STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ESCAMBIA COUNTY UTILITIES AUTHORITY, )

1. F. HAMPTON, TERRY BUSBEE, GEORGE W ) DAVIS and WILSON B. ROBERTSON, )

   )

   Petitioner, )

   )

   vs. ) CASE NO. 85-

   2518RX

   )

   DEPARTMENT OF ADMINISTRATION, )

   DIVISION OF RETIREMENT, )

   )

   Respondent. )

   )

   
   

   FINAL ORDER

   
   

   This rule challenge came on for hearing in Pensacola, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on September 24, 1985, along with the substantial interest proceeding involving the same parties, with which the present case was consolidated, Case No. 85-1718.

   
   

   The Division of Administrative Hearings received the transcript of proceedings on October 17, 1985.

   Petitioners' unopposed motion for extension of time in which to file a proposed order was granted. The motion recited a stipulation by the parties waiving time for entry of the final order.

   
   

   APPEARANCES

   The parties are represented by counsel: For Petitioners: James W. Linn, Esquire

   CARSON & LINN, P.A.

   Cambridge Centre

   253 East Virginia Street Tallahassee, Florida 32301

   and

   RAY & KIEVIT

   15 West Main Street Pensacola, Florida 32501

   
   

   For Respondent: Stanley M. Danek, Esquire

   Cedars Executive Center, Building C 2639 North Monroe Street, Suite 207

   Tallahassee, Florida 32303

   
   

   After respondent informed petitioners that they were ineligible "for membership in the Elected State Officers' Class," by letter dated April 17, 1985, petitioners filed a petition for formal administrative proceedings with the Division of Retirement, Department of Administration, on May 14, 1985. In keeping with Section 120.57(1)(b)3., Florida Statutes (1985), the Division of Retirement transmitted the petition to the Division of Administrative Hearings. Case No. 85-1718. By order entered August 14, 1985, the present challenge petitioners bring against Division of Retirement Rule 22B-1.055(2)(d), Florida Administrative Code, was consolidated with Case No. 85- 1718.

   
   

   At hearing, ruling was reserved on objections to portions of certain depositions. Each of the three objections lodged to various portions of Ruth Sansom's deposition beginning on page 8, line 17, and continuing through page 13, line 15, is sustained. The objections to the portions of Andrew J. McMullian III's deposition, beginning on page 5, line 25, continuing through page 8, line 6; and beginning on page 11, line 19 and continuing through line 25 on the same page; and beginning on page 16, line 12 and continuing through page 18, line A, are sustained.

   
   

   The parties submitted proposed orders, including proposed findings of fact, which are dealt with specifically in the attached appendix.

   
   

   ISSUE

   
   

   Whether Rule 22B-1.055(2)(d), Florida Administrative Code, is an invalid exercise of delegated legislative authority?

   
   

   FINDINGS OF FACT

   1. By letter dated April 17, 1985, A. J. McMullian III, State Retirement Director, advised C. H. Wigley, Jr., Acting Executive Director of the Escambia County Utilities Authority (ECUA) that the individual petitioners were eligible for inclusion in the Regular Class, but not the Elected State Officers' Class, of the Florida Retirement System. Respondent's Exhibit No. 8. "The major difference between the Elected State Officers' Class and the Regular Class is the ESOC members . . . receive a higher retirement benefit . . . for the same number of years of service."

      (T. 38) To finance higher benefits the public employer pays a higher amount, set on "an actuarily sound basis." Deposition of Andrew J. McMullian, III, page 19.

   2. A few years back, "Escambia County and the City of Pensacola, felt it was time . . . to combine . . . utilities' systems into one agency. The City had just completed construction of a twenty-million-gallon-a-day treatment plant and had excess capacity. [Unincorporated] Escambia County had the . . . customers but not the facilities . . ." (T. 74) "Escambia County was faced with extending or having to go to the bond market to borrow significant money to buil[d] treatment facilities . . . [but] it was more practical that the City and County get together." (T. 88) By special act the legislature created the ECUA to purchase and operate the water and sewer systems that had belonged to both City and County, and to exercise "all powers with respect to water and sewer, and such other additional utilities as may be hereafter designated . . . which are . . . could be, or could have been but for this act, exercised by the City of Pensacola or Escambia County, Florida." Ch. 81-376, Section 3, Laws of Florida (1981). The ECUA came into existence on October 1, 1981, (T. 90) and now provides natural gas service (T.

      95) at least outside the franchised area of the City of Pensacola. Ch. 85-410, Section 5(r), Laws of Florida (1985). The ECUA is authorized to provide utility services to the extent of its capacity to do so even in areas outside Escambia County. Ch. 85-410, Section 5(q), Laws of Florida (1985).

      
      

   3. By passing a resolution and signing an agreement effective October 1, 1982, (T. 108), the ECUA joined the Florida Retirement System and "decided to purchase past service back to October, '81, for all employees who were employed as of October 1st, '82." (T. 107) See Respondent's Exhibit No. 5.

      
      

   4. Beginning with the 1984 elections, candidates for the ECUA Board had to meet the same qualifications as candidates for county office and had to live in the county commission district they sought to represent. Each of the five single-member districts has the same boundaries as the corresponding county commission district. Terms of ECUA board members are staggered just as county commissioners' terms are and, beginning in January 1987, all members will be elected for four-year terms, as county commissioners are. Each ECUA board candidate is subject to state election laws governing filing papers, qualifying fees and the like, to the same extent as candidates for county

      office are; and each takes an oath before entering upon the duties of the office. Petitioners' Exhibit No. 2.

      
      

   5. The "Florida Retirement System . . . is a statewide consolidated system that covers public programs and employee groups on all levels of government, state, county, school board, cities, special districts Deposition of Andrew J. McMullian, III, page 13. State retirement programs before the Florida Retirement System, which came into existence on December 1, 1970, did not distinguish between elected officials and regular employees. Deposition of Ruth Sansom, page 16. After the Elected State Officers' Class had been created, the law was again amended, effective July 1, 1981, to make "county elected officials, including any sheriff, tax collector, property appraiser, supervisor of elections, clerk of the circuit

      court, county commissioner, school board member, or elected school board superintendent," Section 121.052(1)(g), Florida Statutes (1985), eligible for participation in the Elected State Officers' Class. Chapter 81-214, Laws of Florida (1981). Aside from holders of the offices named, the Comptrollers of Orange and Escambia Counties and the Mayor of Metropolitan Dade County are enrolled in the Elected State Officers' Class. (T. 40)

      
      

   6. Respondent viewed the Mayor of Metropolitan Dade County as differing in name only from a county commissioner and allowed participation in the Elected State Officers' Class on that account. (T. 50) With respect to the Orange and Escambia County Comptrollers, "the majority in one case of the duties of the Clerk were transferred to the Comptroller and in the other case, it seems like it gas about a 50/50 split of the prior duties being transferred over to the Comptroller." (T. 50) In these circumstances respondent decided that "based on the functions that they were performing, the duties of the office, that whether the title said Comptroller or Clerk, they essentially fit the definition." (T. 50)

      
      

   7. In response to a question from respondent's Assistant Director, Lew Dennard, respondent's chief legal officer, Augustus D. Aikens, Jr., wrote a memorandum dated October 20, 1981. Petitioners' Exhibit No. 1. As phrased by Mr. Aikens, the question was whether the statutory language "limits membership in the Elected State Officers' Class to those elected county officers who are enumerated

      in Section 121.052(1)(g)"? In the memorandum, Mr. Aikens declared himself

      
      

      of the opinion that the language "any county elected officer" was intended to establish the class of individuals eligible for participation in the Elected. State Officers' Class; and the term "including" followed by an enumeration of elected county officers was merely intended to be descriptive of the individuals eligible for inclusion in the Elected State Officers' Class as county elected officers.

      Accordingly, the class is not exhausted by the enumeration found in subsection (g). Other elected county officers are also includable in the Elected State Officers Class. Petitioner's Exhibit No. 1.

      
      

      On November 6, 1984, however, respondent promulgated Rule 22B-1.05, Florida Administrative Code, which did not make participation in the Elected State Officers' Class of the Florida Retirement System mandatory for any county officer and provided:

      
      

      Effective July 1, 1981, participation in the Elected State Officers' Class of the Florida Retirement System shall be optional for the following elected county officers: sheriff, tax collector, property appraiser, supervisor of elections, clerk of the circuit court, county commissioner, district school board member, and elected district school board superintendent.

      1. The elected officer may transfer to and participate in the Elected State Officers' Class by submitting an application to the Administrator within one year from July 1, 1981 if already in office on

         that date, or within one year from the date of election if elected after July 1, 1981. Officers appointed to fill an unexpired term may join the Elected State Officers Class under this provision.

      2. An elected county officer who transfers to the Elected State Officers' Class and who fails to win reelection to an elected office shall cease to be a member of the class. If the member returns to a position covered under the Florida Retirement System he shall receive credit thereafter based on the class of membership of his position. 22B- 1.055(2)(d)

         
         

         In the substantial interest proceedings, Case No. 85-1718, respondent has taken the position that this rule provision, along with the statutory language it implements, preclude petitioners participation in the Elected State Officers' Class of the Florida Retirement System.

         CONCLUSIONS OF LAW

         
         

   8. Inasmuch as respondent relies on Rule 2213- 1.055(2)(d), Florida Administrative Code, as authority for denying the individual petitioners participation in the Elected State Officers' Class, there can be no question that their substantial interests are affected by the rule and that they are proper parties to maintain a challenge to Rule 22B-1.055(2)(d), Florida Administrative Code, under Section 120.56, Florida Statutes (1985).

      
      

   9. When an agency interprets a statute it administers by promulgating a rule, "the burden of demonstrating agency action to be arbitrary, or capricious or an abuse of administrative discretion is a stringent one indeed." Agrico Chemical Company v. State, Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1978) cert. den. 376 So.2d 74 (Fla. 1979). Petitioners carried this stringent burden in the present use.

      
      

   10. The thrust of petitioners' challenge is that Rule 22B-1.055(2)(d), Florida Administrative Code, is invalid because it purports to narrow the Elected State Officers' Class to a group smaller than the group established by Section 121.052(1)(g), Florida Statutes (1985),which provides:

       
       

       On or after July 1, 1981, participation

       in the Elected State Officers' Class shall be optional within the time provided herein for any county elected officer, including any sheriff, tax collector, property appraiser, supervisor of elections, clerk of the circuit court, county commissioner, school board member, or elected school board superintendent. Any such officer may, upon application to the administrator of the Florida Retirement System within 1 year from the date the officer first becomes eligible for membership by virtue of the office he holds, transfer to and participate in the Elected State Officers' Class. Benefits shall accrue upon the same basis as provided for other nonjudicial members of the class.

       Any such officer who is already a member of the Florida Retirement System upon election or appointment to office shall carry with him

       such retirement credit as he has accumulated in the retirement system or class within the Florida Retirement System from which he transfers.

       
       

       To the extent Rule 22B-1.055(2)(d), Florida Administrative Code, construes the statutory provision as if the language "any county elected officer, including" had been excised, it is not faithful to the statute it purports to implement. In adopting this rule and construing the rule's list of officers as exhaustive, respondent has disregarded the advice of its chief legal officer and codified an interpretation of the statute at odds with the agency's own practice in the cases of the Mayor of Metropolitan Dade County and the Comptrollers of Orange and Escambia counties.

       
       

   11. The legislature may authorize administrative agencies to interpret, Department of Professional Regulation, Board of Medical Examiners v. Durrani, 455 So.2d 515, 517 (Fla. 1st DCA 1984), but never to alter statutes. State, Department of Business Regulation v. Salvation Limited, Inc., 452 So.2d 65 (Fla. 1st DCA 1984). The precise rule of decision for determining whether an administrative rule crosses the line dividing statutory implementation from statutory abrogation is not always clear, compare State, Department of Health and Rehabilitative Services v. McTigue, 387 So.2d 454 (Fla. 1st DCA 1980) (rule requirement that license applicant furnish names and addresses so agency could verify that statutory criteria had been met stricken as ultra vires) with Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238 (Fla. 1st DCA 1981) (rule substituting for statutory term "acre" the term "net acre" as defined by agency upheld), but the general idea is that no agency shall usurp the legislature's prerogative of amending and enacting statutes. Respondent has crossed the line here.

It is, accordingly, ORDERED:

1. Respondent's Motion For Dismiss For Lack Of Standing is denied.

2. To the extent Rule 22B-1.055(2)(d), Florida Administrative Code, purports to exclude county elected officers not listed in the rule from participation in the Elected State Officers' Class, it is an invalid exercise of delegated legislative authority.

DONE and ENTERED this 27th day of February, 1986, in Tallahassee, Florida.

Hearings

Hearings 1986.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative

The Oakland Building 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative

this 27th day of February,

APPENDIX

Case No. 85-2518RX

Petitioners' proposed findings of fact one through five, seven through fourteen, sixteen, nineteen, twenty, twenty-three through twenty-seven, twenty nine, thirty-one, thirty-three, thirty-four and thirty-five have been adopted, in substance.

Petitioners' proposed finding of fact six is supported by the weight of the evidence, except for the final sentence which states that "ECUA board members are required to take the same oath of office as that sworn to by county commissioners." Although they are similar, the oaths are not identical.

Petitioners' proposed finding of fact fifteen incorporates petitioners' exhibit 6 which is accurate except that it overlooks the initial two years (1985-1987) during which some of the ECUA board members have two-year terms.

Petitioners' proposed findings of fact seventeen and eighteen fail to mention that ECUA also exercises powers and duties pertaining to what were city utilities.

Petitioner's proposed finding of fact twenty-one is supported by the weight of the evidence except for the second sentence, which was not proven.

Petitioners' proposed finding of fact twenty-two is accurate insofar as the date of the adoption of Rule 22B- 1.055, Florida Administrative Code, but there was no competent evidence of the intent of the Division of Retirement, which, on this record, must be inferred from the language of the rule.

Petitioners' proposed findings of fact twenty-eight, thirty and thirty-two pertain to the course of free-form proceedings, which became immaterial once formal proceedings began.

Respondents' proposed findings of fact one through five, seven, eight, and nine have been adopted, in substance.

Respondents' proposed finding of fact six is supported by the weight of the evidence, except that it was Ch. 83- 403, Laws of Florida (1984) that made the ECUA board elective.

COPIES FURNISHED:

James W. Linn, Esquire Carson & Linn, P.A. Cambridge Centre

253 East Virginia Street Tallahassee, Florida 32301

Ray & Kievit

15 West Main Street Pensacola, Florida 32501

Stanley M. Danek, Esquire Cedars Executive Center 2539 North Monroe Street Suite 207-Building C Tallahassee, Florida 32303

NOTICE OF RIGHT TO JUDICIAL REVIEW

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 A 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: 85-002518RX

Orders for Case No: 85-002518RX