SEQUIM — Robin Auld, the board president and attorney for Fair Weather subdivision, was looking at a fresh asphalt surface fronting the duplex homes in his neighborhood Friday, a day after the city made good on a City Council decision to settle a lawsuit over bond proceeds that had delayed completion of roadwork there.
Auld praised the work of Lakeside Industries, which stood by the $61,000 bid it made last year to pave the subdivision’s roads — Stratus Loop, Nimbus Lane and Fair Weather Drive.
The roads were beginning to erode.
“For Fair Weather, it’s now all fair sailing,” Auld said.
Fair Weather residents and Auld were happy with the City Council’s decision in September to settle the lawsuit over the financially troubled, 45-lot subdivision, allowing completion of street paving.
The decision also will lead to underground utilities, the widening of adjacent West Sequim Bay Road and the paving of a walking and bicycling path along West Sequim Bay Road for completion of the development.
The council voted 6-0, with one member absent, to cover $35,000 of a $138,000 performance bond that allowed for completion of the improvements.
Auld said all that was necessary now was that all parties sign a court agreement to settle officially the lawsuit recently filed in Clallam County Superior Court.
Lawsuit
The lawsuit was filed by the bond insurance company INSCO Insurance Services Inc. as underwriting manager for Developer’s Surety and Indemnity Company of Irvine, Calif.
When he first approached the City Council in July, Auld had contended the city illegally allowed the developer’s bond coverage to be reduced.
In June 2008, just prior to the expiration of the surety bond, the subdivision’s developer, Gerald Engler, requested the city of Sequim reduce the amount of bond coverage based on the fact that he completed some, but not all, of the required improvements to the development.
On June 10, 2008, Engler received a letter from the former city Public Works director, Bill Bullock, that said Engler’s request to reduce the bond was approved.
Bullock estimated the remaining improvements would cost $110,678 and reduced the bond amount to 125 percent of that amount.
So the bond amount was reduced from $840,336 to $138,347, which led to a shortfall to perform all the improvements, which led to the lawsuit.
Bullock left the position later in 2008.
The directorship remained vacant until it was filled last year by Paul Haines. Then, City Attorney Craig Ritchie worked with Auld to come up with a solution acceptable to both parties.
Auld said under the proposed agreement, Anchor Bank will pay $14,000 and Columbia Bank, $5,000 SEmD both had ownership of some of the lots — and the residents of Fair Weather will pay about $9,000 for all improvements.
The city will be responsible for completing the widening of West Sequim Bay Road as well as a portion of a trail running through the subdivision’s frontage and burying overhead power lines.
City officials claimed that the bond remaining — $138,347 — was insufficient to cover all the costs to finish improvements, including the final asphalt overlay of the private streets.
Auld contended that the city should take interest in finishing the subdivision’s improvements because that was always the intent of the city and bonding company.
Faltering economy
Former Sequim Fair Weather Subdivision developer Engler, who still owns a home in Sequim but moved his business, GLC Homes, to Portland, Ore., said the faltering economy forced him to walk away from completion of the subdivision.
The subdivision never went through foreclosure or bankruptcy proceedings as previously reported, Auld said, and developer Green Crow of Port Angeles has purchased 24 of the subdivision’s lots from Anchor Bank.
Columbia Bank still owns four of the subdivision’s lots.
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Sequim-Dungeness Valley Editor Jeff Chew can be reached at 360-681-2391 or at jeff.chew@peninsuladailynews.com.