Court Opinion

ID: 9551457
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:53:53.051207+00
Date Added: 2024-06-11T15:23:53.710186
License: Public Domain

McFADDEN, Justice
(dissenting).
I dissent from that portion of the majority opinion which holds that the action by the Board of County Commissioners of Twin Falls County, in “agreeing to amortize principal and interest payments on the *511notes and bonds issued to them by the Authority” is not violative of the provisions of Idaho Const. Art. 8, § 3. The rationale of the majority opinion is simply that the expenditures for the purpose of improving the structure of the hospital so as to comply .with state safety standards are an ordinary and necessary expense. It is with this conclusion that I disagree. The reasons for this conclusion have been previously discussed in my dissenting opinion in City of Pocatello v. Peterson, 93 Idaho 774, 473 P.2d 644 (1970), and need not be again expressed. See, Comment, “Expansion of the ‘Ordinary and Necessary Expense’ Exception to the Constitutional Limitation on Municipal Indebtedness”, 8 Idaho Law Review (Spring 1972, No. 2), p. 397.
The majority opinion relies upon the cases of Lloyd v. Twin Falls Housing Authority, 62 Idaho 592, 113 P.2d 1102 (1941), and Boise Redevelopment Agency v. Yick Kong Corp., 94 Idaho 876, 499 P.2d 575 (1972), as the basis for holding that in this case the Authority is not in contravention of Article 8, §§ 1-4 of the Idaho Constitution. It is my conclusion that those two cases are distinguishable from this case.
In Lloyd v. Twin Falls Housing Authority, supra, the legislative act which created the Authority contemplated that the Housing Authority would finance proposed construction of low-cost housing to be rented to individuals, pursuant to a contract with the United States Housing Authority. Under this agreement the U.S.H.A. agreed to purchase bonds or other obligations of the Authority. The U.S.H.A. was obligated to reimburse the local Authority by annual contributions in an amount not to exceed 3% per annum' for 60 years. That arrangement set forth in Lloyd v. Twin Falls Housing Authority is a far cry from the agreement contemplated in this present legislation and agreements. Here, the Authority will issue its bond anticipation notes and from the proceeds of those notes (assuming that bonds would later issue to redeem the bond anticipation notes) extend the funds to the borrowers from the Authority, i. e., Twin Falls County. The borrowers then in turn would he obligated to repay these notes to the Authority, which in turn would be obligated to repay the holder of the bond anticipation notes, or the bonds issued by the Authority. In other words, the role of the Authority is merely a vehicle through which the County can circumvent the necessity of seeking voter approval of the voters of that county in order to borrow funds for whatever purpose may be desired.
In the case of Boise Redevelopment Agency v. Yick Kong Corp., supra, this court again was dealing with a legislatively created agency, designed primarily to take advantage of the opportunity afforded by the Federal Government to obtain federal funds to improve what was found by the City Council to be a “deteriorated and deteriorating area” within the City of Boise. In Boise Redevelopment, the primary issue was whether that agency fell within the strictures and prohibitions of Idaho Const. Art. 8, § 4, and Art. 12, § 4, which prohibit the loaning or giving of credit by counties or municipalities, respectively.
It is my conclusion that neither Lloyd v. Twin Falls Housing Authority, supra, nor Boise Redevelopment Agency v. Yick Kong Corp., supra, are authoritative on the proposition propounded by the majority. The purpose of the legislation involved in the instant case, as declared by the majority opinion in part at least, was to compensate for the loss of federal funds previously available under the Hill-Burton Act. The purpose and effect of this legislation (unlike that before this court in Lloyd and Yick Kong Corp., supra) is to circumvent the strictures of Idaho Const. Art. 8, § 3, by denying the eligible voters of the taxing units (i. e., the counties) the opportunity to approve or reject in advance the creation of indebtedness by the counties.
For the foregoing reasons, it is my conclusion that the judgment of the trial court should be affirmed.