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Judge delays decisions on DD1 lawsuit

Two issues involving a lawsuit against Island County Diking District 1 remained unresolved after a Superior Court hearing in Coupeville this week.

Judge Vickie Churchill said Monday she needed more time to study documents, and indicated she may rule within a couple of weeks.

Both issues center on the district’s $430,000 pump project, completed about 14 months ago.

A group of district residents have sued the district and the county, saying diking commissioners approved the project without proper public notice, and that the assessments are inequitable.

They also accuse two commissioners of on-going improper actions regarding the project, and that the pump is damaging the sensitive areas of the wetlands at Deer Lagoon.

Meanwhile, two of the diking commissioners, chairman Steve Arnold and Ray Gabelein, have asked the court to bar the third commissioner, John Shepard, from participating in discussions regarding the lawsuit against the district.

Shepard, an outspoken critic of district policies even before he was appointed to the panel by county commissioners early last year, is the husband of Coyla Shepard, a board member of Citizens in Support of Useless Bay Community (CSUBC), which brought the lawsuit.

Scott Ellerby of Seattle, the diking district’s attorney, said Shepard has collected letters and other confidential documents regarding the district and has likely passed them on to CSUBC. He also has actively participated in e-mail and fundraising campaigns on behalf of the group, Ellerby said.

“Mr. Shepard clearly has a conflict of interest,” Ellerby said.

Arnold and Gabelein also want Shepard to provide the court with a complete list of documents he has obtained from the district.

Shepard’s lawyer, Mike Waller of Oak Harbor, said his client “is in an intolerable situation.” Waller said Shepard would gladly stipulate that he won’t take part in any board discussions of the lawsuit.

“He’d just as soon not attend those meetings, anyway,” Waller said, “so what’s the point?”

As for the other issue regarding CSUBC’s lawsuit, the group’s lawyer, Bob Rowley of Seattle, asked Churchill to require the district to turn over all documents concerning decisions the board made in conducting the business of the district since 1986.

Rowley said the documents will show how the district has unfairly changed its assessment policies through the years.

“For the first time in its history, there’s been a huge levy against a handful of property owners on Sunlight Beach,” he said.

The controversy in Diking District 1 began in 2008 after diking commissioners, before Shepard joined the board, ordered the new pump to handle stormwater in the district, which spans 743 acres and includes the neighborhoods of Sunlight Beach, Olympic View and Sun Vista and Useless Bay Golf & Country Club.

The $430,000 pump was installed more than a year ago, but only those property owners who were expected to benefit from the project — the owners of roughly 460 acres — received special assessments to pay for it.

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