Case Title: Miccosukee Tribe of Indians of Florida, Etc. v. South Florida Water Management District, Etc., Et Al.

Citation: 

Docket Number: 

State: florida

Court: Florida Supreme Court

Date: 2010-11-18T00:00:00Z

Document:
Supreme Court of Florida 
____________ 
 
No. SC09-1817 
____________ 
 
MICCOSUKEE TRIBE OF INDIANS OF FLORIDA, etc., 
Appellant, 
 
vs. 
 
SOUTH FLORIDA WATER MANAGEMENT DISTRICT, etc., et al., 
Appellees. 
 
____________ 
 
No. SC09-1818 
____________ 
 
NEW HOPE SUGAR COMPANY, et al., 
Appellants, 
 
vs. 
 
SOUTH FLORIDA WATER MANAGEMENT DISTRICT, etc., et al., 
Appellees. 
 
[November 18, 2010] 
CORRECTED OPINION 
 
QUINCE, J. 
This case is before the Court on appeal from a circuit court judgment 
validating a proposed bond issue.  We have jurisdiction.  See art. V, § 3(b)(2), Fla. 
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Const.  For the reasons expressed below, we affirm in part and reverse in part the 
circuit court‘s judgment. 
FACTUAL AND PROCEDURAL HISTORY 
In October 2008, the South Florida Water Management District (the 
District), filed a complaint in the Fifteenth Judicial Circuit seeking validation of 
certificates of participation (COPs), pursuant to Chapter 75 of the Florida Statutes, 
in order to purchase land owned by the United States Sugar Corporation for the 
purpose of Everglades restoration.  The court issued a notice and order to show 
cause and scheduled a hearing for December 12, 2008.  After the District filed a 
supplemental complaint, the trial court issued an amended notice and order to show 
cause, which retained the December 12 hearing date.  The state attorneys for each 
of the judicial circuits within the District‘s jurisdictional boundaries (Ninth, Tenth, 
Eleventh, Fifteenth, Sixteenth, Seventeenth, Nineteenth, and Twentieth Circuits) 
responded to the complaint on various dates.  On December 11, 2008, the New 
Hope Sugar Company and Okeelanta Corporation (hereinafter collectively referred 
to as New Hope) served an answer and a memorandum in opposition to the 
complaint.  The parties appeared before the court on December 12 and the court 
granted the District‘s motion to continue the hearing.  The court subsequently 
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entered a second amended notice and order to show cause, rescheduling the bond 
validation proceeding for February 6, 2009. 
In January 2009, several other parties appeared in the cause.  On January 9, 
2009, United States Sugar Corporation (U.S. Sugar) served a notice of appearance 
and motion to intervene as a party defendant.  On January 12, 2009, Dexter 
Lehtinen, already a defendant in his individual capacity, served a notice of 
appearance and answer on behalf of the Miccosukee Tribe of Indians of Florida 
(the Tribe).  Other individuals and the Concerned Citizens of Glades also filed 
notices of appearance and answers to the complaint.  The National Audubon 
Society and Florida Audubon Society served a notice of appearance and a notice of 
intervention.  Accelerated discovery proceedings took place between December 
2008 and February 2009.  Various motions and memoranda of law were filed by 
the parties in February 2009. 
The validation hearing was held over a number of days in February, March, 
July, and August of 2009.  Counsel appeared on behalf of the District, New Hope, 
the Tribe, the state attorneys, Concerned Citizens of Glades, the Audubon Society, 
Nathaniel P. Reid, and U.S. Sugar.  In the midst of these proceedings, various 
parties filed motions to abate the proceedings and reopen them for the court to 
consider new evidence regarding a modification of the transaction, which the court 
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granted.  The parties engaged in more expedited discovery and filed more motions 
during this time.  
On August 26, 2009, the circuit court issued its final judgment, validating 
the COPs in the amount of $650 million, an amount sufficient to purchase 73,000 
acres of property from U.S. Sugar.  The order contained eight pages of factual 
findings and sixteen pages of legal conclusions.  The court found that the District‘s 
responsibilities include restoring and cleaning up the Everglades ecosystem; the 
District‘s Governing Board had adopted resolutions amending the District‘s five-
year plan to include acquisition of the U.S. Sugar lands, establishing a master 
lease-purchase program, and authorizing the issuance of COPs to finance these 
transactions; all of the meetings related to this matter had been open, public, and 
duly noticed.  The court also found that under the master lease-purchase 
agreement, the District will purchase the property and ground lease the property to 
a nonprofit Leasing Corporation.  In turn, the Leasing Corporation will lease back 
the property to the District, which will manage the property and make 
improvements to it.  Under the agreement, the District must determine annually 
whether to appropriate funds to pay the Leasing Corporation for the annual rental 
of the property, and the District regains possession of the property at the end of the 
ground lease.  Additionally, a Master Trust Agreement was executed to issue COPs 
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and to hold the proceeds from the COPs in trust to pay the costs of acquiring, 
constructing, and installing facilities on the sites.  The COPs are secured by the 
lease payments.   The court concluded that the District has the legal authority to 
issue the COPs, that the COPs will serve a legal purpose (water storage and 
treatment), and that the issuance of the COPs complies with the requirements of 
law. 
In June 2009, pursuant to sections 120.569 and 120.57, Florida Statutes 
(2009), and rule 28-106.201 of the Florida Administrative Code, New Hope 
requested a formal administrative hearing challenging the District‘s purchase of 
land from U.S. Sugar.  Later, the Tribe filed a similar request.  The District 
consolidated the parties‘ separate petitions for administrative hearing and 
dismissed them with prejudice for lack of standing.  Both New Hope and the Tribe 
filed notices of administrative appeal, requesting that the district court grant them a 
formal hearing for their administrative law claim.  The District filed an all writs 
petition, asking this Court to transfer the administrative appeals cases from the 
district court because the cases deal with the same issues presented in the bond 
validation proceedings.  We granted the petition and transferred the cases.1 
                                         
1.  We consolidated the two administrative cases and reviewed them without 
oral argument.  See New Hope Sugar Co. v. South Fla. Water Mgmt. Dist., No. 
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In September 2009, the Tribe and New Hope filed separate notices of appeal 
regarding the bond validation proceeding.  We granted the District‘s unopposed 
motion to consolidate the two bond validation appeals.  We heard oral argument 
from the parties in April 2010. 
ISSUES AND ANALYSIS 
The parties raise a number of issues regarding the validity of the COPs, 
including:  whether the trial court‘s findings of fact are complete; whether the trial 
court should have considered the economic feasibility of the project to be funded 
by the COPs; whether the COPs serve a public purpose; whether the transaction 
violates various constitutional provisions; whether the proposed financing structure 
is legal; whether COPs may be issued to purchase an option to buy certain property 
in the future; and whether the District may legally convey purchased lands to 
municipalities.   
Judicial inquiry in a bond validation proceeding, both at the trial court and 
this Court, is limited to determining:  (1) whether a public body has the authority to 
issue the subject bonds; (2) whether the purpose of the obligation is legal; and (3) 
whether the authorization of the obligation complies with the requirements of law.  
                                                                                                                                   
SC10-330 (Fla. Nov. 18, 2010), and Miccosukee Tribe v. South Fla. Water Mgmt. 
Dist., No. SC10-336 (Fla. Nov. 18, 2010). 
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See City of Gainesville v. State, 863 So. 2d 138, 143 (Fla. 2003).  This Court 
reviews the ―trial court‘s findings of fact for substantial competent evidence and its 
conclusions of law de novo.‖  Id. (citing Panama City Beach Cmty. Redev. Agency 
v. State, 831 So. 2d 662, 665 (Fla. 2002), and City of Boca Raton v. State, 595 So. 
2d 25, 31 (Fla. 1992)).  The final judgment of validation comes to this Court 
clothed with a presumption of correctness.  See Strand v. Escambia County, 992 
So. 2d 150, 154 (Fla. 2008).  Moreover, the appellants have the burden of 
demonstrating that the record and evidence fail to support the lower court‘s 
conclusions.  See Wohl v. State, 480 So. 2d 639, 641 (Fla. 1985).   We consider the 
issues raised within this legal framework. 
1. Findings of Fact and Economic Feasibility 
The Tribe and New Hope argue that the factual findings made by the trial 
court in its order of final judgment are incomplete because the trial court failed to 
consider the economic feasibility of the project and because the court failed to 
recognize that the proceeds of the COPs will be used to purchase 73,000 acres 
from U.S. Sugar and not to finance infrastructure projects on the land.   
In its conclusions of law in the final judgment, the trial court recognized that 
―the economic feasibility of the project is outside of its scope of review.‖  The 
court acknowledged that the Tribe and New Hope had made strong arguments that 
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the project is economically impossible.  The court also questioned the wisdom of 
seeking this large amount of COPs during the current economic times.  However, 
the court stated that it was ―bound by precedent which instructs that economic 
feasibility is collateral to bond validation proceedings‖ and cited a number of 
previous decisions by this Court that stand for this proposition.  Ultimately, the 
court stated that it ―cannot and does not base its decision on whether the District 
will have the financing to actually complete a project of this magnitude.‖ 
This Court has repeatedly explained that  
the fiscal feasibility of a revenue project is an administrative decision 
to be concluded by the business judgment of the issuing agency.  Such 
problems as the advisability of the project and its income potential, 
must be resolved at the executive or administrative level.  They are 
beyond the scope of judicial review in a validation proceeding. 
 
State v. Manatee County Port Auth., 171 So. 2d 169, 171 (Fla. 1965).  In Town of 
Medley v. State, 162 So. 2d 257, 258-59 (Fla. 1964), we explained that the 
reasonableness and economic feasibility of the financing plan were ―the 
responsibility and prerogative of the governing body of the governmental unit in 
the absence of fraud or violation of legal duty.‖   See also Washington Shores 
Homeowners‘ Ass‘n v. City of Orlando, 602 So. 2d 1300, 1302 (Fla. 1992) (stating 
that homeowners‘ complaint as to advisability of project is ―collateral to‖ and 
―beyond the scope of‖ bond validation proceedings); State v. City of Sunrise, 354 
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So. 2d 1206, 1210 (Fla. 1978) (explaining that the Court cannot reach the question 
of whether the bond revenue plan is fiscally sound or whether the financing 
method was wise).   
This Court has adhered to these limitations over the years.  For example, in 
State v. School Board of Sarasota County, 561 So. 2d 549, 553 (Fla. 1990), we 
stated that ―[q]uestions of business policy and judgment are beyond the scope of 
judicial interference and are responsibility of the issuing governmental units.‖  
Similarly, in State v. City of Daytona Beach, 431 So. 2d 981, 983 (Fla. 1983), we 
stated that ―questions concerning the financial and economic feasibility of a 
proposed plan are to be resolved at the executive or administrative level and are 
beyond the scope of judicial review in a validation proceeding.‖ 
The rationale that underlies the limited judicial review in bond validation 
cases was explained by this Court in Town of Medley,162 So. 2d at 259: 
[T]he courts do not have the authority to substitute their judgment for 
that of officials who have determined that revenue certificates should 
be issued for a purpose deemed by them to be in the best interest of 
those whom they represent. . . .  
A contrary holding would make an oligarchy of the courts 
giving them the power in matters such as this to determine what in 
their opinion was good or bad for a city and its inhabitants thereby 
depriving the inhabitants of the right to make such decisions for 
themselves as is intended under our system of government. 
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Indeed, ―[t]he function of a validation proceeding is merely to settle the basic 
validity of the securities and the power of the issuing agency to act in the premises.  
Its objective is to put in repose any question of law or fact affecting the validity of 
the bonds.‖  Manatee County Port Auth., 171 So. 2d at 171.   
New Hope argues that there was no administrative determination of the 
economic feasibility of this plan.  However, the Governing Board passed three 
separate resolutions authorizing this project, argued the merits of the project at 
various board meetings, and heard reports by District staff at a number of meetings 
and workshops.  A reviewing court cannot go behind the resolutions of the 
Governing Board which authorized this project.  Thus, we agree with the trial 
court‘s conclusion that economic feasibility is beyond the scope of judicial review 
in a bond validation proceeding. 
2. Public Purpose 
The Tribe and New Hope argue that the purpose of the obligation is not legal 
because the proceeds of the COPs will not be used for the purposes delineated by 
the District, but merely to buy land.  They also argue that the public purpose 
cannot be discerned here because the District does not have specific projects 
planned for the various parcels of land to be acquired.   
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―This Court has held that ‗legislative declarations of public purpose are 
presumed valid and should be considered correct unless patently erroneous.‘‖  
Strand v. Escambia County, 992 So. 2d 150, 156 (Fla. 2008) (quoting Boschen v. 
City of Clearwater, 777 So. 2d 958, 966 (Fla. 2001)).  In its resolution approving 
the purchase of the land from U.S. Sugar and the issuance of the COPs, the 
District‘s Governing Board stated that the acquisition of the land 
will serve a public purpose by increasing the water storage capability 
of the District to reduce harmful freshwater discharges from Lake 
Okeechobee to Florida coastal rivers and estuaries; improving the 
timing and quality of delivery of cleaner water to the Everglades 
ecosystem; preventing phosphorous from entering the Everglades 
ecosystem; eliminating the need for ―back-pumping‖ water into Lake 
Okeechobee and improving the sustainability of agriculture and green 
energy production all as more particularly described in staff report 
entitled Summary of Benefits of the USSC Land Acquisition attached 
hereto as Exhibit A.   
Resolution No. 2008-1027, at 3, Governing Board of the South Florida Water 
Management District (Oct. 9, 2008).  The Summary of Benefits referred to in the 
Governing Board‘s resolution was authored by two District directors and the 
District‘s chief scientist.  This report goes into great detail as to each of the 
benefits listed as a public purpose in the Governing Board‘s resolution. 
Additionally, the Legislature has declared that it is ―necessary for the public 
health and welfare that water and water-related resources be conserved and 
protected‖ and that the ―acquisition of real property for this objective shall 
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constitute a public purpose for which public funds may be expended.‖  § 
373.139(1), Fla. Stat. (2008).  The Legislature has also given water management 
districts the authority to ―issue revenue bonds to finance the undertaking of any 
capital or other project for the purposes permitted by the State Constitution‖ and 
―to pay the costs and expenses incurred in carrying out the purposes of this 
chapter.‖  § 373.584(1), Fla. Stat. (2008).  In fact, the Legislature has provided that  
[t]he powers and authority of districts to issue revenue bonds . . . shall 
be coextensive with the powers and authority of municipalities to 
issue bonds under state law.  The provisions of this section constitute 
full and complete authority for the issuance of revenue bonds and 
shall be liberally construed to effectuate its purpose.   
 
§ 373.584(2), Fla. Stat. (2008). 
For purposes of section 373.584, the definition of a project is broadly 
defined as 
a governmental undertaking approved by the governing body of a 
water management district and includes all property rights, easements, 
and franchises relating thereto and deemed necessary or convenient 
for the construction, acquisition, or operation thereof, and embraces 
any capital expenditure which the governing body of a water 
management district shall deem to be made for a public purpose, 
including the refunding of any bonded indebtedness which may be 
outstanding on any existing project. 
§ 373. 584(4)(b), Fla. Stat. (2008).  ―Works of the district‖ are also broadly defined 
in chapter 373 as ―those projects and works, including, but not limited to, 
structures, impoundments, wells, streams, and other watercourses, together with 
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the appurtenant facilities and accompanying lands, which have been officially 
adopted by the governing board of the district as works of the district.‖  § 
373.019(26), Fla. Stat. (2008). 
Thus, the District has authority to acquire lands to further the objective of 
conserving and protecting water and water-related resources.  This objective has 
been deemed a ―public purpose‖ by the Legislature.  The District can also issue 
revenue bonds to finance the costs of carrying out its responsibilities and projects 
under chapter 373.  Its authority to issue such bonds is coextensive with that of 
municipalities and is to be liberally construed so that it can serve its purpose.  The 
lands upon which the District‘s projects reside are part of its statutorily defined 
works.  In fact, it would be impossible for the District to construct its projects 
without first acquiring the accompanying lands.  These statutes provide ample 
evidence to satisfy the first prong of our review, i.e., whether the District has the 
authority to issue the subject bonds.  See City of Gainesville, 863 So. 2d at 143. 
The Appellants cite this Court‘s decision in State v. Suwannee County 
Development Authority, 122 So. 2d 190 (Fla. 1960), in support of their argument 
that no public purpose has been proven.  In Suwannee County, the Development 
Authority sought validation of revenue certificates for the purchase of land and 
construction of buildings that would be leased to private businesses.  Id. at 191.  
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There were no definite plans as to what land would be purchased with the proceeds 
from the sale of the certificates, what buildings would be constructed, or what 
firms would lease the buildings.  Id.   The Development Authority intended to 
devise the program after the validation.  Id.  On review, this Court explained that in 
order to determine whether an agency may lawfully expend the bond proceeds for 
the contemplated purpose, the issuing governmental agency should set forth in the 
petition for validation ―a description of the purpose for which the proceeds are to 
be used, which description should be sufficiently detailed to enable a member of 
the public and the state to determine whether the issuing agency can lawfully 
expend public monies therefor.‖  Id. at 193.  Thus, ―petitions for validation of 
bonds and revenue certificates should set forth in reasonable detail the purpose or 
purposes which will be accomplished with the proceeds.‖  Id. at 194. 
The complaint for validation and two supplements to the complaint that were 
filed in this case describe the land to be acquired with the proceeds of the COPs 
and the structure of the financing agreement.  The complaint also states that the 
land will be used to further the District‘s mandate to restore natural resources.  
Exhibits filed with the complaint include the Governing Board‘s resolutions which 
authorize the land purchase, the issuance of COPs, and the financing structure; a 
report detailing the benefits to be derived from the land acquisition; a number of 
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reports relating to the District‘s projects and the Everglades restoration; and copies 
of the master lease-purchase agreement, the master trust agreement, the ground 
leases to be used for the leases between the District and the Leasing Corporation, 
the assignment agreement between the Leasing Corporation and the named trustee, 
and the COPs to be issued.  In all, well over 500 pages of exhibits were filed with 
the complaint for validation. 
This is a far cry from the Suwannee County case,where the complaint did 
not specify what land would be purchased, what buildings would be constructed, 
and to whom the buildings would be leased.  Here, the 73,000 acres have been 
identified.  The land will be leased back to U.S. Sugar, which will be required to 
maintain the land as specified in the ground lease and to use best practices in its 
farming.  The land will eventually house various water storage and treatment 
projects.   At the July 13, 2009, evidentiary hearing, the District‘s Executive 
Director specified the various projects and uses for each parcel of the 73,000 acres.  
In fact, it was the lack of such projects or planned uses for the remaining 107,000 
acres that caused the trial court to deny validation of COPs for the purchase of 
those additional acres. 
This Court addressed a similar challenge based on the fact that ―plans and 
specifications of the proposed improvements were not offered in evidence by‖ the 
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governmental entity seeking validation in Rianhard v. Port of Palm Beach District, 
186 So. 2d 503, 505 (Fla. 1966).  In that case, we concluded that the introduction 
of the supporting resolution, which ―sufficiently describe[d] the purposes for which 
the funds derived from the sale of the certificates [would] be expended,‖ was ―all 
that was necessary to justify validation.‖  Id.  We reiterated this holding in Strand, 
when we stated that ―the admission of a resolution may be sufficient evidence 
justifying a bond validation.‖  Strand, 992 So. 2d at 156.  There, the County 
offered into evidence its ordinance and resolution authorizing bonds for a road 
construction project and presented testimony concerning the purpose of the project 
and the financing mechanism.  See id. at 155.  We concluded that these legislative 
findings were ―competent, substantial evidence sufficient to support the final 
judgment.‖  Id. at 156. 
The same can be said in the instant case, where the trial court conducted nine 
days of evidentiary hearings resulting in thousands of pages of transcripts, heard 
testimony from numerous expert witnesses, and considered numerous evidentiary 
materials.  The transcript contains numerous passages in which the trial judge 
questions witnesses to gain more information and asks the parties to clarify various 
issues.  The trial court‘s order of final judgment is comprehensive and well-
documented.  The arguments by the Appellants here do not meet the burden of 
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―demonstrat[ing] from the record the failure of the evidence to support the 
[government body‘s] and the trial court‘s conclusions.‖  Wohl v. State, 480 So. 2d 
639, 641 (Fla. 1985). The trial court‘s final judgment of validation comes to this 
Court ―clothed with a presumption of correctness.‖  Strand, 992 So. 2d at 154 
(citing Wohl, 480 So.2d at 641).  We conclude that there is competent substantial 
evidence in the record to support the finding of a public purpose. 
3. Constitutional Challenges 
The Tribe and New Hope argue that the transaction is not valid because it 
does not comply with several provisions of the Florida Constitution.  These include 
the prohibition in article VII, section 10 against using the state‘s taxing power or 
credit to aid a private entity or person; the requirement of article VII, section 12 
that voters must approve bonds or COPs which are payable from ad valorem 
taxation and mature more than twelve months after issuance; and the requirement 
in article VII, section 11 that bonds issued by the state or its agencies must first be 
approved by the Legislature through an act relating to appropriations or by general 
law.  For the reasons explained below, we conclude that the instant transaction 
does not violate any of these constitutional provisions. 
a. Public Purpose Test of Article VII, Section 10 
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Article VII, section 10 of the Florida Constitution provides in pertinent part:  
―Neither the state nor any county, school district, municipality, special district, or 
agency of any of them, shall . . . give, lend or use its taxing power or credit to aid 
any corporation, association, partnership or person . . . .‖  The Appellants contend 
that the land acquisition in this case violates this constitutional provision because 
the District is buying lands that will then be leased back to U.S. Sugar for a 
number of years, therefore not meeting the paramount public purpose test. 
The basic test for determining whether an expenditure of public funds 
violates this section of the Florida Constitution is whether such expenditure is 
made to accomplish a public purpose.  If the District has used either its taxing 
power or pledge of credit to support issuance of bonds, the purpose of the 
obligation must serve a paramount public purpose and any benefits to a private 
party must be incidental.  See State v. JEA, 789 So. 2d 268, 272 (Fla. 2001) (citing 
State v. Osceola County, 752 So. 2d 530, 536 (Fla. 1999)).  If the District has not 
exercised its taxing power or pledged its credit to support the bond obligation, the 
obligation is valid if it serves a public purpose.  See id. at 272; Northern Palm 
Beach County Water Control Dist. v. State, 604 So. 2d 440, 441-42 (Fla. 1992).  
Incidental private benefit from a public revenue bond issue is not sufficient to 
negate the public character of the project.  JEA, 789 So. 2d at 272. 
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As used in article VII, section 10, ―credit‖ means ―the imposition of some 
new financial liability upon the State or a political subdivision which in effect 
results in the creation of a State or political subdivision debt for the benefit of 
private enterprises.‖  Jackson-Shaw Co. v. Jacksonville Aviation Auth., 8 So. 3d 
1076, 1095 (Fla. 2008) (quoting Nohrr v. Brevard County Educ. Facilities Auth., 
247 So. 2d 304, 309 (Fla. 1971)).  This Court has explained that the lending of 
credit means: 
[T]he assumption by the public body of some degree of direct or 
indirect obligation to pay a debt of the third party.  Where there is no 
direct or indirect undertaking by the public body to pay the obligation 
from public funds, and no public property is placed in jeopardy by a 
default of the third party, there is no lending of public credit.    
 
Id. (quoting State v. Housing Fin. Auth., 376 So. 2d 1158, 1160 (Fla. 1979)).  
Under this definition, we conclude that the COPs in this case do not contemplate a 
pledge of the District‘s credit, and that only a public purpose, not a paramount 
public purpose, need be shown. 
In its final judgment, the trial court concluded that the acquisition of the land 
would serve the public purpose of water storage and treatment.  The trial court 
noted that the Governing Board had voted to approve the acquisition after much 
debate and that District witnesses had outlined, parcel by parcel, the immediate and 
future benefits to be gained by the land acquisition.  The court found that the 
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following benefits would be achieved:  storage and treatment of water before it is 
pumped into Lake Okeechobee; additional storage and treatment facilities that will 
work in conjunction with Comprehensive Everglades Restoration Projects basins; 
and land that will be valuable for future land swaps. 
Examples of valid ―public purposes‖ that have been recognized by this Court 
rather broadly include an on-site road improvement project within a unit of a water 
control district, see Northern Palm Beach County Water Control Dist., 604 So. 2d 
at 443, the construction of an office building for a multistate insurance company, 
see Linscott v. Orange County Indus. Dev. Auth., 443 So. 2d 97 (Fla. 1983), and 
the purchase of mortgages from private homeowners to alleviate shortages in 
public housing, see State v. Housing Fin. Auth., 376 So. 2d 1158 (Fla. 1979).  
 ―Under the constitution of 1968, it is immaterial that the primary 
beneficiary of a project be a private party, if the public interest, even though 
indirect, is present and sufficiently strong.‖  State v. Housing Fin. Auth., 376 So. 
2d at 1160.  Further, public ownership of a project to be funded by bond revenues 
is a ―significant factor in a finding of public purpose.‖  Northern Palm Beach 
County Water Control Dist., 604 So. 2d at 443 (citing Orange County Indus. Dev. 
Auth. v. State, 427 So. 2d 174, 179 (Fla. 1983)). 
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In the instant case, the District will retain title to the lands acquired.  The 
land will be leased back to the seller U.S. Sugar to continue its agricultural 
operations, which will generate revenues and maintain the land until the District 
can construct the infrastructure projects required for water storage and treatment 
for Everglades restoration.  Because we conclude that the purchase of the property 
serves the public purposes of furthering Everglades restoration and the 
management of water resources, the requirements of article VII, section 10 are 
satisfied. 
b. Voter Referendum Requirement of Article VII, Section 12 
Article VII, section 12 of the Florida Constitution, provides:  
Local bonds.—Counties, school districts, municipalities, special 
districts and local governmental bodies with taxing powers may issue 
bonds, certificates of indebtedness or any form of tax anticipation 
certificates, payable from ad valorem taxation and maturing more than 
twelve months after issuance only:  
(a) to finance or refinance capital projects authorized by law 
and only when approved by vote of the electors who are owners of 
freeholds therein not wholly exempt from taxation; or  
(b) to refund outstanding bonds and interest and redemption 
premium thereon at a lower net average interest cost rate. 
The trial court concluded that the referendum requirement of article VII, 
section 12 does not apply in this case because the District‘s obligation to make the 
lease payments is an annual obligation that does not extend more than twelve 
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months and the lease payments are not payable from ad valorem taxation within 
the meaning of the constitutional provision.  The trial court found that the 
arguments advanced by the Tribe and New Hope ignored the plain language of the 
Florida Constitution, the relevant Florida Statutes, the governing resolution and 
agreements, and this Court‘s recent decision in Strand v. Escambia County, 992 
So. 2d 150, 157-59 (Fla. 2008), in which this Court reaffirmed its long-held 
distinction between pledges of ad valorem taxing power and the use of ad valorem 
tax revenues.  We agree. 
In State v. Miami Beach Redevelopment Agency, 392 So. 2d 875 
(Fla.1980), we explained that a referendum is not required by article VII, section 
12 when there is no direct pledge of the ad valorem taxing power.  Although 
contributions may come from ad valorem tax revenues, ―[w]hat is critical to the 
constitutionality of the bonds is that, after the sale of the bonds, a bondholder 
would have no right, if [funds] were insufficient to meet the bond obligations . . . 
to compel by judicial action the levy of ad valorem taxation.‖  Id. at 898.  Where a 
governing body is not obliged and cannot be compelled to levy any ad valorem 
taxes, then the obligation is not ―payable from ad valorem taxation‖ for purposes 
of article VII, section 12, and referendum approval is not required.  Id.; see also 
State v. School Bd. of Sarasota County, 561 So. 2d 549 (Fla. 1990) (reaching same 
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conclusion as to validity of bonds and COPs to be issued by several school boards 
for the construction of schools).  We recently reaffirmed our adherence to this 
reasoning in Strand, when we rejected Strand‘s motion on rehearing asking us to 
recede from the decision in Miami Beach as it relates to the meaning of ―payable 
from ad valorem taxation‖ in article VII, section 12.  Strand, 992 So. 2d at 157-59.   
The trial court found that the District has not pledged its ad valorem taxing 
powers to pay any sum under the lease agreement or any of the leases, cannot be 
compelled to levy any ad valorem tax to pay the lease payments, and cannot be 
compelled to pay any lease payments beyond one year.  We agree.  Under the 
terms of the Master Lease Purchase Agreement, the basic lease payments are 
payable only from funds appropriated by the Governing Board and are not payable 
―from any source of taxation.‖   The District has not pledged its ―full faith and 
credit . . . for payment of such sums.‖  Further, the agreement provides that 
―[n]either the [Leasing] Corporation, the Trustee, nor any certificate holder may 
compel the levy of ad valorem taxes by the Governing Board to pay the lease 
payments.‖  The District‘s Chief Financial Officer also testified that the way the 
deal was structured, none of the certificate holders could ever compel the District 
to levy ad valorem taxes in order to pay the District‘s obligations.  Under the 
nonappropriation clause of the agreement, the obligations and liabilities are 
- 24 - 
 
dependent upon appropriations being made by the Governing Board.   
Additionally, the Governing Board is free to terminate the lease annually without 
further obligation and the certificate holders are limited to lease remedies.  The 
failure of the Governing Board to appropriate the sufficient funds for lease 
payments does not constitute a default, does not require payment of a penalty, and 
does not limit the District‘s right to purchase or use facilities similar in function.  
Instead, the nonappropriation of the funds results in the termination of the lease, 
requiring the District to surrender possession of the facilities to the trustee for the 
remainder of the term of the ground lease.  However, the fee title to the property 
remains in the name of the Governing Board.  Thus, the terms of the agreement 
maintain the District‘s ―full budgetary flexibility.‖  State v. Brevard County, 539 
So. 2d 461, 464 (Fla.1989); see also Sarasota County, 561 So. 2d at 553 (finding 
that ―annual renewal option preserves the boards‘ full budgetary flexibility‖). 
The Tribe and New Hope assert that this nonappropriation clause is illusory 
because the District cannot practically walk away from its obligation.  They cite 
Frankenmuth Mutual Insurance Co. v. Magaha, 769 So. 2d 1012 (Fla. 2000), and 
Volusia County v. State, 417 So. 2d 968, 969 (Fla. 1982), in support of this 
argument.  However, we find both cases to be distinguishable from the instant 
case.   
- 25 - 
 
Frankenmuth involved a master lease agreement for computer equipment to 
be used for county payroll and central data processing for the county offices.  In 
addition to a nonappropriation clause that terminated the lease if the funding 
authority failed to appropriate funds to make the lease payments, the agreement 
also contained a nonsubstitution clause, providing that the county could not 
purchase or rent substitute computer equipment for two years in the event of 
nonappropriation.  See Frankenmuth, 769 So. 2d at 1014-18.  Although the 
agreement stated that there was no pledge of ad valorem taxes by the county and 
the county could not be compelled to appropriate funds to make the lease 
payments, we concluded that the nonsubstitution clause rendered the 
nonappropriation clause illusory by compelling the county to make the lease 
payments or suffer the penalty of losing the computer equipment and not being 
able to substitute other computer equipment for two years.  See id. at 1024.  Thus, 
the county was ―morally compel[led] . . . to pledge ad valorem taxes to fulfill the 
obligations of the lease.‖  Id. at 1026. 
Similarly, in Volusia County, 417 So. 2d at 972, the county pledged all 
available revenues and covenanted ―to do all things necessary to continue receiving 
the various revenues‖ pledged in bonds for the construction of a new jail.  We 
- 26 - 
 
concluded that these two pledges would ―inevitably lead to higher ad valorem 
taxes during the life of the bonds, which amounts to the same thing.‖  Id. 
Here, the master lease agreement contains a nonappropriation clause that 
gives the District the right to terminate the lease on an annual basis if the 
Governing Board should decide not to appropriate the funds for the lease.  As this 
Court explained in Frankenmuth, such nonappropriation or nonrenewal clauses are 
―essential to prevent long-term municipal financing arrangements from being 
classified as debt under state law, thus triggering state-law requirements such as 
voter referendum.‖  769 So. 2d at 1024 (quoting Frankenmuth Mut. Ins. Corp. v. 
Magaha, 10 Fla. L. Weekly Fed. D340, D341 (N.D. Fla. Aug. 30, 1996)).  Unlike 
Volusia County, there are no further pledges as to the source of revenues or efforts 
to maintain revenues.  Unlike Frankenmuth, the only the penalties for 
nonappropriation are normal lease penalties, i.e., the District loses possessory 
interest for the term of the lease and this interest may be re-leased for the benefit of 
the certificate holders.  At the termination of the lease, the District regains 
possession and it always retains title to the land.  We conclude that this structure 
maintains the District‘s budgetary flexibility and thus does not require a 
referendum under article VII, section 12.   
- 27 - 
 
However, the arrangement could run afoul of this constitutional provision if 
the District should include under the master lease any lands that have been 
financed through a pledge of its ad valorem taxing power.  Under Resolution 2009-
500A of the Governing Board, the ―Certificates [of Participation] will be payable 
from basic lease payments to be made by the District under the initial lease 
Schedule related to the lease of the US Sugar Lands or other lands it currently 
owns.‖  Resolution No. 2009-500A, at 2, Governing Board of the South Florida 
Water Management District (May 13, 2009) (emphasis added).  The substitution of 
other lands that implicate a pledge of the District‘s ad valorem taxing power would 
run afoul of the referendum requirement of article VII, section 12, and therefore 
such lands may not be substituted.  
c. Legislative Approval under Article VII, Section 11(f) 
Article VII, section 11 of the Florida Constitution governs state bonds and 
revenue bonds.  Subsection (f) provides that ―[e]ach project, building, or facility to 
be financed or refinanced with revenue bonds issued under this section shall first 
be approved by the Legislature by an act relating to appropriations or by general 
law.‖  This provision applies to bonds issued by ―the state or its agencies.‖  Art. 
VII, § 11(d), Fla. Const.  The trial court concluded that the legislative approval was 
not required in this case because the District was not a state agency for purposes of 
- 28 - 
 
article VII of the Florida Constitution.  The trial court based this conclusion on the 
fact that article VII, section 1(a) of the Florida Constitution prohibits the state and 
its agencies from levying ad valorem taxes, while article VII, section 9(b) 
authorizes the levy of ad valorem taxes ―for water management purposes‖ and for 
―all other special districts.‖  The court reasoned that because the District can and 
does levy ad valorem taxes, it cannot be deemed a ―state agency‖ under article VII.  
Water management districts have an ―amorphous nature‖ in Florida law, 
being deemed state agencies or arms of the state for some purposes, but not for 
other purposes.  Compare Fla. Sugar Cane League, Inc. v. South Fla. Water Mgmt. 
Dist., 617 So. 2d 1065, 1066 (Fla. 4th DCA 1993) (explaining that the district is a 
―regulatory state agency‖ subject to Florida‘s Administrative Procedure Act), with 
Martinez v. South Fla. Water Mgmt. Dist., 705 So. 2d 611 (Fla. 4th DCA 1997) 
(determining that the District was not subject to the provisions of the Drug-Free 
Workplace Act because it was not a state agency).  In this case the dispositive 
question is whether the District is a ―state agency‖ for purposes of article VII, 
section 11(f), which would require legislative approval through general law or an 
appropriations act before the District could issue revenue bonds.  In the past, we 
have concluded that water management districts are not included in the prohibition 
against state ad valorem taxation in article VII, section 1(a) of the Florida 
- 29 - 
 
Constitution.   See St. Johns River Water Mgmt. Dist. v. Deseret Ranches of 
Florida, Inc., 421 So. 2d 1067, 1070 (Fla. 1982) (concluding that ad valorem taxes 
levied by the district did not violate the constitutional prohibition against state ad 
valorem taxes because article VII, section 9 ―specifically authorizes the levying of 
ad valorem taxes for water management purposes,‖ and section 373.503 of the 
Florida Statutes ―provides the implementing legislation for ad valorem taxation to 
finance the works of the District‖).  While the Appellants are technically correct 
that Deseret Ranches did not hold that water management districts are not state 
agencies, we did recognize that the districts are not the ―state‖ for purposes of 
finance and taxation under article VII of the Florida Constitution.  See id. 
Accordingly, we agree with the trial court‘s conclusion that legislative 
approval is not required before the District can issue these certificates of 
participation. 
4. Financing Structure 
The Tribe asserts that the financing structure in this case is not legal. The 
trial court succinctly characterized the financing structure in its order of final 
judgment: 
The District proposes to issue COPs pursuant to a classic, 
annual appropriation, lease-purchase structure that has been 
consistently approved by the Florida Supreme Court.  Here, the 
District will purchase property which it will then ground lease to the 
- 30 - 
 
Leasing Corporation.  The Leasing Corporation will lease such 
property back to the District pursuant to the Master Lease Purchase 
Agreement.  The District will manage such property and may make 
improvements thereto.  Pursuant to Section 3.5 of the Master Lease 
Purchase Agreement, the District must annually determine whether to 
appropriate funds, which may include proceeds from ad valorem 
taxes, to pay the Leasing Corporation for the annual rental of such 
property.  Each of these structural elements is similar to those present 
in School Board of Sarasota County, where title to the public lands 
remained in the school boards, the ground lease was up to thirty years, 
and ―[m]oney from several sources, including ad valorem taxation, 
[was] used to make the annual facilities lease payments.‖  School Bd. 
of Sarasota County, 561 So. 2d at 551. 
If, in any year, the District determines not to appropriate funds 
to make the annual rental payments, the Lease Term of all Leases 
under the Master Lease Purchase Agreement will terminate no later 
than the end of the District‘s fiscal year for which the District 
appropriated funds to make the lease payments.  Upon such 
termination, the District must immediately surrender and deliver 
possession of the property to the Trustee as assignee of the Leasing 
Corporation.  The District surrenders possession only for the 
remaining period of the Ground Lease but does not surrender ultimate 
ownership of the property.  At the end of the Ground Lease, the 
District regains possession of the property.  During such period of the 
ground lease, the District may freely substitute other property for the 
property then controlled by the Leasing Corporation pursuant to the 
Ground Lease. 
The Tribe argues, first, that the District has no authority to form and utilize 
the nonprofit Leasing Corporation, and second, that the financing structure is 
questionable under contract law because the leases between the District and the 
nonprofit Leasing Corporation are not supported by adequate consideration. 
- 31 - 
 
The first argument was rejected by the trial court, which concluded that 
government entities may create nonprofit corporations for the sole purpose of 
facilitating a COPs transaction.  Indeed, in Leon County Educational Facilities 
Authority v. Hartsfield, 698 So. 2d 526, 527 (Fla. 1997), a nonprofit corporation 
was established solely for the purpose of facilitating the financing, acquisition, 
construction, and equipping of a project by the Authority to operate a dormitory 
and food service project to serve students at the local universities and colleges.  
The Authority entered into a lease-purchase agreement with the nonprofit 
corporation that was financed through the issuance of COPS.  Similarly, in School 
Board of Sarasota County, 561 So. 2d at 550-51, the school boards of several 
counties entered into lease-purchase agreements with nonprofit entities which were 
financed with COPs.  Those agreements provided for the lease of public land 
owned by the boards to the nonprofit entities by way of ground leases, the 
construction or improvement of public educational facilities upon the leased lands 
and the annual leaseback of the facilities to the respective school boards by way of 
facilities leases, and the conveyance of the lease rights of the nonprofits entities to 
trustees by way of trust agreements.  See id. 
Section 373.584 of the Florida Statutes authorizes water management 
districts to issue revenue bonds.  Section 373.584(2) gives water management 
- 32 - 
 
districts powers and authority coextensive with municipalities to issue bonds under 
state law.  In fact, this provision provides that the districts‘ power and authority  
to issue revenue bonds, . . . and to enter into contracts incidental 
thereto, and to do all things necessary and desirable in connection 
with the issuance of revenue bonds, shall be coextensive with the 
powers and authority of municipalities to issue bonds under state law. 
The provisions of this section constitute full and complete authority 
for the issuance of revenue bonds and shall be liberally construed to 
effectuate its purpose.  
§ 373.584(2), Fla. Stat. (2008).  We conclude that under this broad grant of 
authority to ―do all things necessary and desirable in connection with the issuance 
of revenue bonds,‖ id., the District has the ability to establish the nonprofit Leasing 
Corporation. 
The order of final judgment does not mention the Tribe‘s second argument 
regarding possible contract problems with the ground lease between the District 
and the leasing corporation due to lack of consideration.  However, we would find 
no merit to the argument, as the ground lease provides that the Leasing 
Corporation will handle the matters related to the COPs and their issuance and the 
matters related to title of the land and the leases.  Thus, the nonprofit Leasing 
Corporation is supplying valuable services in consideration for the lease of the 
lands by the District. 
5. Purchase of Land Option 
- 33 - 
 
The purchase agreement between U.S. Sugar and the District contains an 
―Option to Purchase Real Property,‖ which gives the District an exclusive option to 
purchase an additional 107,000 acres for a period of three years after the closing 
date of the sale at a fixed price of $7400 per acre.  During the following seven 
years, the provision gives the District a nonexclusive option to purchase the land at 
the appraisal value and the right of first refusal if U.S. Sugar sells the option land.  
There is no mention of a cost for this option in this section of the purchase 
agreement, only a listing of the cost per acre should the option be exercised.  The 
parties disagree on whether the price to be paid for the 73,000 acres includes a cost 
for the option to purchase the additional 107,000 acres of U.S. Sugar land.  
Additionally, the District asserts that this issue was not raised below by the 
Appellants and thus is not preserved for review by this Court.   
The order of final judgment states that the District is ―initially acquiring 
approximately 73,000 acres for approximately $536 million, with a $50 million 
option to acquire the remaining 107,000 acres later in time.‖  The record of the 
proceedings below is replete with evidence to support the trial court‘s factual 
determination that the option to purchase the additional acreage will cost the 
District $50 million.  The record also indicates that the Appellants raised the issue 
of the cost of the option during the hearing. 
- 34 - 
 
In various written responses and throughout the validation hearing, the 
Appellants asserted that the option to purchase the additional 107,000 acres would 
cost the District $50 million.  The District never directly contradicted these 
assertions and, in fact, the testimony of several District witnesses tends to support 
the assertions.  On redirect questioning, the District‘s Deputy Executive Director in 
Charge of Everglades Restoration testified that the $50 million value of the option 
had been presented to the Governing Board.  On cross-examination, the District‘s 
Budget Director admitted that the $536 million purchase price ―appeared‖ to 
include payment for the option.  Although the District‘s Executive Director would 
not assign a monetary value to the option, she admitted on cross-examination that 
an expert appraiser had ―blended [the value of the option and the value of the land] 
together in a very intricate way.‖  Additionally, the District never disagreed with 
the judge‘s characterization of the option as costing $50 million. 
The record of the May 2009 Governing Board meeting also supports the 
conclusion that $50 million was being paid for the option.  The District‘s Director 
of Land Acquisitions testified that ―the exclusive three-year option has a value the 
appraisers put in the marketplace of $50 million.‖  When asked by a Board 
member whether the $50 million would be credited to the land cost if the option 
were exercised, the Director responded no and explained that the $50 million had 
- 35 - 
 
to be paid to U.S. Sugar at the closing.  She further explained that ―the $50 million 
is part of the acquisition price, the 536.‖  
The record of the bond validation hearing also negates the District‘s 
assertion that the Appellants never raised the issue of whether COPs can be used to 
purchase a land option.  Counsel for both Appellants challenged the public purpose 
of the $50 million in COPs that would be spent on the option.  The Tribe‘s counsel 
argued that the option money would not be spent on anything tangible, that there 
was no public benefit because the District was merely buying an opportunity, and 
that the taxpayers would be responsible for the $50 million debt even if the District 
never exercised the option.   New Hope‘s counsel made a similar argument in 
closing, questioning the public purpose of the $50 million option. 
Based on the portions of the record described above, we find competent, 
substantial evidence to support the circuit court‘s conclusion that the purchase 
agreement includes a $50 million cost for the option to purchase the remaining 
107,000 acres of U.S. Sugar land.  We also conclude that the issue of whether the 
option serves a public purpose was presented to the circuit court below and thus 
was properly preserved for our review.  The circuit court found the record 
―essentially devoid of any information discussing how the remaining 107,000 acres 
(if acquired) would be utilized‖ and thus the legality of the bond validation as to 
- 36 - 
 
that acreage could not be determined.  Because no public purpose has been proven 
as to the land that is the subject of the option, no public purpose has been shown 
for the option either.  Thus, we reverse that part of the circuit court‘s order 
validating $50 million in COPs related to the land option. 
6. Conveyance of Land to Municipalities 
The Tribe argues that the transaction is illegal because the District plans to 
convey some of the acquired lands to local communities for economic 
development.  The Tribe contends that the District does not have the legal 
authority to purchase land with the express purpose of conveying it to a local 
governmental entity and that a purchase for this purpose exceeds the District‘s 
statutory authority to purchase land so that ―water-related resources [may] be 
conserved and protected.‖  § 373.139(1), Fla. Stat. (2008).  We find no merit to this 
argument. 
The Legislature has given the District authority to convey land to a 
governmental entity.  The statute specifically provides as follows:   
Any water management district within this chapter shall have 
authority to convey or lease to any governmental entity, other agency 
described herein or to the United States Government, including its 
agencies, land or rights in land owned by such district not required for 
its purposes under such terms and conditions as the governing board 
of such district may determine.  
- 37 - 
 
§ 373.056(4), Fla. Stat. (2008).   Additionally, section 373.089(1), Florida Statutes 
(2008), authorizes the District to sell lands that the Governing Board has 
determined to be surplus.  Thus, there is no question that the District has the 
authority to convey land to local communities.  Moreover, the statutory 
authorization to dispose of surplus land clearly indicates that water management 
districts may acquire more land than is ultimately required for a project.  Cf. Dep‘t 
of Transp. v. Fortune Fed. Sav. & Loan Ass‘n, 532 So. 2d 1267, 1269-70 (Fla. 
1988) (explaining that the state may take more property than necessary for a 
contemplated project when it would save money by doing so).    
CONCLUSION 
With the exceptions stated above, we conclude that the District has the 
authority to issue the certificates of participation for the purchase of the 73,000 
acres from U.S. Sugar, that this obligation serves the public purpose of conserving 
and protecting water and water-related resources, and that the authorization of the 
obligation complies with the requirements of law.  See City of Gainesville v. State, 
863 So. 2d 138, 143 (Fla. 2003).  However, because the purchase of the option 
does not serve a public purpose, COPs may not be issued to cover this expense.  
Further, to the extent that the substitution of other lands may implicate a pledge of 
the District‘s ad valorem taxing power, such lands may not be substituted. 
- 38 - 
 
Accordingly, we affirm in part and reverse in part the circuit court‘s order of 
final judgment validating $650 million in certificates of participation to finance the 
land acquisition. 
It is so ordered. 
CANADY, C.J., and PARIENTE, POLSTON, LABARGA, and PERRY, JJ., 
concur. 
LEWIS, J., concurs in result only with an opinion. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
LEWIS, J., concurring in result only. 
Restoration of the Everglades and environmental protection are topics of 
both great public concern and importance.  Water quality, flood control, water 
supply, and ecosystem protection are critical concerns in Florida.  The wisdom and 
desirability of positive steps to restore and protect our environment are beyond 
dispute.  Governor Charlie Crist has proposed a bold vision for the future, and 
those involved in this work and movement should be commended.  However, the 
wisdom, desirability, and vision of the underlying project are not considerations in 
the legal analysis of the validity of the proposed bond issue here.  See Boschen v. 
City of Clearwater, 777 So. 2d 958, 966 (Fla. 2001) (―Moreover, the wisdom or 
desirability of a bond issue is not a matter for our consideration.‖).  I do recognize 
- 39 - 
 
and acknowledge that my reading of Florida constitutional requirements and 
restrictions on long-term public debt payable from ad valorem taxation is not 
currently the majority view of this Court and, therefore, I must concur in result 
only.   
The plan here is just another variety of the attempted devices to circumvent 
the Florida Constitution, as established by Florida citizens, and contains highly 
questionable aspects, such as the creation of an excess land ―real property slush 
fund‖ referred to in the final judgment below as ―valuable for future land swaps.‖  
Additionally, the substance of this bond issue falls within article VII, section 12 of 
the Florida Constitution, which requires the approval of the voters in a referendum.   
First, the final judgment below addressed, and oral argument confirmed, that 
a portion of the proposed project includes ―land that will be valuable for future 
land swaps‖ without any attempt to define or disclose anything further for the 
purpose of that land in this bond issue.  While flexibility and economic 
considerations may favor this type of undisclosed ―slush fund‖ of real property, 
considerations for legal validity do not allow this nebulous ―pot of land.‖  Not only 
does the law require more details or parameters, this ―land swap‖ concept without 
boundaries is certainly subject to abuse and mischief.  The law of Florida with 
regard to public debt requires at least some detail with regard to all of the property 
- 40 - 
 
purchased with the bond proceeds and, most certainly, more detail than just a ―pot‖ 
of land for ―future land swaps.‖  See State v. Suwannee Cnty. Dev. Auth., 122 So. 
2d 190, 193-94 (Fla. 1960).  While this is not fatal for the entire project, the real 
property in the ―slush fund‖ for ―land swaps‖ should not be approved.  This is not 
sufficiently detailed to allow the public or the State to legitimately determine 
whether the future undisclosed and indeterminate ―land swaps‖ are proper 
expenditures of public monies.   
Second, and importantly, article VII, section 12, of the Florida Constitution 
requires that any long-term public financing payable from ad valorem taxes and 
maturing more than twelve months after issue be approved through referendum:  
Counties . . . special districts and local governmental bodies 
with taxing powers may issue bonds [and] certificates of indebtedness 
. . . payable from ad valorem taxation and maturing more than twelve 
months after issuance only:  
(a)  to finance or refinance capital projects authorized by 
law and only when approved by vote of the electors . . . .  
 
Art.  VII, § 12(a), Fla. Const. (emphasis added).  
The finding by the trial court and the bond argument advanced by the bond 
proponents here that the obligation to make payments under the proposed structure 
is only an annual obligation and does not extend more than twelve months is 
fantasy at the highest level.  This phantom and illusory ―walk away‖ argument is 
built on a foundation of straw.  Those who seek public money, but to avoid public 
- 41 - 
 
approval, have developed a variety of devices that create a ―theoretical‖ illusion 
that there is a legitimate escape from the obligation to continue payments beyond 
twelve months.  This ―phantom‖ escape argument has been rejected by this Court 
in Frankenmuth Mutual Insurance Co. v. Magaha, 769 So. 2d 1012 (Fla. 2000).  
This Court has understood the necessity to look beyond the self-serving language 
and disclaimers of any long-term obligations to analyze the effect of the documents 
as applied and as a matter of practical reality.  Just as the lease with a disclaimer of 
long-term obligations was held to be subject to article VII, section 12, in 
Frankenmuth, the practical and actual operation of this structure creates long-term 
payment obligations beyond twelve months.  It is pure mental gymnastics to accept 
that as a practical matter the Water Management District could default at any time 
and simply ―walk away‖ from the amount of money invested.  Frankenmuth 
applies here.   
In a similar manner, this non-income producing plan depends on ad valorem 
taxes to repay bondholders.  The uncontradicted evidence from the Water 
Management District established that with the proposed involvement of federal 
funds and the integrated nature of the proposed expansive water restoration work, 
the Water Management District would not and could not simply ―walk away‖ 
from this land purchase.  In my view, the decision to issue bonds to fund a project 
- 42 - 
 
without first obtaining approval through a constitutionally mandated referendum 
is contrary to the clear and plain words of article VII, section 12, of the Florida 
Constitution.  Article VII, section 12, was clearly designed to address the 
expanding capital needs of local government, but was tempered by the inclusion 
of democratic control with regard to the decision to finance ―capital projects‖ with 
long-term debt ―payable from ad valorem taxation.‖  Art. VII, § 12, Fla. Const.  In 
this context, the majority‘s avoidance of this clear command perpetuates and 
expands a distortion of our fundamental organic law, leads us beyond our prior 
precedent, and denies the voters of this State their constitutional right to determine 
whether their local governments should issue long-term debt that is ―payable from 
ad valorem taxation,‖ as that phrase is understood through its ―usual and obvious 
meaning.‖  City of Jacksonville v. Cont‘l Can Co., 151 So. 488, 489-90 (Fla. 
1933) (―The words and terms of a Constitution are to be interpreted in their most 
usual and obvious meaning . . . . The presumption is in favor of the natural and 
popular meaning in which the words are usually understood by the people who 
have adopted them.‖).  With regard to typical ―capital projects,‖ the Constitution 
unmistakably communicates that entities of local government are required to use a 
referendum to obtain voter approval when a pledge of ad valorem tax revenue or 
- 43 - 
 
ad valorem taxing authority is a source of payment for relevant forms of long-term 
debt.  See art. VII, § 12, Fla. Const. 
I write separately in this context to emphasize two additional points that, in 
my view, demonstrate the violence that expansion of the legal fiction of State v. 
Miami Beach Redevelopment Agency, 392 So. 2d 875 (Fla. 1980), visits upon the 
plain text and manifest intent of article VII, section 12.  First, much of our case 
law in this area has been opaque and counterintuitive due to its complete divorce 
from the text of this constitutional provision.  Cf. Cont‘l Can Co., 151 So. at 490 
(―Constitutions import the utmost discrimination in the use of language, that 
which the words declare is the meaning of the instrument.‖ (emphasis added)).  
Here, the Court should not expand prior decisions from different contexts to 
advance a movement away from the text of article VII, section 12. 
Second, article VII, section 10, of the Florida Constitution (―Pledging 
Credit‖) further undermines application of the ―pledge of taxing power only‖ 
premise of Miami Beach in the context presented here.  This separate, distinct 
constitutional provision demonstrates that the framers of our Constitution were 
aware of, and intended a textual distinction between, an entity of local government 
―giv[ing], lend[ing] or us[ing] its taxing power or credit,‖ as addressed in that 
constitutional provision, and an entity of local government issuing ―bonds, 
- 44 - 
 
certificates of indebtedness or any form of tax anticipation certificates, payable 
from ad valorem taxation,‖ as addressed in article VII, section 12.  (Emphasis 
added.)  If the framers had truly intended for article VII, sections 10 and 12, to 
each only address pledges of the taxing power of local government, then these 
constitutional drafters would have used similar language in section 12; however, 
they did not do so.  Thus, the faulty premise of Miami Beach accomplishes that 
which we are proscribed from doing as judicial officers who have sworn to 
support, protect, and defend our state Constitution:  It amends article VII, section 
12, through judicial fiat by removing and rendering meaningless the phrase 
―payable from ad valorem taxation‖ and replacing it with materially different 
language drawn from a separate, distinct constitutional provision (i.e., article VII, 
section 10).  Cf., e.g., Burnsed v. Seaboard Coastline R.R., 290 So. 2d 13, 16 (Fla. 
1974) (―It is a fundamental rule of construction of our [C]onstitution that a 
construction . . . which renders superfluous, meaningless or inoperative any of its 
provisions should not be adopted by the courts.‖). 
As I have predicted before, like the hapless protagonist in ―Groundhog 
Day,‖ this Court will be forced to continuously relive this controversy until we 
―get it right,‖ because the constitutional provision at issue simply does not support 
the gloss placed upon it by Miami Beach, which has been erroneously expanded to 
- 45 - 
 
this context, and related, distinguishable decisions.  Sooner or later we must 
recognize that the faulty expansion of Miami Beach to far different cases 
involving typical capital projects unjustifiably perpetuates an obvious legal error 
and deprives Florida‘s citizens of a clear constitutional right.  Cf. Puryear v. State, 
810 So. 2d 901, 905 (Fla. 2002) (―Our adherence to stare decisis . . . is not 
unwavering.  The doctrine of stare decisis bends . . . where there has been an error 
in legal analysis.‖). 
When faced with a typical capital project, such as the land-purchase plan 
involved in this case, I would interpret and enforce article VII, section 12, as 
written and would also salvage and apply a long-forgotten portion of our Miami 
Beach decision:  ―The Court looks at the substance and not the form of the 
proposed bonds‖ to determine whether the entity of local government has 
complied with the Constitution.  392 So. 2d at 894 (emphasis added).  Where, as 
here, the bond-financing plan will inevitably lead to diverting funds from ad 
valorem tax revenue to pay for or ―service‖ the associated long-term debt for a 
non-revenue producing capital project, the Constitution requires a referendum. 
See art. VII, § 12, Fla. Const.; see also Frankenmuth Mut. Ins. v. Magaha, 769 So. 
2d 1012, 1023-26 (Fla. 2000) (holding that computer lease-purchase agreement, 
which would inevitably have required Escambia County to appropriate ad valorem 
- 46 - 
 
taxes to make lease payments, violated article VII, section 12); County of Volusia 
v. State, 417 So. 2d 968, 972 (Fla. 1982) (―That which may not be done directly 
may not be done indirectly.‖ (citing State v. Halifax Hosp. Dist., 159 So. 2d 231 
(Fla. 1963))).  Political expediency cannot alter the text of the Florida Constitution 
nor should it be used to thwart the will of the voters of this State. 
Consequently, I believe that expansion of the ―pledge of taxing power only‖ 
premise of Miami Beach to typical capital projects violates article VII, section 12, 
and that any associated local-government bond-financing plan that will inevitably 
lead to diverting funds from ad valorem tax revenue to service related long-term 
debt requires a referendum under our state Constitution.  Thus, even if we follow 
Miami Beach, this project nevertheless violates article VII, section 12.  Unlike 
Miami Beach, which involved a redevelopment project under the auspices of the 
Community Redevelopment Act (part III of chapter 163, Florida Statutes (1975)), 
this case only involves a typical ―capital project‖ within the meaning of article 
VII, section 12.  Furthermore, in contrast to Miami Beach—where ad valorem tax 
revenue was only a contingent source from which the city planned to service the 
associated debt if the primary source proved insufficient—here, ad valorem tax 
revenue is the primary source from which the debt created by these bonds will be 
paid.  This distinction brings the instant case squarely within the rule and rationale 
- 47 - 
 
of County of Volusia and Frankenmuth:  The referendum requirement cannot be 
circumvented because its bond-financing scheme inevitably requires that it pay for 
its debt with ad valorem tax revenue. 
The local-government shell game, which is played to avoid the Florida 
voter, should not be sanctioned by this tribunal.  Unfortunately, we have done so 
in the past and do so today by improperly expanding this game to the very ―capital 
projects‖ addressed in article VII, section 12.  Even good or great ideas that 
require long-term public debt payable from ad valorem taxation must follow 
constitutional requirements.  For these reasons, I can join in the result only, but 
reject the unjustifiable expansion of a fundamentally flawed principle, which 
operates to circumvent voter participation in a decision that requires popular vote 
approval under the Florida Constitution. 
 
Two Appeals from the Circuit Court in and for Palm Beach County – Bond 
Validation 
 
Donald W. Hafele, Judge – Case No. 50-2008-CA-031975XMB 
 
Sonia Escobio O‘Donnell, James Edwin Kirtley, and Clifton R. Gruhn of Jordon 
Burt, LLP, Miami, Florida; Joseph P. Klock, Jr., Gabriel E. Nieto and Juan Carlos 
Antorcha of Rasco, Klock, Renninger, Perez, Vigil, and Nieto, Coral Gables, 
Florida, 
 
 
for Appellants, 
 
- 48 - 
 
Randall W. Hanna , Christine E. Lamia, Frederick J. Springer, Jason M. Breth, and 
Jolinda L. Herring of Bryant, Miller, Olive, PA., Tallahassee, Florida, and Sheryl 
G. Wood, General Counsel, and Frank S. Bartolone, South Florida Water 
Management District, West Palm Beach, Florida;  
 
 
for Appellees, 
 
E. Thom Rumberger and Noah D. Valenstein of Rumberger, Kirk and Caldwell, 
Tallahassee, Florida, on behalf of Florida Audubon Society, Inc. and National 
Audubon Society d/b/a Audubon of Florida and Nathaniel P. Reed; Michael F 
McAuliffe, State Attorney, and Maureen Hackett Ackerman, Assistant State 
Attorney, Fifteenth Judicial Circuit, West Palm Beach, Florida, 
 
 
as Intervenors 
 
Robert L. Nabors of Nabors, Giblin and Nickerson, P.A., Tallahassee, Florida, 
Major B. Harding of Ausley and McNullen, P.A, Tallahassee, Florida, and Joy 
Causseaux Frank, Florida Association of District School Superintendents, 
Tallahassee, Florida, on behalf of Florida Association of District School 
Superintendents, 
 
 
As Amici Curiae