A Volusia County judge delivered another blow Wednesday to Halifax Health’s plans to build a hospital in Deltona, when he ruled that state law does not give the public hospital the power to build facilities outside of its taxing district.
In a written order Volusia County Circuit Court Judge Michael Orfinger agreed with former Ponce Inlet Mayor Nancy Epps that Halifax Health lacks the authority to build or operate the Deltona hospital currently under construction. Halifax already operates an emergency room in that city.
The ruling does not spell the end for Epps’ lawsuit first filed in June 2016 but it answers a question that has been the linchpin of the legal battle. Orfinger still has to decide what kind — if any — relief to reward Epps.
She asked the judge to issue an injunction which would effectively halt the project and to force the hospital to sell the 30-acres of land it purchased for $4.5 million in 2013.
Halifax Health spokesman John Guthrie responded to the ruling in an email, saying "Our objective is to be in Deltona and we have options and alternatives available to us. We will continue to explore the most efficient path possible."
As of Wednesday evening, Halifax Health CEO Jeff Feasel could not be reached for comment.
Halifax Health has been busy constructing what hospital officials are calling a medical village on the land which borders Interstate 4 and State Road 472. The hospital opened the county’s first freestanding emergency room in May 2016 and a 95-bed hospital tower and medical office building is slated to open in December 2019.
The Halifax Hospital District is one of three special taxing district in Volusia County created to serve the public’s health care needs. Halifax Health Medical Center first opened its doors in 1928 and the taxing district was created to serve indigent patients within its boundaries, between Ormond Beach and Port Orange.
Halifax Health officials made pleas in public and told health care regulators that the Deltona hospital would provide a needed financial boost as it fends off competition in a market surrounded by Florida Hospital. The hospital’s lawyers argued in court that state law permitted the hospital to build facilities anywhere as long as it was for the “general welfare of the residents of the district.”
Orfinger disagreed. He said that interpretation would have been too broad and that the Florida “statute must be given its plain and obvious meaning.”
The decision did not surprise some legal experts after Volusia County Circuit Judge Christopher France, in a separate case, decided this month that the hospital did not have the authority to issue $115 million in bonds to pay for the Deltona hospital. That ruling, experts said, would serve as a blueprint for judges who decide future cases involving the same issues.
“Another judge in the same circuit is bound by what this judge said. Another judge can’t turn around and say ‘no’ and disagree,” said Dr. Adam Levine, a health and administrative law professor at the Stetson University College of Law
Epps, in a prepared statement, said the decisions supported her position.
“As I have previously stated, I support Halifax Health’s many services to the community. However, I and all taxpayers of a taxing district deserve and expect to have our tax dollars spent in our community,” Epps said. “Two well-respected judges have concluded that building a hospital in another taxing district is a violation of law and I urge Halifax to respond appropriately.”
It’s unclear if the decision spells the end of the hospital’s Deltona venture. The hospital has already spent $12.7 million to open the freestanding emergency room and the Halifax Health Board of Commissioners agreed last November to spend $105 million to kickstart construction of the hospital.
In his ruling Orfinger said Halifax Health could ultimately find a solution in the Legislature. He cited the Sarasota County Public Hospital District as an example of a special taxing district that successfully asked state lawmakers to allow them to operate health care facilities “within and beyond the boundaries of the district.”
That’s what allows Sarasota Memorial Health Care System to operate a urgent care center in neighboring Manatee County.
“The (Halifax Hospital) District has not offered any reason why the same process would not be viable here,” Orfinger said.
Public attitudes about special taxing districts have waned in recent years. Florida Gov. Rick Scott has long been skeptical of them and launched a commission to study their effectiveness in 2011.
But Halifax Health has long owned and operated various smaller facilities outside of the boundaries of its district, tax records show. The health system’s hospice services extend as far north as Palm Coast and as far south as Orange County.
“Judge Orfinger’s ruling combined with Judge France’s decision only eight days ago, makes clear that special taxing districts like Halifax are constrained to operate within their defined geographic boundaries unless granted express permission from the Florida Legislature to do otherwise,” said Martin Goldberg, one of Epps’ attorneys.
“Should Halifax or other special districts desire to seek out other sources of revenue not tied to providing medical services to their own residents, it should take those strategies to the Legislature.”