Sunday, March 06, 2011

Boise County Files Chapter 9

As reported by the Idaho Statesman, Boise County, northeast of Boise up Highway 21 through Idaho City and Lowman to the pass over to the Stanley Basin, has filed for Chapter 9, municipal bankruptcy. It seems they screwed up a land use decision, the developer sued them and won a multi-million dollar judgment, and the county come anywhere close to paying.

There are several lessons to be learned from this. First, there are a lot of stupid people on the Interweb Pipes. The Statesman story was apparently linked to a bunch of right-wing websites (Drudge, Free Republic, Town Hall, etc.), and the knee-jerk comments started pouring in from folks who apparently hadn't even bothered to read the article (See comments by Ron Reale, Mark Babb, Christopher K, Teddy Kennedy's SEARCH+RESCUE, Joe Astroturf, Jack White, and golden_elixir for the most egregious examples.), screaming about how liberal Boise deserves this (First, Boise is not liberal, except in Idaho. Second, this is Boise County, not Boise City. Get a map, people.) and how this county was bankrupted by public unions (The Koch Brothers really have their meme rolling, here. You might want to check just how unionized Boise County is. Then check whether any union members caused the loss of the lawsuit.). With "civil" discourse at such a level, it's no wonder nothing is getting accomplished in this country.

Second, municipal bankruptcy is a world of its own. One of the commenters (johnnydoughey) asks a decent question: He thought you couldn't get discharged for liability for an illegal act. Well, there are illegal acts (criminal) and illegal acts (civil penalty). Municipalities can't be convicted of the former and can be excused for more of the latter than private people can. The developer's attorneys have already promised a 921(c) motion for dismissal for a bad faith filing, but I doubt the court will grant this (I wonder if the commenters who are currently complaining about the federal court entering the judgment will also complain about the federal bankruptcy court providing protection from that judgment. They're both exercises of federal authority, after all.). It remains to be seen if the county will come up with a viable plan, though.

Third, if you're going to be in local government, please learn how to make land use decisions. At issue here was a teen treatment facility that the county put so many conditions on, it was economically unfeasible. The conditions themselves, frankly, weren't the problem. Most of the conditions had to do with assuring adequate infrastructure back there in the hills. The problem was that the county had already approved other, larger developments back in those hills that required most of the same infrastructure but had applied no such conditions. In other words, the county was trying to charge all the infrastructure costs of several developments to one development, a constitutional no-no, and that was also discrimination against a special needs facility, a Fair Housing Act no-no. On top of that, county staff and elected officials were apparently advising the opponents on how to build a record to block the development, also a constitutional and FHA no-no. The developer filed suit for damages and nailed the county good.

Folks, if the city slickers are coming to your corner of Hay Seed World to make a quick flip on your cheap land, lawyer up and do what your lawyers say. I guarantee the developer has and is mapping out every move you can make. The Boise County commissioners didn't listen when the Boise County attorney said they were screwing up. The Boise County commissioners didn't listen when the attorneys for the Idaho Counties Risk Management Program (the counties' insurance pool) said they were screwing up and (SURPRISE!) the Program has denied coverage. Locally, Draper didn't lawyer up when it was reviewing SunCrest, and it will be dealing with it forever. Bluffdale didn't lawyer up on the one-acre zoning lawsuit and ended up losing an FHA case (It should consider itself lucky the developer wanted the development and not damages, or else we would have had a Chapter 9 here in South Valley.). Whether you're in private business or public office, it's never a good idea to be your own legal counsel.

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