Yesterday we told you about the lawsuit filed by local taxpayer activist and Board member Marilyn Bainter (and her husband, former State Representative Stan Bainter) of the North Lake County Hospital Tax District against the District as well as related parties such as the tax collector (who is responsible for verifying the legality of the law before collecting the tax.) The lawsuit, prepared by an experienced Florida State Constitutional attorney, basically says the tax district is NOT based upon proper legal processes, thus the District and the tax are not legal.
(Note: We have attached the entire 94 page legal summons, plus minutes of the last two Board meetings at the bottom of this blog posting).
The "law" enacting the District has been in place for at least 40 years, and has been modified several times. The law takes 1 mill in taxes (i.e. 1/1000 or $100 for every $100,000) and splits the collected $11-million into 50% portions and pays it to the two major hospitals in North Lake County, Waterman and Leesburg, without ANY verifiable requirements other than the funds be spent on "continued hospital services". Additionally, each hospital then gives 5% of their total to Lifestream Behavioral Center, LLC.
We have posted numerous articles on the tax district, and the lack of accountability or requirements to define acceptable spending objectives, or any process to even determine exactly where the funds go. You can click on the category in the left column for North Lake Hospital District, AND also scroll down to the "pages" section and click on a page for the District that has much of the initial facts collected by Marilyn.
Last year, Marilyn, and several supporters, including myself, made presentations at the Hospital tax district board meetings requesting that the existing law be modified so the millage rate was flexible and could be discussed in Board meetings. Numerous speakers from the Hospitals and other supporters of the tax, as well as Marilyn's supporters spoke before the Board. However, the existing Board, except for Marilyn, refused to consider doing so. We also asked the Florida State legislation group for Lake County to enact a "local law" to change the regulation to allow the flexible rate, and drastically improve the wording of the regulation to establish guidelines for acceptable spending targets and reporting and audit processes much like used for State grants. However, the legislators Marlene O'Toole, Alan Hays, and State Senator Carey Baker came up with excuses not to do so.
Some supporters want to completely eliminate the tax, or at least have the rate changed to allow any amount set from 0 to 1 mill, with public hearings before setting the rate. Others like myself want the regulations beefed up significantly for accountability and auditability purposes, and also have the tax (with a flexible rate of 0 to 1 mill)go before the voters in a referendum so the District Board and Hospitals can make their case to justify the tax. Some Board members will say that the standard CPA financial audit of the hospital statements and the District statements is enough, but that does not provide any review or verifiability of Exactly how the funds are spent, which is provided by specific spending guidelines, and specific audit trails confirming the funds were not spent on other objectives not covered in the guidelines (which currently do not exist).
Marilyn even asked State Senator Carey Baker to request a legal opinion from the State Attorney General on the Constitutionality of the law, and he deferred action, and sent it to Rep. Alan Hays. Hays submitted an unclear request, which resulted in an opinion from the AG that was not relevant to the issue requested by Marilyn.
The primary issue that has been researched by Marilyn for years (this is not recent) is that the current 1 mill tax on North Lake County property (including residences and commercial property) is not based upon proper Florida Constitutional law. In laymen's terms, the tax was setup fast and loose and did not follow the proper process to be legal. Many taxed residents did not even get a chance to vote on various modifications to the tax legislation which is apparently required by State law.
So, the result is now a lawsuit, which was distributed to the Hospital Tax District on Monday by the Board's Attorney to all the Defendants in the case, including:
- The North Lake Hospital District (which is a legal entity, thus the Board members were sent copies)
- Bob McKee, Tax Collector
- Ed Havill, Lake County Property Appraiser
- Leesburg Regional Hospital District, Inc.
- Florida Hospital Waterman, Inc.
- Lifestream Behavioral Center, Inc.
This problem with poor accountability for many Tax Districts is apparently rampant in Florida. Florida does not have strong laws to ensure proper spending guidelines and accountability provisions are included in regulations for tax districts. However, in this lawsuit, the issue is adherence to proper processes defined in the Florida Constitution.
Since the District Board has refused to create a website to provide transparency over their processes, minutes, etc., I am including the minutes of the two most recent Board meetings described above, and the 94 page lawsuit "summons".
I am not an attorney, but I have audited many business contracts, and so here is my layman's overview:
- The summons is 94 pages, but pages 1-18 describe who is being sued (the defendants), the FACTS (paragraphs 12-138) related to the case (lots of legal terms) and "Counts" I through IV (6).
The rest is supporting documentation like copies of laws, etc.
Overview of the FACTS section
In skimming the facts, it is hard not to see all the entries that describe a specific law, or revision of the law related to the District formation and tax, and the term "WAS NOT APPROVED by a vote of the electors." Just this issue was listed NINE times. Thus we assume the attorney is saying such votes are required by the Constitution, but were skipped by people involved in revising the laws over the last numerous years. (This would be decided by the courts).
"Fact 138" says it all: "Taxes levied by the North Lake Hospital District in 2009 and previous years are unconstitutional".
Comments on Summons Facts and Counts Sections: I have jury duty, so will add this section later this week. vj
Attachments:
Download Atty Cover memo with minutes
Download North Lake County Hospital District Summons
Minutes from the prior two meetings:
Download 2009_09_10_northlakehosp_meeting
