Findings Of Fact Heede is in the business of leasing tower cranes as a distributor for Linden Tower Crane Company. It has been in this business for many years. In the early 1980's, Heede began subcontracting for the transportation, erection, and dismantling of the cranes it leased. Linden tower cranes are the "climbing cranes" found on all modern high- rise construction sites. They are initially installed by being mounted on a concrete pad and attached by bolts. During construction the crane is frequently "climbed" as the building construction goes up. The cranes are used for many functions as part of the construction process, including placing concrete forms and pouring cement. The crane does not become a permanent part of the building, but is dismantled and removed after construction, leaving the concrete pad and bolts at the site. It does not become a part of the building as tangible personal property affixed to or incorporated into the real property. These cranes are like other forms of construction equipment utilized in the erection of high-rise buildings. At issue here are seven Equipment Rental Agreements for separate jobs (Respondent's Exhibit 1) and seven corresponding sets of invoices relating to the freight-in (transportation from Heede's equipment yard), erection, dismantling, and freight-out (Respondent's Exhibit 2). Both parties relied on a summary of those invoices and charges, which is set forth below for ease of reference. NOTE: The chart attachment is in an unscanable format and therefore not shown in paragraph 5. of this Recommended Order. It is available for review from the Division's Clerk's Office. The audit period began after the first construction job, number 3050, had commenced so that only the dismantling and freight-out charges were covered by the audit. Similarly, the audit ended before the final two jobs were completed, job numbers 3090 and 3099. Therefore only the freight-in and erection portion of those invoices were subject to this audit. The parties filed a Joint Stipulation as to Amount in Controversy and therein stipulated that the amount in controversy is: Tax $12,071.77 Penalty $ 3,015.01 Interest through 5/20/91 $ 5,762.65 TOTAL $20,849.43 Daily interest continues to accrue at $3.97 per day. This Joint Stipulation was signed by the Department of Revenue and expressed in writing what the parties had agreed on throughout the proceedings, namely that the freight charges were not subject to tax based on the holding in Florida Hi-Lift v. Department of Revenue, 571 So.2d 1364 (1st DCA 1990). However, as will be discussed further in the Conclusions of Law supra, the Department, for the first time in its Memorandum of Law in Support of Respondent's Proposed Recommended Order, now seeks to be relieved from its stipulations and to include the freight charges in calculation of the tax due. The seven Equipment Rental Agreements are essentially similar in form. Attached to each is a separate typed sheet identified at the top as "Equipment Rental Agreement Continued" and also as "Additional Agreement Continued." With the exception of job number 3090, each of the printed forms provides on its face: Said equipment shall be shipped to Lessee at , on or about the day of , 19 , freight or delivery charges Collect from Port of Entry or from see additional agreement [or see attachment]. On the second page of the Equipment Rental Agreement, entitled Conditions of Lease, paragraph 13 provides: 13. TRANSPORTATION--The Lessor shall at its own expense load the equipment for transit to the Lessee and unload it upon its return. The Lessee shall at its own expense do all other loading, unloading, installing, dismantling and hauling and shall pay all transportation charges from and to Lessor's shipping and receiving points; provided, however, unless otherwise agreed, that the Lessee shall not pay return transportation charges greater than those necessary to return the equipment to the point from which it was originally shipped to the Lessee. The "Additional Agreement Continued" attached to each Equipment Rental Agreement essentially contains the following additional paragraphs: Lessor will freight to and from the project, erect, climb, dismantle, and remove the crane from the project. Tower crane operator to be furnished by lessee during erection, climbing, and dismantling. We hereby propose to furnish labor and material complete in accordance with the above agreement for the sum of [sum inserted]. Ira Schmidt, the Comptroller and Secretary/Treasurer and a shareholder of Heede, explained how the books and records of Heede are maintained and what is intended by the Additional Agreement. His testimony was uncontroverted and is accepted as fact. According to Schmidt, Heede leases the tower crane under a separate rental agreement which requires the lessee to transport, erect and dismantle and return the crane to Heede's yard. Numerous parties can bid for the performance of the transportation, erection, dismantling and freight-out at the time the crane is leased. Heede is one of those bidders. Heede generally gets the subcontract for the transportation, erection, dismantling, and freight- out because it has a trained crew that can perform the work less expensively on the Linden cranes. The cranes are loaded onto the convoy of trucks at Heede's yard by Heede personnel as part of the Rental Agreement. If Heede is the successful bidder for the subcontract, it pays the carrier for transportation to the job site and its crew travels by separate transportation to the site, arranging to meet the truck convoy on arrival. Arrangements are made to lease a truck crane from another subcontractor who provides an operator. With the use of the truck crane, Heede's crew then proceeds to erect and test the tower crane. After instructing the contractor's crane operator, the equipment is turned over to the contractor. After the job is completed, the Heede crew, again with the assistance of the subleased truck crane, dismantles and loads the tower crane equipment on a truck convoy to be returned to Heede's yard in Charlotte, North Carolina. On arrival, Heede personnel unload the truck convoy. The freight-in and freight-out costs in all seven of the transactions are F.O.B. Heede's yard, but all such freight charges on these particular rentals are paid by Heede as part of the Additional Agreement subcontract total charge. These freight charges are reflected by separate bills and invoices as shown in the sets of invoices found in Respondent's Exhibit 2. Heede has rented cranes to contractors who have subcontracted with others for the transportation, erection, dismantling, and freight-out. Heede has also bid on and been awarded the subcontract to transport, erect, dismantle and freight-out cranes that were not leased to the contractor by Heede. Job number 3090 is somewhat different in the handling of the transportation portion of the Rental Agreement and Additional Agreement. The lessee in job 3090 and job 3075 was the same. Job 3075 involved the lease of the tower crane at the Caribbean Condominiums in Daytona Beach, Florida, until October, 1987. Job 3090 involved the lease of the tower crane at the Ashley Condominiums in Daytona Beach, Florida, beginning in November, 1987. Because the lessee and the specific tower crane were the same, it would have been ridiculous to transport the crane to Heede's yard in North Carolina and then transport it back to Daytona Beach. The lessee deleted the transportation provisions in the Rental Agreement for job 3090 and entered into a subcontract with Heede for the transportation and erection of the crane at the new site. The transportation charges were then divided between the two jobs as shown in the separate invoices for these two jobs. The transportation charges for job 3090 are included in the parties stipulation as to the amount in controversy because of the deletion of the transportation provisions in that Rental Agreement and because the crane was not F.O.B. Heede's yard. The $675.00 freight charge for job 3090 is included in the tax assessment which the Department seeks and in the stipulated amount in controversy. The stipulated tax amount in controversy represents the tax allegedly due on the freight charge for job 3090 and for the erection and dismantling charges arising from the subcontracts, which includes the costs actually incurred by Heede (trucking and truck crane and operator) and the charges for labor, hotel, food, gas, truck expenses, insurance, and estimated profit.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a Final Order and therein reverse and deny the assessment, penalties and interest, against Heede Southeast, Inc., for the transportation, erection and dismantling services which were not a taxable part of the rental transaction. RECOMMENDED this 4th day of October, 1991, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4627 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Heede Southeast, Inc. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(7); 3(5); 4(6); 7(9&10); 8(12); 9(16); 10(13&14); 11&12(2); 13(15); and 15(2). Proposed findings of fact 2, 5, 6, and 14 are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Revenue Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: (1) and 5(9). Pproposed findings of fact 2, 3, 6, 7, 10, 12, and 13 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 8 and 11 are irrelevant. Proposed findings of fact 4 and 9 are unsupported by the credible, competent and substantial evidence. COPIES FURNISHED: J. Thomas Herndon Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100 Vicki Weber General Counsel Department of Revenue 204 Carlton Building Tallahassee, FL 32399-0100 Bengamin K. Phipps Attorney at Law 802 First Florida Bank Tower Tallahassee, FL 32301 Lealand L. McCharen Assistant Attorney General Department of Legal Affairs Tax Section, The Capitol Tallahassee, FL 32399-1050
Findings Of Fact The following findings of fact are based upon the stipulation of the parties, as well as the evidence presented at hearing, including the demeanor of the witnesses: Polynesian Isles Developers, Ltd., was a developer of a time-share property, within the meaning of Section 721.05(9), Florida Statutes, in Osceola County in 1984. Bailey M. Weldon was a general partner of Polynesian Isles Developers, Ltd., and a developer of time-share property known as Polynesian Isles Resort Condominium I from November 23, 1982 to January 16, 1985. Polynesian Isles Developers, Ltd., submitted certain advertising to Petitioner for approval on January 9, 1984, and was noticed of deficiencies in its Polynesian Isles- Super Bowl advertising materials by notice issued by the Petitioner on January 17, 1984. These advertising materials were distributed in the January 18, 1984 Super Bowl Supplement to the St. Petersburg Times without correction of the noticed deficiencies. No time-share unit weeks were sold as a result of this ad. It was represented in the Polynesian Isles Developers, Ltd., public offering statement, and its sales contract with purchasers of time-share unit weeks, that purchasers would obtain fee title to purchased unit weeks free and clear of encumbrances. It was also represented in such sales contracts with purchasers of time-share unit weeks that Polynesian Isles Developments, Ltd., as Seller, would provide purchasers with an owner's title insurance policy upon closing Respondent agrees and stipulates that no owner's title insurance policy was issued for some of the unit weeks sold and closed in 1984. The evidence establishes that no title insurance policies were issued for 329 unit weeks. Respondent established an escrow account for the deposit and withdrawal of all funds received from, or on behalf of, time-share purchasers. Daniel Giannini served as escrow agent for Polynesian Isles Developers, Ltd., for the purpose of receiving and disbursing funds pursuant to Section 721.08 Florida Statutes. Respondent agrees and stipulates that some affidavits for release of escrow funds were delivered to Daniel Giannini as escrow agent when all conditions required by Section 721.08, Florida Statutes, had not occurred. The evidence establishes that these affidavits falsely stated that all conditions for closing had occurred when, in fact, closing had not properly occurred on 331 unit weeks in 1984 because title was not conveyed free and clear of all encumbrances. As a result, purchasers' funds in escrow were released to Respondent without the conveyance of free and clear title or the issuance of title insurance policies. Goldome Savings Association held the primary mortgage on the first phase of the Polynesian Isles Development. This mortgage encumbered unit weeks sold by the Development. Respondent failed to obtain partial releases from Goldome of the mortgages on 331 unit weeks which closed in 1984, and therefore the sale of these weeks closed without free and clear title. Deeds to the 331 unit weeks were recorded without disclosure of the underlying mortgage. Title insurance policies were not issued on 329 of these unit weeks as a result of the failure to obtain releases. Respondent Weldon was the general partner who was in charge of legal matters, closings and title insurance. He also supervised the general manager of Polynesian Isles with his other general partner, Richard Barcley. It was Weldon's general practice to sign escrow affidavits in blank and to rely on his employees to insure that they were used properly at closings. The general manager of the development during 1984 was Frank Cuyler. Respondent terminated Cuyler when he learned that Cuyler had agreed to an unfavorable change in the terms of Goldome's mortgage as an inducement to obtaining financing for phase II of the development, and had failed to report such change to Respondent, or obtain his approval. The effect of the change which was agreed to by Cuyler was to increase the amount the development had to pay to Goldome for a partial release on each unit-week from $1800 to approximately $3800. When it became apparent that it was not financially feasible for the development to pay this increased amount for releases, Cuyler simply proceeded to close on 331 unit-weeks without releases. Respondent was unaware of this practice, and when it came to his attention he immediately gave instructions that it be discontinued, and terminated Cuyler. In addition, he raised approximately $1.4 million, including $300,000 of his own money, to obtain the releases on these 331 unit-weeks, and to cure any mortgage default. However, the evidence does not establish that releases were ever obtained.
Recommendation Based upon the foregoing, it is recommended that Petitioner enter a Final Order assessing an administrative penalty against Respondent Bailey M. Weldon in the amount of $10,000. DONE AND ENTERED this 17th day of May, 1988, in Tallahassee, Florida. DONALD D. CONN 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 17th day of May, 1988. APPENDIX (DOAH Case No. 86-1003) Rulings on Petitioner's Proposed Findings of Fact: 1.(a)-(c) Adopted in Finding of Fact 1. 1(d) Adopted in Finding of Fact 2. 1(e) Adopted in Finding of Fact 3. 1(f)-(g) Adopted in Finding of Fact 5 1(h)-(i) Adopted in Finding of Fact 3. 2(a)-(b) Adopted in Finding of Fact 2. 2(c)-(e) Adopted in Finding of Fact 5. 2(f) Rejected as unnecessary and cumulative. 2(g)-(h) Adopted in Finding of Fact 8. 2(i)-(j) Adopted in Finding of Fact 6. 2(k) Adopted in Finding of Fact 2. Rulings on Respondent's Proposed Findings of Fact: Rejected since this is a conclusion of law rather than a finding of fact. Adopted in Finding of Fact 1. 3A Rejected as irrelevant to the charges in this case. 3B Adopted in Finding of Fact 2. 3C Adopted in Findings of Fact 3, 5. 3D Adopted in Finding of Fact 3, assuming typographical error of 229 which should be 329. 3E Adopted in Finding of Fact 4. 3F(a) Rejected in Finding of Fact 7. 3F(b) Rejected as not based upon competent substantial evidence in the record. 3F(c) Adopted in part in Findings of Fact 6, 7 and 8. 3F(d) Adopted in part in Findings of Fact 4, 6. COPIES FURNISHED: Pamela S. Leslie, Esquire Eric H. Miller, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Charles Edwin Ray, Esquire 6534 Central Avenue St. Petersburg, Florida 33707 E. James Kearney Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business Regulation 725 South Bronough street Tallahassee, Florida 32399-1007 Van B. Poole Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Joseph A. Sole General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
The Issue Whether Respondent's license as a real estate broker should be suspended or revoked, or the licensee otherwise disciplined for alleged violations of Chapter 475, F.S. as set forth in Administrative Complaint dated December 22, 1981. This proceeding arises from the filing of an administrative complaint by the Board of Real Estate against Jack Braunstein on December 22, 1981, which alleges that he failed to refund an advance rental fee to Annette Richard on May 13, 1980, thus violating a duty imposed upon him by law or by the terms of a listing contract in a real estate transaction in violation of subsection 475.25(1)(b), Florida Statutes. The complaint further alleges that Respondent thereby violated subsection 475.25 (1)(d), Florida Statutes, in failing to account to Ms. Richard, and violation of Section 475.453, Florida Statutes, for failing to provide repayment of any amount over 25 percent of the fee for rental information, if the prospective tenant does not obtain a rental. Respondent requested an administrative hearing, and the case was referred to this Division for assignment of a Hearing Officer on February 8, 1982. At the commencement of the hearing, the parties stipulated as to the truth of Paragraphs 2-3, 5-7, 9-11, and 19-20 of the Administrative Complaint. The parties further stipulated that Respondent was licensed by Petitioner at the time of the incident alleged in the Administrative Complaint. Respondent objected to the proceeding on various grounds, as reflected in the transcript of the hearing. The Hearing Officer treated the objection as a motion to dismiss and denied the same. Petitioner moved to amend Paragraph 22 of the Complaint to correct a typographical error to allege a violation of subsection 475.25(1)(d), F.S. in lieu of the inadvertent recitation of a violation of subsection 475.25(d), F.S. The motion was granted. The post-hearing submission by the Petitioner has been fully considered, and those portions not adopted herein are considered to be either unnecessary, irrelevant, or unwarranted in fact or law.
Findings Of Fact Respondent Jack Braunstein is licensed as a real estate broker and was so licensed at all times relevant to the matters alleged in the Administrative Complaint. Respondent operates Rent-Aid, Inc. located in Fort Lauderdale, Florida, a corporate real estate broker, He is the active broker for that firm. (Petitioner's Exhibits 1-2, Stipulation) On April 15, 1980, Annette H. Richard went to Respondent's firm to ascertain the availability of an apartment for rent in the school district where her child attended school. She had previously talked to Respondent by telephone concerning her needs, and Respondent had informed her that rentals were abundant and that she should come into the office. After she arrived, Respondent turned her over to his associate Jeannie Nemett who took down the information concerning Ms. Richard's apartment requirements. Ms. Nemett informed her that they could find her an apartment in the area, but had nothing available at that time. Although Ms. Nemett looked through the firm's book of apartment listings, she did not permit Ms. Richard to do so. Ms. Nemett told her that there was a new duplex listing not far from the desired area and Ms. Richard agreed to look at it. Ms. Nemett had explained the fact that the firm's services were available for a $50.00 "membership" fee. Since Ms. Richard did not have the money with her, she and Ms. Nemett stopped at the bank on the way to see the property and, after paying the requisite fee, Ms. Nemett gave her a copy of the "membership" agreement. She then showed the duplex and one other rental apartment to Ms. Richard. (Testimony of Richard, Nemett, Petitioner's Exhibit 3) A few days later, Ms. Nemett, having identified some existing available apartments in the school district area in her book of listings, called Ms. Richard several times but could not reach her. The messages were recorded on a telephone answering device. Ms. Richard did not return the calls immediately. About four days after having been shown the duplex by Ms. Nemett, she found an apartment which met her needs as a result of a newspaper ad. Prior to locating this apartment, Ms. Richard had also left telephone messages for Ms. Nemett which had not been returned. About a week or ten days after their initial meeting, Ms. Richard telephoned Ms. Nemett and informed her that she had secured her own apartment and did not wish Rent-Aid, Inc. to proceed any further in her behalf. (Testimony of Nemett, Richard, Petitioner's Exhibit 3) The agreement signed by Ms. Richard with Rent-Aid, Inc. included the following statement: If you do not obtain a rental you are entitled to receive a return of seventy-five percent of the fee paid, if you make demand within thirty days of this contract date. All notices shall be sent by certi- fied mail. A rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. (Emphasis added) By letter dated May 10, 1980, Ms. Richard requested a refund of her $50.00 fee from Rent-Aid, Inc., but by letter dated May 13, 1980, signed by Ms. Nemett, Ms. Richard was informed that a refund could not be made, as follows: It has been construed that the obtaining of rental property is when you receive listings--available, shown by us, in your price range and area, or any other listings which you agree to see. We did, in fact, show you available rental property under the terms of the Rent-Aid policy #011061. Also at that time, I left messages on your answering machine, concerning other avail- able rentals. Under the conditions and terms of this policy--a refund cannot be made. On advice of counsel, Respondent refunded the amount of $37.50 to Ms. Richard on January 11, 1982. (Testimony of Richard, Respondent, Petitioner's Exhibits 4-5) On March 27, 1980, Respondent's attorney wrote to Salvatore A. Carpino, Staff Attorney of the Department of Professional Regulation enclosing Rent-Aid, Inc.`s contract form and requesting review of it to determine whether or not it met the requirements of Chapter 475. The form sent to Mr. Carpino contained the same language as that used in the Richard transaction. By letter of April 1, 1980, the attorney informed Respondent that he had heard from the Department of Professional Regulation about the case and that the form would be acceptable if he deleted the word "registered" in "registered mail." Thereafter, on May 8, 1980, the attorney again wrote Mr. Carpino enclosing print sizes of the form to determine if it met the Department's print size requirements. By letter of May 15, 1980, Carpino informed the attorney that the Respondent could continue to use the existing forms "with the changes that we have previously discussed." Respondent utilized the contract form in question in reliance upon the advice given to him by his attorney in the above regards, and believed that he was operating properly in accordance with the Department's requirements. He had inserted the definition of "obtaining a rental" in the contract form in order to eliminate the vagueness of the statute pertaining to refunds. (Testimony of Braunstein, supplemented by Respondent's Exhibits 1-2)
Recommendation That the Florida Real Estate Commission (formerly Board of Real Estate) issue a private reprimand and impose a $100 administrative fine against Respondent, Jack Braunstein, pursuant to subsection 475.25(1)(d), Florida Statutes. DONE and ENTERED this 20th day of July, 1982. THOMAS C. OLDHAM 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 20th day of July, 1982. COPIES FURNISHED: Bruce Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064 Mr. C. B. Stafford Executive Director Florida Real Estate Commission P. O. Box 1900 Orlando, Florida 32801
Findings Of Fact Sundial is a limited partnership authorized to do business in the State of Florida and is a developer and builder of a condominium complex known as Sundial of Sanabel. In order to provide the purchasers of the condominium units with a means of renting their units when the units were not occupied by the owners, a second limited partnership was formed, Sundial Rental Partners Ltd., in which Sundial is the general partner and each of the condominium owners are limited partners. On August 1, 1973, a management agreement was entered into between Sundial Rental Partners Ltd. (hereafter Rental Partners) and Sundial whereby Sundial agreed to provide management services in connection with the operation of the condominium units as rental accommodations. The terms of this agreement provided that Sundial would be compensated for its management services in the amount of five percent (5 percent) of the gross revenue of the rental partners. On April 7, 1973, an Additional Facilities Lease Agreement was entered into between Sundial and Rental Partners. By this agreement, Sundial leased to Rental Partners additional facilities to be constructed by Sundial and used by the condominium unit owners, the persons who rent the condominium units from the Rental Partners and their guests. Compensation to Sundial is set forth in paragraph 3 of the agreement: Sundial Associates shall be paid an annual rental fee for the additional facilities equal to fifteen percent of the gross revenues of the Rental Partnership. Sun- dial Associates shall operate the additional facilities for its own account. All incom- ing profits shall inure to its benefit and the rental partnership shall have no interest in such incoming profits. The limited partnership agreement between Sundial and Rental Partners was amended on August 6, 1974. Paragraph 5.1 of the Amended Agreement provides that a total of five percent (5 percent) of the gross revenues of the partnership shall be paid to Sundial for its management services and that fifteen percent (15 percent) of the gross revenues of the partnership shall be paid to Sundial as rental payments for those additional facilities to be constructed by Sundial Paragraph 6.1 provides for a management deed to be paid to Sundial in the amount of four percent (4 percent) of the gross revenues of the partnership and paragraph 6.4 provides that the partnership shall lease from Sundial the additional facilities at the rate of fifteen percent (15 percent) of the gross revenues of the partnership. Paragraph 6.4 of the limited partnership agreement calls for the construction of additional facilities, the cost of which is to be some two million one hundred fifty thousand dollars ($2,150,000.00). During the tax period in question, the only facilities actually constructed were a lobby and registration area, the value of which is significantly less than the total value of the expected construction. Nonetheless, during the tax period in question, the Rental Partners have paid Sundial the full five percent (5 percent) management fee and the full fifteen percent (15 percent) rental payment. Sundial recorded receipt of these amounts in separate accounts in their financial records. Sundial received as income during the tax period in question, certain tennis court admission fees which DOR did not intend to include in its computation of the sales tax due from rental proceeds. Yet, the record reflects that the total of fifteen percent (15 percent) of gross sales was three hundred seventeen thousand three hundred ninety-three dollars and ninety-four cents ($317,393.94) while the total from tennis court admission fees was eighteen thousand four hundred ninety-seven dollars and sixty-seven cents ($18,497.67). The sum of these two figures is three hundred thirty-five thousand eight hundred ninety-one dollars and sixty-one cents ($335,891.61) which, when multiplied by four percent (4 percent) equals thirteen thousand four hundred thirty-five dollars and sixty-six cents ($13,435.66). This is the exact amount of the tax assessed by DOR exclusive of interest and penalties. The assessment is in error to the extent that tennis court admission fees were included in the figure purporting to reflect gross receipts of rental fees.
Findings Of Fact Petitioner, T L Consultants, Inc., is a corporation which manages health care facilities. Vettraino Associates Investment Company owns 90 percent of T L Consultants and Grace LaRocca owns the other 10 percent. Vettraino Associates Investment Company is owned in trust by the children of Henry Vettraino, Sr., who set up the trust. Louis Vettraino, son of Henry Vettraino, Sr., is one of the individual trustholders of Vettraino Associates Investment Company and acts as president of T L Consultants, Inc. Grace LaRocca acts as vice president of T L Consultants. In 1980, W. S. Samford, Residential Services Director for District 8 of the Department of Health and Rehabilitative Services was overseeing the implementation of the cluster concept to initiate and aid in the development of Intermediate Care Facilities for the Mentally Retarded (ICF/MR's) in his district. At the request of his supervisor, Mr. Samford returned a call from a Mr. Bundschu. Mr. Bundschu, who dealt in real estate and was involved in the construction company of Bundschu, Bundschu, Kraft and Vettraino, knew of the need for ICF/MR's and indicated he had some Michigan investors who were interested in starting up such a facility. Through Mr. Bundschu, Mr. Samford met with Louis Vettraino and Henry Vettraino, Sr., who indicated that they were interested in building and operating an ICF/MR. Subsequently, Louis Vettraino contacted Maurice Reisman concerning ownership of the facility. Mr. Reisman indicated he would be interested in owning such a facility and, together with Grace LaRocca and Louis Vettraino, he met with Mr. Samford to discuss the application for a certificate of need (CON). Prior to applying for a CON or construction of the facility, it was understood by all of the parties that Henry Vettraino's construction company would build the facility and lease it to Maurice Reisman who would contract with T L Consultants for management services. Louis Vettraino was aware from the beginning that a management firm could not own a facility and charge a fee. He acknowledged that the management firm had sought out the owner instead of the owner seeking out a management firm in the open market. Concerned about the propriety of the management structure which was contemplated, Mr. Reisman wrote Mr. Samford in February of 1981 and asked for a determination by HRS as to whether the proposal met the guidelines for reimbursement. In response to his inquiry, Mr. Reisman was notified that the Department of Health and Rehabilitative Services considered the structure to illustrate a "control" situation, subject to reimbursement limitations. In applying for the CON for the facility, Maurice Reisman relied heavily on the financial backing of Henry Vettraino, Sr. Although Mr. Reisman was applying for a CON for a 1.2 million dollar facility (later increased to 2.7 million dollars), he had only $142,000 in assets. To qualify for the CON, the assets of Henry, Sr., and Jennette Vettraino were included in both the original and amended CON applications. In the minutes of the Lee County Industrial Authority monthly meeting dated June 10, 1982, the bond issue for financing the facility is referred to as the "Vettraino bond issue." It was noted in the CON application that T L Consultants would be the management firm. The CON application was not prepared by Mr. Reisman, but by Grace LaRocca as Operations Director. Ms. LaRocca, a principal in T L Consultants, indicated in the CON application that she was on the Board of Directors of Sandy Park Rehabilitation Center, the corporation that Mr. Reisman formed to own the facility. In addition, when application was made for an amended CON, the request for expedited review listed T L Consultants as a Principal Party in the application. While waiting for the new facility to be built, Mr. Reisman and T L Consultants entered into an agreement to temporarily occupy the existing state facility. Concerned about his responsibilities, Mr. Reisman contacted Mr. Samford for clarification of the agreement. Mr. Samford indicated that although it seemed that Mr. Reisman was not in direct "financial interest" and control of the management firm, as holder of the CON, he was responsible for performance in meeting licensure requirements. This was a separate issue from the question of control for reimbursement purposes and was not a change in the Department's position on that issue. Notwithstanding the original opinion of the Department of Health and Rehabilitative Services, Mr. Reisman made application to the Medicaid Cost Reimbursement Unit (Medicaid) for reimbursement of management fees to be charged by T L Consultants. Mr. Reisman reiterated the fact that T L Consultants had contacted him and acknowledged that he had not sought competitive bids for management services. A proposed management agreement was submitted to Medicaid but was rejected because it had no termination clause. When a new management contract was submitted , the management fee had jumped from 7.5 percent to 10 percent without explanation. In submitting proof of Sandy Park's financial ability to Medicaid, a $100,000 line of credit from Lee County Bank was indicated. Investigation into that line of credit revealed that Henry Vettraino, Sr., had co-signed the loan for Maurice Reisman. These facts, along with the fact that Maurice Reisman had never previously owned a nursing home, the fact that T L Consultants had arranged the entire operation, and the facts surrounding the financing and involvement of Henry Vettraino, Sr., resulted in the denial of the management fees by Medicaid.
Recommendation From the foregoing findings of fact and conclusions of law, it is RECOMMENDED that management fees over and above the actual costs of services to T L Consultants, Inc. be allowed for reimbursement by Medicaid to Sandy Park Rehabilitation Center. DONE and ORDERED this 30th day of October, 1984, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1984. COPIES FURNISHED: William B. Fitzgerald, Esquire Sandra J. Frank, Esquire Fitzgerald, Hodgman, Kazul, Rutledge, Cawthorne & King 1000 First Federal Building Detroit, Michigan 48226 Theodore E. Mack, Esquire Assistant General Counsel Department of HRS 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32301
Findings Of Fact At all times material, Respondent, Gary Dean Upton, was a licensed real estate broker having been issued license number 0090905. Respondent was the broker for the other Respondent herein, Dean Upton Realty, Inc., which has its offices situated at 7045 W. Broward Blvd., Ft. Lauderdale, Florida. At times material herein, Respondent, Dean Upton Realty, Inc., was a corporation licensed as a real estate broker having been issued license number 0213092. On March 11, 1983, a hearing was held before an arbitration panel of the Ft. Lauderdale Area Board of Realtors in response to a complaint filed by Respondent herein, Upton, claiming a commission from another realtor based upon an exclusive rental agreement for property owned by Rex and Martha Anderson. (Tr pages 23, 28) Subsequently, the Ft. Lauderdale Area Board of Realtors filed a complaint with the Department of Professional Regulation alleging possible perjury in connection with Upton's testimony at the hearing or forgery in connection with the exclusive listing agreement with the Andersons. Unrefuted testimony shows that during a meeting at Anderson's home in October, 1982, Rex Anderson initialed a listing brochure for the Anderson property. (Tr page 111-112; Respondents' Exhibit 3; Anderson deposition at page 9; referring to the March 22, 1983 letter at Petitioner's Exhibit 3, page 60, paragraph 3) Anderson claimed he did not intend to give Upton an exclusive listing. However, because of the strain he was under at the time the agreement was purportly executed, he could not swear that he did not initial the document. Anderson's testimony about being under a "severe strain" and unable to remember what occurred in connection with the exclusive listing agreement is not inconsistent with that of the only other eye witness who has testified regarding the transaction, Kevin Scott, a former associate of Upton who is presently involved in hotel management at the Royal Orleans Hotel in New Orleans, Louisiana. (Tr page 108) The day Upton visited the Anderson residence to obtain the listing, Rex Anderson, who had been laid off from his job as an airline pilot, appeared "very upset," and appeared to be drinking. (Tr page 110) Thereafter, Upton and Scott left the Anderson residence for a brief period. When they returned, Anderson was a "very flustered, very nervous and an agitated individual." (Tr page 114) The credible testimony of persons familiar with Upton's reputation for honesty in the community evidenced that he was not reputed to be a person who would forge someone's name on a listing agreement. (Testimony of Clemente, Apuna and Marion Upton at Tr pages 126, 143 and 145, respectively) Based on Respondent's testimony that Anderson initialed the exclusive listing agreement, Kevin Scott's testimony which was corroborative of Respondent Upton's testimony and Anderson's inability to state, without evasiveness, what occurred in connection with the exclusive listing agreement respecting the subject property, there is no competent and substantial evidence herein to establish that Respondent Upton either forged Rex Anderson's initials to the exclusive listing agreement or that he gave perjured testimony before the Fort Lauderdale Area Board of Realtors. On October 17, 1984, Respondent Upton pleaded nolo contendere to the felony offense of possession of an unlawfully issued driver's license. (Petitioner's Exhibit 5) The plea resulted in a withheld adjudication and a sentence of 18 months probation plus the payment of fines and court costs. In making the nolo contendere plea, Respondent Upton considered that such was in his best-interests; however, he felt that he was not guilty and has been a model probationer since October, 1984. (Testimony of Susan Jean Davis, Respondent Upton's correctional officer) Respondent has completed a 30-day residential treatment program for alcoholism at the Beachcomber in Delray Beach, Florida. Since that time, he has also participated successfully in the Broward County Commission of Alcoholism, Inc. DWI program. (Respondents' Exhibits 4, 5 and 8) Those persons who have had the opportunity to observe Respondent since his bout with alcoholism consider him a reformed alcoholic. (Testimony of former judge, Lawrence C. Roberts; Marion Upton and former Broward sheriff and judge, George Brescher) Kendall D. DeVeaux, Broward County's chief evaluator for the substance abuse program had the opportunity to evaluate and supervise Respondent Upton since his DWI and drug abuse offenses. DeVeaux's testimony corroborates that of Roberts and Marion Upton respecting Upton's reformation. Based on the foregoing factual findings and conclusions, and the mitigating factors introduced herein, I hereby make the following:
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent Gary Dean Upton's real estate broker's license number 0090905 be suspended for a period of six (6) months. In all other respects, it is RECOMMENDED that the complaints in Case Numbers 84-0138 be DISMISSED. RECOMMENDED this 8th day of October, 1985, in Tallahassee, Florida. JAMES E. BRADWELL 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 8th day of October, 1985.
The Issue The issue in this case is whether Monroe County Ordinance 004-1997, approved by a Final Order of the Department of Community Affairs, DCA Docket No. DCA97-280-FOI-GM, is consistent with the Principles for Guiding Development set forth in Section 380.0552, Florida Statutes (1997)?
Findings Of Fact The Parties. Petitioners are all involved in the rental of real property in unincorporated Monroe County, Florida. Petitioner John H. Rathkamp is a resident of the State of Georgia. (Admitted fact). Mr. Rathkamp is the owner of real property located in unincorporated Monroe County described as Lost 6, Block 9, Redfish Lane, Cudjoe Ocean Shores Subdivision, Cudjoe Key (RE #188684000800). At the time of purchase, the property was improved. At all times material to this proceeding, Mr. Rathkamp's property was located in an Improved Subdivision land use district. (Admitted facts). Petitioner Monroe County Vacation Rental Managers, Inc., is a Florida not-for-profit corporation doing business in Monroe County. Its principal place of business is located at 701 Caroline Street, Key West, Florida. (Admitted facts). Petitioner Lower Keys Chamber of Commerce is a Florida not-for-profit corporation which conducts business in Monroe County. Its principal place of business is Post Office Box 4330511, Mile Maker 31, Big Pine Key, Florida. (Admitted facts). Petitioner Marathon Chamber of Commerce is a Florida not-for-profit corporation which conducts business in Monroe County. Its principal place of business is 12222 Overseas Highway, Marathon, Florida. (Admitted facts). Respondent, the Department of Community Affairs (hereinafter referred to as the "Department"), is an agency of the State of Florida. The Department is charged with responsibility for, among other things, the approval or rejection of comprehensive plan amendments and land development regulations adopted by the Monroe County Board of County Commissioners. Chapter 163, Florida Statutes, and Sections 380.05 and 380.0552, Florida Statutes (1997). Intervenor, the Board of County Commissioners of Monroe County (hereinafter referred to as the "County"), is the governing body of Monroe County, Florida, a political subdivision of the State of Florida. Among other things, the County is responsible for adopting a comprehensive plan and land development regulations for unincorporated Monroe County. Unincorporated Monroe County has been designated as the Florida Keys Area of Critical State Concern (hereinafter referred to as the "Florida Keys ACSC"), pursuant to Sections 380.05 and 380.0552, Florida Statutes, since 1979. As an area of critical state concern, all comprehensive plan amendments and land development regulations adopted by the County must be reviewed by the Department for consistency with the Principles for Guiding Development (hereinafter referred to as the "Principles"), set out in Section 380.0552(7), Florida Statutes. Standing. The parties stipulated that Petitioners are all substantially affected persons as those terms are used in Section 120.569, Florida Statutes (1997). The evidence in this case proved that Petitioners' substantial interests have been determined by the Department's Final Order approving the land development regulation at issue in this case. Petitioners have standing to initiate, and participate in, this proceeding. The evidence also proved that the County's substantial interests were determined by the Department's Final Order. The County has standing to participate in this proceeding. The County's Adoption of Ordinance No. 004-1997. During 1995 the County directed that public hearings be held on the issue of the rental of real estate for short periods of time for vacation purposes in Monroe County. Public hearings were held before the County's Development Review Committee in Marathon, Monroe County, Florida, on July 25, 1995, and December 2, 1995. Public hearings were also held before the County's Planning Commission on the following dates and at the following locations in Monroe County: Date Location March 7, 1996 Marathon March 21, 1996 Key West April 3, 1996 Key Largo April 18, 1996 Marathon April 22, 1996 Duck Key July 15, 1996 Duck Key September 5, 1996 Marathon On November 5, 1996, a referendum was placed on the ballot in Monroe County. The referendum asked the following question: "Should transient rentals of less than 28 days be allowed in (IS) Improved Subdivisions?" This question was answered "yes" by 51% of the citizens who voted on the referendum. Public hearings to consider an ordinance prohibiting certain vacation rentals were held before the County on December 18, 1996 in Marathon and on February 8, 1997, in Key West. On February 3, 1997, the County passed and adopted Ordinance No. 004-1997 (hereinafter referred to as the "Ordinance"). The Ordinance applies to lands located in unincorporated Monroe County. (Admitted facts). The Department's Review of the Ordinance. On February 25, 1997, the County transmitted a copy of the Ordinance to the Department for approval or rejection pursuant to Section 380.05, Florida Statutes. (Admitted fact). On April 25, 1997, the Department caused notice of Proposed Rule 9J-14.006(11), approving the Ordinance, to be published in the Florida Administrative Weekly. (Admitted fact). A challenge pursuant to Section 120.56, Florida Statutes, to the proposed rule was filed by Petitioners on May 16, 1997. The Department held public hearings in Monroe County on the proposed rule on May 21 and 22, 1997, and June 26, 1997. On May 31, 1997, an amendment to Section 380.05(6), Florida Statutes, became effective. The amendment changed the procedure for approving or rejecting comprehensive plan amendments and land development regulations in areas of critical state concern. Pursuant to the new procedure the Department was required to approve or reject comprehensive plan amendments and land development regulations in areas of critical state concern by final order instead of by rule. (Admitted facts). Petitioners in the rule challenge proceeding stipulated that they would not object, procedurally, if the Department elected to withdraw the proposed rule and issue a final order approving or rejecting the Ordinance. (Admitted fact). On November 26, 1997, the Department caused a Final Order entered November 5, 1997, to be published in the Florida Administrative Weekly, Vol. 23, No. 48. The Final Order was accepted into evidence as Joint Exhibit 5. The Final Order contains Findings of Fact and Conclusions of Law. Those Findings of Fact and Conclusions of Law are hereby incorporated by reference into this Recommended Order. A copy of the Final Order is attached to this Recommended Order. Pursuant to the Department's Final Order, the Department approved the Ordinance as being consistent with the Principles. (Admitted facts). Studies and Reports. One thing that was made abundantly clear during the formal hearing was that no formal studies were conducted by the County during its consideration and adoption of the Ordinance. Instead, the County relied upon information provided to it during the hearings conducted prior to, and during, the adoption of the Ordinance and the County's knowledge about Monroe County. Another fact made abundantly clear was that the Department also did not undertake any formal studies during its review of the Ordinance. The Department relied upon the its knowledge of Monroe County and information that had been provided to the County, summarized in memorandums. The Principles. Section 380.0552(7), Florida Statutes, creates the Principles: To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation. To protect shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat. To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat. To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development. To limit the adverse impacts of development on the quality of water throughout the Florida Keys. To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys. To protect the historical heritage of the Florida Keys. To protect the value, efficiency, cost- effectiveness, and amortized life of existing and proposed major public investments, including: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and Florida Keys Electric Co-op; and Other utilities, as appropriate. To limit adverse impacts of public investments on the environmental resources of the Florida Keys. To make available adequate affordable housing for all sectors of the population of the Florida Keys. To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or man-made disaster and for a post-disaster reconstruction plan. To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource. In determining whether the Ordinance is consistent with the Principles, the Principles must be considered as a whole and no specific provision is to be construed or applied in isolation from the other provisions. Section 380.0552(7), Florida Statutes. The Principles must also be construed and applied with due consideration to the legislative intent. The legislative intent in promulgating Section 380.0552, Florida Statutes, is set out in Section 380.0552(2), Florida Statutes: LEGISLATIVE INTENT.—It is hereby declared that the intent of the Legislature is: To establish a land use management system that protects the natural environment of the Florida Keys. To establish a land use management system that conserves and promotes the community character of the Florida Keys. To establish a land use management system that promotes orderly and balanced growth in accordance with the capacity of available and planned public facilities and services. To provide for affordable housing in close proximity to places of employment in the Florida Keys. To establish a land use management system that promotes and supports a diverse and sound economic base. To protect the constitutional rights of property owners to own, use, and dispose of their real property. To promote coordination and efficiency among governmental agencies with permitting jurisdiction over land use activities in the Florida Keys. In order for the Ordinance to be consistent with the legislative intent of Section 380.0552(2), Florida Statutes, it must be consistent with the Principles. The Ordinance. The Monroe County 2010 Comprehensive Plan (hereinafter referred to as the "Plan"), establishes the land uses which are allowed and prohibited in Monroe County. The Ordinance provides the following "Purpose": The purpose of this ordinance is to further and expressly clarify the existing prohibition on short-term transient rental of dwelling units for less than twenty-eight (28) days in duration in Improved Subdivisions, mobile home districts (which provide affordable housing) and native areas, and to allow tourist housing uses in all other districts and in improved subdivision districts with a newly-created tourist housing subindicator. The Ordinance defines the terms "vacation rentals" as the rental for tenancies of a dwelling unit for less than twenty- eight days. Hotels, motels, and recreational vehicle spaces are specifically excluded from the definition of "vacation rentals." The Ordinance addresses the following land use districts and prohibits vacation rentals within those district: Sparsely Settled Residential District; Native Area District; Mainland Native Area District; and Commercial Fishing Residential District. The Ordinance addresses the following land use districts and provides that vacation rentals are allowable "if a special vacation rental permit is obtained under the regulations established in Code s9.5-534": Urban Commercial District. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use; Urban Residential District; Sub Urban Commercial District. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use; Sub Urban Residential District; Sub Urban Residential District (Limited); Destination Resort District; Maritime Industries District. Vacation rentals are not allowed, however, in commercial apartments with more than six units; and Mixed Use Districts. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use. The Ordinance addresses the following land use districts and provides that vacation rentals are prohibited except "in gated communities which have (a) controlled access and (b) a homeowner's or property owners' association that expressly regulates or manages vacation rental uses": Urban Residential-Mobile Home District; URM-L District; and Improved Subdivision Districts. Improved Subdivision Districts (hereinafter referred to as "IS Districts"), are the primary, residential districts in Monroe County. 40 The Ordinance establishes a new district, the Improved Subdivision-Tourist Housing District (hereinafter referred to as the "IS-T District"). Vacation rentals are allowed in IS-T Districts under certain conditions: A map amendment designating a contiguous parcel as IS-T may be approved, provided that the map amendment application (and subsequent building permit applications and special vacation rental permit applications) meet the following standards, criteria and conditions: The IS-T designation is consistent with the 2010 Comprehensive Plan and there is no legitimate public purpose for maintaining the existing designation. The IS-T designation allowing vacation rental use does not create additional trips or other adverse traffic impacts within the remainder of the subdivision or within any adjacent IS district: The parcel to be designated IS-T must contain sufficient area to prevent spot zoning of individual parcels (i.e., rezonings should not result in spot-zoned IS-T districts or result in spot-zoned IS districts that are surrounded by IS-T districts). Unless the parcel to be rezoned contains the entire subdivision, there will be a rebuttable presumption that spot-zoning exists, but the Board of County Commissioners may rebut this presumption by making specific findings supported by competent, substantial evidence that: the designation preserves, promotes and maintains the integrity of surrounding residential districts and overall zoning scheme or comprehensive plan for the future use of surrounding lands; does not result in a small area of IS-T within a district that prohibits vacation rentals; the lots or parcels to be designated IS-T are all physically contiguous and adjacent to one another and do not result in a narrow strip or isolate pockets or spots of land that are not designated IS-T, or which prohibit vacation rentals; and the IS-T designation is not placed in a vacuum or a spot on a lot-by-lot basis without regard to neighboring properties, but is a part of an overall area that allows vacation rentals or similar compatible uses. In addition to the requirements contained in Code s.9.5-377 (District Boundaries), an IS-T district shall be separated from any established residential district that does not allow tourist housing or vacation rental uses by no less than a class C bufferyard: Vacation rental use is compatible with established land uses in the immediate vicinity of the parcel to be designated IS- T: and Unless a map amendment is staff-generated (i.e., initiated by Monroe County), an application for a map amendment to IS-T shall be authorized by the property owner(s) of all lots (or parcels) included within the area of the proposed map amendment. The Ordinance provides that vacation rentals are prohibited in Offshore Island Districts unless they "were established (and held valid state public lodging establishment licenses) prior to January 1, 1969." Finally, the Ordinance provides, in part, that the following uses are permitted in Recreational Vehicle Districts: Recreational vehicle spaces. RV spaces are intended for use by traveling recreational vehicles. RV spaces may be leased, rented or occupied by a specific, individual recreational vehicle, for a term of less than twenty-eight days, but placement of a specific, individual Recreational Vehicle (regardless of vehicle type or size) within a particular RV park for occupancies or tenancies of 6 months or more is prohibited. Recreational Vehicles may be stored, but not occupied, for periods of 6 months or greater only in an approved RV storage area (Designated on a site plan approved by the Director of Planning) or in another appropriate district that allows storage of recreational vehicles. . . . Code s9-534 of the Ordinance requires a permit for vacation rentals, except for vacation rentals located within a controlled access, gated-community or within a multifamily building which has 24-hour on-site management or 24-hour on-site supervision. This Code section also provides certain conditions which must be met by vacation rentals, requires that a copy of any permit be provided to surrounding property owners, provides for the circumstances under which a permit may be revoked, provides for certain penalties, and deals with other miscellaneous matters. Code s9-534 is hereby incorporated into this Recommended Order. The Ordinance is a "land development regulation" as defined in Section 380.031(8), Florida Statutes. (Admitted fact). Petitioners' Challenge to the Ordinance. On December 16, 1997, Petitioners timely filed a challenge pursuant to Sections 120.569 and 120.57, Florida Statutes, to the Department's Final Order approving the Ordinance. (Admitted facts). In addition to alleging that the Ordinance is not consistent with the Principles, Petitioners also challenged some of the specific findings of fact contained in the Final Order entered by the Department. While the Department has agreed that it has the burden of proving the "validity of the final order," for purposes of Sections 380.05 and 380.0552, Florida Statutes, the only "final order" which the Department entered in this matter is the final line of the order: "WHEREFORE, IT IS ORDERED that Monroe County Ordinance No. 004-1997 is consistent with Section 380.0552(7), F.S., and is hereby approved." Because this is a de novo proceeding, the "facts" and "conclusions of law" the Department reached in taking the "proposed agency action" at issue in this case, are not controlling. Petitioners also alleged that the Ordinance is not "consistent with the legislative intent for designation of unincorporated Monroe County as the Florida Keys ACSC expressed in Section 380.0552(2), F.S." Chapter 380, Florida Statutes, does not specifically require the Department to independently determine whether a land development regulation is consistent with the legislative intent. The Department is only required to determine consistency with the Principles. If a land development regulation is consistent with the Principles, it will also be consistent with the legislative intent. Finally, Petitioners alleged in their Petition that the Ordinance is not consistent with the Plan. This allegation was not included in the Prehearing Stipulation. This issue was, therefore, waived by Petitioners. Even if not considered waived, the issue of whether the Ordinance is consistent with the Plan is not an issue which has been properly brought before this forum. The challenge in this case was instituted pursuant to Chapter 380, Florida Statutes. Nowhere in Chapter 380, Florida Statutes, is the Department required or authorized to review a land development regulation for consistency with a growth management plan. The Department's authority to review a land development regulation for consistency with a growth management plan comes from Chapter 163, Florida Statutes. Challenges to Department's decisions under Chapter 163, Florida Statutes, must be instituted pursuant to Section 163.3213, Florida Statutes. No such proceeding has been instituted by Petitioners. Petitioners, although not specifically alleged in their petition or the Prehearing Stipulation, presented evidence at hearing and argument in their proposed order concerning what the County and Department knew or did not know, and what they did or did not do, at the time of their respective actions. Because this is a de novo proceeding, such knowledge or actions, do not support a finding that the Ordinance is not consistent with the Principles unless, in the case of required information, the information is not provided at hearing and, in the case of an action that was not taken, the action was required by rule or statute. The evidence presented at hearing in this case was sufficient to determine consistency of the Ordinance with the Principles. The evidence also failed to prove that the County or the Department failed to take any action required by rule or statute with regard to their respective roles in this matter. Sound Economic Development of Monroe County. Section 380.0552(7)(d), Florida Statutes, includes the following principle: "To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development." This principle is consistent with the legislative intent set out in Section 380.0552(2)(e), Florida Statutes, that a local government establish a land use management system that promotes and supports a diverse and sound economic base. Undoubtedly, the evidence in this case proved that the Ordinance will cause a negative impact to the economy of Monroe County. No economic impact study was necessary to prove this fact. Although neither the County nor the Department conducted an economic impact study prior to the County's adoption and the Department's review of the Ordinance, the County and the Department were aware of the fact that there would be a negative economic impact as a result of the Ordinance and took that fact into consideration in carrying out their respective roles. More importantly, there is no requirement in Chapters 120 or 380, Florida Statutes, that an economic impact study be performed prior to adoption of a land development regulation or during the Department's review. Nor is the Department authorized as part of its review pursuant to Chapter 380, Florida Statutes, to require such a study be conducted by the County. This is a de novo proceeding. Therefore, it was incumbent upon the Department in order to meet its burden of proof to present sufficient competent substantial evidence concerning the economic impact of the Ordinance during the formal hearing. Much of the proof was presented by Petitioners. The combined proof of the parties in this case concerning the economic impact of the Ordinance is sufficient to make a determination as to whether the Ordinance is consistent with Principle "d." The economy of Monroe County is primarily dependent upon the tourist industry. The tourist industry in turn is largely dependent on the natural resources of Monroe County. As a consequence, the majority of the Principles provide for a consideration of impacts on the environment of Monroe County. Ultimately, the economic viability of Monroe County depends on its environmental resources. Tourists who vacation in Monroe County generally require lodging while on vacation. Lodging in Monroe County is diverse and includes hotels, motels, camp grounds, RV parks, and rentals of dwellings, including rentals for periods of less than 28 days (rentals of dwellings of less than 28 days are hereinafter referred to as a "Short-Term Rental Property"). There are some tourists who prefer to stay in Short- Term Rental Property over other types of accommodations available in Monroe County. There are even some tourists who may go elsewhere if they are unable to find Short-Term Rental Property in Monroe County. A reduction in available Short-Term Rental Property may also cause some tourists to come to Monroe County during periods during the year when tourism is lower. The evidence, however, failed to prove the extent of the loss of tourists or the extent to which tourists may come to Monroe County during the off-season if there is a reduction in the available number of Short-Term Rentals Property as a result of the Ordinance. Short-Term Rental Property makes up a significant portion of tourist lodging available throughout Monroe County. Short-Term Rental Property has been a part of the tourist economy of Monroe County for the past twenty to thirty years. Short-Term Rental Property, however, has increased significantly recently as the number of dwellings in Monroe County has increased. The use of properties as Short-Term Rental Property adds to the economy of Monroe County by providing work for a number of businesses in Monroe County. Those businesses include real estate brokers, pool maintenance, lawn maintenance, home repairs, maid/cleaning services, and many of the businesses associated with the tourist industry. Occupancy rates for Short-Term Rental Properties in Monroe County have been averaging approximately 30% annually. Occupancy occurs primarily during the peak tourist season from December or January through April. To a lesser extent, occupancy is higher in August also. Occupancy rates in Monroe County hotels and motels during the peak season have been approximately 80% to 100%. There is currently a moratorium in the Florida Keys on the construction of hotels and motels. The moratorium is only effective through 2006. The construction of new transient rentals and the conversion of single-family residences to transient rentals are prohibited by the Plan. These measures represent an effort of the County to regulate the influx of tourists into Monroe County and very likely result in an increase of properties used for Short-Term Rental Property to meet the demand for tourist lodging. As a result of the Ordinance's restriction on where Short-Term Rental Property will be allowable in Monroe County, there will be some reduction in the number of Short-Term Rental Properties available to tourist in Monroe County. Petitioners have estimated that there will be a reduction of in excess of 3,000 Short-Term Rental Properties as a result of the Ordinance. This number is based upon the assumption that there are 4,100 Short-Term Rental Properties in Monroe County, that 76% of those rentals are located in IS districts, and that all 76% of the rentals in IS districts will be lost. The evidence failed to support a finding that such a reduction will occur. First, the Ordinance does not prohibit all Short-Term Rental Property in Monroe County. The use of properties for Short-Term Rental Property is not prohibited in several land use districts listed, supra. Short-Term Rental Property located in the cities of Key West, Key Colony Beach, and Village of Islamorada are also not subject to the Ordinance. There are approximately 12,000 seasonal rental units in incorporated and unincorporated Monroe County. To the extent that the demand for Short-Term Rental Property is not met by properties which are no longer available for use as a Short-Term Rental Property under the Ordinance, some part of that demand will be met by seasonal units not impacted by the Ordinance: those units located in land use districts in which Short-Term Rental Properties are not prohibited and in incorporated areas. The market will react to the market conditions as they change under the Ordinance. Petitioners' expert witness, Charles Ilvento, provided estimates of the losses in revenue and sales tax collections in Monroe County (at a rate of 11.55 per cent) as a result of the Ordinance. Those estimates were that Monroe County would experience $400,235,747.00 to $500,294,683.00 per year in economic losses and $6,262,444.00 per year in sales tax losses. The Department's and County's expert, Dr. Nicholas, estimated that the economic loss from the Ordinance to Monroe County would only be approximately 20 per cent of the loss projected by Mr. Ilvento and would last only two years. Mr. Ilvento also suggested that the losses would be continuing losses. The weight of the evidence failed to support the extent of losses suggested by Mr. Ilvento. First, in making his estimates, Mr. Ilvento relied upon the number of Short-Term Rental Properties Petitioners had estimated would be lost as a result of the Ordinance. Those estimates are too high. See Findings of Fact 68 and 69. Secondly, Mr. Ilvento did not take into account the economic benefit of keeping residential uses of property and the more commercial activities of Short-Term Rental Properties separate as required by the Ordinance. Because of the value of Short-Term Rental Properties, finding property for permanent residents is more difficult. In some areas, the use of residential property for Short-Term Rental Properties can dominate the residential nature of an area to a great enough extent that the residential sector will decline and withdraw. Thirdly, Mr. Ilvento did not take into account the increase in income that would be likely to occur from the sales of properties formerly used as Short-Term Rental Property which Petitioners assert will have to be sold. Fourthly, Petitioners' estimate of the number of properties that will be sold (50%), which Mr. Ilvento relied upon in reaching his estimates, is not reasonable. Petitioners' estimate of the number of Short-Term Rental Properties that will be sold assumes that the owners of those properties will no longer be able to afford them without the rental income they had previously enjoyed from the properties. This assumption is not realistic. It is not realistic to assume that half the owners of Short-Term Rental Properties acquired their property without taking into account the possibility that they would not be able to rent the property. Additionally, it is not reasonable to assume that an owner who is faced with the inability to carry the debt on a property will necessarily elect to sell it rather than rent it on a long-term basis. The evidence also proved that the economy of Monroe County will be benefited to the extent that the Ordinance enhances the availability of affordable housing and reduces adverse impacts to the environment of Monroe County, as discussed, infra. The benefits to the economy as a result of the increase in affordable housing and the reduction of adverse impacts to the environment will not be substantial, however. The weight of the evidence in this case proved that there will be an overall economic loss in Monroe County as a result of the Ordinance. That loss should last approximately two to three years. The amount of the loss projected by Dr. Nicholas is a more reasonable estimate of the loss which will occur. That loss, however, will be substantial. Protection of the Public Health, Safety, and Welfare. Section 380.0552(7)(l), Florida Statues, includes the following principle: "To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource." The County, in adopting the Ordinance, was primarily exercising its police power to protect the public health, safety, and welfare of the citizens of Monroe County. The County decided to exercise its power by limiting the types of activities allowable in areas designated for residential use. The County's decision was based upon extensive testimony on the negative impacts of Short-Term Rental Property in neighborhoods given at the public hearings conducted by the County. Additionally, the County was aware of the results of the November 5, 1996, referendum vote in which residents of the County voted in favor of prohibiting Short-Term Rental Property in IS districts. Although the testimony concerning the negative impacts of Short-Term Rental Property and the results of the referendum vote relied upon by the County constitutes hearsay, it does corroborate and explain the testimony of Denise Werling, a permanent resident of Monroe County. It is difficult to characterize the rental of Short- Term Rental Property as purely commercial or residential. While Short-Term Rental Property is being used by the people who rent the property as housing, which is in the nature of a residential use, the services they are provided in conjunction with the rental is more in the nature of a commercial enterprise. Therefore, Short-Term Rental Property use is more like the rental of a hotel or motel rental, rather than the a long-term lease of property. Additionally, although there are always exceptions, occupants of Short-Term Rental Properties use the properties for reasons that are different from the uses that occupants of long- term rentals or permanent residents put their properties. As a result of the differences between the uses to which occupants of Short-Term Rental Property and permanent residents put their property, conflicts arise where the two land uses exist side by side. Although Short-Term Rental Properties have been a part of Monroe County for many years, there has been an increase in the number of properties available for use as Short-Term Rental Property in areas which have also increasingly been used as neighborhoods for permanent residents during the past ten years. As a result, the conflicts between occupants of Short-Term Rental Properties and permanent residents have increased. Denise Werling testified as to the types of conflicts she has experienced with a Short-Term Rental Property located next door to her home. Ms. Werling's testimony was illustrative of the types of conflicts which can exist if Short-Term Rental Properties are allowed to exist in areas designated for purely residential uses. The following are the types of problems which are not uncommonly associated with the use of properties as Short-Term Rental Property in residential areas: Short-Term Rental Property may be occupied with excessive numbers of tenants. Occupants of Short-Term Rental Property usually do not have to work because they are on vacation. As a consequence, they usually want to maximize the time they spend enjoying their vacation. As a result, they may stay up later at night and/or get up earlier in the morning than permanent residents. Late- night parties are not limited to weekends. Occupants often have excessive numbers of vehicles, boats, jet skies, RV's, and boat trailers, which they park on residential streets or all over the Short-Term Rental Property. RV's are parked in the driveway, yard, or the street in front of the rental property. When occupied, these RV's can be noisy if they are powered by self-contained generators. Multiple boats may be docked along seawalls behind Short-Term Rental Properties. Ms. Werling has seen as many as six boats parked at one time against the seawall of the Short- Term Rental Property located next to her residence. Occupants of Short-Term Rental Property are unfamiliar with garbage and recycling schedules. As a result, full trash containers and recycle containers, if they are used, are left outside when the occupants leave, even though it may be several days before pickup is scheduled. Pets that are unfamiliar to the neighborhood are left to roam free. Ms. Werling has had dogs from the property next to hers on her property. Occupants of Short-Term Rental Property are strangers to the neighborhood. As a result, they can create a sense on uneasiness to permanent residents. This sense of uneasiness is not only a result of concern for the safety of the permanent residents and their families, but is also caused by the fact that occupants of Short-Term Rental Properties are less likely to adhere to accepted neighborhood practices. They may leave outdoor security lights on all the time. They are less concerned about trespassing onto seawalls and yards of the permanent residents. They are only in the area for a relatively short period of time and, consequently, they are likely to be less considerate of the neighboring permanent residents. Short-Term Rental Property occupants are often less familiar with the waters that surround their Short-Term Rental Property. As a result, they tend to run aground, causing damage to seagrass beds. While they could cause such damage elsewhere if they were staying at a hotel or motel, they at least have hotel and motel personnel that are familiar with the surrounding waters that they can consult before venturing out. Such information is not as readily available at Short-Term Rental Properties. 86 Most of the difficulties associated with Short-Term Rental Properties are not limited to occupants of Short-Term Rental Properties. Many are also caused by some permanent residents. Just as there are some Short-Term Rental Property occupants that are inconsiderate to permanent residents, there are permanent residents that are inconsiderate to their neighbors. The degree to which the problems are caused is much higher, however, for occupants of Short-Term Rental Properties than it is for permanent residents. Additionally, it is more likely that permanent residents that cause problems can be effectively dealt with through the enforcement of regulations than occupants of Short- Term Rental Property. Finally, some of the problems are only associated with occupants of Short-Term Rental Properties. Efforts to enforce regulations intended to deal with the problems associated with inconsiderate neighbors, such as anti-noise ordinances, have not been successful in eliminating the problems associated with Short-Term Rental Property. Short- Term Rental Property occupants have less reason to be concerned about regulations because they know they will be leaving the community in a short time. Whether they get along with their "neighbors" is not something they are concerned with. Ms. Werling has reported the problems she has experienced with the Short-Term Rental Property located next door to her. The problems, however, persist. Efforts of managers of Short-Term Rental Properties have not eliminated the difficulties associated with Short-Term Rental Property for the same reason that regulations are not effective and because not all owners of Short-Term Rental Property use local managers. Some absentee owners rent the properties themselves and they are not available to handle complaints as they arise. The County, in adopting the Ordinance, was exercising its police power to eliminate the incompatible use of Short-Term Rental Properties in districts intended for use as residential communities. In exercising its police power, the County prohibited Short-Term Rental Property in the most sensitive residential areas and placed restrictions intended to reduce the impacts of Short-Term Rental Properties in areas where Short-Term Rental Properties are allowed under the Ordinance. The County also restricted Short-Term Rental Properties in districts intended to protect the sensitive natural resources of the Florida Keys ACSC. Petitioners' have suggested that, while additional regulation of Short-Term Rental Property may be appropriate and beneficial, to prohibit Short-Term Rental Property in IS districts, given the negative economic impact of such a prohibition, would be detrimental to the overall welfare of Monroe County. Therefore, Petitioners have argued that the Ordinance is not consistent with Principle "l." Petitioners' suggestion does not support a finding that the Ordinance is not consistent with Principle (l), however. Petitioners' suggestion relates to the issue of the balancing of all the Principles, discussed infra. The County's Ability to Manage Land Use and Development. Section 380.0552(7)(a), Florida Statutes, includes the following principle: "To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation." Short-Term Rental Properties have existed throughout the Florida Keys for many years. Many owners of Short-Term Rental Property have obtained an occupational license for their rental business. Prior to the adoption of the Ordinance, the County Attorney and the Monroe County Code Enforcement Board, began to question whether the use of property as Short-Term Rental Property was an allowable land use in certain land districts in Monroe County under existing laws. The fact that some owners of Short-Term Rental Properties obtained occupational licenses from the Monroe County Tax Collector and licenses pursuant to Chapter 509, Florida Statutes, from the Department of Business and Professional Regulation does not, as Petitioners have argued, support a finding that the use of Short-Term Rental Properties have been an allowable use. An occupational license is, in essence, a method of collecting a tax pursuant to Chapter 205, Florida Statutes, for the operation of a business in a local jurisdiction. The issuance of such a license is not in the nature of a land use decision. Although there was a requirement in the County prior to the adoption of the Ordinance that occupational licenses issued by the Tax Collector be reviewed by the County for consistency with land use requirements, the evidence failed to support a finding that licenses were actually reviewed. Even if they had been, the evidence in this case only proved that the County simply did not give any consideration to whether existing comprehensive plans and land development regulations allow or prohibit the use of property as Short-Term Rental Property in all land use districts of Monroe County. Licenses from the Department of Business and Professional Regulation also do not constitute land use decisions. By taking the actions necessary to consider the problem of Short-Term Rental Properties and in adopting the Ordinance, the County has evidenced the willingness to take responsibility for the issue of whether the use of property for Short-Term Rental Property is allowable, and, if so, in which districts. By adopting the Ordinance, the County has resolved any ambiguity concerning the legality of Short-Term Rental Property. Even if it were clear that the use of Short-Term Rental Property has been allowable throughout Monroe County, the County has still taken steps to strengthen its capability for managing land use and development. The County took on a highly controversial issue, with vocal proponents and opponents, and made a decision as to the future direction of neighborhoods in Monroe County. In so doing, the County also took the actions necessary to actually "manage" Short-Term Rental Properties. The Environmental Issues. 100. Sections 380.0552(7)(b), (c), (e), (f), and (i), Florida Statutes, are Principles which require a consideration of the impacts on the environment of the Florida Keys: Principle "b": "To protect shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat." Principle "c": "To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat." Principle "e": "To limit the adverse impacts of development on the quality of water throughout the Florida Keys." Principle "f": "To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys." Principle "i": "To limit the adverse impacts of public investments on the environmental resources of the Florida Keys." (This Principle could also be grouped with Section 380.0552(7)(h), Florida Statutes). These Principles are consistent with the legislative intent set out in Section 380.0552(2)(a), Florida Statutes, that a local government establish a land use management system that protects the natural environment of the Florida Keys. Part I of Chapter 380, Florida Statutes, is titled "The Florida Environmental Land and Water Management Act of 1972." Section 380.012, Florida Statutes. The legislative purpose for establishing Part I and designating areas of critical state concern was primarily to provide State protection from adverse development impacts on environmentally sensitive areas of the State: Big Cypress Swamp, Green Swamp, Apalachicola Bay, and Monroe County's Florida Keys. All of these areas include environmentally sensitive lands and water bodies. The Ordinance does not specifically deal with environmental issues. The Ordinance involves primarily a balancing of a local government's police power with the economic impact of the exercise of that power. The Ordinance does, however, have some small positive impacts on the environment of Monroe County. Most importantly, the Ordinance does nothing contrary to the legislative intent to protect the Florida Keys ACSC. Monroe County's economic viability depends on the preservation and protection of its natural resources, including the quality of its surrounding waters. Tourism, which is the largest industry in Monroe County, is dependent on Monroe County's natural resources. The tourists who come to Monroe County are, in large part, attracted to Monroe County by its environmental qualities. Unfortunately, tourists are generally the worst abusers of the natural environment of Monroe County. This is true whether a tourist is staying in a motel or a Short-Term Rental Property. Tourists have more free time and, as a consequence, tend to participate in the recreational activities available in Monroe County more frequently and intensely than permanent residents. They simply use the resources more than a permanent resident. For example, in addition to spending more time on the water during good weather, tourists tend to engage in water activities even during inclement weather. Unlike a permanent resident who can wait until the next clear weekend, a vacationer will not necessarily be in Monroe County when the weather clears and therefore, is likely to be on the water at every opportunity. Tourists use the resources of the Florida Keys ACSC throughout their vacation. Unlike permanent residents, who are limited primarily to enjoying the natural environment of the Florida Keys ACSC on weekends and holidays, tourists are free to enjoy the environment everyday they are in Monroe County. In addition to the more frequent and intense use of the resources of Monroe County, tourists also cause harm to the environment because of their lack of knowledge about the Florida Keys ACSC or because they simply don't care. Monroe County's nearshore waters consist of numerous unmarked channels that leave many areas of Monroe County, including many canals of IS Districts. The unmarked channels can be difficult to navigate because of shallow waters typical of the Florida Keys. Navigation through these channels is learned largely from experience. The shallow nearshore waters contain beds of seagrasses that provide an important part of the ecosystem of the Florida Keys. They support juvenile fish and shellfish, which in turn provide feeding stock for birds and larger fish species. Grounding on these seagrass beds causes propeller scaring damage to the seagrasses. Tourists are also not familiar or do not care about limits on the numbers of fish and other marine life that can be caught, the sensitively of coral reefs and other natural resources of the Florida Keys ACSC, or the need to minimize human contact with the Key Deer. As a result, tourist tend to create more harm to most of the environmental features of the Florida Keys ACSC. Tourists that stay in Short-Term Rental Properties located in IS Districts and other land use districts are not significantly different from tourists that stay in other transient rentals available in Monroe County such as hotels or motels in terms of their impacts on the environment. The adverse impacts on the environment from tourists described, supra, are caused by tourists regardless of where they may be staying. Tourists that stay in Short-Term Rental Properties, however, do cause slightly more harm to the environment than other tourists for several reasons. First, a large number of tourists bring their own boats and ski jets with them to Monroe County. Those who stay in Short-Term Rental Properties generally do not operate or store their boats out of commercial marinas or use public boat ramps. As a consequence, it is more difficult to educate them about the adverse impacts they may cause on the environment. Marinas and other commercial locations where boats may be docked provide greater information about the waters of the Florida Keys and are more likely to have adequately marked access channels than Short- Term Rental Properties. Marinas, hotels, and motels also have knowledgeable individuals available to answer questions concerning the surrounding waters, a service not available to Short-Term Rental Property occupants. Prohibiting Short-Term Rental Properties in IS Districts will reduce the number of inexperienced boaters using the numerous canals of IS Districts to access the waters of Monroe County. Secondly, tourists that occupy Short-Term Rental Properties are more likely to cause harm to the Key Deer and other sensitive natural resources due to the proximity of their Short-Term Rental Property to the Key Deer and other resources. Key Deer inhabit the Florida Keys primarily on Big Pine Key. The Key Deer is an endangered species. Properties located on Big Pine Key and in other areas where Key Deer are found are used for Short-Term Vacation Rental Properties. Adverse impacts on the Key Deer result from their interaction with humans, through feeding, automobile deaths, and dogs that chase the Key Deer. While all tourists have impacts on the Key Deer due to their interaction with the them, the location of Short-Term Rental Property within the Key Deer habitat, especially areas located away from the main highway corridor of the Florida Keys, U.S. Highway 1, increases the amount of interaction between those tourists who occupy those Short-Term Rental Properties and the Key Deer. Tourists staying in IS Districts on Big Pine Key, especially those in Port Pine Heights at the north end of the Key, feed the Deer more because they are there more often, and cause more traffic problems because of the drive required to get to their rental property. Principle "e" requires that land development regulations limit the adverse impacts of development on water quality. There are public health concerns associated with untreated or improperly treated sewage, including viruses, bacteria, and parasites. Throughout most of the Florida Keys ACSC, septic tanks are used to dispose of sewage. Many of the septic tanks were installed years ago and do not meet today's standards for septic tanks. The size of a septic tank that must be installed depends on what the property will be used for. For single family residences, it is assumed that 100 gallons per day of sewage will be disposed of. Hotels are also assumed to create the same amount per room, while resorts, camps, and cottages are assumed to produce 200 gallons per day. Establishments with self-service laundries are assumed to produce 750 gallons per day. The use of Short-Term Rental Properties is somewhere between the use of single-family residence, hotels, resorts, and establishments with self-service laundries because of the similarity in how tourists in Short-Term Rental Properties and occupants of other transient locations live. Additionally, Short-Term Rental Properties are often occupied with more persons than would normally be found in a single-family residence. Although some septic tanks are designed with even more capacity than may be required by rules, not all septic tanks are designed to handle the increased use that occupants of Short-Term Rental Properties can cause. As a consequence, there is at least the potential for adverse consequences to the water of the Florida Keys ACSC to the extent that Short-Term Rental Properties are not better regulated by the County. Through the Ordinance, the County is attempting to ensure that the potential harm from the over use of septic tanks in Monroe County is regulated. The Ordinance limits the number of occupants of Short-Term Rental Properties. The Ordinance also requires that applicants for vacation rental permits submit a report from the Department of Health verifying compliance with existing septic tank or on-site sewage disposal system regulations. The Ordinance has no direct impact on Principle (i) and some parts of the other environmental Principles. The Ordinance is not, however, inconsistent with any of the Principles which deal with the environment. Community Character and Historical Heritage of the Florida Keys. Section 380.0552(7)(f), Florida Statutes, provides for a consideration of the "community character" of the Florida Keys, in addition to environmental considerations. This principle is consistent with the legislative intent set out in Section 380.0552(2)(b), Florida Statutes, that a local government establish a land use management system that promotes the community character of the Florida Keys. Section 380.0552(7)(g), Florida Statutes, includes the following Principle: "To protect the historical heritage of the Florida Keys." Although the evidence proved that the vacation rental of single-family residences has been a part of the character and historical heritage of the Florida Keys for many years, the problem being dealt with by the County through the Ordinance has not. The Ordinance does nothing to harm the community character or historical heritage of Monroe County. Public Investments. Section 380.0552(7)(h), Florida Statutes, requires that "the value, efficiency, cost-effectiveness, and amortized life of existing and proposed major public investments be protected, including the following investments: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and the Florida Keys Electric Co-op; and Other utilities, as appropriate. This principle is consistent with the legislative intent set out in Section 380.0552(2)(c), Florida Statutes, that a local government establish a land use management system that promotes orderly and balanced growth in accordance with the capacity of available and planned public facilities and services. The evidence in this case failed to prove that the Ordinance has any impact, positive or negative, on "existing and proposed major public investments " Affordable Housing. Section 380.0552(7)(j), Florida Statutes, provides the following Principle: "To make available adequate affordable housing for all sectors of the population of the Florida Keys." This Principle is consistent with the legislative intent set out in Section 380.0552(2)(d), Florida Statutes, that a local government provide affordable housing in close proximity to places of employment in the Florida Keys. There is a significant problem finding housing in Monroe County. It is especially difficult finding housing affordable to lower income residents. The shortage of housing has been caused by the lack of available developable land and restrictions on development, including those imposed by the Rate of Growth Ordinance (hereinafter referred to as "ROGO"). ROGO limits the number of new permanent residential units which may be constructed in the Florida Keys to 255 per year. Because of the restrictions on available new housing in Monroe County, prices for residential property have increased over the years. Currently, most 2 to 3 bedroom properties used as Short-Term Rental Properties are selling for $200,000.00 to $300,000.00. These properties do not come under the definition of "affordable housing" for lower income residents. "Affordable housing" is defined in terms of housing which can be afforded by very-low income, low-income, and moderate-income persons. Homes that costs over $200,000.00 do not constitute "affordable housing" as defined in the County's Land Development Regulations. The market for homes selling for over $200,000.00 in Monroe County is not high. Therefore, to the extent that properties located in IS Districts that are currently used as Short-Term Rental Properties are placed on the market, there will not be a direct increase in housing for very-low income, low- income, or moderate-income persons. Many of the Short-Term Rental Properties in Monroe County are second homes that are used only part of the year by the owners and are used as Short-Term Rental Properties the rest of the year. Some Short-Term Rental Properties are properties that have been purchased for investment purposes and/or with the intent of using the properties as the owners' permanent residence upon retirement. As a result, these properties are not available for use by permanent residents. Regardless of their costs, with a limited number of new residential properties allowed under ROGO, the use of new properties as Short-Term Rental Properties necessarily reduces the overall availability of housing in Monroe County. The restriction caused in the overall housing market in Monroe County can reasonably be expected to also negatively impact the availability of affordable housing. Potential revenues to property owners from Short-Term Rental Properties in IS Districts are higher then the potential revenues from long-term rentals to permanent residents. Consequently, as more property owners in IS Districts are attracted to using their properties as Short-Term Rental Properties, there is a reduction in the amount of housing available for long-term rentals. Therefore, the use of properties in IS Districts as Short-Term Rental Properties decreases the supply of long-term rentals available for residents of Monroe County. By prohibiting the use of properties in IS Districts as Short-Term Rental Properties, the total properties in Monroe County available for housing, including for long-term rentals, for permanent residents, will increase. As supply increases demand for all housing, including an affordable housing to some small extent, will be better met. There is a demand for long-term rentals in Monroe County. Two to three bedroom homes located in IS Districts can easily be rented for $1,000.00 to $1,500.00 per month. Some segment of the permanent population of Monroe County could afford such rentals if they were available, freeing up less expensive housing. Additionally, some absentee owners are able to purchase more expensive property because of their ability to rent the property as Short-Term Rental Property and apply the rental income to meet a higher mortgage payment. As a result, the real estate market in Monroe County builds more expensive homes to meet the demand. To the extent that this market for higher priced homes is reduced by the Ordinance, the allocation of ROGO residential units may be used for less expensive housing. The overall impact on the increase in available housing for permanent residents of Monroe County as a result of prohibiting Short-Term Rental Properties in IS Districts will generally "trickle" down throughout the entire housing market and benefit the availability of affordable housing. Natural or Manmade Disaster and Post-Disaster Relief. Section 380.0552(7)(k), Florida Statutes, provides the following Principle: "To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or manmade disaster and for a postdisaster reconstruction plan." Hurricane evacuation in Monroe County is a difficult problem because of the low elevations in the Florida Keys and the lack of evacuation routes. Through most of the Florida Keys, there is only one evacuation road: U.S. Highway 1. The County has adopted, and put in place, hurricane evacuation plans for Monroe County. Estimated hurricane evacuation times for Monroe County determine the extent to which growth can be allowed in the future. The estimated hurricane evacuation time for Monroe County is determined by a ROGO hurricane evacuation model. The model takes into account seasonal residents, hotel/motel residents, transient rental occupants, and permanent residents. Petitioners presented evidence in an effort to show that the reduction in Short-Term Rental Properties will cause the calculation under the ROGO hurricane evacuation model to be inaccurate. The evidence failed to support such a finding. The evidence failed to prove how occupants of Short- Term Rental Properties are treated for purposes of the hurricane evacuation model. Testimony that they are included as seasonal occupants was not credible. Even if occupants of Short-Term Rental Properties are considered seasonal occupants for hurricane evacuation purposes, it does not necessarily mean that the Ordinance is inconsistent with Principle "k." It would only mean that the results of the hurricane evacuation model need to be revised. Rather than hampering hurricane evacuation efforts in Monroe County, the Ordinance should have a beneficial impact by giving the County more accurate information about the actual number of Short-Term Rental Properties in Monroe County. Consideration of the Principles as a Whole. Section 380.0552(7), Florida Statues, specifically provides that the Principles are to be "construed as a whole and no specific provision shall be construed or applied in isolation from the other provisions." The evidence in this case supports a conclusion that the Ordinance has no or little impact on most of the Principles, except Principles "d" and "l." To the extent that there is any impact on the other Principles, the evidence proved that the Ordinance is consistent. This finding, however, is not dispositive of this case. Ultimately, the question of whether the Ordinance is consistent with the Principles is dependent upon an evaluation of the consistency of the Ordinance with Principles "d" and "l." Clearly, the Ordinance will have a short-term negative impact on the economy of Monroe County. Just as clearly, the Ordinance will enhance the safety, health, and welfare of the residents of Monroe County. When the legislative intent of Chapter 380, Florida Statutes, is taken into account, it is clear that this is not the type of land use decision the State is most concerned with. Because the Ordinance does essentially no harm to the natural environment and waters of the Florida Keys ACSC, the State's interest in the Florida Keys ACSC is protected. The issue is essentially a local one. Consequently, some deference should be afforded the County to make this difficult choice. Given the purpose of the Department's involvement in this matter, the legislative intent of Chapter 380, Florida Statutes, the County's effort in considering the issues, and the evidence presented in this proceeding, it is concluded that the County's effort to protect the public safety, health, and welfare is sufficient to overcome any harm to the economy. Therefore, the Ordinance is consistent with the Principles, considered as a whole.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Community Affairs enter a Final Order approving Monroe County Ordinance 004-1997 as consistent with the Principles for Guiding Development of Section 380.0552(7), Florida Statutes. DONE AND ENTERED this 30th day of September, 1998, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 1998. COPIES FURNISHED: Kelly B. Plante, Esquire Kenneth J. Plante, Esquire Wilbur E. Brewton, Esquire Gray, Harris and Robinson, P.A. 225 South Adams, Suite 250 Tallahassee, Florida 32301 Jeffrey Bell, Esquire Herzfeld & Rubin 5310 North West 33rd Avenue, Suite 102 Ft. Lauderdale, Florida 33309 Kathleen R. Fowler, Assistant General Counsel Sherry Spiers, Assistant General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Ralf G. Brookes, Esquire Hugh J. Morgan, Esquire Karen K. Cabanas, Esquire Morgan & Brookes 317 Whitehead Street Key West, Florida 33040 James T. Hendrick Monroe County Attorney 310 Fleming Street Key West, Florida 33040 James F. Murley, Secretary Department of Community Affairs Suite 100 2555 Shummard Oak Boulevard Tallahassee, Florida 32399-2100 Stephanie Gehres Kruer, General Counsel Department of Community Affairs Suite 325-A 2555 Shummard Oak Boulevard Tallahassee, Florida 32399-2100
The Issue Appellants raised several issues on appeal, including: (1) whether Appellee retroactively applied the LDC to Appellants' lawfully established non-conforming vacation rental use; (2) whether Appellee violated Appellants' right to due process by applying Ordinance 004-1997, and its 2016 counterpart, retroactively to events which occurred and were established as a matter of record prior to 1997; (3) whether the Appellee erred by requiring compliance with Ordinance 004-1997, and its 2016 counterpart, in light of the doctrine of laches and equitable estoppel; (4) whether Appellants acquired vested rights when Ordinance 004-1997 was enacted, and the circuit court opinion judicially recognized those vested rights; and (5) whether Appellants' compliance with Ordinance 004-1997 and its 2016 counterpart, would be unduly burdensome.
