Prosecutor seeks contempt ruling in convoluted case against Stevens County commissioners

One at a time, the Stevens County commissioners recused themselves and briefly left their meeting room in Colville. While one was gone, the other two voted, using their majority to pass a resolution.

The May 31 meeting proceeded like clockwork. Commissioner Don Dashiell left the room first, at 10:15 a.m. Then went Commissioner Steve Parker at 10:20 a.m. and Commissioner Wes McCart at 10:25 a.m., according to their official meeting minutes.

By the end of that unusual process, each commissioner had a resolution with his name on it, saying the county “will defend, settle and pay on behalf of him any amounts for which he is liable” in lawsuits brought by Stevens County Prosecutor Tim Rasmussen.

On Thursday, a judge will make two major decisions in those lawsuits: whether to grant a summary judgment against the commissioners, and whether to hold them in contempt for authorizing the county to cover their legal expenses.

The commissioners are accused of misspending more than $121,000 from a public fund dedicated to fighting homelessness. That includes more than $30,000 that went to a couple whose home was damaged by historic flooding last year, and nearly $91,000 that two nonprofits used to build a transitional home for people with spinal cord injuries.

In February, the state auditor’s office found the commissioners had made an “unallowable gift of public funds.”

Rasmussen is seeking to hold the commissioners personally liable for the homelessness funds. He wants the county to collect from their public official bonds – a type of insurance policy that pays governments up to a fixed amount when an official fails to “faithfully perform” his or her duties.

Travelers Insurance and the United States Fire Insurance Co. have issued a total of five bonds for the commissioners, each valued at $20,000. Those bonds would not cover the full amount in dispute, so Rasmussen is seeking to recoup the difference from the commissioners’ personal finances, plus interest and attorney fees.

The commissioners have defended the payments from the homelessness fund and argued they were acting within their official capacity when they approved the payments.

Spokane County Superior Court Judge Maryann Moreno, who has visited Stevens County to hear the cases, has yet to rule on the legality of the payments.

But in May, Moreno denied the commissioners’ request to have the public foot the bill for their legal defense, saying Rasmussen did not have a duty to appoint an attorney for them. Under normal circumstances, the prosecutor’s office is expected to give the commissioners legal advice and represent the county in most civil and criminal matters.

Rasmussen’s specially appointed deputy prosecutor, George Ahrend, filed a motion in October asking Moreno to hold the commissioners in contempt, saying their resolutions violate Moreno’s previous order. The resolutions also had not appeared on the commissioners’ agenda, as is required for public meeting items.

“They were adopted in a collusive manner,” the prosecutors wrote. “They amount to a further unconstitutional gift of public funds and run afoul of other applicable laws.”

In passing their resolutions, the commissioners parted ways with their attorney, Jerry Moberg, and appointed a new one, Todd Startzel.

Neither the commissioners nor Startzel responded to messages seeking comment Monday. But in court records, Startzel described Rasmussen’s contempt motion as “nothing more than a ploy to harass the commissioners” and “a waste of judicial resources.”

Startzel argued the commissioners were entitled to appoint an attorney – him – using their own legislative authority, even though they were not granted a lawyer by the court or the prosecutor’s office. And although the commissioners authorized the county to reimburse them, Startzel wrote that they had not submitted any bills to the county.

“Even if the resolutions did violate the prior order, a contempt motion is entirely improper as the county has suffered no harm,” Startzel wrote.

Lawsuits’ origins

The homelessness fund consists of surcharges that people pay when they record documents such as property deeds. State law requires counties to collect those fees and maintain homelessness funds to pay for services such as shelters and low-income housing programs. Use of those funds is restricted by state law and each county’s 10-year homelessness plan.

In a public meeting in August 2018, the commissioners approved a payment of $30,128 to reimburse Joseph and Alena Boharski for the cost of moving their house onto a new foundation on their property near the Canadian border. A few months earlier, the Kettle River had overflowed with rain and snowmelt, eroding the shoreline and sweeping away the couple’s front porch.

Rasmussen raised questions about that payment in September 2018 during a contentious local election season, asking the state auditor’s office and the Washington State Patrol to investigate.

The commissioners argued the Boharskis were at risk of becoming homeless because the flooding made their house unsafe to occupy and they did not have insurance for such an event. The auditors, however, agreed with Rasmussen that the payment was inappropriate.

“Because the homeless housing plan only allows for minor repairs and alterations for single-family, owner-occupied housing, the owner’s request did not fall within the plan’s allowed activities and therefore constitutes an unallowable gift of public funds,” their report states.

The other payments totaling $90,893 went to the Colville affiliate of Habitat for Humanity and another nonprofit, Casey McKern’s Pay It Forward, named for a Kettle Falls man who was left paralyzed below the neck after a diving accident in 2008.

According to Rasmussen’s lawsuits, the two organizations used the money to build a house described as a “bed-and-breakfast/layover/vacation house” for people with spinal cord injuries, and the commissioners “did not require the funds to be used to reduce homelessness in Stevens County.”

In the middle of the building process, Habitat for Humanity “withdrew from the project for multiple reasons, including excessive expenditures by the (Casey McKern) Foundation and breaches of the parties’ agreement,” the lawsuits state.

The auditor’s office determined the payments to the two organizations constituted an “unallowable use” of “restricted funds” because nonprofits don’t meet the definition of “poor and infirm” under the state constitution.