The Idaho Supreme Court in a unanimous ruling Thursday said language in a financing contract between the Greater Boise Auditorium District, Capital City Devbelopment (CCDC) Wells Fargo Bank and the Gardner Development Company complies with the constitution whether it is a lease or a purchase.
GUARDIAN editor David R. Frazier responded to the District’s petition for “judicial confirmation” in an effort to force GBAD to seek permission from voters to go into debt to expand the facility. The court said provisions for annual renewal of a lease agreement for more than 20 years with a “non-appropriation clause” was good enough to comply with Article 8, sec 3 of the Idaho Constitution which requires voter approval for debt in excess of a single year revenues.
“My big fear is that the right of citizens to weigh-in on public debt will forever be compromised by this ruling, opening the door to local governments to never seek voter approval for bonds, opting instead for “annual leases” .
THE COURT’S SUMMARY STATEMENT Greater Boise Auditorium District v. Frazier – Docket No. 43074
In a case arising out of Ada County, the Idaho Supreme Court reversed the district court’s order denying judicial confirmation of a lease the Greater Boise Auditorium District (the “District”) intended to enter into.
The District filed a petition for judicial confirmation, pursuant to Idaho Code section 7-1304, asking the district court for a determination that a lease the District intended to enter into did not violate the Constitution’s Article VIII, section 3 clause prohibiting a municipal body, without voter approval, from incurring indebtedness or liabilities greater than it has funds to pay for in the fiscal year. Respondent, David R. Frazier (Frazier), a Boise resident and property owner, objected to the requested judicial confirmation, and appeared in the case to contest it.
The lease was one part of a complex agreement by which the District intended to own a new facility being constructed. The District asserted that the lease in question does not subject it to any long-term liabilities. Frazier responded that both the lease and the overall agreement unconstitutionally subject the District to liabilities greater than it has funds to
pay for in the fiscal year.
The district court denied the Petition for Judicial Confirmation and the District appealed. The Supreme Court held that the district court erred in denying the District’s request for judicial confirmation because the agreements into which it entered satisfied Article VIII. section 3 of the Constitution.