Diking district residents sue to get their payments back

A group of residents and businesses in controversy-laden Island County Diking District 1 have sued to get their 2009 tax assessments back and to prohibit the district from levying more assessments.

The new suit, filed in Island County Superior Court before the June 30 state statutory deadline — but amended twice since then — includes 12 residents and two businesses with property in the district.

The plaintiffs are all members of Citizens in Support of Useless Bay Community (CSUBC), a larger group of property owners upset with the district’s assessments for a $430,000 pump project and the effects of the pumping on the district’s wetlands.

CSUBC filed the original lawsuit, which is still under review by Island County Superior Court Judge Vickie Churchill.

Plaintiffs in the new suit are Robert and Judith Winquist, Sharon Vanderslice, Jack and Theresa Hodge, Deborah Hedlund, Ronda Skubi and Edward Sheets, Jan Clotfelter, Leo Cruise and businesses SLB Partners and Sunlight Beach House.

Diking district commissioner John Shepard and his wife, Coyla, are also plaintiffs. Coyla Shepard is a board member of CSUBC.

Seattle environmental lawyer James Klauser said Monday that the new suit is a companion to the original legal action and is a required step in having tax assessments refunded if the judge finds in favor of CSUBC.

“It’s something you have to do if you want to get your money back,” Klauser said.

By state law, only those residents who have formally protested the tax payment can sue for a refund, he said.

Klauser said he’s not sure how much tax money is involved, “but taken together, it could be substantial.”

He said he doesn’t know why more CSUBC members didn’t join the latest lawsuit, but speculated that some may not have filed formal protests, while others may not want to pay more legal costs.

“There’s no hidden strategy,” Klauser said. “Those who want to get their taxes back have to file a case.”

Meanwhile, Churchill has ordered the diking district to produce additional documents detailing the district’s business, and late last month gave the district 60 days to comply.

“We’re waiting to see what happens,” said Klauser, whose firm, Rowley

& Klauser, also represents CSUBC. “It’s a complicated issue, but we’re in for the long haul.”

CSUBC says district commissioners pushed through the pump without appropriate public notification or hearings, and that it changed its assessment procedure, putting the bulk of the financial burden on a few residents.

In March, Churchill ruled that the 1986 assessment method adopted by the diking commissioners was changed in 1995 on short notice and without public input.

“There was no notice to the property owners, no public hearing, no chance to be heard, and no appeal process,” the judge wrote in her March 27 ruling.

“Because there was no open hearing, the public affected did not have a chance to influence the District commissioners’ decision and not have a chance to appeal, as they did after 1986,” Churchill added.

The judge said that district officials must turn over all documents concerning decisions the diking commissioners made in conducting the business of the district since 1986.

The $430,000 pump project has now spawned three lawsuits from angry property owners and has divided the district’s board of commissioners.

One of the lawsuits was subsequently dropped shortly after it was filed.

Critics have complained for more than a year that the cost for the project hasn’t been fairly spread out among property owners.

Opponents have also claimed that the pump is draining sensitive wetlands next to Useless Bay that are prime wildlife habitat.

The district spans 743 acres and includes the neighborhoods of Sunlight Beach, Olympic View and Sun Vista and the Useless Bay Golf & Country Club.

In 1986, the district added to its assessment role not only the 460 acres included when the district was formed in 1914, but additional property along Sunlight Beach.

It also at that time adopted a resolution to assess the property of benefited parties at full market value.

The pump was installed on Christmas Eve, 2008, and has been a bone of contention since.

Early last December, the U.S. Corps of Engineers in Seattle suspended the diking district’s permit for the pump, saying that it may have issued the wrong kind of permit.

The decision was based on information provided by CSUBC and other critics.

The Corps said the pump could remain in operation until the situation is sorted out.

Meanwhile, Shepard, a constant critic of the district’s actions, has been regularly outvoted by fellow diking commissioners Steve Arnold and Ray Gabelein, both of whom are defendants in the CSUBC suit.

Gabelein said on Tuesday that the district is complying with the judge’s request for documents, but beyond that, he had no comment.

“I don’t know any more than what’s in the judge’s order, and that people want their assessments back,” Gabelein said. “It’s all in litigation.”

In an earlier ruling, Churchill agreed with the other two commissioners that Shepard had provided information to CSUBC, and should be excluded from all subsequent official discussion of the original lawsuit.

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