The Idaho Supreme Court on Thursday overturned a lower court’s denial of Greater Boise Auditorium District’s plan to use a series of one-year leases to finance the expansion of Boise Centre, the city’s main convention center.
The justices concurred the financing plan does not violate the Idaho Constitution, which prohibits a municipal body, without voter approval, from incurring debt greater than it has funds to pay for in the fiscal year.
Under the agreement, bonds sold by the city’s urban renewal agency would pay for the construction. The auditorium district would use hotel room taxes to pay bondholders via a series of one-year leases. The auditorium sought judicial confirmation that the lease agreement by which the district intended to own the new facility did not violate the constitution.
Boise watchdog David Frazier contested the judicial confirmation, saying the arrangement is a violation of the constitution.
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Twice district judges denied the auditorium district’s request to use the renewal agency as a pass-through to pay for the convention center expansion.
In April, the auditorium district appealed its case to the Idaho Supreme Court.
The constitution “does not prohibit incurring a debt or liability. It only prohibits doing so in an amount exceeding in that year, the income and revenue provided for it for such year,” explained Justice Joel Horton in his concurring opinion.
“As long as the District will have income and revenue in the fiscal year to make the lease payment that will come due if it extends the lease for one more year, it will not violate the constitutional provision,” wrote Horton.
“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,’” Frazier wrote Thursday on his Boise Guardian blog.
In 2002 and 2004, Frazier successfully stopped the city of Boise from borrowing money to build a parking garage at the Boise Airport and a police station.