McCall to pay part of its debt

BOISE – The central Idaho vacation town of McCall, hoping to stave off a bankruptcy filing, plans to pay more than $300,000 this month on a $6.2 million judgment and is working on plans to pay off the balance of the debt, the mayor said Thursday.

Bill Robertson said he expects the City Council to follow through on a plan it has already approved that calls for a check to be written at the June 28 council meeting.

The city plans to borrow another $600,000 to make another payment sometime this fall, he said, after McCall gets information on taxes coming from new construction and on property taxes it could have previously collected under state law but didn’t.

Robertson said the next step would be obtaining a bond, either through a process called judicial confirmation or via a vote by city residents, that would allow the city to pay off the rest of the judgment it owes construction and insurance companies that built and financed a lawsuit-plagued wastewater treatment plant.

However, Robertson said a bankruptcy filing is still a possibility because the proposed bond could be rejected by a judge as not being “ordinary and necessary” as it is not for a construction project, but to pay off a judgment.

If a judge rejects it, Robertson said the bond measure would go before voters, who would face higher property taxes or sewer rates if it passes.

“We don’t want to know what happens if they say ‘no,’ ” Robertson said.

“We just don’t want to get there.”

Even if the bond is approved, that could take up to a year, he said, and the judgment against the city requires the money to be paid immediately.

He said the city was in the process of submitting paperwork for the bond.

In April, U.S. District Judge B. Lynn Winmill ordered the city to immediately pay the money to Employers Insurance of Wausau and Boise-based St. Clair Contractors, Inc. That ruling was the culmination of six years of court decisions that have gone against McCall.

But Robertson said the city doesn’t have the money, and that if Wausau insists on immediate payment, Winmill could appoint a federal receiver to manage the town. Robertson said that would take control of the town away from elected officials.

He said the city would seek bankruptcy protection to prevent that from happening.

“That’s really a matter of whether or not Wausau chooses to go back to the judge, because the judge could say ‘pay immediately,’ and we can’t do that,” Robertson said.

Ron Blewett, a Lewiston attorney representing Wausau, did not immediately return a call from the Associated Press on Thursday.