STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PRECISION TRAFFIC COUNTING, INC., ) d/b/a BUCKHOLZ TRAFFIC, )

)

Petitioner, )

)

vs. ) CASE NO. 96-3498

)

DEPARTMENT OF LABOR AND )

EMPLOYMENT SECURITY, ) DIVISION OF MINORITY BUSINESS ) ADVOCACY AND ASSISTANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

An administrative hearing was conducted in this proceeding on January 24, 1997, in Jacksonville, Florida, before Daniel Manry, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Burita Allen, President

Precision Traffic Counting, Inc. 3585 Kori Road

Jacksonville, Florida 32257

For Respondent: Joseph L. Shields, Senior Attorney

Department of Labor and Employment Security

Division of Minority Business Advocacy and Assistance

Hartman Building, Suite 307 2012 Capital Circle, Southeast

Tallahassee, Florida 32399-2189

STATEMENT OF THE ISSUE

The issue for determination is whether Respondent should certify Petitioner as a minority business enterprise ("MBE").

PRELIMINARY STATEMENT

On February 28, 1996, Petitioner applied for MBE certification. Respondent denied Petitioner's application by letter dated June 6, 1996. Petitioner timely requested an administrative hearing.

At the administrative hearing, Petitioner presented the testimony of one witness and submitted eight exhibits for admission in evidence. Respondent called one witness and submitted 10 exhibits for admission in evidence.

The identity of the witnesses and exhibits, and the rulings regarding each, are set forth in the record of the administrative hearing. Neither party requested a transcript.

Respondent timely filed its proposed recommended order ("PRO") on February 4, 1997. Petitioner did not file a PRO.

FINDINGS OF FACT

1. Respondent is the governmental agency responsible for granting or denying applications for MBE certification in accordance with Section 288.703(1), Florida Statutes,1 and Florida Administrative Code Rules 60A-2.001 and 60A-2.005.2 Petitioner is an applicant for MBE certification.

2. Petitioner is engaged in the business of installing traffic signal devices. Petitioner is a closely held Florida corporation that was organized in 1990.

1. Minority Ownership

   1. All of Petitioner's stock is owned by Ms. Burita Allen. Ms. Allen is a minority person within the meaning of Section

      288.703(3) (the "minority owner" or "minority shareholder").

   2. The minority shareholder is majority shareholder. She owns at least 51 percent of Petitioner's stock within the meaning of Rule 60A-2.005(2)1.

2. Financial Risk And Control

   1. The minority ownership of Petitioner is real, substantial, and continuing within the meaning of Rule 60A- 2.005(3)(d)3. The minority owner provided all of the $100,000 used for Petitioner's initial capitalization on April 4, 1995.3

   2. Petitioner was inactive from 1990 until it began its first job on May 11, 1995. Petitioner now has completed or started a total of eight jobs.

   3. The minority owner has knowledge and control of Petitioner's financial affairs. She has sole control of the day to day operations of the company and its profit and loss. She contributed all of its initial capital, writes the checks, and contracts with employees, subcontractors, and customers.

3. Operating And Management Control

   1. The minority owner has operating control of Petitioner and is technically qualified to manage and operate Petitioner's business. She has generated significant growth for Petitioner.

   2. Operating revenues have increased from zero to

      $170,736.28 in less than two years. Petitioner has another

      $90,268.08 in work performed but not billed.

   3. Petitioner's clients include the Florida Department of Transportation, the United States Navy, and Nassau County,

   Florida. Petitioner has also performed jobs for private companies such as Georgia Pacific, Target, and Haynes & Sons Inc.

4. Affiliation

   1. Petitioner's minority owner gained the knowledge and experience needed to operate Petitioner successfully as an employee of J.W. Buckholz Traffic Engineering, Inc. ("Buckholz Engineering"). Buckholz Engineering is a closely held Florida corporation owned by five individuals.

   2. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. She owns 52 percent of the stock of Buckholz Engineering. Petitioner shares office space, equipment, and staff with Buckholz Engineering.

   3. Petitioner's minority owner allocates approximately 40 percent of the 70 to 102 hours she works each week to Petitioner. The remainder of her work week is allocated to Buckholz Engineering.

   4. The affiliation between Petitioner, its minority owner, and Buckholz Engineering does not impair the minority owner's ownership and control of Petitioner. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Petitioner's minority owner has an unimpeded legal right to share Petitioner's income, earnings, and other benefits in proportion to her stock ownership within the meaning of Rule 60A-2.005(2)(b).

   5. Neither the exercise of discretion by Petitioner's minority owner, her financial risk, nor her equity position in Petitioner is subject to any formal or informal restrictions

      within the meaning of Rule 60A-2.005(3)(a). There are no provisions in any purchase agreement, employment agreement, voting rights agreement, or the corporate by-laws that vary or usurp the minority owner's discretion.

   6. Buckholz Engineering assisted Petitioner in obtaining greater bonding limits than Petitioner could obtain on its own. Petitioner was capable of obtaining bonding on its own but increased the amount of bonding by adding Buckholz Engineering as co-applicant. Petitioner's minority owner is the majority shareholder in Buckholz Engineering.

   7. Buckholz Engineering is a professional service corporation that provides design services by licensed professional engineers. Buckholz Engineering utilizes professional liability insurance. It is not a construction company and has no need to be bonded.

   8. Petitioner derived its name in part to benefit from the goodwill of Buckholz Engineering. However, the two companies are not engaged in the same business.

   9. Buckholz Engineering is a professional engineering firm that performs professional services including the design of traffic control systems. Petitioner installs traffic signal devices. Unlike Buckholz Engineering, Petitioner does not need a professional engineering license to conduct its business.

5. Electrical License

1. Petitioner does not offer a trade or profession to the state which requires a trade or professional license within the

   meaning Section 287.0943(1)(3)1.4 Unlike the professional engineers in Buckholz Engineering, no state statute requires the minority owner to be licensed in a particular trade or profession in order for Petitioner to install traffic signals.

2. Petitioner's minority owner satisfies all certification requirements that are generally required for Petitioner to conduct its business. The minority owner is certified by the International Municipal Signal Association ("IMSA") and by the American Traffic and Safety Association ("ATSA").

3. In a particular job, Petitioner's customer may require that a licensed electrician pull the necessary permits for the job or that a licensed electrician approve the job. This customer requirement comprises only a de minimis portion of Petitioner's business.

4. Of the eight jobs contracted by Petitioner, only one customer has required the permit to be pulled by a licensed electrician. Petitioner can satisfy these occasional customer requirements by subcontracting with a licensed electrician at a cost that is a small portion of the job cost.

   CONCLUSIONS OF LAW

5. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties. The parties were duly noticed for the formal hearing.

6. The burden of proof is on Petitioner. Petitioner must show by a preponderance of the evidence that it is entitled to

   MBE certification. Florida Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So.2d

   349 (Fla. 1st DCA 1977).

7. Petitioner satisfied its burden of proof. Petitioner's minority shareholder owns at least 51 percent of all issued stock within the meaning of Rule 60A-2.005(2)(a)1. The ownership exercised by the minority owner is real, substantial, and continuing in accordance with Rule 60A-2.005(2).

8. The minority owner has knowledge and control of Petitioner's financial affairs within the meaning of Rule 60A- 2.005(3)(d)3. She has a legal right to share income, earnings, and other benefits in proportion to her stock ownership within the meaning of Rule 60A-2.005(2)(b). The minority owner's discretion is not limited by any formal or informal restrictions within the meaning of Rule 60A-2.005(3)(a).

9. The minority owner satisfies the licensing requirements generally required of Petitioner within the meaning of Section 287.0943(1)(e)1. She is certified by IMSA and ATSA. Occasional customer requirements for licensed electricians have no adverse impact on the minority owner's ownership and control.

10. Petitioner is a minority business within the meaning of Rule 60A-2.001(19). It satisfies the requirements of certification in accordance with Rule 60A-2.001.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that Respondent enter a Final Order and therein GRANT Petitioner's application for MBE certification.

RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida.

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1997.

ENDNOTES

1/ All chapter and section references are to Florida Statutes (1997) unless otherwise stated.

2/ All references to rules are to rules promulgated in the Florida Administrative Code as of the date of this Recommended Order.

3/ The minority owner capitalized Petitioner with two checks for

$50,000 each. One check was written on a joint account with Mr. Jeffrey W. Buckholz. Ms. Allen testified that the funds in the joint account were hers. Her testimony was credible and persuasive and consistent with Petitioner's stock ownership and the absence of any liabilities owed to Mr. Buckholz by either Ms. Allen or Petitioner.

4/ Sec. 287.0943(1)(e)1., in relevant part, requires ownership and control by a minority person to be linked to:

. . . licensure of a minority owner in any trade or profession that the minority business enterprise will offer to the state when certified. . . .

COPIES FURNISHED:

Edward A. Dion, General Counsel Department of Labor and

Employment Security Hartman Building, Suite 307

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189

Burita Allen, President Precision Traffic Counting, Inc. 3585 Kori Road

Jacksonville, Florida 32257

Joseph L. Shields, Senior Attorney Department of Labor and

Employment Security Division of Minority Business

Advocacy and Assistance Hartman Building, Suite 307 2012 Capital Circle, Southeast

Tallahassee, Florida 32399-2189

Douglas L. Jamerson, Secretary Department of Labor and

Employment Security Hartman Building, Suite 303

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

1/ All chapter and section references are to Florida Statutes (1997) unless otherwise stated.

2/ All references to rules are to rules promulgated in the Florida Administrative Code as of the date of this Recommended Order.

3/ The minority owner capitalized Petitioner with two checks for

$50,000 each. One check was written on a joint account with Mr. Jeffrey W. Buckholz. Ms. Allen testified that the funds in the joint account were hers. Her testimony was credible and persuasive and consistent with Petitioner's stock ownership and the absence of any liabilities owed to Mr. Buckholz by either Ms. Allen or Petitioner.

4/ Sec. 287.0943(1)(e)1., in relevant part, requires ownership and control by a minority person to be linked to:

. . . licensure of a minority owner in any trade or profession that the minority business enterprise will offer to the state when certified. . . .

COPIES FURNISHED:

Edward A. Dion, General Counsel Department of Labor and

Employment Security Hartman Building, Suite 307

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189

Burita Allen, President Precision Traffic Counting, Inc. 3585 Kori Road

Jacksonville, Florida 32257

Joseph L. Shields, Senior Attorney Department of Labor and

Employment Security Division of Minority Business

Advocacy and Assistance Hartman Building, Suite 307 2012 Capital Circle, Southeast

Tallahassee, Florida 32399-2189

Douglas L. Jamerson, Secretary Department of Labor and

Employment Security Hartman Building, Suite 303

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 96-003498

Orders for Case No: 96-003498