McCall Idaho Headline News

The McCall City Council voted last week to release about $300,000 in reserve funds to begin paying off a $6.5million judgment against the city for its mismanagement of the construction of the city's J-Ditch storage pond.

The city will pay St. Clair Contractors Inc., of Boise $300,432 on June 22.

"It will be good to get this off our plate," Mayor Bill Robertson said after the vote during the council's meeting last Thursday.

Robertson noted that the payment would put a stop to any extra street paving or improvements to the sewer system to limit groundwater leaks into the system.

Those projects were previously designated for surplus funds in past years.
The city owes Employers Insurance of Wausau and St. Clair Contractors Inc., about $6.5 million.

The city lost a lawsuit in 2004, when a jury ordered the city to pay the two entities $4.9 million for its mismanagement of the construction of the city's winter wastewater storage pond. Legal fees and interest make up the balance.

City Manager Lindley Kirkpatrick told the council that St. Clair's law firm filed a lien against the payment to ensure the attorneys are paid first.

The city still owes about $6.2 million and plans to pay about $600,000 more later this year.
Plans call for borrowing money equal to the amount of property taxes that can be levied by Idaho law above what is now being levied to run city government. The funds could be available later this summer or early next fall.

The city will then issue bonds to cover the balance of the judgment, which is expected to be about $5.6 million.

The action requires the approval of a state judge. The bond funds will not be available any sooner than six months.

The city considered filing municipal bankruptcy to allow more flexibility in structuring a payment plan, but the city council decided against that last month.

Meanwhile, the city has filed an appeal with the Ninth Circuit Court of Appeals to overturn U.S. District Judge B. Lynn Winmill's April decision.

That decision said the city can exceed property tax collections caps in Idaho law. A ruling is expected no sooner than six months.

If the city wins the ruling, it would not be liable for the $5.6 million balance, city officials have said.