News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

LAKid53

Official Member of the Girly Girl Fan Club
Premium Member
I think you just solved it.

The state just needs to acquire land within the RCID boundary. Probably through eminent domain or seizure of some type. Perhaps asset forfeiture, they could charge some of the land as part of a meth scheme or something.

Then, move in enough loyal people to have a majority in the RCID vote and vote in a new government.

Of course, they'll need to execute this plan faster than RCID is able to change its boundaries to exclude that land from the district. Just like they did when they sold off other land for people to buy but not be in RCID then.

I bet that would fun to watch play out. 🍿

Provided the state does so under Chapters 73 and 74 and Section 253.025, F.S.
 

LAKid53

Official Member of the Girly Girl Fan Club
Premium Member
I wonder if there's any case law testing the limits of that authority, or if it's ever even been used.

It has. City/county commissioners, a sheriff or 2. And a county supervisor of elections.

Former Governor Scott suspended 50 officials - only 3 weren't convicted of crimes.

DeSantis suspended 3 who weren't even charged.
 

lazyboy97o

Well-Known Member
There you go then. Start looking for the RVs or Trailer homes being rolled out.

Adding enough people that meet the conditions required to vote on RCID government, and simply voting for a new government would be the least controversial way to take over RCID.
Voting in the District is apportioned by land holdings, not per person. One person with more land gets more votes.
 

mmascari

Well-Known Member
Couldn't Disney just build corporate housing faster and move in loyalists to counter that?
Good question. Or, just keep removing land from the district.

If RCID approves the plan
Any idea what the process is to get voting rights within the district?

Meaning, could the state set up a RV Trailer Home Tiny House on state land to get voting rights? Or, is there some larger process that involves sign off from RCID for someone to get those voting rights? Meaning, was the district set up with enough protections to avoid a takeover threat by someone who already has land within the district using it to create a majority of electors?

This still applies.
I bet that would fun to watch play out. 🍿

At least a take over this way would be unlikely to create bond or constitutional issues. It wouldn't scale to most municipalities either.
 

mikejs78

Premium Member
Under Section 112.51, F.S., the governor can suspend any elected or appointed municipal official for "...malfeasance, misfeasance, neglect of duty, habitual drunkenness, incompetence, or permanent inability to perform official duties." In addition, the governor can suspend said official when "...is arrested for a felony or for a misdemeanor related to the duties of office or is indicted or informed against for the commission of a federal felony or misdemeanor or state felony or misdemeanor..."

A temporary appointment to the vacant office shall be made in the same manner in which the office is filled. If no such provision exists, then the governor appoints a temporary.
For RCID, I believe the charter does have a provision for vacancies.
 

LAKid53

Official Member of the Girly Girl Fan Club
Premium Member
This is some dark stuff. Just take a step back and think about what we are talking about. The state abolishing charters of incorporated cities. Are people really OK with that? Legal or not why would anyone support that kind of action, especially since it‘s being done over a political difference? Even the concept of creating a special tax district to collect additional taxes that covers private property but allows none of the property owners any representation. Is that something anyone really supports? When did so many people decide this extreme level of government overreach is OK. I can’t really believe most people actually would support this stuff but unfortunately with social media bubbles and echo chambers many people just blindly believe the talking points. “Disney is going to pay their fair share”. This has very little to do with their share and nothing to do with fair. Dark stuff.

As a Florida resident of 56 years, my opinion is:

1. Many Florida voters don't know the laws of the state...until it directly affects them, and even then they are clueless
2. They are ignorant of the taxing structure of the state in general
3. They are okay with government overreach, as long as it doesn't affect them directly. And even then, they think it will affect "others" more than them.

They SHOULD be outraged that the homeowners insurance crisis has been ignored by the Legislature since the general session and subsequent special sessions.
 

ParentsOf4

Well-Known Member
This is some dark stuff. Just take a step back and think about what we are talking about. The state abolishing charters of incorporated cities. Are people really OK with that? Legal or not why would anyone support that kind of action, especially since it‘s being done over a political difference? Even the concept of creating a special tax district to collect additional taxes that covers private property but allows none of the property owners any representation. Is that something anyone really supports? When did so many people decide this extreme level of government overreach is OK. I can’t really believe most people actually would support this stuff but unfortunately with social media bubbles and echo chambers many people just blindly believe the talking points. “Disney is going to pay their fair share”. This has very little to do with their share and nothing to do with fair. Dark stuff.
I agree with everything you wrote.

I simply am trying to understand how DeSantis can legally do what he says he going to do. I don't agree with it.

It's up to the voters of Florida to punish him if they think he's wrong.

Ultimately, I'm convinced Disney will win on First Amendment grounds, if it comes to that.
 

lazyboy97o

Well-Known Member
The bond issue remains maybe.

This depends on what it means to "substantially" impair a contract. Ultimately, this will require a legal interpretation by sitting justices, if the bond issue makes it that far.

As a refresher, the bond issue originates from a statement released by RCID:

In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties.​

The relevant part of the Reedy Creek Act reads:

Section 56. Pledge by the State of Florida to the Bond Holders of the District and to the Federal Government.-The State of Florida pledges to the holders of any bonds issued under this Act that it will not limit or alter the rights of the District to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for herein and to fulfill the terms of any agreement made with the holders of such bonds or other obligations, that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged.

Let's consider what it means to impair a contract:

This term applies to any law that will lessen the value or decrease the enforceability of a contract or an agreement.​

Contract impairment is addressed by Art. I, § 10 of the U.S. Constitution:

no State shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.​

Several have referenced a Bloomberg article written by Jacob Schumer. One of the cases referenced in his article is Von Hoffman v. City of Quincy. In brief, the City of Quincy passed a law in attempt to avoid paying bonds it had issued. The Supreme Court ruled against the City of Quincy, finding this to be a violation of Art. I, § 10.

From RCID's perspective, this means the State of Florida cannot pass a law to avoid paying RCID's bonds.

However, this same ruling also included the following statement:

It is competent for the States to change the form of the remedy, or to modify it otherwise, as they may see fit, provided no substantial right secured by the contract is thereby impaired.​

From a Constitutional perspective, the State of Florida has a right to alter bonds issued by RCID, as long as "no substantial right secured by the contract is thereby impaired."

I find it interesting that one of the cases cited by Mr. Schumer in defense of RCID explicitly states that Florida can alter bonds, as long as those alterations are not "substantial".

As has been noted, some of the bonds cannot be paid off early. However, as noted in a separate Bloomberg article:

There are several ways of defeasing outstanding bonds including a tender, make-whole or refunding, the strategists wrote.​

For example, if a bondholder is paid off in full, including all due interest, does this result in a "substantial" impairment? What if the State of Florida simply assumes the bonds, using the exact same revenue source that RCID does to guarantee these bonds? Is this a "substantial" impairment?

The State of Florida has a Constitutional right to alter bonds in non-substantial ways. The Supreme Court says so. Also consider that a purpose of Art. I, § 10 is not to guarantee that RCID exists. It's to make sure that bondholders are paid in full.

Ultimately, this is a matter of legal interpretation. What does it take to "substantially" impair these bonds?
The State has a higher standard for modifying contracts than the federal courts. The State would have to demonstrate a public need for the modification.
 

mikejs78

Premium Member
The State has a higher standard for modifying contracts than the federal courts. The State would have to demonstrate a public need for the modification.
Exactly right. That aside though, altering the collateral of a bond that had a explicit guarantee would probably fall under substantial even at the federal level. But the state level is even more stringent, so it would probably fail at the state level forever needing to go to the federal level.

They could probably get around it by paying off most of the debts in full and striking an agreement with the 2029 debt holders, but that'll never happen.
 

lentesta

Premium Member
Okay, reading the RCID charter, it's not clear the state can take over RCID without violating the FL Constitution. For example, here's the RCID charter page 2:

providing authority to set rates, fees, rentals, tolls, fares and charges, subject to certain requirements concerning public hearings and the sufficiency of revenues, and to make agreements and contracts for services without public hearing and pledge the same as security for District bonds;

If the state took over those functions and did not hold public hearings, wouldn't that violate the state's Sunshine Laws?
The bond issue remains maybe.

This depends on what it means to "substantially" impair a contract. Ultimately, this will require a legal interpretation by sitting justices, if the bond issue makes it that far.

As a refresher, the bond issue originates from a statement released by RCID:

In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties.​

The relevant part of the Reedy Creek Act reads:

Section 56. Pledge by the State of Florida to the Bond Holders of the District and to the Federal Government.-The State of Florida pledges to the holders of any bonds issued under this Act that it will not limit or alter the rights of the District to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for herein and to fulfill the terms of any agreement made with the holders of such bonds or other obligations, that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged.

Let's consider what it means to impair a contract:

This term applies to any law that will lessen the value or decrease the enforceability of a contract or an agreement.​

Contract impairment is addressed by Art. I, § 10 of the U.S. Constitution:

no State shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.​

Several have referenced a Bloomberg article written by Jacob Schumer. One of the cases referenced in his article is Von Hoffman v. City of Quincy. In brief, the City of Quincy passed a law in attempt to avoid paying bonds it had issued. The Supreme Court ruled against the City of Quincy, finding this to be a violation of Art. I, § 10.

From RCID's perspective, this means the State of Florida cannot pass a law to avoid paying RCID's bonds.

However, this same ruling also included the following statement:

It is competent for the States to change the form of the remedy, or to modify it otherwise, as they may see fit, provided no substantial right secured by the contract is thereby impaired.​

From a Constitutional perspective, the State of Florida has a right to alter bonds issued by RCID, as long as "no substantial right secured by the contract is thereby impaired."

I find it interesting that one of the cases cited by Mr. Schumer in defense of RCID explicitly states that Florida can alter bonds, as long as those alterations are not "substantial".

As has been noted, some of the bonds cannot be paid off early. However, as noted in a separate Bloomberg article:

There are several ways of defeasing outstanding bonds including a tender, make-whole or refunding, the strategists wrote.​

For example, if a bondholder is paid off in full, including all due interest, does this result in a "substantial" impairment? What if the State of Florida simply assumes the bonds, using the exact same revenue source that RCID does to guarantee these bonds? Is this a "substantial" impairment?

The State of Florida has a Constitutional right to alter bonds in non-substantial ways. The Supreme Court says so. Also consider that a purpose of Art. I, § 10 is not to guarantee that RCID exists. It's to make sure that bondholders are paid in full.

Ultimately, this is a matter of legal interpretation. What does it take to "substantially" impair these bonds?

Off the top of my head, I'm guessing some of the bondholders traded derivatives based on those bonds. Those derivatives would have to be unwound in a similar manner if the bond was repaid in full. Just figuring out how to do that seems like a decent starting point for "substantial impairment", even if the net dollar amounts are the same. I mean, yeah, you'd think the derivatives would also have some sort of early-repayment-of-the-underlying-asset criteria too. Call me crazy, but I don't have that kind of faith that the derivatives market is that omniscient.

Beyond that, the bond's interest protects a bit against inflation. While it's rarely talked about, deflation is also a possibility, where future dollars are worth more than current dollars. It last happened in 2009 and we were thatclose in 2015. Hell, I'd probably try to minimize risk via opposite trade, just to reduce risk. So unwinding the bonds would have to unwind the opposite-trade-as-insurance-bets. If I'm a bondholder who wants Disney to continue to run the RCID, I'd be making this point too. (Von Hoffman v City of Quincy was argued more than 150 years ago, when things like derivatives and deflation were probably not well considered. Neither are mentioned in the SCOTUS ruling.)

Third, we know at least one of the bonds has a no-prepayment clause. I don't know why a bondholder would want that, because I don't know anything about bonds, but I assume if it's there, it's there because the buyer thinks its valuable.

As usual, I could be completely wrong.
 

GoofGoof

Premium Member
I agree with everything you wrote.

I simply am trying to understand how DeSantis can legally do what he says he going to do. I don't agree with it.

It's up to the voters of Florida to punish him if they think he's wrong.

Ultimately, I'm convinced Disney will win on First Amendment grounds, if it comes to that.
Yeah I agree. I think where I’m mostly disturbed is that people will turn a blind eye on this type of behavior. Politics has always been a dirty game but there were boundaries and if you crossed a line you did get punished. I don’t see that happening this time.
 

flynnibus

Premium Member
Is that something anyone really supports? When did so many people decide this extreme level of government overreach is OK.

Because people are being coached to believe in the end goal and care less about what it cost to get there. "Consequences" and the ideals of limited government are conveniently ignored as long as the 'cause' resonates with the audience. It's the exact same conditioning people used to buy support for many of Trump's crazed schemes that tried to just act above the law or that the law didn't apply to him. "You are getting what you want right? Don't sweat the details...". It's bad when people ignore 'how will you pay for it'.. but it's downright alarming when people turn a blind eye to our core architecture of separation of powers.

It's the same conditioning that gets people to focus on 'the good' of policies while completely dismissing the corruption, abuse of power, and other things that came along to get the results desired.

It's a really short-sighted mindset... one that preaches "like the results, ignore the methods" and really dangerously throws out so much of the principals that BY DESIGN made these kinds of things difficult and NOT within the power of a few to simply do as they please or deletes the checks and balances.
 

LAKid53

Official Member of the Girly Girl Fan Club
Premium Member
The bond issue remains maybe.

This depends on what it means to "substantially" impair a contract. Ultimately, this will require a legal interpretation by sitting justices, if the bond issue makes it that far.

As a refresher, the bond issue originates from a statement released by RCID:

In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties.​

The relevant part of the Reedy Creek Act reads:

Section 56. Pledge by the State of Florida to the Bond Holders of the District and to the Federal Government.-The State of Florida pledges to the holders of any bonds issued under this Act that it will not limit or alter the rights of the District to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for herein and to fulfill the terms of any agreement made with the holders of such bonds or other obligations, that it will not in any way impair the rights or remedies of the holders, and that it will not modify in any way the exemption from taxation provided in the Act, until all such bonds together with interest thereon, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged.

Let's consider what it means to impair a contract:

This term applies to any law that will lessen the value or decrease the enforceability of a contract or an agreement.​

Contract impairment is addressed by Art. I, § 10 of the U.S. Constitution:

no State shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.​

Several have referenced a Bloomberg article written by Jacob Schumer. One of the cases referenced in his article is Von Hoffman v. City of Quincy. In brief, the City of Quincy passed a law in attempt to avoid paying bonds it had issued. The Supreme Court ruled against the City of Quincy, finding this to be a violation of Art. I, § 10.

From RCID's perspective, this means the State of Florida cannot pass a law to avoid paying RCID's bonds.

However, this same ruling also included the following statement:

It is competent for the States to change the form of the remedy, or to modify it otherwise, as they may see fit, provided no substantial right secured by the contract is thereby impaired.​

From a Constitutional perspective, the State of Florida has a right to alter bonds issued by RCID, as long as "no substantial right secured by the contract is thereby impaired."

I find it interesting that one of the cases cited by Mr. Schumer in defense of RCID explicitly states that Florida can alter bonds, as long as those alterations are not "substantial".

As has been noted, some of the bonds cannot be paid off early. However, as noted in a separate Bloomberg article:

There are several ways of defeasing outstanding bonds including a tender, make-whole or refunding, the strategists wrote.​

For example, if a bondholder is paid off in full, including all due interest, does this result in a "substantial" impairment? What if the State of Florida simply assumes the bonds, using the exact same revenue source that RCID does to guarantee these bonds? Is this a "substantial" impairment?

The State of Florida has a Constitutional right to alter bonds in non-substantial ways. The Supreme Court says so. Also consider that a purpose of Art. I, § 10 is not to guarantee that RCID exists. It's to make sure that bondholders are paid in full.

Ultimately, this is a matter of legal interpretation. What does it take to "substantially" impair these bonds?

Anything that affects the holder's right to principal and interest (coupon) payments could be construed as such.
 

flynnibus

Premium Member
As a Florida resident of 56 years, my opinion is:

1. Many Florida voters don't know the laws of the state...until it directly affects them, and even then they are clueless
2. They are ignorant of the taxing structure of the state in general
3. They are okay with government overreach, as long as it doesn't affect them directly. And even then, they think it will affect "others" more than them.
Describes pretty much most of america these days... Short-sighted FTW!
 

GoofGoof

Premium Member
Okay, reading the RCID charter, it's not clear the state can take over RCID without violating the FL Constitution. For example, here's the RCID charter page 2:



If the state took over those functions and did not hold public hearings, wouldn't that violate the state's Sunshine Laws?


Off the top of my head, I'm guessing some of the bondholders traded derivatives based on those bonds. Those derivatives would have to be unwound in a similar manner if the bond was repaid in full. Just figuring out how to do that seems like a decent starting point for "substantial impairment", even if the net dollar amounts are the same. I mean, yeah, you'd think the derivatives would also have some sort of early-repayment-of-the-underlying-asset criteria too. Call me crazy, but I don't have that kind of faith that the derivatives market is that omniscient.

Beyond that, the bond's interest protects a bit against inflation. While it's rarely talked about, deflation is also a possibility, where future dollars are worth more than current dollars. It last happened in 2009 and we were thatclose in 2015. Hell, I'd probably try to minimize risk via opposite trade, just to reduce risk. So unwinding the bonds would have to unwind the opposite-trade-as-insurance-bets. If I'm a bondholder who wants Disney to continue to run the RCID, I'd be making this point too. (Von Hoffman v City of Quincy was argued more than 150 years ago, when things like derivatives and deflation were probably not well considered. Neither are mentioned in the SCOTUS ruling.)

Third, we know at least one of the bonds has a no-prepayment clause. I don't know why a bondholder would want that, because I don't know anything about bonds, but I assume if it's there, it's there because the buyer thinks its valuable.

As usual, I could be completely wrong.
The no pre-payment clause locks in a steady stream of interest payments at the set rate. In theory if rates drop and the bond issuer can call the bonds back early they can call them and reissue new debt at a lower interest rate. As the bond holder if I want to know the cash flows will continue for years to some I buy a bond without an early redemption clause. The trade off is I probably get a slightly lower interest rate because I’m reducing my risk.

Your analysis on derivatives and hedges is spot on. The only way these bonds can be paid off in full is if there is an agreement reached with the bondholders. Everyone has their price and there is nothing illegal about asking for an early termination. The bond holders could say no, but they aren’t likely politically motivated so if you make them an offer they can’t refuse it would get done. But in that case then does the state of FL just eat the billion dollars plus whatever you pay as a sweetener to get the deal done? There’s no mechanism to make Disney pay. Sticking the debt to all FL residents will go over great. No wonder they plan to resolve this “after the election”.
 

Lilofan

Well-Known Member
As a Florida resident of 56 years, my opinion is:

1. Many Florida voters don't know the laws of the state...until it directly affects them, and even then they are clueless
2. They are ignorant of the taxing structure of the state in general
3. They are okay with government overreach, as long as it doesn't affect them directly. And even then, they think it will affect "others" more than them.

They SHOULD be outraged that the homeowners insurance crisis has been ignored by the Legislature since the general session and subsequent special sessions.
Some will listen to their favorite one sided news media source or some get educated courtesy of Twitter
 

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