The town of Yacolt has filed a lawsuit in Clark County Superior Court against the Washington State Auditor's Office and others, alleging town officials were defamed by a 2011 performance audit.
The lawsuit says the auditor's office "failed to take reasonable or proper steps" to verify the accuracy of an audit that claims the town violated the state's competitive bidding law and skirted ethics when it purchased excavation equipment from a city employee.
The lawsuit also alleges that auditors working for the state office didn't engage town officials in "meaningful or objective discussion" about the audit's findings. The town is asking for unspecified monetary damages and a retraction of the audit.
The audit asserts that in 2009, Yacolt purchased an excavator from Pete Roberts, a recently hired employee of the public works department. The $13,980 purchase exceeded the state's formal bid threshold, the audit says, and happened without an independent appraisal taking place.
Along with Roberts, former Mayor Joe Warren was implicated by the audit, which said he needed to improve internal controls to safeguard public resources.
Town officials were "shattered by the audit report," according to the lawsuit. Warren stepped down as mayor after the audit's release at the recommendation of his doctor.
Yacolt sought an independent appraisal of the equipment and purchased it for about $2,000 less than its market value, the lawsuit says.
Officials were surprised the purchase raised eyebrows. The town had previously bought a Ford F-250 pickup truck for $12,000 without completing a competitive bid process. That purchase was vetted by an attorney from Municipal Research Services Center of Washington, which provides advice to local governments.
That purchase, which the city made in 2008, did not receive any scrutiny from the auditor's office. Yacolt deemed buying the used excavator to be comparable to buying the pickup, the lawsuit says. The Town Council signed off on both purchases.
In addition to the excavator, Roberts donated other items to the town, including a refrigerator, tools, a microwave oven and oil. All told, Yacolt's former Public Works Director Paul Tester estimated Roberts gave the town $30,000 worth of equipment and received only $13,980 in return.
In 2009, Yacolt promoted Roberts to public works director following Tester's retirement.
In a 2011 email to Tina Watkins, acting audit manager in Vancouver at the time of the audit's release, Yacolt's attorney, Dave Ridenour, asked for clarification on the negative audit.
"I understand the auditor's office is critical of the transaction, but I am not clear how the town's receipt of those items, whether donated or purchased, separately or combined, violated state bidding law, or any other law," Ridenour wrote.
Lawsuits against the auditor's office, although rare, were not unheard of, spokesman Matt Miller said. He said the office couldn't comment extensively about ongoing litigation.
The auditor's office has until the end of the month to respond to the lawsuit.