Federal judge says no bankruptcy for Boise County

Federal judge says no bankruptcy for Boise County
BOISE, Idaho (AP) — A federal judge says the sparsely populated Boise County can't declare bankruptcy in a bid to stave off paying a legal judgment worth more than $5 million.

Boise County, which has a population of only about 7,000 people and sits north of Idaho's most populated Ada County, was sued by developer Oaas-Laney LLC for allegedly violating the federal Fair Housing Act. Oaas-Laney wanted to build a 72-bed treatment center for teens called Alamar Ranch, and contended the county worked with neighbors of the ranch to set impossible planning and zoning requirements.

Last year, a federal jury agreed with the developer and awarded Oaas-Laney $4 million, plus $1.4 million in attorney fees.

County commissioners, fearing that the county wouldn't be able to cover the cost of necessary services if they paid the judgment, filed for Chapter 9 bankruptcy — a rarely used type of bankruptcy protection reserved only for municipalities.

Oaas-Laney, meanwhile, asked U.S. District Bankruptcy Judge Terry Myers to reject the filing, because the company believed the county had money available to pay the judgment.

In a ruling handed down Friday afternoon, Myers agreed.

Generally, counties in Idaho are prohibited from spending more than they have appropriated in the budget. But there are exceptions, the judge noted, including one for expenditures made on order of a court. Another is for certain kinds of emergencies.

"The court is not persuaded the county is unable to pay the Alamar judgment under this system," the judge wrote.

Even if a county can't pay for such expenditures because it doesn't have enough money available, Myers said, the county treasurer can try to borrow cash from other counties at market interest rates, get financing from banks or pass levies.

Besides, the judge noted, the county has excess funds of more than $3.1 million that it doesn't expect to use this fiscal year or next. Add that to the more than $2 million immediately available in the county's trust accounts, Myers said, and it has more than $5.1 million, enough to pay the Alamar judgment.