Bill Masella of Depoe Bay submitted the following as public comment for the July 21, 2026, Depoe Bay City Council meeting. Masella previously served on the City Council and was appointed to the city’s Financial Advisory Committee when it was created. The comment is published here in full.

Public Comment for the July 21, 2026 City Council Meeting

Mayor and Councilors,

I’m submitting this public comment as a resident of Depoe Bay — and as someone who previously served on this Council — because I believe the City’s financial situation deserves to be treated as a top governance priority, not a background issue to be managed quietly.

The audit gap is a matter of public record. The Oregon Secretary of State’s published Municipal Audit list currently shows the City of Depoe Bay as delinquent on required audit reports for multiple consecutive fiscal years, with the Depoe Bay Urban Renewal Agency similarly delinquent. This is not a subjective characterization — it is the state’s own public filing status for this city. I understand the Legislature removed the fund-withholding penalty tied to this requirement in 2023, which means there is no longer an automatic state financial consequence for continued delinquency. That makes it more important, not less, that this Council treat annual audit compliance as a self-imposed, non-negotiable standard — because the state will no longer enforce it for us.

I recognize it has been noted that Depoe Bay is not alone on this list — that other Oregon cities are also currently delinquent. That is true, and it does not change my request tonight. The fact that a failure is common does not make it acceptable, and it does not reduce this Council’s responsibility to this community. Other cities’ delinquency is not a defense; if anything, it is a warning about how easily this kind of gap normalizes once it starts. Depoe Bay’s obligation is to Depoe Bay’s residents, not to a peer-group average.

This is not a hypothetical concern. In reviewing the City’s accounts payable records, I have seen a garnishment of the City’s bank account by the Oregon Department of Revenue. I have also heard councilors and City administration speak to notices received by the City regarding anomalies in tax reporting. These are not rumors — they are documented in the City’s own financial records and have been acknowledged in discussion by City officials. A garnishment of public funds by a state revenue agency is a serious event. It should never be treated as routine, and it should never reach the Council’s attention only after the fact, without a full accounting of amount, cause, and corrective action.

Current City administration has now overseen City finances for multiple years, spanning the entire period in which no audit has been completed. That means this Council — and this community — currently has no independent, professional confirmation of whether the City’s financial systems, controls, and processes have been operating properly at any point during that time. This is not a statement about any individual; it is a statement about a gap in oversight that has gone on far too long. Every year that passes without independent verification is another year this Council is asked to simply trust that things are being handled correctly, without the means to confirm it one way or the other.

Nothing should preclude resuming meaningful independent review now, and there are two distinct paths available to do it — the Council should not wait for one at the expense of the other.

First, a full statutory audit. I recognize that any audit covering the backlog of prior years will likely need to work from reconstructed or incomplete transactional data, and that an auditor may reasonably issue a qualification related to opening fund balances carried forward from unaudited prior periods. That is a normal, well-understood limitation when any entity resumes auditing after a gap — it is not a reason to delay, and it does not mean the City “can’t be audited.” A qualification on opening balances does not prevent an auditor from testing and opining on the current year’s transactions, ending balances, and — most importantly — whether the internal controls required by our own Municipal Code are actually functioning today.

Second, and faster to initiate, an independent internal controls review. This does not require reconciling historical data at all. A CPA or forensic accounting engagement can directly test whether the safeguards already required by City ordinance — dual review of credit card charges, budget monitoring, tax filing and payment procedures — are actually being followed right now. This kind of engagement can typically be scoped and started well before a multi-year statutory audit contract is finalized, and it would give this Council a concrete, current answer to the question we do not currently have any way to answer: is City Hall operating properly today.

I’d ask the Council to pursue both — not to treat the internal controls review as a placeholder for “someday,” and not to let the complexity of the historical backlog be used as a reason to delay confirming, right now, whether current operations are sound.

This Council has codified obligations already on the books that appear to not be functioning as required, and I’d ask that each be addressed directly. I want to be transparent about my source: the following citations are drawn from the Municipal Code as currently published on the City’s website. I understand there has been some question raised about whether that online version can be fully relied upon as current and accurate. Given that, I’d ask staff to confirm these sections are up to date and correctly reflect the code now in effect — and if any of the following has since been amended or repealed, I’d ask that the Council or staff correct the record accordingly. If the online code cannot be trusted to reflect what is actually in effect, that is itself worth this Council’s attention.

1. The Financial Advisory Committee (Depoe Bay Municipal Code § 32.03) was created by ordinance in 2020 with specific, standing duties — including monitoring adherence to the budget, ensuring financial policies and procedures are documented and followed, and reviewing the auditor’s management recommendation letter with follow-up on any issues identified. To my understanding, this committee is not currently active. I’d ask the Council to reinstate it without further delay, since its absence removes exactly the kind of ongoing financial oversight this situation has shown we need.
2. The Credit Card Policy (§ 36.02(C)) requires that all City credit card charges be reviewed and approved monthly by the City Recorder and City Council. I’d ask the Council to confirm, in a public setting, that this monthly dual review is actually occurring, and if it is not, to correct that immediately.
3. Annual audit compliance should be restored as a standing, budgeted line item with a public timeline — not an item that is allowed to lapse again once current attention moves elsewhere. I’d ask the Council to adopt a clear compliance calendar and to report publicly on progress at regular intervals until the City is current.

I want to be clear about what I am and am not asking for tonight. I am not asking this Council to render a verdict on individual conduct in a public meeting — that is not the appropriate venue, and personnel matters have their own process. What I am asking is that this Council commit, on the record, to restoring the oversight structures our own code already requires, and to resuming independent, annual audits starting with the current fiscal year — so that whatever the City’s systems and controls actually look like today, we find out through a qualified, independent audit rather than continuing to operate without one.

We should not be perpetuating the conditions that allowed this situation to develop in the first place. I’d ask the Council to treat this as a priority commensurate with its seriousness.

Respectfully,

Bill Masella

Resident, Depoe Bay