An out-of-court settlement is being discussed between the Blaine County School District and Seattle-based McKinstry Essention in multi-million dollar litigation between the parties.
The discussions were confirmed Monday by district Business Manager Mike Chatterton. He declined to discuss specifics but said Superintendent Lonnie Barber and engineer Brian Formusa were in Seattle Monday and Tuesday talking about a settlement with McKinstry officials. Formusa, of Hailey, is contracted by the School District to provide engineering services and advice.
“Right now there is not a settlement,” Chatterton said.
The district and McKinstry have discussed a settlement previously, even as early as 2011 before litigation was started, but the parities were never able to reach an agreement.
The district board of trustees has scheduled an executive session for noon today, Sept. 18. The meeting agenda states that it is to discuss legal issues, but board Chairman Paul Bates declined to discuss whether or not the session concerned the McKinstry litigation.
“That’s the nature of executive sessions,” Bates said Monday.
While executive sessions are closed to the public, any vote taken by a public agency is required by state law to be done in open rather than closed session.
“If we were to act on any settlement, it would become information that we would share with the public,” Bates said.
Litigation between the district and McKinstry started in May of 2012 when both parties filed lawsuits against each other in Blaine County 5th District Court. The lawsuits were later consolidated into one case with McKinstry listed as the plaintiff and the district as the defendant and counter-claimant.
The litigation stems from a contract signed between the parties in 2010 for energy savings work and other improvements at eight district schools and facilities. McKinstry claims it performed work worth about $26 million and is seeking an alleged unpaid balance of between $6 million and $7 million.
The district claims it only authorized work worth $18.6 million and is seeking damages against McKinstry for at least that amount.
The case is scheduled for a jury trial to begin on April 8, 2014.
Chatterton told the school board in April that at that time the district had paid nearly $20 million for the McKinstry work, either directly to McKinstry or by joint checks to McKinstry and local subcontractors who worked on the projects.
Chatterton said then that the district wanted reimbursement from McKinstry for the payments to local subcontractors that were made after McKinstry stopped paying them in late 2011.
The district has thus far spent about $2 million in legal fees and investigation costs for the litigation.
Terry Smith: email@example.com