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Port awaits auditor’s report

May 25, 2013
By LINDA HARRIS - Staff writer (lharris@heraldstaronline.com) , The Herald-Star

WEIRTON - West Virginia Public Port Authority Executive Director Doug York said he's awaiting the results of an auditor's report before he sits down with his board members to discuss what, if anything, they need to do to resolve questions surrounding operations at the Weirton port.

City and county leaders had called for a post-legislative audit in February to address concerns with the port's operation, but jurisdictional questions prompted Auditor Glen Gainer's office to step in last month and commence a review of the Weirton port's books.

"I want to wait and give the auditor time to do his job," he said. "I don't know what the audit will reveal, when it will be done. Usually there are a set of recommendations offered with (the audit report). I want to give that process time to occur before we jump up and say, 'Do this' or 'Do that.' If he was not doing the audit, then I would take all the information I have and let the board look at it as a whole, I'd tell them to give me direction, tell me what they would like to see done."

In requesting the audit, local leaders cited a number of areas of concern, including WAPA's organizational structure, which they described as "complicated, unclear" with too-little governmental oversight and lack of transparency.

They've also questioned the role being played within the port hierarchy by Karl Keffer, who was previously associated with a port project in the Eastern Panhandle and was named in a pair of lawsuits alleging his company had failed to pay two vendors for hundreds of thousands of dollars in work they'd done for him there. Default judgments against Keffer totaling more than $500,000 are on the books in Berkley County and Fairfax County, Va., where the suits were filed.

More recently, Bridgeport, W.Va., based Citynet has sued Weirton Area Port Authority Inc. for more than $220,000 it says it's owed for work done on a fiber optic network, claiming breach of contract. Citynet claims Keffer gave them the go-ahead to do hundreds of thousands of dollars of work but, when they submitted the invoice, offered various reasons for them not being paid.

WINC's response to the Citynet suit, however, stated that "...Karl Keffer is not an authorized agent or representative of the defendant, and cannot legally bind this defendant and his actions or omissions are not governed, controlled or directed by defendant, although defendant is aware that he had discussions with (Citynet)." It also indicated WAPA "is aware that an advisor to the Port Authority, not the defendant or any of its representatives, likely provided a Master Services Agreement to plaintiff, but denies the agreement was ever fully executed or binding."

Keffer, however, was recently named interim director of the port because of his "background in port development, federal contracts and federal programs," WAPA Chairman B.J. DeFelice has said.

Meanwhile, Kokosing Construction Co., general contractor for the earthwork done at the Weirton port, also has filed a mechanics lien for $513,350 against WAPA and the owner of the property it occupies in Weirton's Half Moon Industrial Park, alleging it, too, hasn't been paid. Kokosing General Counsel Mike Currie has said that, unless payment is made, the company will be forced to file suit.

DeFelice, however, labeled it a contractor dispute and contends they have differing "expectations (of) what the deliverable was" and said Kokosing "didn't meet the process."

At least one other vendor claims he is owed more than $200,000 for work done at the port for which he hasn't been paid, and a former contracted consultant also was heard after a recent WAPA meeting questioning why payment hadn't been forthcoming.

Nearly two weeks ago City Council asked the West Virginia Public Port Authority to take an in-depth look at the local port's operation and, if cause is found, to replace its officers and directors as is deemed necessary.

The resolution, passed unanimously, said WVPPA has a "moral and ethical obligation" to the people of Weirton to address questions surrounding the port's organizational structure, "including facts about their subsidiaries, financial information, cash management and transparency, background history of the principals involved, ... allegations of non-payment or delinquent payment to vendors, allegations of non-payment of employees, clarification of employee classifications, reports of alleged threats of Eminent Domain as a means to acquire property, statements of unfounded authority to other parties and authorities, and other items of concern."

DeFelice says there's a lack of understanding surrounding the port's organization and operations, in part because participation at meetings is poor.

"We're developing a port," he said. "As we learn things, we have to make changes. We haven't done it before. It's a change in the model, an opportunity from a development standpoint for revenue sharing in the community. Any money made here, the community will share. No work is being done here that won't benefit the public."

DeFelice said there's a "lot of confusion, but people need to get some facts."

He said they've given state officials "every report they ask for, we're meeting all requirements for transparency, use of public funds, and the audit," though he said they "can't audit private investment because it is private investment. Exposing all private company information to competitors puts you at a disadvantage."

He also said WVPPA will have to sign off on any bond issue by the port.

"Everything we do goes through the state port, even private equity. If we accept any financing, any financing we do, the state port authority has to approve," he said.

York, meanwhile, said he considers the controversy surrounding the port to be a "local issue that needs to be resolved locally ... but having said that, I think it would be fair to give (Gainer's office) a little time to complete the audit before we (do anything as a board)."

York said he's planning to meet privately with local leaders within the next couple weeks in hopes of better understanding their concerns with operations at the Weirton port.

"There may be some things we can do, some things may not be in our perview," he said. "But, I'm confident as a whole we can come up with something that will allow the port concept in that area to move forward.

"We've studied that area and two others in state have had independent studies conducted," he said. "If you take the cast of characters out, if none of them are there it's still a wonderful place to explore economic development opportunities with rail, water and highway access. We're poised to explore those things if we can come to agreement."

 
 

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