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Fair association will pay property taxes

LANGLEY — The Island County Fair Association will pay more than $2,700 in back taxes owed on the Waterman property, fair officials said Monday.

The association has owned the property for two decades, but never paid property taxes because the 10 acres had been wrongfully exempt at the county level. The property was sold in 2006 for $120,000 and the money was put in two local bank accounts.

Fair association treasurer Sandey Brandon said the group recently received the tax bill from the county.

At the association’s meeting Monday, Brandon suggested paying the taxes from the interest that’s been earned from proceeds of the property sale.

“Keep the $120,000 intact and withdraw the interest,” Brandon said.

She added that the move was necessary because the association doesn’t have enough cash to pay the taxes in its regular account.

“We don’t have that kind of money,” Brandon told the members.

The membership agreed and voted unanimously to pay the taxes with the interest.

The issue of unpaid taxes came to light after news reports in The Record detailed the fair association’s sale of the property. The newspaper learned earlier this year that fair officials paid only the property tax levy for forest firefighting protection in recent years — roughly $15 annually — but no property taxes on the 10-acre parcel.

More recently, the county asked the fair association to pay back taxes dating back to 2003, which added up to about $2,700. The assessor counted three years from the date the property was sold in January 2006, counting the sale date as the point of discovery of the wrongful tax exemption.

If the property hadn’t been wrongfully tax exempt, the association would have paid an estimated $11,000 to $19,000 over the course of two decades.

The property had been donated to the fair by the Waterman family in the mid-1980s. The sale of the property, however, came under intense scrutiny when critics of the fair association began asking about donations that fair officials had accepted to fund their legal battle with the city of Langley over a road easement.

The Island County Fair Association also adopted new bylaws Monday designed to separate the nonprofit organization from the fair board.

The new rules governing the association have been trimmed of any mentions of the county fair board, the group made up of appointees made by the county commissioners and members of the fair association.

The association membership unanimously voted for the new bylaws without any further discussion.

Though the new rules include stripping away a provision for open meetings, Brandon said the changes were limited.

“All we have done is remove the board,” Brandon said.

The changes were initiated after a long-running dispute over the roles of the fair board that has statutory authority to run the fair and the association that provides the workers who help put on the annual event. Both the fair board and the fair association have come under criticism in the past for withholding records from the public and commingling public funds with private money. The state Auditor’s Office earlier promised to review the fair’s handling of public money and its adherence to public access laws when it audits Island County this summer.

Association members have been talking about new bylaws since May. During a meeting in early May, the group held a brainstorming session to talk about the association’s organizational structure.

Under the new rules, the association wants to be separate from the board. Association members hope the county will contract with the fair board to put on the fair, then the fair board will use the association as a subcontractor.

The fair board is currently working on a new contract that outlines its relationship with the county, which owns the fairgrounds. The fair board manages the annual fair.

The fair association also deleted some major sections from the old bylaws.

A section stating “all association meetings shall be open” was deleted from the old rules and a paragraph about public notice of meetings was also taken out.

All references to the board of directors, including a statement that said the control and management of the Island County Fair shall rest in the board of directors, was deleted.

Language in the old bylaws that said the association secretary would provide a copy of meeting minutes to the fair board of directors and the county commissioners was taken out, as well, and not retained in the new bylaws.

Brandon told the membership that the association now has to refile its articles of incorporation with the state.

The changes went into effect immediately.

Whether the new bylaws will pass muster remains to be seen.

According to state law, “the affairs of a corporation shall be managed by a board of directors.”

However, by separating itself from its fair board of directors, the association currently only has executive officers.

Also, state law says the initial bylaws of a corporation shall be adopted by its board of directors.

Another loose end is the identity of the fair board. The fair board is still called the Island County Fair Association Board of Directors.

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