Audit questions Mill Creek manager’s alcohol, meal expenses

The state found a pattern of spending by the city manager that lacked a clear public purpose.

Mill Creek City Manager Rebecca Polizzotto

Mill Creek City Manager Rebecca Polizzotto

MILL CREEK — A state audit released Thursday highlighted alcohol and meal charges with no clear business purpose on city manager Rebecca Polizzotto’s government credit card.

That included $269 for alcohol and another $955 for meals, the report said. Those details were part of a state review of city expenses between 2015 and 2017.

The City Council placed Polizzotto on paid administrative leave earlier this week but declined to say why. It’s unclear whether that action has any connection to the audit. The city on Thursday said a change in policy earlier this year addresses some of the auditors’ concerns.

Mayor Pro Tem Brian Holtzclaw characterized the alcohol purchases as “isolated issues” and secondary to the auditor’s recommendation to better document expenses.

“I don’t see it as a recurring problem, but it’s something that should not happen again,” he said.

Holtzclaw declined to answer any questions about Polizzotto’s leave from work.

State auditors noted the credit card charges in a yearly accountability report. They issued what’s called a finding — an accounting term for a serious level of concern. They reviewed charges for meals, employee recognition and expenses related to travel. A lack of itemized receipts was a common theme.

“There were other cards that also had charges that were not documented for a public purpose, but there were more of those charges on the city manager’s card,” said Kathleen Cooper, a spokeswoman for the Office of the Washington State Auditor.

“We consider that to be notable, which is why we wrote the finding the way we did.”

All told, they identified $2,497 in purchases with an unclear public purpose, $1,622 of them from the city manager. Among them, auditors flagged small gift purchases to recognize employee achievement or milestones. They included $398 in spending by the city manager and another $789 by other employees.

Whether the city manager reimbursed the city for the purchases wasn’t a subject of the audit.

Auditors last year issued a management letter to Mill Creek highlighting similar issues.

Polizzotto, 53, has been a controversial figure since becoming the top administrator in Mill Creek city government three years ago. Former employees have blamed her for a high level of staff turnover. She has defended her actions as necessary to reform the workplace culture at City Hall.

In an official response to the finding, city officials emphasized that they allow employees to reimburse the city for expenses. They also noted that they have rewritten policies about business expenses. They adopted changes in March in an attempt to address the auditor’s management letter from last year.

The new policies limit the amount of expenses per day, “eliminating the need for detailed receipts, except in specially noted circumstances,” the city wrote in response to the audit.

“This audit does not include the time frame after the policy was enacted,” city spokeswoman Joni Kirk said Thursday. “That was already in the works before this came out.”

The city manager draws a yearly base salary of $173,825. That’s almost as much as Gov. Jay Inslee.

Polizzotto’s contract also includes a $300 monthly car allowance. She received an extra $16,000 last year that the city described as an “employee award.”

Polizzotto has been absent from work since April. City Council members have said she is on medical leave.

On June 8, the council called an unusual Friday-night meeting to issue a statement defending Polizzotto from allegations in a weekly newspaper.

“The council looks forward to Ms. Polizzotto being able to return to work soon,” they said. “In the meantime, we will have no further comment and not provide any interviews until further notice.”

A week and a half later, however, the council voted unanimously to place Polizzotto on paid leave for 45 days, effective immediately. Tuesday’s action followed a lengthy closed-door session to discuss two topics: potential litigation and to review the performance of a public employee.

The council then appointed Police Chief Greg Elwin as acting city manager. Former Mill Creek city manager Bob Stowe has since agreed to take on the role as interim manager for up to three months, starting Monday.

Holtzclaw said he plans to ask Stowe to have city staff review the expense policies adopted by the council earlier this year in light of the auditor’s latest finding.

Noah Haglund: 425-339-3465; nhaglund@herald net.com. Twitter: @NWhaglund.

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