The city of Oak Harbor settled a lawsuit brought by the former public works director and city engineer three years ago.

The lengthy complaint, which was filed in Island County Superior Court in 2020, made a variety of claims against Mayor Bob Severns and City Administrator Blaine Oborn but largely revolved around the cost of building the sewage treatment plant skyrocketing unexpectedly. The lawsuit claims that Severns scapegoated staff members for not alerting him and the city council about the rising costs.

Under the settlement, Cathy Rosen, who was the longtime public works director, received $200,0000, according to documents obtained through a public records request.

Joe Stowell, the former city engineer, settled for $15,000, plus $32,000 in attorney fees, according to court documents.

In the original complaint for damages, Rosen demanded $1.25 million in damages and Stowell wanted $600,000.

The city’s risk pool, Washington Cities Insurance Authority, handles all claims against the city and made the decision to settle even though risk pool attorneys and officials determined there was no merit to the claims.

“The costs of defending against even false/spurious allegations can be significant, as is the time the City employees are required to expend in defending the City and responding to discovery requests,” the city responded this week in response to questions. “Any and all liability was and is specifically denied by the City, the Mayor, and City Administrator Oborn.”

A statement from the city noted that Rosen and Stowell had threatened to file the lawsuit and alert the media if the city didn’t respond to the tort claim; under law, a tort or complaint for damages first must be presented to the city before a lawsuit can be filed. The city’s statement also says that the lawsuit has spurious allegations intended to get press coverage.

The News-Times, however, has never heard from Rosen or Stowell about the claim and discovered the lawsuit through regular monitoring of civil lawsuits filed in superior court. Their attorneys declined to comment about the lawsuit or the settlement. All the information and comments the News-Times obtained about the claim and lawsuit came from the city and court files.

The city’s sewage treatment plant is at the heart of the lawsuit. In 2015, the cost estimate for building the Clean Water Facility partly into the waterfront Windjammer Park was $79 million, but the final cost was about $150 million. In February of 2018, the estimated cost jumped by $20 million, which surprised the city council and the mayor.

In response to the revelation, Severns sent the News-Times a press release in which he expressed serious concerns about the increased cost and the lack of communication from city staff about the estimate. He wrote that he will conduct an “intense review” of staff members responsible for monitoring the cost, “including the City Administrator, City Engineer and Public Works.”

Oborn was not the city administrator at the time but was hired later in the year after the position became open.

Rosen and Stowell took exception to the press release, saying that it was “published” in the News-Times and that it accused Rosen and Stowell of unethical behavior despite evidence to the contrary. The News-Times did not publish the press release but quoted from it in a story. The paper did, however, publish a subsequent column from Severns in which he wrote that he takes responsibility for the problems with the sewage treatment plant.

The lawsuit claims that Severns knew about the cost increase and became angry when staff members wanted to alert the council during a workshop meeting. He and the council allegedly held an illegal executive session during which he blamed staff members for not communicating the cost increase earlier, the lawsuit states.

The lawsuit includes many other claims, including retaliation for whistleblowing, gender discrimination, hostile work environment, wrongful discharge and violation of the Public Records Act.

The lawsuit claims that Oborn treated Rosen in an unfair, inappropriate and sexist manner.

Stowell alleged that he was forced to quit because of a hostile work environment. Rosen resigned in June 2021 and didn’t receive a severance package.