State Swiped Our Hospital, Nonprofit Says

TALLAHASSEE (CN) – A nonprofit health foundation claims Florida passed a “special law” that unconstitutionally allowed a county hospital board to usurp control of its hospital and wrest control of its finances – though more than 90 percent of the money comes from private sources.




     Citrus Memorial Health Foundation sued the Citrus County Hospital Board and the State of Florida in Leon County Court.
     The foundation claims the state intervened in the nonprofit’s fight against the county board’s power grab, and passed a law giving the county board control of hospital finances, though Citrus Memorial Hospital gets less than 7 percent of its funding from taxes.
     The Citrus County Hospital Board (CCHB) leased Citrus Memorial Hospital to the Foundation in 1990; the lease and agreement do not expire until 2033, and the foundation as a 45-year renewal option, according to the complaint.
     The CCHB is the sole member of the foundation, but the foundation says the board has no “vested property right” and “no voting or other rights except as provided in the articles of incorporation or bylaws.”
     But the relationship between the nonprofit and the hospital board “has become strained, and they are now embroiled in two civil actions pending in Citrus County,” according to the complaint. “In addition, CCHB has raised an issue regarding the foundation’s entitlement to sovereign immunity.”
     (Citrus County, whose seat is Inverness, is on the west coast of Florida. Leon County’s seat is the state capital.)
     The foundation says that the Florida attorney general and the 5th Circuit both have concluded that it is entitled to sovereign immunity.
     But in August 2009, the CCHB served the foundation with a notice of default under the lease and agreement, and claimed that the foundation did not have sovereign immunity. The foundation says, “CCHB lobbied for a special law that would retroactively grant it greater control over the foundation that the foundation’s articles and the parties’ existing contracts provide, claiming that this was necessary to assure the foundation would continue to have sovereign immunity.”
     The foundation claims that through the special law, “the Legislature sought to top the scaled in the parties’ ongoing litigation in favor of CCHB and against the foundation by materially and retroactively abrogating the foundation’s article, the lease, and the agreement.”
     The key issue appears to be whether the foundation may elect a majority of its own board. The foundation says it can; the special law “expressly provides that CCHB trustees shall ‘constitute a majority of the voting directors of the not-for-profit corporation,'” according to the complaint.
     The foundation claims “this is intended retroactively to impair and displace the existing relationship between the parties,” and gives the CCHB control over all the foundation’s money – not just its tax-funded appropriations.
     The foundation claims that “funds from other sources constitute the overwhelming majority of the foundation’s budget,” and that tax revenue “never exceeded 6.3 percent of the foundation’s total revenues” in the past 5 years.
     The foundation claims the special law and the CCHB’s power grab are unconstitutional, and were enacted in violation of the state’s open meetings law.
     It seeks declaratory judgment and an injunction. The foundation’s lead counsel is Sylvia Walbolt of Tampa.

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