Florida Senate - 2010                     (NP)    CS for SB 2752
       
       
       
       By the Committee on Health Regulation; and Senators Dean and
       Fasano
       
       
       
       588-04752-10                                          20102752c1
    1                        A bill to be entitled                      
    2         An act relating to Citrus County; providing for
    3         codification of special laws relating to the Citrus
    4         County Hospital Board, an independent special district
    5         in Citrus County; providing legislative intent;
    6         codifying, amending, and reenacting chapter 99-442,
    7         Laws of Florida, as amended, as the “Citrus County
    8         Hospital and Medical Nursing and Convalescent Home
    9         Act”; deleting obsolete provisions; making technical
   10         revisions; repealing prior special acts relating to
   11         board; authorizing the board to enter into a lease or
   12         contract with a not-for-profit corporation for the
   13         purpose of operating and managing the hospital and its
   14         facilities; providing requirements for such lease or
   15         contract; declaring a need for governance authority to
   16         fulfill the hospital board’s public responsibilities;
   17         providing for approval by the hospital board of the
   18         governing documents of the not-for-profit corporation
   19         and of the members of its board of directors;
   20         providing that the hospital board is the sole member
   21         of the not-for-profit corporation; providing for the
   22         hospital board’s approval for a merger or dissolution
   23         of the not-for-profit corporation; providing that all
   24         members of the hospital board are voting members of
   25         the board of directors of the not-for-profit
   26         corporation and will comprise a voting majority of the
   27         board; requiring hospital board approval of the Chief
   28         Executive Officer of the hospital and his or her term
   29         of office; requiring hospital board approval for all
   30         substantial operating, capital, and debt expenditures;
   31         providing for the hospital board’s approval of the
   32         annual operating and capital budgets of the not-for
   33         profit corporation; requiring an annual independent
   34         audit of the fiscal management of the hospital at the
   35         discretion of the hospital board; providing that all
   36         records of the not-for-profit corporation, unless
   37         exempted, are public records; requiring that
   38         proprietary confidential business information be
   39         disclosed to the hospital board; providing for
   40         interpretation and implementation of the act and for
   41         court enforcement; providing for severability;
   42         providing for application of the act; providing an
   43         effective date.
   44  
   45         WHEREAS, the Citrus County Hospital Board was created by
   46  the Legislature in 1949 as a special taxing district and a
   47  public nonprofit corporation for the purpose of operating public
   48  hospitals, medical nursing homes, and convalescent homes in
   49  Citrus County, and
   50         WHEREAS, in 1987 the hospital board incorporated a not-for
   51  profit management corporation, and in 1990 entered into a lease
   52  agreement with the not-for-profit corporation pursuant to s.
   53  155.40, Florida Statutes, leasing all public assets, operations,
   54  and management of Citrus Memorial Hospital, and
   55         WHEREAS, members of the hospital board constituted a
   56  majority of the board of directors of the lessee corporation
   57  when the hospital board incorporated the not-for-profit
   58  corporation, but the hospital board’s majority has been diluted
   59  over time through increases in the number of private, at-large
   60  corporate directors, and
   61         WHEREAS, the term of the lease agreement extends for forty
   62  two (42) years, with an unconditional right of renewal provided
   63  to the lessee corporation for an additional forty–five (45)
   64  years, providing an effective ninety-seven (97) year lease term,
   65  and
   66         WHEREAS, the lease provisions do not provide for reasonable
   67  public accountability regarding operative or financial
   68  performance standards, other than requiring the not-for-profit
   69  corporation to maintain minimal bond covenants, the lease fails
   70  to provide for any corporate performance standards regarding
   71  financial or operative compliance with industry standards or for
   72  any actionable financial or operative performance monitoring by
   73  the hospital board, and
   74         WHEREAS, the Financial Hospital Data 2003–2008 compiled by
   75  Florida’s Agency for Health Care (AHCA) reports the lessee
   76  corporation has incurred cumulative financial operative losses
   77  from patient services exceeding fifty (50) million dollars, and
   78  2009 internal corporate financial documents project additional
   79  patient service operative losses, and
   80         WHEREAS, the Florida AHCA Financial Hospital Data 2003–2008
   81  reports the lessee corporation consistently underperforms AHCA
   82  not-for-profit and similarly grouped hospital operating margins
   83  financial benchmarks, and
   84         WHEREAS, consistent patient service operative losses
   85  incurred by the lessee corporation have necessitated substantial
   86  increases in the ad valorem tax burden on the citizens of Citrus
   87  County, and
   88         WHEREAS, in February 2010 the Auditor General issued a
   89  final Operational Audit, report number 2010-093, with findings
   90  that are critical of the not-for-profit corporation’s fiscal
   91  management of the leased public hospital facilities, and its
   92  accountability for public funds, noting that the lease agreement
   93  does not prescribe any specific good business practices to
   94  ensure efficient operations of the public hospital, and
   95         WHEREAS, the Attorney General has opined and the Fifth
   96  Judicial Circuit Court in and for Citrus County has held that
   97  the not-for-profit corporation is an instrumentality of the
   98  hospital board for purposes of s. 768.28, Florida Statutes, and
   99  is entitled to sovereign immunity, and
  100         WHEREAS, the hospital board has repeatedly expressed
  101  governance and administrative concerns to the not-for-profit
  102  corporation with respect to its performance of public
  103  responsibilities and its management of public assets on behalf
  104  of the hospital board and the taxpayers of Citrus County, and
  105         WHEREAS, the hospital board has endeavored to resolve
  106  governance and administrative concerns with the lessee on an
  107  amicable basis, but without cooperation on the part of the
  108  lessee, and
  109         WHEREAS, meaningful oversight by the hospital board is
  110  necessitated in light of the not-for profit corporation’s status
  111  as an instrumentality of the hospital district, and
  112         WHEREAS, restoration of the hospital board’s representation
  113  on the board of the lessee corporation, and implementation of
  114  appropriate accountability and oversight by the hospital board,
  115  are necessitated by the not-for-profit corporation’s significant
  116  financial losses from patient services, financial
  117  underperformance when compared with Florida not-for-profit
  118  hospitals or similarly grouped Florida hospitals, and corporate
  119  deficiencies as found by the Auditor General, and in order to
  120  ensure corporate sovereign immunity status as an instrumentality
  121  of the hospital district, and
  122         WHEREAS, the ability of the hospital board to continue to
  123  act in the public interest on behalf of the taxpayers of Citrus
  124  County requires mechanisms to ensure future adherence to the
  125  hospital board’s public responsibilities, as well as express
  126  authority for judicial interpretation and enforcement of this
  127  act through declaratory proceedings and other appropriate
  128  judicial remedies, and
  129         WHEREAS, this act provides an appropriate and effective
  130  means of addressing in a public forum the hospital board’s
  131  concerns with respect to its oversight of the lessee’s
  132  performance of its responsibilities to the public and to the
  133  taxpayers of Citrus County, NOW, THEREFORE,
  134  
  135  Be It Enacted by the Legislature of the State of Florida:
  136  
  137         Section 1. This act constitutes the codification of all
  138  special acts relating to the Citrus County Hospital Board. It is
  139  the intent of the Legislature in enacting this law to provide a
  140  single comprehensive special act charter for the district,
  141  including all current authority granted to the district by its
  142  several legislative enactments.
  143         Section 2. Chapters 99-442 and 2001-308, Laws of Florida,
  144  relating to the Citrus County Hospital Board, are codified,
  145  reenacted, and amended to read:
  146         Section 1. This act shall be known and may be cited as the
  147  “Citrus County Hospital and Medical Nursing and Convalescent
  148  Home Act.”
  149         Section 2. As used in this act, the words and terms shall
  150  have the following meanings:
  151         (a)The term “Citrus County Hospital Board” or the word
  152  “board” shall mean the Citrus County Hospital Board.
  153         (b)The word “county” shall mean the County of Citrus, in
  154  the State of Florida.
  155         (c)The word “state” shall mean the State of Florida.
  156         (d)The word “property” shall mean the real and personal
  157  property of every nature whatsoever.
  158         (e)The word “operate” shall include build, construct,
  159  maintain, repair, alter, expand, equip, lease, pursuant to and
  160  consistent with section 17 of this act, finance, and operate.
  161         (f)The words “county hospital and medical nursing and
  162  convalescent homes” shall include hospitals, medical care
  163  facilities, clinics, and other allied medical care units.
  164         Section 3. (a)There is hereby created the Citrus County
  165  Hospital Board, an independent special district, and by that
  166  name the board may sue and be sued, plead and be impleaded,
  167  contract and be contracted with, acquire and dispose of property
  168  or any interest therein, and have an official seal. The board is
  169  created as a public nonprofit corporation without stock and is
  170  composed of and governed by the five (5) members herein provided
  171  for, to be known as trustees. The hospital board is hereby
  172  constituted and declared to be an agency of the county and
  173  incorporated for the purpose of operating hospitals, medical
  174  nursing homes, and convalescent homes in the county. The
  175  hospital board shall consist of five (5) trustees appointed by
  176  the Governor and, upon this act becoming a law, the present
  177  members will automatically become trustees and shall constitute
  178  the board. Their respective terms of office shall be the term
  179  each member is presently serving. All subsequent appointments,
  180  upon the expiration of the present terms, shall be for the term
  181  of four (4) years. Upon the expiration of the term of each
  182  trustee, the successor shall be appointed by the Governor.
  183  Likewise, any vacancy occurring shall be filled by appointment
  184  by the Governor for the unexpired term. Each appointment by the
  185  Governor is subject to approval and confirmation by the Florida
  186  Senate.
  187         (b)The trustees of said board shall elect from its members
  188  a chair, a vice chair, and a secretary-treasurer who shall each
  189  hold office for a period of one (1) year.
  190         (c)The hospital board shall comply with the applicable
  191  requirements of Florida Security for Public Deposits Act,
  192  chapter 280, Florida Statutes, and the Investment of Local
  193  Government Surplus Funds Act, part IV of chapter 218, Florida
  194  Statutes.
  195         (d)Any and all funds so deposited shall be withdrawn by a
  196  check or warrant signed by two (2) trustees of the hospital
  197  board, of which one (1) shall be the chair, vice chair, or
  198  secretary-treasurer. No check or warrant shall be delivered to
  199  the payee without approval thereof shown in the minutes of the
  200  hospital board.
  201         Section 4. The trustees of the board shall receive no
  202  compensation for their services. Three trustees shall constitute
  203  a quorum of the hospital board for the purpose of conducting its
  204  business and exercising its powers and for all other purposes.
  205  Action may be taken by the board only upon a vote in the
  206  affirmative of three trustees thereof.
  207         Section 5. The Citrus County Hospital Board as hereby
  208  created shall be for the purpose of operating, in the County of
  209  Citrus, public hospitals, medical nursing homes, and
  210  convalescent homes, primarily and chiefly for the benefit of the
  211  citizens and residents of Citrus County. Authority is hereby
  212  given to said board to build, erect, expand, equip, maintain,
  213  operate, alter, change, lease, pursuant to and consistent with
  214  section 17 of this act, and repair public hospitals, medical
  215  nursing homes, and convalescent homes in Citrus County. The
  216  corporation is authorized, when rooms and services are
  217  available, without detriment or deprivation to the citizens and
  218  residents of Citrus County, to extend the hospitalization and
  219  medical nursing home and convalescent home services provided by
  220  said hospitals, medical nursing homes, and convalescent homes to
  221  patients from adjoining and other counties of Florida and from
  222  other states, upon the payment of the cost of such
  223  hospitalization, medical nursing home services, and convalescent
  224  home services as may be determined by the trustees of the
  225  hospital board. The board shall have the power and authority to
  226  operate an ambulance system and ambulance services. The board
  227  shall have the authority to charge all patients for all services
  228  rendered in any facility owned or operated by the hospital
  229  board, including the ambulance facility. The board may charge
  230  patients interest on the patient’s account; may sell, discount,
  231  or assign said account to a bank, finance company, collection
  232  agency, or other type of collection facility; may accept
  233  promissory notes or other types of debt obligations from a
  234  patient; may assign or discount said accounts receivable, notes,
  235  or other obligations; may require a patient to guarantee the
  236  payment of an existing account or note; may require a guarantee
  237  of payment before admitting a patient; and may receive and
  238  assign any assignment of all types of insurance proceeds.
  239         Section 6. The board may provide for the annual levy of an
  240  ad valorem tax upon all taxable property within the district to
  241  pay for the principal of and interest on promissory notes,
  242  mortgages, or ad valorem bonds; and may pay for the erecting,
  243  building, equipping, maintaining, changing, altering, repairing,
  244  leasing, and operating the public hospital. However, the millage
  245  rate may not exceed 3 mills per year. The board shall comply
  246  with the applicable provisions of chapter 200, Florida Statutes.
  247         Section 7. The hospital board is hereby authorized and
  248  empowered to own and acquire property by purchase, lease, gift,
  249  grant, or transfer from the county, the state, or the Federal
  250  Government, or any subdivision or agency thereof, any
  251  municipality, person, partnership, or corporation, and to
  252  acquire, construct, maintain, operate, expand, alter, repair,
  253  change, lease, finance, and equip hospitals, medical nursing
  254  homes, convalescent homes, medical care facilities, and clinics
  255  in the county.
  256         Section 8. The hospital board is authorized and empowered
  257  to enter into contracts with individuals, partnerships,
  258  corporations, municipalities, the county, the state or any
  259  subdivision or agency thereof, and the United States of America
  260  or any subdivision or agency thereof to carry out the purposes
  261  of this act.
  262         Section 9. The hospital board is empowered to and shall
  263  adopt all necessary rules and regulations and bylaws for the
  264  operation of hospitals, medical nursing homes, and convalescent
  265  homes; to provide for the admission thereto and treatment of
  266  such charity patients who are citizens of Florida and residents
  267  of Citrus County for the last two (2) preceding years; to set
  268  the fees and charges to be made for the admission and treatment
  269  therein of all patients; and to establish the qualifications for
  270  members of the medical profession to be entitled to practice
  271  therein.
  272         Section 10. The hospital board shall have the power to
  273  purchase any and all equipment that may be needed for the
  274  operation of hospitals, medical nursing homes, and convalescent
  275  homes, and shall have the power to appoint and hire such agent
  276  or agents, technical experts, attorneys, and all other employees
  277  as are necessary for carrying out the purposes of this act, and
  278  to prescribe their salaries and duties. The board shall have the
  279  power to discharge all employees or agents when it shall be
  280  deemed by the board necessary for the carrying out of the
  281  purposes of this act.
  282         Section 11. At the end of each fiscal year thereafter, the
  283  Citrus County Hospital Board shall within thirty (30) days file
  284  with the Clerk of the Circuit Court of Citrus County a full,
  285  complete, and detailed accounting of the preceding year and at
  286  the same time shall file a certified copy of said financial
  287  report with the Board of County Commissioners of Citrus County,
  288  which report shall be recorded in the minutes of the board of
  289  county commissioners. The board of county commissioners at its
  290  discretion and at the expense of the county may publish and
  291  report an accounting in a newspaper of general circulation in
  292  Citrus County.
  293         Section 12. In addition to all other implied and express
  294  powers contained herein, the board shall have the express
  295  authority to negotiate loans to borrow money from any state or
  296  federal agency for the purpose or purposes of constructing,
  297  maintaining, repairing, altering, expanding, equipping, leasing,
  298  and operating county hospitals, medical nursing homes,
  299  convalescent homes, medical care facilities, clinics, and all
  300  other types of allied medical care units.
  301         Section 13. In addition to all other implied and express
  302  powers contained herein, the board shall have the express
  303  authority to borrow money, with or without issuing notes
  304  therefor, for the purpose or purposes of constructing,
  305  maintaining, repairing, altering, expanding, equipping, leasing,
  306  and operating county hospitals, medical nursing homes,
  307  convalescent homes, medical care facilities, clinics, and all
  308  other types of allied medical care units. The board’s authority
  309  to borrow money, with or without issuing notes, shall be subject
  310  to the conditions of this act, applying to the board’s right to
  311  issue revenue bonds.
  312         Section 14. Said board shall have express authority to
  313  issue bonds, subject to approval by a referendum of the voters
  314  of said county, and to issue revenue bonds, without a referendum
  315  of the voters of said county, the proceeds of which shall be
  316  used for erecting, equipping, building, expanding, altering,
  317  changing, maintaining, operating, leasing, and repairing said
  318  hospitals, medical nursing homes, and convalescent homes.
  319         Section 15. (a)Said bonds, federal or state hospital
  320  loans, notes, or revenue bonds shall mature within thirty (30)
  321  years from the year in which they are issued or made, and shall
  322  be payable in such years and amounts as shall be approved by the
  323  board.
  324         (b)The board shall determine the form of the loans, notes,
  325  bonds, and revenue bonds, including any interest coupons to be
  326  attached thereto, and the manner of executing it, shall fix the
  327  denomination or denominations thereof and the place or places of
  328  payment of principal and interest which may be at any bank or
  329  trust company within or without the state. In case an officer
  330  whose signature or a facsimile of whose signature shall appear
  331  on any loan, note, bond, or revenue certificate or coupon shall
  332  cease to be such officer before the delivery thereof, such
  333  signature or facsimile shall nevertheless be valid and
  334  sufficient for all purposes the same as if the officer had
  335  remained in office until such delivery. All loan agreements,
  336  notes, bonds, and revenue bonds issued hereunder shall have and
  337  are hereby declared to have all the qualities and incidents of
  338  negotiable instruments under the negotiable instruments law of
  339  the state.
  340         (c)Whenever the board shall pass a resolution approving
  341  the issuance of said bonds, the board shall call for an election
  342  and, subject to said election, permit the repayment of the bonds
  343  out of an annual levy not to exceed one and one-half (1 1/2)
  344  mills per year. Said millage is included in the maximum millage
  345  of three (3) mills per year. Subject to such limitations, said
  346  bonds shall be payable from the full faith and credit of the
  347  board.
  348         (d)The loans, notes, and revenue bonds, together with the
  349  interest, shall be payable from gross or net receipts of the
  350  hospital board or any portion thereof.
  351         (e)Said loans, notes, bonds, or revenue bonds shall not
  352  bear interest in excess of the maximum rate permitted by the
  353  laws of the State of Florida.
  354         (f)The board may sell bonds, loans, notes, or revenue
  355  bonds such manner, either at public or private sale, and for
  356  such price as it may determine to be for the best interest of
  357  the hospital board.
  358         (g)The board of county commissioners during any period
  359  that bonds payable from ad valorem taxation are outstanding
  360  shall, in addition to the maximum of one and one-half (1 1/2)
  361  mills levied above and authorized for the repayment of the bonds
  362  and interest, levy annually the remainder of the hospital tax in
  363  the amount up to one and one-half (1 1/2) mills on the dollar
  364  for the purpose of maintaining and operating the county
  365  hospitals, medical nursing homes, and convalescent homes.
  366         Section 16. The total amount of outstanding bonds of said
  367  hospital payable from ad valorem taxation at any one time shall
  368  not exceed an amount equal to six (6) times the annual hospital
  369  tax, assuming said tax is based upon the yearly millage of three
  370  (3) mills.
  371         Section 17. The hospital board shall have the authority to
  372  enter into leases or contracts with a not-for-profit Florida
  373  corporation for the purpose of operating and managing a public
  374  hospital and any or all of its facilities of whatsoever kind and
  375  nature. To ensure public oversight, accountability, and public
  376  benefit, in addition to the requirements for any such lease or
  377  contract which are set out in s. 155.40, Florida Statutes:
  378         (a)The Articles of Incorporation, all amendments or
  379  Restatements of the Articles of Incorporation, all corporate
  380  Bylaws, all amendments or Restatements of the corporate Bylaws,
  381  and all other governing documents of such not-for-profit
  382  corporation shall be subject to the approval of the hospital
  383  board; and any such documents which have not heretofore been
  384  approved by the hospital board shall be submitted to the
  385  hospital board for approval forthwith.
  386         (b)The hospital board shall be the sole member of the not
  387  for-profit corporation.
  388         (c)The hospital board shall independently approve any plan
  389  of merger or dissolution of the not-for-profit corporation
  390  pursuant to sections 617.1103 and 617.1402, Florida Statutes.
  391         (d)All members of the hospital board shall be voting
  392  directors of the not-for-profit board of directors.
  393         (e)The number of members of the hospital board shall at
  394  all times constitute a majority of the voting directors of the
  395  not-for-profit corporation, and to the extent that any
  396  governance documents of the not-for-profit corporation do not so
  397  presently provide the not-for-profit corporation shall forthwith
  398  take all steps necessary to bring them into conformity with this
  399  majority membership requirement.
  400         (f)All members of the not-for-profit board of directors
  401  shall be subject to approval by the hospital board, and any
  402  board members presently serving who have not heretofore been
  403  approved by the hospital board shall be submitted to the
  404  hospital board for approval forthwith.
  405         (g)The Chief Executive Officer of the hospital, and his or
  406  her term of office and any extensions thereof, shall be approved
  407  by the hospital board.
  408         (h)The borrowing of money in any form and for any reason
  409  in an amount exceeding $100,000 shall be approved by the
  410  hospital board.
  411         (i)No annual operating and capital budget of the not-for
  412  profit corporation shall become effective until approved by the
  413  Citrus County Hospital Board.
  414         (j)Any capital project having a value in excess of
  415  $250,000 per project, and any non-budgeted operative expenditure
  416  in excess of $125,000 in the per annum aggregate, shall be
  417  approved by the hospital board.
  418         (k)At the discretion of the hospital board, each and every
  419  year the not-for-profit corporation shall complete an
  420  independent audit of the fiscal management of the hospital by an
  421  auditor chosen by the hospital board, with the audit to be paid
  422  for by the not-for-profit corporation.
  423         (l)All records of the not-for-profit corporation shall be
  424  public records unless exempt by law; provided however, the
  425  hospital board, pursuant to their oversight and auditing
  426  functions, must be given full and complete access to all
  427  proprietary confidential business information upon request and
  428  without subpoena, and must maintain the confidentiality of
  429  information so received. As used in this paragraph, the term
  430  “proprietary confidential business information” means
  431  information, regardless of its form or characteristics, which is
  432  owned or controlled by the not-for-profit corporation or its
  433  subsidiaries, including, but not limited to, all matters
  434  encompassed in privileged attorney-client communications and
  435  strategic planning.
  436         Section 18.In order to ensure public oversight,
  437  accountability, and public benefit, the provisions in this act
  438  and the hospital board’s lease with the not-for-profit
  439  corporation:
  440         (a) Shall be construed and interpreted as furthering the
  441  public health and welfare, and the open-government requirements
  442  of s. 24, Article I of the State Constitution and ss. 119.01 and
  443  286.011, Florida Statutes; and
  444         (b) May be enforced by a court of competent jurisdiction in
  445  declaratory proceedings under chapter 86, Florida Statutes, by
  446  injunction, or by any other appropriate form of judicial relief.
  447         Section 3. Chapter 99-442, Laws of Florida, and chapter
  448  2001-308, Laws of Florida, are repealed.
  449         Section 4. If any provision of this act or its application
  450  to any person or circumstance is held invalid, the invalidity
  451  does not affect other provisions or applications of the act
  452  which can be given effect without the invalid provision or
  453  application, and to this end the provisions of this act are
  454  severable.
  455         Section 5. This act shall take effect upon becoming a law
  456  and shall apply to existing and future leases and amendments,
  457  revisions, and restatements thereto, and to existing and future
  458  agreements for hospital care and amendments, revisions, and
  459  restatements thereto; however, this act shall not apply to the
  460  term of any existing contract entered into by the not-for-profit
  461  corporation with a third-party, to any existing contract for the
  462  borrowing of money in excess of $100,000 for which the hospital
  463  board has not previously given its approval, or to any existing
  464  contract for a capital project in excess of $250,000 for which
  465  the hospital board has not previously given its approval.