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The News Service of Florida provides journalists, lobbyists, government officials and other civic leaders with comprehensive, objective information about the activities of state government year-round.

Hope scholarships begin with funding delay

The Florida Board of Education next week is expected to approve a rule outlining how a new scholarship program for bullied students will work.

But while the Hope Scholarship program, approved by the Legislature and signed into law by Gov. Rick Scott earlier this year, begins with the new school year, there will not be any funds for the program until sometime after Oct. 1.

The delayed funding for the scholarships may lead to an uneven start for the program, which will allow students who are victims of bullying or other types of harassment to use the scholarships to attend private schools or to transfer to another public school.

A preliminary estimate by state analysts projects 7,302 Hope scholarships will be awarded in the 2018-19 school year, with some $27 million in funding. As dictated by the new law, the scholarships will be handed out on a “first-come, first-served” basis.

But the first key question is how much scholarship money will be available.

The program will be funded by voluntary contributions made by Floridians when they buy new or used vehicles. Beginning Oct. 1, motorists will be able shift up to $105 from the sales tax they would normally pay on the vehicle transactions to the Hope scholarship program.

However, state analysts and officials with Step Up For Students, the nonprofit organization that will handle the scholarship program, said the initial sales tax money may not be available until Nov. 20. That’s because car dealers, like other businesses that collect the state sales tax, have 20 days to submit their prior month tax collections.

“We really have no idea,” said Ron Matus, a spokesman for Step Up For Students, referring to the number of Hope scholarships that could be awarded this school year. “This is a brand-new program. I don’t think anybody really knows what the demand is going to be.”

Matus said a variety of factors will have an impact on the start of the new scholarship program, including the amount of the voluntary tax donations as well as the number of students and their parents who want to use the scholarships.

The law identifies more than a dozen incidents, including bullying, harassment, fighting, assault, robbery and intimidation, which would make students eligible for the Hope scholarships.

Once an incident is reported to a school principal, the school district must notify the student’s parents within 15 days or upon the completion of the investigation, whichever occurs first, about the scholarship opportunity.

Those reports may start coming in next month, when Florida’s 2.8 million students in the kindergarten-through-high-school system return to their classrooms.

But Matus said, given the delay in the funding, it may be some time before Step Up For Students starts taking applications for the scholarships.

“We haven’t determined yet when we will start taking applications,” Matus said. “It probably won’t be for a few months when we get closer to that time when we can actually start raising money.”

However, he said his organization was already getting inquiries from parents about the program.

“We started keeping an interest list because we have had parents ask about it,” Matus said.

The scholarships, which are based on the statewide per-student funding level, would be worth more than $7,112 for high school students for a full year, $6,816 for middle school and $6,519 for students in kindergarten through fifth grade.

But since the funding is not expected to be available until Nov. 20 or later, state analysts project some 14 weeks of the new school year will be completed, leaving 22 weeks for the scholarships. The delay would reduce the amounts in the first year to $4,346 for the high school students, $4,165 for middle school and $3,984 for the elementary school students.

In addition to using the state-funded scholarships to attend a private school, the Hope program would also let students attend another public school, providing up to $750 in transportation costs. That amount would be reduced to $458 in the first year because of the delayed funding.

The state projects 6,858 Hope scholarships will be awarded in the 2019-20 academic year, which would be the first full year for the program, including more than $40 million in funding.

Judge closes book on disputed abortion law

In a case that focused heavily on First Amendment rights, a federal judge has issued a permanent injunction against a 2016 abortion law approved by Florida lawmakers and Gov. Rick Scott.

U.S. District Judge Robert Hinkle, who granted a preliminary injunction against the law in September, issued the permanent injunction last week and ordered the state to pay attorney fees for a group of plaintiffs who challenged the measure.

The permanent injunction came after attorneys for the state and the plaintiffs filed a joint motion last month indicating the state did not want to continue contesting the issues in the preliminary injunction.

“In order to spare the parties and the court the cost and burden of further litigation, plaintiffs and defendants have reached an agreement for the court to convert the preliminary injunction into a permanent injunction … enter a declaratory judgment in plaintiffs’ favor, and retain jurisdiction over an award of attorneys’ fees, if necessary, thereby resolving all the claims,” the June 22 joint motion said.

Hinkle’s order last week, like the preliminary injunction, found disputed parts of the law unconstitutional. The American Civil Liberties Union filed the lawsuit in December 2016 on behalf of several clergy members and abortion-rights organizations.

The law, in part, sought to require people or groups who provide information about abortions — considered “referral or counseling” agencies under the law — to register with the Agency for Health Care Administration and pay a $200 fee.

It also sought to require anyone who counsels women about abortions to provide an explanation about the procedure, including alternatives, before making referrals or assisting in obtaining abortions.

Hinkle in the September ruling agreed that the law could affect the plaintiffs, including the clergy members who sometimes counsel people about abortion.

“At least on a literal reading of (the law), all of the challenged provisions apply to these plaintiffs and will require the plaintiffs to take prompt action unless enforcement of the statute is enjoined,” Hinkle wrote in September. “The plaintiffs will be required to register and pay the attendant fee. When they refer an individual to an abortion clinic, they will be required to engage in compelled speech — to give a full and detailed explanation of abortion, including the effects of and alternatives to abortion, whatever that means — and will be subject to prosecution if they fail to do so. And if they refer a minor to an abortion clinic, they will be required to notify and provide the same information to the minor’s parents or guardian.”

Hinkle found that the law violated the plaintiffs’ free-speech rights.

“(The) state has no legitimate interest, let alone a compelling interest, in requiring disclosure of private religious speech of this kind,” he wrote in September. “The statute is a naked effort to impede speech on a disfavored topic promoting a disfavored but legal viewpoint.”

Lottery posts $6.7B in sales

Thanks in part to strong Powerball and Mega Million jackpots, Florida Lottery sales grew 8 percent to a record $6.7 billion over the past year, according to the state agency.

“We had a couple of good jackpots last year,” Lottery Deputy Secretary of Sales Mike Purcell said. “We had a Powerball jackpot of about $700 million, and we had a Mega Millions jackpot of about $393 million. Those help contribute to it.”

Scratch-off tickets accounted for 69 percent of the sales in the 2017-2018 fiscal year that ended June 30. Scratch game sales were up about $400 million from the prior fiscal year, according to Purcell.

The Lottery anticipates that up to $1.75 billion of the money generated by the sales will be transferred to the state’s Educational Enhancement Trust Fund.

FPL customers to receive Hurricane Matthew recovery fund

Florida Power & Light customers will see a small, one-time credit in August that in part corrects an “over-recovery” cost for Hurricane Matthew, which whipped the east coast in 2016.

The Florida Public Service Commission on Tuesday approved the $27.7 million agreement between the Juno Beach-based power giant and the Office of Public Counsel. The adjustment should equate to about a $3.18 credit for a residential customer who uses the industry standard of 1,000 kilowatt hours a month.

The credit is “in the best interest of FPL customers,” Public Service Commission Chairman Art Graham said.

“The agreement provides a reasonable recovery amount, with funds available for future storm recovery, if needed,” he said.

The Florida Retail Federation and the Florida Industrial Power Users Group, which represents large business users of electricity, took no position on the agreement. But FPL officials said refunds would also be issued to business customers.

FPL President and CEO Eric Silagy called the agreement a “sensible resolution.”

“It speaks to the fact that we never lose sight of our responsibility to operate efficiently while executing an aggressive and rapid response to a major hurricane to safely restore power to all customers as quickly as possible,” Silagy said in a press release.

The powerful storm never made landfall in Florida but ran up the east coast, impacting nearly every county serviced by Florida Power & Light.

The company noted it was able to restore power to 99 percent of the 1.2 million customers affected by Matthew within two days.

The utility estimates it replaced more than 250 miles of wire, more than 900 transformers and more than 400 poles, in addition to clearing large amounts of vegetation, after the storm.

To recover its costs, FPL added extra charges to customers’ bills for a year, from March 1, 2017, through Feb. 28, 2018. For a residential customer who uses 1,000 kilowatt hours per month, the charge was $3.35 a month.

The company collected $322.45 million through the charge, with about $6 million listed in the agreement as “over-recovery” of costs.

The remainder of the refund, $21.7 million, comes from an accounting adjustment on the restoration costs. The one-time refund includes interest.

A similar surcharge was not imposed for Hurricane Irma, which battered the state in a pair of landfalls last September.

FPL was planning to bill customers for the $1.3 billion cost of restoring electricity after Irma. Instead, the power company joined Duke Energy and Tampa Electric, which opted to rely on savings from last year’s federal tax overhaul, which cut corporate tax rates and made numerous other changes to the federal tax code that benefited businesses.

Pensacola-based Gulf Power, the state’s fourth major utility provider, was largely spared damage from Hurricane Irma in September.

SunPass continues to catch up on toll transactions

State transportation officials estimate that about two days’ worth of toll transactions will be processed on a daily basis as the SunPass Centralized Customers Service System catches up with what was expected to be a weeklong upgrade.

“As improvements to the system move forward, it is anticipated that up to 8 million transactions will be posted on a daily, recurring basis until all accounts are reconciled,” Department of Transportation spokeswoman Kim Poulton said in press release Monday evening.

As of Monday, more than 20 million backlogged toll transactions had been posted, following a systemwide upgrade that began June 6, according to the release. The upgrade, designed to consolidate electronic tolling authorities into a single billing system, took about three weeks longer than planned to complete. Transportation officials, who estimate about 4 million toll transactions occur each day, have said that tens of millions of toll charges were not immediately posted during the upgrade.

Customers’ transactions will be processed gradually, with the oldest backlogged toll fees processed first, according to Monday’s press release. Late fees and penalties are not being imposed “until the system is operating fully and providing the benefits and ease of access that SunPass customers deserve and expect,” the release said.

Transportation officials have blamed the vendor, Conduent, for the delays, and have pledged to “hold the vendor fully accountable for the delays it has caused” and to enforce all penalties “to the maximum extent possible.” State authorities have not yet said what penalties will be imposed.

Nursing home records ruling put on hold

 A state appeals court has stepped in and at least temporarily halted the release of thousands of death records to an embattled Broward County nursing home.

The 1st District Court of Appeal on Monday extended a stay of a lower-court ruling that would require the Florida Department of Health to quickly turn over death certificates from across the state to attorneys for The Rehabilitation Center at Hollywood Hills.

The one-page order was largely procedural and did not explain the court’s reasoning. But it was the latest twist in a months-long records battle between the Florida Department of Health and the nursing home, which the state moved to shut down after residents died following Hurricane Irma.

The nursing home has been in a series of legal fights with Gov. Rick Scott’s administration, including about a state attempt to revoke the facility’s license. As part of those disputes, the nursing home filed a public-records lawsuit Jan. 31, alleging that the Department of Health had improperly refused to provide copies of death certificates for people across the state from Sept. 9 through Sept. 16 — a period that included Hurricane Irma and its immediate aftermath.

An attorney for the nursing home indicated last month that the facility is seeking the addresses of locations where other people died during and after the massive storm.

Leon County Circuit Judge Terry Lewis ruled in favor of the nursing home in April and last month, with a June 19 decision saying, in part, that the department is “specifically ordered to immediately (within 24 hours of receipt of this order) produce to petitioner electronic copies (e.g. via email, drop box, a flash drive, or other appropriate medium) all of the approximate 5,907 death certificate records that petitioner has requested.”

The Department of Health appealed the June decision to the Tallahassee-based appeals court, creating a short stay. Lewis issued another order June 29, rejecting a department request to extend the stay of his ruling until all appeals are finished — though he approved a 15-day stay to give the department time to quickly go back to the appeals court.

The appeals court Monday, however, quashed Lewis’ June 29 order and said a stay “shall remain in effect pending final disposition of the merits of this appeal.” The appeals court also said it will handle the case in an “expedited” fashion, though a schedule for filing briefs indicates a decision would not be issued until at least mid-August.

A key point of contention in the records dispute is the Department of Health’s position that it needs to review and redact information from death certificates before turning them over to the nursing home. In a document filed last month in circuit court, the department said release of the records poses a threat to private health information.

“The release of the private information belonging to individuals on each of the 5,907 death (records) constitutes irreparable harm, as each individual could be contacted by attorneys, press or other individuals seeking information regarding this high-profile matter,” the department argued in the document. “Once released, there is no effective way to retract this sensitive information.”

But attorneys for the nursing home say the death certificates are already public information and that Lewis correctly ruled that the department should turn them over.

“DOH’s speculative arguments ignore that anybody can walk into a vital statistics office anywhere in Florida and request this information, unredacted, and receive it the same day,” attorneys for the nursing home wrote in a court document last month. “DOH’s own website allows, through a third-party vendor, anyone in the world to request these records without even being physically present in Florida (or the United States). … The only difference is that Hollywood Hills is requesting these records by a date range, not by name.”

The Scott administration suspended the facility’s license — and moved to revoke the license — after the nursing home lost its air-conditioning system Sept. 10 as Hurricane Irma pounded the state. The outage created sweltering conditions that resulted in the facility being evacuated Sept. 13. Authorities have attributed 12 deaths to problems at the nursing home after the storm.

Richard Corcoran committee reports more than $1.4M in bank

A political committee tied to House Speaker Richard Corcoran, a Land O’ Lakes Republican, spent nearly $200,000 in June — but still had more than $1.4 million in the bank, according to a newly filed finance report.

Corcoran raised $6.9 million for the committee, known as Watchdog PAC, in 2017 and early 2018 as he considered a possible run for governor. But Corcoran announced this spring that he would not run for governor and stopped raising money for the committee.

From June 1 through June 29, the committee spent $196,540, according to the report, with the largest single expenditure a $50,000 contribution to the Republican Party of Florida. The committee also paid tens of thousands of dollars to consultants.

As of June 29, the committee had about $1.44 million on hand.

Pension fund keeps positive streak alive

Florida’s $160.4 billion state pension fund showed a preliminary return of 8.99 percent for the fiscal year that ended June 30, marking the ninth straight year the retirement fund has shown a positive gain.

Ash Williams, executive director of the State Board of Administration, which oversees the fund that pays retirement benefits for teachers, county workers, law enforcement officers, state workers and higher-education employees, said he expects the final number to be even higher.

“Preliminary figures for the Florida Retirement System pension plan project returns for fiscal-year 2017-18 just shy of 9 percent,” Williams said. “Fiscal year-end valuations for our private market assets — real estate, private equity, etc. — have not yet been posted, which should further improve the return.”

The initial estimate, according to the State Board of Administration, was .71 percent above the various indexes and benchmarks the financial managers use to gauge the performance of the investments, which include domestic and foreign stocks, bonds, real estate, other financial instruments and cash.

The nine-year positive run began after the fund plunged more than 19 percent in 2008-09 as Florida was dealing with the impact of the Great Recession. Since then, the fund had two years where the return was less than 1 percent, but there were also five years of double-digit returns, including a 13.77 percent return in 2016-17.

Over the last 33 years, the fund has only had five negative years and has had 21 years of double-digit returns.

The investment return is important because the fund pays out more than $9 billion in benefits to retirees each year. That is only partially offset by some $3.3 billion in contributions from the government agencies that participate in the fund and from active employees, who have been contributing 3 percent of their annual salaries since 2011.

The 8.99 percent return helped the fund grow to $160.4 billion as of June 30, which was $6.8 billion higher than it started last July 1, even after accounting for the benefit payouts offset by the contributions.

The investment return is also important for the long-term fiscal health of the fund. As of July 1, 2017, independent consultants calculated that the pension fund could pay 84.3 percent of its future obligations, leaving a $28 billion long-term unfunded liability.

The ability to pay more than 80 percent of its future obligations puts the Florida pension fund among the upper tier of state retirement plans. Moody’s Investor Service, which gave Florida a top-level credit rating last month, cited the pension fund as a sign of the state’s fiscal responsibility.

“The state has also maintained consistently low debt and pension liabilities that compare well with other Aaa-rated states,” Moody’s said.

The state has been taking other steps to make the pension fund more fiscally sound, although independent advisors say it may not be aggressive enough.

For the last four years, the state has lowered the “assumed” rate of return on the pension fund, which impacts the annual contribution amounts. Last fall, the Florida Retirement System Actuarial Assumption Conference lowered the projected rate from 7.6 percent to 7.5 percent.

That decision came despite an evaluation from independent financial consultants that suggested a more realistic long-term assumed rate of return would be in the range of 6.6 percent to 6.8 percent.

A lower assumed rate of return means the government agencies that participate in the fund have to increase their annual pension contributions.

Last year’s reduction in the assumed rate resulted in the government agencies paying an additional $178.5 million in the new budget year, including $66.4 million from the counties, $54.4 million from the school districts and $31 million from the state agencies.

In a December letter to state officials, Milliman, the consulting firm that acts as an independent actuary for the pension fund, noted the 7.5 percent projected return “conflicts” with what the actuaries believe “would constitute a reasonable assumption.”

The letter said that if the 7.5 percent assumed rate of return drops to an actual 7.1 or 7 percent over the next 15-year period, it would result in an $8 billion to $12 billion increase in the unfunded liability for the pension system.

If the 15-year actual rate of return is close to the 6.8 percent assumed rate suggested by the consultants, the unfunded liability could grow by 75 percent, the letter said.

State analysts will meet again this fall to review the assumed rate of return for the pension fund, with the likelihood that the conference will again recommend another reduction in the rate.

The state pension system includes more than 630,000 active employees, although about 117,000 are enrolled in a 401(k)-type plan rather than the traditional pension plan. School district employees represent nearly half of the active workers, followed by county workers at 23 percent and state workers at 20 percent.

Ex-guard stripped of benefits in murder conspiracy

A former correctional officer convicted of conspiring to murder a former inmate in a case that involved the Ku Klux Klan will lose his state retirement benefits, according to an order issued this week.

The State Board of Administration, which operates the retirement system, issued the order upholding a recommendation from an administrative law judge that David Moran should forfeit his benefits.

Moran, a former sergeant at the Florida Department of Corrections Reception and Medical Center at Lake Butler, was convicted in a plot to kill a black former inmate who had bitten another officer.

Moran and another correctional officer and a former officer involved in the plot were members of the Ku Klux Klan, according to a May recommended order by Administrative Law Judge Hetal Desai.

The men were arrested after enlisting an FBI informant to help kill the former inmate. The State Board of Administration informed Moran in 2017 that he had forfeited his benefits because of the conviction.

Moran sought an administrative hearing, contending in part that there was not a connection between his job at the Department of Corrections and the conspiracy.

Desai disagreed, and the State Board of Administration order backed that opinion.

“It might have been difficult for petitioner and his co-conspirators to carry out a murder or attempted murder of an inmate at the correctional facility at which they worked or had worked,” this week’s order said.

“However, just because the conspiracy to commit murder occurred off the employer’s premises, does not mean that forfeiture (of benefits) would not be appropriate. There have been numerous cases that have found a sufficient nexus between the crime and public employment to require forfeiture where the specified offense did not occur at the public employee’s actual place of employment.”

Republished with permission of the News Service of Florida.

Court upholds commitment and mental illness dispute

A state appeals court Friday upheld a judge’s decision to involuntarily commit a man to an inpatient treatment facility, despite the man’s arguments that his mental illness did not pose a danger to his well-being and that other less-restrictive alternatives were available.

A panel of the 2nd District Court of Appeal said it could have treated the Southwest Florida case as moot because a three-month time frame in the commitment order had already passed, but it said similar issues could recur.

The case focused on a man, identified only by the initials D.F., who suffers from a mood disorder and dementia.

The director of Riverside Behavioral Center in Punta Gorda filed a petition seeking involuntary inpatient treatment for D.F., whose psychiatrist also recommended that he be placed in a closed facility. In part, D.F. was “mildly” malnourished and had no family or friends to care for him, Friday’s ruling said.

D.F. argued that he did not pose a threat to himself and that he could be placed in a group home. But the appeals court, in a nine-page order, upheld the commitment order by a Charlotte Court circuit judge, which followed a recommendation from a magistrate.

“Although D.F. was mildly, not grossly, malnourished, we are not prevented from concluding that the state presented evidence of specific occasions where D.F.’s failure to take medication and take care of himself resulted in substantial harm to his well-being,” said Friday’s ruling, written by Chief Judge Edward LaRose and joined by judges Darryl Casanueva and J. Andrew Atkinson.

“We note that the malnutrition followed shortly after D.F.’s last discharge from a group home. Thus, the trial court did not err in adopting the magistrate’s finding that the state presented clear and convincing evidence that, without treatment, D.F. would pose a real and present threat of substantial harm to himself.”

Republished with permission of the News Service of Florida.

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