STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

1. LEWIS SCHOETTLE, )

   )

   Petitioner, )

   )

   vs. ) CASE NO. 86-1330

   ) STATE OF FLORIDA, DEPARTMENT OF ) ADMINISTRATION, DIVISION OF ) RETIREMENT, )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Consistent with the Notice of Hearing furnished to the parties on May 13, 1986, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Tallahassee, Florida, on July 24, 1986. The issue for consideration was whether Petitioner was given proper credit toward retirement for his service as a teacher on Kwajalein Atoll during the school years 1963 through 1965.

   
   

   APPEARANCES

   
   

   For the Petitioner: Byron B. Mathews, Jr., Esquire

   Monroe Park Tower, Suite 1090

   101 North Monroe Street Tallahassee, Florida 32301

   
   

   For the Respondent: Burton M. Michaels, Esquire

   Assistant Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Suite 207, Building B Tallahassee, Florida 32303

   
   

   BACKGROUND INFORMATION

   
   

   On March 25, 1986, A.J. McMullian, III, State Retirement Director, by letter advised Petitioner, Dr. Schoettle, that the period of time he was employed by a private company during the school year 1963-1964 was leave of absence from the Florida Retirement System/Teacher's Retirement System and did not constitute credible service for retirement purposes under either system.

   Thereafter, on April 7, 1986, Petitioner submitted a Petition for Formal Administrative Hearing contesting the agency action referred to above and on April 16, 1986, the agency elected to request assignment of the case to a Hearing Officer of the Division of Administrative Hearings. The file was forwarded to the Division for assignment to a Hearing Officer and on May 13, 1986, the undersigned set the case for hearing as stated Previously.

   At the hearing, Petitioner testified in his own behalf and Presented the testimony of Andrew Jackson McMullian, III, Director of Retirement for the State of Florida; Ruth Sansom, Bureau Chief of Retirement Calculations; and, by deposition, Captain Allen, former commander of the military facility on Kwajalein Atoll. Petitioner also introduced Petitioner's Exhibits A through H and J Exhibit I was withdrawn and not admitted. Petitioner's Exhibit D, a yearbook of the George Seitz School for one of the years in question, was withdrawn by Petitioner with the understanding that an appropriate copy would be furnished for inclusion in the record. This copy has not been forthcoming.

   
   

   Respondent Presented the testimony of James T. Perdue, Jr., a Benefit Calculations Specialist with the Department of Revenue, and introduced Respondent's Exhibits 1 through 15 and 17 and 18. Respondent's Exhibit 16 for identification was not introduced.

   
   

   Subsequent to the hearing, both parties submitted Proposed Findings of Fact for the consideration of the Hearing Officer which were thoroughly evaluated in the preparation of this Recommended Order. A ruling on each is contained in the Appendix attached hereto.

   
   

   FINDINGS OF FACT

   
   

   1. At all times pertinent to the issues contained herein, prior to January 1, 1975, the Petitioner was a member of the Florida Teachers' Retirement System provided for in Chapter 238, Florida Statutes, and at all times pertinent to the issues herein subsequent to January 1, 1975, he was a member of the Florida Retirement System provided for under Chapter 121, Florida Statutes.

      
      

   2. From about July 31, 1963, to on or about January 19, 1964, Petitioner was employed by Transport Company of Texas (TCT), a private concern under contract to the United States, as a school teacher at the George Seitz School, Kwajalein Atoll, the Marshall islands. Between January 19, 1964 and July 1, 1965, Petitioner was employed by Global Associates (Global), a private company successor to TCT, as a teacher at the same school. Both TCT and Global at all times relevant to the issues herein were private companies contracting with the United States government to provide support services to the mission of the United States military on Kwajalein Atoll.

      
      

   3. Though the George Seitz School was operated by one or the other of those companies, the buildings, the supplies, the materials, and the equipment were all furnished by the United States government. Desks, transportation, books, and all like items were marked "property of the United States Navy." Maintenance on the buildings and of the equipment was accomplished by either military personnel or maintenance personnel of the companies in question under the terms of the contract with the military.

      
      

   4. Petitioner during the times in question taught fourth grade at George Seitz School. The school was built by the United States Navy to provide a school for the dependent children of American military and civilian personnel on the atoll in support of the military operation.

      
      

   5. Kwajalein island is a small crescent shaped atoll located in the Pacific Ocean approximately 2,200 miles southwest of Hawaii. The only individuals residing on the island were United States military and civilian personnel employed by the United States government or private concerns under contract to the United States military who were involved in the missile testing program being accomplished there. Native Marshall islanders were not allowed to

      remain on the island overnight. Native island children did not attend the school in question nor did their parents have access to the military facility except as workers. All personnel on the island, including Petitioner and his wife, had to have security clearances issued by the United States military.

      
      

   6. The island was the test site for the United States Army's Nike missile systems. Although the missiles being tested were Army missiles, in 1963, the island was under the Navy's jurisdiction. In 1964, jurisdiction was transferred to the Army.

      
      

   7. All logistic support for the missile range facility such as the schools, the clinic, the bus transportation system, the commissary, the exchange, the service clubs, and military police was provided by either TOT during its tenure or by its successor, Global.

      
      

   8. Although an employee of private companies, Petitioner was afforded officer grade equivalent status. He was authorized to patronize the Officer's Club and was authorized to purchase in the commissary and exchange, benefits usually accorded only military personnel or government employees. However, due to the remoteness of the location, all contractor employees were afforded this privilege.

      
      

   9. The school was the only school on the atoll and attendance was mandatory for all school age dependents residing on the island. The school was tuition free to attendees and operated as the equivalent of a public school in the United States. All students as well as all teachers were United States citizens. Petitioner presented tax withholding statements for his and his wife's salary to cover the period in question. However, under the Federal statute in effect at the time, if Petitioner remained outside the United States for a stipulated period, his wages for that period would be tax exempt and he could file an amended return to secure a refund of taxes paid on all income earned from an employer other than the United States government. The wages received by U.S. military personnel or civilian employees of the United States government were fully taxable. It is clear, therefore, that Petitioner was an employee of the company by which he was hired and not of the United States government.

      
      

   10. Petitioner's salary as a teacher on Kwajalein was based upon an equivalency with a federal employee in the pay grade 05-12. His pay from the companies by which he was employed undoubtedly came from, at least in part, the federal money paid to the companies under the contract. According to a letter dated March 18, 1986, from the Assistant Manager for industrial Relations of Global to Ms. Sansom, Global operates under its contract fully accredited elementary and high schools and further states that though the teachers' salaries are paid by the company, they are reimbursed by the Department of Defense. It is difficult from this letter to determine whether that is on a dollar for dollar basis or in the general sense reimbursed by the overall contract payment.

       
       

   11. Though the school in question was operated by a contractor as a part of the base support contract, there were other situations outside the United States where United States military facilities were operated under a contract as here, but where the schools were operated by personnel of the armed force operating in the area. When the law was changed and the dependent schools were

       consolidated under the Department of Defense Overseas Dependent Schools, the schools remained a United States government operation. The George Seitz School in this case was not, then, a school conducted by either the Armed Forces of the United States or the Department of Defense.

       
       

       CONCLUSIONS OF LAW

       
       

   12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding.

       
       

   13. In 1959, the Florida Legislature enacted House Bill Number 821 which amended Section 238.06, Florida Statutes, and provided out-of-state credit for service rendered as teachers in the American Overseas Dependent Schools of the Armed Forces. Specifically, the statute, at subparagraph (10) provided:

       
       

       (10) Subject to the provisions of subsection

       (4) of this section, out-of-state service credit shall be allowed for service rendered as a teacher in American Overseas Dependent Schools conducted by the Armed Forces of the United States for children of citizens of the United States residing in areas outside the continental United States.

       
       

       This law and the succeeding law on the subject requires that for a teacher to receive credit for the period in question, he or she must have been teaching in an overseas dependent school conducted by the Armed Forces of the United States. The current statute, which is much the same, refers to dependent schools of the Armed Forces operated by the Department of Defense.

       
       

   14. The issue in this case is whether the George Seitz School, which was operated exclusively for the dependents of United States military and civilian employees while on Kwajalein Atoll, was conducted by the Armed Forces.

       
       

   15. The ultimate authority to interpret the laws governing agency operation resides with the head of the agency who has the principal responsibility to interpret statutory provisions relating to his operation consistent with the Legislature's intent and objectives. The law is well settled in Florida that an agency's interpretation of its own rules or of the laws applicable to its operation are given great weight and must be sustained unless clearly erroneous even if other individuals may reasonably hold an interpretation of the rule or statute contra to that taken by the agency.

       
       

   16. Here, the agency has concluded that Dr. Schoettle's period of employment was with a private concern and not with the United States military so as to bring his service under and within the terms of the statute authorizing out-of-state credit. If this is a harsh interpretation, that is unfortunate for it is nonetheless a reasonable interpretation and legally sustainable.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that Petitioner, Dr. H. Lewis Schoettle, be denied out-of-state credit for the period 1963-1965, when he was employed as a teacher on Kwajalein Atoll.

RECOMMENDED in Tallahassee, Florida, this 11th day of September, 1986.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 11th day of September, 1986.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1330

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed Findings of Fact submitted by the parties to this case.

RULINGS ON PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER

1. Incorporated in Finding of Fact 1. 2-5. Accepted as Background information.

6. Incorporated in Finding of Fact 2.

7-8. Incorporated in Finding of Facts 3, 4 and 5.

1. First sentence accepted in Finding of Fact 6. The remainder is rejected as immaterial.

2. Incorporated in Finding of Fact 5.

3. Incorporated in Finding of Fact 6.

4. Incorporated in Finding of Facts 3 and 7.

5. Incorporated in Finding of Fact 2.

6. Incorporated in Finding of Fact 8. 15-16. Incorporated in Finding of Fact 9.

1. Rejected as cumulative of other Petitioner evidence.

2. Accepted as to the conclusion that it was conducted for American dependent children overseas under the auspices of

   the Armed Forces, but rejected as a finding that it was operated or conducted by the Armed Forces.

3. Rejected as irrelevant to the issues involved.

4. Rejected as argument and not Finding of Fact.

5. Rejected as irrelevant to the issued involved.

6. Rejected as irrelevant to the issues.

7. Rejected as misleading and not Supported by the evidence. While the contracts with TNT and Global were paid with tax money, these payments were not primarily designated for school services. The school was included only as a part of the overall contract.

8. Incorporated in Finding of Fact 11.

RULINGS ON PROPOSED FINDINGS OF FACT SUBMITTED BY RESPONDENT

1. Incorporated in Finding of Fact 1. 2-3. Accepted as Background information. 4-6. Incorporated in Finding of Fact 2. 7-8. Incorporated in Finding of Fact 3.

9. Incorporated in Finding of Fact 9. 10-11. Incorporated in Finding of Fact 11.

1. Rejected as irrelevant.

2. Rejected as redundant of Finding of Facts 9-10 and 11.

14-15. Rejected as a Conclusion of Law and not a Finding of Fact.

COPIES FURNISHED:

Byron B. Mathews, Jr., Esquire Monroe-Park Tower, Suite 1090

101 North Monroe Street Tallahassee, Florida 32301

Burton M. Michaels, Esquire Assistant Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Suite 207-Building C Tallahassee, Florida 32303

Gilda Lambert, Secretary Department of Administration

435 Carlton Building Tallahassee, Florida 32301

A.J. McMullian, III, Director Division of Retirement Department of Administration Cedars Executive Center Building C

2639 North Monroe Street Tallahassee, FL 32303

Docket for Case No: 86-001330

Orders for Case No: 86-001330