Opinion
January 23, 1951.
Appeal from the Circuit Court for Highlands County, D.O. Rogers, J.
S. Colquitt Pardee, Jr., Avon Park, and Meginniss, Thompson Morrison, Tallahassee, for appellant.
Drew, Burns, Middleton Rogers and Bezoni Ervin, Tallahassee, for appellee.
In December 1950 the City of Avon Park enacted Ordinance 324, authorizing the city to employ a financial adviser or fiscal agent to direct it in conducting proceedings to call outstanding refunding bonds, series of 1942, and issue in lieu thereof other refunding bonds, series of 1950. The ordinance also authorized the city to pay certain fees to the fiscal agent which included the costs of calling and issuing the refunding bonds. This is a suit for declaratory decree under Chapter 87, Florida Statutes 1941, F.S.A., to determine whether or not the City had power to pass the ordinance and execute the contract with the fiscal agent. The chancellor on bill and answer gave an affirmative answer to this question and the City appealed.
As a preface to the ordinance the City found that it had outstanding refunding bonds, Series of 1942, in the sum of $1,012,325.73, that it was advisable to call said bonds and issue refunding bonds, Series of 1950, in lieu thereof, that the result of such refunding would be a saving of $311,081 in interest and $82,600 in principal to the City, that to consummate the transaction it would be necessary for the City to employ a financial adviser to assist it, that the City is without funds to employ such an adviser, that the adoption of Ordinance 324 is necessary to preserve the public welfare and that the City has investigated and considered proposals of several financial agencies and finds that the bid of appellees is the lowest and best bid offered to perform the services.
In view of the saving to the city as disclosed by its finding, there can be no objection to the proposed refunding program. In fact it would seem to be very desirable from an economic and business standpoint. Section six, Article IX of the constitution, F.S.A., in terms authorizes the issue of refunding bonds without an approving vote of the freeholders, so the ultimate and only real point with which we are confronted is whether or not the city had power to enact the ordinance and execute the fiscal contract without an approving vote of the freeholders.
We have not heretofore expressed any opinion as to the validity of similar contracts, though we have several times been confronted with them. State v. Northeast Tampa Special Road and Bridge District, 148 Fla. 14, 3 So.2d 481; State v. Sarasota County, 118 Fla. 629, 159 So. 797; Renicks v. City of Lake Worth, 154 Fla. 694, 18 So.2d 769.
The ordinance authorizing the employment of a financial adviser requires that the advertisement for sale of the refunding bonds request all bidders to post a sum equal to $45 on each $1000 bond, in addition to the par value thereof with accrued interest, and that such funds be earmarked to pay the expenses of the refunding program. It was estimated that this expense would approximate $45,000 so the charge per thousand was fixed to raise this amount which was to be separate and distinct from the bid on the refunding bonds. The contract also provided that all bids for the refunding bonds be par or more, plus accrued interest and that the sum paid by the bidders to bear the expense of the refunding program be placed in a special fund and marked "Bond refunding expense account."
The city was without funds to pay the expense of the refunding program, hence this requirement as to all bids. Ordinance 324 authorized the city to require bids in this manner. It was defined as split bidding and was designed to keep the amount posted for the expense of the refunding program separate and distinct from the amount bid for the refunding bonds. It is admitted that the only legislative authority for the ordinance and the contract is that embodied in the general power of the city. The employment of a fiscal agent in such cases is now frequently done, his function being to create the widest possible market for the bonds through publicity and other means, to make exchanges of the bonds if found to be advisable, and to pay all charges incident to preparing and marketing the bonds.
In early bonding history such services were performed by the city or the bond purchaser, but we know of no reason why the city if legally authorized, should not employ an agent to do this or enter into such an arrangement for doing so as is defined in the ordinance and the contract. True it may be different from the orthodox method, but if that had been followed the expenses would have been paid from the proceeds of the refunding bonds or from some other fund in the hands of or to be raised by the city. After all the taxpayer bears the burden and so long as that is not increased he has no cause to complain.
Under the scheme provided in the contract, that is to say by the split bid arrangement, the cost of the refunding program was assured by the bond purchaser on condition that the bonds bring a minimum of par plus accrued interest. The Constitutional authorization for refunding outstanding bonds without an approving vote of the freeholders must carry the implied power to raise the necessary expense of refunding in some legitimate manner. We find no legal objection to the ordinance or the contract.
It follows that the decree appealed from must be and is hereby affirmed.
Affirmed.
SEBRING, C.J., and THOMAS and HOBSON, JJ., concur.