Sarasota County Comprehensive Annual Financial Report 2020

Sarasota County, Florida Notes to Financial Statements September 30, 2020 NOTE 14. CONTINGENCIES 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 $689 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 County filed a Motion for Rehearing which was denied. As a result, the case has been sent back to the Circuit Court in Sarasota and trial was scheduled for November 18, 2019. However, the County petitioned the Second District Court of Appeals for a Writ of Prohibition and a stay of the trial was issued while the Petition is considered. The ruling by the Florida Supreme Court does not require to reimburse the private hospitals for indigent medical care and the County has additional defenses it will present, shou l d the matter proceed to trial. 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 December 2020, the County issued Utility System Revenue Bonds, Series 2020A and Series 2020B (Federally Taxable) in the amount of $61,295,000 and $44,740,000 respectively. The proceeds of Series 2020A Bonds will be used to (a) finance the design, acquisition, and construction of facilities expanding and improving the County’s Utility System; (b) refinance a loan from the Florida Local Government Finance Commission Pooled Commercial Paper; and to (c) pay costs of issuance of 2020A Bonds. The proceeds of Series 2020B Bonds (Federally Taxable) will be used to (a) advance refund all or a portion of the County’s Utility System Revenue Refunding Bonds, Series 2011A maturing on or after October 1, 2022; (b) advance refund the County’s Utility System Revenue Bonds, Series 2013 maturing on or after October 1, 2024; and to (c) pay costs of issuance of Series 2020B Bonds (Federally Taxable). In January 2021, the County approved a Commercial Lease with Option to Purchase for a facility with approximately 39,488 sq. ft., to be used by the District Twelve Medical Examiner. The terms of the lease will commence on the date possession of the Premises is delivered to and accepted by the County. The annual rent amount will be $1,125,408. 142