Supremes Rule For GBAD In Frazier Case

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 ofAda 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.

ENTIRE OPINION43074 opinion

Comments & Discussion

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  1. The way I’m reading this ruling in non lawyer type layman’s terms— An annual lease meets the criteria of no bonds exceeding a year’s payback.

    Regardless, what people should take away form this, is that it exposes the glaring flaw in the Idaho Constitution. Clearly some worthy projects take more than a year. The New York Canal project took more than a year and had to be taken over by the feds. Idaho would not be what it is without complicated multi-year projects.

    The powers that be who want to push through complicated multi-year projects are going to come up with ever more complicated and creative financing schemes. Another example besides GBAD— Garvee Bonds. These accounting procedures become so arcane that frankly, most of the electorate is not even qualified to vote on them.

    If the people could vote on multi year bonds it would be a lot easier and more transparent.

  2. If I read the supremes correctly the case goes back to the District Court and they can still rule that the deal can be denied.

    It appears it was a question of if the District Court could rule on judicial review….is this correct?

    EDITOR NOTE–The opinion is the lower court was in error in its conclusion.

  3. So did the lower court rule it was not approved via judicial review or that it was not eligible for judaical review? If they ruled it was eligible then the lower court can still rule to not approve it…..correct? Just trying to get my head around this.

    EDITOR NOTE–It is complex. The only question before any court was whether or not the plan was a “debt” of more than a single year’s revenues. By way of example: GBAD cut the $22 million cost into about 22 years of annual “lease” payments of $1 million each with a clause that allowed them to walk away at any time if they didn’t have the cash for a year’s payment. I argued–without success–the lease was nothing but a mortgage in disguise. Not unlike leasing a car and walking away at some point with no obligation to pay off the balance, but if you make enough payments you own it.

  4. Did this invalidate the original Frazier decision? How are the 2 situations different?

    EDITOR NOTE–In a nutshell GBAD convinced the court their “lease agreement” was an annual agreement and did not constitute “debt” since they had a “walkaway clause” included. Time will tell if future local governments adopt the same language and effectively subvert the requirement to seek voter approval for debt.

  5. Dave Bieter showed up at the press conference this morning and tried to take credit for the Supremen Court victory. Not only did he do nothing to help with the court case, but he fought building the structures around Boise Centre for two and a half years before relenting from pressure by every other group.

  6. The reason Bieter showed up is also because he and Tom Alquist (Gartner Co) are in each others pockets and the more they can scratch each other the better.

  7. I do not think there is a fair and balanced court anywhere in America anymore. They all seem more or less liberal and more than happy to overreach the obvious interpretation of the laws. So they can have their name on a new case-law file.

    How much you on the hook for Editor?

  8. Funny how none of you are addressing the point I made, just blaming the bad old liberal court. Seriously? The Idaho Supreme Court if filled with liberal activists?

    Like I said, maybe it’s the Idaho Constitution which is flawed, which has directly lead to creative financing schemes. Whatever, keep sticking your heads in the sand.

  9. The Supreme Court does not rule something to be right or wrong; it rules whether or not it is in compliance with the Constitution. So, change the law, not the truth, to achieve compliance.

    Elect some law makers with some back bone to change the law

    Just saying

  10. chicago sam
    Oct 17, 2015, 1:34 pm

    Legislative interim Committee on Urban Renewal is meeting Monday 10/19 @ 9AM in the Statehouse with an agenda asking for public comment.
    AT 1PM on the agenda is discussion of GBAD vs. Frazier. Didn’t take long for them to try and see how this could be incorporated into UR law.

  11. If you are opposed to the continued use of urban development agencies PLEASE attend the meeting Monday. Tom Alquist (Gardner Co) and others plan to be there to EXPAND urban development (in Boise and in more areas in Idaho).

  12. Dave, where do you come up with all the $$ for these law suits?

    EDITOR NOTE–There are no attorney fees awarded at appeal in this case. Prior to this decision, I (with great assistance of counsel) have prevailed in every matter before the courts. Hence, the taxpayers have been forced to pay to cover the bad decisions of their elected officials. Each time the issue has been to protect the right of citizens to vote on public debt–not the merits of any particular project.

  13. I think Dave has asked for donations before……
    Every one wants to feed starving children but wait tell you ask them for money and see what happens.

  14. When was this argued before the Black Robed Boys of Boise?

    EDITOR NOTE–Argued early September.

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