There's Gonna Be A Lynchin'

McCall residents are plenty angry with their city council, and are talking about jailing them. If you've not been following the issue, about 8 years ago regulators made the city stop dumping sewage into the Payette River. McCall contracted to build a sewage treatment plant. KTVB described it as storage ponds. After it was built, McCall apparently asserted that the contractor had defaulted on the contract, and withheld payment. The contractor and its insurance company sued, and eventually won. Now McCall has to pay for the plant, plus interest and attorney fees. The city is considering doubling property taxes, or perhaps declaring bankruptcy.

The current council members weren't involved in creating the mess, and the ones who created it are gone, but residents still blame the current council. The Statesman reports:

At one point during the town hall meeting, an audience question was read that asked if current or past City Council members could be made to pay the debt, and a dozen audience members cheered and applauded.

"In my personal opinion, they are inept, they are irresponsible, they don't listen to their attorneys or planning and zoning, and that's why they're in the mess they're in right now," said Joan Catlett, 65, before the meeting.
...

"We feel like some of our previous City Council members and current City Council members should be in jail," she said.

Residents also question why the city didn't plan for the eventuality that they might lose the lawsuit and start saving up. I wonder about the money to pay for the plant in the first place. City officials say

all of the money earmarked for the waste treatment site had gone into it at the time, and said they couldn't speak in detail on why the money hadn't been enough.

If they had it, why wasn't it enough? And if they had it and held back paying the contractor, wasn't it invested in some interest bearing account? I'm also curious about what they were thinking when they withheld the money in the first place. The Statesman says:

In 2001, the city held contractor St. Clair Contractors Inc. in default, saying the building was not completed by set time frames.

So the city got its plant but refused to pay because it wasn't done on time. Well, on time for what? Did the regulators set a deadline and the city had to pay fines because the plant was late? If not, it kind of sounds like the city was trying a bit of sharp dealing.

The Times-News says the problem was that "the facility wasn't complete under terms of the contract." KTVB says "the lawsuits began when the city held its contractor in default for allegedly not building this facility to agreed upon specifications." So, either it was late, or not complete, or not built right.

Since Judge Lynn Winmill ordered the city to pay "immediately," it looks like this story will play out pretty quickly.

The Idaho Business Review, which has apparently read the judge's order, points out that the city can issue general revenue bonds to cover the expense.

New York filed for bankruptcy, so I guess McCall can. The Bankruptcy Code has a section for municipalities, and the Idaho Code also allows a taxing district to go bankrupt. For a growing town like McCall, a bankruptcy might hurt its future ability to issue bonds to fund new infrastructure. Almost certainly it will cost the city in higher interest rates on such bonds.

I kind of surprised that no one is blaming environmentalists for wanting to clean up the Payette River, or blaming "government" for forcing the city to build the plant, or lawyers, or an activist federal judge.