Dr. Gregory Strand v. Escambia County
SC06-1894

ALL RISE. HEAR YEA, HAR EYE THE SUPREME COURT OF THERE IS NOW IN SESSION. ALL THOSE HAVING BUSINESS BEFORE THIS COURT DRAW NYGH, GIVE ATTENTION AND YOU SHALL BE HIRED. GOD SAVE THE UNITED STATES AND THE GREAT STATE OF FLORIDA AND THIS HONORABLE COURT.
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GOOD MORNING.,,
LADIES AND GENTLEMEN THE FLORIDA SUPREME COURT. PLEASE BE SEATED.
GOOD MORNING, FRIEND AND WELCOME TO THE FLORIDA SUPREME COURT. AND THE ORAL ARGUMENT CALENDAR FOR TUESDAY, OCTOBER 9th. THE FIRST MATTER ON OUR CALENDAR THIS MORNING IS IN CONNECTION WITH THE REHEARING IN STRAND VERSUS ESCAMBIA COUNTY. COUNSEL READY TO PROCEED.
YES, SIR.
GOOD MORNING, MATE PLEASE THIS COURT, I'M ELAINE JOHNSON NAMES, A PARTNER AT EDWARDS, ARMY AND DODGE AND WE MOVE THE ES -- ESCAMBIA COUNTY AND JANET LANDER AT COUNSEL TABLE AND YOU KNOW FORMER JUSTICE GRIMES, IF YOU WOULD GIVE ME ONE MINUTE TO FRAME FOR THE COURT THE ISSUES WE BELIEVE REMAIN AFTER THE REVISED OPINION, I WANT TO TALK TO YOU FIRST ABOUT THE REAL-LIFE IMPACT OF THE OPINION. THE MIAMI BEACH REDEVELOPMENT CASE LED TO THE DEVELOPMENT OF SOUTH BEACH. THE REVISED OPINION REMOVED THE VEHICLE THAT LOCAL GOVERNMENT WAS -- COMMUNITY REDEVELOPMENT AGENCIES HAVE USED TO REDEVELOP BLIGHTED --
CAN YOU -- CAN YOU -- CAN YOU GIVE US --
YES, SIR?
A SPECIFIC UNDERSTANDING, OR A -- YOU KNOW, I KNOW THAT YOU AND THE AMEEK KRA -- EMEKA HAVE ARGUED ON REARGUE THERE IS GREAT RELIANCE ON THE TIF MEANS OF FINANCING.
YES, SIR. AND CAN YOU TELL US HOW MANY OF THESE KIND OF BONDS IS ESCAMBIA COUNTY ISSUED OVER THE PERIOD -- HOW MANY EACH YEAR OR --
I CAN'T TELL YOU HOW MANY ESCAMBIA COUNTY ISSUED, I CAN TELL YOU THE BONDS HAVE BEEN USED TO REDEVELOP SOUTH BEACH AND MIAMI AND THEY HAVE BEEN USED TO REDEVELOP CITY PLACE IN WEST PALM BEACH AND HAVE BEEN USED TO REDEVELOP GAINS STREET HERE IN TALLAHASSEE. AND BECAUSE THE COURT IS RECEDING FROM MIAMI BEACH REDEVELOPMENT ALL OF THOSE SORTS OF DEVELOPMENTS WOULD BE IMPOSSIBLE --
I MEAN, THE FAIRLY -- THAT IS A STRONG STATEMENT, IMPOSSIBLE. IT WOULD APPEAR TO BE OUR DISCUSSION THIS MORNING NEEDS TO BE DIRECTED TO WHAT THE CONSTITUTION PROVIDES AND EVERYONE MAY THINK THESE ARE GREAT IDEAS, BUT, IMPOSSIBILITY IS A STRONG STATEMENT AND SEEMS TO BE OTHER METHODS OF FUNDING OUT THERE, ARE AVAILABLE THAT COULD BE MAYBE NOT IDENTICAL TO WHAT THIS IS BUT MAYBE THERE ARE OTHERS.
USING -- IMPOSSIBLE WAS AN OVERSTATEMENT BUT IT WOULD BE IMPRACTICABLE BECAUSE IF YOU REQUIRE A REFERENDUM TO USE THIS TIFF IT WILL NOT BE THE FLUID VEHICLE IT HAS BEEN FOR REDEVELOPMENT, AND THE OTHER THING THE COURT SHOULD BE AWARE OF IS THERE ARE -- I'M NOT SUGGESTING THAT YOU ARE NOT AWARE OF IT, BUT WE ARE TALKING ABOUT DIFFERENT KINDS OF DEBT. WHEN WE TALK ABOUT TIF, WE TALKING ABOUT A REVENUE BOND LINKED TO THE VALUE THAT IT PRODUCES.
LET ME ASK YOU A QUESTION WITH REGARD TO THAT. AND MAKE SURE WE UNDERSTAND. IS WE CREATE A PROPOSAL TO IMPROVE SOMETHING AND THERE BY INCREASES PROPERTY VALUATIONS AND RAISES PROPERTY TAXES AND THEREFORE PAYS FOR ITSELF.
IT INCREASES THE REVENUE DERIVED FROM PROPERTY TAXES.
THE VALUE OF THE PROPERTY, THAT THIS IS E WHOLE DESIGN.
EXACTLY.
SO THAT IT CONTINUES THE SPIRAL OF PROPERTY VALUES, AND INCREASED TAXES, AND THEN IT BECOMES AN IMPROPER MECHANISM T WE -- IF WE ASK THE PUBLIC TO VOTE FOR THAT. IS THAT ESSENTIALLY WHERE WE ARE.
NO, IT IS NOT ANISM PROMISER MECHANISM IF YOU ASK THE -- THE ELECTORATE TO VOTE FOR IT. YOUR HONOR, THE POINT IS THE ELECTORATE UNDER THE CONSTITUTION IS SUPPOSED TO VOTE FOR A LONG-TERM DEBT. THAT THAT --
IT SAYS Z LANGUAGE. WHAT DOES THE CONSTITUTION SAY.
LONG TERMITY BACKED BY THE FULL FAITH AND CREDIT OF THE GOVERNMENT. TIFs ARE NOT BACK BY THE FULL FAITH AND CREDIT OF THE GOVERNMENT. THEY'VE ON THE FACE OF THE REVENUE BOND THEY ARE NOT BACKED BY THE FULL FAITH AND CREDIT AND THAT THEY -- THE ONLY PAYMENT WILL COME IF THERE IS AN INCREMENTAL INCREASE OF VALUE AS A PART OF THE --
LET ME ASK YOU A QUESTION.
YES.
IF ESCAMBIA COUNTY WERE NOT TO PAY THE TAX INCREMENT, IF THIS WERE TO GO THROUGH, IF THEY WERE NOT TO PAY FROM THEIR GENERAL REVENUES THAT INCREMENT TO THIS FUND, WHAT RIGHT WOULD THE BOND HOLDER HAVE TO REQUIRE THAT THAT PAYMENT BE MADE?
THE BONDHOLDER WOULD HAVE A CONTRACTUAL RIDE, YOUR HONOR, TO FORCE ESCAMBIA COUNTY TO MAKE THE ALLEGATION -- ALLOCATION TO THE TRUST FUND THAT IS REQUIRED UNDER THE --
HOW LONG -- AND HOW LONG IN THAT -- THEY CAN DO IT FOR 35 YEARS.
WHATEVER ALLOCATION IS SUPPOSED TO BE MADE ANNUALLY, YES, SIR.
WHAT I'M --
WHERE WOULD ESCAMBIA QOUT GET THE MONEY ASSUMING THEY HAD -- ASSUMING THEY HAD SALES TAXES THAT DIDN'T COME UP TO THE AMOUNT THAT IT -- YOU SHOULD PUT INTO THE FUND. WHERE WOULD THEY GET THE.
THE ORDINANCE REQUIRES, YOUR HONOR, THAT THE FUNDS COME FROM ANY LEGALLY AVAILABLE SOURCE, DESIGNATE BY THE COUNTY. THERE IS NO REFERENCE TO AD VALOREM REVENUES IN THE ORDINANCE.
BUT IF THEY HAVE A SHORT FALL, THE COUNTY WOULD HAVE A RIGHT TO INCREASE THE ADD VA LORM TAXES IF THEY WANTED TO.
ON THE FACTS OF THIS IS, RESPECTFULLY THERE IS NO EVIDENCE THERE WOULD BE A SHORT FALL.
I'M NOT SAYING THERE IS EVIDENCE THAT THERE WOULD BUT WE ARE TALKING ABOUT IN A CASE WHERE THERE IS NOT ENOUGH MONEY TO PUT IN THE FUND, THERE IS NOTHING THAT WOULD STOP THE COUNTY FROM INCREASING THE AD VALOREM TAX.
TRUE, BUT, RESPECTFULLY YOUR HONOR THE INQUIRY ISN'T WHETHER THERE WOULD BE SOMETHING TO STOP THE COUNTY. THE INQUIRY IS CONSTITUTIONALLY WHETHER THERE IS ANYTHING THAT COULD COMPEL THE COUNTY TO RAISE THE TAXES. AND ON THE FACTS OF THIS CASE --
IS THAT WHAT THE CONSTITUTION REALLY SAYS.
YES, MANAGEMENT.
THE CONSTITUTION DOESN'T REALLY SAY TO COMPEL THE TAXES BUT TO PAY AD VALOREM TAXES.
I'M SORRY. IT SAYS COMPEL TAXATION, I APOLOGIZE, I DIDN'T MEAN TO INTERRUPT YOU. YES, SIR.
IT BRINGS US BACK TO WHERE I STARTED, AND THIS COURT CAME OUT WITH AN OPINION ON SEPTEMBER THE 6th. IN WHICH IT RECEDED FROM THE CITY OF MIAMI BEACH CASE, WHICH HAS THE FUNDAMENTAL PREMISE THAT YOU JUST ESPOUSED. MY -- WHAT I NEED TO KNOW IS EVALUATING THE REHEARING ON THE BASIS OF STARRY DECISIS. HOW MUCH RELIANCE HAS THERE BEEN AND IS THERE PRESENTLY ON THE CITY OF MIAMI BEACH FUNDAMENTAL PREMISE AND WE ARE NOT DEALING WITH A BLIGHTED AREA SPECIFICALLY IN THE CASE, WE ARE DEALING WITH BAIDING OF A ROAD. -- BUILDING OF A ROAD. IS THERE WIDESPREAD RELIANCE ON THIS METHOD OF FINANCING.
ABSOLUTELY, YOUR HONOR.
FOR THAT TYPE OF ROAD AND WHERE ARE THE SPECIFICS.
ABSOLUTELY, ABSOLUTE RELIANCE FOR THAT TYPE OF ROAD, PERHAPS NOT. BUT, FOR THE ECONOMIC DEVELOPMENT PROJECTS, THAT TIFs TYPICALLY ARE USED FOR THERE IS WIDESPREAD RELIANCE AROUND THE STATE.
MY CONCERN HERE IS -- [INAUDIBLE] AND NOT WANT TO -- MIAMI BEACH BUT I READ -- [INAUDIBLE] THOUGH THERE ARE BROAD STATEMENTS IN THERE, IT IS IN THE CONTEXT OF A CRA. WHICH AS YOU EXPLAINED, THAT IS THE THE AREA WE KNOW -- [INAUDIBLE] WHAT CONCERNS ME IS THE UMBRELLA OF THE CRA, USING THIS TIF METHOD HAVE BEEN APPARENTLY -- UTILIZED AROUND THE STATE WITHOUT VALIDATION AND FOR SOME REASON, ESCAMBIA COUNTY THOUGHT THEY'D NEVER COME TO THE COURT TO -- TRIAL COURT ASK FOR VALIDATION. WHAT I WANT TO KNOW IS WHEREAS AFTER MIAMI BEACH DID ALL OF THE MUNICIPALITIES, COUNTIES GET THE IDEA THEY COULD USE THIS TYPE OF FINANCING ANY TIME THEY WANT TO BUILD A ROAD, A BRIDGE, BECAUSE IN THAT SITUATION IT'S NOT TO -- TO INCLUDE A BLIGHTED AREA, NOT A GUARANTEE THIS MONEY THAT WOULD BE PUT INTO IT, A DECREASE IN THE PROPERTY ACTIONS, THAT IT CAME BECAUSE OF THE IMPROVEMENT -- [INAUDIBLE] SO ALL OF A SUDDEN NOW WE HAVE WITHOUT OUR KNOWING IT, HOW MANY BILLIONS OF DOLLARS OF THIS TYPE OF NONCRA, BONDS UTILIZED, 67 COUNTIES AND THE 100S OF MUNICIPALITIES. DOES ANYONE HAVE THE INFORMATION.
I DO NOT HAVE THAT INFORMATION --
YOU ARE GOING -- EMOTIONAL THING WHICH IS WE WANT TO HELP BLIGHTED AREAS AND WE NEED KNOW, EVEN IF MIAMI BEACH WAS WRONG, THE DECISION, WHETHER WE SHOULD ADHERE TO IT BECAUSE -- BECAUSE IT HAS BEEN RELIED ON FROM A BROADER PRINCIPAL AND AS LONG AS YOU DON'T PROMISE THEY CAN'T COMPEL TAX IS A AS IT WERE -- A FORM OF TAX IS A IT IS OKAY.
YOUR HONOR YOU SAID SOMETHING IMPORTANT, YOU SAID WITHOUT THE UMBRELLA OF THE CRA THE REASON THAT ESCAMBIA COUNTY SOUGHT VALIDATION IS BECAUSE IT WAS NOT PROCEEDING UNDER CHAPTER 163, IT WAS UNDER 125 AND THAT IS RARE. WHAT I'M TRYING TO TELL YOU. IT IS --
OKAY. SO THAT --
THAT IS RARE.
ARE YOU GOING TO CONCEDE THAT IS AN EXTENSION OF MIAMI BEACH NEVER INTENDED BY MIAMI BEACH.
I WILL CONCEDE ESCAMBIA COUNTY USED THE TIF FINANCING SCHEME WITHOUT KEEPING ALL OF THE SAFEGUARDS THAT ARE SET FORTH IN CHAPTER 163 OF THE REDEVELOPMENT ACT. I WILL CONCEDE THAT, YES, MA'AM, THERE WAS NOT A SEPARATE ENTITY FOR EXAMPLE THAT WAS A NONTAXING AUTHORITY, AND I WILL CONCEDE THAT.
YOU ARE UP HERE LIMITING THE -- WITHOUT GOING BACK TO -- WHAT THEY'RE FOUR THINGS OR THREE THINGS --
I WOULD ASK THE COURT TO CARVE OUT AN EXCEPTION FOR CRATIF UNDER MIAMI BEACH REDEVELOPMENT IN MUCH THE SAME WAY IT DID FOR CERTIFICATES OF PARTICIPATION UNDER SARASOTA COUNTY. I WOULD ASK THE COURT FOR A NARROW RULING FOCUSED ON THE FACTS OF THIS CASE, TELLING ESCAMBIA COUNTY IF IT WANTS TO USE HOME RULE POWER UNDER 125, TO PASS TIF IT MUST ALSO USE THE SAFEGUARDS AND REQUIREMENTS OF MIAMI BEACH REDEVELOPMENT. VOLUSIA -- VOLUSIA COUNTY AND 163 PART 3.
ESCAMBIA COUNTY SHOULD REALLY HAVE A SEPARATE ENTITY THAT OWNS THE TRUST AND THOSE TYPES OF -- BUT, IS THAT REALLY ANY DIFFERENT? I MEAN, WHO WOULD OWN THE TRUST? NOT ESCAMBIA COUNTY, IT IS WHAT, THE TRUST -- MANAGED BY A SEPARATE NONTAXING ENTITY AND GOES TO JUSTICE BELL'S POINT BUS IF A SEPARATE NONTAXING ENTITY OWNS AND CONTROLS THE TRUST THE BOND COVENANT IS BETWEEN THAT ENTITY AND THE BONDHOLDER AND THE ONLY RESOURCE THE BONDHOLDER HAS IS TO REQUIRE THE ALLOCATIONS TO BE MADE AND THERE US ONE POINT I REALLY NEED --
SEPARATE ENTITY. REALLY STILL THE COUNTY.
NO, MA'AM, BECAUSE IT IS ONLY -- THE SAME THAT'S CRA, JUSTICE QUINCE, THE CRA MIGHT BE THE TALLAHASSEE CRA BUT IT DOES NOT HAVE THE TAXING POWERS OF THE CITY OF --
ISN'T THE -- IN REALITY, UNDER THE STATUTE, AND WHAT -- ON THE GROUND, THAT THE BOARD OF THE CRAs IS THE CITY COUNCIL AND BOARD OF COUNTY COMMISSIONERS, THE SAME ENTITY CONTROLLING BOTH SOURCES.
BUT THEY SIT SEPARATELY, THE CRA MEET A WITHIN TIME AND THE CITY COMMISSION AT ANOTHER TIME AND IF THE CRA NEEDS AN ALLOCATION IT HAS TO GO TO THE CITY TO GET AND CAN'T ALLOCATE ITS OWN MONEY AND I NEED TO MAKE ONE POINT ABOUT --
JUSTICE CANTERA HAS A QUESTION FOR YOU. I HAVE A FUNDAMENTAL QUESTION.
IN NONE OF THE MOTIONS FOR REHEARING HAVE I READ THE ARGUMENT THAT OUR EARP INTERPRETATION OF THE CONSTITUTION IN THE ORIGINAL OPINION WAS INCORRECT. THE ARGUMENTS ALL APPEAR TO BE THAT EVEN THOUGH OUR INTERPRETATION IS CORRECT, AND PERHAPS MIAMI BEACH WAS WRONG, CITIES AND COUNTIES HAVE RELIED ON IT, FOR SO LONG, THAT WE SHOULD JUST LEAVE WELL ENOUGH ALONE.
WELL, YOUR HONOR I DIDN'T WRITE IT WELL, BECAUSE AUTO WANTED TO ARTFULLY TELL THE COURT THAT YOUR OPINION WAS WRONG, BECAUSE YOUR -- THE COURT'S OPINION STAND ON THE PREMISE THAT ESCAMBIA COUNTY INDIRECTLY PLEDGED AD VALOREM TAXES AND IN YOUR OWN OPINION, PAGE 6 YOU DEFINE TAX INCREMENT FINANCING AND YOU SAY THAT THE ALLOCATION CAN BE MADE FROM ANY AVAILABLE SOURCE AS LONG AS THEY ARE EQUAL TO THE AMOUNT OF THE TAX INCREMENT. THEN ON PAGE 8 AND 13 YOU GO FROM HAVING ACKNOWLEDGED THAT IT IS JUST AN ALLOCATION, THAT HAS TO BE EQUAL IN AMOUNT TO THE ASSUMPTION THAT THERE HAS BEEN A PLEDGE OF THE TAXES AND THAT ASSUMPTION ABOUT THE PLEDGE IS THE PREMISE FROM WHICH THE COURT JUMPS TO RECEIVED FROM MIAMI BEACH REDEVELOPMENT AND WHAT WE'RE SAYING TO THE DORT COURT IS IF YOU ARE GOING TO EXAMINE MIAMI BEACH REDEVELOPMENT, CHAPTER 163, DO IT IN THE CONTEXT OF THE CASE THAT INVOLVES THE CRA BECAUSE THAT IS WHAT MIAMI BEACH REDEVELOPMENT WAS DESIGNED FOR. DO IT IN THE CONTEXT OF A CASE THAT SQUARELY PRESENT THOSE FACTS TO THIS COURT. DON'T DO IT IN THE CONTEXT OF HAVING AND IN CONSISTENCY IN YOUR OWN OPINION THAT SUGGESTS THAT THE PREMISE TO CAUSED YOU TO REEVALUATE MIAMI BEACH REDEVELOPMENT IS NOT SOUND.
AND WITH THAT YOU HAVE NOT ONLY USED UP YOUR MAIN TIME BUT REBUT.
I DON'T THINK I USED MY REBUT.
YOU USED YOUR ENTIRE TIME. IF HE SET THE CLOCK CORRECTLY. MR. MARSHAL IS THE CLOCK SET CORRECTLY?
MR. GRIMES, ARE YOU GOING TO -- NOT USED ALL OF MR. GRIMES' TIME.
YOU HAVE YOUR 7 MINUTES.
THANK YOU.
MAY IT PLEASE THE COURT, STEPHEN GRIMES FOR THE FLORIDA REDEVELOPMENT --
JUSTICE PARIENTE HAS A QUESTION.
I HAVE, WHAT JUSTICE -- WHAT TRUBS ME IS THAT THE -- TROUBLES ME THIS IS PLAIN LANGUAGE OF THE CONSTITUTION SAYS NOT PLEDGE AD VALOREM TAXATION, IT SAYS, PAYABLE AD VALOREM TAXATION AND I WANT TO MAKE SURE EVERYBODY UNDERSTANDS WHEN THEY THINK THE COURT GOT IT WRONG IT DOESN'T SAY PLEDGE. THAT IS WHY THREE MEMBERS OF THE BOARD IN 198 SO SAID IT WAS PLAIN WRONG AND SO COULD YOU ADDRESS WHAT JUFTION CANTERO ASKED, IF WE ARE STARTING ON A CLEAN SLATE, CLEARLY IT SAYS PAYABLE FROM AD VALOREM TAXATION AND NOT A -- [INAUDIBLE] AD VALOREM TAXATION.
NO, I SUGGEST THAT THERE ARE TWO REASONABLE INTERPRETATIONS YOU CAN MAKE OUT OF THAT.
LET'S CONTINUE WITH KNOWLEDGE WE KNOW WE ARE DEALING WITH THE SAME CONSTITUTION. WHAT DOES THE CONSTITUTION SAY.
PAYABLE FROM AD VALOREM TAXATION.
THANK YOU.
THE PAYMENTS MADE INTO THE TRUST FUND DON'T NECESSARILY HAVE TO COME FROM AD VALOREM TAXATION AND LET ME --
YOUR QUESTION. LET ME ASK YOUR POSITION THAT OUR DECISION WASN'T NECESSARILY AN INCORRECT INTERPRETATION OF THE CONSTITUTION. BUT MUNICIPALITIES HAVE RELIED ON MIAMI BEACH FOR SO LONG THAT UNDER THE PRINCIPLES OF STORY DECISIS AND ONE OF THE FACTORS IN ONE OF THE DETERMINING RULES -- [INAUDIBLE] IS THE RELIANCE ON THE CASE AND YOUR POSITION BASED ON THAT WE SHOULD NOT RECEIVE FROM MIAMI BEACH REGARDLESS OF WHETHER OUR INTERPRETATION OF THE CONSTITUTION IS CORRECT.
WELL, NO, I DON'T CONCEDE YOUR INTERPRETATION IS ANY MORE CORRECT THAN MIAMI BEACH AND IN FACT, I THINK BOTH INTERPRETATIONS ARE REASONABLE CONCLUSIONS THAT DIFFERENT COURTS CAN REACH. I SUGGEST TO REALLY -- REALLY, IT IS IN THE EYES OF THE BE HOLDER BECAUSE FOR EXAMPLE, IF WE POINT OUT IN THE BRIEF THE -- A LOT OF OTHER STATES FACED THE SAME ISSUE AND THE SAME CONSTITUTIONAL QUESTIONS AND THE MAJORITY OF THOSE COURTS HAVE COME DOWN ON THE SIDE OF MIAMI BEACH. SO REASONABLE PEOPLE CAN COME TO TWO CONCLUSIONS HERE. I CONCEDE THERE IS LOGIC IN YOUR OPINION, I ALSO BELIEVE AND SUBMIT THERE IS LOGIC IN THE ORIGINAL OPINION.
BASICALLY YOU ARE -- YOUR ARGUMENT -- EXCUSE ME, THAT THAT PROVISION IS AMBIGUOUS AND COULD BE INTERPRETED IN DIFFERENT WAYS. I DON'T READ THE AMBIGUITY IN THE NERM PAYABLE FROM AD VALOREM TAX IS A AS ANYTHING OTHER THAN REQUIRING A REFERENDUM WHENEVER THESE BONDS ARE PAYABLE FROM AD VALOREM TAXATION.
WELL, IN ALL DUE RESPECT, THEN, THE MAJORITY OF THE COURTS DON'T AGREE WITH THAT POSITION.
DO THEY HAVE -- PRECISE LANGUAGE WE HAVE IN OUR CONSTITUTION? A DICEY THING TO COMPARE STATE CONSTITUTIONS BECAUSE THEY ARE ALL WORDED SO DIFFERENTLY. SO TO STAY THE MAJORITY HOLDS ONE WAY, THERE ARE 50 DIFFERENT STATE CONSTITUTIONS, AND THEY CAN ALL HAVE 50 DIFFERENT WAYS OF SAYING THE SAME THING.
LET ME SUGGEST THIS, YOUR HONOR, THERE ARE TWO CASES. THIS IS NOT A COMMUNITY REDEVELOPMENT CASE, AS YOU KNOW. THERE ARE TWO CASES PENDING IN THIS COURT, CEDAR GROVE AND CARTER WHICH ARE SET FOR ORAL ARGUMENTS IN JANUARIEN WHICH THE BRIEFING WILL BE -- IN WHICH THE BRIEFING WILL BE MORE COMPREHENSIVE AND DISCUSS WHAT YOU SAID AND COMPARE THE CONSTITUTIONAL PROVISIONS. IN THIS CASE, NEITHER PARTY EVEN ASKED TO HAVE MIAMI BEACH OVERTURNED UNTIL THE COURT DID AND NOW ONLY -- YOU HAVE THE ONLY AMICUS LAST MINUTE BRIEFS ON THE SUBJECT AND I WOULD REQUEST BEFORE YOU REACH A DECISION AND IF YOU ARE -- CONFIRM THE CASE, TO HOLD OFF UNTIL YOU HEAR -- SEE THE BRIEFS AND HEAR THE CASES WHICH DO INVOLVE THE COMMUNITY REDEVELOPMENT CASES WHICH ARE DIFFERENT FROM THIS CASE.
JUSTICE BELL HAS A QUESTION.
I AGREE WITH THAT POINT, BUT LET ME ASK A QUESTION. MIAMI BEACH WAS A DIFFERENT SITUATION. AND IN THAT CASE IT WAS CLEARLY THE INCREMENT WAS SIMPLY A MEASUREMENT AND THERE WERE OTHER REVENUE SOURCES. DO YOU AT LEAST CONCEDE IN THE CASE THAT THE PRIMARY, IF NOT THE SOLELY REVENUE SOURCE IN THE ESCAMBIA COUNTY CASE IS AD VALOREM TAXES?
AND ALLOWED US TO GO FORWARD JUST UNDER -- THE SOLE PURPOSE AS INDICATED IN MIAMI BEACH OF THE CAUSE WHICH IS TO LIMIT THE SPENDTHRIFT TENDENCIES.
I AM NOT HERE DEFENDING THE ESCAMBIA COUNTY POSITION. I CAN'T TELL YOU FOR CERTAIN WHETHER THE WAY THEY'VE STRUCTURED IS IT HAS TO COME FROM AD VALOREM. IF IT HAS TO COME FROM AD VALOREM TAXES I WOULD AGREE WITH YOU. BUT, UNDER THE TRADITIONAL COMMUNITY REDEVELOPMENT WAY, THE MONEY DOES NOT HAVE TO BE PAID FROM COMMUNITY -- IT IS MEASURED BY IT AND THAT IS WHY I SUGGEST --
BUT IN THIS CASE IF THE COURT WERE TO ALLOW THE COUNTY TO GO FORWARD, DOES THAT NOT JUST SIMPLY UNDERCUT THE SPENDTHRIFT PROTECTIONS THE CLAUSE IN THE CONSTITUTION WAS INTENDED TO PROTECT?
IF IN FACT -- AND I DON'T KNOW THE DETAILS OF THE ESCAMBIA COUNTY CASE. IF IN FACT IT HAS TO BE PAID FROM AD VALOREM TAXES, THEN I WOULD AGREE WITH YOU.
COULD YOU SPEAK TO THE RELIANCE ISSUE THAT I RAISED WITH OTHER COUNSEL AS TO HOW --
I THINK THE CONCERN IS UNDER THE COMMUNITY REDEVELOPMENT ACT IF YOU HAVE REFERENDUMS IT WILL BE VERY -- A PRACTICAL THING AND PROBABLY GOING TO BE MORE DIFFICULT, MORE EXPENSIVE TO HAVE REFERENDUMS ON IT. THERE ARE A LOT MORE SAFEGUARDS IN THE COMMUNITY -- A LOT MORE NOTICE, PEOPLE ARE ALL AWARE OF IT. IT ISN'T LIKE THE COUNTY COMMISSION HAULS OFF AND DOES IT.
[INAUDIBLE] THROWING ESCAMBIA COUNTY UNDER THE -- [INAUDIBLE].
[LAUGHTER].
I MIGHT NOT PUT IT THAT WAY. [LAUGHTER].
THE REASON I ASK IS BECAUSE WHEN YOU HAVE A -- [INAUDIBLE] REDEVELOPMENT ONE OF THE SOURCES IN MIAMI BEACH -- [INAUDIBLE] REVENUE, BUILD A ROAD OR A BRIDGE AND -- [INAUDIBLE] ALL THE MONEY GOES BACK FROM THE INCREASE -- [INAUDIBLE].
I AGREE NOT WITHIN THE SPIRIT OF THE COMMUNITY REDEVELOPMENT ACT. TO FIX BLIGHT. MY OTHER POINT WOULD BE --
I GUESS BASICALLY WHAT YOU ARE SAYING IS ANY DECISION THAT COMES FROM THIS COURT IN THIS CASE NEEDS TO BE MORE SPECIFICALLY LIMITED. IS THIS POINT THAT YOU ARE MAKING.
YES.
IN OTHER WORDS, -- NOT THROWING ESCAMBIA UNDER THE BUS BUT THAT THIS IS ARGUMENT, WE HAVE ANOTHER CASE PENDING AND SHOULD WAIT TO MAKE THAT DECISION LATER, WHATEVER DECISION IS MADE IN THE CASE.
YES, YES, SIR AND BEYOND THAT, OTHER THAN THE RELIANCE THING AND I'M TOLD THAT RIGHT NOW, ACTUALLY, THE WAY YOUR OPINION IS WRITTEN, YOU EFFECTIVELY DECLARED UNCONSTITUTIONAL THE REDEVELOPMENT ACT IN A COUPLE OF PARTS. AND I CAN GO INTO THAT AS TO WHY, BUT THE FACT IS THAT, AND SO I WOULD HOPE THAT YOU WAIT AND AS FAR AS THE OTHER REASONS FOR DEPARTING FOR STORY DECISIS THERE IS NO ABUSE, NOW ESCAMBIA COUNTY, HOWEVER YOU -- NO SHOWING PEOPLE ARE GOING BANKRUPT AND BONDHOLDERS ARE NOT BEING PAID AND THERE NEEDS TO BE A REASON FOR DEPARTING FROM --
THANK YOU VERY MUCH. YOU HAVE ALSO USED YOUR TIME.
COUNSEL FOR THE APELLANT, READY TO... A LITTLE UNUSUAL BEING THE APELLANT AND HAVING TO RESPOND.
MAY IT PLEASE THIS COURT, DAVID THERIAQUE, I REPRESENT DR. STAND -- [INAUDIBLE] --
LET ME --
DR. STRAND IS ALSO HERE, YES, SIR.
LET ME EXPLAIN MY CONCERN YOU CAN ADDRESS, AND THAT IS THE RELIANCE ASPECT. I DON'T BELIEVE IN WHOLESALE RECEDING FROM PRECEDENT AND THERE HAVE TO BE GOOD REASONS FOR RECEDING. AND I CERTAINLY BELIEVED IN THE FIRST OPINION OUR INTERPRETATION OF THE CONSTITUTION WAS CORRECT. BUT THERE HAS TO BE MORE THAN THAT. I THINK, IN ORDER TO RECEIVE FROM -- RECEDE FROM A PRIOR OPINION. ONE OF THE FACTORS COURTS USED IS WHETHER THE LAW HAS BECOME UNWORKABLE, WHETHER THE PRINCIPLE WE ESPOUSED HAS BECOME UNWORKABLE. ANOTHER PRINCIPLE IS THE RELIANCE ON OUR PRIOR OPINION AND WHY HASN'T THE RELIANCE BEEN SO GREAT THAT IT -- WE SHOULD NOT, REGARDLESS OF WHETHER THE FIRST OPINION WAS CORRECT OR NOT, THAT WE SHOULD NOT RECEDE FROM IT BECAUSE OF THE SOCIETAL RELIANCE.
JUSTICE CANTERO.
WE WOULD SUBMIT THE RELIANCE ARGUMENT IS NEGATED BY THE FACT THE COURT AMENDED THE OPINION TO SET ITS PERSPECTIVE ONLY AND THE BONDS -- VALIDATED BEING OVERTURNED AND BOND HOLDERS ADVERSELY AFFECTED IS GONE. THIS COURT UNANIMOUSLY HELD IT IS -- LEGAL FICTION THINK E LEGAL FICTION WAS EXTENDED BY ESCAMBIA COUNTY TO BASICALLY FUND A ROAD OUTSIDE THE SCOPE OF THE CRA. SO THE ABUSES THAT THE COURT LOOKS FOR WE'D POINT TO ESCAMBIA --
LET ME --
THROW THEM UNDER THE BUS.
LET ME -- YOU KNOW, I WENT BACK AND WATCHED OUR ORAL ARGUMENT THE LAST TIME YOU WERE HERE. AND ONE THING, YOU HAVE ATTRACTED A CROWD, NO DOUBT ABOUT THAT. [LAUGHTER].
BUT MY CONCERN IS AS POINT OUT IN THE PETITIONS FOR REHEARING. IS THAT YOU WEREN'T ASKING US TO RECEDE FROM THE CITY OF MIAMI BEACH CASE. YOU DIDN'T EVEN PRESENT THAT IN YOUR BRIEFS. YOU DIDN'T PRESENT THAT IN YOUR ORAL ARGUMENT. UNTIL THERE WAS RIGHT DOWN AT THE END, QUESTIONS THAT LED TO A DISCUSSION ABOUT THAT. AND THE -- MY CONCERN IS THAT THE SARASOTA COUNTY CASE WAS NOT EVEN MENTIONED AND IN A BRIEF -- IN THE BRIEF AND HOW -- WE NOW HAVE A SITUATION IN WHICH FOR 30 OR 27 YEARS, IT HAS BEEN OUT THERE. YOU DIDN'T CONTEST IT. WHY SHOULDN'T THAT BE AN INDICATION THE COURT REALLY NEEDS TO GO BACK AND DEAL WITH WHAT YOU WERE DEALING WITH IN YOUR BRIEF? AND THAT IS, WHETHER THIS PARTICULAR SITUATION MEETS THE STANDARD OF THE CONSTITUTION.
JUSTICE WE DID NOT RAISE IT IN OUR INITIAL BRIEF AND IN FACT WE DIDN'T RAISE IT EXPRESSLY IN OUR REPLY BRIEF AND IT WASN'T UNTIL ORGAN ARGUMENT WHEN JUSTICE ANSTEAD ATTEMPTED TO CONCEDE THAT SOMEHOW ESCAMBIA -- THE CONCEPT WAS LEGAL EXCEPT THEY WERE DOING IT OUTSIDE THE CRA AND THE REASON WE DIDN'T RAISE IT IS BECAUSE IT WAS OUTSIDE THE CRA AND I BELIEVE I MAY HAVE MENTIONED DURING MY ORAL ARGUMENT IN RESPONSE TO JUSTICE PARIENTE WE HAD CONCERNS MIAMI BEACH DIDN'T MAKE SENSE THEY WERE USING THE AD VALOREM TAXES INDIRECT WHEN YOU COULD HAVE USED IT DIRECT BUT ESCAMBIA COUNTY WAS SO OUTSIDE OF WHAT MIAMI BEACH HELD.
ISN'T THERE A PRINCIPLE OF LAW -- AND BEGAN I REALIZE YOU ARE IN AN AWKWARD POSITION AND DIDN'T ASK US TO DO WHAT WE DID AND WE CREATED OBVIOUSLY OTHER ISSUES, FOR EXAMPLE, I WOULD SAY I DIDN'T KNOW THAT WITHOUT MUNICIPALITIES OR COUNTIES SEEKING VALIDATION THEY WERE JUST ISSUING BONDS AND -- ON RELIANCE OF MY BAEM -- MIAMI BEACH EVEN THOUGH THEY WEREN'T CRAs AND THE QUESTION HIVE IS DON'T WE BEHAVE PRINCIPLE OF LAW WE DECIDE A CASE ON THE MOST NARROW GROUNDS, AND IF YOU WERE -- BACK UP HERE AND YOU SAY I HAVE A WIN, WOULD STILL LIKE TO WIN, WHAT WOULD BE -- HOW WOULD YOU WRITE THE OPINION TO NARROW IT SO THAT ESCAMBIA COUNTY -- CSI IS NOT USED TO FUND ROADS, IF YOU KNOW AGAIN, IT IS GOING TO BE PAYABLE FROM AD VALOREM TAXES, BUT THEY DON'T -- NOT GENERATING ANY OTHER SOURCE OF REVENUE UNLIKE REDEVELOPMENT AREAS. HOW WOULD YOU FRAME IT?
I WOULD START OFF BY SAYING THERE IS NO REASON TO REWRITE THE DECISION AND WE AGREE --
DON'T WE HAVE A PRINCIPLE.
THAT THIS IS ATTA BOY DOCTRINE!
ABSOLUTELY, SIR!
DON'T WE HAVE A PRINCIPLE WE AVOID CONSTITUTIONAL QUESTIONS IF ISN'T THAT A PRINCIPLE OF THE COURT AS WELL.
IF THE COURT WERE TO FOR LACK OF A BETTER WORD TRY TO PUT THE HORSEBACK IN THE BARN BECAUSE THE COURT HELD IT WAS A LEGAL FICTION THE MIAMI BEACH CASE SIMPLY OVERLOOKED, TWO PRONGS TO WHAT THE CONSTITUTIONAL PROVISION STATES AN ESCAMBIA COUNTY FOCUSED ON THE HARM TO POTENTIAL BOND HOLDERS AND ALSO THE PRONG OF NOT BEING ABLE TO USE AD VALOREM TAX DOLLARS TO FUND LONG TERM DEBT THAT WILL LOST FOR YEARS AFTER THE ELECTED OFFICIALS VOTE TO INCUR IT ARE GONE AND THE HORSE LEFT THE BARN BUT IF THE COURT WERE TO SAY WE WANT TO BACK UP AND WE BELIEVE UNANIMOUSLY THIS IS A LEGAL FICTION AND WANT TO SOMEHOW TAKE A STEP BACK, THEN I THINK THE COURT CAN CLEARLY STATE, HEY ESCAMBIA COUNTY, THE CIRCUIT COURT HELD THAT ESCAMBIA COUNTY WAS USING AD VALOREM TAXES, CLEARLY IN THE COURT'S DECISION. SO THAT THAT IS IN THERE. ESCAMBIA COUNTY WAS NOT FUNCTIONING WITHIN THE SCOPE OF THE CRA AND BELIEVE THAT IS THERE AS WELL AND NOW HAS BEEN THE FRAMEWORK OF A CRA, USING AD VALOREM TAX DOLLARS TO REPAY THE INCREMENTS AND YOU HAVE THOSE TWO PRONGS AND WE DO AT THE END OF THE DAY, WOULD LIKE TO WIN, SO --
AND ESCAMBIA COUNTY, PUT THAT MONEY IN YEAR AFTER YEAR, THERE BY DEPRIVING THE REST OF THE TAXPAYERS IN ESCAMBIA COUNTY OF THAT MONEY FOR POTENTIALLY NEEDED SERVICES.
THERE IS THAT PRONG AND I THINK ALSO JUST MORE OF A PUBLIC POLICY PERSPECTIVE.
THAT IS PUBLIC POLICY. THAT IS --
IT IS.
THE ISSUE OF ONE AREA BENEFITING TO GET ROADS AND THE REST THE COUNTY NOT HAVING THE MONEY AVAILABLE TO IT.
ABSOLUTELY AND I THINK THE SECOND PRONG SET FORTH IN THIS COURT'S UNANIMOUS DECISION, WENT BACK THROUGH AND LOOK AT THE HISTORY OF WHY THE CONSTITUTIONAL PROVISION IS IN THERE. AND THIS COURT WENT BACK TO THE 1930s AN 1920s AND LOOK AT THE HARM THAT WILL INCUR WHEN GOVERNMENTS RUN AMOCK AND NOT SAYING ESCAMBIA COUNTY RAN AMOK BUT HISTORICAL PRECEDENT FOR THE CONCERN, 1968 CONSTITUTION IS MORE RE--.
BUT, MY PROBLEM WITH WHAT THAT IS WHEN YOU GET BACK AND TRACE THESE CASE, THE -- CITY OF MIAMI BEACH CASE DEALT WITH ALL OF THAT HISTORY. AND DIFFERENCE BETWEEN GENERAL OBLIGATION BONDS AND REVENUE BONDS AND HOW THIS IS STRUCTURED, WE CAME OUT WITH A CASE IN 1986, THAT REAFFIRMED IT, CAME OUT WITH A CASE IN 1989 THAT REAFFIRMED IT. CAME OUT WITH A PEN IN '93 AND CONSISTENTLY REAFFIRMED THAT AND I AM CONCERNED SOMEWHAT IN THE REVISED OPINION WHERE YOU DIDN'T ARGUE THE SAR SOCIETY COUNTY CASE, WE HAVE DELETED THE AIR SOCIETY TA COUNTY CASE BUT THE UNDERPINNING OF THE SAR SOCIETY COUNTY CASE IS THE CITY OF MIAMI BEACH. CASE.
I'M SORRY.
IF WE DON'T REVISE AND DELETE OUR RECEDING FROM THE CITY OF MIAMI BEACH CASE WE STILL HAVE A QUESTION OUT THERE AS TO THE COPs AND SAR SOCIETY COUNTY, DON'T WE IN ISN'T THAT --
NO, SIR, I RESPECTFULLY DISAGREE, TWO PRONGS YOU LOOKED AT ON SARASOTA COUNTY AND FIRST IS PAYABLE FROM AD VALOREM TAX REVENUE AND THE COURT IN MIAMI BEACH LOOK AT THE BOND HOLDERS' ABILITY TO COMPEL AND FOCUS ON WHAT JUSTICE BELL'S OPINION FOCUSED ON HERE, THE REPAYMENT THROUGH TAX REVENUES AND THE SECOND PRONG WAS BONDS THAT HAD A LIFE MORE THAN 12 MONTHS. AND IN SARASOTA THE -- THE COURT CLEARLY HELD THE SECOND PRONG WAS NOT TRIGGERED AND REGARDLESS OF THE COURT'S RESCISSION FROM MIAMI BEACH THE SECOND PRONG STILL IS APPLICABLE HERE BECAUSE IN THAT INCIDENCE THE FUNDING MECHANISM DOES NOT EXCEED 12 MONTHS.
THE ELEPHANT IN THE REAM AND THE PREVIOUS ORAL ARGUMENT IN THE CASE WAS THE AS YOU WERE DEFINING TAX INCREMENT FINANCING AND THE SIMPLICITY OF IT IT WAS DEFINED IN TERMS OF THE -- WHAT YOU DO IS DEVISE A PLAN WHICH AS FOR A BLIGHTED AREA AND THE PENSACOLA CASE IN TERMS OF IMPROVING THE ROAD SYSTEM AND THE ACCESS TO THE AREAS AROUND THERE, BUT THAT BY IMPROVING THE BLIGHTED AREAS OR THE ACCESS TO THE DEVELOPMENT, DEVELOPED AREAS THERE, WHAT YOU ARE GOING TO DO IS INCREASE THE VALUE OF THE PROPERTIES, YOU KNOW, THAT THERE ARE. AND THAT THE WHOLE IDEA OF TAX INCREMENT FINANCING IS TO MEASURE OR GAUGE, OKAY, WHAT THAT INCREASE IS GOING TO MEAN. IN TERMS OF THE COUNTY'S -- OR THE CITIES OR WHATEVER GOVERNMENT REVENUES, OKAY? AND AD VALOREM TAXATION AND THAT YOU ARE GOING TO USE WHATEVER REVENUES WERE BEFORE AND THEN HOW MUCH THEY HAVE INCREASED AND THAT IS WHAT IS GOING TO PAY FOR, YOU KNOW, THE BONDS. AND SO IT WAS THAT VERY SIMPLE PROPOSITION THAT I THINK REALLY, YOU KNOW, SET OFF CONCERNS AMONGST ALL OF THE MEMBERS OF THE COURT. COULD YOU ADDRESS THAT AGAIN FOR US? IN TERMS OF THE FACT THAT THE VERY CONCEPT OF TAX INCREMENT FINANCES SEEMS TO INVOLVE A PLEDGE OF AD VALOREM TAXES, I.E. THE AMOUNT THAT IS INCREASED BY THE DEVELOPMENT OR WHATEVER GOES ON BUT THAT THAT VERY CONCEPT THEN MEANS THAT THE BONDS ARE TO BE PAYABLE FROM AD VALOREM TAXATION.
I WOULD IMAGINE THAT THERE IS A HYPOTHETICAL SITUATION THAT A LOCAL GOVERNMENT COULD COME UP WITH AND STATE THEY WILL SOMEHOW ATTEMPT TO FUND THE INCREMENT OF TAX DOLLARS, THE PROPERTY TAX INCREASE IN A TAX IN KREEMENT FINANCING PROGRAM, WITH NONAD VALOREM TAXES. I'M SURE SOMEBODY WILL ATTEMPT TO ARGUE THAT, HYPOTHETICALLY THAT COULD BE DONE.
YOU COULDN'T CALL IT TAX INCREMENT FINANCING, COULD YOU?
I GUESS YOU COULD CALL IT WHATEVER YOU DESIRE TO CALL IT BUT YOU HAVE THE ABILITY TO GO OVER -- FORM OVER SUBSTANCE AND SAY WHAT IS ACTUALLY TAKING PLACE AND I THINK THIS COURT'S CONCERN IS THEIR DOING INDIRECTLY WHAT THEY CAN'T DO DIRECTLY.
AT THE END OF THE DAY, WHETHER STATING THEY'LL USE AD VALOREM TAX REVENUES AND REGARDLESS OF WHETHER OR NOT THE BOND HOLDER CAN COMPEL ADDITIONAL AD VALOREM TAXES, AT THE END OF THE DAY, AD VALOREM TAX DOLLARS WILL BE USED TO REPAY LONG TERM DEBT. AND THAT THE CONSTITUTIONAL PROVISION IN 1968 IS BROADER THAN JUST THE ABILITY TO PRECLUDE BOND HOLDERS FROM COMPELLING --
BUT THE CONSTRUCT THAT WAS SET UP IN CITY OF MIAMI BEACH WAS THAT GOING BACK TO THE DIFFERENCE BETWEEN REVENUE BONDS AND GENERALABLEGATION BONDS, THAT THESE BONDS, BY REASON OF THE MEASURE OF WHAT WAS GOING TO BE PUT INTO THE TRUST, WAS THE VALUE -- THE INCREASE IN VALUE, THE IMPROVEMENTS WERE MORE AKIN TO REVENUE BOND THAN THEY WERE TO GENERAL OBLIGATION BONDS. ISN'T THAT THE THEORY?
IN MIAMI BEACH THERE WERE I THINK THREE FORMS OF REVENUE. YOU HAVE THE AD VALOREM TAXES THAT WERE GOING TO BE USED, AND ALSO A SALE AND LEASE PROCEEDS. HERE YOU DON'T HAVE ANY OF THAT. YOU HAVE AD VALOREM TAXES, THAT ARE SPECIFICALLY MENTIONED IN THE --
RIGHT. BUT THAT IS THE -- BECAUSE OF THE STRUCTURE OF THIS PARTICULAR BOND ISSUE, AS OPPOSED TO WHAT THE THEORY OF MIAMI BEACH WAS, IN INTERPRETING THIS PROVISION OF THE CONSTITUTION.
BUT JUSTICE WELLS, IT SAID IN MIAMI BEACH, CLEARLY STATED THIS WAS ESSENTIALLY LEGAL FICTION AND CALM IT WHATEVER YOU WANT, IT SYSTEMS AT THE END OF THE DAY, TAX REVENUES, TAX DOLLAR REVENUES ARE GOING TO BE USED TO REPAY THESE BONDS. SO YOU ARE ESSENTIALLY --
BUT HAVING AUTHORED A FEW DISSENTS MYSELF ALONG THE WAY, I RECOGNIZE THAT WASN'T A MAJORITY POSITION.
THAT'S RIGHT.
AND SO WE ARE DEALING WITH WHAT THE THEORY WAS AND WHETHER THAT WAS A REASONABLE INTERPRETATION OF THIS CONSTITUTION.
I WOULD SUBMIT THAT A UNANIMOUS DECISION ON THE COURT -- OF THE COURT IS THAT IS IT IS NOT A REASONABLE INTERPRETATION OF THE CONSTITUTIONAL PROVISION AT ISSUE.
CAN I ASK TWO QUICK QUESTIONS, IS THE LOGICAL, THOUGH WE DIDN'T SAY IT EXPRESSLY, HAVEN'T WE INDIRECTLY HELD THE COMMUNITY REDEVELOPMENT ACT UNCONSTITUTIONAL BECAUSE WITHOUT A REFERENDUM YOU CAN NOT HAVE THEN REDEVELOPMENT IN AN AREA, USING 163.
NO, MA'AM, I BELIEVE THERE IS NOTHING IN THE 163 STATUTE THAT PRECLUDES A REFERENDUM.
YOU AGREE THAT UNDER OUR DECISION IT WOULD BE REQUIRED.
ABSOLUTELY.
AFTER THE U.S. SUPREME COURT, THEY MAY NOT BE -- MIGHT NOT BE TOO MANY OF THESE KINDS OF DEVELOPMENTS ANY WAY, SO, YOU WOULD AGREE ESSENTIALLY ALL OF THE -- ANYTHING UNDER 163 WOULD REQUIRE A REFERENDUM.
YES, MA'AM. SO THE TAX INCREMENT FINANCING IS NOT BEING PRECLUDED. THERE IS AN ADDITIONAL STEP.
RIGHT. NOW THE OTHER QUESTION I HAVE AND THIS IS WHAT I THOUGHT IT SAYS PAYABLE FROM AD VALOREM TAXES AND TO ME, AND THIS IS REALLY A QUESTION, PHILOSOPHICALLY, IF YOU HAD A BOND THAT WAS PAYABLE FROM SPECIAL ASETTLES AND IF THE STRUCTURE OF THE BOND IN ONE YEAR, WHOEVER WAS THE -- PAYING THE BOND BACK, I'LL USE THIS YEAR, I'LL TAKE 10% OF -- AND USE THAT -- AD VALOREM TAXES TO TAI PAY IT BACK, UNDER OUR DECISION, THAT WOULD BE PROHIBITED, THAT IS, USING AD VALOREM TAXES, IN ANY WAY, AT ANY TIME, TO REPAY ANY BOND OBLIGATION NO MATTER HOW SMALL THE AMOUNT OF THE TAXES WOULD BE. WOULD THAT BE -- LOGICAL EXTENSION OF WHAT WE HELD IN THE CASE.
YES, MANAGEMENT. I READ YOUR DECISION TO SAY THAT, THAT IF YOU ARE -- A LOCAL GOVERNMENT DESIRES TO USE AD VALOREM TAX REVENUES, THERE MUST BE A REFERENDUM.
OKAY. NOW THE OTHER -- GOING BACK TO THE NARROWING OF THIS TELL THUS CONCERN OF YOUR CLIENT THAT LED HIM TO CHALLENGE THIS BOND SO WE CAN REALLY GET, AGAIN THE PUBLIC POLICY, WE THAT HE HAVE PUBLIC POLICY OF ALL OF THE MUNICIPALITIES AND UNFORTUNATELY THE VOTERS DIDN'T FILE -- MAKE IT ON YOUR BEHALF, WHAT THIS IS EVIL YOU OR YOUR CLIENTS SAW THAT LED IT TO -- HIM TO CHALLENGE THIS BOND?
I BELIEVE TWO THINGS, ONE, JUSTICE PARIENTE YOU MENTIONED DURING THE FIRST ORAL ARGUMENT ABOUT PERHAPS REVENUES WILL NOT BE ADEQUATE AND, THEREFORE, SERVICES IN OTHER PARTS OF THE COUNTY WOULD BE HARMED. BUT, MORE FUND -- FUNDAMENTALLY DR. STRAND FELT IT WASN'T FAIR, HIGHS A FISCAL CONSERVATIVE AND DOESN'T FEEL LOCAL GOVERNMENT SHOULD INCUR A LONG TERM DEBT AND IF THEY DO THE CITIZENS SHOULD HAVE YOU A RIGHT TO SAY YES OR NO, ESPECIALLY WHEN LOOKING AT LONG TERM DEBT THAT WILL BORDER THE CITIZENS OF ESCAMBIA COUNTY FOR DECADES AFTER THE ELECTED OFFICIALS ARE GONE. I THINK THAT IS REALLY THE CORE OF DR. STRAN'S CONCERNS.
DO YOU KNOW, BECAUSE NO ONE ELSE HAS BEEN ABLE TO TELL US THIS, BUT IN AROUND THE STATE, OF THE BONDS ISSUED, HOW MANY ARE LIKE ESCAMBIA COUNTY OR MOST OF THE -- OR ALL OF THE TAXES INCREMENT FINANCING BONDS DONE UNDER THE AUSPICES OF THE CRA.
I DON'T KNOW, MANAGEMENT. THEY ARE SAYING THERE WERE ALL THESE BONDS ISSUED AND NOT VALIDATED LIKE ESCAMBIA COUNTY BUT I HAVEN'T HEARD OF ANY THAT, JUST LIKE ESCAMBIA COUNTY.
ESCAMBIA COUNTY IS THE FIRST ONE I PERSONALLY HAVE HEARD OF THAT WAS OUTSIDE OF THE CRA CONTEXT, ATTEMPTING TO FUND --
PREVIOUS BOND CASES IN ESCAMBIA COUNTY, IF WE HAD APPROVED, WERE THERE NOT.
NOT IN ESCAMBIA COUNTY.
THE PEN, PEN CASE, WAS THAT ESCAMBIA COUNTY.
THAT.
YES, WASN'T FUNDING A ROAD.
WELL, AGAIN WHAT IT FUND I GUESS -- I'M OTHER THAN OUTSIDE OF PAK TAKING AN AREA AND SAYING, WE'RE GOING TO NOW -- IT HAD NO AD VALOREM TAXES, BECAUSE IT WAS A SLUM, BLIINGTEDED, DESERTED. SO ZERO WAS COMING IN. NOW, WE ARE GOING TO REDEVELOP IT AND THEREFORE, IT SEEMS FAIR, MAYBE EVEN TO A FISCAL CONSERVATIVE TO SAY, ALL RIGHT. WE'RE GOING TO HAVE THAT, IT WILL HAVE A -- AN EFFECT ON THE WHOLE CITY OR COUNTY, SO, THAT IS A GOOD THING, TO LET THAT LITTLE AREA, YOU KNOW, PAY BACK THE BOND FROM WHAT IS GENERATED. YOU SEE -- I MEAN, TO ME, I GUESS, THAT -- I SEE A DISTINCTION. STRUGGLING TO SEE HOW CONSTITUTIONALLY, YOU COULD STILL MAKE THE DISTINCTION, WITH THE BROADER LANGUAGE THAT WE HAVE BEEN TALK ABOUT.
THERE IS EVEN A FLAW IN THE ASSUMPTION, SOMEHOW PROPERTY VALUES WILL GO UP BECAUSE A LOCAL GOVERNMENT TARGETS SOMETHING FOR REDEVELOPMENT DOESN'T MEAN THE REDEVELOPMENT IS GOING TO WORK AND AS YOU DOESN'T MEAN BUSINESSES THAT ARE EXISTING IN OTHER PARTS OF THE COUNTY MIGHT THEN GO TO THE NEW AREA AND DEPRIVE OTHER AREAS OF THE COUNTY AND PROPERTY VALUES CAN GO DOWN AND HAVE SEEN THAT THE LAST COUPLE YEARS.
THAT IS THIS BOND HOLDERS -- THEY ARE THE ONES THAT BEAR THE RISK IF IT GOES DOWN.
FROM THE PERSPECTIVE OF BEING ABLE TO COMPEL LOCAL GOVERNMENT BUT IF A LOCAL GOVERNMENT DEFAULTS ON BONDS IT AFFECTS THE ABILITY OF THE LOCAL GOVERNMENT TO BORROW IN THE FUTURE WHICH WILL HAVE AN ADVERSE IMPACT ON ALL CITIZENS 0 THE LOCAL GOVERNMENT.
IS THERE ANY INFORMATION ANECDOTALLY AS TO HOW OFTEN THESE MUNICIPALITIES OR COUNTIES EVER DO REFERENDUMS IN ORDER TO PLEDGE OR USE THE AD VALOREM TAXATION POWER.
I DON'T HAVE ANY INFORMATION ON THAT, MA'AM.
I --
THIS KIND OF FINANCING IS REALLY GETTING AROUND THE WHOLE NOTION THAT THE CITIZENS SHOULD HAVE AN OPPORTUNITY TO VOTE ON THESE KINDS OF PROJECTS.
IN THE CRA -- CONTEXT THE LOCAL GOVERNMENTS ARE NOT USING A REFERENDUM BECAUSE OF THE STATUTORY FRAMEWORK THE COURT APPROVED IN CHAPTER 163. BUT I BELIEVE ESCAMBIA COUNTY WAS TRYING TO PUSH THE ENVELOPE FURTHER. AND I WOULD ALSO NOTE, ANECDOTALLY A LOT OF CITY MANAGERS AND CITY AND COUNTY MANAGERS AND ADMINISTRATORS ALSO COMMENTED IF THEY CAN'T SELL THE PROPOSED CAPITAL IMPROVEMENT TO THE CITIZENS OF THEIR LOCAL GOVERNMENT, THEN MAYBE IT'S NOT A GOOD THING FOR THE LOCAL GOVERNMENT TO BE DOING. AFTER ALL THESE THEY'RE TAX DOLLARS OF THE CITIZENS, NOT THE ELECTED OFFICIALS.
AND WITH OUR HELP YOU HAVE USED ALL OF YOUR TIME, THANK BOTH SIDES FOR YOUR PRESENTATIONS AND THOSE THAT FILED FRIENDS OF THE COURT BRIEFS, WE THANK YOU FOR THAT AND WE'LL TAKE THIS VERY SERIOUS MATTER UNDER CONSIDERATION, SINCE I HAVE BEEN ON THE COURT, THIS IS THE FIRST TIME WE HAVE HAD AN ACTUAL ORGAN ARGUMENT ON A REHEARING, THE COURT TAKE IT VERY SERIOUSLY AND WE THANK YOU FOR THE INFORMATION AND THE ARGUMENTS YOU HAVE PRESENTED. THANK YOU VERY MUCH.