The city of McCall suffered a setback last week in its legal battle over the 2000 construction of the city's giant wastewater holding pond.
The U.S. Ninth Circuit Court of Appeals ruling last week affirmed that the city owes $6 million in damages and attorney's fees to Employers Insurance of Wausau, a bonding agency, and St. Clair Contractors Inc., which the city fired as the contractor for the facility, called the J-Ditch pond.
The appeals ruling affirmed there were no errors in instructions given to the jury in the trial held in U.S. District Court in Boise in 2004. It also affirmed that there was sufficient evidence to justify the jury's award and that the attorney fees were reasonable.
"The city ultimately has to pay," said Jeff McConnell, St. Clair's attorney. "It has the power to raise taxes, float a bond; private people can discharge a debt, but I don't think a city can do that."
Randy St. Clair, owner of St. Clair Contractors, said he would go after the money through any surpluses in the city's budget.
"We're going on seven years now; it's time for this thing to be concluded," St. Clair said.
City manager Lindley Kirkpatrick said in a statement that the city was proceeding "with a good-faith effort" to comply with the court judgment.
"The City Council will continue to take all of the fiscally responsible and prudent steps which are allowable to that end," Kirkpatrick said.
St. Clair appeared before the McCall City Council last Thursday and demanded to know when and how the city of McCall planned to pay the judgment due to St. Clair and Employers Insurance of Wausau, a bonding agency that filed suit with St. Clair against the city.
"I would like to know what the city has done to appropriate funds and more importantly what are you intending to do and when," St. Clair said during the public comment portion of the meeting. The city council had no response for St. Clair.
"They have been court ordered to appropriate funds," St. Clair said in an interview. "We've asked them to show us the documents where they have started to appropriate them ... they have showed us no documents."
If the city pays the court-ordered price, about $2.2 million would go to Wausau and the rest would go to St. Clair.
St. Clair has another case pending in federal district court in Boise asking for an additional $1.1 million in contractor fees.
On April 18, a federal judge in Boise will hear arguments on whether McCall is in contempt of court for not paying Wausau and St. Clair.
The city fired St. Clair when the contractor could not finish the storage pond that stores treated wastewater over the winter months for irrigation on contracted farmland south of the city during the summer.
Since the city terminated the contract for St. Clair in the winter of 2000-01, St. Clair's business has substantially changed.
"I've had no banking capabilities, no bonding capabilities," St. Clair said. "I have liens on all my personal and contractor assets; anything I do has to be done with the blessing of the people who have liens against me."
Before the termination by the city, the business derived 75 percent of its business through public works contracts, he said. He also lost his experienced workforce as his gross revenues and profits took a substantial dive after the decision by the city.
The business went from annual revenues of $3 million to $6 million to a little more than $1 million, he said. Before the J-Ditch storage pond project, the business earned more than $1 million in retained earnings, now it has negative earnings, St. Clair said.
"This changed my business plan...it's taken three-quarters of my opportunities away from me," St. Clair said.
"It would be nice if the city of McCall would conduct its business as a private individual has to," he said. "They have had numerous opportunities to come to the table and workout an agreement, and I can't understand why they failed to do that."
