Gold Bar may cease to exist

Snohomish county town beset by financial woes, lawsuits

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GOLD BAR — Financial problems have pushed the Snohomish County town of Gold Bar to the brink of extinction -- at least as a local government.

Finances again were the main agenda item at Tuesday night's city council meeting, and officials will have to decide by early January whether disincorporation is their only option, Mayor Joe Beavers said. Residents could vote in March on whether Gold Bar will cease to exist after more than a century. If so, it would fall under the general county governance.

Residents packed a city council meeting last July and spoke passionately against dissolving the town. But earlier this month voters rejected a tax levy to help pay legal bills. Homeowners were asked to pay an average of $11 a month. It failed with 43 percent of the vote.

The city has run up legal bills from lawsuits over public records requests. It also apparently was the victim of hackers who took $450,000 over the past year.

Three women who run an online news site called the Gold Bar Reporter have filed lawsuits, recall petitions and complaints with the state Public Disclosure Commission. They believe the city is hiding emails to cover up past scandals.

Lawyers cost the city about $100,000 a year, Beavers said Wednesday. The entire city general fund is about $500,000.

With the exception of litigation expenses, the city pays for itself. That's the ongoing situation," Beavers said. "And we're still trying to recover money from the fraudulent account."

About $451,000 was taken from a city account through computer fraud. About $223,000 was blocked or recovered, Beavers said.

The case is being investigated by the Clackamas County, Ore., sheriff's office as part of a multi-state wire fraud investigation involving the FBI and IRS.

"I couldn't believe how easy it was to take money out of a bank with a computer," Beavers said. "All they had to do was get your bank account number -- that thing at the bottom of the check."

As if the city didn't have enough black eyes, a clerk was caught on video replacing about $400 she had improperly taken.

"She took it out. We found it gone. They set up a monitor. She put it back. They had a conversation," Beavers said.

The county prosecutor is deciding whether to file a charge. The clerk no longer works for the town.

Beavers is a retired engineer who has been mayor since July 2009. He's listed on the town's website as the person to call in case a water main breaks after hours.