STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STEFAN AND DANA GHEORGHE,

Petitioners,

vs.

DEPARTMENT OF TRANSPORTATION,

Respondent.

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) Case No. 12-3537

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RECOMMENDED ORDER

A formal hearing was conducted in this case on December 12, 2012, via video teleconference from locations in Jacksonville and Tallahassee, Florida, before Lawrence P. Stevenson, a duly- designated Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Dana Gheorghe, pro se

1910 Southampton Road

Jacksonville, Florida 32207

For Respondent: Kimberly Clark Menchion, Esquire

Department of Transportation Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue is whether the Department of Transportation's calculation of Petitioner's replacement housing payment determination was correct.

PRELIMINARY STATEMENT

In a letter dated April 10, 2012, Robert M. Knight, the relocation assistance manager for the Department of Transportation (the Department), notified Petitioners Stefan and Dana Gheorghe (the Gheorghes) of the results of his administrative review of the Gheorghes' appeal of the district office's denial of the Gheorghes' request for an additional replacement housing payment. Mr. Knight's letter stated as follows, in relevant part:

You are appealing the District Office's denial of your request for the following:

• Calculation of the Replacement Housing Payment Determination;

  
  

• Comparable selected as the number one due to location;

  
  

• Reimbursement of deposits.

The purpose of this benefit is to provide you and your family with the necessary assistance to make comparable housing affordable. The payment, in accordance with

49 C.F.R., Part 24, Section 402 Replacement housing for 90-day occupants, is based on the difference in the rent and utilities of your current dwelling and the rent and utilities of a comparable dwelling for a reasonable period prior to displacement.

The final calculation made available to you was performed in accordance with this regulation.

The number one comparable selected was chosen in accordance with 49 C.F.R., Part 24, Section 403(a)(4) which states: To the extent feasible, comparable replacement dwellings shall be selected from the neighborhood in which the displacement dwelling is located or, if that is not possible, in nearby or similar neighborhood where housing costs are generally the same or higher. It also must meet decent, safe and sanitary (DS&S) requirements. The one selected is located in a similar neighborhood with higher housing costs and is DS&S. It is on the tax rolls as a

3-bedroom, 1.5 baths; has approximately 450 square feet more of heated area; the lot is approximately 35,900 square feet larger than your current lot and is on the city water system. It was constructed in 1981 and should be more energy efficient than your current dwelling. Based on our research, it appears the number one comparable is in a safer area than your current dwelling.

As to your appeal for the reimbursement of a pet deposit, 49 C.F.R., Part 24, does not address this and the Department construed this as a non-eligible expense, also it further states in section 301(h)(12): Refundable security and utility deposits are considered ineligible moving and related expenses, therefore not reimbursable.

Based on my review of this appeal, it has been determined the district's actions are in accordance with 49 C.F.R., Part 24, and are in compliance with governing law.

Therefore, the district's denial of your calculation of the Replacement Housing Payment Determination, comparable selected as the number one due to location and reimbursement of deposits is upheld . . .

On April 27, 2012, the Gheorghes filed with the Department a request for formal hearing challenging the Department's denial of their request for an additional replacement housing payment.

On October 31, 2012, the Department referred the case to the Division of Administrative Hearings (DOAH) for the assignment of an Administrative Law Judge the conduct of a formal hearing. The case was scheduled for hearing on December 12, 2012, on which date it was convened and completed.

At the hearing, Dana Gheorghe testified on her own behalf. Petitioners' Exhibits 1 through 3 were admitted into evidence. The Department presented the testimony of Chris Scodius, a senior right-of-way specialist for American Acquisition Group, a Department contractor; and Robert E. Knight, the Department's relocation assistance manager. The Department's Exhibits 1 through 12 were admitted into evidence.

At the close of the hearing, the parties agreed to a period of 30 days after the filing of the transcript within which to file their proposed recommended orders. The Gheorghes filed a written closing argument on December 31, 2012. The one-volume transcript of the hearing was filed at DOAH on January 9, 2013. The Department timely filed its Proposed Recommended Order on February 8, 2013. The Gheorghes did not file a proposed recommended order.

FINDINGS OF FACT

1. The Department is the state agency responsible for acquiring rights-of-way for highway construction and widening in the State of Florida.

2. As part of a federally funded right-of-way acquisition project, the Department acquired the house that the Gheorghes were renting. The Gheorghes thus became eligible for relocation assistance under the Surface Transportation and Uniform Relocation Assistance Act of 1987, Public Law No. 100-17, codified at 42 U.S.C. § 4601 et seq. (Uniform Act).1/

3. Chris Scodius is a senior right-of-way specialist with American Acquisition Group, a consulting firm that provides acquisition, relocation, appraisal, cost estimating, and property management services. The firm provides these services to the Department pursuant to contract. In November 2011,

   Mr. Scodius was assigned the task of calculating a revised replacement housing estimate for the Gheorghes' relocation.2/ Mr. Scodius estimated that he has performed a similar function on over 50 relocation projects, including 25 projects involving the Department.

4. Mr. Scodius gathered information on three comparables to the displaced dwelling and chose the one most comparable for the computation of the rental assistance payment. He selected the comparables by browsing websites such as Realtor.com and by

   
   

   visiting local realtors and property management companies to find dwellings that were functionally equivalent to the displaced dwelling.

5. The dwelling from which the Gheorghes were displaced was at 1910 Southampton Road on the south side of Jacksonville, near Atlantic Boulevard and I-95. Mr. Scodius' report described it as follows:

   The single family house facing Southampton Road is a one-story, wood frame residence, built off-grade on a wood joist floor system with asbestos shingle siding and an asphalt shingle roof on a pitched rafter system, originally constructed 68 years ago in 1943. Interior floor coverings are hardwood and carpet, walls and ceilings are of plaster on lathe. A central system conditions air with heat and cooling. Two window air units supplement cooling capacity of the dwelling. The 1093 square foot conditioned portion of the house is divided into six rooms in addition to the single full bathroom. These six rooms include a living room and a dining room, a kitchen, a small office and three bedrooms. Attached to the front of this conditioned space is a small, covered entry stoop and steps with a small covered entry stoop at the rear behind the garage. There is a one-car enclosed garage attached to the west side of the house with doorway access only to the exterior of the house at the dirt driveway. The appraisal prepared for FDOT indicates that the house is of average quality construction and interior finish, is in average condition and indicates the building structure has a remaining economic life of about 35 years. The described home- site contains 4,495 square feet more or less. Ingress and egress frontage along Southampton Road is 50 feet. This dwelling

   
   

   is served by a public potable water supply and a public wastewater disposal system.

   
   

6. The comparable dwellings were located at 7416 Silver Lake Terrace in Arlington; 2427 Sam Road, between University Boulevard and Dean Road; and 7913 Jasper Avenue in Arlington. None of the comparables was in the same neighborhood as the Southampton Road house, but none was more than 5.3 miles away and all were on the south side of Jacksonville in similar neighborhoods.

7. Mr. Scodius chose the Silver Lake Terrace property as the most comparable and used it for the calculation.3/ This was a 1,549 square foot single family home consisting of three bedrooms and 1.5 bathrooms, built in 1980 with a recently renovated interior. Mr. Scodius described it as follows:

   Similar to the subject, this dwelling has one full bathroom and its conditioned space is further divided into 6 rooms. These rooms consist of a living room, dining room, kitchen and three bedrooms. Accessed from outside the interior space of the dwelling, but enclosed and under the carport roof is a small utility room equipped with connections for a washer and dryer. The general construction and material of the interior is similar to the subject, with hardwood, tile and carpeted floors and painted sheet-rock walls. This home is heated and cooled by an electric, central, ducted system. Potable water is from a public supply and wastewater disposal is by a private septic tank and drainfield system. Exterior features include a fenced back yard with wood storage building at the back property line.

   
   

8. Before making his selection, Mr. Scodius visited the Southampton Road and Silver Lake Terrace properties to determine their comparability in person. He calculated that the Silver Lake Terrace property was 4.7 miles from the Southampton Road property and that the Silver Lake Terrace property was within two miles of a variety of shopping, restaurants, banks, schools and community services. He inspected the dwelling and determined that it met the standards of "Decent, Safe and Sanitary" (DS&S) prescribed by the Federal Highway Administration and the Uniform Act.

9. Mr. Scodius concluded his report on the Silver Lake Terrace property as follows:

   This dwelling has been chosen as the number one comparable dwelling because of its distinct similarity to the subject in terms of overall room count, number of bedrooms, overall living area and close proximity to the subject neighborhood. Given its quiet, residential setting within easy access to shopping and being within 4 miles of the displacee's church of choice, this available rental dwelling appears to be the best suited of the three to this displaced family's particular needs and lifestyle.

   
   

10. Mr. Scodius testified that he chose this house in the Arlington area because he believed it to be the most functionally equivalent comparable, and because it was actually superior to the Southampton Road property in which the Gheorghes were currently residing.

    
    

11. Mr. Scodius explained that the number one comparable is used only as the basis for computing the amount of the rental assistance payment. Though the number one comparable must be available, the displaced persons are not required to move into it. They may take the rental assistance payment and move into a dwelling of their choosing.

12. After choosing the number one comparable dwelling, Mr. Scodius prepared a computation of the rental assistance

    payment for the Gheorghes. To arrive at a final rental assistance payment number, the base rent for the current dwelling, including average utility payments over 12 months, is subtracted from the advertised monthly rental rate for the comparable, including information obtained from the Jacksonville Electric Authority (JEA) as to average utility payments for a representative 12-month period. The resulting number is then multiplied by the 42 months for which payments are available in order to arrive at a final lump sum rental assistance payment.

13. In this case, the advertised market rent of $950.00 plus average monthly utilities of $217.50 as provided by the JEA for the Silver Lake Terrace property totaled $1,167.50. The base rent for the Southampton Road property was the actual monthly rental of $525.00 plus average monthly utilities of

    $437.21 for a total of $962.21. The difference of $205.29 was

    
    

    multiplied by 42 to arrive at a rental assistance payment of

    
    

    $8,622.18.

    
    

14. The federal relocation assistance regulations provide that the maximum payment for rental assistance is $5,250.00.

    49 C.F.R. § 24.402(a). However, the regulations also provide for "replacement housing of last resort" in situations where replacement dwellings are not available within the prescribed monetary limits. 49 C.F.R. § 24.404. The Department determined that the Gheorghes were eligible for a last resort payment as "the best alternative allowable within the established procedure in order to relocate Mr. Gheorghe and his family into a decent, safe and sanitary replacement dwelling in a timely manner." Therefore, the Gheorghes were paid $8,622.18, plus a $1,500.00 moving assistance fee.

15. At the hearing, the Gheorghes4/ voiced several criticisms of the Department's methodology in selecting the number one comparable and its calculation of the rental assistance payment. First, Ms. Gheorghe complained that the chosen comparables were all several miles from the Southampton Road house despite the fact that there were three available rental properties in her current neighborhood. However, no evidence beyond Ms. Gheorghe's bare assertion was provided as to the existence of these rental properties, and no particulars

    
    

    were offered as to their functional equivalence to the Gheorghes' Southampton Road dwelling.

16. Next, the Gheorghes claimed that the basis for comparison was skewed because the rent they paid on the Southampton Road house was well below market value. In renewing the Gheorghes' lease in 2006, the landlord acknowledged they were good longtime tenants and therefore charged them only

    $525.00 per month.

    
    

17. Mr. Scodius testified that the federal guidelines do not focus on price but on functional equivalence. The amount of rent currently being paid by the Gheorghes was an irrelevant factor in his selection of comparables.

18. Further, if it is true that the Gheorghes' rent was artificially low, this factor worked in their favor by raising the amount of rental assistance to which they were entitled. Under the formula, the current rent is subtracted from the advertised rent of the number one comparable. The lower the current rent, the higher the resulting rental assistance calculation. This objection by the Gheorghes is not a ground for disturbing the calculation made by Mr. Scodius.

19. The Gheorghes complained that the Silver Lake Terrace house could not be considered comparable to the Southampton Road house because the latter was connected to city water and sewage, whereas the former, despite the statement in Mr. Scodius' report

    
    

    that it received potable water "from a public supply," was actually serviced by a well and septic tank. Mr. Knight reasonably testified that a well and septic tank provide the same function as city water and city sewer. The well provides potable water to the dwelling and the septic tank provides a means to discharge the waste. While some people might prefer one to the other, the well and septic tank are functionally equivalent to city water and sewage and meet the DS&S standard.5/

20. The Gheorghes attacked the comparability of the JEA bills for the Southampton Road house and the Silver Lake Terrace house. They claimed that the latter was unoccupied for a period of the time considered by Mr. Scodius in his calculation, and therefore the utility bill for the house was artificially low. However, Mr. Scodius plausibly testified that he specifically asked JEA for an average utility bill for the last 12 months in which the property was occupied. To the best of his knowledge, JEA gave him information on an occupied dwelling.

21. It is noted that the average monthly utility bill for the Gheorghes' home on Southampton Road was almost exactly double that of the Silver Lake Terrace house. It is also noted that the average utility bills for the comparable houses on Sam Road and Jasper Avenue were $211.25 and $228 respectively, far closer to the Silver Lake Terrace bill than to the Gheorghes' Southampton Road dwelling. Unless JEA provided Mr. Scodius with

    
    

    bad information as to all three comparable houses, it appears that the Gheorghes' utility bill is the outlier among these comparables.6/

22. Ms. Gheorghe argued that she should have been reimbursed for pet deposits at her new residence because the Department was well aware at the outset of negotiations that she had a dog and more than one cat. However, the Gheorghes could point to no provision of the Uniform Act or its implementing rules that authorize or require the agency to pay the relocation costs for pets. Mr. Knight affirmatively testified that the Department is not authorized to consider pet deposits as expenses eligible for reimbursement.

23. At the hearing, the Department did not contest

    
    

    Ms. Gheorghe's testimony that some of its representatives dealt high-handedly with the Gheorghes during the relocation process. Much of Ms. Gheorghe's presentation had less to do with the financial data in question than with what she considered her family's poor treatment at the hands of certain Department personnel. Ms. Gheorghe's complaints were heartfelt and appeared legitimate. It is hoped that being forced to undertake the time and expense of litigating this matter has demonstrated to the Department that good will and civility are not only desirable qualities in a public agency but cost effective ones as well.

    
    

    CONCLUSIONS OF LAW

    
    

24. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.7/

25. The general rule is that the burden of proof, apart from a statutory directive, is on the party asserting the affirmative of an issue before an administrative tribunal. Young v. Dep't of Cmty. Aff., 625 So. 2d 831, 833-834 (Fla. 1993); Dep't of Transp. v. J.W.C. Co., 396 So. 2d 778, 788 (Fla. 1st DCA 1981); Balino v. Dep't of HRS, 348 So. 2d 349, 350 (Fla. 1st DCA 1977). In this case, the Gheorghes are the parties asserting their entitlement to replacement housing payments over and above the amount they have already accepted from the Department, and as such bear the burden of proof by a preponderance of the evidence.

26. Section 339.09(2), Florida Statutes, provides:

    
    

    The department may, in cooperation with the Federal Government, expend transportation tax revenues pursuant to rules adopted by the department, for control of undesirable rodents, relocation assistance, and moving costs of persons displaced by highway construction and other related transportation projects to the extent, but only to the extent, required by federal law to be undertaken by the state to continue to be eligible for federal highway funds.

    
    

27. Section 421.55, Florida Statutes, titled "Relocation of displaced persons," provides:

    1. It is the intent of the Legislature to authorize the state and its departments, agencies, political subdivisions, and legislatively established port and airport authorities to comply with the provisions and requirements of the Surface Transportation and Uniform Relocation Assistance Act of 1987, Pub. L. No. 100-17, in those public projects or programs for which federal or federal-aid funds are available and are used.

       
       

    2. As used in this section:

       
       

       1. "State" means the State of Florida, any department, agency or political subdivision thereof, or any port or airport authority established by the Legislature.

          
          

       2. "Public Law No. 100-17" means the Surface Transportation and Uniform Relocation Assistance Act of 1987 adopted by the United States Congress.

          
          

       3. "Displaced person" means any individual, partnership, corporation, or association that is required to move from any real property on or after March 20, 1972, as a result of the acquisition of such real property for public purposes, or who, as the result of the acquisition for public purposes of real property on which such person is conducting a business or farm operation as defined in Pub. L. No. 100-17, is required to move said business or farm operation.

       
       

    3. The state is authorized and empowered, in acquiring real property for use in any public project or program in which federal or federal-aid funds are used, to make all such relocation and other payments to or for displaced persons as are required under the

       
       

       provisions of Pub. L. No. 100-17, and to provide such displaced persons with relocation services and make available to them replacement dwellings, as required by Pub. L. No. 100-17.

       
       

    4. The state is authorized and empowered, in acquiring real property for use in any public project or program in which federal or federal-aid funds are used, to follow and conform with the land acquisition policies set forth in Pub. L. No. 100-17, and to pay or reimburse owners of property so acquired in the manner specified in Pub. L. No. 100-

       17. This authority shall include, as to federal-aid highways and airports, as a last resort, the use of eminent domain powers to acquire real property for replacement housing as required by Pub. L. No. 100-17.

       
       

28. Florida Administrative Code Rule 14-66.007, titled "Relocation Assistance Program," provides as follows, in relevant part:

    Pursuant to sections 339.09(2) and (3), and 421.55, F.S., the Department may expend transportation tax revenues on federal and non-federal-aid projects which shall include relocation assistance and moving costs to persons displaced by transportation facilities or other related projects.

    
    

    1. The purpose of this rule is to govern the provision of relocation services, moving costs, replacement housing costs, and other related expenses and to ensure that each person displaced as a direct result of a transportation project is treated fairly, consistently, and equitably, so that such person will not suffer disproportionate injury as a result of projects designed for the benefit of the public as a whole, and to ensure that the Department implements these regulations in a manner that is efficient and cost effective. This rule shall apply

to all persons displaced by any applicable transportation project on which negotiations for right-of-way acquisition begin after the effective date of this rule. The provisions of 49 C.F.R. Part 24, Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally-Assisted Programs (effective October 1, 2006), as modified herein, are incorporated into this rule by reference. (Emphasis added.)

29. 49 C.F.R. § 24.402(b) provides:

(b) Rental assistance payment. (1) Amount of payment. An eligible displaced person who rents a replacement dwelling is entitled to a payment not to exceed $ 5,250 for rental assistance. (See § 24.404.)[8/] Such payment shall be 42 times the amount obtained by subtracting the base monthly rental for the displacement dwelling from the lesser of:

1. The monthly rent and estimated average monthly cost of utilities for a comparable replacement dwelling; or

   
   

2. The monthly rent and estimated average monthly cost of utilities for the decent, safe, and sanitary replacement dwelling actually occupied by the displaced person.

1. The Gheorghes were paid in accordance with subsection (i). The Department determined that the monthly rent and estimated average utility cost for the comparable replacement dwelling selected by Mr. Scodius was less that the monthly rent and estimated average monthly utilities of the replacement dwelling actually selected by the Gheorghes.

2. The Gheorghes received the maximum payment for which they were eligible under the applicable statutes and rules. The

   
   

   evidence presented at the hearing established that the Department used the correct figures and calculated the payment in accordance with Federal regulations.

3. Petitioners failed to demonstrate that the Department did not calculate their replacement housing payment according to the Uniform Act and Florida law.

RECOMMENDATION

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

RECOMMENDED that the Department of Transportation enter a final order denying the petition of Stefan and Dana Gheorghe for an additional replacement housing payment.

DONE AND ENTERED this 30th day of April, 2013, in Tallahassee, Leon County, Florida.

S

LAWRENCE P. STEVENSON

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 30th day of April, 2013.

ENDNOTES

1/ The original law dates to 1970, but this is the version referenced in section 421.55, Florida Statutes. See Conclusion of Law 26, infra.

2/ The Department had begun the relocation assistance process with the Gheorghes in October 2010. A replacement housing computation was presented to the Gheorghes, and they appealed it to Mr. Knight, who was then the relocation administrator. In reviewing the file, Mr. Knight discovered that the number one comparable dwelling chosen as the basis for the computation had only two bedrooms. The Gheorghes' current home had three bedrooms, meaning that the comparable was not functionally equivalent to the current home. Mr. Knight ordered a revision of the replacement housing estimate.

3/ Mr. Scodius performed a full analysis of all three selected comparables. He testified that he was not required to analyze the two properties that were not selected as the number one comparable, but that doing so is the preferred methodology, presumably to act as a check on the figures derived from the number one comparable.

4/ At the hearing, Ms. Gheorghe was assisted by her son, Radu Gheorghe, with the consent of the undersigned and without objection from the Department.

5/ To the Gheorghes' complaint that the exclusion of city water unfairly depressed the utility bill of the Silver Lake Terrace house in comparison to the bill of the Southampton Road house, Mr. Knight pointed out that the Silver Lake Terrace house incurs electricity costs for pumping the water from the well and thus that any difference in the utility bills based on this distinction would be negligible.

6/ Over the Department's objection, the Gheorghes introduced recent utility bills from the house in which they are now living to support their contention that the utility bills for the comparables were artificially low. The Department correctly points out that the governing regulations do not permit it to consider utility bills from dwellings other than the selected comparables, unless the result is a lower rental assistance payment. 49 C.F.R. § 24.402(b)(1). Even assuming the undersigned has the authority to consider those bills, the Gheorghes did not offer evidence sufficient to establish that

their current residence meets the functional equivalence test. There could be any number of explanations for a difference in utility bills from one house to the other that are at least as plausible as the suggestion that Mr. Scodius received bad data from the JEA.

7/ Unless otherwise indicated, all references to the Florida Statutes are to the 2012 edition.

8/ 49 C.F.R. § 24.404 is the provision that allows for payments in excess of $5,250 for replacement housing of last resort. See Finding of Fact 14, supra.

COPIES FURNISHED:

Kimberly Clark Menchion, Esquire Department of Transportation Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399

Stefan Gheorghe Dana Gheorghe

1910 Southampton Road

Jacksonville, Florida 32207

Trish Parsons, Clerk of Agency Proceedings Department of Transportation

Haydon Burns Building

605 Suwannee Street, MS 58

Tallahassee, Florida 32399-0450

Gerald B. Curington, General Counsel Department of Transportation

Haydon Burns Building

605 Suwannee Street, MS 58

Tallahassee, Florida 32399-0450

Ananth Prasad, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street, MS 57

Tallahassee, Florida 32399-0450

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: 12-003537

Orders for Case No: 12-003537