STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLES OTERO, )

)

Petitioner, )

)

vs. ) CASE NO. 86-2487

) DEPARTMENT OF ADMINISTRATION, ) DIVISION OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Final hearing in the above-styled action was held in Tampa, Florida, on November 5, 1986, before Mary Clark, Hearing Officer of the Division of Administrative Hearings.

The parties were represented as follows:

For Petitioner: Edward P. de la Parte, Jr., Esquire

705 E. Kennedy Boulevard Tampa, Florida 33602

For Respondent: William A. Frieder, Esquire

Assistant Division Attorney Department of Administration Division of Retirement Cedars Executive Center

2639 North Monroe Street Suite 207, Building C Tallahassee, Florida 32303

BACKGROUND AND PROCEDURAL MATTERS

By letter dated July 31, 1985, the Division of Retirement ("Division") informed Charles Otero ("Otero") that his employment as a part-time teacher from November 1965 through November 1971, was not creditable for Florida Retirement System purposes. Mr. Otero filed a Petition for Formal Hearing, deemed timely in the absence of an objection, and this proceeding ensued.

At the commencement of the final hearing, counsel for Otero argued his pending motion to expedite response to second request for admissions. In the alternative he asked that the record remain open until after the hearing to permit the responses by the Division she Division opposed the motion and it was denied. A witness from the Division was available at the hearing with necessary files for examination regarding the subject matter of the second request for admissions.

Otero presented his own testimony and that of four witnesses. His nine exhibits were admitted without objection. The Division presented two witnesses, and four exhibits were admitted without objection.

After hearing both parties submitted proposed recommended orders, and Charles Otero submitted a written closing argument and memorandum of law. These submittals have been carefully considered in the preparation of this recommended order and specific rulings on the proposed findings of fact are found in the attached appendix.

ISSUE

WHETHER CHARLES OTERO'S EMPLOYMENT AS A PART TIME TEACHER FOR THE HILLSBOROUGH COUNTY SCHOOL BOARD BETWEEN 1965 AND 1972 IS CREDITABLE SERVICE UNDER THE FLORIDA RETIREMENT SYSTEM.

There was some discussion at the commencement of the hearing as to whether Otero's petition for formal hearing properly raised his claim that his service is creditable both as "past" and as "prior" service. The terms "past," "prior" and "previous" service are each separate terms of art defined in Rule 225-6, Florida Administrative Code.

While Otero's petition requests permission to purchase Florida Retirement System ("FRS") credit for "prior" service, his petition also frames the ultimate issue in the broader terms as expressed above. (See Petition, paragraphs 4 and 5.) The Division's unilateral Pre-hearing Statement filed on October 29, 1986, paragraph f., states: "At issue is whether or not Petitioner should be permitted to purchase the requested employment time as creditable service in the Florida Retirement System."

The Division has not suggested that a more specific request for "past" credit would have resulted in any different response. The broader issue is, therefore, considered here in the interest of economy.

FINDINGS OF FACT

1. In 1965, Charles Otero was an inspector for the Tampa Police Department. Through a joint effort of the Police Department and the Hillsborough County School District a unique high school course curriculum was developed to assist youths who were interested in pursuing careers in law enforcement. A survey was conducted and some preliminary recruiting revealed sufficient student interest to include the course as an elective at Leto Comprehensive High School in Tampa, Florida.

   
   

2. The curriculum was divided into two levels: Law Enforcement I and Law Enforcement II. A student enrolling in Law Enforcement I had to be in 11th grade and be free of any physical impediments to a future law enforcement career. Law Enforcement I consisted of two hours instruction a day (one hour in the classroom and one hour of physical education), five days a week. The students who successfully completed this level were expected to go on to Law Enforcement II in the 12th grade. This course was conducted one hour a day, five days a week. Students were required to complete the first level before enrolling in Law Enforcement II. (Testimony of Otero and Farmer.)

3. Charles Otero was hired as a part-time instructor for the Hillsborough County School District in September 1965. He began teaching the new course, Law Enforcement I, at Leto Comprehensive High School, two hours a day, five days a week for the entire school year. The following year, he taught both Law Enforcement I and II, for a total of three hours a day, five days a week.

   
   

4. Without interruption, Otero continued teaching the courses at Leto through the 1968/1969 school year. He taught the same courses at Blake High School during the 1969/1970 school year, and from August 1970 until June 1974, he taught the same courses at the Hillsborough County Evening Vocational Center. He resigned in 1974 to become Police Chief for the City of Tampa. (Testimony of Otero, Mahin, Farmer and Scaglione).

   
   

5. For each school year from 1965 until 1974, Charles Otero was hired under an annual part-time contract for instructional staff. The three contracts placed in evidence as Petitioner's Exhibits #4, #5 and #6 are typical of the forms used by Hillsborough County School District during the relevant period. Each contract specifies an hourly rate and provides that the hours of instruction are based upon the classes offered for which the teacher is qualified and assigned to teach by the county superintendent or his designee. The contract also provides for termination at will by either party upon written notice to the other. This option was not exercised during the relevant period.

   
   

6. Otero was certified only as a part-time law enforcement teacher. (Testimony of Otero and Dobbins, Petitioner's Exhibits #4, #5 and #6).

   
   

7. Otero's wages for teaching were paid from a Hillsborough County School District wages and salary account commonly used to pay part-time, adult education teachers. The adult education account was separate from the regular teachers' account. Otero was not paid from an OPS (other personnel services) account. (Testimony of Mann.)

   
   

8. At the time that he was hired in 1965, both Otero and the Hillsborough County School District anticipated that the law enforcement courses would continue for at least two years, based on the survey and recruitment responses, and based on the expectation that the Level I students would go on to take the Law Enforcement II course. Since these were elective courses, the students were not required to enroll and if an insufficient number had enrolled, then Otero's courses would not have been taught. In fact, the courses continued and still continue today, with full-time teachers. (Testimony of Otero, Farmer, Scaglione and Dobbins.)

   
   

9. Prior to December 1, 1970, full time instructional staff of the Hillsborough County School District participated in the teacher's retirement system under Chapter 238, Florida Statutes. On December 1, 1970, the FRS was created and the existing systems were closed out. Otero never participated in the teacher's retirement system, nor was he eligible for that system as a part- time teacher. In January 1972, he became a member of the FRS when the Hillsborough County School District commenced contributions on his behalf.

   
   

10. Otero was re-employed by the Hillsborough County School Board in 1979, as Supervisor of Security and has been continually employed in that capacity on a full-time basis. He has likewise participated continually in the FRS since 1979. Otero conceded that his application to the Division indicating that he was seeking purchase of "refunded service" was in error. He had no "refunded service" under an existing system or the FRS. (Testimony of Otero and Sansom.)

11. In June 1984, Charles Otero applied to the Division for an audit of his employment with the Hillsborough County School District to determine how much of his service would be creditable under the FRS. In July 1985, the Division responded that his employment as a part-time teacher from 1965 through 1971 is not creditable. (Testimony of Otero and Sansom, Petitioner's Exhibits #7 and #8.)

    
    

12. The Division of Retirement is statutorily charged with administering the FRS and with determining what service may be claimed by a member as cieditable service in calculating that member's retirement benefits. Ruth Sansom has been Chief of the Division's Retirement Calculations Bureau since October 1980. She has been employed in some capacity in calculating retirement benefits for the teachers' retirement system and the FRS for 23 years. She is intimately familiar with the Division's policies. She has interpreted retirement laws and has assisted in policymaking and rulemaking for the Division. She is likewise familiar with Charles Otero's request and she testified regarding the bases for the Division's denial.

    
    

13. The Division considered Otero's circumstances as similar to part-time adult education instructors who are paid on an hourly basis and whose students enroll on a voluntary basis. Those teachers who are hired with no contractual expectation of continuation are considered "temporary" instructional personnel and are not considered eligible for participation in the FRS. When examining a request for purchase of service, the Division applies the rules in effect at the time the request is made. The Division, however, applies those rules just as they would to an individual seeking enrollment in the FRS. The Division looks at the employment contract and legitimate expectations of the parties at the time of hire, rather than at the actual length of time the individual was employed. In other words, while the rule is applied retroactively, the employment circumstances of the individual are examined in a prospective manner. An individual is considered "temporary," even if employed for many years, so long as the employment relationship described at its commencement is merely temporary. A "part-time" teacher is not automatically "temporary." (Testimony of Sansom.)

    
    

14. In making a determination regarding an individual's service credit the Division applies Chapter 121, Florida Statutes, Rules 225-1, 2 and 6, Florida Administrative Code, Memorandum 81-60 (Respondent's Exhibit #3) and a memorandum dated February 1, 1982 from A.J. McMullian, III. (Petitioner's Exhibit #9.)(Testimony of Sansom.)

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

16. The Hillsborough County School District is an "employer" as defined in Section 120.021(10), Florida Statutes.

    
    

17. The burden is on Charles Otero to prove entitlement to his 1965-1971 part-time teaching employment as "creditable service" under the Florida Retirement System.

    
    

18. "Creditable service" is defined as "... the sum of [a member's] past service, prior service, military service, worker's compensation credit, and future service allowed within the provisions of this chapter if all required

    contributions have been paid and all other requirements of this chapter have been met (emphasis added.) Subsection 12I.021(17)(a), Florida Statutes.

    
    

19. Charles Otero's employment with the Hillsborough County School District was not creditable past service.

    
    

20. Past service relates only to limited classes of employees, including employees of a city or special district that became a covered group under the FRS. See Section 121.081(1), Florida Statutes. Otero's claim to this type of service is based on his theory that the Hillsborough County School District is a "special district." (Charles Otero's closing argument and Memorandum of Law,

    III. B., p. 16.) It is not.

    
    

21. Participation in the FRS since its inception on December 1, 1970, is compulsory for employees of a school district. Section 121.051(1)(a), Florida Statutes. For employees of cities and special districts, however, participation in the FRS depends on the governing body's election to participate. Section 121.051(2)(b), Florida Statutes.

    
    

22. Further evidence that the legislature intended school districts to be something other than a special district is found in the definition of "employer" in Section 121.021(10), Florida Statutes, wherein "district school board" and "special district" are separately listed.

    
    

23. "Special district" is defined in Section 121.021(9), Florida Statutes, as "... an autonomous district or public body created by or pursuant to an act of the Legislature." School districts are not autonomous; each system is considered a part of the state system of public education and is subject to regulations and minimum standards prescribed by the state. Sections 230.01 and 230.03, Florida Statutes.

    
    

24. Otero's claim to creditable prior service is based on the definition of "prior service" at subsection 121.021(19)(b), Florida Statutes, which provides:

    
    

    (19) "Prior service" under this chapter means:

    * * *

    (b) Service prior to an employee's membership in the Florida Retirement System with an employer, either before or during the employer's participation in an existing system. The word "service" as used in this paragraph and paragraph (c) means employment service which, at the time it is claimed as prior service, satisfies the requirements for a regularly established position, as defined by rules of the Florida Retirement System. (emphasis added.)

    * * *

    
    

25. This subsection precludes Otero's claim for creditable service between December 1, 1970 and January 1972, as once the FRS was created in December 1, 1970, the Hillsborough County School Board was no longer participating in an "existing system." The definition of "existing system" in Section 121.021(2), Florida Statutes, includes the teachers' retirement system.

26. This conclusion regarding the period after the creation of the FRS is also compelled by the following provision of Rule 225-2.04, Florida Administrative Code:

    
    

    22B-2.04 Credit for Prior Service.

    1. Prior service credit may be claimed by any member of the Florida Retirement System who complies with the provisions of this section and whose prior service conforms

       to any of the following five circumstances:

       * * *

       (b) Non-Membership Service.--

       1. The service must have been with an employer who was participating in an existing system at the time the service was performed; and

       2. The employee was not a member of the existing system and paid no retirement contributions on the prior service; and

       3. The service was performed prior to the establishment of the Florida Retirement System (December 1, 1970); and

       4. The service would have otherwise been creditable in the Florida Retirement System (that is, the member was employed in a regularly established position as defined by these rules). (emphasis added.)

       
       

27. [The other four circumstances defined in 22B-2.04(I)(a), (c), (d), and

    (e) do not apply to Charles Otero, nor does he argue otherwise.]

    
    

28. This leaves the period from September 1965 until December 1, 1970, still in question. Under the above-cited provision of Rule 22B-2.04(1)(b)4., Florida Administrative Code, the remaining issue is whether Charles Otero was employed in a "regularly established position."

    
    

29. The Division received Otero's application to purchase Florida Retirement System credit on June 14, 1984. On that date the rules of the Florida Retirement System defined a regularly established position as follows:

    
    

    A regularly established position in a state agency is a position which is authorized and established pursuant to law and is compensated from a salaries appropriation pursuant to Sections 216.011(1)(o)1. and 2., F.S., or

    an established position which is authorized pursuant to Subsection 216.262(1)(a) and (b) and is compensated from a salaries account in accordance with Section 3A-10.31, F.A.C.

    A regularly established position in a local agency (district school board, county agency, community college, city and special district) is an employment position which will be in existence for a period of four or more con- secutive months, except as provided in

    22B-1.04(6)(e). (Emphasis added).

30. On the date Otero applied to purchase Florida Retirement System credit, Florida Administrative Code Rule 22B-1.04(6)(e) read as follows:

    
    

    The following types of positions in a local agency are considered temporary positions for retirement purposes. This is not a complete list of temporary positions and should only be used as a guide, along with the definitions above in determining if an individual is filling a temporary position.

    1. Casual Laborers (persons who work intermittently when there are specific tasks to be performed).

    2. Student Employees (persons who are bona fide students in an accredited educational or vocational program who perform services for a public employer in a temporary position set aside strictly for students).

    3. Work-Study Employees (Students partici- pating in the Federal Work-Study program).

    4. Temporary Instructional Personnel (persons appointed to positions which are established with no expectation of continuation beyond one quarter, one semester, or one trimester at a time to teach in a community college, public school, or vocational institution.

    5. Substitute teachers (persons not on contract called to work intermittently to substitute).

    6. Consultants and Other Professional Persons on Contract (as defined in Rule 22B- 6.01(11)).

    7. Persons on Call (employees who are called to work unexpectedly for brief periods and whose employment ceases when the purpose for being called is satisfied.)

    8. CETA Participants excluded from membership in a regularly established position in Rule

       22B-1.04(4)(c) 6.a.

    9. Non-Salaried Elected Officials (persons elected or appointed to a position which they receive no compensation, but receive expenses, e.g., per diem or honorarium.)

    10. Temporary Community College Employees (persons appointed to non-instructional positions which are established with no expectation of continuation beyond one quarter, one semester or one trimester in a time in a community college.)

    11. Temporary Replacement (persons employed for six months or less to perform the duties of an incumbent of a regularly established position, who is on an approved leave of absence.) (emphasis added.)

31. The Division contends that Charles Otero was "temporary instructional personnel" described in 4., above. His testimony at the hearing regarding non- applicability of the remaining types of positions was uncontroverted.

    
    

32. The Division of Retirement interpreted Rule 22B-1.04(6)(e)4. in its Memorandum No. 81-60, dated December 23, 1981. This memorandum was upheld as a clarification and guide to the rule in Oreta R. Lucas vs. Dept. of Administration, Division of Retirement, (DOAH Case No. 83-2189R, Final Order entered February 9, 1984.) The memorandum provides, in pertinent part:

    
    

    * * *

    Having studied the question of whether adult education instructors fill regularly established positions or temporary positions, the Division has concluded that adult education instructors are essentially temporary in nature where there in no promise, claim or right of employment beyond the quarter, semester or trimester to which they are appointed to teach. Although some school districts give such instructors contracts using the familiar annual contract form, these particular contracts typically represent only an entitlement to work, if appointed or called, and they usually specify an hourly rate of pay for any work performed. A contract of this kind is not sufficient to alter the temporary nature of the position held by an adult education instructor.

    * * *

    
    

33. This language describes Otero's contract and would appear to provide effective authority for the Division's position in Otero's case. However, a subsequent memorandum, issued less than two months later to provide additional information regarding Memorandum No. 81-60, reverses the Division's interpretation relating to hourly pay and contingent contracts:

* * *

1. If the employing agency desires to establish a more permanent employment relationship with an adult education instructor and cover him for membership in the Florida Retirement System, it must enter into an annual contract with the instructor and compensate him from the same salary fund used to compensate all other full time instructors. The adult education instructor can be compensated on an hourly basis, but it must be from a salary fund. The annual contract can contain provisions which limit employment due to lack of enrollment or scheduling. This supersedes the language in Memorandum 80-61 [sic] regarding annual contracts.

   * * *

2. If the employing agency decides that it wants a temporary employment relationship and

does not want to provide Florida Retirement System membership to one or more adult education instructors, it can either not provide a contract or provide a contract for employment for only one quarter, one semester, or one trimester at a time. In either case, the employee must be compensated from the other personnel services (OPS) account for community colleges and one of the "750" series accounts used by the district school boards.

The Florida Retirement System rules require that the employer advise an employee that he is filling a temporary position and is not covered for retirement purposes.

* * *

(Memorandum dated February 1, 1982, to Community Colleges and District School Boards, from A.J. McMullian, III, State Retirement Director, Petitioner's Exhibit #9.)

Otero's circumstances more closely resemble those described in paragraph 1. than

1. above.

   
   

   1. The Division argues that Otero's circumstances are similar to those of the adult education teachers that it has consistently found to be "temporary instructional personnel." See Sally T. Sperling vs. State of Fla. Dept. of Administration, Division of Retirement, (Case No. 82-452, Final Order entered November 18, 1982), and (Oreta Lucas vs. Dept. of Administration, Division of Retirement, (Case No. 83-2189R, Final Order entered December 10, 1985.) [numbered the same, but not the case referenced in the preceding paragraph] In a more recent case, DOAH Hearing Officer, J. Lawrence Johnston, found no "clearly erroneous" basis to overturn the agency's interpretation of Rule 22B-I.04(5)(e) Florida Administrative Code. Irja K. Lisnay and Albert D. Lisnay vs. Department of Administration, Division of Retirement, (consolidated Case Nos. 85-2878 and 85-3821, Recommended Order entered July 18, 1986.)

      
      

   2. The rule itself states that the listing of types of temporary positions is to be used only as a guide. Memorandum 81-60 and its follow-up Memorandum dated February 1, 1982, are also guides and the-decision as to whether a position is "temporary" or "regularly established," "... is one involving judgment and discretion, which must be based on the peculiar facts of each case." Final Order, Lucas vs. DOA, Division of Retirement, Case No. 83- 2189R [Section 120.56, F.S. proceeding.]

      
      

   3. The peculiar facts of Otero's case distinguish him significantly from Sperling, Lucas and the Lisndsays. For the period in question, he was a part- time high school teacher, not an adult education teacher and he was never paid from OPS funds. Further, there is no mention in the orders cited above of the February 1, 1982, Memorandum and its obvious impact on the guidance previously provided in Memorandum 81-60. Also significantly, the period in question in the instant case precedes the establishment of the FRS. The School Board could not have anticipated at the time that it hired Charles Otero what it would take to include or exclude his position from the FRS. That guidance clearly came later, and Charles Otero was duly enrolled in the system approximately one year after its creation. (See Finding of Fact #6, above.)

   4. In Sperling, supra., the Division recognized a cardinal rule in the construction of contracts that the intention of the parties to the contract must be given full effect. The Division found in that case that evidence of the Petitioner's understanding at the time of hire was essential to review of the employment relationship. (paragraph 5, p.3.) The uncontroverted testimony in this case is that both Otero and his employer anticipated at the time he was hired in 1965 that the law enforcement courses would continue well beyond the four consecutive calendar months specified in the Division's definition of "regularly established position."

      
      

   5. In summary, Charles Otero has distinguished his circumstances from those of other part-time teachers held ineligible for FRS participation. His annual contracts with the school board, even though terminable for lack of enrollment and based upon an hourly rate of pay, are within the guidelines established in the Division's February 1, 1982 Memorandum. While he was not paid from the same salary fund used to compensate full time instructors, nor was he paid from an "OPS" account. He has proved that his employment between- September 1965 and the establishment of the FRS in December 1970 meets the requirements of the Division's rules in effect at the time of his application.

      
      

   6. While it may appear anomalous to exclude Otero's service from December 1970 until his enrollment in the FRS in 1972, the provisions of Rule 22B-2.04, Florida Administrative Code, regarding credit for prior service, are unambiguous.

RECOMMENDATION

Based upon the foregoing, it is RECOMMENDED that:

1. So long as the required contributions are made, Charles Otero's request to purchase "prior service" in the FRS for the period September 1965 to December 1970, be approved.

   
   

2. Charles Otero's request for the period December 1970 until his enrollment in the FRS in 1972, be denied.

DONE and RECOMMENDED this 5th day of December, 1986, in Tallahassee, Florida.

MARY CLARK

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 5th day of December, 1986.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2487

The following constitutes my specific rulings on the proposed findings of fact submitted by the parties.

PETITIONER'S PROPOSED FINDINGS OF FACT

1-3. Rejected as irrelevant.

1. Adopted in paragraph 6.

2. Adopted in paragraph 8. 6-10. Adopted in paragraph 6.

11. Adopted in paragraph 2. 12-13. Adopted in paragraph 1.

1. Rejected as unnecessary.

2. Adopted in paragraphs 1 and 2, except that the record establishes that he

   was hired effective September 28, 1965.

   (Petitioner's Exhibit 1.)

3. Adopted in paragraph 5.

17-28. Adopted in summary form in paragraph 2. 29-35. Rejected as irrelevant.

36-38. Adopted in paragraph 4.

39-44. Adopted in summary form in paragraph 3. 45-46. Adopted in substance in paragraph 2.

47-49. Rejected as unnecessary.

50. Adopted in part in paragraph 2. The record is not clear that the Hillsborough County Evening Vocational Center was a "high school classroom."

51-56. Rejected as unnecessary. (See Conclusion of Law 7.)

57. Adopted in paragraph 2.

58-59. Adopted in substance in paragraph 5. 60-63. Adopted in paragraph 6.

1. Rejected as unnecessary.

2. Adopted in paragraph 7. 66-67. Adopted in paragraph 8.

68. Rejected as cumulative and unnecessary. 69-70. Adopted in substance in paragraph 8.

RESPONDENT'S PROPOSED FINDINGS OF FACT

1-3. Adopted in paragraph 2.

1. Adopted in paragraph 6.

2. Adopted in paragraph 5.

3. Adopted in paragraph 3.

4. Adopted in paragraph 5.

5. Adopted by implication in paragraphs 3 and 5.

9-13. Adopted in paragraphs 3 and 5.

1. Adopted in part in paragraph 5 (as to continual nature of the course); otherwise rejected as unsubstantiated by the record.

2. Rejected as unnecessary.

3. Adopted in substance in paragraph 4.

4. Adopted in paragraph 6.

18-21. Adopted in paragraphs 2 and 6.

22-23. Adopted in paragraph 7.

1. Adopted in "Background" portion of the recommended order.

2. Adopted in paragraph 8.

COPIES FURNISHED:

Edward P. de la Parte, Jr., Esquire Edward M. Chew, Esquire

705 East Kennedy Boulevard Tampa, Florida 33602

Stanley M. Danek, Esquire William A. Frieder, Esquire Division of Retirement Cedars Executive Center

2639 North Monroe Street, Suite 207

Tallahassee, Florida 32303

Andrew J. McMullian, III, Director Division of Retirement

Department of Administration Cedars Executive Center, Bldg. C Tallahassee, Florida 32303

Gilda H. Lambert, Secretary Department of Administration

435 Carlton Building Tallahassee, Florida 32301

Docket for Case No: 86-002487

Orders for Case No: 86-002487