Sewer district gets new attorney

"Acting on advice from the state auditor's office, commissioners in the Holmes Harbor Sewer District fired the district's attorney Thursday night, then hired a Bellevue law firm to represent the district as it starts to untangle itself from an ill-advised bond sale.On a unanimous vote, the five commissioners resolved to terminate the district's contract with attorney Charles Tull. Tull, who was appointed as the sewer district's general counsel one week before district commissioners approved a $20 million bond sale last October, also acted as the district's co-bond counsel for the past 10 months. The bond sale has since been ruled illegal by the Auditor's Office.Replacing Tull will be Michael Rourke, an attorney working for the firm of Inslee Best Doezie & Ryder. Four of the sewer district commissioners interviewed Rourke at his office Wednesday. At a special meeting Thursday night, the commissioners said they believed that of the firms they had to choose from, Inslee Best Doezie & Ryder is the best. However, said commissioner Don LaMontagne, the firm's services will come at a price - $200 an hour.They are not the least expensive firm, he said.The commissioners' choice was limited. At another special meeting Tuesday night, board chairwoman Meg Wingard said the district needed a firm with experience in both municipal and bond law. The district contacted four firms with this expertise. One firm, Preston, Gates & Ellis, was out of the running immediately because it is representing developer Terry Martin. It was Martin and his attorneys who convinced the district to sell the bonds, which he intended to use to develop a commercial office complex in Everett.Tull made an attempt Tuesday to remain in the district's employ, telling the commissioners that a $100,000 payment made to his firm out of the bond proceeds last October ties him to the district as its legal representative on the bond issue as long as the commissioners choose to retain him. Commissioners Stan Walker and LaMontagne said they wanted to retain Tull because they believed he could provide valuable information to the district's new general counsel.But after Thursday night's meeting, Wingard said the commissioners will not retain Tull. The district sent him a letter Friday telling him the district has no need of his services. The letter also suggests that he consider refunding his $100,000 fee.Attorney Rourke has a good deal of work to do in his first weeks as the district's counsel. One of his first tasks will be to bring the district in line with the opinions of the state auditor and attorney general. On paper, the district is still at odds with the state. In the district's response to the Aug. 3 audit report concerning the bond sale, the district disagrees with the auditor's opinion that the bond issue is illegal. Charles Tull wrote the district's response.Also of concern is an upcoming interest payment that must be made to bondholders. The bond's payment schedule required the district to pay about $742,000 in interest on Sept. 1. Stacia Hollar, an assistant state attorney general who attended Thursday's meeting, said her agency cannot and will not block the payment, which will come out of approximately $10 million of bond funds that are currently under her agency's control.Making the payment is the best choice for the district right now, she said. Withholding the payment would embroil the district in a legal battle it is not prepared to fight. As soon as that payment is halted, the bond goes into default, she said. Then the lawsuits begin.On Tuesday, Tull said Terry Martin had secured a loan with which he would pay the interest if the district did not. Tull also said at an earlier meeting that Martin would take out a loan to pay off the bond. Responding to questions about these loans in an e-mail Wednesday, Martin was noncommittal.I am continuing to look for workable solutions to this matter, but it would be premature to comment on any specific actions that I may take, he wrote.Several district ratepayers at Thursday's meeting asked the commissioners where the district would get the money to pay its new attorney. Wingard said the commissioners will discuss payment strategies at its Sept. 6 meeting. At a previous meeting, Wingard had said it is likely district ratepayers will bear the burden of attorney's fees in higher sewer rates. "

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