Opinion
July 25, 1952.
Appeal from the Circuit Court, Broward County, George W. Tedder, J.
Phil O'Connell, West Palm Beach, and Frank S. Cannova, Hollywood, for appellants.
Thomas O. Berryhill, Fort Lauderdale, for appellee.
This is an appeal from a final decree of the Circuit Court in Broward County validating an issue of $630,000 of City of Fort Lauderdale Utility Tax Revenue Certificates, Series 1952. The certificates are to be issued for the purpose of paying the cost of an additional unit to and improving the Broward General Hospital, and also for the purpose of paying outstanding revenue certificates in the sum of $114,000 which were originally issued for the purpose of erecting the hospital.
The certificates are to be payable from the revenues derived by the City from the operation of the hospital after first paying the reasonable current expenses of operating, repairing and maintaining said hospital, and in addition to such revenues, to the extent necessary, the proceeds of the tax imposed by the City known as the Utility Tax.
The questions raised by the assignments of error were presented to the Court below by an answer filed by the appellants. The Circuit Judge found against the appellants and held that the appellee had ample authority and power under its charter, Chapter 24514, Sp.Laws of Florida, 1947, as amended, to issue the certificates, and that they would be legal, valid and binding obligations. The appellants urged in their brief and in oral argument two main assignments of error: first, that the appellee had no legislative authority to use the Utility Tax for the purpose of paying certificates issued to finance additions or improvements to the hospital and that only the revenues from the hospital could be so used, and, second, if it had such legislative authority, it could not be exercised, except by an election of freeholders as required by Section 6 of Article IX of the State Constitution, F.S.A.
The legislative authority for the City to acquire, own, maintain, lease, operate and manage a municipal hospital is not contained in a special provision in an amendment or in an addition to its general charter, but is embodied in the general charter, to-wit, Chapter 24514, Special Acts of 1947. All provisions of the charter with reference to this matter are of equal dignity, and should be construed together, giving full force and effect to each, if not in conflict with organic law. Section 2(b) of Article 3 of Part. 1 of said Chapter is as follows:
"Hospital. To acquire, own, maintain, lease, operate and manage a municipal hospital or hospitals in the City of Fort Lauderdale and all necessary appurtenances; to issue bonds or revenue certificates for the purpose of obtaining money to establish or improve such hospital facilities; to levy ad valorem taxes on all property within the City Limits for the purpose of operating and maintaining such hospital or hospital facilities; * * *." (Emphasis supplied.)
A part of the same charter with reference to revenue certificates is as follows:
"How Issued. The City Commission of City of Fort Lauderdale shall have the power to provide by resolution for the issuance and sale of revenue bonds and/or certificates to provide money to finance, acquire, construct, improve and operate any utility, facility, enterprise, work, undertaking or project which said City of Fort Lauderdale is authorized by law to acquire, construct, improve and operate, and to provide that such revenue bonds and/or certificates and interest thereon shall be payable from the revenue to be derived by the City from the operation of same, or a combination of any or all of such utilities, facilities, enterprises, works, undertakings, or projects. Such resolution may be adopted at a regular or special meeting by a majority vote of the City Commission and at the same meeting at which it is introduced, to take effect immediately upon its passage. It is determined and declared as a matter of legislative intent that no election to authorize the issuance of revenue bonds or certificates shall be necessary. * * *". Part 8, art. 3, § 1.
The section of the charter with reference to bonds has no bearing whatever upon the issuance of revenue certificates such as contemplated in this case. The section with reference to bonds is Article 2 of Part VIII of the Charter. This section provides that if bonds are to be issued, and ad valorem taxes are to be levied, the same must be voted on as required by Section 6 of Article IX of the State Constitution. It specifically excepts revenue bonds or certificates as authorized by the charter from the requirement of an election.
It is significant and controlling that the charter specifically authorizes what has been done in this case. The charter specifically authorizes the City to acquire, own, operate and manage a municipal hospital and to issue "revenue certificates for the purpose of obtaining money to establish or improve such hospital facilities". The section with reference to the issuance of revenue certificates contains full and complete authority for the City to issue and sell certificates "to provide money to finance, acquire, construct, improve and operate any utility, facility, enterprise, work, undertaking or project which said City of Fort Lauderdale is authorized by law to acquire, construct, improve and operate". The charter further provides that the City shall have the power to provide by resolution that such "certificates and interest thereon shall be payable from the revenue to be derived from the City from the operation of same, or a combination of any or all of such utilities, facilities, enterprises, works, undertakings, or projects."
This Court in the case of Schmeller v. City of Fort Lauderdale, Fla., 38 So.2d 36, construed this same charter of the City of Fort Lauderdale. In that case the City desired to issue revenue certificates to provide recreational facilities. The certificates were to be paid from the revenue received from the facilities and, in addition thereto, revenue from the Utility Tax. It was contended this could not be done without a vote of the freeholders. The certificates were validated by the Circuit Court and affirmed by this Court.
In the case of State v. City of Bartow, Fla., 48 So.2d 747, this Court held that the City had the authority under its charter to pledge a Utility Tax without a vote of the freeholders and that Section 6 of Article IX of the Constitution of the State did not apply.
The certificates in question are not general obligations of the City of Fort Lauderdale and they are not secured by a pledge of the general taxing power or any physical property or utility of the City.
The history and the development of financing the building or improving of facilities by the issuance of revenue certificates and the reason why the issuance of such certificates is not controlled by Section 6 of Article IX of the State Constitution was well stated in the opinion of Mr. Justice Whitfield in State v. City of Tampa, 148 Fla. 6, 3 So.2d 484.
As a secondary question it is seriously argued by the appellants that to the extent of $114,000 the certificates to be issued are refunding bonds and that no additional security can be pledged for the benefit of the holders of these outstanding bonds which are to be refunded. The fallacy of the argument of the appellants is clear when an examination of the record shows that the real purpose of including the $114,000 of outstanding bonds in the new issue is not to give the holders of these outstanding bonds additional security but to secure not only enough money to make the addition to the hospital but also enough to pay in full these outstanding bonds. The cases cited by the appellants are not applicable in this case because in each of them new bonds with additional security were to be given to replace the old bonds.
The resolution authorizing the issuance of the certificates in question duly adopted by the City, which is a part of the record in this case, shows that there was an original issue of $150,000 of revenue certificates issued, the proceeds of which were used to erect the hospital. $36,000 has been paid on the old certificates, leaving outstanding $114,000. The resolution then recites that the $114,000 is included in order to avoid the necessity of issuing such certificates as Junior Certificates and subordinate to those outstanding, to obtain a more advantageous price for the new certificates, and in order to decrease the rate of interest borne by the outstanding certificates.
We have carefully considered every assignment of error and each is without merit. The City has full and complete power and authority to issue and sell the certificates involved in this case and to pay the interest and principal thereon from the sources of revenue as set forth in the record. The certificates are not bonds, and Section 6 of Article IX of the State Constitution will not be violated by the issuance and sale of such certificates.
Affirmed.
SEBRING, C.J., and ROBERTS, J., and FUTCH, Associate Justice, concur.