What can residents and officials do when a Florida city is financially failing and the city commission won't act?

Plain-English summary

A city commissioner from the City of South Bay wrote about the city's troubles and the city commission's failure to address them, including financial instability and possible criminal violations. The Attorney General's office responded with an informal letter rather than a formal opinion, stressing that it has no specific authority over municipalities or their governing bodies, and offering pointers to the relevant law and the offices that could act.

The letter laid out three sets of tools. First, voters can remove a member of a municipal governing body through the recall process in section 100.361, on grounds such as malfeasance, misfeasance, neglect of duty, and incompetence. Second, the Governor can suspend an elected or appointed municipal official under section 112.51 for similar grounds. Third, when a local government hits one of the financial-distress triggers in section 218.503 (such as failing to pay debts, payroll, or withheld taxes for lack of funds), it becomes subject to review and oversight by the Governor, who can require approval of the city's budget or set up a financial emergency board. The letter also directed the commissioner to the Governor's Office, the local state attorney for any criminal matters, and the Florida Commission on Ethics for conflict-of-interest questions under the Code of Ethics.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The letter is an informal response, and the office was careful to say it has no direct authority over cities. It pointed to existing statutory mechanisms rather than offering a legal conclusion.

Section 100.361, Florida Statutes, provides for recall of a member of a municipal governing body by the municipality's electors for grounds including malfeasance, misfeasance, neglect of duty, and incompetence, and it applies whether or not the municipality has adopted its own recall provisions. Section 112.51(1) authorizes the Governor, by executive order filed with the Secretary of State, to suspend an elected or appointed municipal official for malfeasance, misfeasance, neglect of duty, habitual drunkenness, incompetence, or permanent inability to perform official duties.

For financial distress, section 218.503(1) lists the conditions that subject a local government to review and oversight by the Governor, including failure (for lack of funds) to pay short-term loans or debt service, to pay uncontested creditor claims within 90 days, to transfer withheld employee taxes or social-security and pension contributions, or to make payroll, as well as certain reported fund-balance deficits. Once a financial emergency is determined, section 218.503(3) lets the Governor take measures such as requiring approval of the city's budget or establishing a financial emergency board.

The letter noted that the Governor may previously have declared the city to be in a financial emergency, and it referred the commissioner to the Governor's Office, to the local state attorney for any criminal violations, and to the Florida Commission on Ethics for conflict-of-interest questions under the Code of Ethics for Public Officers and Employees (Part III, Chapter 112).

Common questions

Q: Who can remove a city commissioner who won't do the job?
A: The letter pointed to two routes. Voters can pursue recall under section 100.361 on grounds like neglect of duty or incompetence, and the Governor can suspend a municipal official under section 112.51.

Q: What happens when a Florida city runs out of money?
A: Under section 218.503, hitting one of the listed financial-distress conditions subjects the city to the Governor's review and oversight. The Governor can require budget approval or create a financial emergency board to oversee the city.

Q: Does the Attorney General step in to run a troubled city?
A: No. The office stated it has no specific authority over municipalities or their governing bodies. It pointed the commissioner to the Governor's Office, the state attorney, and the Commission on Ethics depending on the issue.

Citations and references

Statutes:

• s. 100.361, Fla. Stat. (recall of municipal officials)
• s. 112.51(1), Fla. Stat. (gubernatorial suspension of municipal officials)
• s. 218.503(1), Fla. Stat. (conditions triggering state oversight of local financial emergencies)
• Part III, Chapter 112, Fla. Stat. (Code of Ethics for Public Officers and Employees)

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/municipalities-financial-instability
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/8168

Original opinion text

Ms. Linda Johnson

Post Office Box 644

South Bay, Florida 33493

Dear Commissioner Johnson:

The Office of Attorney General Pam Bondi has received the copy of the letter you sent to Representative Mack Bernard regarding the problems encountered by the City of South Bay and the failure of the city commission to address those problems.

While this office has no specific authority over municipalities, or their governing bodies, the following informal comments are offered in an effort to be of assistance.

You state that the citizens previously had presented the city commission with a vote of no confidence and request for removal petition. Section 100.361, Florida Statutes, provides for the removal from office of any member of the governing body of a municipality by the electors of the municipality for, among other things, malfeasance, misfeasance, neglect of duty and incompetence.[1] The statute, which applies to municipalities "whether or not they have adopted recall provisions[,]"[2] sets forth the requirements for the recall petition.[3] Moreover, section 112.51(1), Florida Statutes, provides that the Governor, by executive order stating the grounds for the suspension and filed with the Secretary of State, may suspend from office any elected or appointed municipal official for malfeasance, misfeasance, neglect of duty, habitual drunkenness, incompetence, or permanent inability to perform official duties.

Inasmuch as your refer to the financial instability of the city, I would direct your attention to section 218.503(1), Florida Statutes, which provides that local governmental entities shall be subject to review and oversight by the Governor, when any one of the following conditions occurs:

"(a) Failure within the same fiscal year in which due to pay short-term loans or failure to make bond debt service or other long-term debt payments when due, as a result of a lack of funds.

(b) Failure to pay uncontested claims from creditors within 90 days after the claim is presented, as a result of a lack of funds.

(c) Failure to transfer at the appropriate time, due to lack of funds:

1. Taxes withheld on the income of employees; or

2. Employer and employee contributions for:

a. Federal social security; or

b. Any pension, retirement, or benefit plan of an employee.

(d) Failure for one pay period to pay, due to lack of funds:

1. Wages and salaries owed to employees; or

2. Retirement benefits owed to former employees.

(e) An unreserved or total fund balance or retained earnings deficit, or unrestricted or total net assets deficit, as reported on the balance sheet or statement of net assets on the general purpose or fund financial statements, for which sufficient resources of the local governmental entity, . . . as reported on the balance sheet or statement of net assets on the general purpose or fund financial statements, are not available to cover the deficit. Resources available to cover reported deficits include net assets that are not otherwise restricted by federal, state, or local laws, bond covenants, contractual agreements, or other legal constraints. Fixed or capital assets, the disposal of which would impair the ability of a local governmental entity . . . to carry out its functions, are not considered resources available to cover reported deficits."

It appears from your letter that the Governor may have declared the city to be in a financial emergency in the past. If it is determined that the city is currently experiencing a financial emergency, the Governor may take several measures to assist the local governmental entity in resolving the financial emergency, including, but not limited to, requiring approval of the city's budget by the Governor or establishing a financial emergency board to oversee the activities of the city.[4]

In light of the above, you may wish to contact the Governor’s Office at the following address: Office of Governor Rick Scott, State of Florida, The Capitol, 400 South Monroe Street, Tallahassee, Florida 32399-0001; telephone (850) 488-7146; fax: (850) 487-0801.

You also indicate that there may have been criminal violations of the laws of this state. Such violations would be prosecuted by the local state attorney’s office. It appears, however, that you have already contacted that office. Questions involving conflict of interest under the Code of Ethics for Public Officers and Employees, Part III, Chapter 112, Florida Statutes, should be addressed to the Florida Commission on Ethics, which may be contacted at: Post Office Drawer 15709, Tallahassee, Florida 32317-5709; telephone: (850) 488-7864; fax: (850) 488-3077.

I hope that the above information may be of assistance. Thank you for contacting the Attorney General’s Office.

Sincerely,

Joslyn Wilson

Assistant Attorney General

JW/tsh

[1] See s. 100.361(2)(d), Fla. Stat.

[2] See s. 100.361(12), Fla. Stat.

[3] See s. 100.361(2), Fla. Stat.

[4] See s. 218.503(3), Fla. Stat.