A Spokane County sheriff’s deputy and his wife are accused of embezzling about $35,000 over four years from a private water district near Elk.
Thirty homeowners on the east side of Reflection Lake belong to the nonprofit association, contributing $20 a month.
On Tuesday, the Reflection Lake Water Association filed a lawsuit against Kristine and Michael Zollars, accusing them of stealing the money and wiping out the association’s cash reserve.
The Zollars were removed from the governing board in February, officials said.
Mike Zollars started serving as president in June 1992; his wife joined the board a year later.
The association vice president said he and other angry homeowners want the couple prosecuted for theft.
“Mike wouldn’t open the books up to us,” Kevin Jobes said. “He said there wasn’t any money in the account because of expensive electric bills.”
An attorney for the sheriff’s deputy, however, denied the charges.
“Mr. Zollars had nothing to do with that,” attorney Rick Bonewell said.
Zollars, who remains on active duty, couldn’t be reached for comment Wednesday. He has told residents he didn’t know about the missing money.
Kristine Zollars and her attorney, William Mableson, refused to comment.
But Mableson said his client agrees “the probability does exist that some monies were used without authorization,” according to documents filed in Spokane County Superior Court.
The association’s electric bills are usually less than $40 a month, according to Jobes, whose wife preceded Kristine Zollars as treasurer.
When Zollars began paying the bills, there was more than $10,000 in the association’s bank account, Jobes said.
Sheriff’s Department spokesman Dave Reagan said the Zollars aren’t currently under investigation. Detectives are waiting for the association to complete an audit, Reagan said.
Jobes said the association is reviewing financial documents dating back to 1993, but doesn’t have money to pay for an audit.
Officials said they notified authorities about the missing money in February. The problem came to light after last November’s ice storm.
Jobes said a pump to a holding tank was damaged during the storm.
“We had power but no water,” he said. “We were all trying to figure out what was going on. Mike told us he had ordered a pump, and that it was on its way up from Portland.
“He said repairs could be completed if there was enough money. And that’s what sent up the red flags.”
The pump was later replaced. The association charges homeowners $600 a month for use of the holding tank, which draws water from a spring near the lake.
The money pays for electricity, water testing, tank maintenance and system improvements.
“In a weird way, it’s a good thing we had the ice storm,” said resident Frances Aune. “Who knows how long this would have gone on if it weren’t for the storm?”