Sarasota County Comprehensive Annual Financial Report 2019

Sarasota County, Florida Notes to Financial Statements September 30, 2019 NOTE 14. CONTINGENCIES Federal, State and Local Grants Federal, State and Local Grants Grant monies received and disbursed by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County. Litigation On February 25, 2011, Sarasota Doctors Hospital, Inc. and Englewood Community Hospital, Inc. and Venice HMA, LLC d/b/a Venice Regional Medical Center (collectively, the “Plaintiffs”) filed declaratory actions against the County and the Sarasota County Public Hospital District seeking reimbursement for health care services provided to indigents. Invoices which have been presented to the County and have not been paid by the County total approximately $635 million (total damages being sought by the plaintiffs are approximately $635 million). The invoices are based on a 2003 reenactment of a 1959 special act unique to the County that, to this date, has never previously been used to support claims of this nature. On November 5, 2013, the trial court judge entered an order granting the County’s Motion for Summary Judgement. The order held that the special act relied on by the Plaintiffs to support their claim for reimbursement for indigent medical care was unconstitutional. Plaintiffs appealed the trial court ruling and the Florida Supreme Court issued a ruling on July 6, 2017, reversing the lower court’s decision and finding the special act constitutional. The case has been sent back to the Circuit Court in Sarasota for trial. The ruling by the Florida Supreme Court does not require the County to reimburse the Plaintiffs for indigent care and the County has additional defenses it will present at trial. On Nov 4, 2019, the Second DCA filed an order to show cause staying the lower court trial. Responses have been file and the parties are now awaiting a ruling from the Second DCA. Additionally, the County is a defendant in various lawsuits in the normal course of business. To the extent the outcome of such litigation has been determined to result in probable loss to the County, such loss has been accrued in the accompanying financial statements. Litigation where loss to the County is reasonably possible has not been accrued; however, a reserve for general liability claims has been established in the risk management fund – see Note 10 for additional information. Although the outcome of the remaining claims is not presently determinable, it is the opinion of the County’s General Counsel that resolution of these matters will not have a material adverse effect on the financial condition of the County. NOTE 15. SUBSEQUENT EVENTS In November 2019, the County issue d Florida Local Government Finance Commission Pooled Commercial Paper Revenue Note Draw No. A-24-1 in the amount of $2,129,000. The proceeds of this note will be used to finance costs of the Manasota Key Beach Nourishment project. In January 2020 the County issued Florida Local Government Finance Commission Pooled Commercial Paper Revenue Note, Draw No. A-25-1 in the amount of $2,340,000. The proceeds of this note will also be used to finance costs of the Manasota Key Beach Nourishment project. NOTE 16. DEFICIT FUND BALANCES The following Non-Major Governmental Fund ended the year with a deficit balance in unassigned fund balance. 141