By Dan Moffett
The 4th District Court of Appeal has ruled that Palm Beach County cities and towns don’t have to pay the county’s bill for running an inspector general’s office — even though their voters approved it.
The unanimous ruling by a three-judge panel in December overturns a lower court decision and is a victory for home rule and municipal autonomy, say attorneys for a coalition of 14 municipalities that sued the county.
“This case has always been about the legal method for funding a countywide program, not the virtue of, or the need for the program itself,” said Manalapan Town Attorney Keith Davis, who hailed the ruling as “great news” for the towns. “This is not, and never has been, about the OIG (Office of Inspector General) itself. My clients are not foes of the OIG.”
Davis said the essence of the issue is whether the county has the right to bill municipal governments directly without negotiating a contract with the municipalities.
In 2015, Palm Beach County Circuit Judge Catherine Brunson ruled that the county did have that power and got it when voters went to the polls in 2010 and approved a referendum establishing the OIG. The appeals court disagreed, however.
“The court held that the voters’ original approval of the referendum did not rise to the level of creating a contract between the county and the municipalities that would allow for the billing scheme,” Davis said. “The court held that there was no waiver of sovereign immunity based on the referendum that created the OIG in the first place.”
Inspector General John Carey said he was “deeply disappointed” by the court’s reversal, which raises questions about how his office, which has a $3 million annual budget, will find the money to keep doing work as the county’s government watchdog. Had the lower court decision been upheld, Palm Beach County’s 39 cities and towns would have had to come up with roughly $6 million by the end of 2016 to cover their share of the past and current OIG bills.
Davis said he expects the case ultimately to wind up in the Florida Supreme Court. Besides Manalapan, the other plaintiffs in the suit are West Palm Beach, which has played the lead role in the legal fight, Gulf Stream, Boca Raton, Highland Beach, Ocean Ridge, Riviera Beach, Lake Park, Jupiter, Palm Beach Gardens, Tequesta, Palm Beach Shores and Mangonia Park.
Briny Breezes Town Attorney John Skrandel applauded the appellate ruling and told his Town Council he intends to add Briny’s name to the coalition of municipalities.
“This is a distinctly big win for the towns,” Skrandel said. “Basically 99 percent of the things the county wanted got shot down.”
Skrandel said the referendum was overly vague about how to pay for the OIG, and county officials went too far in trying to define it.
“They got creative here, and that’s something you never want to do,” he said. “It was a very dangerous thing the way they did it. … If a county can tax a city, that’s huge. It was a dangerous precedent to set.”
Judge Carole Taylor, in writing for the appellate panel, said that — contrary to the lower court’s view that the voters’ will trumped the need for a contract — municipalities have the distinct power to control their budgets and decide what costs to pass on to their residents.
“Voters may not waive a municipality’s sovereign immunity through a local referendum,” the ruling said. “In sum, we hold that the municipalities’ decision whether to budget funds for the OIG program is a discretionary decision protected by sovereign immunity.”
By Dan Moffett