Statement of the Argument

We have before us the claim that, should Ormond decide that they no longer wish to operate the hospital, or should we decide that we no longer wish to have them, we will be liable for their debts pursuant to the Lease and Transfer Agreement (hence, ‘‘Lease’’) §2.02(b) and §11.03(b).

It is argued that the Authority should undertake to repay the debts of this private corporation. I argue here that it is bad policy to do such a thing.

Faith and Credit

Article 7, Section 10, Constitution of Florida provides that

Neither the state nor any county, school district, municipality, special district, or agency of any of them, shall become a joint owner with, or stockholder of, or give, lend or use its taxing power or credit to aid any corporation, association, partnership or person; ...

During the period of Ormond’s operation, they have done things (including contracting of debt) which they feel have been to their advantage. They have done these things as a private corporation, taking risks and making decisions which may in retrospect prove unsound.

Though they have been enthusiastic in contracting debt, they have been reluctant in paying. Our most recent annual report from them shows that they have not generated sufficient cash flow to properly service the debt. In short, they borrowed more than they can pay.

We we to disregard the advice of the Constitution, and pledge our faith to cover their unsound operation, we would do an injury to the taxpayers. It is as though one of your children reached majority, immediately racked up mind-boggling credit card debt through wild living, and then decided to move back in, renounce emancipation, and stick you with the bill.

While such a prodigal should be welcomed back into the family, K.J.V. at Luke 11:15 et seq., and our Hospital should certainly be taken back, it is not reasonable to expect the parent, or the taxpayer, to suffer the financial hangover. That child may be working for the next ten years to pay off the credit card sharks. A responsible parent will surely assist in arranging that debt into a more easily managed instrument than a stack of credit card bills.

Similarly, the taxpayer can not be expected to pick up the debt from six years of wild living, high salaries, and poor service from Ormond. The Constitution says we can not. I say we must not try.

The constitution forbids us to lend our faith and credit prospectively, as well. That is, we can not say in advance that we will cover any debt Ormond chooses to contract.

No lender is entitled to rely on a putative guarantee which is clearly not in accord with the Constitution. Further, the Constitution is available for public inspection in every court house in the State, and via the internet for those unable to find the court house. This should be considered adequate notice to any lender, and he should have no equitable claim for public repayment.

In short: it is bad public policy, and not in accord with the Constitution, to lend our faith and credit to a private enterprise. For this reason, the Authority can not be expected to make good on Ormond’s debts.

Open Government

Ormond has, during its entire term of operation, refused to comply with §119.07, F.S. and Article 1 Section 24(a), Constitution of Florida, (hence, ‘‘Open Records’’) and §286.011, F.S. and Article 1 Section 24(b), Constitution of Florida (hence, ‘‘Sunshine’’). All of its actions have been taken outside of public meeting, and its records (including specifically bond covenants and repayment schedules) are unavailable for public inspection.

As the Board of a public entity, you are aware that actions taken outside of the Sunshine are null and void from the beginning.

The case law is interesting also. A mere ‘‘rubber-stamp’’ re-adoption at public meeting is insufficient: Centrust (violation of Sunshine not cured by perfunctory public ratification); accord Village (subsequent ratification did not cure Sunshine violation, transaction so adopted found void).

It will be difficult for Ormond to change the invalid act of agreeing to pay debts into a valid act, at least if they plan to merely adopt bond covenants identical to the ones in place now: Pigeon Key (lease substantially different from that formulated by advisory committee out of Sunshine is evidence that final action was taken in accord with §286.011).

Further, I note that were we to consider taking Ormond’s questionable debt upon ourselves, we would be doing so without full knowledge. Ormond has to date refused to comply with Open Records. I have specifically been denied inspection of the bond covenants and repayment schedules.

We don’t know what debt Ormond may have run up, where the money went, or under what terms the lenders hope for repayment. A blind assumption of Ormond’s debt, contracted outside of Sunshine and information on which is unavailable under Open Records, is fool-hardy.

We can not undertake to repay Ormond’s debt, and we must not attempt to do so.

Table of Authorities

Centrust: Spillis Candela & Partners, Inc. v. Centrust Savings Bank, , 535 So. 2d (3DCA, 1988) is cited as Centrust.
Referenced:.....

K.J.V.: Holy Bible, King James Version, , 535 So. 2d (God, 1988) is cited as K.J.V. with the usual locators.
Referenced:.....

Pigeon Key: Monroe County v. Pigeon Key Historical Park, Inc., , 647 So. 2d (3DCA, 1994) is cited as Pigeon Key.
Referenced:.....

Village: Citizens for a Better Royal Palm Beach, Inc., v. Village of Royal Palm Beach, , 647 So. 2d (Fla 15th Cir, May, 1992) is cited as Village
Referenced:.....

@(#)hosp0006.txt 1.0 15-Mar-2000

proc with hmac.ta2