was involved at the “ground floor” as he was, but didn’t know when she became part of the venture.

“I am an investor…. I forgot about it because it never got off the ground. We didn’t have any business. Not only no business, there was no profit,” he told the council.

He admitted “I should have revisited or remembered the investment when I was asked to be the direct supervisor of Ms. Billington’s contract. I want to offer my most sincere apologies, and I will certainly learn from this mistake. ” He added that he would cooperate with the investigation “and will accept whatever findings come from the inquiry.”

Billington said the business was created in 2015 while Community Development Director Mark Hofman was her contract supervisor. She also said the business never had any revenue.

“It was a third party who asked me to enter the arrangement. Because the business never had any activity, frankly I forgot about it,” she wrote. “In spring of 2016, Mr. Marcinko became my joint direct report. The business to date, has zero revenue. It never got off the ground.”

Mayor Larson said the city will bring in an independent third party to review the investigation on the various issues surrounding the contractor.

“We will conduct and complete a thorough investigation and review then make recommendations and appropriate actions to make controls to make sure this doesn’t happen again,” he said. “When the report is complete, we will bring an impartial third party to review all of that and have them make any other recommendations and confirm that the review and recommendations were done with integrity and are appropriate.”

To that end, the council discussed the process of appointing a hearing officer, as well as an independent auditor to verify the invoiced work was performed.

Next steps

All council members expressed a strong interest in proceeding as quickly as possible to hire these two people. Sundwall added that for appearances’ sake, it would be good to have several choices for each role.

Administrator Larson warned the council not to rush into the process, since the scope of the work should be carefully defined and approved by the council. He noted that the council has only a few meetings left before the end of the year in which to approve the scope and then review qualifications, too.

Prewitt dismissed his concerns, saying the council could hold special meetings every week to get the work started as soon as possible.

“I don’t want to wait,” she said. “Whatever we need to do, wherever you need council to show up to take a legislative action, I am there.”

Larson said he would attempt to gather information for the scoping work by next Monday for the council to review.

Councilman Bryan Holloway had to leave before the conclusion of the meeting, but was in agreement on the need for the investigation. He emphasized, however, before leaving, that city processes would have to change as a result.

“The organization was at fault, too,” he told the council. “The organization had a culture in which this was believed to be OK.”

At the conclusion of the Oct. 23 meeting, the council also agreed not to renew Billington’s contract, which expires in December.

Lizzy Billington

More in News

Man arrested in Snoqualmie for threatening Seattle church is charged

The King County Prosecuting Attorney’s office charged a 25-year-old man for emailing pastors: “Time to engage the artillery and kill you all.”

Snoqualmie worker left with broken legs after being hit by a truck

A miscommunication between co-workers led to an injury resulting two broken legs… Continue reading

Carnation hires Amy Arrington as new City Manager

The city of Carnation welcomed its newest addition to the administration in… Continue reading

The Tolt Hill Bridge near Carnation will be closed Monday morning for an inspection of the steel truss connections, part of the design work for needed repairs to the structure. (File Photo)
Tolt Hill Bridge to close Monday for half-day inspection

The Tolt Hill Bridge will be closed Monday, but only for a… Continue reading

Blotter: Car hits teenage bicyclist; driver rolls over on snowy freeway

Police and fire agencies in the Snoqualmie Valley responded to the following calls:

State Patrol IDs North Bend area as preferred site for new weigh station; city, residents object at Nov. 7 town hall meeting

The Washington State Patrol, like everyone else who lives in North Bend, thinks the city will be the perfect spot to locate a future weigh station, but the plans have not received a warm welcome so far.

A group of new teachers hired in 2013 pose in front of the Snoqualmie Valley School District Office. (File Photo)
School board moves ahead with levy plans, finds funding for 40 teachers to expand programming, reduce class sizes

Two weeks ago, the Snoqualmie Valley School Board was considering the implications… Continue reading

Most incumbents ahead in election results, except Snoqualmie Valley School Board and one Snoqualmie City Council seat

Snoqualmie’s contentious election season may result in very little change on the city council, but big changes on the Snoqualmie Valley School Board.

Maleng Regional Justice Center in Kent. (Photo courtesy King County)
King County Could Ban Solitary Confinement for Youth in Detention

Last week, a lawsuit was filed over the practice; this week, King County scrambled to respond.

Most Read