Hearing set on inter-fund transfers

SANDPOINT — A hearing has been set to determine if inter-fund transfers should be taken off the table as a potential funding option to complete the beleaguered courthouse renovation project.

First District Judge Benjamin Simpson is scheduled to take up a motion to dismiss inter-fund transfers as a potential funding option on Oct. 18 in Kootenai County, court records show.

The county petitioned the court in August to confirm inter-fund transfers or the issuance of general obligation bonds to complete the remodeling project.

Inter-fund transfers have been used for years in Bonner County to cover budget shortfalls or to fund costly endeavors such as the ambulance district and juvenile detention center. Funds from one department is loaned to another department and paid back over time with interest.

Prior county commissions have been counseled that the practice is permissible, but the current commission is balking at conducting any further transfers until a court declares that they are allowed.

The court’s ruling could have far-reaching implications in Idaho. Commissioners here contend counties throughout the state utilize inter-fund transfers.

Sagle taxpayer Lou Goodness filed a motion to dismiss to thwart the county’s use of inter-fund transfers.

He argues they are forbidden by state law and the Idaho Constitution.

“Inter-fund transfers, from operative funds, are prohibited unless ‘expressly provided and permitted by law,’ ” Goodness said in a brief in support of the dismissal motion.

Goodness maintains there are no provisions in state law or the constitution that permit inter-fund transfers. Goodness further argues that such transfers negate the budget-setting process and that officials who made the expenditures could be held personally responsible.

The state constitution prohibits counties from incurring indebtedness beyond a single fiscal year unless voters approve it. However, counties can ask a district judge to declare that the indebtedness is for an ordinary and necessary expense.

Goodness is not opposing judicial confirmation that the courthouse is an ordinary and necessary offense.

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