I am also going to call in anther person that just had to "work with his PB" to overcome some problems
That's me!
So sorry to hear of your dilemma. It's awful, and stressful. I feel for you.
I'm not a lawyer, but managed to learn a lot about how things work in CA when it comes to contractors who misbehave.
First things first. Do not do any work yourself to correct anything. You
must give your contractor the opportunity to fix what is wrong. No harm in getting other bids. And I do not believe you'll have that much trouble getting someone else to do the necessary work if it comes to that. You need a remodel (of your remodel), and there are plenty of contractors that do that all the time. So your pool can, and will, be made right, eventually. A good plaster company can probably do most of what you need done. You might not need another PB at all. But don't attempt any repairs or hire someone else to do any work. Not yet.
I don't see anything in your complaints that is unreasonable. And I am not one who thinks you should "give in" on the little things to facilitate getting the big things corrected. Yes, you have big and little issues, but they can all be lumped into a punch list and should all be corrected. I don't feel you need to negotiate anything. Your pool should be delivered as promised, and everything should be up to par, and certainly up to code.
Start documenting everything. Take lots of pictures. Try to communicate with the contractor in writing as much as possible. Email is OK. Follow up conversations with an email synopsis. You may or may not want to try Kim's approach. I wouldn't (sorry Kim). I think you are beyond that. No harm in trying, for sure, I just don't think that's going to get you anywhere. This guy has his hackles up, and is looking to minimize losses. He's not going to be swayed by your good graces, or good manners. (IMO) Once I knew my guy was not going to perform (because he flat out said so), I stopped talking to him altogether, and told him so. I made it clear all future communications must be in writing. We never spoke after that. That's a big step, but in my case it had no bearing on my outcome. Ironically, because this guy wasn't too bright, a lot of what he wrote inadvertently made my case. Half of my evidence was going to be his letters and emails, in which he admitted all sorts of wrong doing and illegal activity. If he had done that only on the phone, that wouldn't have helped me much at all. My guy was a liar, so he would have denied everything to a judge. But by forcing the letter writing, I had him dead to rights. Most contractors are quite ignorant of contractor law, and will trip themselves up if you allow them.
So...
You do not have to pay him the final payment. So don't. You are in what is known as a "good faith dispute." That suspends your need to pay, and the contractors right to be paid, until the dispute is resolved. That might mean you'll owe him some interest if he can prove the dispute was unfounded, but obviously that is not the case. I think I read he can't even ask for final payment (as in, that's illegal), until the work is complete. Clearly, not passing inspection
means the work is not complete, so you are in the right in that regard.
Next...
Write a letter to the contractor. List all the things that are not complete, not to your satisfaction, not up to code, etc. Leave out any emotional-type rhetoric or long-winded explanations or justifications. All unnecessary. Just state the facts. Then state a deadline by which the outstanding work must be completed (two weeks? four weeks?). I'm not sure what would be considered reasonable, but the baseline would be how much time a contractor would need to finish everything. Here's the bad news, and only based on my limited understanding of pools in general and yours specifically: you are looking at a complete chip out of your finish, possibly a complete re-tile job, and some gunite work (or patch work). I'm basing that on the lights. If they have to be moved, and the rebar situation has to be addressed, that means a full chip out. He might try to pawn off a patch job. I wouldn't accept that. Typically some tile work is lost in that process, so unless the tile can be matched, then all the tile gets redone. So that's at least two weeks. More if you're feeling generous. The letter needs to include language that clearly states your intention to take him to court should he fail to comply by your deadline. This is a necessity in order to use the letter as your basis for a lawsuit. It will inflame the situation, so be prepared to "go for it" should the contractor not comply. Send the letter certified mail. Then you wait for the reply. The next step is based on his response.
So if he refuses any or all of your demand, then you go to the Board (California Contractors State License Board). Go to their website, download the complaint form, fill it out and submit the complaint. You'll include a copy of the letter, along with your other evidence (pictures, emails, etc). The Board will then intervene between you and the contractor and attempt to negotiate a solution. That's as far as I got. The Board can't do much to force a contractor to do anything, but apparently they (or at least my case worker) have their ways, and my contractor ponied up. The entire amount I was due. And I sought everything: new plaster, new tile, the cost of the refill water, the salt, new plaster startup costs, etc.
Had that failed, my next step would have been to file a complaint against the bond (all CA contractors are required to carry a bond). The Board doesn't do that, that's something you do separately. Theoretically, the bond company would pick up the tab for the fix (pay you), then go after the contractor to make good on the cost. I didn't get that far. The bond company is basically an insurance company, and they decide about doling out the bond. Seems like a complete conflict of interest (an insurance company allowed to decide if they pay out?!?), but that's the system here in CA. I was disappointed to learn the Board doesn't direct the payment of the bond. I don't have any experience if that system works or not.
The final resolution would be court. You might be able to use Small Claims (up to $10K), but it's hard to say if that would cover everything. My remodel was $9K, but I didn't have any rebar or electrical issues. My remodel included work on my returns and drains, so there was some gunite chipping and patching done, but I'm not sure that would cover your lights issue. I think they're going to have to dig up the dirt behind the light, to move the conduit, and punch a hole in the gunite to reset the lights. Is there a deck yet? If so, that would surely put you over the $10K. So you could settle for $10K and eat the rest, or go to Superior Court and pay a lawyer, which might eat into what you settle for. Tough call. Let's not go down that road yet. I made myself sick (literally) stressing and worrying about court, only to have the whole thing taken care of by the Board. And maybe you won't even have to go there, if the contractor comes around because of the letter. Do one thing at a time. Don't worry about things you don't have to worry about yet. I only mention "worst case" so that you can start preparing for that possibility (such as documenting, writing the letter, etc).
As long as he thinks he has an out, and might be able to negotiate his way out of finishing the job, or push you around some more, he's not going to budge. The letter (IMO) is the first salvo that sends a clear message that you're going to get what's due you, one way or another, and that you mean business. That certified mail sticker on an envelope can be sobering to someone that thinks he can get away with not doing what's right. Didn't work with my guy, we exchanged certified letters multiple times, in which he continued to try and shirk his responsibilities. He thought he had nothing to lose stringing me along, hoping I'd cave. He thought wrong. Whatever my Board case worker did was all that was needed. But I would have gone to court, and I think my contractor knew that, but was willing to push things that far on the off chance he could minimize his pay out by BSing the judge. I suspect the case worker convinced him he was going to lose. And maybe she threatened some Board sanctions or something. Not sure. Hopefully your situation will resolve before it goes too much further.
That's a primer of one course of action. Weigh carefully if and when you want to go down that road. You know best what this guy's personality is, and how he might respond to this course of action, or Kim's, or another's. Do some googling. About CA Contractor law, CA small claims requirement, etc. You can do all that, and more, first, without any out of pocket. Knowledge is power. Try Kim's method first, if that fits your sensibilities. Then try something "stronger" if that doesn't work. Keep in mind, though, that once lawyers are involved, everybody loses except them. That is your last resort. There are other things to try first.
Good luck. Let me know if I can be of any help...