STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: PETITION FOR RULE )

CREATION - COASTAL LAKE ) COMMUNITY DEVELOPMENT DISTRICT. )

Case No. 04-1041

)

ADMINISTRATIVE LAW JUDGE’S REPORT TO THE FLORIDA LAND AND WATER ADJUDICATORY COMMISSION

Notice was given and a local public hearing under Section 190.005(1)(d), Florida Statutes, was held on May 25, 2004, before Charles A. Stampelos, an Administrative Law Judge of the Division of Administrative Hearings (DOAH). The hearing was held at the WaterColor Inn, 34 Goldenrod Circle, Seagrove Beach, Florida.

STATEMENT OF THE ISSUE

The issue is whether the Petition to Establish the Coastal Lake Community Development District should be granted pursuant to Chapter 190, Florida Statutes, and Florida Administrative Code Chapter 42-1. The local public hearing was conducted for the purpose of gathering information in anticipation of rulemaking by the Florida Land and Water Adjudicatory Commission (Commission).

APPEARANCES

For Petitioner: Jonathan T. Johnson, Esquire

Brian A. Crumbaker, Esquire Hopping, Green & Sams, P.A.

123 South Calhoun Street Post Office Box 6526 Tallahassee, Florida 32314

PRELIMINARY STATEMENT

The Petitioner filed the Petition to Establish the Coastal Lake Community Development District (Petition) with the Secretary of the Commission on February 27, 2004. Prior to this time, Petitioner delivered the Petition and its attachments, along with the requisite filing fee, to Walton County. A copy of the Petition, including its attachments, was received into evidence as Petitioner’s Composite Exhibit A.

On March 19, 2004, the Secretary of the Commission certified that the Petition contained all required elements and forwarded it to the DOAH for the purpose of holding the public hearing required under Section 190.005(1)(d), Florida Statutes. A copy of the Secretary’s correspondence to the DOAH was received into evidence as Petitioner’s Exhibit D. (All citations are to the 2003 version of the Florida Statutes unless otherwise indicated.)

The Commission published a Notice of Receipt of Petition in Volume 30, Number 19 of the Florida Administrative Weekly on

May 7, 2004. A copy of the Notice of Receipt of Petition was received into evidence as Petitioner’s Exhibit G.

The local public hearing was scheduled in Seagrove Beach, Florida, on May 25, 2004, at 10:30 a.m. (CST). Petitioner published notice of the hearing in accordance with Section 190.005(1)(d), Florida Statutes. The proof of publication of the notice of local public hearing was received into evidence as Petitioner's Exhibit C.

The land to be included within the proposed District is contained wholly within the boundaries of unincorporated Walton County, Florida. The land within the external boundaries of the proposed District is neither contained within nor contiguous to the boundaries of any municipality. Section 190.005(1)(c), Florida Statutes, provides that the county containing all or a portion of the lands within the proposed District has the option to hold a public hearing within forty-five (45) days of the filing of the petition. Walton County did not opt to hold such a hearing.

At the local public hearing on May 25, 2004, the Petitioner presented the testimony of George Jones, Project Manager for The St. Joe Company; Richard Wohlfarth, P.E., of CCL Consultants, Inc., an expert in civil engineering and public infrastructure; William J. Rizzetta, President of Rizzetta & Company, Inc., a management consulting firm, an expert in district management; Carey Garland, Director of Public Finance with Fishkind & Associates, Inc., and an expert in economic and financial analysis; and Mike Patterson, Principal Planner with PBS&J,

Inc., an expert in land use planning. Petitioner's Exhibits A through N, were received into evidence at the hearing.

A copy of the Transcript of the public hearing was filed at DOAH on June 24, 2004. On June 24, 2004, Petitioner filed a Proposed Report of Findings and Conclusions, which has been considered.

SUMMARY OF THE REPORT

1. Overview

   
   

   1. Petitioner is seeking the adoption of a rule by the Commission to establish a community development district proposed to consist of approximately 1,402 acres located within the unincorporated boundaries of Walton County, Florida. The proposed name for the proposed District is the Coastal Lake Community Development District.

   2. There are no parcels within the external boundaries of the proposed District that are to be excluded from the District.

   3. The estimated cost of the infrastructure facilities and services that are presently expected to be provided to the lands within the District was included in the Petition.

   4. The sole purpose of this proceeding is to consider the establishment of the District as proposed by the Petitioner. Information relating to the managing and financing of the service-delivery function of the proposed District was considered. This report summarizes the relevant and material evidence relating to Section 190.005(e)1.-6., Florida Statutes.

2. Whether all statements contained within the Petition have been found to be true and correct.

   
   

   1. Petitioner's Composite Exhibit A consists of the Petition and its attachments filed with the Commission.

      Mr. Jones testified that he had reviewed the contents of the Petition and approved its findings. Mr. Jones also generally described certain of the attachments to the Petition. Mr. Jones testified that the Petition and its attachments were true and correct to the best of his knowledge.

   2. Mr. Wohlfarth testified that he had assisted in the preparation of portions of the Petition and its attachments. Mr. Wohlfarth also generally described the services and facilities that the proposed District is expected to provide.

      Mr. Wohlfarth testified that the construction cost estimates identified in Attachment 7 to the Petition were true and correct to the best of his knowledge.

   3. Mr. Garland testified that he had prepared Exhibit 8 to the Petition, the Statement of Estimated Regulatory Costs (SERC). Mr. Garland also testified that the SERC submitted as Attachment 8 to Petitioner's Composite Exhibit A was true and correct to the best of his knowledge.

   4. The Petition included written consent to establish the District from the owner of one hundred percent (100%) of the real property located within the lands to be included in the

      proposed District. Mr. Jones also testified that the ownership of the lands to be included within the proposed District had not changed.

   5. The evidence indicates that the Petition and its exhibits are true and correct.

3. Whether the establishment of the District is inconsistent with any applicable element or portion of the State Comprehensive Plan or of the effective local government comprehensive plan.

   
   

   1. Mr. Patterson reviewed the proposed District in light of the requirements of the State Comprehensive Plan, Chapter 187, Florida Statutes. Mr. Patterson also reviewed the proposed District in light of the requirements of the Walton County Comprehensive Plan.

   2. The State Comprehensive Plan “provides long-range policy guidance for the orderly social, economic and physical growth of the State” by way of twenty-five subjects, and numerous goals and policies. From a planning perspective, two subjects of the State Comprehensive Plan apply directly to the establishment of the proposed District, as do the policies supporting those subjects.

   3. Subject 15, Land Use, recognizes the importance of locating development in areas with the fiscal ability and service capacity to accommodate growth. The evidence indicates that the proposed District will have the fiscal ability to

      provide services and facilities and help provide infrastructure in a fiscally responsible manner in an area that can accommodate development within Walton County.

   4. Subject 25, Plan Implementation, provides that systematic planning shall be integrated into all levels of government, with emphasis on intergovernmental coordination. The evidence indicates that the proposed District is consistent with this element of the State Comprehensive Plan because the

      proposed District will systematically plan for the construction, operation and maintenance of the public improvements and the community facilities authorized under Chapter 190, Florida Statutes, subject to and not inconsistent with the local government comprehensive plan and land development regulations. Additionally, the District meetings are publicly advertised and are open to the public so that all District property owners and residents can be involved in planning for improvements.

      Finally, Section 189.415, Florida Statutes, requires the District to file and update public facilities reports with the County or City, which they may rely upon in any revisions to the local comprehensive plan.

   5. Mr. Garland reviewed the proposed District in light of the requirements of the State Comprehensive Plan, Chapter 187, Florida Statutes. From a financial perspective, two subjects of the State Comprehensive Plan apply directly to the establishment

      of the proposed District, as do the policies supporting those subjects.

   6. Subject 17, Public Facilities, provides that the state shall protect substantial investments in public facilities and plan for and finance new facilities to serve residents in a timely, orderly and efficient manner. The evidence indicates that the proposed District will be consistent with this element because the District will plan and finance the infrastructure systems and facilities needed for the development of lands within the District; be a stable, perpetual unit of local government and will be able to maintain the infrastructure servicing the lands within the District; and allow growth within the District to pay for itself at no cost to Walton County.

   7. Subject 20, Governmental Efficiency, provides that governments shall economically and efficiently provide the amount and quality of services required by the public. The evidence indicates that the proposed District will be consistent with this element because the proposed District will economically and efficiently finance and deliver those public services and facilities as needed by the District's residents and property owners. The evidence indicates that the proposed District will be professionally managed, financed, and governed by those whose property directly receives the benefits of the services and the facilities provided. Creating a District does

      not burden the general taxpayer with the costs for the services or facilities inside the proposed District.

   8. Based on the testimony and exhibits in the record, the evidence indicates that the proposed District will not be inconsistent with any applicable element or portion of the State Comprehensive Plan.

   9. Based on the evidence in the record, the evidence indicates that the proposed District will not be inconsistent with any applicable element or portion of the Walton County Comprehensive Plan.

   10. The Florida Department of Community Affairs (DCA) reviewed the Petition for compliance with its various programs and responsibilities. After conducting a review of the petition, DCA had no comment on the petition for the establishment of the proposed Coastal Lake Community Development District relative to DCA’s programs and responsibilities under Chapters 163 and 380, Florida Statutes.

4. Whether the area of land within the proposed district is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community.

   
   

   1. All of the land in the proposed District is part of a Planned Unit Development (PUD) approved by ordinance of Walton County, Florida.

   2. The proposed District will include approximately 1,402 acres, located within the unincorporated borders of Walton County, Florida. From planning, engineering and management perspectives; the evidence indicates that the area of land to be included in the proposed District is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developed as a single functionally interrelated community.

5. Whether the proposed District is the best alternative available for delivering community development services and facilities to the area that will be served by the proposed District.

   1. It is presently intended that the District will construct or provide certain infrastructure improvements as outlined in the Petition.

   2. Installation and maintenance of infrastructure systems and services by the proposed District are expected to be paid through the imposition of special assessments. Use of such assessments will ensure that the real property benefiting from District services is the same property that pays for them.

   3. Two alternatives to the use of the District were identified. First, Walton County might provide facilities and services from its general fund. Second, facilities and services might be provided by some private means, with maintenance delegated to a property owners' association (POA) or a homeowners' association.

   4. The evidence indicates that the District is preferable to these alternatives.

   5. The District will construct certain infrastructure and community facilities that will be needed by the property owners

      and residents of the project. Expenses for the operations and maintenance of the facilities the District retains are expected to be paid through maintenance assessments to ensure that the property receiving the benefit of the district services is the same property paying for those services.

   6. The community development district allows for the independent financing, administration, operations and maintenance of the land within such a district. The community development district allows district residents to ultimately completely control the district.

   7. From an engineering perspective, the evidence indicates that the proposed District is the best alternative to provide the proposed community development services and facilities to the land included in the proposed District because it is a long-term, stable, perpetual entity capable of maintaining the facilities over their expected life.

   8. From planning, economic, engineering and special district management perspectives, the evidence indicates that the proposed District is the best alternative available for delivering community development services and facilities to the area that will be served by the District.

6. Whether the community development services and facilities of the proposed District will be incompatible with the capacity and uses of existing local and regional community development services and facilities.

   1. The evidence indicates that the services and facilities proposed to be provided by the District are not incompatible with uses and existing local and regional facilities and services. The District's facilities and services will not duplicate any existing regional services or facilities.

      None of the proposed services or facilities is presently being provided by another entity for the lands to be included within the District.

   2. Therefore, the evidence indicates that the community development services and facilities of the proposed District will not be incompatible with the capacity and uses of existing local and regional community development services and facilities.

7. Whether the area that will be served by the District is amenable to separate special-district government.

   1. As cited previously, from planning, economics, engineering and special-district management perspectives; the evidence indicates that the area of land to be included in the proposed District is of sufficient size, is sufficiently compact and is sufficiently contiguous to be developed and become a functionally interrelated community. The community to be included in the District has need for certain basic infrastructure systems, and the proposed District provides for an efficient mechanism to oversee the installation of these improvements.

   2. From planning, engineering, economic and management perspectives, the evidence indicates that the area that will be served by the District is amenable to separate special-district government.

8. Other requirements imposed by statute or rule.

1. Chapter 190, Florida Statutes, and Florida Administrative Code Chapter 42-1, impose specific requirements regarding the petition and other information to be submitted to the Commission.

   Elements of the Petition

2. The Commission has certified that the Petition to Establish the Coastal Lake Community Development District meets all of the requirements of Section 190.005(1)(a), Florida Statutes.

   Statement of Estimated Regulatory Costs

3. The SERC contains an estimate of the costs and benefits to all persons directly affected by the proposed rule to establish the District--the State of Florida and its citizens, the City and its citizens, the Petitioner, and consumers.

4. Beyond administrative costs related to rule adoption, the evidence indicates that the State and its citizens will only incur minimal costs from establishing the District. These costs are related to the incremental costs to various agencies of reviewing one additional local government report. The proposed District will require no subsidies from the State. Benefits will include improved planning and coordination of development, which is difficult to quantify but nonetheless substantial.

5. Administrative costs incurred by Walton County related to rule adoption will be modest. These costs are offset by the

   $15,000 filing fee required to accompany the Petition to Walton County.

6. Consumers will pay non-ad valorem, or special assessments, for certain facilities. Locating within the District is voluntary. Generally, the evidence indicates that the District financing will be less expensive than maintenance through a POA or capital improvements financed through developer loans. The evidence indicates that benefits to consumers in the area within the community development district will include a higher level of public services and amenities than might otherwise be available, completion of District-sponsored improvements to the area on a timely basis, and a larger share of direct control over community development services and facilities within the area.

7. Section 190.005(1)(a), Florida Statutes, requires the petition to include a SERC which meets the requirements of Section 120.541, Florida Statutes. The Petition contains a SERC. The evidence indicates that it meets all requirements of Section 120.541, Florida Statutes.

   Other Requirements

8. The evidence indicates that the Petitioner has complied with the provisions of Section 190.005(1)(b)1., Florida Statutes, in that Walton County was provided a copy of the Petition and was paid the requisite filing fee.

9. Section 190.005(1)(d), Florida Statutes, requires the Petitioner to publish notice of the local public hearing in a newspaper of general circulation in Walton County for four (4) consecutive weeks prior to the hearing. The notice was published in a newspaper of general paid circulation in Walton County (The Northwest Florida Daily News) for four consecutive

   weeks, on April 27, 2004; May 4, 2004; May 11, 2004; and May 18,

   2004.

   Public Comment During the Hearing

10. Public comment received during the hearing raised a number of issues, most of which were not relevant to the proceeding. Several comments or questions; however, though not seemingly tied to the statutory criteria, are briefly addressed here.

11. One speaker inquired about the source of funds necessary to pay the debt service obligations of the District and whether property taxes will still be paid to Walton County. The evidence indicates that the District’s debt and operation/maintenance expenses are paid through the levy of special assessments on real property benefiting from the construction of improvements and their maintenance. The special assessments are in addition to any property taxes and/or assessments levied by the local general-purpose government.

12. Another inquiry was made regarding the construction of a dock on Lake Powell. The evidence indicates that the dock is not currently permitted by the ordinance establishing the PUD for WaterSound North, and it is not anticipated that the District will fund construction and/or maintenance of the facility. Pursuant to Section 190.002(2)(d), Florida Statutes, matters concerning permitting and planning are not material or relevant when determining whether the Coastal Lake Community Development District should be established. However, any issues relating to the dock may be relevant to and may appropriately be raised during the permitting process undertaken by the applicable governmental entity.

    APPLICABLE LAW

13. This proceeding is governed by Chapters 120 and 190, Florida Statutes, and Florida Administrative Code Chapter 42-1.

14. The proceeding was properly noticed pursuant to Section 190.005, Florida Statutes, by publication of an advertisement in a newspaper of general paid circulation in Walton County and of general interest and readership once each week for the four consecutive weeks immediately prior to the hearing.

15. The evidence indicates that the Petitioner has met the requirements of Section 190.005, Florida Statutes, regarding the submission of the Petition and satisfied the filing fee requirements.

16. The Petitioner bears the burden of establishing that the Petition meets the relevant statutory criteria set forth in Section 190.005(1)(e)1.-6., Florida Statutes.

17. The evidence was that all portions of the Petition and other submittals have been completed and filed as required by law.

18. The evidence was that all statements contained within the Petition are true and correct.

19. The evidence was that the establishment of the District is not inconsistent with any applicable element or portion of the State Comprehensive Plan or the effective Walton County Comprehensive Plan.

20. The evidence was that the area of land within the proposed District is of sufficient size, is sufficiently compact

    and is sufficiently contiguous to be developable as one functional interrelated community.

21. The evidence was that the proposed District is the best alternative available for delivering community development services and facilities to the area that will be served by the District.

22. The evidence was that the community development services and facilities of the proposed District will not be incompatible with the capacity and uses of existing local and regional community development services and facilities.

23. The evidence was that the area to be served by the proposed District is amenable to separate special-district government.

CONCLUSION

Section 190.005(1)(e), Florida Statutes, states that the Commission shall consider the entire record of the local hearing, the transcript of the hearing, resolutions adopted by local general-purpose governments and the factors listed in that subparagraph. Based upon the record evidence, the Petition appears to meet all statutory requirements and there appears to be no reason not to grant the Petition and establish the proposed Coastal Lake Community Development District by rule.

For purposes of drafting such a rule, a metes and bounds description of the proposed Coastal Lake Community Development District can be found as Petition Attachment 2. Also, the five persons designated to serve as the initial members of the Board of Supervisors of the Coastal Lake Community Development District are identified in paragraph 5 of the Petition.

DONE AND ENTERED this 30th day of June, 2004, in Tallahassee, Leon County, Florida.

CHARLES A. STAMPELOS

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 June, 2004.

COPIES FURNISHED:

Jonathan T. Johnson, Esquire Hopping, Green, & Sams, P.A.

123 South Calhoun Street Post Office Box 6526 Tallahassee, Florida 32314

Michael P. Hansen, Secretary

Florida Land and Water Adjudicatory Commission The Capitol, Room 2105

Tallahassee, Florida 32399-0001

Barbara Leighty, Clerk

Growth Management and Strategic Planning The Capitol, Room 1802

Tallahassee, Florida 32399-0001

Raquel A. Rodriguez, General Counsel Office of the Governor

The Capitol, Suite 209 Tallahassee, Florida 32399-0001

Heidi Hughes, General Counsel Department of Community Affairs

2555 Shumard Oak Boulevard, Suite 325

Tallahassee, Florida 32399-2100

Docket for Case No: 04-001041

Orders for Case No: 04-001041