STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GOVERNMENT EMPLOYEES CREDIT ) UNION OF FLORIDA, )

)

Petitioner, )

)

vs. ) CASE NO. 82-2518

) 1st FLORIDA PUBLIC EMPLOYEES ) CREDIT UNION and STATE OF )

FLORIDA, OFFICE OF THE )

COMPTROLLER, DEPARTMENT OF )

BANKING AND FINANCE, )

)

Respondents. )

)

HEARING OFFICER'S REPORT

PER SUBSECTION 120.57(1)(B)12., FLORIDA STATUTES

Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. This hearing was conducted on January 24, 1983, in Jacksonville, Florida. This report is being rendered following receipt and review of the transcript of proceedings which transcript was filed with the Division of Administrative Hearings on May 3, 1983. 1/

APPEARANCES

For Petitioner: Michael A. Wodrich, Esquire

Rogers, Towers, Bailey, Jones & Gay 1300 Gulf Life Drive

Jacksonville, Florida 32207

For Respondent: F. Palmer Williams, Esquire

(For 1st Florida Pennington, Wilkinson, Gary & Dunlap Public Employees) Post Office Box 3985

Tallahassee, Florida 32303

(For Office Franklyn J. Wollett, Esquire and of Comptroller) Clyde A. Willard, Esquire

Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301

ISSUES

This presentation concerns the application by Government Employees Credit Union of Florida for the approval of a proposed by-law amendment by the Department of Banking and Finance which would allow an expansion of the field of membership of that credit union to include employees of the State of Florida, Department of Environmental Regulation. The hearing in this matter was

occasioned by the protest to the expansion, filed by 1st Florida Public Employees Credit Union. (In the course of the facts reported, Government Employees Credit Union of Florida shall be referred to as "Applicant"; 1st Florida Public Employees Credit Union shall be referred to as "Protestant"; and the Office of the Comptroller, Department of Banking and Finance shall be referred to as "Department".)

FINDINGS OF FACT

1. On August 13, 1982, the Applicant filed its Application for Approval of a proposed By-Law Amendment with the Department. In accordance with Subsection 120.60(4), Florida Statutes, notice of the application was published in the Florida Administrative Weekly, dated August 27, 1982. By letter dated August 30, 1982, Protestant, in the person of its manager, Helen Ferrell, filed a protest to the application. On September 16, 1982, the Applicant filed a petition requesting a hearing to allow it to demonstrate that the proposed by- law amendment of the credit union was in the best interest of the membership, provided means for better service to the membership, was in accord with sound credit union practices, and did not expose the members' funds to unnecessary risks. The Department requested the Division of Administrative Hearings to conduct a final hearing, by correspondence dated September 8 and 23, 1982. A Hearing Officer was appointed to consider that request, and pursuant to Hearing Officer's Notice of Hearing of October 20, 1982, a final hearing date was established for January 24, 1983.

   
   

2. Applicant is a Florida chartered credit union, which primarily serves employees of the State of Florida, Department of Health and Rehabilitative Services. By this request, Applicant seeks to amend its charter, Article II, Section 1, to expand the field of membership to include ". . .employees of the Department of Environmental Regulation. . ." The employees who would be added to the field of membership of the Applicant are employees of the State of Florida. Should the application request be honored, the limited field of membership of the Applicant would include those employees of the Department of Environmental Regulation and the other groups serviced as set forth in Applicant's Exhibit No.

   1 admitted into evidence.

   
   

3. The Department of Environmental Regulation has approximately 744 employment positions within that agency, of which 670 positions were filled effective December 31, 1982. That agency has a total of 353 employees in Tallahassee, Florida. Approximately 400 Department of Environmental Regulation employees are members of the Protestant credit union, with 300 of those members being housed in offices in Tallahassee, Florida. Employees of Department of Environmental Regulation are also included in the field of membership of two credit unions unrelated to this controversy, with 17 of their employees being members of those credit unions. The other two credit unions are Sunshine State Employees Credit Union and Hillsborough County Employees Credit Union. Only the

   68 employees of the Department of Environmental Regulation, who relocated in Hillsborough County, Florida, are eligible for membership in Hillsborough County Employees Credit Union. Those employees of the Department of Environmental Regulation not located in Tallahassee are dispersed throughout the state. Department of Environmental Regulation employees represent approximately 50 percent of the use of the Protestant's Tallahassee branch office. This percentage is as a result of information obtained on January 19, 1983, two days prior to a payday for Department of Health and Rehabilitative Services and 12 days prior to Department of Environmental Regulation payday. Approximately 75 percent of Department of Environmental Regulation's employees in Tallahassee are members of the Protestant credit union, with 67 percent of those members

   maintaining share-draft accounts in Protestant's Tallahassee office. The results of a limited survey conducted in November, 1982, indicated that Department of Environmental Regulation members were responsible for the contribution of 25 percent or $440,000 of the total share deposits; 32 percent or $136,000 total sharedraft deposits; 21 percent or $120,000 of the total certificates of deposit; and 19 percent or $373,000 of the total loans in the Protestant's branch office in Tallahassee. Should the request for expansion of membership be granted, the field of membership could potentially increase to the extent of 740 Department of Environmental Regulation employees and their families.

   
   

4. In the latter part of 1982, a survey was conducted of Department of Environmental Regulation employees in Tallahassee to ascertain the satisfaction of those employees with services by Protestant credit union. Of the 143 responses received, 121 were not in opposition to the quality of service being provided by Protestant credit union. The remainder had expressed some dissatisfaction with the services. Several Department of Environmental Regulation employees have expressed an interest in having the Applicant provide credit union services for Department of Environmental Regulation. This indication was made to an employee in the Tallahassee branch office operated by the Applicant.

   
   

5. At present, the Applicant has approximately 15,000 members, with a potential membership of 35,000 employees and their families. Applicant has experienced growth in assets from approximately 2.6 million dollars in 1973 to an excess of 15 million dollars in 1983. Applicant's principal office location is Jacksonville, Florida. It maintains a branch location in Tallahassee, Florida. The office in Jacksonville is owned by the Applicant and contains 10,400 square feet of useable space. The Jacksonville office has an additional 2,300 square feet of unused space to meet future needs. Applicant's Tallahassee branch is leased and contains 1,800 square feet of useable space. Applicant has doubled the floor space in the Tallahassee office during the course of its lease to meet present needs and anticipated expansion. In 1982, the Applicant spent

   $110,000 for the purchase of real estate in Tallahassee for constructing a building in the future. That construction is not contingent upon the approval of the expansion of membership which is the subject of this proceeding. On December 23, 1982, the fee simple title to that parcel of property was received, constituted of a 1.42 acre site located at the corner of Blair Stone Road and Old St. Augustine Road. Should the building be constructed, it would contain 5,000 square feet, primarily directed to service of Leon County area credit union members. The Applicant employs 25 to 26 full time employees to serve credit union members, and four of those employees are located in the Tallahassee branch office. In addition to the full time employees of the Applicant, it utilizes 400 credit union representatives throughout the state and those representatives maintain a supply of credit union forms to assist out-of-town members in credit union transactions. Approximately 2,000 members of the Applicant's credit union utilize the Tallahassee facility. Those members utilizing the Tallahassee facility may also utilize the main office in Jacksonville, which is additionally available to the balance of the credit union membership. The Jacksonville office could be used by the potential Department of Environmental Regulation employees, and this useage would be facilitated by the existence of two suncom lines, three unlimited incoming watts lines, and a 24-hour recorded telephone service. Should the amendment be allowed, Applicant would not alter its membership requirements or lending policies.

6. Applicant's Exhibit No. 3 contains a list and description of various services provided by the Applicant credit union. Some of those services are common to opportunities provided by Protestant. Some services are unique to the Applicant and Protestant credit unions. Protestant's Exhibit No. 8 is a list of services provided by that institution. A comparison of Applicant's No. 3 and Protestant's No. 8, in the context of testimony given by management officials within those credit unions, point out differences in services provided and requirements to be met before a member may avail himself or herself of particular services offered.

   
   

7. In addition to the services described, Applicant expects to participate in February of 1984 in a statewide system of automatic teller machines. This system would allow the credit union members to conduct transactions with their credit union through 300 Publix Supermarkets stores.

   
   

8. Protestant offers credit union services to the State of Florida, Department of Health and Rehabilitative Services; State of Florida, Department of Corrections; and State of Florida, Department of Environmental Regulation. Protestant has a membership of 11,821 members and approximately 17.7 million dollars in assets. Protestant has a potential membership of over 32,000 employees and their families. Protestant's membership is composed of approximately 5,400 members of the Department of Health and Rehabilitative Services; 5,200 members of the Department of Corrections, and the 400 employee members of Department of Environmental Regulation. Among its membership, 1,650 members are located in the Tallahassee area. The principal office of Protestant is located in Jacksonville, Florida. Petitioner also owns and maintains a 4,000 square feet branch office building in Tallahassee located on Blair Stone Road across from the Department of Environmental Regulation's Tallahassee office. Protestant expended $300,000 in establishing the Tallahassee branch office facility. At present, Protestant's Tallahassee facility is in the posture of an even financial position, that is to say, no significant gains or losses in the operation. By way of future services, Protestant anticipates the installation of an automatic teller machine in 1983, and the potential for access to other automatic teller machines beyond that point.

   
   

9. Applicant and Protestant have within their limited fields of membership employees of the State of Florida, Department of Health and Rehabilitative Services. The effect of this overlap is to draw members from a common limited field of membership, and as a consequence, at times, enroll members to the exclusion of the competing credit union, who might otherwise have enrolled as a member in that competing credit union. Protestant also is in a position of overlapping limited fields of membership by other credit unions.

   Notwithstanding these overlaps, Applicant and Protestant maintain a sound financial position.

   
   

10. As stated, neither Applicant nor Protestant have reached the maximum potential for membership in their respective credit unions. Additional membership gains lead to more efficient utilization of credit union employees. Conversely, losses of members acts to the detriment of the efficiency of credit union employees. Expansion of the membership also promotes diversification of services and a better return for investments made in the credit unions.

    
    

11. If expansion was allowed to the field of membership, that action would not overly tax facilities of the Applicant or dilute or impair services offered. Nor would the expansion create risk or loss, insolvency or dissipation of assets

    or offer serious prejudice to the interest of the members of the Applicant's credit union.

    
    

12. Protestant has expressed particular concern about the effect of approval of this amendment on its Tallahassee branch office operations. Success of that operation is a primary concern of the Protestant; however, the success of that facility is not vital to the existence of Protestant. Likewise, Applicant's request for expansion of membership, while desired, is not necessary to the continued existence of that entity.

    
    

    CONCLUSIONS OF LAW

    
    

13. In the course of the final hearing in this cause, certain items of evidence were presented. Upon review of the transcript of proceedings, the following rulings are made related to those items, to clarify the record. Applicant's Exhibits No. 9 and 10 are denied admission. Applicant's Exhibits No. 13 and 14 are admitted. Protestant's Exhibits No. 1, 2, 3, 4, 5, 9, 10, 12, and 14 are admitted. Protestant's Exhibit 11 is admitted related to that portion dealing with personnel positions filled and vacant within the Department of Environmental Regulation. Protestant's Exhibit No. 1, a composite, was not provided with the transcript of materials submitted by the court reporter and a copy of that material has subsequently been provided by Protestant. The substitute material has been compared with Page 48 of the transcript to ascertain the completeness of that exhibit. Treatment of all evidential items is in keeping with the various discussions of the matters of evidence related to the question of relevancy and materiality of those offerings, which discussions are found in the transcript of proceedings. Decisions on relevancy and materiality have not been reached, except to the extent that those determinations are necessary to reach facts found in this report. See Section 120.55, Florida Statutes. (The parties were not in accord on the subject of the provisions of statute or rule which would apply to the disposition of this controversy. Discussion of the divergent positions and points of agreement may be found at Pages 5 through 27 in the transcript.)

DONE and ENTERED this 14th day of June, 1983, in Tallahassee, Florida.

CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 1983.

ENDNOTE

1/ The Petitioner and Respondent, First Florida Public Employees Credit Union, in the person of counsel, have offered proposed findings of fact. These proposals have been reviewed prior to the preparation of this report. To the extent that the proposals are consistent with the report, they have been utilized. To the extent that the factual proposals are inconsistent with the

report, they are rejected. Those elements of the proposals made by the aforementioned parties which concern conclusions of law and the proposed disposition in this case are transmitted to the agency head in furtherance of the preparation of the final order in this cause.

COPIES FURNISHED:

Michael A. Wodrich, Esquire Rogers, Towers, Bailey, Jones

& Gay

1300 Gulf Life Drive Jacksonville, Florida 32207

F. Palmer Williams, Esquire Pennington, Wilkinson, Gary

& Dunlap

Post Office Box 3985 Tallahassee, Florida 32303

Franklyn J. Wollett, Esquire Clyde A. Willard, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301

Mr. Felix Adams Director

Division of Banking Suite 1301, The Capitol

Tallahassee, Florida 32301

Docket for Case No: 82-002518

Orders for Case No: 82-002518