Audit finds no problems in sewer dispute

An eagerly-anticipated report from the Washington State Auditor’s Office has cleared the city of Oak Harbor of any impropriety related to the Dillard’s Addition sewer controversy.

Several residents of the neighborhood, however, were unhappy with the “accountability audit report” and puzzled by the fact that it doesn’t even mention Dillard’s.

But city officials hope this will end the dispute.

“The auditor didn’t find anything out of line,” Finance Director Doug Merriman said. “From a financial standpoint and regarding access to public records, the city has met all the requirements the city is supposed to.”

The audit summary, released to the public this week, briefly states the results in four lines. It states that the city complied with its own policies in “most areas,” but that certain issues were communicated to city management.

The management letter sent to the city, however, details only two small issues that have nothing to do with the Dillard’s sewer, but are in reference to financial reporting and ensuring that a safe is locked.

The State Auditor’s Office looked into the Dillard’s Addition sewer issue after receiving complaints from residents. The state amended the original audit agreement to include an additional 32 hours of review, at a cost to the city of $2,512, specifically to address the Dillard’s Addition sewer system.

The News-Times has requested copies of the working papers from the audit. But Mindy Chambers, communications director for the Auditor’s Office, reiterated that the office found no problems with the way the city handled the sewer matter.

Chambers said that the report does address Dillard’s, even though it’s not mentioned by name in the report which examined transactions in 2006 — the year before the sewer fiasco occurred.

Robyn Kolaitis, an outspoken resident of Dillard’s Addition, said she was shocked, amazed and disappointed in the report. She said it doesn’t square with what an audit manager previously told her, which was that the city did leave itself open to liability.

“Of all the information we sent them, we have no idea precisely what they looked at,” she said.

The sewer controversy goes back to last March, when the city approved an agreement with a developer to put in a low-pressure, grinder-pump sewer system in the waterfront neighborhood. The problem was that the majority of residents weren’t notified, even though they would be forced to hook up and pay for the system — to the tune of $15,000 per residence.

Many of the homeowners complained in a series of dramatic City Council meetings. They were upset about the type of sewer system chosen for them, and they felt the city didn’t comply with state law regarding open records and meetings. They also had a plethora of other concerns.

In the end, city staff, which has always defended the project, determined that purchasing the sewer system from the developer for almost $125,000 would be the best decision. The City Council agreed.

The council members passed an ordinance in December which requires the residents to hook up to the system within five years.

You can reach News-Times reporter Jessie Stensland at or call 675-6611.

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