STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WALTER VERNON CREECH, )

)

Petitioner, )

)

vs. ) Case No. 99-3099RU

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

FINAL 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 ISSUE

The issue is whether Respondent's policy with regard to Section 112.65(2), Florida Statutes, constitutes an administrative rule, and, if so, whether the rule is valid.

PRELIMINARY STATEMENT

By Petition For Rule Challenge (Petition) dated July 21, 1999, Petitioner challenged Respondent's policy regarding Section 112.65(2), and Section 121.081(1)(i), Florida Statutes, as an invalid, unpromulgated administrative rule. Additionally, Petitioner argues that Respondent's Administrative Rule 60S- 2003(7), Florida Administrative Code, exceeds Respondent's statutory authority and is invalid.

Pursuant to request of Petitioner, the matter was consolidated for purpose of final hearing only with Division of Administrative Hearings Case No. 98-5207 and Case No. 99-4566. The substance of those cases have been addressed in a separate Recommended Order issued concomitant with this Final Order.

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 Final Orders submitted by the parties have been reviewed and utilized in the preparation of this Final 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 Florida Retirement System (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 the 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 recalls 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 representatives that he was not eligible to purchase such service because of provisions of Sections 112.65(2) and 121.081(1)(I ), 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 Sections 120.56(1), (3), and (4), Florida Statutes.

16. Petitioner seeks to prove that, based upon invalid administrative rules or erroneous constructions of law which constitute unpromulgated and thereby invalid rules, Respondent denied Petitioner's request to purchase FRS credit for his years of employment with the City of Live Oak Police Department.

17. Petitioner has failed to demonstrate that Respondent's response to his request constitutes a statement of general applicability that implements, interprets, or prescribes law or policy and which substantially affects the rights of affected parties including Petitioner. Section 120.52(15), Florida Statutes. While Section 120.54(1)(a), Florida Statutes, directs that rulemaking is not a matter of Agency discretion, here the statutes under consideration require no further implementation, or prescription interpretation by the agency and are found to be self- executing as used by the Respondent here.

18. A review of these self-executing statutory provisions begins with Section 121.081(1)(i), Florida Statutes. That statute 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.

    
    

19. Additionally, Section 112.65(2), Florida Statutes, states in pertinent part:

    No member of a retirement system or plan covered by this part who is not now a member of such plan shall be allowed to receive a retirement benefit or pension which is in part or in whole based upon any service with respect to which the member is already receiving, or will receive in the future, a retirement benefit or pension from another retirement system or plan.

20. Petitioner has argued that Respondent has exceeded a statutory grant of authority with the content of Rule 60S- 2003(7), Florida Administrative Code, which provides that:

    A member may not claim credit for past service which is used to qualify for a benefit under any retirement system.

    
    

21. Petitioner's argument that Respondent is without authority to promulgate an administrative rule pursuant to Section 112.65(2), Florida Statutes, ignores the provisions of Section 121.081(1), Florida Statutes, authorizing Respondent to make such rules as are necessary for the effective and efficient administration of the FRS. To the extent that Respondent has relied upon Section 112.65(2), Florida Statutes, for authority

    for the promulgation of Rule 60S-2003(7), Florida Administrative Code, such reliance can only be viewed as a procedural error which does nothing to invalidate the statute or Respondent's action of denying Petitioner's request pursuant to self-executing statutory provisions.

22. With regard to Petitioner's allegation that Respondent's failure to promulgate an administrative rule permitting the disclaimer by an FRS member of a benefit under another retirement system constitutes a rule in and of itself, such a charge is without deference to the requirements of Section 120.536(1), Florida Statutes, that require a specific law to be implemented in a rule's promulgation. The legislature has not chosen to enact a statute permitting such a disclaimer for individuals desiring to purchase additional FRS creditable service. Absent statutory authority, such a rule would not only exceed Respondent's delegated rulemaking authority, it would also be in conflict with Section 689.21, Florida Statutes, which provides a one year period of time within which insurance contracts must be disclaimed.

ORDER

Based on the foregoing Findings of Fact and Conclusions of Law, the Petition for Rule Challenge is denied.

DONE AND ORDERED 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

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

Stanley M. Danek, Esquire

2114 Great Oak Drive, Suite 200

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

Carroll Webb, Executive Director

Joint Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code The Elliott Building, Room 201 Tallahassee, Florida 32399-0250

NOTICE OF RIGHT TO APPEAL

A party who is adversely affected by this final order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of the notice of appeal with the Agency Clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 99-003099RU

Orders for Case No: 99-003099RU