LSHA: Gov's Board Approves $7.5 mil Investment No One Asks About the Rate, Ignores FL Statutes
Posted October 15, 2020 01:45 pm
COLUMBIA COUNTY, FL – This past Monday evening, the Governor's Lake Shore Hospital Authority Board approved a $7.5 mil investment – sight unseen, rate unknown, Florida statutes ignored. Authority Manager Dale Williams provided no written backup documentation, and no one asked for it.
Background
In the olden days, the days of legendary Authority Manager Jackson P. "Jack" Berry, one could argue that many things were not done right. However, when it came to investing the Authority's money, taxpayer's money, proposals were announced, advertised, made public, and approved by the Governor's Board.
Recently, CHS, the corporation that leased the hospital from the Authority, decided it could not continue to sustain its losses and for $7.5 mil bought its way out of its lease.
On Monday evening, Authority Manager Dale Williams announced that the $7.5 mil was deposited in the Authority's bank account.
That's where the trouble began.
A report from a steno pad is not following the law
Manager Williams announced that in time he would give the Board a written report.
He said, "We have received the seven and a half million dollar lease payout... It was transferred to Ameris Bank. It was placed in a six month CD. We chose Ameris by getting telephonic quotes of interest rates being paid. We simply selected the one offering the highest CD rate for a six month period."
The Lake Shore Hospital Authority is sitting on a cash hoard of over $23 mil. The Governor's Board has not had a comprehensive investment report for over a year and a half and hasn't asked for one.
Authority Manager Dale Williams
The Governor's Board has not established financial goals, procedures, or hired an independent investment or independent outside auditing firm. Other than monthly balances, the Board has not received any detailed analysis of its investments.
The primary function of Manager Williams is the administration of the Authority in accordance with the "policies established by the Board Members."
The Authority's Procurement policy explains how purchases of over $25,000 are made. A Certificate of Deposit, or CD, is a purchase.
"Purchases in excess of $25,000 - Authority staff shall prepare bid specifications, obtain approval of Authority Board, and solicit bids by advertising or other appropriate means. Bids shall be reviewed at an Authority Board meeting and acted upon by the Board."
After Manager Williams reported that he had hired six new Authority employees to keep the vacated hospital serviceable, not one Board member asked how much this would cost.
Your reporter commented to the Board that they used to approve the purchase of CD's.
He said, "If you are going to invest 7 million dollars... you should get something in writing that the Board could look at. The four of you sit there and do nothing as Mr. Williams runs the Authority off a steno pad."
Manager Williams addressed the $7.5 mil CD situation. He said, "I wish to remind the trustees, we recently went through a bid process and a selection process as it related to financials. That was a little over a year ago. The quotes list the name of the person giving the quote and the amount. It is perfectly in-line with proper procedure. Had we not recently went through a bid process and had we simply placed this with our existing bank, I could better understand the argument. I do not think this wavered from good financial policy."
Manager Williams & the Governor's Board Wavered on Everything
Manager Williams' mention of the February 2019 bid has nothing to do with the Authority's $7.5 mill dollars recently received.
At that time, Richard Powell, the Authority accountant-internal auditor-external auditor-financial advisor [all one person], was involved in the banking issues.
Authority Attorney and Lake City City Attorney Fred Koberlein, Jr., was also involved.
It is not clear what they were thinking. In 2019, the Authority was following the wrong Florida Statute.
Yesterday afternoon, Authority Manager Williams sent a message saying that in 2019 and presently, the Authority was using FL stat. 218.415. He highlighted a section that gave direction to a "unit of local government" that elected "not to adopt a written investment polity..."
The Lack of a Written Investment Policy
While FL stat. 218.415 is the wrong statute; even if it were correct, the Authority Board would have had to agree not to have a written investment policy. The Board has never done that.
The Florida legislature, recognizing the unique character and problematic issues of special districts, enacted investment legislation just for them. In essence, Florida statute 218.345, "Special districts; investments," created the Authority's investment policy.
The first mention in the statute explains that the "governing body" shall, by resolution, invest any surplus public funds..." The statute then details where the money can be invested.
Epilogue
On Monday, the Governor's Lake Shore Hospital Authority Board didn't pass any resolution authorizing the Hospital Authority Manager Dale Williams to deposit $7.5 mil, at an unknown rate of interest, anywhere.
