ALAMEDA, Calif. — Boise County, Idaho, filed for Chapter 9 bankruptcy Tuesday after losing an expensive court case.
The county of about 7,400 residents does not have any bond debt, Jamie Anderson, chair of the county commission, said Wednesday in an e-mail.
Boise County does not encompass the city of Boise, which is located in Ada County.
Idaho City, the seat of Boise County, is about 40 miles from the city of Boise.
County officials say they were forced to seek bankruptcy protection after losing a federal court case brought by a developer, Alamar Ranch LLC, claiming that the county illegally foiled its plans to build a residential treatment facility for substance-abusing teenagers.
In December, the federal jury in the case of Alamar Ranch LLC v. Boise County found in favor of the developers, awarding them a $4 million judgment plus attorneys’ fees, for which the plaintiffs are seeking $1.4 million.
The county’s entire annual operating budget is about $9.5 million.
Boise County is appealing the verdict and has held meetings to negotiate with the plaintiffs, but officials said they felt compelled to make the bankruptcy filing this week.
“The Board of Commissioners has determined that it cannot satisfy the judgment and continue to operate and satisfy the county’s legal obligations and provide basic services to county residents with the amount of resources available,” the board said in a news release.
“The plaintiffs have stated that they will immediately proceed to execute on the judgment and seek the county’s operating cash in order to satisfy the judgment,” the news release said. “In order to ensure the continuous operation of Boise County, the board has determined to file Chapter 9 bankruptcy and seek relief through the bankruptcy process.”
In 2007, Alamar Ranch sought a conditional use permit from the county to build a 72-bed residential treatment center for teens.
Patients of the proposed facility would include males between ages 12 and 17 suffering from mental or emotional illnesses and-or recovering from drug or alcohol abuse, according to the complaint the developer filed in its federal lawsuit.
The lawsuit alleged the county violated the federal Fair Housing Act, under which the teen residents of the proposed treatment center would qualify as handicapped.
The developers accused the county and its Board of Commissioners of effectively denying approval to the project in 2008 by attaching numerous conditions, including a limit on the number of residents, the requirement to maintain a helicopter landing pad, and to buy and maintain a fire-suppression vehicle.
“The conditions were a pretext designed to conceal the board’s discriminatory motive of preventing the project from being built,” the developer’s complaint said. “By itself, the condition limiting the number of residents destroyed the viability of the project. In essence, Boise County refused Alamar’s request for reasonable accommodations by placing conditions on the conditional-use permit aimed at ensuring the project would not be economically feasible.”
The county denied the charges, but the jury sided with Alamar Ranch.
It’s not unheard of for a large legal judgment to force a municipality into bankruptcy.
Desert Hot Springs, Calif., filed for Chapter 9 bankruptcy in 2001 after losing a Fair Housing Act lawsuit brought by a developer that sought to build a mobile home park for low-income tenants. The city emerged from bankruptcy after issuing $9.7 million of judgment obligation bonds in 2004 in connection with the lawsuit settlement.
No hearings have been scheduled yet in the Boise County bankruptcy case, which was filed in the Idaho district of the U.S. Bankruptcy Court.