HB 1475

1
A bill to be entitled
2An act relating to Citrus County; providing for
3codification of special laws relating to the Citrus County
4Hospital Board, an independent special district in Citrus
5County; providing legislative intent; codifying, amending,
6and reenacting chapter 99-442, Laws of Florida, as
7amended, as the "Citrus County Hospital and Medical
8Nursing and Convalescent Home Act"; deleting obsolete
9provisions; making technical revisions; repealing prior
10special acts relating to board; authorizing the board to
11enter into a lease or contract with a not-for-profit
12corporation for the purpose of operating and managing the
13hospital and its facilities; providing requirements for
14such lease or contract; declaring a need for governance
15authority to fulfill the hospital board's public
16responsibilities; providing for approval by the hospital
17board of the governing documents of the not-for-profit
18corporation and of the members of its board of directors;
19providing that the hospital board is the sole member of
20the not-for-profit corporation; providing for the hospital
21board's approval for a merger or dissolution of the not-
22for-profit corporation; providing that all members of the
23hospital board are voting members of the board of
24directors of the not-for-profit corporation and will
25comprise a voting majority of the board; requiring
26hospital board approval of the Chief Executive Officer of
27the hospital and his or her term of office; requiring
28hospital board approval for all substantial operating,
29capital, and debt expenditures; providing for the hospital
30board's approval of the annual operating and capital
31budgets of the not-for-profit corporation; requiring an
32annual independent audit of the fiscal management of the
33hospital at the discretion of the hospital board;
34providing that all records of the not-for-profit
35corporation, unless exempted, are public records;
36requiring that proprietary confidential business
37information be disclosed to the hospital board; providing
38for interpretation and implementation of the act and for
39court enforcement; providing for severability; providing
40for application of the act; providing an effective date.
41
42     WHEREAS, the Citrus County Hospital Board was created by
43the Legislature in 1949 as a special taxing district and a
44public nonprofit corporation for the purpose of operating public
45hospitals, medical nursing homes, and convalescent homes in
46Citrus County, and
47     WHEREAS, in 1987 the hospital board incorporated a not-for-
48profit management corporation, and in 1990 entered into a lease
49agreement with the not-for-profit corporation pursuant to s.
50155.40, Florida Statutes, leasing all public assets, operations,
51and management of Citrus Memorial Hospital, and
52     WHEREAS, members of the hospital board constituted a
53majority of the board of directors of the lessee corporation
54when the hospital board incorporated the not-for-profit
55corporation, but the hospital board's majority has been diluted
56over time through increases in the number of private, at-large
57corporate directors, and
58     WHEREAS, the term of the lease agreement extends for forty-
59two (42) years, with an unconditional right of renewal provided
60to the lessee corporation for an additional forty-five (45)
61years, providing an effective ninety-seven (97) year lease term,
62and
63     WHEREAS, the lease provisions do not provide for reasonable
64public accountability regarding operative or financial
65performance standards, other than requiring the not-for-profit
66corporation to maintain minimal bond covenants, the lease fails
67to provide for any corporate performance standards regarding
68financial or operative compliance with industry standards or for
69any actionable financial or operative performance monitoring by
70the hospital board, and
71     WHEREAS, the Financial Hospital Data 2003-2008 compiled by
72Florida's Agency for Health Care (AHCA) reports the lessee
73corporation has incurred cumulative financial operative losses
74from patient services exceeding fifty (50) million dollars, and
752009 internal corporate financial documents project additional
76patient service operative losses, and
77     WHEREAS, the Florida AHCA Financial Hospital Data 2003-2008
78reports the lessee corporation consistently underperforms AHCA
79not-for-profit and similarly grouped hospital operating margins
80financial benchmarks, and
81     WHEREAS, consistent patient service operative losses
82incurred by the lessee corporation have necessitated substantial
83increases in the ad valorem tax burden on the citizens of Citrus
84County, and
85     WHEREAS, in February 2010 the Auditor General issued a
86final Operational Audit, report number 2010-093, with findings
87that are critical of the not-for-profit corporation's fiscal
88management of the leased public hospital facilities, and its
89accountability for public funds, noting that the lease agreement
90does not prescribe any specific good business practices to
91ensure efficient operations of the public hospital, and
92     WHEREAS, the Attorney General has opined and the Fifth
93Judicial Circuit Court in and for Citrus County has held that
94the not-for-profit corporation is an instrumentality of the
95hospital board for purposes of s. 768.28, Florida Statutes, and
96is entitled to sovereign immunity, and
97     WHEREAS, the hospital board has repeatedly expressed
98governance and administrative concerns to the not-for-profit
99corporation with respect to its performance of public
100responsibilities and its management of public assets on behalf
101of the hospital board and the taxpayers of Citrus County, and
102     WHEREAS, the hospital board has endeavored to resolve
103governance and administrative concerns with the lessee on an
104amicable basis, but without cooperation on the part of the
105lessee, and
106     WHEREAS, meaningful oversight by the hospital board is
107necessitated in light of the not-for profit corporation's status
108as an instrumentality of the hospital district, and
109     WHEREAS, restoration of the hospital board's representation
110on the board of the lessee corporation, and implementation of
111appropriate accountability and oversight by the hospital board,
112are necessitated by the not-for-profit corporation's significant
113financial losses from patient services, financial
114underperformance when compared with Florida not-for-profit
115hospitals or similarly grouped Florida hospitals, and corporate
116deficiencies as found by the Auditor General, and in order to
117ensure corporate sovereign immunity status as an instrumentality
118of the hospital district, and
119     WHEREAS, the ability of the hospital board to continue to
120act in the public interest on behalf of the taxpayers of Citrus
121County requires mechanisms to ensure future adherence to the
122hospital board's public responsibilities, as well as express
123authority for judicial interpretation and enforcement of this
124act through declaratory proceedings and other appropriate
125judicial remedies, and
126     WHEREAS, this act provides an appropriate and effective
127means of addressing in a public forum the hospital board's
128concerns with respect to its oversight of the lessee's
129performance of its responsibilities to the public and to the
130taxpayers of Citrus County, NOW, THEREFORE,
131
132Be It Enacted by the Legislature of the State of Florida:
133
134     Section 1.  This act constitutes the codification of all
135special acts relating to the Citrus County Hospital Board. It is
136the intent of the Legislature in enacting this law to provide a
137single comprehensive special act charter for the district,
138including all current authority granted to the district by its
139several legislative enactments.
140     Section 2.  Chapters 99-442 and 2001-308, Laws of Florida,
141relating to the Citrus County Hospital Board, are codified,
142reenacted, and amended to read:
143     Section 1.  This act shall be known and may be cited as the
144"Citrus County Hospital and Medical Nursing and Convalescent
145Home Act."
146     Section 2.  As used in this act, the words and terms shall
147have the following meanings:
148     (a)  The term "Citrus County Hospital Board" or the word
149"board" shall mean the Citrus County Hospital Board.
150     (b)  The word "county" shall mean the County of Citrus, in
151the State of Florida.
152     (c)  The word "state" shall mean the State of Florida.
153     (d)  The word "property" shall mean the real and personal
154property of every nature whatsoever.
155     (e)  The word "operate" shall include build, construct,
156maintain, repair, alter, expand, equip, lease, pursuant to and
157consistent with section 17 of this act, finance, and operate.
158     (f)  The words "county hospital and medical nursing and
159convalescent homes" shall include hospitals, medical care
160facilities, clinics, and other allied medical care units.
161     Section 3.  (a)  There is hereby created the Citrus County
162Hospital Board, an independent special district, and by that
163name the board may sue and be sued, plead and be impleaded,
164contract and be contracted with, acquire and dispose of property
165or any interest therein, and have an official seal. The board is
166created as a public nonprofit corporation without stock and is
167composed of and governed by the five (5) members herein provided
168for, to be known as trustees. The hospital board is hereby
169constituted and declared to be an agency of the county and
170incorporated for the purpose of operating hospitals, medical
171nursing homes, and convalescent homes in the county. The
172hospital board shall consist of five (5) trustees appointed by
173the Governor and, upon this act becoming a law, the present
174members will automatically become trustees and shall constitute
175the board. Their respective terms of office shall be the term
176each member is presently serving. All subsequent appointments,
177upon the expiration of the present terms, shall be for the term
178of four (4) years. Upon the expiration of the term of each
179trustee, the successor shall be appointed by the Governor.
180Likewise, any vacancy occurring shall be filled by appointment
181by the Governor for the unexpired term. Each appointment by the
182Governor is subject to approval and confirmation by the Florida
183Senate.
184     (b)  The trustees of said board shall elect from its
185members a chair, a vice chair, and a secretary-treasurer who
186shall each hold office for a period of one (1) year.
187     (c)  The hospital board shall comply with the applicable
188requirements of Florida Security for Public Deposits Act,
189chapter 280, Florida Statutes, and the Investment of Local
190Government Surplus Funds Act, part IV of chapter 218, Florida
191Statutes.
192     (d)  Any and all funds so deposited shall be withdrawn by a
193check or warrant signed by two (2) trustees of the hospital
194board, of which one (1) shall be the chair, vice chair, or
195secretary-treasurer. No check or warrant shall be delivered to
196the payee without approval thereof shown in the minutes of the
197hospital board.
198     Section 4.  The trustees of the board shall receive no
199compensation for their services. Three trustees shall constitute
200a quorum of the hospital board for the purpose of conducting its
201business and exercising its powers and for all other purposes.
202Action may be taken by the board only upon a vote in the
203affirmative of three trustees thereof.
204     Section 5.  The Citrus County Hospital Board as hereby
205created shall be for the purpose of operating, in the County of
206Citrus, public hospitals, medical nursing homes, and
207convalescent homes, primarily and chiefly for the benefit of the
208citizens and residents of Citrus County. Authority is hereby
209given to said board to build, erect, expand, equip, maintain,
210operate, alter, change, lease, pursuant to and consistent with
211section 17 of this act, and repair public hospitals, medical
212nursing homes, and convalescent homes in Citrus County. The
213corporation is authorized, when rooms and services are
214available, without detriment or deprivation to the citizens and
215residents of Citrus County, to extend the hospitalization and
216medical nursing home and convalescent home services provided by
217said hospitals, medical nursing homes, and convalescent homes to
218patients from adjoining and other counties of Florida and from
219other states, upon the payment of the cost of such
220hospitalization, medical nursing home services, and convalescent
221home services as may be determined by the trustees of the
222hospital board. The board shall have the power and authority to
223operate an ambulance system and ambulance services. The board
224shall have the authority to charge all patients for all services
225rendered in any facility owned or operated by the hospital
226board, including the ambulance facility. The board may charge
227patients interest on the patient's account; may sell, discount,
228or assign said account to a bank, finance company, collection
229agency, or other type of collection facility; may accept
230promissory notes or other types of debt obligations from a
231patient; may assign or discount said accounts receivable, notes,
232or other obligations; may require a patient to guarantee the
233payment of an existing account or note; may require a guarantee
234of payment before admitting a patient; and may receive and
235assign any assignment of all types of insurance proceeds.
236     Section 6.  The board may provide for the annual levy of an
237ad valorem tax upon all taxable property within the district to
238pay for the principal of and interest on promissory notes,
239mortgages, or ad valorem bonds; and may pay for the erecting,
240building, equipping, maintaining, changing, altering, repairing,
241leasing, and operating the public hospital. However, the millage
242rate may not exceed 3 mills per year. The board shall comply
243with the applicable provisions of chapter 200, Florida Statutes.
244     Section 7.  The hospital board is hereby authorized and
245empowered to own and acquire property by purchase, lease, gift,
246grant, or transfer from the county, the state, or the Federal
247Government, or any subdivision or agency thereof, any
248municipality, person, partnership, or corporation, and to
249acquire, construct, maintain, operate, expand, alter, repair,
250change, lease, finance, and equip hospitals, medical nursing
251homes, convalescent homes, medical care facilities, and clinics
252in the county.
253     Section 8.  The hospital board is authorized and empowered
254to enter into contracts with individuals, partnerships,
255corporations, municipalities, the county, the state or any
256subdivision or agency thereof, and the United States of America
257or any subdivision or agency thereof to carry out the purposes
258of this act.
259     Section 9.  The hospital board is empowered to and shall
260adopt all necessary rules and regulations and bylaws for the
261operation of hospitals, medical nursing homes, and convalescent
262homes; to provide for the admission thereto and treatment of
263such charity patients who are citizens of Florida and residents
264of Citrus County for the last two (2) preceding years; to set
265the fees and charges to be made for the admission and treatment
266therein of all patients; and to establish the qualifications for
267members of the medical profession to be entitled to practice
268therein.
269     Section 10.  The hospital board shall have the power to
270purchase any and all equipment that may be needed for the
271operation of hospitals, medical nursing homes, and convalescent
272homes, and shall have the power to appoint and hire such agent
273or agents, technical experts, attorneys, and all other employees
274as are necessary for carrying out the purposes of this act, and
275to prescribe their salaries and duties. The board shall have the
276power to discharge all employees or agents when it shall be
277deemed by the board necessary for the carrying out of the
278purposes of this act.
279     Section 11.  At the end of each fiscal year thereafter, the
280Citrus County Hospital Board shall within thirty (30) days file
281with the Clerk of the Circuit Court of Citrus County a full,
282complete, and detailed accounting of the preceding year and at
283the same time shall file a certified copy of said financial
284report with the Board of County Commissioners of Citrus County,
285which report shall be recorded in the minutes of the board of
286county commissioners. The board of county commissioners at its
287discretion and at the expense of the county may publish and
288report an accounting in a newspaper of general circulation in
289Citrus County.
290     Section 12.  In addition to all other implied and express
291powers contained herein, the board shall have the express
292authority to negotiate loans to borrow money from any state or
293federal agency for the purpose or purposes of constructing,
294maintaining, repairing, altering, expanding, equipping, leasing,
295and operating county hospitals, medical nursing homes,
296convalescent homes, medical care facilities, clinics, and all
297other types of allied medical care units.
298     Section 13.  In addition to all other implied and express
299powers contained herein, the board shall have the express
300authority to borrow money, with or without issuing notes
301therefor, for the purpose or purposes of constructing,
302maintaining, repairing, altering, expanding, equipping, leasing,
303and operating county hospitals, medical nursing homes,
304convalescent homes, medical care facilities, clinics, and all
305other types of allied medical care units. The board's authority
306to borrow money, with or without issuing notes, shall be subject
307to the conditions of this act, applying to the board's right to
308issue revenue bonds.
309     Section 14.  Said board shall have express authority to
310issue bonds, subject to approval by a referendum of the voters
311of said county, and to issue revenue bonds, without a referendum
312of the voters of said county, the proceeds of which shall be
313used for erecting, equipping, building, expanding, altering,
314changing, maintaining, operating, leasing, and repairing said
315hospitals, medical nursing homes, and convalescent homes.
316     Section 15.  (a)  Said bonds, federal or state hospital
317loans, notes, or revenue bonds shall mature within thirty (30)
318years from the year in which they are issued or made, and shall
319be payable in such years and amounts as shall be approved by the
320board.
321     (b)  The board shall determine the form of the loans,
322notes, bonds, and revenue bonds, including any interest coupons
323to be attached thereto, and the manner of executing it, shall
324fix the denomination or denominations thereof and the place or
325places of payment of principal and interest which may be at any
326bank or trust company within or without the state. In case an
327officer whose signature or a facsimile of whose signature shall
328appear on any loan, note, bond, or revenue certificate or coupon
329shall cease to be such officer before the delivery thereof, such
330signature or facsimile shall nevertheless be valid and
331sufficient for all purposes the same as if the officer had
332remained in office until such delivery. All loan agreements,
333notes, bonds, and revenue bonds issued hereunder shall have and
334are hereby declared to have all the qualities and incidents of
335negotiable instruments under the negotiable instruments law of
336the state.
337     (c)  Whenever the board shall pass a resolution approving
338the issuance of said bonds, the board shall call for an election
339and, subject to said election, permit the repayment of the bonds
340out of an annual levy not to exceed one and one-half (1 1/2)
341mills per year. Said millage is included in the maximum millage
342of three (3) mills per year. Subject to such limitations, said
343bonds shall be payable from the full faith and credit of the
344board.
345     (d)  The loans, notes, and revenue bonds, together with the
346interest, shall be payable from gross or net receipts of the
347hospital board or any portion thereof.
348     (e)  Said loans, notes, bonds, or revenue bonds shall not
349bear interest in excess of the maximum rate permitted by the
350laws of the State of Florida.
351     (f)  The board may sell bonds, loans, notes, or revenue
352bonds such manner, either at public or private sale, and for
353such price as it may determine to be for the best interest of
354the hospital board.
355     (g)  The board of county commissioners during any period
356that bonds payable from ad valorem taxation are outstanding, in
357addition to the maximum of one and one-half (1 1/2) mills levy
358above authorized for the repayment of the bonds and interest,
359levy annually the remainder of the hospital tax in the amount up
360to one and one-half (1 1/2) mills on the dollar for the purpose
361of maintaining and operating the county hospitals, medical
362nursing homes, and convalescent homes.
363     Section 16.  The total amount of outstanding bonds of said
364hospital payable from ad valorem taxation at any one time shall
365not exceed an amount equal to six (6) times the annual hospital
366tax, assuming said tax is based upon the yearly millage of three
367(3) mills.
368     Section 17.  The hospital board shall have the authority to
369enter into leases or contracts with a not-for-profit Florida
370corporation for the purpose of operating and managing a public
371hospital and any or all of its facilities of whatsoever kind and
372nature. To ensure public oversight, accountability, and public
373benefit, in addition to the requirements for any such lease or
374contract which are set out in s. 155.40, Florida Statutes:
375     (a)  The Articles of Incorporation, all amendments or
376Restatements of the Articles of Incorporation, all corporate
377Bylaws, all amendments or Restatements of the corporate Bylaws,
378and all other governing documents of such not-for-profit
379corporation shall be subject to the approval of the hospital
380board; and any such documents which have not heretofore been
381approved by the hospital board shall be submitted to the
382hospital board for approval forthwith.
383     (b)  The hospital board shall be the sole member of the
384not-for-profit corporation.
385     (c)  The hospital board shall independently approve any
386plan of merger or dissolution of the not-for-profit corporation
387pursuant to sections 617.1103 and 617.1402, Florida Statutes.
388     (d)  All members of the hospital board shall be voting
389directors of the not-for-profit board of directors.
390     (e)  The number of members of the hospital board shall at
391all times constitute a majority of the voting directors of the
392not-for-profit corporation, and to the extent that any
393governance documents of the not-for-profit corporation do not so
394presently provide the not-for-profit corporation shall forthwith
395take all steps necessary to bring them into conformity with this
396majority membership requirement.
397     (f)  All members of the not-for-profit board of directors
398shall be subject to approval by the hospital board, and any
399board members presently serving who have not heretofore been
400approved by the hospital board shall be submitted to the
401hospital board for approval forthwith.
402     (g)  The Chief Executive Officer of the hospital, and his
403or her term of office and any extensions thereof, shall be
404approved by the hospital board.
405     (h)  The borrowing of money in any form and for any reason
406in an amount exceeding $100,000 shall be approved by the
407hospital board.
408     (i)  No annual operating and capital budget of the not-for-
409profit corporation shall become effective until approved by the
410Citrus County Hospital Board.
411     (j)  Any capital project having a value in excess of
412$250,000 per project, and any non-budgeted operative expenditure
413in excess of $125,000 in the per annum aggregate, shall be
414approved by the hospital board.
415     (k)  At the discretion of the hospital board, each and
416every year the not-for-profit corporation shall complete an
417independent audit of the fiscal management of the hospital by an
418auditor chosen by the hospital board, with the audit to be paid
419for by the not-for-profit corporation.
420     (l)  All records of the not-for-profit corporation shall be
421public records unless exempt by law; provided however, the
422hospital board, pursuant to their oversight and auditing
423functions, must be given full and complete access to all
424proprietary confidential business information upon request and
425without subpoena, and must maintain the confidentiality of
426information so received. As used in this paragraph, the term
427"proprietary confidential business information" means
428information, regardless of its form or characteristics, which is
429owned or controlled by the not-for-profit corporation or its
430subsidiaries, including, but not limited to, all matters
431encompassed in privileged attorney-client communications and
432strategic planning.
433     Section 18.  In order to ensure public oversight,
434accountability, and public benefit, the provisions in this act
435and the hospital board's lease with the not-for-profit
436corporation:
437     (a)  Shall be construed and interpreted as furthering the
438public health and welfare, and the open-government requirements
439of s. 24, Article I of the State Constitution and ss. 119.01 and
440286.011, Florida Statutes; and
441     (b)  May be enforced by a court of competent jurisdiction
442in declaratory proceedings under chapter 86, Florida Statutes,
443by injunction, or by any other appropriate form of judicial
444relief.
445     Section 3.  Chapter 99-442, Laws of Florida, and chapter
4462001-308, Laws of Florida, are repealed.
447     Section 4.  If any provision of this act or its application
448to any person or circumstance is held invalid, the invalidity
449does not affect other provisions or applications of the act
450which can be given effect without the invalid provision or
451application, and to this end the provisions of this act are
452severable.
453     Section 5.  This act shall take effect upon becoming a law
454and shall apply to existing and future leases and amendments,
455revisions, and restatements thereto, and to existing and future
456agreements for hospital care and amendments, revisions, and
457restatements thereto; however, this act shall not apply to the
458term of any existing contract entered into by the not-for-profit
459corporation with a third-party, to any existing contract for the
460borrowing of money in excess of $100,000 for which the hospital
461board has not previously given its approval, or to any existing
462contract for a capital project in excess of $250,000 for which
463the hospital board has not previously given its approval.


CODING: Words stricken are deletions; words underlined are additions.