Despite its repeated claims of running out of room, the Island County Fair Association has had land to spare after all in recent years.

The fair association has been battling the city of Langley for more than a year over a city street that Langley wants to build across the fairgrounds to lessen traffic woes in town.

Fair officials, however, have repeatedly rejected the city’s request for a road easement. Putting the road through would hurt the county fair because every inch of the land is needed for the fair, supporters have said.

According to public records reviewed by The Record, however, fair officials approved last year’s sale of 10 acres owned by the fair association that sits near the county fairgrounds.

The city of Langley filed a condemnation lawsuit in October against Island County, the owners of the fairgrounds, to get the land needed for the new street. The Fair Association joined the lawsuit as interveners, and fair officials have said the new street — called Fairgrounds Road — would hurt the fairgrounds and would isolate the tent campground area. Fairgrounds Road would cross about 400 feet of the fairgrounds property and would mostly follow the path of an existing gravel road.

Dan Ollis, the chairman of the fair board and a member of the fair association, said that the association was pondering for years over what to do with the property before selling it. The land was given to the Island County Fair Association by Margaret Waterman in 1988.

The land was ruled out as a potential campground area because some felt the distance to the fairgrounds was too far for 4-H campers, Ollis said. The property is located east of the fairgrounds near Langley Road.

According to the county assessor’s office, the 10-acre property was purchased by Bryan Nichols for $120,000.

“I heard from friends that the property might be for sale, so I walked the property and thought it looked good,” Nichols told The Record. “We did run into a problem with the access, so we had to first purchase a piece of property adjacent to it that would give us the access.”

“It was purchased as a long-term investment and maybe a future home site,” Nichols added.

The land sale has prompted questions beyond the city’s squabble with the county and the fair association over the easement for Fairgrounds Road, however.

Years ago, Island County named the fair association as the exclusive agency to operate and manage the county fair. County officials also created a special account in the county treasurer’s office — designated the “Island County Fair Fund” — as a place to deposit all donations and receipts coming from the fair, according to Island County code.

The fair association, however, did not give the money from the land sale to the county to deposit in the fair fund. Instead, fair officials created an independent account for the money, outside of the reach of the county treasurer’s office.

The state will review the property sale when starts its annual audit of the county’s books in June.

“We’re going to look at this,” said Mindy Chambers, spokeswoman for the State Auditor’s Office.

Donations questioned

The Island County Code — the set of regulations that cover everything from zoning to pet licenses — specifically states that “all fair receipts and donations” shall be deposited in the fair fund. Donations to the fair association in recent weeks have been called into question, as supporters of the new road have asked the fair board to identify where it has gotten the money to pay for its legal fight against the city.

Fair officials have declined to say who exactly has paid the association’s legal fees in the court battle.

The Record filed a public records request to review donations made to the fair association in recent years earlier this month.

In a response to the newspaper on Jan. 30, fair administrator Sandey Brandon said the records were not public.

“The association is a private Washington non-profit corporation and we are confident that our private status would be upheld in a court of law, basked upon our history dating back to 1912 and the purpose of the association,” Brandon wrote.

In an earlier letter to Island County, however, the state auditor’s office warned county officials that the association must abide by the state’s public records and access laws.

In a management letter sent to the fair association, the state auditor’s office said: “The association is acting as an agent of Island County and is subject to and required to follow the laws affecting the county. These laws include but are not limited to compliance with contract and bid laws and the Open Public Meetings and Public Disclosure Acts.”

The letter, dated Nov. 21, 2003, concludes: “To properly safeguard public funds, we recommend the county establish policies and procedures to adequately monitor the association’s compliance with all applicable state laws.”

In her letter, Brandon said the state auditor’s letter was “erroneous.”

Ollis said the association is currently deciding what to do with the money from the land sale.

At a fair association meeting in early January, fair association members created a “trust committee” to help create an endowment fund with money from the property sale.

Fair officials indicated that the fair board and the fair association have separate accounts. Ollis said that the fair board receives donations that go into the county fair fund. He said he could not speak for the association concerning its accounting practices.

Currently, the fair association has two boards that are involved with the county fair. The fair board is led by Ollis and vice chairman Jon Gabelein; the Island County Fair Association is led by president Diane Divelbess and vice president Sally Berry.

The fair board is responsible for putting on the fair, according to Brandon, while the association is responsible for volunteers and raising money.

Ollis said the organization has tried to change its bylaws to clarify the relationship between the fair board and the fair association, but those efforts failed.

In the battle over Fairgrounds Road, fair supporters have repeatedly claimed that any loss of land would be damaging to the fair.

Elaine Spencer, the fair association’s lawyer in the condemnation lawsuit, said last year that the condemnation of a piece of the fairgrounds could have a harmful effect on the fair’s survival.

The city is aware of the property sale, but declined to comment.

Michaela Marx Wheatley can be reached at 221-5300 or mmarxwheatley@southwhidbeyrecord.com.