“About 100 homeowners who live in the Holmes Harbor Sewer District did not get many of the answers they wanted Thursday night to questions about about a $20 million bond sale that seems to have gone bad.For about two hours, the residents questioned the sewer district’s commissioners, one former commissioner, and the district’s attorney to find out if they could be on the hook to pay off the bond, which was prematurely collapsed last month in response to a state audit. Gathered at the Holmes Harbor Golf Club for an unusually large commissioners meeting, the homeowners said they were concerned that the bond sale could affect the value of their homes and that it has already prompted area real estate agents to refuse to sell homes within the district’s borders.How can you unring a bell? asked Helga Johnson, a real estate agent and a homeowner in the sewer district.The meeting was the district’s first since an article in the June 30 edition of the South Whidbey Record detailed two years of negotiations between the sewer district board and a Snohomish County developer which led to a $20 million bond sale last October. That sale is being investigated by the state auditor’s office and the state attorney general. The developer, Terry Martin, has already spent half the money to purchase land and to pay attorneys, companies involved with the bond sale, and his own corporation. A district audit is expected from the state by late July. The district has already been charged more than $15,000 in audit fees.Martin was supposed to use the bond money to develop an Everett business park called the Silver Sound Corporate Center. However, according to the Snohomish County Assessor’s office, he does not have clear title to the land he wants to develop, nor does he have a permit to build. The eventual buyers of the 538,000 square feet of office space Martin promised to build were to pay off the bond with assessments.With all this in mind, a number of district residents asked the commissioners and district attorney Charles Tull who is going to pay. After saying several times that he does not believe the sewer district residents will be responsible for the debt, Tull admitted the district will try to get Martin to buy off the bond debt. He said he did not know what will happen if Martin refuses.If he won’t buy them back, we’ll have to deal with it at that point, he said.The answer whipped the crowd into laughter. One woman told Tull that his explanation didn’t make her feel better.I don’t think you’re making a very good case, she said. A number of people asked why the district sold the bonds in the first place. Former commissioner Bill Spalding, who sat with the district commissioners during the meeting, said the district stood to make money when Martin finished building Silver Sound. The district received a $100,000 fee for the bond sale and stood to make more money for maintaining the public works at the development, Spalding said. We knew this was going to make us a little more solvent, he said. Unfortunately, it didn’t work out that way.Also puzzling those at the meeting was the reason Martin came to the district for what amounts to a $20 million loan instead of going to a bank. Though reluctant to speak for Martin, who was reportedly on vacation and unable to attend Thursday’s meeting, Tull said he believed Martin had very legitimate reasons to seek public funding instead of private money for his project.Perhaps the most confusing issue at the meeting came up when Tull tried to explain the type of bond the district sold. He said the district sold $20 million in non-recourse, revenue bonds. That means, he said, that the property of the district is not pledged as equity.A few minutes later, he retreated somewhat from that position, noting that the bonds are to paid off with assessments against Silver Sound property owners. He said that it is possible the state might still hold sewer district property owners responsible for that payoff.Tull said he and the commissioners disagree with the state’s ruling on the bond sale and with the news coverage the issue has received. He said that he and Sacramento, Calif. bond counsel Mike McCall, whom he called a high-powered bond attorney, believe the sale was legal, as was the district’s attempt to set up a utility local improvement district for Silver Sound. In correspondence with the district, the state attorney general has disapproved of both actions.In light of the state’s opinion of the deal, audience member Tom Palotas had some advice for the district commissioners.Don’t go to California to get your bond counsel, he said.As for The Record’s coverage, Tull said the writer of the June 30 article misconstrued the facts of the bond sale and the result of the bond’s collapse. He did not elaborate on which facts he felt to be inaccurate.Homeowner Jim Roberts said he was not ready to believe Tull.If the information isn’t accurate, why would the newspaper print it? he asked. Commissioner Zoll tried to bolster the board’s position by pointing to the state auditor’s office as being a responsible party in the apparently blown bond sale. She said no member of the auditor’s office sent the district written warning against the sale, nor did a person from that office attend a district meeting. After the meeting, Holmes Harbor homeowners milled around outside the clubhouse and exchanged phone numbers. Several said they will look into hiring a new attorney to represent the district. “