Round One of a lawsuit against Island County Diking District 1 over its controversial pump project has gone to its upset property owners.

Island County Superior Court Judge Vickie Churchill ruled that district officials must turn over all documents concerning decisions the board made in conducting the business of the district since 1986. She also said diking district officials may have acted illegally when they approved the financing scheme for the district’s controversial pumping project.

Churchill granted a writ of review to Citizens in Support of Useless Bay Community (CSUBC), a group of property owners upset with the district’s assessments for its $430,000 pump project and the effects of the pumping on the district’s wetlands, on March 27.

CSUBC says district commissioners pushed through the pump without appropriate public notification or hearings, and that it changed its assessment procedure, putting the bulk of the financial burden on only a few residents.

“Guarding the individual’s rights to due process is a fundamental function of courts,” Churchill wrote. “It appears that the district exceeded its jurisdiction or acted illegally and there is no adequate remedy at law.”

Churchill ruled that the 1986 assessment method adopted by the diking commissioners was changed in 1995 on short notice and without public input.

“There was no notice to the property owners, no public hearing, no chance to be heard and no appeal process,” the judge wrote. “Because there was no open hearing, the public affected did not have a chance to influence the district commissioners’ decision and did not have a chance to appeal, as they did after 1986.”

“We’re gratified with the court’s decision,” Jim Klauser of Seattle, one of the attorneys for CSUBC, said Wednesday. “It looks like she made a very good one.”

“This is round one of several rounds, and we will continue with the case,” Scott Ellerby, the Seattle attorney representing the diking district in the lawsuit, said Thursday.

“We respect the judge’s decision,” Ellerby added, “and we definitely plan to follow the order of the court and produce whatever documents we’re required to produce.”

Diking commission chairman Steve Arnold said Thursday the documents could easily have been obtained through the state’s open public records law.

“They were going to get them either way,” Arnold said of CSUBC. “They just chose the expensive way.”

Klauser, of the firm Rowley & Klauser, which specializes in cases involving environmental issues, said the next step in the process is for the judge to sign the order directing the district to produce its records within a specified period.

The judge then reviews the documents and issues another decision.

Klauser predicted the next ruling will be the same as the previous one, that the district was in the wrong. Many of the documents used by the judge in making her latest decision were copied earlier from the district’s files by CSUBC, he said.

“We simply said we don’t know what the commissioners did, and they fought tooth and nail over that,” Klauser said. “The judge obviously saw through it.”

The $430,000 pump project has spawned two lawsuits from angry property owners and has divided the district’s board of commissioners. One of the lawsuits was subsequently dropped.

Critics have complained for more than a year that the cost for the project hasn’t been fairly spread out among property owners in the district. Opponents have also claimed that the pump is draining sensitive wetlands next to Useless Bay that comprise prime wildlife habitat.

The district spans 743 acres and includes the neighborhoods of Sunlight Beach, Olympic View and Sun Vista and Useless Bay Golf & Country Club.

In 1986, the district added to its assessment role not only the 460 acres included when the district was formed in 1914, but additional property along Sunlight Beach. It also at that time adopted a resolution to assess the property of benefited parties at full market value.

Churchill said that those 1986 actions were done properly, and with due process.

“However, the Citizens are correct when they say over the years the District has applied different laws,” the judge said.

She said the assessment method was changed by three resolutions and without due process in 1995. The resolutions said that unimproved and unplatted property within the benefited area would now be assessed at $1,100 per acre, and all other properties at market value. Any property with less than half in the benefited area would not be assessed.

Diking commissioners Arnold and Ray Gabelein both own unimproved property in the district, property which both say they have no plans to develop. Gabelein currently uses part of his land in the area to graze cows, and another portion is covered by a conservation easement with the Whidbey Camano Land Trust.

It was the 1995 revision that was referred to by the diking commission as the “historical assessment method” which was later to be used for the 2009 assessments for the 6,000-gallons-per-minute pump, which was installed on Christmas Eve 2008.

“If the 1995 assessment was made only after 24 hours notice to the district commissioners, it is hard to imagine that the property owners affected by the change in assessment methods had the opportunity to appeal, when they had no notice of the meeting in which the decision was made,” Churchill wrote.

Klauser said CSUBC’s position is that the pump should stop pumping and a hearing should be held.

Early last December, the U.S. Army Corps of Engineers in Seattle suspended the diking district’s permit for the pump, saying that it may have issued the wrong kind of permit. The decision was based on information provided by CSUBC and other critics.

The Corps of Engineers has said the pump can remain in operation until the situation is sorted out. Talks between the diking district and the Corps continue.

The new project is designed to pump into Useless Bay any excess stormwater that could flood property in the district. Opponents say all it has done so far is to endanger the wetlands, while seasonal flooding on the east end of Sunlight Beach continues as it always has.

Meanwhile, the third diking commissioner, John Shepard, a constant critic of the board’s actions, has remained out of the loop regarding the lawsuit.

In an earlier ruling, Churchill agreed with the other two commissioners that Shepard had provided information to CSUBC, of which his wife Coyla is a board member, and should be excluded from all subsequent official discussion of the lawsuit by diking district officials.