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Fight over special Boise taxing district heads to court

Residents fighting a special taxing district in Harris Ranch got their day in court this week. 

On Thursday, attorneys for the Harris Ranch CID Taxpayers’ Association, the Harris Ranch Community Infrastructure District, and subdivision developer Harris Family Limited Partnership went head to head at the Ada County Courthouse in oral arguments on the long-running dispute over the district. Residents of the neighborhood are disputing the constitutionality of extra taxes collected and payments through the Harris Ranch Community Infrastructure District to the developer of the Southeast Boise subdivision for infrastructure improvements. 

This district was established in 2010 and is governed by three members of the Boise City Council. The concept of CIDs is that they allow for extra taxes to be collected on residents of a district to be paid to a developer to build infrastructure improvements so growth can pay for itself. Harris Ranch developers and the district itself say the extra taxes are bringing in new amenities as growth comes to an area so it doesn’t have to catch up later as the tax base fills in.

But, residents of the district argue the district adds a heft cost to their tax bill, and it only serves as a way to subsidize things developers would have had to pay for themselves anyway. 

The Harris Ranch CID Taxpayers’ Association started raising objections to the district and payments it was making to Barber Valley Development and Harris Family Limited Partnership in 2021 and eventually filed this lawsuit. It’s unknown when Fourth Circuit Judge Nancy Baskin will issue a ruling on the case and it’s likely to be appealed to the Idaho Supreme Court for a final decision, so it could be some time before there is a formal resolution to the dispute. 

This is the first time any CID in Idaho has been litigated since the law was changed allowing the special taxing districts in 2008, meaning there is no existing case law on this specific issue for the attorneys or judge to draw upon. The results of this case will set a precedent for future cases on CIDs down the road. 

‘A tortured analysis’

Nicholas Warden, attorney for the taxpayers’ association, says a 2021 move by the CID board to approve bonds and payments to entities connected to the Harris family violated the Idaho State Constitution. 

“The city and the developer primarily tried to avoid this fundamental reality through what we characterize as a tortured analysis of the CID Act and an often slanted and characterization of what the law says, what the record says and what we say in our briefing,” Warden said at the opening of his arguments. 

He pointed to the section in the state’s constitution that prohibits local governments from taking on debt without a 2/3rds vote of approval from voters for the project. Warden says because the Harris Ranch CID is supported by city staff, has all city council members on the board and uses city infrastructure its effectively an “alter ego” of the City of Boise. And thus, he says the issuance of bonds by the Harris Ranch CID Board illegally bypassed this voting requirement and are not valid. 

Warden also argued that the projects the Harris Ranch CID Board approved were not allowed under the statute because they were improvements to the project, not meant to pay for growth enjoyed by the whole community. He said this is because of a reference in the statute to the law governing what impact fees can be paid for. 

“This can only refer to system improvements because project improvements already have to be paid for by the developer and any new growth already pays for itself even if the district did not exist,” he said. “The legislature is clearly talking about community-wide growth here.”

What does the District and the developer say?

Attorneys for the Harris Ranch CID and the developer told the judge the neighbors legally can’t challenge the CID’s constitutionality because it’s outside of the 60-day appeal period. And, on top of that, their objections to the specific projects the CID funds were paying for are invalid. 

Melodie McQuade, an attorney with Givens Pursley the Harris Ranch CID hired to defend the district, said allowing a challenge to anything but the bond payments and the project reimbursements approved in 2021 would be “eviscerating” the appeal period of the law. 

During her testimony, Baskin asked McQuade if she agreed with Warden’s argument that the CID functions as a benefit to developers to cover the costs they would cover themselves otherwise. McQuade disagreed, saying the homeowners would pay the cost one way or another. 

“I think the cost would be passed on somehow,” McQuade said. “The homes would probably cost more. What the CID act says is ‘let’s deal with this problem of growth and have growth pay for itself and have these houses pay for the infrastructure, but I would not agree with the characterization of the CID by the petitioners.”

Hethe Clark, attorney for the Harris Family Limited Partnership, told the judge Warden’s arguments that certain reimbursements the CID paid for were illegal didn’t pass muster. He said the neighbors’ interpretation of the word “fronting” and how they use that to see which roads can be paid for doesn’t take into account the greater context of how the word is used in zoning codes. Clark also disputed Warden’s arguments about reimbursements for storm drain facilities he said weren’t meaningfully conveyed to the public. 

Clark argues that even though the developer still owns the land, it has an exclusive easement on it locking these areas into only being used for public use. 

“It’s part of the public right-of-way system,” Clark said. “We can’t do anything else with that property and it can only serve that purpose. It’s not reversible.”

Correction: An earlier version of this story misidentified the entity payments from the CID go to. It has been corrected to reflect that the Harris Family Limited Partnership and Barber Valley Development receive the payments and the Harris Family Limited Partnership is the intervenor. the suit.

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Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel is a BoiseDev reporter focused on the City of Boise, housing, homelessness and growth. Contact her at [email protected] or by phone at (757)705-8066.

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