County told to make lawsuit payments

BOISE - A federal judge has ordered Boise County to raise taxes above the 3 percent state budget cap, if necessary, to pay a multimillion-dollar judgment in a lawsuit.

U.S. District Judge B. Lynn Winmill's order requires the county to "seek a declaratory judgment or other legal" remedy against the state Tax Commission if it does not approve the levies.

Boise developer Oaas Laney LLC won a $4 million judgment and $1.4 million in attorney fees in a federal lawsuit that alleged the county violated the Fair Housing Act. The jury ruled the county created a series of unreasonable expectations that stymied a plan to build a 72-bed treatment center and school for teens with mental illness or substance abuse problems.

Boise County Commission Chairwoman Jamie Anderson said the county is complying with the order.

The county paid $1.2 million to Oaas Laney on Monday and plans to make a $1.05 million payment by Dec. 21, the Idaho Statesman reported Wednesday.

Boise County sought Chapter 9 bankruptcy protection after losing the lawsuit, but the bankruptcy judge ruled the county failed to prove it is insolvent.

During a bankruptcy hearing, county clerk Mary Prisco testified that many of the county's various funds have money in them at the end of the year - a surplus that totaled $6.7 million. She also projected the county would end its fiscal year in September with a cash balance of more than $5.4 million.

The county proposed paying Oaas Laney $500,000 and saying the developer would have to recover any additional money from the county's insurer, which has denied claims for coverage.

Winmill's order said the county must pay Oaas Laney at least $811,000 annually and "must levy above the 3 percent budget cap" in Idaho because the county doesn't have the cash on hand to pay the full amount.

The state tax cap is intended to protect residents from large tax increases, and a proposed increase of more than 3 percent must be approved by a two-thirds vote.