By Mark Waite
Jim Scott, owner of the former Willow Creek golf course, was led away in handcuffs on Wednesday, after Senior Judge Bob Rose sentenced him to 21 days in jail for continuing to violate court orders to clean up the golf course ponds.
Rose said Scott won’t receive good time credits, early release or be able to go home for Thanksgiving. He was also ordered to produce documents requested by Utilities Inc. attorney Laura Granier.
Scott’s incarceration came despite a bankruptcy petition filed at 4:30 p.m. Tuesday for Scott’s latest company, Caldera P and G. While bankruptcy protects Caldera, Granier argued U.S. bankruptcy law allows actions against guarantors in their individual capacity, like Scott himself, or on behalf of other companies, in this case the company he managed, Ashland Capital LLC.
“His actions amounted to willful disobedience of a court order. Mr. Scott, court orders are court orders. They are not suggestions,” Rose said. He referred to a court order last April to remediate the ponds by July, which was followed by another hearing, then another hearing.
“Mr. Scott, I don’t like to jail people. I gave you every opportunity not to be jailed. This is the third time but even a patient judge’s patience can wear out,” Rose said.
Scott was first ordered to remediate the ponds by the Nevada Division of Environmental Protection back in 2009.
Though a couple of pieces of construction equipment are on site, Granier claimed the only work done was to clear some dirt and cut down a few trees since a pre-construction conference Oct. 5. Granier said Scott didn’t even pay the contractor hired to rehabilitate the ponds, O and J Construction, the $25,000 mobilization fee; Scott said the contractor hasn’t submitted an invoice.
Scott’s attorney, Tim Post, said “the ponds are a mess. We agree. We’ve got to stop the repetition. The ponds are a mess, he has no money. We have to bridge that gap.”
But Granier pointed to $83,000 Scott received from an investor in October 2011 when Caldera P and G purchased the golf course. Scott said that was to pay off the note. Then Granier brought up $550,000 deposited in his capital account in July. Scott said he used those funds to pay an architect for design work and operating costs of the golf course.
Then there was the $1.7 million Granier said Caldera P and G loaned to a subsidiary, Sunray Petroleum, which she said had a producing oil well Utilities Inc. would like to seize.
Scott testified Caldera P and G filed for bankruptcy because it had no money to remediate the ponds.
But Granier said, “this is a flagrant abuse of the judicial system. He files bankruptcy after bankruptcy. He tries to hide behind different corporate shells.”
Post said his client wouldn’t be able to remediate the ponds from jail. But Granier said he can’t remediate them outside jail either.
A trustee appointed by the bankruptcy court will now take over for Caldera P and G and any repair of the ponds, causing still more delays.
Scott explained the delays in getting the remediation process started.
“It took me several months to find a qualified architect and a qualified group to be able to do the work. This is specific work on these ponds, not every contractor understands this work. I hired a local contractor who was immediately subpoenaed by you, to scrutinize his ability to do it. So I had a contractor in place prior to the July deadline, he was unable to obtain the permits,” Scott said.
The contractor, Floyd’s Construction, received incorrect pipe and valves for the project that the current contractor is unable to use, he said.
Granier said the firm of Ninyo and Moore provided a contract to Scott back in August 2010 to remediate the ponds. Scott said he didn’t own the property at that time.
“The property went to auction, an open bid auction. If we were not the successful bidder then I had no ability to remediate the ponds, I would not be the owner of the property,” Scott said.
O and J Construction received a 180-day contract, Scott said adding, “he was on other projects and he would mobilize as he could mobilize the equipment and manpower to do the contract.”
“The next stage of the construction is not to drain the ponds, it’s to construct intermediate lines to be certain the effluent is controlled and handled to provide necessary water,” Scott testified.
Granier said the contract required draining the reservoirs and removing the liners within 45 days of the execution of the contract Oct. 1.
Scott testified it’s been several years since fairways were irrigated at Willow Creek golf course, which closed in 2008, but some greens have been irrigated somewhat continuously.
Rose referred to an Aug. 1 letter from the Nevada Division of Environmental Protection that Caldera P and G failed to achieve compliance with water pollution control laws, failing to properly maintain the effluent ponds causing the continued discharge of pollutants into the ground water.
“There never has been a finding to my knowledge of an illicit release into the ground water,” Scott replied. “It’s my understanding Utilities Inc. and their monitoring wells has reported there has been no contamination.”
Utilities Inc. of Central Nevada Regional Director Wendy Barnett testified from Nov. 5 when the pond was real low, to 7:30 a.m. Wednesday, Nov. 7, a primary receiving pond has risen almost to the brink, threatening to flood nearby homes and yards with effluent containing fecal coliform.
Rose asked why that happened. Barnett said Willow Creek was irrigating and moving water between ponds but ceased doing it. She said UICN discharges 600,000 gallons of recycled effluent per day from the sewer plant. Lake View Executive Golf Course took as much water as they can, but Doug Shaw with the Lake View Association said their storage is limited. This past weekend their ponds were full.
Shaw testified there were instances where there were concerns over the quality of the effluent Lake View received, with algae clogging up the pumps and concerns over a high bacteria count.
In his findings, Judge Rose told Scott “this whole case has an element or a component of community safety and health in it. The situation apparently from all the testimony I have heard has become desperate and your failure to remediate those ponds and follow court orders have directly caused a fair and present danger to this community and its citizens with the effluent about to overflow from pond no. 9 and other ponds. No convincing or admissible evidence has been received to show why you haven’t done that.”
Barnett added holes dug during a pre-construction meeting Oct. 5 to check for pipes, a process called “potholing” are still exposed to people using the golf course.
During a walk-through of the golf course during the pre-construction meeting, Barnett said the contractor outlined plans to install a bypass valve for a receiving pipe to an overflow pond so the primary receiving pond could be cleared out first.
“To date there has been no step to even drain the ponds,” she said.
Scott also hasn’t paid the $516,162 awarded in a judgment to Utilities Inc. last March either, according to Wednesday’s testimony.
Granier said when Scott was asked by a hearing officer in his debtor’s examination Monday why he chose to pay other creditors and not Utilities Inc. he replied, “it’s very simple; the ones that can work with me and will sit down with me and negotiate on a deal will get paid.”
Post appealed to the judge at the end for leniency for his client.
“He’s doing what he can with what resources he has. Somebody has to tell me how can we do it? He doesn’t have the money, he’s getting ground down to nothing,” Post said. “We’re getting very, very close to the end unless something constructive, extrajudicial can be worked out for a win-win-win situation and we’re hoping for that.”