STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SKIFF'S WORKINGMAN'S NURSERY, )

)

Petitioner, )

)

vs. ) CASE NO. 88-1652

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on September 14, 1988, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: J. Philip Landsman, Esquire

Emily Tracey, Esquire Broward Financial Centre

500 East Broward Boulevard, Suite 1850 Fort Lauderdale, Florida 33394

For Respondent: Vernon L. Whittier, Jr., Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58 6O5 Suwanee Street

Tallahassee, Florida 32301 PRELIMINARY STATEMENT

Petitioner seeks reimbursement for expenses related to relocation of the business caused by construction of I-595 in Broward County, Florida. Respondent Department of Transportation Preliminarily denied Petitioner's request for reimbursement for impact fees and professional services related to the relocation. Accordingly, the issues for determination herein are whether impact fees and design services are eligible for reimbursement as relocation expenses.

Petitioner presented the testimony of Steven H. Magee, Edward P. Skiff, Donald Cowell, Ginger Gordon, Rhonda Lynn Sawyer, and by way of deposition Jane Steele and David Nicholson. Additionally, Petitioner's Exhibits numbered 1-6 and 9-13 were admitted in evidence.

Respondent presented the testimony of David Nicholson and Ginger Gordon.

Additionally, Respondent's Exhibits numbered 1 and 2 were admitted in evidence.

Both parties submitted post-hearing proposed findings of fact in the form of proposed recommended orders. A ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Edward P. Skiff has been the owner and operator of Petitioner Skiff's Workingman's Nursery. For 28 years the nursery was located on State Road 7 (US 441), one of the busiest traffic arteries in Broward County.

   
   

2. In 1981, Respondent Department of Transportation first contacted Skiff to advise him that he would be required to relocate his business due to the construction of I-595, the Port Everglades Expressway. In 1985 Respondent purchased the property on which Skiff's Workingman's Nursery was located and ordered Skiff to vacate the property by January 1, 1986.

   
   

3. Between 1981 and 1985 Skiff searched for a comparable piece of property on which to operate a retail nursery in Broward County. As requested by the Respondent, Skiff submitted to the Department a list of six properties he was considering, only 2 or 3 of which were platted. There is no indication that Department employees objected to any of sites under consideration. Skiff closed on his new site located on Hillsboro Boulevard in Broward County in 1985. At the time, that site was not yet platted, and Skiff was required by Broward County to plat the property. Prior to his purchase of the site, no mention was made of impact fees by the Department or anyone else.

   
   

4. Skiff began processing his application for plat approval with Broward County. During the processing, he was advised that he would be required to pay impact fees to Broward County for the relocation site, a requirement that had been imposed by Broward County for any site within that county and not just for the relocation site selected by Skiff. The Department of Transportation knew at the time that impact fees had been imposed for any development in Broward County so that relocating businesses would be required to pay such fees.

   
   

5. When Skiff was several months into the platting process with Broward County he was further advised that his relocation site had been annexed by the City of Coconut Creek, Broward County, Florida. Accordingly, Skiff became obligated to pay impact fees assessed by the City of Coconut Creek in addition to the impact fees assessed by Broward County.

   
   

6. Skiff was required to pay to Broward County transportation impact fees as a condition precedent to recording the plat for Skiff's Workingman's Nursery. He was also required to pay to the City of Coconut Creek water, sewer, and street connection charges as a condition precedent to obtaining a building permit and a certificate of occupancy.

   
   

7. Skiff paid to Broward County, in order to record his plat, impact fees in the amount of $32,887.00.

   
   

8. Skiff also paid to the City of Coconut Creek water and wastewater impact fees in the amount of $4,499.20 and sewage and street connection charges in the amount of $24,634.00. None of the connection fees paid to the City of Coconut Creek involved bringing the utilities from the right-of-way to a building or improvement upon Skiff's property.

   
   

9. The impact fees imposed by the City of Coconut Creek and by Broward County were necessary and reasonable. The fees were derived according to a specific formula which has a correlation to estimated usage, and they were not arbitrary numbers. Likewise, the mandatory sewage connection charges were both

   reasonable and necessary and involved the construction of a lift station required by the City of Coconut Creek.

   
   

10. When Skiff submitted to Respondent his claim for reimbursement of the impact fees paid by him to Broward County and the City of Coconut Creek, Respondent preliminarily denied that claim reasoning that operating expenses of a business are not reimbursable under the Department's relocation assistance program.

    
    

11. The Department never considered whether an impact fee is reimbursable as a license, permit, or certification required of a displaced person at the replacement location. The sole basis for the Department's denial was a memorandum written by an employee of the United States Department of Transportation Federal Highway Administration in a different case which did not address the question of whether an impact fee qualifies as a reimbursable permit, license, or certification required by a governmental entity prior to the creation of a new business.

    
    

12. At the time that Respondent denied Skiff's claim for reimbursement of impact fees, the district relocation administrator believed those fees to be reimbursable. However, the state relocation administrator who was new to her job, who could not define the term "operating expense of a business," who was unaware of the regulations qualifying permits and licenses and certifications as expenses eligible for reimbursement, and who did not consider whether the impact fees were eligible under those provisions, denied the claim. Her successor also believed the claim to be reimbursable.

    
    

13. There are no definitional guidelines as to the terms "operating expense", "license, permit or certification", or any of the other terms relevant to these proceedings, contained in either the Code of Federal Regulations or in the Florida Department of Transportation guidelines. Accordingly, those terms must be given their common, everyday meaning.

    
    

14. An impact fee is a developmental permit fee, i.e., a one-time fee mandated by a governmental entity which must be paid prior to that governmental entity's permitting development; it is a charge which allows a new or relocating business to start conducting business activities at a new location.

    
    

15. An impact fee is therefore a start-up cost and not an operating expense since an operating expense is an ongoing cost of doing business for an existing business.

    
    

16. The Department's decision-making personnel who testified in this proceeding all agree that the term "operating expense" assumes that a business is in operation.

    
    

17. The Department has failed to consider whether impact fees are reimbursable under the proper criteria.

    
    

18. In preparation for its move to the relocation site, Skiff's Workingman's Nursery paid professional consultant's fees (architectural and engineering) in the amount of $14,915.85 for site planning and site preparation planning for the a nursery. Skiff submitted his claim for reimbursement for design services to Respondent. Although the district relocation administrator believed those costs to be reimbursable under the specific provision allowing reimbursement for professional services related to the move of personal property, the claim was denied by the state relocation administrator who was new

    to her job and who stated that nurseries were excluded, without identifying where in the law such an exclusion was written.

    
    

19. While the Department was considering Skiff's claims for reimbursement for impact fees and design services, it conducted its own survey of nurseries asking those nurseries for information pertaining to relocation of a nursery, asking specifically about eligible move costs and necessary land and soil preparations if a nursery had to be relocated to virgin land. Responses received by the Department indicated the importance of site location, plant layout, and soil considerations required by both the plants and customers of the nursery and the importance of paying impact fees. There is no evidence that the information the Department gleaned from its own survey was considered in determining whether the payment of impact fees by a nursery and whether the payment of professional design services by a nursery were reasonable and necessary expenses incurred by a displaced nursery required by the government to relocate to a new site.

    
    

20. The Department took the position that although nurseries were an exclusion from the provision that businesses were entitled to be reimbursed for professional services attendant to relocation, an exception to the exclusion could be granted based upon appropriate documentation. It concluded, however, that Skiff's had not submitted the appropriate documentation. Yet it failed to advise Skiff as to what documentation would be appropriate and failed to request any additional documentation.

    
    

21. After Skiff's plat was recorded, he filed an application with Broward County to modify that plat in order to provide access to the nursery from Hillsboro Boulevard, the main thoroughfare, rather than requiring customers to gain access to the nursery from the back of the nursery off a side street. Access from Hillsboro Boulevard was approved, and Skiff paid $7,500.00 to construct a traffic turn lane from Hillsboro Boulevard onto the nursery property. The first claim for reimbursement for that cost which would give Skiff's Workingman's Nursery access to a major thoroughfare comparable to the major thoroughfare from which it had been displaced by the Department was made during the course of the final hearing in this cause.

    
    

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.

    
    

23. It is undisputed that Petitioner is a displaced person within the meaning of Title 49 C.F.R. Section 25.2(f); that the Petitioner was forced to relocate due to the construction of I-595; that due to Broward County and City of Coconut Creek ordinances it was necessary for Petitioner to pay impact fees for the relocation site, and that the impact fees paid by Petitioner were not previously required at the previous business site which was acquired by Respondent.

    
    

24. By ordinance, the Broward County Code requires that impact fees levied upon a developer, including Mr. Skiff, be paid or secured prior to the recordation of a plat. Moreover, the City of Coconut Creek requires that both municipal and county impact fees be paid prior to the issuance of a building permit or certificate of occupancy. An impact fee is essentially a developmental permit fee. Had the Department of Transportation not acquired Mr. Skiff's property, it is undisputed that he would not have had to pay impact fees

    at his old site. But, having chosen to acquire Skiff's site, it is appropriate that the Department of Transportation reimburse Skiff for those relocation expenses permitted to be reimbursed under applicable law.

    
    

25. Title 49 C.F.R., Section 25.303(a)(c) expressly provides for reimbursement for any license, permit, or certification required of the displaced person at the replacement location. This obviously includes those things which are necessarily conditions precedent to the issuance of permits, such as the filing of surveys and the payment of governmentally-mandated fees. Impact fees are such governmentally-imposed mandatory obligations that constitute a license, permit, or certification as that term is commonly understood and are reimbursable under the provision cited. It is clear that Respondent failed to consider this provision when it evaluated Skiff's claim. Impact fees are operating expenses. Accordingly, Skiff should be reimbursed for the $4,499.20 in impact fees paid to the City of Coconut Creek and the

    $32,887.00 paid to Broward County in impact fees.

    
    

26. Title 49 C.F.R., Sections 25.303(a)(8) and (14) provide for reimbursement for professional services and other moving related expenses that are not listed as ineligible. In this case the architectural and engineering fees sought are a moving related expense. Moreover, in an interoffice memorandum Respondent's district administrator states that Skiff's claim appears to comply with the provisions of Section 25.303(a)(8). The alleged exclusion for nurseries from this provision relating to all businesses is not mentioned in the memorandum. Accordingly, Skiff's documented claim in the amount of

    $14,915.85 should be allowed.

    
    

27. The City of Coconut Creek mandated a charge of $24,634.00 for water distribution, sewage connection and street connection charges. Title 49 C.F.R., Section 25.303(a)(3) specifically provides that connections to utilities available nearby, including modifications necessary to adapt the utilities at the replacement site, are specifically reimbursable. However, that section does exclude expenses for providing utilities from the right of way to the building or improvement. In this case, Petitioner's unrebutted testimony is that none of the connection fees paid to the City of Coconut Creek involved bringing the utilities from the right of way to a building or improvement upon his property. Accordingly, this charge is allowable and specifically reimbursable. The nature of the charge is not significantly different from an impact fee.

    
    

28. Petitioner also claims that he is entitled to reimbursement for the

    $7,500.00 which he was required to expend for the construction of a right turn lane which would permit him access to Hillsboro Boulevard. Petitioner's old business which was acquired by the Department was located on State Road 7, one of the busiest traffic arteries in Broward County, and, in order to find a comparable location, it was important to have access to a main thoroughfare. In this case, although Skiff's property is adjacent to Hillsboro Boulevard, absent the construction of a turn lane, Broward County platting requirements would not permit direct access. Although the payment of the $7,500.00 for a turn lane was important for Skiff in order to have direct access to traffic and was reasonable and necessary, the expense was never claimed by Skiff Previously, formally or otherwise, and is therefore not appropriately determined in this proceeding.

    Therefore, the claim of $7,500.00 for the turn lane should not be reimbursed.

    
    

29. Respondent is unable to cite any federal or state statute or regulation which defines impact fees as operating expenses. Respondent's only basis for that assertion (which is contrary to the opinions of its own employees) is that the federal government transmitted a memorandum in a

    different case stating that impact fees were an operating expense. No one from the federal government testified that that was the Federal Highway Administration's policy, and no record foundation was made by Respondent to support that statement as a policy interpretation. Further, the memorandum does not suggest that impact fees were considered under the criteria establishing costs eligible for reimbursement.

    
    

30. Lastly, the memorandum does not suggest any basis for interpreting the term "business operating expense" in a manner contrary to the meaning normally given to that term. Accordingly, the memorandum cannot constitute a legal basis for denying the claim of Skiff's for reimbursement of fees paid by it to Broward County and the City of Coconut Creek. In this case, the charges assessed by Broward County and by the City of Coconut Creek were conditions precedent to the issuance of a permit to create a business on the property in question and are not a day-to-day operating cost of a business already in existence.

    
    

31. Respondent's sole basis for denying the claim for professional services which would normally be reimbursable to any business displaced by highway construction is simply a statement in an interoffice memorandum which says that nurseries are excluded but that exceptions can be made but that Petitioner did not submit the right documentation to qualify for an exception. An interoffice memorandum alone does not constitute the record foundation necessary to establish a policy interpretation by an agency. As Respondent found out in conducting its survey of nursery owners in this case, site planning, site preparation, and site layout are of utmost importance in starting a nursery.

    
    

32. Respondent's reliance in its proposed recommended order on a provision in its Right-of-Way Manual stating that planning and design costs for the exterior are not reimbursable is misplaced. First, Respondent's Right-of-Way Manual was neither introduced in evidence nor officially recognized in this proceeding. Second, the design services for which Petitioner seeks reimbursement do not relate to the exterior appearance of a structure but relate to the display of Petitioner's product, i.e., the nursery stock which Petitioner sells.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered:

1. Granting Petitioner's claim for reimbursement for water and wastewater impact fees imposed by the City of Coconut Creek in the amount of $4,499.20;

   
   

2. Granting Petitioner's claim for reimbursement for transportation impact fees imposed by Broward County in the amount of $32,887.00;

   
   

3. Granting Petitioner's claim for reimbursement for sewage and street connection charges imposed by the City of Coconut Creek in the amount of

   $24,634.00;

   
   

4. Granting Petitioner's claim for reimbursement for professional consultant's fees for design services in the amount of $14,915.85; and

5. Denying without prejudice Petitioner's claim for reimbursement for the cost of constructing a traffic turn lane in the amount of $7,500.00 which was not properly a part of this proceeding.

DONE and RECOMMENDED this 28th day of November, 1988, at Tallahassee, Florida.

LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of November, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1652

1. The first unnumbered paragraph of Petitioner's proposed findings of fact has been rejected as being unnecessary for determination of the issues herein.

   
   

2. Petitioner's second through sixth unnumbered paragraphs of Petitioner's proposed findings of fact have been adopted either verbatim or in substance in this Recommended Order.

   
   

3. Respondent's proposed findings of fact numbered 1-3 have been rejected as not being supported in their entirety by the weight of the evidence in this cause.

COPIES FURNISHED:

Kaye N. Henderson, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301

J. Philip Landsman, Esquire Emily Tracey, Esquire Broward Financial Centre

500 East Broward Boulevard Suite 1850

Fort Lauderdale, Florida 33394

Vernon L. Whittier, Jr., Esquire Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32301

Thomas H. Bateman III, Esquire Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION

SKIFF'S WORKINGMAN'S NURSERY,

Petitioner,

vs. CASE NO. 88-1652

DEPARTMENT OF TRANSPORTATION,

Respondent.

/

FINAL ORDER

The record in this proceeding and the Recommended Order or the Hearing Officer have been reviewed. Respondent, Florida Department of Transportation, has filed exceptions to the Recommended Order which are considered and addressed below.

Except for the points specifically rejected herein, the Findings of Fact set forth in the Recommended Order are considered correct and are incorporated as part of this Final Order.

Respondent's exception to the Hearing Officer's finding, in paragraph 12, that the state relocation administrator's successor believe the claim to be reimbursable, is well taken. There is absolutely no testimony from Mr.

Nicholson indicating that he harbored such a belief concerning Petitioner's claim. The finding is wholly unsupported by the record and is therefore rejected. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985).

Respondent's exception to the last sentence of Finding of Fact 13, though technically accurate, is nonetheless rejected as being immaterial to the disposition of this matter.

The Hearing Officer's characterization of impact fees set out in Finding of Fact 14 is adequately supported by the record. Consequently, Respondent's exception thereto must be rejected. Heifetz v. Dept. of Business Regulation, supra. However, the Hearing Officer's Finding of Fact 15, as Respondent notes in its exception, is a legal conclusion. Said conclusion is contrary to

established Department policy, Department of Transportation on v. Reddy Ice, DOAH Case No. 87-4590, Final Order entered June 7, 1988, and is therefore rejected.

Respondent's exception to Finding of Fact 17 is also valid. Not only is this "finding of fact" objectionable on the ground that it is a legal conclusion, it is also equally objectionable on the ground that there is insufficient record support for the statement. Heifetz v. Dept. of Business Regulation, supra. Thus, the Hearing Officer's Finding of Fact 17 is rejected.

The Hearing Officer's recommendations that Petitioner's claims for reimbursement for professional services in the amount of $14,915.85, and sewage and street connection charges in the amount of $24,634.00, be granted are considered correct and are incorporated herein. Similarly, the Hearing Officer's recommended denial of Petitioner's claim in the amount of $7,500, which represents a fee paid for the provision of a turn lane onto its property, and the legal conclusions supporting the recommendation, are considered correct and are incorporated as part of this Final Order. The remainder of the Hearing Officer's Conclusions of Law and recommendations are rejected.

Department of Transportation v. Reddy Ice, supra, is "dispositive of any question regarding reimbursement of impact fees. The Federal Highway Administration treats impact fees as an operating expense which is not reimbursable under 49 CFR Section 23.305(f). That interpretation of the regulations is reasonable, clearly controlling, and mandates denial of Petitioner's claim for reimbursement of impact fees. Accordingly,

IT IS ORDERED that:

Petitioner's claim for reimbursement of water and wastewater impact fees imposed by the City of Coconut Creek in the amount of $4,499.20, be and is hereby denied;

Petitioner's claim for reimbursement of transportation impact fees imposed by Broward County in the amount of $32,887.00, be and is hereby denied;

Petitioner's claim for reimbursement of sewage and street connection charges imposed by the City of Coconut Creek in the amount of $24,634.00, be and is hereby granted; and,

Petitioner's claim for reimbursement of professional services in the amount of $14,915.85, be and is hereby granted; and,

Petitioner's claim for reimbursement for the cost of constructing a traffic turn lane in the amount of $7,500.00, be and is hereby denied without prejudice since the claim was not properly raised in this proceeding.

DONE AND ORDERED this 16th day of February, 1989.

KAYE N. HENDERSON, P.E.

Secretary

Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399

Copies furnished to:

Linda M. Rigot Hearing Officer

Division of Administrative Hearings The Oakland building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

Vernon L. Whittier, Jr., Esquire Department of Transportation Haydon Burns Building, MS 58

603 Suwannee Street

Tallahassee, Florida 32399-0458

J. Philip Landsman, Esquire Emily Tracey, Esquire Broward Financial Centre

500 East Broward Boulevard Suite 1850

Ft. Lauderdale, Florida 33394

NOTICE OF RIGHT TO JUDICIAL REVIEW

Judicial review of agency final order may be pursued in accordance with Section 120.68, Florida Statutes, and Florida Rules of Appellate Procedure 9.030(b)(1)(c) and 9.110. To initiate an appeal, a Notice of Appeal must be filed with the Department's Clerk of Agency Proceedings, Haydon Burns Building, 605 Suwannee Street, MS 58, Tallahassee, Florida 32399-0458, and with the appropriate District Court of Appeal within 30 days of the filing of this Final Order with the Department's Clerk of Agency Proceedings. The Notice of Appeal filed with the District Court of Appeal should be accompanied by the filing fee specified in Section 35.22(3), Florida Statutes.

Docket for Case No: 88-001652

Orders for Case No: 88-001652