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

[flynnibus]

Two things can be true at once - the governor could have legitimate concerns about powerful and influential companies who push values which he feels are not aligned with those of his constituents, while at the same time being out of line in trying to exert government power by taking over a special district in an attempt to improve the situation.

And also his responsibility to understand or hold consul that understand the law and abide by it - not weld his party like a hammer to get something HE wants.

 

[ParentsOf4]

I think we have to first define how the governor will gain control of the RCID board, because some options might conflict with the Florida Constitution ("FLC").

Assume any time I say "governor" here, I also mean "with the legislature's help". For example, the legislature could repeal the RCID's "conflicts with future legislation" clause. (I know they haven't done this, and that the supremacy clause has survived a couple of legal challenges already, and that the existing dissolution law might not survive similar challenges.)

Option 1: The governor simply "packs" the RCID board through appointment, with no other changes to the RCID.

Option 2: The governor creates a new ISD, appoints the board, and forces a merger with RCID.

If I'm reading the FLC correctly, both options would create a conflict within the RCID board itself: Elected members would be subject to the FLC's "Ethics in Government" rules (Article II, Section 8, f(1) and 3(c)), but members appointed by the governor would not (because the language uses the "elected" qualifier).

It seems like ... there would be FLC issues with that.

Do any existing special districts have a setup where some members are elected and some are appointed?

Edit: Answered my own question. There's a website that lets you search Florida special districts by characteristic, including election methods and powers.

There are no special districts with bond-issuance and ad valorem authority whose board consists of both elected and appointed members in Florida.

Edit 2: Setting aside the bond powers, there's only one board (the Juvenile Welfare Board of Pinellas County) in the entire state with these two:

• Ad valorem power
• A board that consists of appointed AND elected officials

My bad legal take is that a SD with bond and ad valorem authority, having a mixed-seating board, creates an equal protection problem under the FLC. Some members are bound by Article II, Section 8, and others are not.

Regarding the two options you suggest:

Option 1: The governor simply "packs" the RCID board through appointment, with no other changes to the RCID.

Option 2: The governor creates a new ISD, appoints the board, and forces a merger with RCID.

The legislature/governor might create a new Independent Special Board pursuant to F.S.189.031 to replace RCID. This new ISD could very well include a board wholly appointed by the governor. Per the link you provided, Florida currently has dozens of ISDs with bond authority and boards appointed by the governor.

This new ISD would continue to exist within Orange and Osceola Counties, meaning those counties would collect taxes as they currently do.

In addition, the new ISD would inherit the bond debt of RCID along with the higher ad valorem taxes previously approved by the district's landowners. The question is, can this be done in such a way as to not violate the Contracts Clause?

I see three possible legal outcomes (if this makes its way to the court):

• Courts rule that the law to dissolve RCID and/or the law to create its replacement do violate the Florida Constitution.
• Courts rule that these laws do not violate the Florida Constitution. In this case, either:
  • Courts rule that these laws do violate the Contracts Clause.
  • Courts rule that these do not violate the Contracts Clause. In this case:
    • Disney wins this on First Amendment grounds. IMO, Disney has an ironclad case.

I keep returning to the same conclusion. Regardless of how we get there, RCID continues to exist.

Before this gets to the courts, Disney might be pursuing a more amiable settlement through back channels. This might never make it to court. Again, RCID will continue to exist.

 

[mikejs78]

In addition, the new ISD would inherit the bond debt of RCID along with the higher ad valorem taxes previously approved by the district's landowners.

I'm not sure this is a given. The ordinance for higher ad valorem taxes was voted on as part of an RCID ordinance.. If that district is dissolved, would that ordinance survive? I don't think it does. I think it may require a revote.

Even if it doesn't, I do think that creating a new district would require notice or a vote (as it would require a special act) and couldn't Disney just vote to remove the higher tax rate before the new district took over? In other words Disney could sabatoge the Governor's plan, even if the governor could legally take over the district.

 

[Nubs70]

Regarding the two options you suggest:

The legislature/governor might create a new Independent Special Board pursuant to F.S.189.031 to replace RCID. This new ISD could very well include a board wholly appointed by the governor. Per the link you provided, Florida currently has dozens of ISDs with bond authority and boards appointed by the governor.

This new ISD would continue to exist within Orange and Osceola Counties, meaning those counties would collect taxes as they currently do.

In addition, the new ISD would inherit the bond debt of RCID along with the higher ad valorem taxes previously approved by the district's landowners. The question is, can this be done in such a way as to not violate the Contracts Clause?

I see three possible legal outcomes (if this makes its way to the court):

• Courts rule that the law to dissolve RCID and/or the law to create its replacement do violate the Florida Constitution.
• Courts rule that these laws do not violate the Florida Constitution. In this case, either:
  • Courts rule that these laws do violate the Contracts Clause.
  • Courts rule that these do not violate the Contracts Clause. In this case:
    • Disney wins this on First Amendment grounds. IMO, Disney has an ironclad case.

I keep returning to the same conclusion. Regardless of how we get there, RCID continues to exist.

Before this gets to the courts, Disney might be pursuing a more amiable settlement through back channels. This might never make it to court. Again, RCID will continue to exist.

RCID HoldCo?

 

[lentesta]

I see three possible legal outcomes (if this makes its way to the court):

• Courts rule that the law to dissolve RCID and/or the law to create its replacement do violate the Florida Constitution.
• Courts rule that these laws do notviolate the Florida Constitution. In this case, either:
  • Courts rule that these laws do violate the Contracts Clause.
  • Courts rule that these do notviolate the Contracts Clause. In this case:
    • Disney wins this on First Amendment grounds. IMO, Disney has an ironclad case.

I keep returning to the same conclusion. Regardless of how we get there, RCID continues to exist.

Before this gets to the courts, Disney might be pursuing a more amiable settlement through back channels. This might never make it to court. Again, RCID will continue to exist.

Agree on all counts. The more I look at what it'll take to dissolve or meaningfully change the RCID, the more convoluted and very, very specific the legislation becomes.

The more cycles of "pass law, law gets struck down, start over" the legislature and governor go through, the easier the 1A case becomes.

 

[GoofGoof]

Regarding the two options you suggest:

The legislature/governor might create a new Independent Special Board pursuant to F.S.189.031 to replace RCID. This new ISD could very well include a board wholly appointed by the governor. Per the link you provided, Florida currently has dozens of ISDs with bond authority and boards appointed by the governor.

This new ISD would continue to exist within Orange and Osceola Counties, meaning those counties would collect taxes as they currently do.

In addition, the new ISD would inherit the bond debt of RCID along with the higher ad valorem taxes previously approved by the district's landowners. The question is, can this be done in such a way as to not violate the Contracts Clause?

I see three possible legal outcomes (if this makes its way to the court):

• Courts rule that the law to dissolve RCID and/or the law to create its replacement do violate the Florida Constitution.
• Courts rule that these laws do notviolate the Florida Constitution. In this case, either:
  • Courts rule that these laws do violate the Contracts Clause.
  • Courts rule that these do notviolate the Contracts Clause. In this case:
    • Disney wins this on First Amendment grounds. IMO, Disney has an ironclad case.

I keep returning to the same conclusion. Regardless of how we get there, RCID continues to exist.

Before this gets to the courts, Disney might be pursuing a more amiable settlement through back channels. This might never make it to court. Again, RCID will continue to exist.

Digging in a little further, the majority of special districts with governor appointed boards do not have taxing authority. Of those with Governor appointed commissioners and tax authority the majority seem to be hospitals and medical centers and/or water treatment districts so non-profit businesses essential for the community. As an example, Halifax Hospital Medical Center, the board is appointed as below:

(1) The governing body of the district shall be a Board of Commissioners which shall consist of seven members, each of whom shall be residents of the district and appointed by the Governor. Except with respect to those appointees who shall be appointed to serve terms ending on the dates specified herein, each commissioner shall be appointed for a term of 4 years. The appointments which must be made with respect to the four commissioners whose terms ending in May of 1985 shall be made with two commissioners being appointed for terms ending May 23, 1986, and two commissioners being appointed for regular 4-year terms. With respect to the appointments which must be made for the three commissioners whose terms end in May 1987, two commissioners shall be appointed for regular 4-year terms and one commissioner shall be appointed for a term ending May 23, 1988.

This is a community hospital where the district covers mostly all of Volusia County that has both bond and Ad Valorum tax authority so the taxes are assessed to all of the land owners of Volusia County. The key to me is the bold sentence. The Governor appoints the board, but they must be residents of the district. So there is no issue with taxation without representation.

I checked a few others that have taxing authority and government appointed boards. All had the same clause requiring the appointed board members to be residents of the district Including Baker County Medical Center, Eastpoint Water and Sewer District, and Florida Inland Navigation District. I didn’t check them all so maybe there is an exception, but it seems to me that’s the standard practice which makes total sense. I do not think there’s an example of a special district where land owners pay taxes but the board is not selected from the citizens of the district. If someone finds an example where this is not the case post it here.

So the only way for the Governor to wrestle control from Disney would be to create a new district that extends to other land owners outside of RCID and then pick the board from those land owners but those people added would now owe additional taxes (in his own words, “more than what Disney pays today”). So good luck finding a landowner who wants to pay extra taxes just to be the Governor’s yes man. I do see this as a potential out for the Gov. He creates a new district covering the exact area of RCID and sets it up so the Governor will appoint the board from the citizens of the district and then appoints virtually the same board. This way he can claim Disney doesn’t control their own local government.

 

[lentesta]

So the only way for the Governor to wrestle control from Disney would be to create a new district that extends to other land owners outside of RCID and then pick the board from those land owners but those people added would now owe additional taxes (in his own words, “more than what Disney pays today”).

I was just writing @ParentsOf4 saying that what this whole thing really needs is an eminent domain land seizure.

 

[GoofGoof]

As long as we are referencing state statutes, the legislature can write new statutes to alter those existing statutes using the infamous “notwithstanding”.

Legislatures change laws all the time. This is why we should focus the Florida Constitution to find ways it might be violated.

Therefore, when you quote:

(1) The governing body of the district shall be a Board of Commissioners which shall consist of seven members, each of whom shall be residents of the district and appointed by the Governor.​

This prevents the governor from appointing his own board without the consent of the legislature. However, if the governor has that consent, then the governor and legislature are only bound by the state constitution (and federal law).

Remember, even through F.S. 189.072(2)(a) states:

In order for the Legislature to dissolve an active independent special district created and operating pursuant to a special act, the special act dissolving the active independent special district must be approved by a majority of the resident electors of the district or, for districts in which a majority of governing body members are elected by landowners, a majority of the landowners voting in the same manner by which the independent special district’s governing body is elected.​

The legislature navigated around this by simply including the following in the bill to terminate RCID:

Notwithstanding s. 189.072(2),​

We have to keep in mind that the Florida Supreme Court is composed of a majority of conservative justices, who are more likely to be textualists. Therefore, focusing on the actual text of the Florida Constitution (without reading something into it that’s not explicit) might give us a better idea of how they might rule on future cases.

I’m not saying this is the only way this will play out. I’m only suggesting that it’s more likely to play out this way.

I think you and I have reached the same conclusion (Disney's rights were violated) - it’s just a matter of how we get there.

Again, I do not think the “notwithstanding” wording is an automatic blank check to do what they want. As stated earlier just because the constitution doesn’t explicitly prevent an action doesn‘t make it automatically legal. Take this out of the context of a political debate and public feud. If the Governor decided to dissolve a special district that covers a community hospital and then created a new special district where he appointed whoever he wanted to run it, people from outside the district, and then publicly said he was going to raise the taxes on the taxpayers in that district and they would have no say how the hospital was a actually run and how the funds are spent, would the courts just allow that? If a landowner sued they could point to the fact that there are thousands of special districts and none are structured this way. There’s a great deal of precedent already there. If the only argument the Governor would have is a sentence that says “notwithstanding“ that’s a very difficult legal argument to win.

This is much bigger than this petty fight with Disney. The Governor was publicly angry that he didn’t have total control over local governments during the Covid pandemic. This is a basic power play disguised as a culture war crusade. If the courts allow the Governor and legislature to do whatever they want and supersede the power of local elected officials that‘s the first step towards taking total control.

 

[lentesta]

Again, I do not think the “notwithstanding” wording is an automatic blank check to do what they want. As stated earlier just because the constitution doesn’t explicitly prevent an action doesn‘t make it automatically legal.

My assumption here is that the governor and legislature will attempt to use "notwithstanding" as a blank check to do whatever they want. They'll put the onus on Disney to make the case that it violates the FL or US constitutions (FLC and USC). It costs Disney time and money, and requires an extensive PR campaign.

Put more bluntly: it's clear that "legal" is a secondary, maybe tertiary concern here. It's not stopping anyone from passing legislation. That's why the focus is on the FLC and USC - what's the backstop when two branches of government are colluding?

Not for nothing, but the governor also knows the direction that the FLSC and SCOTUS lean. I'm not exaggerating when I say that every lawyer I've spoken to - without exception - identified the same 3 SCOTUS justices as likely to find some argument that allows them to side with DeSantis, if it comes to that.

Of course, there are 3 justices who'd view DeSantis with skepticism too.

I think the thing that's needed to stop the courts is that the action take is so obviously unconstitutional that 2 more judges aren't willing to go along. In this case, I think Roberts is one of the swing votes, if that helps.

:

 

[GoofGoof]

My assumption here is that the governor and legislature will attempt to use "notwithstanding" as a blank check to do whatever they want. They'll put the onus on Disney to make the case that it violates the FL or US constitutions (FLC and USC). It costs Disney time and money, and requires an extensive PR campaign.

Put more bluntly: it's clear that "legal" is a secondary, maybe tertiary concern here. It's not stopping anyone from passing legislation. That's why the focus is on the FLC and USC - what's the backstop when two branches of government are colluding?

Not for nothing, but the governor also knows the direction that the FLSC and SCOTUS lean. I'm not exaggerating when I say that every lawyer I've spoken to - without exception - identified the same 3 SCOTUS justices as likely to find some argument that allows them to side with DeSantis, if it comes to that.

Of course, there are 3 justices who'd view DeSantis with skepticism too.

I think the thing that's needed to stop the courts is that the action take is so obviously unconstitutional that 2 more judges aren't willing to go along. In this case, I think Roberts is one of the swing votes, if that helps.

:

I don’t know the specific backgrounds of the individual members of the FL Supreme Court, I know it’s skewed heavily conservative, but that doesn’t automatically mean they side with DeSantis. Many conservative judges would have a very difficult time overturning years of precedent in favor of obvious government overreach. There are literally thousands of special districts in FL and none are setup with both taxing authority and a board that is made up of members from outside the district exclusively selected by the governor. That kind of obvious government overreach sets a dangerous precedent that any judge would need to think long and hard on.

 

[Chip Chipperson]

I don’t know the specific backgrounds of the individual members of the FL Supreme Court, I know it’s skewed heavily conservative, but that doesn’t automatically mean they side with DeSantis. Many conservative judges would have a very difficult time overturning years of precedent in favor of obvious government overreach. There are literally thousands of special districts in FL and none are setup with both taxing authority and a board that is made up of members from outside the district exclusively selected by the governor. That kind of obvious government overreach sets a dangerous precedent that any judge would need to think long and hard on.

And it would create an obvious First Amendment case that could bypass the FL courts altogether. "You spoke out against our legislation so now we're taking away your right to vote for your District’s board - and we plan to use our newly-acquired control of that board to raise your taxes."

 

[mikejs78]

We have to keep in mind that the Florida Supreme Court is composed of a majority of conservative justices, who are more likely to be textualists. Therefore, focusing on the actual text of the Florida Constitution (without reading something into it that’s not explicit) might give us a better idea of how they might rule on future cases.

Again, I do not think the “notwithstanding” wording is an automatic blank check to do what they want.

My assumption here is that the governor and legislature will attempt to use "notwithstanding" as a blank check to do whatever they want. They'll put the onus on Disney to make the case that it violates the FL or US constitutions (FLC and USC). It costs Disney time and money, and requires an extensive PR campaign.

Textualists, though, also don't like ambiguity, and tend to frown on blanket "notwithstanding" clauses - they would much prefer, for example, a specific callout to amend the text of the section in question, and will often defer to the more specific statute than the general notwithstanding clause. There's also the complication under FL law as to how laws need to be written, how each law is supposed to only deal with a specific thing, that complicate how a law can be constructed. Case in point, it's highly likely that the Dissolution law as written today wouldn't even hold up as applying to Reedy Creek under rules of statutory construction.

That said, I think @lentesta is right that they'll try to do this anyways, as the goal isn't necessarily to actually remove the district, but rather cause pain for Disney and score a political win with their base.

 

[GoofGoof]

And it would create an obvious First Amendment case that could bypass the FL courts altogether. "You spoke out against our legislation so now we're taking away your right to vote for your District’s board - and we plan to use our newly-acquired control of that board to raise your taxes."

Yes for sure. I was just putting the Federal issue aside and also the contract issue with the bondholders involving the promise from the state which violates the contract. I was speaking purely from a taxpayer and local government structure standpoint. What the Governor is proposing to do certainly was never intended when the state constitution was written.

 

[lazyboy97o]

I don’t know the specific backgrounds of the individual members of the FL Supreme Court, I know it’s skewed heavily conservative, but that doesn’t automatically mean they side with DeSantis. Many conservative judges would have a very difficult time overturning years of precedent in favor of obvious government overreach. There are literally thousands of special districts in FL and none are setup with both taxing authority and a board that is made up of members from outside the district exclusively selected by the governor. That kind of obvious government overreach sets a dangerous precedent that any judge would need to think long and hard on.

It makes an even bigger issue if they try to maintain the flimsy pretense special district reform. That means this change to give the governor control would have to apply to other special districts.

 

[GrumpyFan]

I'm late to the conversation, and maybe it's been said already, but the biggest issue I see with dissolving Reedy Creek is figuring out how to redistribute the services (fire, utilities, roads, water ways) to the neighboring governments and then ensuring they maintain the same high level that Disney has developed. Yes, Disney has an advantage in how RCID is organized and run, but this advantage also serves the governments and citizens of Orange and Osceola equally as well. Because of RCID, Disney's pays taxes to themselves which goes directly to these services to maintain the property, which relieves the local governments responsibility to provide services.

What people don't realize is that the RCID tax rate is higher than the surrounding counties and affords Disney they ability to maintain their own property as they see fit, and not have to rely on or over-burden the county's infrastructure. This self-contained district also relieves the local citizens from the burden of having to pay for improvements to Disney property.

 

[lentesta]

I'm late to the conversation, and maybe it's been said already, but the biggest issue I see with dissolving Reedy Creek is figuring out how to redistribute the services (fire, utilities, roads, water ways) to the neighboring governments and then ensuring they maintain the same high level that Disney has developed. Yes, Disney has an advantage in how RCID is organized and run, but this advantage also serves the governments and citizens of Orange and Osceola equally as well. Because of RCID, Disney's pays taxes to themselves which goes directly to these services to maintain the property, which relieves the local governments responsibility to provide services.

What people don't realize is that the RCID tax rate is higher than the surrounding counties and affords Disney they ability to maintain their own property as they see fit, and not have to rely on or over-burden the county's infrastructure. This self-contained district also relieves the local citizens from the burden of having to pay for improvements to Disney property.

Welcome!

I think the FL legislature realizes this too. The consensus here (if I'm reading this correctly) is that the legislature will attempt to keep the RCID in place and add board members (somehow) appointed by the governor (somehow).

Keeping the RCID in place resolves all the tax, bond, and contract issues that arise from dissolution.

The latest round of posts here is discussing:

1. Whether the Florida or US constitutions (FLC/USC) prohibit this style of takeover from happening
2. Whether allowing it to happen would generate conflicts within the FL or USC such that the courts would be unable to resolve without kicking back to the legislature for another re-do.

I think we all agree that Disney has a 1st Amendment case to fall back on, if it comes to that, and that Disney doesn't want that to be their main strategy. I think Disney would prefer not to play that card until all other options have been explored.

 

[mikejs78]

Welcome!

I think the FL legislature realizes this too. The consensus here (if I'm reading this correctly) is that the legislature will attempt to keep the RCID in place and add board members (somehow) appointed by the governor (somehow).

Keeping the RCID in place resolves all the tax, bond, and contract issues that arise from dissolution.

The latest round of posts here is discussing:

1. Whether the Florida or US constitutions (FLC/USC) prohibit this style of takeover from happening
2. Whether allowing it to happen would generate conflicts within the FL or USC such that the courts would be unable to resolve without kicking back to the legislature for another re-do.

I think we all agree that Disney has a 1st Amendment case to fall back on, if it comes to that, and that Disney doesn't want that to be their main strategy. I think Disney would prefer not to play that card until all other options have been explored.

I still think we could see a face-saving compromise where the governor appoints the board from among the residents of Reedy Creek - and largely keeps the board intact, but allows them to claim victory in that "the state now has oversight".

 

[flynnibus]

I still think we could see a face-saving compromise where the governor appoints the board from among the residents of Reedy Creek - and largely keeps the board intact, but allows them to claim victory in that "the state now has oversight".

meh... This would not hold up to even the most simple twitter headline win.

Even a child would point out that Disney controls who the residents are.. so it's a simple charade. The Gov would never claim victory for something known to be the company holding the line over him. Nah... he can't claim victory picking company men.

 

[GoofGoof]

meh... This would not hold up to even the most simple twitter headline win.

Even a child would point out that Disney controls who the residents are.. so it's a simple charade. The Gov would never claim victory for something known to be the company holding the line over him. Nah... he can't claim victory picking company men.

I don’t know if he will have a choice. It seems unlikely that it will be deemed legal for the Governor to appoint a board and not have the board selected from landowners in the district. There are currently no examples of special districts in FL that have taxing authority where the board is Government appointed without a clause that says the board members must be from the district. I think that is his goal but it seems like a big hurdle to overcome.

 

[GrumpyFan]

The latest round of posts here is discussing:

1. Whether the Florida or US constitutions (FLC/USC) prohibit this style of takeover from happening
2. Whether allowing it to happen would generate conflicts within the FL or USC such that the courts would be unable to resolve without kicking back to the legislature for another re-do.

Are either of these even viable without further legislation?

I would be curious to know if there's anything in the recently passed legislation that Disney could challenge in Florida's state supreme court? On the surface, this new law seems to violate the original act.

I think we all agree that Disney has a 1st Amendment case to fall back on, if it comes to that, and that Disney doesn't want that to be their main strategy. I think Disney would prefer not to play that card until all other options have been explored.

If it comes to that, it would be a big case, and would likely take a few years to work its way through the courts.