Can a Florida special district use district funds to pay for board members' group health insurance, in addition to their statutorily authorized compensation?

Plain-English summary

The Loxahatchee River Environmental Control District is an independent special district covering the Loxahatchee River Basin in Palm Beach and Martin Counties. Its charter, Ch. 2002-358, Laws of Florida, gives elected board members $100 per month in compensation plus per diem and travel under § 112.061. The charter is silent on insurance.

The District wanted to provide group health insurance to its board members. Counsel asked the AG two questions: (1) could district funds pay the premiums (or part of them), in addition to the $100/month compensation? And (2) could board members voluntarily direct their compensation, or pay from personal funds, to participate?

The AG answered yes to both, primarily by relying on § 112.08(2)(a), Florida Statutes:

• District funds: yes. Section 112.08(2)(a) lets a "local governmental unit" pay all or part of the premium for group health insurance "for the officers and employees of the local governmental unit and for health…insurance for the dependents of such officers and employees." Section 112.08(1) defines "local governmental unit" to include special districts. Critically, § 112.08(2)(a) applies "[n]otwithstanding any general law or special act to the contrary," which means the silence (or even contrary terms) in the District's charter does not block the authority.

• Compensation or personal funds: also yes. The AG found nothing in the charter or in § 112.08 that would forbid a board member from voluntarily directing compensation toward insurance premiums, or paying from personal funds. AGO 04-08 had previously reached a similar conclusion.

The AG explicitly noted that the opinion didn't address whether the District's particular insurance program met all the requirements of § 112.08 (which include rules about insured groups, plan structures, and so on). That detail was beyond the scope of the question presented.

Currency note

This opinion was issued in 2017. 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.

Common questions

Q: Were Florida special districts "local governmental units" for insurance purposes?
A: Yes. Section 112.08(1) defined "local governmental unit" to include any "special district," giving them the same authority as cities and counties to provide group insurance to officers and employees.

Q: Did the silence of a charter foreclose insurance benefits?
A: No, because § 112.08(2)(a) applies "notwithstanding any general law or special act to the contrary." The independent statutory authority applies even where the charter is silent. The general rule that special districts have only powers expressly granted (Forbes Pioneer Boat Line v. Bd. of Comm'rs of Everglades Drainage Dist., 82 So. 346 (Fla. 1919)) gives way to a specific statutory grant.

Q: Could the district use board compensation to fund insurance?
A: Yes, at the board member's direction. The AG found no charter provision and no § 112.08 rule that prohibited a member from voluntarily routing compensation to insurance.

Q: Could a board member pay premiums from personal funds?
A: Yes. There was no statutory limit on doing so.

Q: What was the source of the $100/month compensation?
A: Section 4(10) of Ch. 2002-358, Laws of Fla., the District's charter act. That compensation could be in addition to insurance benefits paid by the District out of its operating funds.

Q: What did the AG decline to opine on?
A: Whether the District's actual group health insurance program complied with all the requirements of § 112.08. The AG had no specifics on the program design and explicitly left compliance review to the District.

Background and statutory framework

Florida's group-insurance authority for public bodies is in § 112.08. The 2002 reorganization that produced the Loxahatchee River District left a charter that didn't address insurance. The District's authorities therefore had to come from somewhere else, and § 112.08 supplied them.

The "notwithstanding" clause in § 112.08(2)(a) is the key. Without it, the rule from Forbes Pioneer Boat Line, that a special district has only the authority granted by its enabling legislation: would have foreclosed the result. The Legislature wrote § 112.08 broadly to cover all local governmental units, including special districts, with an explicit override of charter silence. The statute also allows alternative arrangements: insurance through commercial carriers, third-party administrators, self-insurance, or risk-management consortia.

The opinion is short and largely mechanical. The substantive interest is the demonstration that § 112.08 functions as a baseline statutory grant, leveling the field across local governmental units regardless of charter idiosyncrasies.

Citations and references

Statutes and laws:
- § 112.08, Fla. Stat. (Group insurance for public officers and employees)
- § 112.061, Fla. Stat. (Per diem and travel expenses)
- § 189.012, Fla. Stat. (Special-district definitions)
- Ch. 2002-358, Laws of Fla. (Loxahatchee River District charter)

Cases:
- Forbes Pioneer Boat Line v. Bd. of Comm'rs of Everglades Drainage Dist., 82 So. 346 (Fla. 1919)

Prior AG opinions:
- Op. Att'y Gen. Fla. 04-08 (2004)
- Op. Att'y Gen. Fla. 89-34 (1989)

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/special-district-group-health-insurance
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/1496

Original opinion text

August 9, 2017

Mr. Curtis L. Shenkman

Attorney for Loxahatchee River District

11891 U.S. Highway One, Suite 100

North Palm Beach, Florida 33408

RE: MULTICOUNTY INDEPENDENT SPECIAL DISTRICT – SECTION 112.08 –– use of district funds, board member compensation, or board member personal funds to pay for District board members' participation in the District's group health insurance program.

Dear Mr. Shenkman:

You have requested an opinion addressing these matters:

1. Whether the Loxahatchee River Environmental Control District ("District") is authorized by section 112.08(2)(a), Florida Statutes (pertaining to group insurance for public officers, employees, and certain volunteers), or Chapter 2002-358, Laws of Florida (the enabling legislation for the District), to use District funds to pay for all or a portion of the cost for District board members to participate in the District's group health insurance program, in addition to the board member compensation which is provided as authorized by section 4(1) of Chapter 2002-358; and

2. Whether all or a portion of the compensation paid to board members under section 4(1) of Chapter 2002-358, Laws of Florida, or the private funds of the District board members may be used to pay for the board members' participation in the District's group health insurance program?

In sum:

1. The District is authorized by section 112.08(2)(a), Florida Statutes, to use District funds to pay for all or a portion of the cost for District board members to participate in the District's group health insurance program, in addition to the board member compensation which is provided as authorized by section 4(1) of Chapter 2002-358.

2. Neither section 112.08(2)(a), Florida Statutes, nor Chapter 2002-358, Laws of Florida, appears to preclude use, at the board member's direction, of all or a portion of the compensation paid to District board members (under section 4(1) of Chapter 2002-358), or use of the board members' private funds, to pay for the members' participation in the District's group health insurance program.

The charter for the Loxahatchee River Environmental Control District is codified at Chapter 2002-358, Laws of Florida. The District—whose geographical boundaries comprise portions of Palm Beach and Martin Counties, including the Town of Jupiter, Jupiter Inlet Colony, Juno Beach, and the Village of Tequesta (generally defined as the Loxahatchee River Basin)—is established as a multicounty independent special district of the state, and is thus a local agency of government. "The purpose of the District is to effectively achieve water quality and water quantity management within the Loxahatchee River Basin through the management of water supply, wastewater, and storm water drainage." In implementing this purpose, the District is governed by a five-member board. The District board members, who are elected by the registered voters of the District, act as officers of the District. The District's operation and projects may be financed through issuance of bonds and collection of assessments and ad valorem taxes.

As a general rule, special districts possess only the power and authority granted to them by their enabling legislation (whether expressly granted or necessarily implied to carry out expressly-granted powers). Therefore, absent an additional, independent source of statutory authority, the District may only exercise the powers granted by its enabling legislation, either expressly or by necessary implication.

Question One

The charter for the Loxahatchee River Environmental Control District provides that members of the board "shall serve with compensation in the amount of $100 per month per member, and shall be entitled to per diem and travel expenses as provided by section 112.061, Florida Statutes." The charter does not address whether insurance can be provided for officers of the District (including board members). But section 112.08(2)(a), Florida Statutes—to which the District is also subject—does address this issue. Moreover, it specifies that its provisions apply "[n]otwithstanding any general law or special act to the contrary[.]"

Section 112.08(2)(a), Florida Statutes, specifically authorizes a "local governmental unit" to "provide and pay out of its available funds for all or part of the premium for… health … insurance, or all or any kinds of such insurance, for the officers and employees of the local governmental unit and for health…insurance for the dependents of such officers and employees upon a group insurance plan…." Section 112.08(1), in turn, defines the term "local governmental unit," as used in that section, to include special districts. Section 112.08, Florida Statutes, also authorizes the District to enter into contracts with insurance companies or professional administrators to provide such insurance; to self-insure to provide any plan for health, accident, and hospitalization coverage; or to enter into a risk management consortium to provide such coverage. Based on the statute's applicability notwithstanding "any general law or special act to the contrary," the independent statutory authority granted by section 112.08 may be invoked even where, as here, a district's enabling legislation does not address the matters comprised by section 112.08.

Neither Chapter 2002-358, Laws of Florida, nor section 112.08, Florida Statutes, requires that the District board member compensation be used to make insurance payments for the members' insurance coverage, as described in section 112.08. Instead, section 112.08(2)(a) appears to grant the District the independent power to provide, and pay for, such insurance for its officers (including board members).

Therefore, assuming that the District's group health insurance program otherwise complies with the requirements of section 112.08, Florida Statutes, the Loxahatchee River Environmental Control District is authorized by section 112.08(2)(a), Florida Statutes, to use District funds to pay for all or a portion of the cost for District board members to participate in the District's group health insurance program. Payment of such cost may be in addition to the board member compensation authorized by Chapter 2002-358, Laws of Florida.

Question Two

You ask whether the authorized board member compensation, itself, may be used to pay the cost of all or a portion of the premiums for such insurance, and whether the board members may make such payments from their personal funds. I am aware of no provision of the charter for the Loxahatchee River Environmental Control District which would preclude the use, at a board member's direction, of a board member's compensation to pay for insurance provided by the District. Nor am I aware of any limitation on the use of the board members' personal funds for such purposes.

Sincerely,

Pam Bondi

Attorney General

PB/ttlm