STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALACHUA COUNTY, )

)

Petitioner, )

)

vs. ) CASE NO. 80-702RX

)

FLORIDA DEPARTMENT OF )

TRANSPORTATION, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this cause on November 13, 1980, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Peter Skoro, Esquire

Deputy County Attorney Post Office Drawer "CC"

Gainesville, Florida 32602

For Respondent: Philip S. Bennett, Esquire

Haydon Burns Building Tallahassee, Florida 32301

Petitioner, Alachua County, Florida (hereinafter "Petitioner" or "Alachua County") challenges as an unadopted, and therefore allegedly invalid "rule", a letter dated July 22, 1977 from the then-Secretary of the Florida Department of Transportation (hereinafter "Respondent" or "DOT"). Final hearing was originally scheduled for August 7 and 8, 1980 by Notice of Hearing dated April 17, 1980. Thereafter, the parties stipulated to many of the facts at issue in this proceeding, and final hearing was rescheduled for November 13, 1980 by Notice of Hearing dated October 29, 1980.

At the final hearing, Petitioner called Jean Cogburn, Carmen Hiers and Ed Culpepper as its witnesses. Respondent called Walter Howard Skinner, III, as its only witness. The parties stipulated to the entry into the record of Hearing Officer's Exhibit No. 1, with attached Exhibits 1 through 21, and Hearing Officer's Exhibit No. 2.

FINDINGS OF FACT

1. The parties entered into a Stipulation resolving many of the factual disputes involved in this proceeding. This Stipulation included attached Exhibits 1 - 21, which were referred to by number in the Stipulation. The Stipulation, in its entirety, provided as follows:

   1. On August 1, 1973, and February 1, 1976, the State of Florida issued full faith and credit road bonds on behalf of Alachua County, Florida, said bonds having a face value of $3.8 million and

      $4.0 million, respectively (see Exhibits 1 and 2). The 1976 bonds were issued in parity with the 1973 bonds. The Alachua County portion of the fifth and sixth cent gas tax (Second Gas Tax) were pledged for the payment of "the principal of and interest on the bonds."

      
      

   2. The 1973 and 1976 bonds were issued to pay for certain specified road construction projects and unspecified "rights-of-way acquisition for Primary and Secondary roads throughout Alachua County" (see Exhibits 1 and 2, pp. 6).

      
      

   3. Prior to July 1, 1977, the Florida Department of Transportation (DOT) controlled the expenditure of the counties' portion of the Second Gas Tax fund pursuant to statute.

      
      

   4. Prior to July 1, 1977, upon priorities established jointly by the counties and the DOT, the counties through their respective boards of county commissioners adopted resolutions and signed agreements authorizing the DOT to expend county Second Gas Tax funds and

      road bonds (such as the Alachua County road bond funds) on road construction and right-of-way acquisition projects within the counties. Upon receiving such authorization, all aspects of the road projects.

      
      

   5. Exhibits 3, 4, and 5 (attached hereto) consist of the requisite county resolutions (requesting initiation of road projects and specifying the source of funds) and right-of-way acquisition agreements for Alachua County road projects

      initiated by the Florida Department of Transportation, prior to July 1, 1977, said projects being identified as numbers 26070-2532, 26070-2533 and 26250-2501,

      respectively.

      
      

   6. Exhibits 6, 7, and 8 (attached hereto) consist of right-of-way agreements, right-of-way appraisal

      agreements, and orders of taking in condemnation suits, executed prior to July 1, 1977, which pertain to the road projects identified in Paragraph 5 above.

      
      

   7. Exhibits 9 and 10 (attached hereto) are of the same character as Exhibits 6, 7, and 8, but were executed after July 1, 1977.

      
      

   8. Exhibit 11 (attached hereto) represents a summary of expenditures, by year, for each of the above- enumerated right-of-way acquisition projects.

   9. The Florida Department of Transportation committed and expended approximately $500,000 to $600,000 of Alachua County road bond funds after July 1, 1977, for acquisition of Primary rights-of-way. These expenditures included acquisition of real property, surveying costs, appraisals, general personnel and office operation costs of the Florida Department of Transportation.

      
      

   10. Prior to July 1, 1977, the three above-enumerated road projects were designated as part of the state Primary Road System, pursuant to statute. After

       July 1, 1977, pursuant to Chapter 77-165, Laws of Florida, establish [sic] three road classification systems including State roads, County roads, and Municipal roads. Pursuant to law, each jurisdiction was to assume administrative, operational, and financial responsibility for its respective road system.

       
       

   11. Pursuant to Chapter 77-165, Laws of Florida, Florida DOT assumed the administrative, operational, and financial responsibility for State roads, and adopted Chapters 14-11 and 14-12, Florida Administrative Code, to effect this assumption

       and transfer of responsibility.

       
       

   12. Pursuant to Chapter 77-165, Laws of Florida, and Chapters 14-11 and 12, Florida Administrative Code, the Florida DOT requested that the various counties identify those road projects (jurisdiction over which had been transferred to the counties pursuant to the new law) for which the counties desired the Florida Department of Transportation

       to continue administrative responsibility. Attached as Composite Exhibit 12 are documents consisting of the new Florida DOT's above-noted request to Alachua County and Alachua County's response thereto.

       
       

   13. After July 1, 1977, Alachua County never requested, through resolution or signed agreement, that the Florida Department of Transportation acquire rights-of-way on the three above-identified rights-of-way acquisition projects. Alachua County did not adopt resolution [sic] in the same form used to initiate the road projects (see Exhibits 3, 4 and

       5), requesting the Florida Department of Transportation to discontinue acquisition of said rights-of-way; however, there was an exchange of correspondence between representatives of both Alachua County and

       the Florida Department of Transportation subsequent to July 1, 1977, relative to the issue of bond monies, copies of which letter [sic] are attached hereto as Composite Exhibit Number 13.

       
       

   14. Exhibit 14 consists of a DOT office of Management and Budget circular which was distributed

       throughout the various offices, including District Offices, of the Department of Transportation.

       Exhibit 15 (which is a July 22, 1977, letter) was distributed to the various boards of county commissioners for the counties within the State of Florida.

       
       

   15. For fiscal year 1977-1978, the Florida Legislature appropriated to the Florida Department

       of Transportation at Chapter 77-464, Laws of Florida, the amount of $20 million for the specific purpose

       of acquiring Primary rights-of-way for the new State Road System. Similar appropriations have been awarded to the Department of Transportation in subsequent fiscal years.

       
       

   16. On or about October 18, 1988, the Florida Department of Transportation pursuant to Chapter

       77-165, Laws of Florida, for the purpose of affecting said law, promulgated rules as set forth at Chapters 14-11 and 14-12, Florida Administrative Code.

       
       

   17. In connection with the February 1, 1976, bond issue, the road construction project denominated as Southeast 40th Avenue (see page 6 of Exhibit 2) remains uncompleted as of this date and there are

       insufficient monies remaining in the Alachua County road bond fund to complete said project. As of July 21, 1980, $28,317.01 remains in the February 1, 1976, bond issue fund.

       
       

   18. Attached as Composite Exhibit 16 is an August 23, 1977, letter from the Palm Beach County Engineer to Board of County Commissioners, an August 26, 1977, letter from Palm Beach County Director of Engineering Coordination to the Florida Department of Transportation, and a copy of resolution number

       R-77-859, said resolution dated August 23, 1977.

       
       

   19. Attached as Exhibit Number 17 are documents showing that the Florida Department of Transportation, with the concurrence of the Alachua County Board of County Commissioners, transferred $1.2 million from the Alachua County road bond account to the Second

       Gas Tax account of Alachua County.

       
       

   20. Attached as Exhibits 18 and 19, respectively, are the January 30, 1973, and August 5, 1975, resolution of the Alachua County Commission issued in connection with the August 1, 1973, and February 1, 1976, bond issues.

       
       

   21. Attached as Exhibits 20 and 21, respectively, are the August 1, 1973, Lease Purchase Agreement and the February 1, 1976, Supplemental Lease

       Purchase Agreement prepared in connection with their respective bond issues.

   22. The parties to this stipulation agree to submit into evidence the depositions taken by Petitioner of Leon Cassels, Florida Department of Transportation, Comptroller; Tom Webb, Florida Department of Transportation, Deputy Director of Operations; Gene Mynard, Florida Department of Transportation, Fiscal Division Accountant; Fred Renault, Florida Department of Transportation, Chief, Bureau of Right-of Way; Chuck Butterworth, Florida Department of Transportation, Fiscal and Securities Analyst; Robert (Bob) Taff, Florida Department of Transportation, Contracts Supervisor.

       
       

2. Subsequently, the parties by Supplemental Stipulation further agreed as follows:

   
   

   . . . The Florida Department of Transportation expended $590,018 of Alachua County road bond funds after July 1, 1977, in connection with road projects #26070-2532, 26070-2533, and 26250-2501;

   and this sum represents the amount of money Alachua County claims should be reimbursed by the Florida Department of Transportation.

   
   

3. The July 22, 1977, letter referred to in Paragraph 14 above which Petitioner challenges as an unadopted, and therefore invalid "rule," provides, insofar as here pertinent, as follows:

   
   

   Subject: Administration of the 80 percent Surplus of the Second Gas Tax (Secondary)

   
   

   Governor Askew has signed into law House Bill 803 and Senate Bill 32-B which provide for the transfer

   of the 5th and 6th cents gas tax to the counties over a three-year period.

   
   

   This is extremely complex legislation which is summarized and consolidated for your convenience in attachment 1. Implementation of the new law will require a major administrative effort by the state and the counties in the next two months. It is the department's desire to be as helpful as possible during the transition while abiding by the spirit and intent of the law. It is apparent that the transition should be orderly and that counties must address the matter in time to make any necessary adjustments to the county budget.

   
   

   The district engineer in your area, or his representative, will visit you shortly to assist

   in the matters set forth in this letter. We need to proceed immediately with the following tasks:

   
   

   Project Authorizations. Without formal request from the county, the department is unable to continue with projects currently being administered for the

   county from your secondary fund unless the project is:

   
   

   1. A project on which construction bids were received before July 1;

      
      

   2. A bond project which pledges the secondary fund; or

      
      

   3. A project which is a connector to the Interstate under county-state agreement prior to July 1.

   
   

   All other projects underway require a new request from the project phase, it should be listed on a standard resolution-agreement form which will be provided by our district engineer. If you wish to take over a

   project phase now underway, the department will provide technical assistance during the changeover . . . .

   (Emphasis added).

   
   

4. Petitioner also argues that additional evidence of the existence of the alleged unadopted "rule" is contained in a circular dated July 19, 1977, developed by DOT's Office of Management and Budget. This circular provided that "[n]o work funded by the 5th and 6th cents may be administered by [DOT] without a formal requires from the counties after July 1, 1977, except for [b]ond

   projects pledging the 5th and 6th cents . . . ." The circular further indicated that ". . . [b]ecause bond projects are financed through the sale of bonds under authority specified in the Florida Constitution, there will be no change in the administration of bond projects which pledge the 80 percent Surplus Gas Tax."

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.56, Florida Statutes.

   
   

6. Section 120.52(14) Florida Statutes, defines "rule" as:

   
   

   . . . each agency statement of general applicability that implements, interprets, or prescribed law or policy or describes the organization, procedure,

   or practice requirements of an agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule. The term also includes the amendment or repeal of a rule . . . .

   
   

7. As indicated by the Court in Department of Administration v. Harvey,

   356 So. 2d 323, 325 (Fla. 1st DCA 1978) "[w]hether an agency statement is a rule turns on the effect of the statement, not on the agency's characterization of the statement . . . ." Thus, an agency statement is a "rule" if it ". . .

   purports in and of itself to create certain rights and adversely affect others .

   . . ." Department of Administration v. Stevens, 344 So. 2d 290, 296 (Fla. 1st DCA 1977). An agency statement also constitutes a rule if the statement serves ". . . by [its] own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law." McDonald v.

   Department of Banking and Finance, 346 So. 2d 569, 581 (Fla. 1st DCA 1977).

8. It is concluded as a matter of law that the July 22, 1977 letter and the language contained in the circular from DOT's Office of Management and Budget do not constitute "rules" within the intent and meaning of Section 120.52(14), Florida Statutes. The rights and obligations of DOT and Petitioner were fixed by the bond documents, the final judgments validating the bond issues, the resolutions adopted by the county commissioners, and applicable constitutional and statutory provisions. Therefore, Petitioner's rights could not have been affected by any agency statement opining as to the proper disposition of the bond fund. Further, in a companion case involving Petitioner and DOT, DOAH Case No. 80-811, this Hearing Officer determined that DOT properly interpreted the bond documents and the applicable statutes in expending the contested funds, so that the rule-adoption requirements of Chapter 120, Florida Statutes are not applicable under the circumstances in this case. See, DeDakis

v. Florida Real Estate Commission, 388 So. 2d 22 (Fla. 1st DCA 1980).

Petitioner having failed to demonstrate that the letter of July 22, 19977 and the circular dated July 19, 1977 constitute "rules" within the intent and meaning of Section 120.52(14), Florida Statutes, the relief sought by Petitioner should be, and the same is hereby DENIED.

DONE and ORDERED this 2nd day of April, 1981, in Tallahassee, Florida.

WILLIAM E. WILLIAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division Division of Administrative Hearings this 2nd day of April, 1981.

COPIES FURNISHED:

Peter Skoro, Esquire Deputy County Attorney Post Office Drawer "CC" Gainesville, Florida 32602

Philip S. Bennett, Esquire Haydon Burns Building Tallahassee, Florida 32301

Docket for Case No: 80-000702RX

Orders for Case No: 80-000702RX