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

[LAKid53]

I'd argue the bond issue still remains. It's quite a different situation between "the bond issuer controls the revenue source" and "the bond issuer does not control the revenue source".

Anything that affects the covenants of the bonds will have serious ramifications for both the issuer and holder.

 

[lentesta]

'...pursuant to general or special law' -- Which is why LAKid53 keeps referencing Ch 166 - because that is the relevant general law already in place. They can change that existing statue of course.. but it has much wider impacts.

Ch 165 also defines the process of creating the municipalities, so to your question about creating a new county, etc.. you can look there. You can see the basic timelines do not support the govenor's timeline..

At least the existing general law of chapters 165 and 166 are more well thoughtout then their special session law of just 'strike it down'

"
(3) The dissolution of a municipality must meet the following conditions:
(a) The municipality to be dissolved must not be substantially surrounded by other municipalities.
(b) The county or another municipality must be demonstrably able to provide necessary services to the municipal area proposed for dissolution.
(c) An equitable arrangement must be made in relation to bonded indebtedness and vested rights of employees of the municipality to be dissolved."

Ch 165 also requires new special districts to have a minimum population (emphasis mine):

165.061 Standards for incorporation, merger, and dissolution.—
(1) The incorporation of a new municipality, other than through merger of existing municipalities, must meet the following conditions in the area proposed for incorporation:
(a) It must be compact and contiguous and amenable to separate municipal government.
(b) It must have a total population, as determined in the latest official state census, special census, or estimate of population, in the area proposed to be incorporated of at least 1,500 persons in counties with a population of 75,000 or less, and of at least 5,000 population in counties with a population of more than 75,000.

If I'm reading this correctly, then around 4,960 people from the area around RCID would be roped into the new RCID. But wouldn't that then mean the state wouldn't control the RCID? Because you'd have regular Florida citizens within RCID, unable to vote on things.

I could be wrong.

 

[mmascari]

With support from both chambers of the legislature, DeSantis can alter statutes pretty much anyway he wants.

What DeSantis cannot alter is the Florida Constitution. IMO, we have to look for ways that violate the Florida Constitution. The Florida Supreme Court cannot ignore that.

Imagine he finds a way that's within the Constitution and he is able to have state takeover of RCID. (I said to imagine it, no matter how unlikely.)

What constrains him from taking over every other local government he has a disagreement with? Disagree with a local schoolboard, take over the controlling government. Disagree with a local sheriff, take over the controlling government.

I presume DeSantis has an opponent in the upcoming election? I realize DeSantis is still the favorite but that person will surely run against this blatant hate toward LGBTQIA+ and the Mouse. I can’t imagine these moves really help sway the general population toward DeSantis. His supporters? Sure. But even they are clearly not liking the news that this will cost taxpayers money. DeSantis can claim he will get everything he wants and Disney will pay for everything, but that doesn’t mean it’s true. It reminds me of, “we are going to build a wall and Mexico is going to pay for it.” We know how that played out.

This one feels even worse. A good, or even just adequate, opponent will run ads about DeSantis coming for their local government. Coming to punish the companies they work for. That the DeSantis policies and actions are discouraging businesses from coming to FL. That they're depressing employment opportunities. That they're adding to the taxes everyone needs to pay. That they're making it harder for local governments to raise money. That DeSantis is anti business and pro individual tax increases.

An opponent doesn't have to talk about the other social issues at all. They'll be able to point at the direct impacts that are the result of the actions. Those are the results if RCID is successfully dissolved.

This is why Disney doesn't have to say anything right now. The talking point of "getting back at Disney" may be good for DeSantis, but the collateral damage of actually doing those things is most definitely bad for him. Someone that is "Not Disney" is going to use all those things to attack him. If that doesn't resolve the issues for Disney, they can deal with it after that.

While the impact to Disney may be the most immediate thing if RCID is dissolved, the impact to others will have much larger impact to the others than the relative impact is to Disney.

 

[LAKid53]

Ch 165 also requires new special districts to have a minimum population (emphasis mine):



If I'm reading this correctly, then around 4,960 people from the area around RCID would be roped into the new RCID. But wouldn't that then mean the state wouldn't control the RCID? Because you'd have regular Florida citizens within RCID, unable to vote on things.

I could be wrong.

If they are property owners within the District, they have voting rights.

 

[mmascari]

If they are property owners within the District, they have voting rights.

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.

 

[peter11435]

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.

The state (and the federal government) already owns land within the district.

 

[LAKid53]

Imagine he finds a way that's within the Constitution and he is able to have state takeover of RCID. (I said to imagine it, no matter how unlikely.)

What constrains him from taking over every other local government he has a disagreement with? Disagree with a local schoolboard, take over the controlling government. Disagree with a local sheriff, take over the controlling government.

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.

 

[UNCgolf]

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.

I wonder if there's any case law testing the limits of that authority, or if it's ever even been used.

 

[GoofGoof]

With support from both chambers of the legislature, DeSantis can alter statutes pretty much anyway he wants.

What DeSantis cannot alter is the Florida Constitution. IMO, we have to look for ways that violate the Florida Constitution. The Florida Supreme Court cannot ignore that.

My kneejerk reaction is that what DeSantis proposes (taking direct control over RCID) violates the Floridia Constitution.

However...

(a) POLITICAL SUBDIVISIONS. The state shall be divided by law into political subdivisions called counties. Counties may be created, abolished or changed by law, with provision for payment or apportionment of the public debt.​

OK, so the state can create, abolish, or change counties by simple majority law.

Counties have officers and commissioners elected by the residents/landowners (for RCID, this is effectively Disney):

(d) COUNTY OFFICERS. There shall be elected by the electors of each county, for terms of four years, a sheriff, a tax collector, a property appraiser, a supervisor of elections, and a clerk of the circuit court.​

(e) COMMISSIONERS. Except when otherwise provided by county charter, the governing body of each county shall be a board of county commissioners composed of five or seven members serving staggered terms of four years. After each decennial census the board of county commissioners shall divide the county into districts of contiguous territory as nearly equal in population as practicable. One commissioner residing in each district shall be elected as provided by law.​

But there's an exception:

(f) NON-CHARTER GOVERNMENT. Counties not operating under county charters shall have such power of self-government as is provided by general or special law. The board of county commissioners of a county not operating under a charter may enact, in a manner prescribed by general law, county ordinances not inconsistent with general or special law, but an ordinance in conflict with a municipal ordinance shall not be effective within the municipality to the extent of such conflict.​

Does this mean that DeSantis can turn RCID into its own non-charter county, and then enact in "general or special law" whatever provisions he wants?

Still, he runs into the issue of Lake Buena Vista and Bay Lake, which are incorporated cities. Maybe he gets around those with this:

(a) ESTABLISHMENT. Municipalities may be established or abolished and their charters amended pursuant to general or special law. When any municipality is abolished, provision shall be made for the protection of its creditors.​

The Floridia Constitution is complex. Presumably, someone is advising DeSantis that there are ways to accomplish what he (says) he wants to do.

It just seems like it would get tied up in court for years, with Disney ultimately winning on First Amendment grounds if it came to that.

What a mess.

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.

 

[lentesta]

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.

Couldn't Disney just build corporate housing faster and move in loyalists to counter that?

 

[mmascari]

The state (and the federal government) already owns land within the district.

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.

 

[JoeCamel]

Couldn't Disney just build corporate housing faster and move in loyalists to counter that?

If RCID approves the plan
...

 

[LAKid53]

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]

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]

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]

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]

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]

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.

 

[lazyboy97o]

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]

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.