Thursday, November 17, 2011

Boise County Debt Easily Solved

Snitched from the Boise Guardian
Thanks to David Frazier

Wednesday, November 16th

DISCLAIMER: The GUARDIAN is not an attorney, but plays one in court when necessary.

As a public service to the citizens of Boise County, we will offer some “municipal finance” advice about the ill advised actions of your Commishes with regard to bankruptcy and zoning the property for troubled teens.

U.S. District Judge B. Lynn Winmill ordered the payments — totaling $5.4 million, including about $1.4 million in attorneys’ fees — after a federal jury last year said the county violated the Fair Housing Act in its handling of an application for a proposed teen treatment center called Alamar Ranch. He did the right thing. Boise County Commishes filed for bankruptcy in response. They did the wrong thing.

Judge Winmill has ordered a payment schedule and told the county it would have to levy above the 3 percent budget cap in Idaho Law. Probably not a good order.

The least painful solution is found in the Idaho Constitution–a document that needs to be examined by lawyers, judges, commsihes and citizens. Article VIII, sec 3 says a municipality cannot go into debt–usually bonded indebtedness–without 2/3 approval of voters EXCEPT:
“Provided, that this section shall NOT be construed to apply to the ordinary and necessary expenses authorized by the general laws of the state…”

So, all Boise County needs to do is file a petition for “Judicial Confirmation” and get the 4th District judge to confirm the expense–in this case an order from the United States District Court–is ordinary and necessary. Such an expense is indeed ordinary and necessary. Then, the county sells bonds to get the cash they need. McCall obtained judicial confirmation when elected officials there got into financial trouble fighting payment of a sewer system construction which was also ordered by a Federal Court.

Bottom line, the GUARDIAN has saved hundreds of thousands in legal fees for Boise County. Taxpayers will see an increase, but only for the repayment period of the bonds (loan) the county will have to sell to finance the payments to Oaas Laney and Alamar Ranch.

There is talk of attempting a tax hike over the state 3% limit and a hearing before tax commishes, but if they do as the constitution allows, it will be almost painless–and a lesson learned.

1 comment:

  1. That's a relief! Anyone listening?