STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WALTER VERNON CREECH, )

)

Petitioner, )

)

vs. ) Case Nos. 98-5207

) 99-4566

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for formal hearing before Don W. Davis, Administrative Law Judge with the Division of Administrative Hearings, on May 23, 2000, in Live Oak, Florida.

APPEARANCES

For Petitioner: Stanley M. Danek, Esquire Suite 200

2114 Great Oak Drive Tallahassee, Florida 32303

For Respondent: Robert B. Button, Esquire

Division of Retirement

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

STATEMENT OF THE ISSUES

The issues are: (1) Whether Walter Vernon Creech (Petitioner) is entitled to purchase past service in the Florida Retirement System (FRS) for a period of service with the City of Live Oak (City), during which time he became vested in the City's local retirement plan and elected to retain those vested benefits

prior to commencement of employment with the Suwannee County Sheriff's Department, and (2) whether Petitioner is entitled to variance and waiver of regulations which prohibit purchase of prior service for FRS inclusion when the member was vested at the time in a local retirement system.

PRELIMINARY STATEMENT

By letter dated October 15, 1998, Respondent Department of Management Services, Division of Retirement (Respondent), denied Petitioner's request to purchase FRS credit for prior service in a local retirement plan in which Petitioner was vested.

Subsequently, Petitioner filed a Petition for Formal Administrative Hearing dated November 5, 1998. The matter was referred to the Division of Administrative Hearings on November 24, 1998.

Petitioner had previously sought and been denied a variance and waiver from Respondent of those regulations prohibiting the subject purchase of prior service for inclusion in the FRS. Thereafter, on November 20, 1998, Respondent filed a Petition for Formal Hearing regarding that denial.

Both Petitions are addressed in this Recommended Order.

Although consolidated for purpose of final hearing, a separate final order will be issued with regard to Petitioner's Petition For Rule Challenge, which forms the basis for Division of Administrative Hearings Case No.99-3099RU.

At the final hearing, Petitioner presented testimony of five witnesses and nine exhibits. Respondent presented testimony of three witnesses and six exhibits.

A Transcript of the final hearing was filed on July 6, 2000. The parties were granted leave to file proposed findings of fact and conclusions of law more than ten days following the hearing.

Proposed Recommended Orders submitted by the parties have been reviewed and utilized in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner was employed as a police officer with the City of Live Oak, Florida, and is currently a deputy sheriff with the Suwannee County Sheriff's Department.

2. On March 1, 1990, the Suwannee County Sheriff's Department assumed the functions of the Live Oak Police Department and the Police Department was disbanded.

3. Petitioner and other members of the Police Department became employees of the sheriff's office. Petitioner has been continuously employed by the sheriff's office since 1990 and presently is the patrol commander for the Sheriff.

4. The ordinance creating the City of Live Oak Retirement System was repealed on October 12, 1990. The pension plan was terminated.

5. An annuity was purchased by the City of Live Oak following termination of the pension plan from the Franklin Life

   Insurance Company for Petitioner, a vested member of the former pension plan. The annuity entitled Petitioner to future benefits. Non-vested members of the police force were refunded their previous contributions to City of Live Oak retirement plan.

6. Several months prior to the retirement annuity purchase and the repeal of the City of Live Oak Retirement System, Petitioner had elected, on April 9, 1990, by ballot provided by Respondent to retain his vested benefits with the annuity provided by the City and "begin membership in the [FRS] effective March 1, 1990." The ballot choice selected by Petitioner stated specifically that "I understand I may not purchase past service in the FRS for service under the local retirement system which may be used to obtain a benefit."

7. Petitioner's position is that he was not aware on April 9, 1990, that he could select the second ballot choice that would have permitted him to withdraw from City of Live Oak Retirement system and join the FRS at that time. He represents that he was told specifically by the sheriff at the time that he could not elect this option. The sheriff is now deceased.

8. At the time he joined the sheriff's office, Petitioner had not vested in the FRS, although he had prior service as a state employee.

9. No evidence establishes on-site visitation by Respondent employees upon transfer of police functions to the County Sheriff's Office, or direct advice by Respondent employees to

   Petitioner or any other transferring employees. A letter, however, dated April 18, 1990, from Loraine Voss, a former Bureau Chief with Respondent, documents that there were communications between Respondent employees and the now-deceased sheriff. In pertinent part, the letter advised that employees were eligible to purchase past service credit in FRS provided such past experience would not be used to provide a benefit in another retirement scenario.

10. Absent the letter authored by Voss, Respondent provided no documented direction regarding retirement options to Petitioner at the time of his election to retain his service in the city's retirement annuity. The action of local authorities (i.e., the mayor of the City of Live Oak and the county sheriff) in advising the transferees on retirement matters was not taken at the behest of or on behalf of Respondent.

11. As established by testimony of the now-retired police chief, Jack Garret, members of the police force were aware at the time that their contributions could be withdrawn from the City's retirement fund even though a member might be vested.

12. Before the police force of the City of Live Oak was disbanded, Marvin Clayton, a representative of the Florida Department of Insurance, addressed the members of the force. Clayton recalled that at the February 9, 1990, meeting, he informed the officers of the force that persons who were vested in the City's plan could have their contributions refunded and

    thereby become eligible to buy past service with the FRS. Local police and fireman retirement funds were regulated by the Department of Insurance at that time.

13. In 1998, Petitioner changed his mind. He contacted Respondent's representative in order to purchase additional retirement credit in FRS for his time with the City of Live Oak Police Department. By letters dated June 15, 1998, and again on October 15, 1998, he was informed by Respondent's representatives that he was not eligible to purchase such service because of provisions of Sections 112.65(2) and 121.081(1)(h), Florida Statutes.

14. As established at the final hearing, Petitioner would have to assign any benefits of his annuity to FRS and pay required FRS contributions plus interest since 1990 in order to acquire FRS credit today for his time with the City of Live Oak Police Department.

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding pursuant to Section 120.57(1), Florida Statutes.

16. Petitioner has the burden of proving by a preponderance of the evidence that he is entitled to the relief sought in this proceeding, i.e., that he was prohibited from joining the FRS at the time of transfer to the sheriff's office as a consequence of action by the Respondent or its agent and that he should now be

    permitted such a choice without payment of the required interest of 6.5 percent per annum since 1990. Petitioner has not carried his burden on these issues. Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977).

17. Section 121.081(1)(i), Florida Statutes, provides in pertinent part:

    creditable service shall not be available to any member who receives a benefit from another state or local retirement system which is derived in whole or in part from the same service.

    
    

18. Section 185.38(1), Florida Statues, provides as follows, in pertinent part:

    Any police officer who has a vested right to benefits under a pension plan created pursuant to the provisions of this chapter and who elects to participate in another state retirement system may not receive a benefit under the provisions of the latter retirement system for any year's service for which benefits are paid under the provisions of the pension plan created pursuant to this chapter.

19. Additionally, Petitioner has presented no evidence that assignment or disclaimer of his benefits to the City's annuity is possible, thereby permitting use of his term of employment with the City's police department to purchase additional creditable FRS service.

20. Also at issue is whether Petitioner was misled or misinformed by local authorities regarding the options that were available to him on April 9, 1990, when he executed his ballot

    declining FRS credit and payment to him of any then available entitlements under the City's retirement plan.

21. Petitioner's argument that actions of the mayor and the sheriff should be construed as acts of Respondent, thereby entitling Petitioner to set aside his earlier choice, is not persuasive. First, the mayor denies that officers were not permitted to withdraw contributions, even if the officer was vested in the City plan. Second, the allegations of the sheriff's actions cannot be considered absent corroboration. At any rate, if misstatements of law were made to Petitioner and fellow officers, such misstatements do not bind Respondent. Austin v. Austin and the Division of Retirement, 350 So. 2d 102 (Fla. 1st DCA 1977).

22. Finally, Petitioner has requested, pursuant to Sections

    
    

    120.542 and 120.57(1), Florida Statutes, and Florida Administrative Code Rule 28-104, variance or waiver of the Division's refusal to permit his purchase of past creditable service with the police department. Such variance or waiver is not possible for two reasons: (1) A variance or waiver is not permitted public employees with regard to matters affecting their employment. Section 120.542(1), Florida Statutes; and (2) Petitioner basically requests the waiver of statutory requirements. Variance and waiver may be used to relax rules of regulatory agencies, but only the legislature may change a statutory requirement.

23. Finally, Respondent properly denied Petitioner’s request to purchase FRS credit for service with the City of Live Oak Police Department, as well as Petitioner's request for waiver and variance.

RECOMMENDATION

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

RECOMMENDED that Respondent enter an order denying (1) the Petition for Waiver and Variance and (2) also denying the request to be permitted to purchase for creditable FRS service the time spent by Petitioner in the employment of the City of Live Oak Police Department.

DONE AND ENTERED this 23rd day of August, 2000, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of August, 2000.

COPIES FURNISHED:

Robert B. Button, Esquire Division of Retirement 2639 North Monroe Street

Tallahassee, Florida 32399-1560

Stanley M. Danek, Esquire 2114 Great Oak Drive Tallahassee, Florida 32303

Ron Poppell, Interim Director Division of Retirement

Cedars Executive Center Building C

2639 North Monroe Street Tallahassee, Florida 32399-1560

Emily Moore, Chief Legal Counsel Division of Retirement

Cedars Executive Center Building C

2639 North Monroe Street Tallahassee, Florida 32399-1560

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: 98-005207

Orders for Case No: 98-005207