Boise County Idaho files for bankruptcy

March 3, 2011 by · Leave a Comment
Filed under: Industry News 

This is a good sign if you really think about it.  If Boise County has unsustainable debt levels then having them file for protection and re-negotiate with their creditors is the proper and legal remedy.  What we don’t want to see is the federal government coming in and bailing these municipalities out and basically trying to have them support large budgets without the tax revenues to back it up.   There are quite a few more on the east coast that are getting close to this point so we should hear something to this effect in the future.  As a nation as a whole, we need to get all our spending back to a sustainable level so we honestly get our house in order and start reducing this historic public debt we have.

Idaho Statesman – In a move rare in the United States and perhaps unprecedented in Idaho, Boise County is filing for federal protection against a multimillion dollar judgment.  “This was not our first option. This was our last option,” said Jamie Anderson, chairwoman of the three-member Boise County Board of Commissioners. “This protects us so we can continue to operate.”  Chapter 9 protection, from a section of federal code expressly for financially distressed municipalities, means that creditors can’t collect while the county is developing a plan for reorganizing its debts.

Dan Chadwick, an attorney and executive director of the Idaho Association of Counties, said he is not aware of any other county, city or taxing district in Idaho ever filing for bankruptcy. He’s been with the association for 20 years and before that was at the Attorney General’s Office for 10 years, he said.

Bill Nichols, McCall’s city attorney, said he is not aware of any other Chapter 9 filings in Idaho, either.

“I don’t think there has been anyone in the Northwest that has used this, other than an irrigation district in the state of Washington,” Nichols said.

Nichols’ firm began representing McCall after a federal jury determined it owed a contractor $6.2 million. McCall officials considered bankruptcy but opted against it, Mayor Don Bailey told the Idaho Statesman in December.

The mayor said city services were not curtailed during the financial ordeal, but residents are paying off the city’s debt over a 20-year period. Their sewer/water fees went up by $5 to $6 a month, Bailey said.

JUST EIGHT CHAPTER 9 FILINGSPER YEAR IN U.S.

James Spiotto, an expert on Chapter 9 bankruptcies, told The Bond Buyer in a Tuesday article that there have been about eight municipal bankruptcies per year in the U.S. for the past four decades. Among the most famous cases: Orange County, Calif., in 1994 and Vallejo, Calif., in 2008.

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