YACOLT — Contending that a two-year-old accountability audit defamed the town "beyond measure," Yacolt plans to file a notice of its intent to sue the Washington State Auditor's Office in Clark County Superior Court.
The town's tort claim — the precursor to a civil lawsuit filed against the state — alleges a 2011 audit falsely implicated town officials in semi-legal dealings and mischaracterized the town's financial controls.
The town is asking that the auditor's office retract its findings.
The audit highlighted a slew of financial problems, including ones associated with billing and receipting, community event documentation, bank account reconciliations, town payments and payroll.
Yacolt's former mayor, Joe Warren, and its current public works director, Peter Roberts ,are named as co-plaintiffs in the town's claim.
Both men were explicitly named in the audit, and Warren resigned from his position shortly after its release. The audit claimed the city purchased equipment, including a used excavator, from Roberts for nearly $14,000, "exceeding the state's formal bid threshold" of $7,500.
It concluded that Warren hadn't provided adequate financial oversight of the town of 1,605 residents. Unlike in larger communities with city managers, Yacolt's mayor is responsible for overseeing town operations.
Yacolt's attorneys contend the city purchased the excavator for below market value after seeking an independent valuation of its open-market price. The purchase of the excavator was then approved by Yacolt's finance committee and town council, according to the town's draft defamation complaint.
Roberts, who was a Yacolt employee but wasn't serving as public works director when he sold the equipment, also donated other items free of charge, including oil and a compactor attachment for the town's backhoe.
Yacolt contends there were more than 80 false statements mentioned in the audit report. They include:
• That a management-level employee directed the town to purchase the excavator.
• That it was unlawful or unethical to purchase equipment without first obtaining an independent appraisal.
• And that the purchase was done in a more secretive fashion than permitted by law.
"The state auditor's office looked at a benefactor and called him a crook," town attorney David Ridenour wrote in a Feb. 25 letter to the Washington Department of Enterprise Services, Office of Risk Management, the agency where tort claims against the state are initially filed.
The Town Council has approved filing the complaint in Superior Court.
Ridenour said the auditor's office had not formally responded to the town's complaint.
The office declined to comment to The Columbian on potential litigation.
To assist with Yacolt's complaint, the town has retained the services of Portland-based law firm Stewart, Sokol & Gray. Yacolt will only pay the firm if there's a favorable result.
Attorneys say the auditor's office came to "sensational conclusions" that "recklessly tarnished" the town, its employees and elected leaders.
Warren, a two-term mayor, stepped down about a week after the audit's release in 2011. At the time, he cited "personal reasons" for his resignation.
According to the town's complaint, the resignation followed doctor's orders because Warren was suffering from stress-related conditions, including having dangerously high blood pressure.
In the weeks following the audit's publication, town council meetings turned into raucous, standing-room-only affairs, according to the complaint. On a number of occasions, town officials called the Clark County Sheriff's Office to keep the peace.
In the ensuing two years, Warren has led a relatively isolated life, the complaint says, avoiding most community events. The town's complaint alleges the audit also negatively affected Roberts' reputation.
He has frequently "found himself on the receiving end of rude gestures and comments from some citizens in town," the complaint says.
Meanwhile, Mayor Jeff Carothers, who was elected in 2011, has endured repeated vandalism to his home and vehicle.
In the draft complaint, Ridenour, the town's attorney, says the vandalism evidently happened because Carothers refused to "accept the conclusions of the report without proof, or agree to fire members of the town's staff and consultants."