The cost of broken communication

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How much is a good meeting worth?

Fifty bucks? A hundred? How about a thousand?

A lawsuit was brought against the city of Hayden by North Idaho Building Contractors Association, which maintained Hayden was charging an illegal sewer tax on about 335 new homes built from 2010-2016. The judge agreed with NIBCA and has ordered Hayden to reimburse the home builders and buyers roughly $750,000.

City officials will decide if they’re going to appeal the judge’s ruling to the Idaho Supreme Court. Meanwhile, there’s time to pause and maybe, to learn.

Hayden has spent more than $750,000 in legal fees to defend itself. Had it not fought back, the city would have had to pay an estimated $1.35 million to settle. It’s unlikely anybody in City Hall believed the legal costs would ever get this high, let alone escalate with a possible Supreme Court appeal. City officials did what they considered fiscally responsible for their citizens.

However, if Hayden ultimately loses, the city will be responsible for paying the $750,000 as ordered by the district judge. With its own attorney fees, that’s a total of more than $1.5 million.

NIBCA’s lawyers wouldn’t say how much they’ve billed so far, but assuming it’s somewhere in the ballpark of the city’s lawyers, the total cost of this case is more than $2 million. And again, it might not be over.

In our view, there aren’t any villains in this dispute. NIBCA, comprised of many of the region’s top construction industry people, was looking out for itself and its customers. The city of Hayden was attempting to charge no more than what was needed to provide sewer service. So what went wrong — to the possible tune of more than $2 million?

Well, communication went wrong. When two reasonable entities end up in a fight like this, there’s a strong likelihood that a basic disagreement escalated unnecessarily. In our research, we’ve learned that constructive discussion devolved into confrontation. The result? This legal and emotional mess between a city and builders who need each other.

Unless Hayden wins a Supreme Court appeal, its residents will end up paying dearly. The city is likely to tap its emergency fund and its general fund to pay for this disaster. There’s no insurance bailout.

And even if it wins, NIBCA won’t feel the full windfall after its legal bills are paid. Only the lawyers are likely to walk away smiling.

Now how much do you think a good meeting is worth?

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