william h. websterVs.larry d. scott|Department of Management... -- eLawyers

Petitioner: CITY OF CARRABELLE
Respondent: DIVISION OF RETIREMENT AND IRENE MURRAY
Judges: STEPHEN F. DEAN
Agency: Department of Management Services
Locations: Tallahassee, Florida
Filed: Dec. 03, 1990
Status: Closed
Recommended Order on Friday, April 5, 1991.
Latest Update: Apr. 05, 1991
Summary: The primary issue in this proceeding is whether Irene Murray is an employee of the City of Carrabelle and covered by Social Security and the Florida State Retirement System. A secondary issue is when did Murray become an employee.Determination city employee was member of retirement system.

90-7650.PDF

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF CARRABELLE, )

IRENE MURRAY, )

)

Petitioners, )

)

vs. ) CASE NO. 90-7650

) DEPARTMENT OF ADMINISTRATION, ) DIVISION OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

The final hearing in the above-styled matter was heard pursuant to notice by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings, on February 11, 1991, at 1230 Apalachee Parkway, Tallahassee, Florida.

APPEARANCES

For Petitioner:

City of Carrabelle William H. Webster, Esquire Irene Murray City Attorney

Post Office Box 478 Crawfordville, Florida 32327

For Respondent:

Department of Larry D. Scott, Esquire Administration Assistant Division Attorney

Division of Cedars Executive Center Retirement Building C

2639 North Monroe Street Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUES

The primary issue in this proceeding is whether Irene Murray is an employee of the City of Carrabelle and covered by Social Security and the Florida State Retirement System. A secondary issue is when did Murray become an employee.

PRELIMINARY STATEMENT

On October 19, 1990, the Director of the Division of the Florida State Retirement System by letter notified the City of Carrabelle (herein after "City"), and Ms. Irene Murray that, based upon a final determination, an employee/employer relationship exists between the City and Ms. Murray and she must be enrolled in the Florida Retirement System (herein after FRS) with retroactive adjustment to be made to her date of employment.

Subsequent to the final agency action, a request for formal hearing was made by the City of Carrabelle. The matter was then forwarded to the Division of Administrative Hearings for assignment of a hearing officer and the scheduling of the final hearing. In a preliminary ruling, the Hearing Officer ruled the interests of the City and Ms. Murray were identical. Based upon this ruling, counsel for the City was allowed to represent both parties. Proposed findings were submitted by the Department and the Petitioners. These were read and considered. The Appendix attached hereto and incorporated by reference herein states which findings were adopted and which were rejected and why.

FINDINGS OF FACT

In August 1984, the City of Carrabelle entered into a contract with Ms. Irene Murray to serve as the Director of the City's community center.
The City was petitioned by citizens several years ago to open a community center. Initially, the center was operated by volunteers. Ms. Murray had been a leader in the drive to establish a center and was one of the volunteers.
From the outset, the facility for the community center has been rented by the City from the School Board. Ms. Murray is not and has never been a party to the rental agreement.
The contract between the City and Ms. Murray has been renewed each year from 1984 through 1991 without change. The contract may be cancelled with or without cause by either party with no liability upon fifteen (15) days notice. The contract is contingent upon the availability of funds appropriated for this purpose.
Ms. Murray does not prepare a budget for operating the center which is suppose to be self supporting from its own revenues. The receipts from operating the center are periodically deposited by Ms. Murray to the City's general account, and the deposit credited to the center's ledger account. Ms. Murray is authorized to expend funds on items less than $200. She has no authority to write checks on the general revenue account of the City. Prior approval of the City Commission must be obtained for expenditures in excess of two hundred dollars ($200). The City Finance Manager will not approve expenditures from the community center account if there are not sufficient funds credited to the account to cover the expenditures.
Repairs to the community center must be approved by the City Commission. The skates for the community center were purchased by the City as was the P.A. system. The phone bill for the community center is paid for out of general revenue funds.
The contract requires the exclusive services of Ms. Murray as Director. The contract permits Ms. Murray other employment, and she is employed as the custodian at the post office. As Director, she is responsible to the City Commission, principally the Commissioner in charge of the Road and Parks Department.
Pursuant to the contract, Ms. Murray is paid four hundred dollars ($400) per month, and all equipment, materials, and products are supplied by the City of Carrabelle.
Ms. Murray's is paid monthly from the City's general revenue fund without submitting an invoice for services rendered. The City has not withheld income or FICA taxes from Ms. Murray's checks.
If Ms. Murray expends personal funds in the performance of her duties, she is reimbursed by the City of Carrabelle from general revenue funds.
Pursuant to the contract, the City pays the premium for liability insurance coverage for Ms. Murray under the City's policy.
The City hired a janitor to clean the community center.
Pursuant to its authority, as social security administration for covered state and local governments, the Division conducts periodic audits of local agencies. Such an audit was conducted on the City. It was determined that Irene Murray was an employee, should be covered by Social Security, and should be enrolled in FRS.
The directors of city community centers generally are employees and not independent contractors.

CONCLUSIONS OF LAW
The Division of Administration has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes (1989).
Chapter 121, Florida Statutes, established the Florida Retirement System in 1970. The Division of Retirement, pursuant to Section 121.031(1), Florida Statutes (1989), is authorized to implement rules for the efficient administration of the system. Pursuant to Chapter 650, Florida Statutes, administration of the Public Employee Social Security Program is vested with the Division of Retirement.
The agreement between the State of Florida and the Federal Government on social security requires mandatory social security coverage of all Florida Retirement System members. The Division is responsible for the determination of employee/employer relationships for retirement and social security Coverage.
Pursuant to Section 121.021(11), Florida Statutes (1989), an officer or employee is defined as follows:

"Officer or employee" . . . if employed by a city or special district, employed in a covered group.
The Division of Retirement promulgated Rule 22B-6.001(47), F.A.C., which defines a regularly established position in a local agency or cities as:

"An employment position which will be in existence for a period beyond 6 consecutive months, except as provided in Rule
22B-1.004(5)(e), F.A.C."
Rule 22B-1.004(5)(e), F.A.C., provides that student employees, work- study employees, temporary instructional personnel, substitute teachers, and persons on call for brief periods of time employed by a local agency are temporary position which are excluded and not covered.
The City and Ms. Murray contended that she was employed as an independent contractor. Rule 22B-6.001(16), F.A.C., promulgated by the Division defines consultant or independent contractor as follows:

Consultant or Independent Contractor - Means an individual who: agrees to provide certain services; works according to his own methods; is not subject to the control of his employer, except as to the results of his work; and does not receive the fringe benefits offered by
the employer. A consultant or independent contractor usually: is compensated from another salaries and wages account; does not earn annual or sick leave; and may frequently do a majority of his work in his own office rather than on the employer's premises.
[See 22B-1.004(5)(e)(6).]
The preceding rule is consistent with the tests set in the Restatement (Second) of Agency ss.220 (1958), as cited in Global Home Care v. Department of Labor, 521 So.2d 220, 221 (Fla. 2d DCA 1988).
The City had the right to control the performance of Ms. Murray. The Contract required performance in a manner satisfactory to the City. The City had the right to control the hours of the community center. The City leased the property from the school board and controlled the terms of the facility's use.
Although the minutes of the City Commission meetings clearly reflect an intent to avoid "employment" and the payment of social security taxes, it is the relationship of the parties which determines their status. See, Cantor v. Cochran, 184 So.2d 173 (Fla. 1966). The length of time one is employed is one of the indicia by which the nature of the relationship is judged. Clearly, by the end of the second year, the relationship of the parties had changed. By January, 1987, their conduct revealed the establishment of an employment relationship.
Ms. Murray was not engaged in a distinct occupation or business. Ms. Murray does not do her work under a business name or advertise her services to others. She is not incorporated, nor does she possess a business license. The yearly renewal of her contract is without advertisement, without bid, and without change in the terms. Ms. Murray does not bill the City for her services, but is paid monthly without an invoice from the City's general fund, contrary to the manner in which an independent contractor typically invoices the city.
The position of director of a community center is normally held by an employee of a city/county. A survey of several local cities revealed that the directors of their community centers were City employees. In no case was an independent contractor retained to fill the position.
The operation of the Community Center is typically a service rendered by a city. While special skill and training might be helpful to a director of a community center, it is not a separate vocation or profession.
Ms. Murray, does not expend personal funds or experience a degree of financial risk in the performance of her duties for the City. The City supplies the facility and the other equipment for Ms. Murray. The City provided the liability insurance, skates, food, phone, and other material for the operation of the Center.
The City controls the finances, writes all the checks, and reimburses Ms. Murray for any purchases she makes. Purchases over two hundred dollars ($200) have to be pre-approved by the City Commission. Receipts were deposited to the general fund and operating expenses came out of the general revenue account for the City. The budget and operation of the center is part of the regular business of the City Commission.
Based upon the foregoing, it is concluded that the relationship of Ms. Irene Murray to the City of Carrabelle is one of an employee/employer relationship and has been since September, 1986. Under the Social Security Act and Federal Insurance Contributions Act (FICA), payments for the employment of Ms. Murray from September, 1986 are due from the City of Carrabelle.

RECOMMENDATION

It is RECOMMENDED that Petitioner, Irene Murray, be enrolled as a member of the FRS effective September, 1986 and Petitioner, City of Carrabelle, pay the retroactive retirement contributions.

DONE AND ENTERED this 5th day of April, 1991, in Tallahassee, Leon County, Florida.

Stephen F. Dean Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 5th day of April, 1991.

APPENDIX TO RECOMMENDED ORDER

The Petitioner's proposed findings were adopted or rejected for the following reasons:

Paragraph 6 Rejected second unnumbered paragraph as

contrary to more credible evidence.

Paragraph 8 Rejected first sentence as contrary to

more credible evidence. Rejected third sentence as to Ms. Murray's paying her taxes because it is irrelevant.

Paragraph 9 Rejected as to entitlement to unemployment compensation because the contract is silent on this.

Paragraph 10 Rejected all because it's contrary to more credible evidence.

Paragraph 14 The city participates in a job and job skills program funded by a federal grant. The janitor at the center is a participant in this program. The City's proposal, while not strictly untrue, is an overstatement of the matter.

Paragraph 16 Rejected that FRS is illegally interfering with the contract between the city and Ms.

Murray, and what Ms. Murray wants is irrelevant.

Paragraph 17 Rejected as a legal conclusion beyond the competence of the witnesses.

Paragraphs 18 Rejected as contrary to fact. and 20

The Respondent's proposed findings were adopted or rejected for the reason stated:

Paragraph 5 Rewritten to more completely explain the budget relationship.

Paragraph 19 Rejected as conclusion of law.

COPIES FURNISHED:

William H. Webster, Esquire Post Office Box 478 Crawfordville, FL 32327

Larry D. Scott, Esquire Division of Retirement Cedars Executive Center Building C

2639 North Monroe Street Tallahassee, FL 32399-1560

A. J. McMullian III, Director Division of Retirement

Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, FL 32399-1560

John A. Pieno, Secretary Department of Administration

435 Carlton Building Tallahassee, FL 32399-1550

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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AGENCY FINAL ORDER

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DEPARTMENT OF ADMINISTRATION DIVISION OF RETIREMENT

CITY OF CARRABELLE and IRENE MURRAY,

Petitioners,

vs. CASE NO. 90-7650

DEPARTMENT OF ADMINISTRATION, DIVISION OF RETIREMENT,

Respondent.

FINAL ORDER

On April 5, 1991, Stephen F. Dean, a Hearing Officer from the Division of Administrative Hearings, submitted to the DIVISION OF RETIREMENT (DIVISION) and to Petitioners, CITY OF CARRABELLE and IRENE MURRAY, his Recommended Order, a copy of which is attached as Exhibit A. The Petitioners timely filed exceptions to the Recommended Order. The matter then came before me as the Director of the Division of Retirement for final agency action.

RULING ON EXCEPTIONS TO FINDINGS OF FACT

Exception 4:

The Petitioners' contention that the contract between Ms. Murray and the City is contingent upon the revenues generated and that the City never contributed funds to the operation of the program is without merit and hereby rejected. The Hearing Officer's findings of fact, which are supported by

competent, substantial evidence in the record, concludes the contract is contingent upon the availability of funds appropriated for that purpose. Petitioners' exception is rejected.

Exception 5:

The Hearing Officer's finding of fact is supported by competent, substantial evidence. The City Commission is the authority responsible for the approval of the budget for the Center. Petitioners' exception is rejected.

Exception 6:

The Petitioners' contention that repairs to the Community Center do not have to be approved by the City Commission is without merit. The Hearing Officer found that prior approval of repairs must be granted by the City Commission and the expenditures for the Community Center are paid out of the City's general revenue fund. The Hearing Officer's findings are supported by competent, substantial evidence in the record. Exception 6 is rejected.

Exception 7: