The former Island Transit finance manager is defending her reputation after being fired and accused of financial mismanagement at the agency.

Executive Director Martha Rose said she fired Barbara Savary in June after it was revealed that IT didn’t have enough money to pay its bills.

Rose said Savary did not properly communicate to her the agency’s money troubles and was dipping into investment reserves secretly to cover expenses.

As a result of money problems, staffing and route cuts were implemented.

Not true, Savary said last week. Savary said she warned Rose that Island Transit was headed for a shortfall, but that her concerns were routinely ignored.

“Over the course of the last few years, I became increasingly uncomfortable with decisions made at Island Transit and the effect these decisions were having on the budget,” Savary said in a letter released after consulting with an attorney.

“I repeatedly informed (Rose) that changes and cuts needed to be implemented to avoid the exact situation that now befalls Island Transit.”

Savary said she was already “looking for other opportunities” when the budget shortfall was made public.

Rose was also aware the agency was drawing on its investment reserves to cover expenses, Savary said.

Island Transit obtained an $18 million federal grant for the new facility, which was completed this year, and needed to come up with $4.4 million in matching funds.

Savary claims only about $1 million of the original $6.2 million was used to cover budgetary shortcomings, and another $5 million, she claims, was used to finish the new transit facility and purchase new vehicles.

“These expenditures were published in the budget and approved by Ms. Rose,” Savary said in her letter. “I explained to Ms. Rose that, without a change in practices, our reserves would be completely depleted by May 2013.”

Island Transit’s investments were at zero as of July, and Island Transit had to obtain a $1.5 million bond to raise the necessary match and operating costs.

Savary said Rose initially asked her to take a demotion, which she accepted, but then Savary decided to give her two-week’s notice.

During her last two weeks at IT, Savary claimed Rose asked her to stay on, but she declined. Then, before completion of her final two weeks at the transit center, Savary said she was handed a termination letter by Rose and was denied her accrued vacation pay.

Savary also counters Rose’s claim that she left unpaid bills in her desk upon her departure.

“There is no basis for making this statement,” Savary wrote. “I have never knowingly put invoices in my desk. Following my departure, I was contacted on several occasions by Island County staff for assistance on various issues. Never once was I asked about invoices found in my desk.”

Rose “created liability” for Island Transit when she made false statements, Savary alleges in her letter, adding she has met with lawyers. She didn’t say whether she intends to sue her former employer.

Savary could not be reached for additional comment. Rose said last Tuesday she hadn’t read Savary’s letter and would not comment.

Lydia Ferguson, who drove a bus for Island Transit for 15 years until April, said she has a hard time believing Rose wasn’t aware of the agency’s finances.

“There was nothing, not one penny, that Martha didn’t know about,” Ferguson said. “She was very much in control of everything and anything that happened at Island Transit.”

Ferguson, an Oak Harbor resident for 25 years, said she left Island Transit by her own choice, but experienced some health issues and was using her Family Medical Leave Act time prior to making a decision to not return.

Ferguson concedes she wasn’t close with most of the office staff, but said she saw and heard what was happening.

“I simply don’t understand how (Rose) can say that she wasn’t aware,” Ferguson said. “It was Martha’s way or the highway.”

Ferguson also said she believes Rose had good intentions.

“I think her heart’s in the right place,” Ferguson said. “She just wanted so much for it she forgot about what’s right and wrong.”

Island County Commissioner Helen Price Johnson, who serves on the transit board of directors, said she was advised by legal council not to comment on the “possible litigation” when asked to comment on Savary’s letter.

Finding out what happened is important, and she looks forward to the results of the audit, Price Johnson said.

“My main focus is moving forward — correcting the structural deficiencies, restoring Island Transit’s fiscal health and preserving this vital service for our community,”  Price Johnson said via an email.

“I am saddened that Ms. Rose has opted to publish false statements with knowledge of their falsehood in what is apparently a desperate attempt to retain her own job,” Savary said in her letter. “I’m am truly sorry it has come to this, but I cannot silently accept blame when it is not due.”

Island Transit has a $12 million operating budget and is an independent taxpayer-funded agency overseen by a board of directors.