The Issue Whether or not the Petitioner is liable for tax, penalties and interest under the authority of Chapter 212, Florida Statutes, on certain purchases, rentals/leases and repairs to capital equipment made by the Petitioner on paging equipment, for the audit period October 1, 1974 through September 30, 1977. The audit also considers the purchase of office supplies in the aforementioned period, but for the purposes of this hearing the Petitioner is not contesting the imposition of tax, penalty and interest on those items. Furthermore, the Petitioner does not contest the mathematical calculations in arriving at the tax as set forth in the Notice of Proposed Assessment; instead, it is an attack on the right of the Respondent to affect such a tax against the Petitioner on the items in dispute.
Findings Of Fact This cause came on for consideration based upon the Petition filed by Gabriel Communications Corporation protesting a proposed deficiency of sales tax liability asserted by the Respondent, the Florida Department of Revenue, by its 1st Revised Notice of Proposed Assessment of Tax, Penalties and Interest Under Chapter 212, Florida Statutes. The contents of that 1st Revised Notice of Proposed Assessment, to include the worksheets of the Respondent's Tax Examiner, may be found as the Respondent's Composite Exhibit No. 1 admitted into evidence. The proposed assessment contains claims for tax, penalties and interest on the Petitioner's purchase, rentals/lease and repair to capital equipment; to wit, pagers made by the Petitioner. The purchases and rentals/leases were involved in transactions between the Petitioner and certain suppliers to the Petitioner and the repairs pertain to materials necessary to keep the pagers in working order. There are additional items in the audit which concern certain office supplies purchased by the Petitioner for which sales tax was not paid; however, for the purposes of this proceeding those items are not contested by the Petitioner. Moreover, Gabriel Communications Corporation does not contest the amount of the assessment, assuming that the Respondent is entitled in law to make the assessment on the matters in dispute. Gabriel Communications Corporation is a Florida corporation and a holder of a Certificate of Public Convenience and Necessity issued by the Florida Public Service Commission, which certificate authorizes Gabriel to provide radio, telephone and paging services to the public in certain areas in Florida. The Petitioner's corporate office is in Fort Lauderdale, Florida. Gabriel Communications Corporation is one of forty-three organizations licensed by the Public Service Commission of the State of Florida as a radio common carrier. (The conclusion is borne out in the late-filed exhibit of the Petitioner, which is Exhibit No. 5, admitted into evidence, being a statement from the Commission Clerk for the Florida Public Service Commission.) The tax that the Respondent is attempting to impose in this matter is a tax on the pagers which the Petitioner has purchased or rented/leased from suppliers to be provided to the Petitioner's customers to assist in establishing the paging services which the Petitioner offers to those customers. The proposed tax also involves a tax asserted against the Petitioner on those items of inventory which the Petitioner purchases from its suppliers for purposes of making repairs to the equipment its customers are utilizing. The focus of the Petitioner's argument in support of this Petition is centered on the provision of Rule 12A-1.46(8) (i), Florida Administrative Code, which in discussing taxation involving telephone, telegraph and other communication services by radio common carrier states as follows: "(8) Radio Common Carriers. * * * The charge by the radio common carrier for one-way pocket pager service is exempt." In the view of the Petitioner this means that the entire transaction between the Petitioner and its customers involving paging services, to include the initial purchase or rental/lease of pagers from its suppliers and repairs thereto, would be exempt from any tax under Chapter 212, Florida Statutes. The Petitioner supports its argument in this vein by citing Attorney General's Opinion 68-62, dated 1968, dealing with an interpretation of Section 212.05(5), Florida Statutes, and the subsequent Florida Revenue Commission ruling No. 068-56 of June 27, 1978. That section, 212.05(5), Florida Statutes, states: (5) At the rate of 4 percent on charges for all telegraph messages and long distance telephone calls beginning and terminating in this state; on recurring charges to regular subscribers for local telephone service and for wired television service; on all charges for the installation of telephonic, wired television, and telegraphic equipment; and, at the same rate, on all charges for electrical power or energy. Telephone and telegraph services originating within this state and completed outside this state or originating outside this state and completed within this state are not taxable. The provisions of s. 212.17(3), regarding credit for tax paid on charges subsequently found to be worthless, shall be equally applicable to any tax paid under the provisions of this section on charges for telephone and telegraph services and electric power subsequently found to be uncollectible. The word 'charges' in this subsection shall not include any excise or similar tax levied by the federal government, any political subdivision of the state, or any municipality upon the purchase or sale of telephone, wired television or telegraph service, or electric power, which tax is collected by the seller from the purchaser." The Petitioner makes a further argument that the provision which the Respondent relies on in proposing its assessment does not have application. That provision is Rule 12A-1.46(8)(e), Florida Administrative Code, and it reads: "(8) Radio Common Carriers. * * * (e) Sales, rentals or repairs of machines, equipment, parts or accessories to a radio common carrier for its use in providing communication services are taxable. This includes parts and materials used by radio common carriers in the repair and installation of their own communication equipment. When purchasing equipment for resale or for exclusive rental, a radio common carrier should furnish its supplier a resale certificate in lieu of paying the tax." The Petitioner doesn't feel that this provision has application to it because of the perception that the sale-rental or repair of equipment is not for purposes of the radio common carrier's use in providing communication service, but is for the benefit of the ultimate consumer/customer of the Petitioner. Finally, the Petitioner argues that if a tax should be allowed, it should be on the arrangement between the Petitioner and the customer, on the theory that the arrangement involves the rental of a pager by the customer and the Respondent should not make that tax have retroactive application to the transactions in question. From the point of view of the Respondent, Section 212.21(2), Florida Statutes, establishes the general proposition that tax shall be levied for sales and rentals considered under Chapter 212, Florida Statutes, except to the extent that those transactions were specifically exempted. To the Respondent, the only exemption in application is that exemption found in Rule 12A-1.46(8)(i), Florida Administrative Code, and that only pertains to the one-way pocket pager service, not as Rule 12A-1.46(8)(e), Florida Administrative Code, sets out, the, "sales, rentals or repairs of machines, equipment, parts or accessories to a radio common carrier for its use in providing communication services." In the position of the Respondent, the purchase or rental of equipment and the repair to that equipment made by the Petitioner are for its own use in providing the separate exempt service to the Petitioner's customers. After analyzing the arguments in behalf of the parties, the Respondent's position is found to be persuasive. Although the service charges made by the Petitioner to its consumer are exempt from taxation, under authority of Rule 12A-1.46(8)(i), Florida Administrative Code, the purchase or rental/lease and repair to the capital equipment of the Petitioner which it uses in providing that service to its consumers are taxable pursuant to Rule 12A- 1.46(8)(e), Florida Administrative Code. There flows from that tax liability certain interest charges not to exceed a total penalty of 25 percent in the aggregate (see Section 212.12(2), Florida statutes). However, the Respondent may for good cause shown compromise those penalties after investigation reveals that the penalty would be too severe or unjust (see Section 212.12(5), Florida statutes). In view of the testimony offered by a number of radio common carriers in the State of Florida licensed by the Florida Public Service Commission to the effect that they misunderstood the tax liability under Rule 12A-1.46(8)(e), Florida Administrative Code, and the acknowledgement of the undersigned of that difficulty, it would be recommended that no penalty be imposed in this instance. (A review has been made of the proposed findings of fact and conclusions of law submitted, and they have been utilized in this Recommended Order in those instances in which the proposals were deemed to be appropriate.)
Recommendation Upon a full consideration of the facts in this cause, it is recommended that the Petitioner be required to pay the tax and applicable interest due and owed under the 1st Revised Notice of Proposed Assessment of Tax, Penalties and Interest, which is the subject of this case. It is further recommended that the penalties be waived. DONE and ENTERED this 29th day of August, 1978, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of August, 1978 COPIES FURNISHED: John D. Moriarty, Esquire Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32304 John W. Costigan, Esquire Post Office Box 669 Tallahassee, Florida Maxie Broome, Jr., Esquire Department of Legal Affairs The Capitol Tallahassee, Florida 32304
The Issue Whether Respondent violated Section 112.3143(3), Florida Statutes, by voting on September 7, 2000, September 21, 2000, October 19, 2000, November 30, 2000, and December 21, 2000, as a member of the Palm Beach Gardens City Council on certain matters affecting the Mirasol development project when Respondent's homebuilding company was engaged in discussions with the master developer of the project concerning the company's participation in the project, as alleged in the Order Finding Probable Cause, and, if so, what is the appropriate penalty.
Findings Of Fact Based on the evidence adduced at the public hearing and the record as a whole, the following findings of fact are made to supplement and clarify the extensive factual stipulations set forth in the parties' Joint Prehearing Stipulation5: Each of the "Sabatello companies" referred to in the parties' Stipulation of Fact 3 was wholly owned by Respondent and his brothers Paul, Theodore, and Michael Sabatello, with each of the four brothers owning an equal (25%) share of the company. Of these companies, only one, Sabatello Development Corporation IV (SD IV) was involved in the Mirasol Project. SD IV has been in continuous existence since its formation in or around the 1980's. It is a Subchapter S corporation. As such, its profits are passed through to its four shareholders, Respondent and his three business associate- brothers, in equal amounts. As president of SD IV, Respondent "oversees all [of its] functions." Craig Perna, the Taylor Woodrow "representative" mentioned in the parties' Stipulation of Fact 5, had "overall responsibility for every aspect of the [Mirasol] development" project, including the "selection of builders." The builder selection process started with Mr. Perna getting the names of "prominent builders in the Palm Beach Gardens market" having "excellent reputation[s]" and then contacting them to inquire as to their interest in participating in the Mirasol Project. Respondent was among those Mr. Perna contacted. He was contacted (by telephone) in mid-May of 2000. At that time, he advised Mr. Perna he was "very interested" in having his company considered for selection as a builder in Mirasol. As a member of the Palm Beach Gardens City Council, Respondent had reviewed documents submitted by Taylor Woodrow to obtain PCD approval for the Mirasol Project. As a result, he was familiar with the project and recognized its potential. At the time, residential "golf developments," like the Mirasol Project, sold out quickly and were "very profitable." Builders competed vigorously for the relatively limited opportunities that were available to build in these developments. Having the upper hand over builders because of this competitive landscape, Taylor Woodrow, as the master developer of the Mirasol Project, did not have to engage in "give [and] take with any builder" concerning contractual matters. As Mr. Perna put it in his deposition testimony, "You either wanted to participate or you didn't under my terms, period, the end." Respondent's company, SD IV, was one of at least ten or builders vying to be selected to participate in the Mirasol Project. Over a period of approximately eight months (from mid- May 2000, to mid-January 2001), Taylor Woodrow requested and obtained from SD IV and from the other would-be participants in the project (Other Builders) information and documents in order to evaluate these builders' qualifications for selection. The requests directed to SD IV were extensive and concerned such matters as the company's financials, products, pricing, form contracts, sales operations, customer service department, past accomplishments, current capacity, and "appetite for future work." Taylor Woodrow also wanted to see floor plans and architectural drawings. These requests were made both in writing and verbally. Wanting to maximize its chances of being selected, SD IV provided Taylor Woodrow with "whatever [was] ask[ed] for." Initially, Respondent was SD IV's "sole contact person" in its dealings with Taylor Woodrow. In this capacity, he engaged in "numerous discussions" with Taylor Woodrow representatives regarding SD IV's possible participation in the Mirasol Project. On or about May 17, 2000, Taylor Woodrow sent to Respondent and the Other Builders copies of "artist's drawings of potential elevations of homes that would be built in Mirasol," accompanied by a cover letter requesting feedback from the would-be project participants in the form of "more specific" drawings, consistent with the renderings, showing what they would build if selected. These "more specific" drawings were to be reviewed by the Mirasol Architectural Review Committee to determine whether or not they were acceptable. In a conversation that Respondent had with Mr. Perna following his receipt of this May 17, 2000, correspondence, Respondent stated, in reference to the elevations depicted in the "artist's drawings" Taylor Woodrow had provided, that "they were within the basic parameters" of what SD IV intended to build if selected. SD IV subsequently prepared and submitted to Taylor Woodrow the "more specific" drawings that had been requested. "[M]ost of the drawings" were "very similar" to drawings that SD IV had used in other developments. The first vote that Respondent allegedly unlawfully cast was on Resolution 71, 2000 at the Palm Beach Gardens City Council September 7, 2000, meeting. As the summary statement on its first page reflects, Resolution 71, 2000 was: A resolution of the City Council of the City of Palm Beach Gardens, Florida, providing for approval of a site plan of development for Parcels 1 through 5 with a total of 114 zero lot line single-family home lots and 85 single-family custom home lots within the Golf Digest (Mirasol) PCD, located along PGA Boulevard and as more particularly described herein; providing for five waivers to allow for reductions in the side interior setback, an increase in lot coverage, the placement of pools, screen enclosures and accessory structures within the side interior and rear setbacks, and a reduction in the minimum lot width requirement; providing for conditions of approval; and providing for an effective date. The minutes of the September 7, 2000, Palm Beach Gardens City Council meeting reflect that Respondent and City Attorney Rubin, among others, were present and that, with respect to Resolution 71, 2000, in pertinent part, the following occurred: Resolution 71, 2000- Principal Planner Jim Norquest presented the project. The City Council was assured by the petitioner [Taylor Woodrow] that an architectural committee with proper requirements had been established. Ann Booth, Urban Design Studio, agent for the petitioner, described the project. Landscaping themes for different parcels were described by the landscape architect. Councilman Clark made a motion to approve Resolution 71, 2000. Vice Mayor Jablin seconded the motion, which carried by unanimous 5-0 vote. The next allegedly unlawful votes that Respondent cast were on Resolutions 72, 2000 and 73, 2000 at the Palm Beach Gardens City Council September 21, 2000, meeting. As the summary statement on its first page reflects, Resolution 72, 2000 was: A resolution of the City Council of the City of Palm Beach Gardens, Florida, providing for approval of a site plan of development for Parcels E, F and G with 35, 39, and 67 zero lot line single-family home lots within the Golf Digest (Mirasol) PCD, located along PGA Boulevard and as more particularly described herein; providing for five waivers to allow for reductions in the side interior setback, an increase in lot coverage, the placement of pools, screen enclosures and accessory structures within the side interior and rear setbacks, and a reduction in the minimum lot width requirement; providing for conditions of approval; and providing for an effective date. As the summary statement on its first page reflects, Resolution 73, 2000 was: A resolution of the City Council of the City of Palm Beach Gardens, Florida, providing for approval of a site plan of development for Parcels H and I with 56 single-family custom home lots and 79 zero lot line single-family home lots within the Golf Digest (Mirasol) PCD, located along PGA Boulevard and as more particularly described herein; providing for six waivers to allow for reductions in the side interior setback, street side setback, an increase in lot coverage, a reduction of lot width, and the placement of pools, screen enclosures, and accessory structures within the side interior and rear setbacks; providing for conditions of approval; and providing for an effective date. The minutes of the September 21, 2000, Palm Beach Gardens City Council meeting reflect that Respondent, among others, was present and that, with respect to Resolution 72, 2000 and Resolution 73, 2000, in pertinent part, the following occurred: Resolution 72, 2000- Principal Planner Jim Norquest presented the project. Ann Booth, Urban Design Studio, agent for the petitioner [Taylor Woodrow], described recreational open space proposed by the petitioner. Petitioner was requested to include in the design a tot lot, pool, two tennis courts, and a building, for which staff was directed to draft language for a condition of approval. The language was read into the record during consideration of Resolution 73, 2000: The recreation center south of parcel F shall include a swimming pool, two tennis courts, a tot lot, and a recreation building unless different amenities are approved by City Council at site plan review. Councilman Clark made a motion to approve Resolution 72, 2000 with the additional condition as read into the record by petitioner. Vice Mayor Jablin seconded the motion, which carried by unanimous 5-0 vote. Resolution 73, 2000- Principal Planner Jim Norquest presented the project. Ann Booth, Urban Design Studio, agent for the petitioner [Taylor Woodrow], described the proposed homes and landscaping. Petitioner agreed to provide a gazebo or tot lot on Parcel H, and to allow continued access to the open space at the entrances by residents on both sides of the road. Petitioner and staff agreed to the following condition of approval, which was read into the record by petitioner: The recreation center south of parcel F shall include a swimming pool, two tennis courts, a tot lot, and a recreation building unless different amenities are approved by City Council at site plan review. Councilman Clark made a motion to approve Resolution 73, 2000 with the additional condition as read into the record by petitioner and with the understanding placed on the record by petitioner regarding the open space at the entrances to parcels H and I. Vice Mayor Jablin seconded the motion, which carried by unanimous 5-0 vote. The "waivers" that were granted by Resolutions 71, 2000, 72, 2000, and 73, 2000 were from the requirements of the Palm Beach Gardens Code that Taylor Woodrow, or whichever builder(s) it subsequently selected to build on the affected parcels, would otherwise have to meet. The next vote of Respondent's that has been called into question is his vote at the October 19, 2000, Palm Beach Gardens City Council meeting on Resolution 92, 2000. As the summary statement on its first page reflects, Resolution 92, 2000 was: A resolution of the City Council of the City of Palm Beach Gardens, Florida, providing for approval of a site plan for a[n] 8,046 square foot fire rescue and police substation within the Golf Digest (Mirasol) PCD, located 1/4 mile north of PGA Boulevard on the east side of Jog Road and as more particularly described herein; providing for waivers; providing for conditions of approval; and providing for an effective date. This "site [had to] be completed and dedicated prior to the issuance of [any] certificate of occupancy for any dwelling units in the Golf Digest [Mirasol] PCD" or the "opening of a golf course" in the PCD. The minutes of the October 19, 2000, Palm Beach Gardens City Council meeting reflect that Respondent, among others, was present and that, with respect to Resolution 92, 2000, in pertinent part, the following occurred: Resolution 92, 2000- . . . . Senior Planner Ed Tombari reviewed the petition. A representative of Gee & Jenson answered questions regarding the project and Ann Booth, Urban Design Studio, spoke on behalf of the petitioner [Taylor Woodrow]. Councilman Clark made a motion to approve Resolution 92, 2000. Vice Mayor Jablin seconded the motion, which carried by unanimous 3-0 vote. On November 3, 2000, Elaine Appleyard, a legal assistant with Taylor Woodrow, sent the following e-mail to Taylor Woodrow's Aaron Chorost, who was the chief financial officer for the Mirasol Project: Good morning Aaron - we're finalizing a redline on the Builder Agreement and need two items clarified: Is the intention to have just one closing on all of the lots? Will this particular builder be building anywhere else on the property other than Parcel 4? Mr. Chorost responded within the half hour by sending Ms. Appleyard the following e-mail: I cannot guarantee that Sabatello will purchase beyond parcel 4. It is likely that he will look to do all the 60' wide lots which means he could also purchase parcels 7 and 16 in the future. Likewise for Kenco, buying parcel 5 plus in the future could be doing parcel 12 also. Kenco may also be a builder in the custom builder program but not Sabatello. Yes, there will be only one closing for each parcel containing all the lots in the parcel. These were "completely internal" e-mail communications to which no one outside of Taylor Woodrow, including Respondent and the Other Builders, were privy. No decision had yet been made as to who would be building on Mirasol Parcel 4.6 Taylor Woodrow was even seriously considering keeping the parcel so that it could build on the property itself. At the November 30, 2000, Palm Beach Gardens City Council meeting, Respondent and the other four members of the City Council present voted in favor of Resolution 115, 2000, a consent agenda item which "approv[ed] the Golf Digest-Jog Road (AKA Mirasol Plat One) Plat." The land that was the subject of this resolution had to be platted and dedicated to Palm Beach County before any building permits could be issued for residential construction in Mirasol. On December 4, 2000, Mr. Perna sent Respondent a memorandum requesting certain information that would be needed in the event SD IV was selected to build on Mirasol Parcel 4. The memorandum read as follows: Please forward the list of your Officers and Directors for your parcel immediately. Sabatello - Parcel 4 ("Paradisio") We will be preparing the documents this week for your review. Respondent subsequently provided the requested information. The December 5, 2000, memorandum authored by City Attorney Rubin, which is referenced in the parties' Stipulation of Fact 10, was provided to all members of the Palm Beach Gardens City Council, including Respondent, as well as to the Interim City Manager. The memorandum read as follows: You have indicated that the Sabatello Companies, of which you are a principal, is currently in negotiations with the developers of the Mirasol Planned Community District ("PCD") to become a builder of homes within that community.[7] Your activities as a builder would be limited to specific parcels or pods within the PCD. You asked this office to provide a legal opinion as to your obligation to abstain from voting in your official capacity on matters relating to Mirasol that come before the City Council. Voting conflicts for members of the City Council are governed by section 112.3143, Florida Statutes. Subsection (3)(a) provides that a municipal officer shall not vote in an official capacity on any measure that "would inure to the special gain" of the officer, a principal by whom the officer is retained, or a relative or business associate of the officer. According to the state Ethics Commission, the determination of whether the officer receives a special private gain is based upon the size of the class of persons affected by the vote at issue. The Mirasol PCD encompasses a variety of residential, commercial, recreational and community uses. The residential uses range from low density single family homes to high density multi-family apartments. It is anticipated that your company's activities will be limited to the construction of single family dwellings within a specific, identifiable parcel for which a site plan has already been approved. Because of this limited involvement, there does not appear to be any requirement that you abstain from every vote relating to the approval of plats, parcels and site plans within the entire Mirasol PCD. See CEO 85-62 (city council member not prohibited from voting on rezoning of property within a large redevelopment area where member's corporation owns a parcel of land within the same area). By way of example, the City Council's approval of the site plan for the fire station or the plat for Jog Road in no way inures to your or your company's special private gain. You would, however, be required to abstain from any additional votes relating to the specific parcels or pods within the community in which your company possesses or acquires an interest by virtue of a contractual relationship with the master developer. Where a conflict of interest exists, you are required to state the nature of your interest prior to the vote and file a voting conflict memorandum with the City Clerk, within 15 days. The existence of a voting conflict does not necessarily require you to abstain from all discussion relating to the matter (although you are free to do so). If you plan to participate in discussion of a matter in which you know you have a conflict, you must file a written conflict memorandum before the public meeting. You have also expressed concern that upon learning that your company will be building homes within Mirasol, members of the public may perceive a conflict of interest in all matters relating to Mirasol. To avoid the appearance of impropriety, it would be appropriate to make the following disclos[ure] prior to any vote: "While it is anticipated that the Sabatello Companies will be building homes within Mirasol, the matter before the City Council does not concern the areas in which such construction will take place and is wholly unrelated to any interest held by me or my corporations." Should you have any questions or be in need of additional information, please do not hesitate to contact this office. In a December 8, 2000, letter to Respondent's brother and business associate, Paul Sabatello, Taylor Woodrow's James Harvey, the Mirasol Architectural Review Committee project development manager, wrote: Please accept this letter as our approval of the following items that will require administrative modification of the City of Palm Beach Gardens Parcel Four site plan: We have no objection to modifying the side yard setbacks to 3'1" and 6'11" with a minimum of 10' separation between buildings. All other approved setbacks must be met. We have no objection to moving the zero side of the lot (now 3'1" per your request) on lots 10 thru 38 to the opposite lot line. We have no objection to building the models on lots #40, #39, #7, #8, and #9. We have no objection to modifying the roof tile, body and trim, and paver colors to those submitted with your A.R.C. submission dated November 22, 2000. In addition, the Rafael, Michelangelo, Dante and Be[rn]in[i] models have been reviewed and meet the Design Guidelines established for this parcel.[8] If you should need any further information feel free to give me a call. Those of the Other Builders "being considered for [Mirasol] Parcel 4" were sent similar letters advising them of the Mirasol Architectural Review Committee's action on the plans and drawings that they had submitted. On December 11, 2000, Ms. Appleyard sent the following e-mail to Mr. Perna: Attached are redlined and clean copies of the most recent versions of the Parcel Builder Agr. and Brokerage Agr. Marc asks that you stamp these draft before sending to Carl. [T]hanks. Although it was Mr. Perna's intention that copies of these "draft" agreements be sent to all those "in the mix to become a builder" in Mirasol, including Respondent's company, for their review and comments, Respondent never received any agreement marked "draft" from Taylor Woodrow. Respondent, however, did receive the following letter, dated December 18, 2000, from Mr. Perna: Please find attached the matrix regarding your price lot in Paradisio[9] with corresponding square footage. You can see that it will be necessary to reduce your 2 story to 4,000 square feet in order to fit into the overall structure. You can split up your premiums but standard options and upgrades must stay within the box. Please do not hesitate to give me a call if you have any questions. The "Mirasol Housing Price Matrix," a copy of which was enclosed with the letter, provided that the "base lot price charged to [the selected] builder" for the 46 lots in Mirasol Parcel 4 would be $139,000 per lot. "That would be the deal" for whoever was selected to build on that parcel. There was no room for negotiation. Copies of the "Mirasol Housing Price Matrix" were also sent to the Other Builders. Taylor Woodrow advised SD IV, as well as the Other Builders, that, if selected, they would be expected to start construction of their model homes as soon as possible so that the homes could be completed before the last day of March when the "season" ended. It therefore encouraged them to take such preliminary steps as might be necessary for them to "be ready to pull a building permit" upon the conclusion of the builder selection process.10 This included filing paperwork to obtain City of Palm Beach Gardens administrative (staff) approval of site plan modifications endorsed by the Mirasol Architectural Review Committee.11 Any builder wanting to file such pre- selection paperwork had the permission of Taylor Woodrow (the property owner) to do so (as Taylor Woodrow's agent). SD IV, through Paul Sabatello, filed such paperwork, along with a $150.00 check (for the filing fee),12 with the Palm Beach Gardens Planning and Zoning Division on December 18, 2000. In doing so, SD IV was seeking approval of the modifications to the Mirasol Parcel 4 site plan referenced in Mr. Harvey's December 8, 2000, letter to Paul Sabatello. SD IV's submission was accompanied by a cover letter, dated December 18, 2000, from Paul Sabatello to Steve Cramer, the Palm Beach Gardens' Interim Growth Management Director, which read as follows: Please find enclosed architectural drawings, exterior colors and site plans for your review and approval for Parcel 4 (Paradisio) Mirasol. The floor plan and building colors vary slightly from the prototypical plans previously submitted. We are requesting at this time an approval for the ability to use 3'-1" + 6'11" side yard set backs instead of the usual 0 + 10'. These set back conditions provide the required 10' building separation while according to Table 600 of the Standard Building Code allowing us to include some glass on what would be the zero side. The enclosed site plans show this clearly for the proposed models on specific lots. This set-back condition would apply to all lots in Parcel 4. One additional request for approval. The original site plan indicated zero side of lots with the "zero flip" occurring on lots 9, 10 and 38, 39. [T]his is not possible with the new set back[] conditions. Therefore, we are requesting that the zero side 3'-1" set back side be as follows: Lots 1-23 "Zero" on Right Lots 24-46 "Zero" on Left The enclosed site plan indicates the change that we are requesting. Also enclosed please find the letter of approval from the Mirasol Architectural Review Committee for the above-mentioned request.[13] Should you have any questions do not hesitate to call. Thank you. The "architectural drawings" that were submitted showed the Da Vinci model (on lot 9), the Raphael model (on lot 10), the Bernini model (on lot 11), the Dante model (on lot 39), and the Michelangelo model (on lot 40). On the forms that were part of the filing, the representation was made that SD IV owned Mirasol Parcel 4. In fact, Taylor Woodrow was the owner of the property, and it had merely given SD IV permission to make the filing on its behalf. It had not, at the time of the submission, entered into any agreement with SD IV regarding ownership of the property. Among the other things that SD IV did around this time to be "ready to go" if and when selected by Taylor Woodrow to build on Mirasol Parcel 4 was to assemble materials it would need to submit to the Palm Beach Gardens Building Department to obtain building permits to construct model homes on the parcel. As part of this process, Respondent signed and dated building permit application forms. He did so as early as December 20, 2000, the same date that a list of subcontractors (to accompany the permit applications) was prepared.14 Respondent recognized that it was a "gamble" to do the things that SD IV was doing to ready itself to begin building in Mirasol because there was the chance that the company would not be chosen to participate in the project and that all its preparation would be for naught. Nonetheless, he considered it to be a "gamble" worth taking and made good business sense. Such pre-selection risk-taking was not uncommon among builders doing business in Palm Beach Gardens.15 The most recent of Respondent's allegedly unlawful votes were cast at the Palm Beach Gardens City Council December 21, 2000, meeting. These votes were in favor of approving six items on the consent agenda (Resolutions 127, 2000; 128, 2000; 129, 2000; 130, 2000; 131, 2000; and 132, 2000) involving the platting of parcels that were part of the Mirasol Project, including Mirasol Parcel 4, as more particularly described in the parties' Stipulation of Fact 11. These plats had to be approved before any building permits could issue. By the time of the December 21, 2000, votes, Respondent was aware that Mirasol Parcel 4 was where SD IV would be building (at least at the outset) if selected to participate in the Mirasol Project. He was hopeful that his company would get the opportunity to build there, but it was a matter over which he had no control. It was in the hands of Taylor Woodrow. As of December 21, 2000, Taylor Woodrow had not extended SD IV an offer to participate in the Mirasol Project, nor had it given SD IV any assurances that such an offer would be forthcoming. There was uncertainty as to whether SD IV would be selected. It was not until the following month that this uncertainty was eliminated when Taylor Woodrow finally made its decision to allow SD IV to become a builder in Mirasol, specifically on Mirasol Parcel 4. In voting on these and prior resolutions affecting the Mirasol Project, Respondent was acting in a manner consistent with the verbal advice he had solicited from the City Attorney before each vote, as well as the advice contained in City Attorney Rubin's December 5, 2000, memorandum (which is set forth above). At the time of each of these votes, Respondent's company did not have "an interest by virtue of a contractual relationship with the master developer" in any property in Mirasol. Therefore, according to what he had been advised by City Attorney Rubin, he was not required to abstain from voting. On December 28, 2000, the City of Palm Beach Gardens Planning and Zoning Division granted its approval of the modifications SD IV had sought (through its December 18, 2000, filing) to the Mirasol Parcel 4 site plan. Respondent first learned that his company had been selected to build on Mirasol Parcel 4 when he received from Taylor Woodrow a letter dated January 22, 2001, so advising him, along with a Parcel Builder Agreement and Exclusive Agency Brokerage Agreement for Mirasol Parcel 4. These agreements were fully executed in February of 2001. SD IV paid $139,000 per lot for the lots that it purchased in Mirasol Parcel 4 (consistent with the pre-selection pronouncement that had been made in the 'Mirasol Housing Price Matrix" that Taylor Woodrow had distributed). SD IV was one of first builders to start construction in Mirasol. SD IV successfully built out Mirasol Parcel 4. It sold all of the 46 homes it built.16 A total of 12 builders, including SD IV, participated "in the whole [Mirasol] [P]roject." Not all of the Other Builders were selected to participate in the project.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a public report finding the evidence presented at the public hearing in this case insufficient to clearly and convincingly establish that Respondent violated Section 112.3143(3), Florida Statutes, by voting at the September 7, 2000, September 21, 2000, October 19, 2000, November 30, 2000, and December 21, 2000, Palm Beach Gardens City Council meetings on matters affecting the Mirasol Project and dismissing the complaint filed against Respondent. DONE AND ENTERED this 4th of March, 2009, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 2009.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the arguments of counsel and the entire record compiled herein, the following relevant facts are found. Based on an Administrative Complaint filed on July 6, 1979, the Florida Construction Industry Licensing Board (herein sometimes referred to as the Petitioner or the Board) seeks to take disciplinary action against Licensee Richard E. Ulbricht, d/b/a Ulbricht Construction, Inc., and to impose an administrative fine or $500.00. Respondent is a registered contractor who holds the following licenses: RG 0011921 - Registered General/Active/Issued RGA 0011921 - Registered General/Active/Issued RG OB 11921 - Registered General/Delinquent RM 0014920 - Registered Mechanical/Active/Issued RM 0017586 - Registered Mechanical/Delinquent RS 0019201 - Registered Sheet Metal/Active/Issued RC 0019264 - Registered Roofing/Active/Issued Respondent was first licensed by the Petitioner during February, 1972. On June 14, 1977, Respondent qualified Ulbricht Construction, Inc., as the business entity through which he would conduct his contracting business. The construction activities involved herein took place in the City of Palm Bay, Florida. Palm Bay has no local licensing board. On June 12, 1978, Respondent entered into a contract with Michael D. and Karen K. McCammack to construct a residence for the sum of $39,900.00. Respondent received the full contracted price and the transaction closed on January 4, 1979. Chelsea Title and Guaranty Company closed the transaction for Respondent and the McCammacks on January 4, 1979. Camille Guilbeau is the manager for the Palm Bay branch of Chelsea Title and Guaranty Company. Ms. Guilbeau is in charge of all closing and as such ensures that all outstanding obligations of record are paid. In keeping with Chelsea's policy of protecting itself in the event of outstanding unrecorded claims of liens, Chelsea has a policy of requiring contractors and builders such as Respondent to declare in an affidavit that there is no outstanding work which has been performed, or labor or materials for which a lien could be filed on property in which Chelsea is closing the mortgage transaction. Respondent executed such an affidavit relative to the McCammacks' property, which Chelsea relied on to close the transaction on January 4, 1979 (Petitioner's Exhibit 4). On January 4, 1979, Chelsea Title and Guaranty Company paid Rinker Materials Corporation of Melbourne, Florida, $1,201.02 based on a claim of liens filed December 15, 1978, for materials consisting of concrete block, steel and miscellaneous items which were used on the McCammack property (Petitioner's Exhibit 6). Subsequent to the date of closing, January 4, 1979, liens amounting to approximately $2,761.62 have been filed against the McCammack property based on Respondent's failure to pay bills for labor and/or materials used in connection with the construction of the McCammacks' residence. These lien claims were filed against the McCammacks' property for a drilled well, installation of a pump and tank by Perry and Leighty, Inc., of Melbourne, Florida; two septic tanks, drains and sand supplied by Pence South Brevard Sewer and Septic Tank of Melbourne, Florida (Petitioner's Exhibits 7, 8 and 9). On December 22, 1978, Respondent entered into a contract with Robert J. Greene to construct a residence for $30,500.00 in Palm Bay, Florida. Respondent filed an affidavit of no liens relative to the Greene property on January 10, 1979. Chelsea Title and Guaranty Company relied on this affidavit to close the Greene property transaction on January 10, 1979 (Petitioner's Exhibit 5). Respondent was paid thee entire contract price. On February 12, 1979, Pence South Brevard Sewer and Septic Tank filed a claim of lien in the amount of $1,015.36 for two septic tanks, drains and sand which had been furnished the Respondent for the property of Robert J. and Alice Greene of Palm Bay, Florida, on December 15, 1978 (Petitioner's Exhibits 10 and 11). Approximately $3,496.40 was retained by Chelsea Title and Guaranty Company to satisfy outstanding recorded obligations on the date the Greene transaction closed (Petitioner's Exhibit 13). On February 21, 1979, Respondent caused to be filed in the United States District Court of the Middle District of Florida, a Voluntary Petition for Bankruptcy for Ulbricht Construction, Inc. (Petitioner's Exhibit 2 Composite).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent's contractors licenses set forth hereinabove be REVOKED. RECOMMENDED this 6th day of May, 1980, 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 6th day of May, 1980.
The Issue The issue to be determined in this case is whether proposed Florida Administrative Code Rule 62-4.161 of the Department of Environmental Protection (“DEP”) is an invalid exercise of delegated legislative authority.
Findings Of Fact The Parties DEP is the state agency granted regulatory and enforcement powers in chapter 403, Florida Statutes, to control air and water pollution. Associated Industries of Florida, Inc., is a non-profit corporation. It is the largest association of business, trade, commercial, and professional organizations, partnerships, and proprietorships in Florida. Florida Farm Bureau Federation is a not-for-profit agricultural organization. It is the State’s largest general- interest agricultural association with about 145,000 members. Florida Retail Federation, Inc., is a non-profit corporation with over 4,000 members, which are retail companies operating in Florida. The Florida Petroleum Marketers and Convenience Store Association is a division of the Federation. Florida Trucking Association, Inc., is a non-profit corporation whose members include about 26,000 trucking companies. National Federation of Independent Business, Inc., is the Nation’s leading small business association. It has about 10,500 members operating in Florida. A principal purpose of each Petitioner is to represent the interests of its members before elected and appointed officials of state government. For each Petitioner, a substantial number of its members are owners and operators of installations or otherwise engaged in activities capable of having “reportable releases” as that term is defined in the proposed rule. The Proposed Rule Proposed rule 62-4.161, entitled “Public Notice of Pollution,” is lengthy and does not need to be set out here in its entirety to understand the objections raised by Petitioners or the defenses advanced by DEP. In summary, the proposed rule requires a person who has a reportable release of a regulated substance to inform DEP, the general public (via television and newspaper), and the local government within 24 hours after the release occurs. Within 48 hours of the release, additional information must be provided to the same entities. If the release goes beyond the property of the owner/operator, the adjacent property owner must be notified within 24 hours, as well as DEP and the local government. The proposed rule describes the information that must be included in the notices and the penalty for non-compliance with the rule’s requirements. Rulemaking Authority The proposed rule identifies seven statutes as authority for the rule. Section 377.22(2). This provision grants authority to DEP to adopt rules to implement and enforce the provisions of chapter 377, which regulates oil and gas resources. Section 403.061(7). This provision grants authority to DEP to adopt rules to implement the provisions of the Florida Air and Water Pollution Control Act, which is a part of chapter 403. Section 403.061(8). This provision grants authority to DEP to issue orders “necessary to effectuate the control of air and water pollution.” Section 403.061(28). This provision authorizes DEP to “Perform any other act necessary to control and prohibit air and water pollution.” Section 403.062. This provision grants DEP general control over surface and ground waters under the jurisdiction of the state insofar as their pollution may affect public health or the public interest. Section 403.855(1). This provision authorizes DEP to adopt emergency rules to protect the public health when DEP has information that a contaminant may present an imminent hazard or substantial danger to public or private water supplies. Section 403.861(9). This provision authorizes DEP to adopt rules to implement the provisions of the Florida Safe Drinking Water Act, which is a part of chapter 403. Law Implemented The proposed rule identifies eight statutes as the law implemented by the rule. Two of these statutes, sections 403.62 and 403.861(9), have already been described above. The other six statutes are described below. Section 377.21. This provision, in pertinent part, authorizes DEP to collect data, make inspections, and “[p]rovide for the keeping of records and making of reports” related to oil, gas, and other petroleum products. Section 403.061(16). This provision requires DEP to encourage voluntary cooperation to achieve the purposes of the Florida Air and Water Pollution Control Act. Section 403.061(17). This provision requires DEP to encourage local governments to handle pollution problems on a cooperative basis. Section 403.061(18). This provision requires DEP to conduct investigations and research related to pollution and its causes, prevention, abatement, and control. Section 403.061(28). This provision empowers DEP to perform any act necessary to control and prohibit air and water pollution. 403.855(3). This provision authorizes DEP to establish a program designed to prevent contamination or to minimize the danger of contamination to potable water supplies. Within chapters 377 and 403, the only provisions that specifically address reporting of spills or contamination require that the report be made to DEP only. For example, section 377.371(2), Florida Statutes, requires that a spill or leak of oil, gas, other petroleum product, or waste material be reported to the Division of Resource Management within DEP. Upon review of the proposed rule by the staff of the Joint Administrative Procedures Committee (“JAPC”), DEP was asked why the proposed rule was not an unlawful modification or enlargement of section 377.371(2), which only requires notice to DEP in the event of a spill or leak. Section 376.30702, entitled “Contamination notification,” requires notice only to DEP for several scenarios where contamination is discovered: The Legislature finds and declares that when contamination is discovered by any person as a result of site rehabilitation activities [pursuant to statutes dealing with dry- cleaning, petroleum storage, brownfields, and other contamination], it is in the public’s best interest that potentially affected persons be notified of the existence of such contamination. Therefore, persons discovering such contamination shall notify the department . . . and the department shall be responsible for notifying the general public. § 376.30702(1), Fla. Stat. There are two other statutes that require notice to DEP for actions which are somewhat analogous to a release of pollution. Section 403.862(1)(b) provides that county health departments must notify DEP of potential violations of standards at any public water system. Section 403.93345(5) requires a vessel owner or operator to notify DEP within 24 hours if the vessel has struck or damaged a coral reef. For comparison, section 376.707(11) requires an applicant for a DEP solid waste facility permit to notify the local government and the general public by newspaper that it has applied for the permit. This statute shows the Legislature has required broader notice when it wanted. Lower Cost Regulatory Alternative DEP prepared a Statement of Estimated Regulatory Costs (“SERC”) for the proposed rule and published notice of its availability as required by section 120.541. In the SERC, it is estimated that the total increased regulatory costs are $182,000 per year. On October 19, 2016, 27 regulated entities, including Petitioners, submitted a Lower Cost Regulatory Alternative (“LCRA”) to DEP. Florida Electric Power Coordinating Group, Inc., also submitted a LCRA. Both LCRAs proposed that DEP be responsible for notice to the general public, local governments and adjacent property owners, which would result in lower costs to the regulated community. In the SERC made available to the public in November 2016, DEP stated that it rejected the LCRA because the party who caused an unauthorized release of contaminants is the more appropriate party to incur the reporting costs imposed by the proposed rule, and (2) the party who releases contaminants is in a better position to know details about the substances that were released which must be included in the report.
The Issue The issues to be considered were framed through challenges to the aforementioned rules as alleged invalid exercises of delegated legislative authority, and if held to be invalid that the rules constitute agency statements that violate Section 120.535, Florida Statutes. In particular Petitioner alleges that the rules are invalid exercises of delegated legislative authority for reason that: The Respondent failed to publish notice of its decision to modify the challenged rules after they had been proposed. Rules 25-22.056(1)(a) and (4)(b), Florida Administrative Code, deny parties the opportunity to file exceptions to any order or Hearing Officer's recommended order as allowed by Section 120.57(1)(b)4, Florida Statutes. Rules 22-25.056(1)(a) and (4)(b), Florida Administrative Code, are invalid exercises of delegated legislative authority in that they modify and contravene Sections 120.53(1)(c), 120.57(1)(b)4 and 6 and 120.58(1)(e), Florida Statutes, and are arbitrary and capricious. Concerning Section 120.53(1)(c), Florida Statutes, the challenged rules are alleged to be other than "rules of procedure appropriate for the presentation of argument." It is asserted that the possibility exists that the failure to accept a finding of fact could be considered as a waiver of objection on appeal in the setting where the rules are not procedures appropriate for presentation of argument. Therefore, the rules are alleged to be inappropriate. It is alleged that the rules violate Section 120.57(1)(b)4, Florida Statutes, specifically in that the rules do not allow parties the opportunity to file exceptions in the instance where two or more Public Service Commissioners conduct the formal proceeding, contrary to the referenced statutory provision which does not contain that limitation. Similarly, it is alleged that the rules violate Section 120.57(1)(b)6(e), Florida Statutes, by failing to provide the parties the opportunity to develop a record which includes exceptions, in that no opportunity to file exceptions is provided other than the instances where a hearing officer conducts the formal proceedings. It is alleged that Section 120.58(1)(e), Florida Statutes, is violated in that the challenged rules do not provide the parties the opportunity to file exceptions to the proposed order in those circumstances where a majority of those who are to render the final order have not heard the case or read the record, and where a decision adverse to a non-agency party is to be made, thus contravening the legal requirements set out in that statute. It is alleged that there is no logical rationale for limiting the statutory opportunity to file exceptions according to the number of Public Service Commissioners conducting the formal hearing, when considering the aforementioned statutes. It is alleged that Rule 25-22.056(1)(b), Florida Administrative Code, is vague in that it fails to establish adequate standards for agency decisions by not specifying what is meant by the right to file exceptions to a proposed order "within the time . . . designated by the hearing officer." Moreover, Rule 25-22.056(1)(b), Florida Administrative Code, when contrasted with Rule 25- 22.056(4)(b), Florida Administrative Code, is said to be inconsistent when describing the right to file exceptions to recommended orders. Rule 25-22.058, Florida Administrative Code, is alleged to limit oral argument in formal proceedings to only those instances when the Respondent exercises discretion to grant oral argument in contravention of Section 120.58(1)(e), Florida Statutes, which is alleged to grant a mandatory right of oral argument in instances where a majority of those who are to render the decision have not heard the case or read the record and a decision adverse to a party other than the agency is contemplated by a proposed order.
Findings Of Fact Rules Adoption On October 18, 1992, Respondent published notice of intent to adopt Rule 25-22.021, Florida Administrative Code, entitled Agenda Conference Participation. The publication was made in the Florida Administrative Weekly. On that same date, in the Florida Administrative Weekly, Respondent published notice of its intent to amend Rule 25-22.056, Florida Administrative Code, entitled Post Hearing Filings; to repeal Rule 25-22.057, Florida Administrative Code, entitled Recommended Order, Exceptions, Replies, Staff Recommendations; and to amend Rule 25-22.058, Florida Administrative Code, entitled Oral Argument. On November 12, 1992, Petitioner submitted timely written comments to the Respondent regarding the rule proposals. In these comments Petitioner expressed an interest in the right to file exceptions to opposing parties' proposed findings of fact and to file exceptions to Respondent's staff advisory memoranda provided to Commissioners. On February 16, 1993, Respondent considered the published rules and public comments and voted to adopt the rules with changes. On March 3, 1993, Respondent filed with the Secretary of State a certification of the adopted rule, rule amendments and rule repeal previously described. On March 4, 1993, Respondent issued an order memorializing the adoption process. That order was No. PSC-93-0337-FOF-OT, Notice of Adoption of Rule. This document set forth that the Respondent had adopted Rules 25-22.021 and 25- 22.056, Florida Administrative Code, with changes; that Rule 25-22.058, Florida Administrative Code, was adopted without change and that Rule 25-22.057, Florida Administrative Code, was repealed. Respondent did not publish additional notice in the Florida Administrative Weekly of the decision to change Rule 25-22.056, Florida Administrative Code. The Parties Petitioner is a public interest environmental law firm with an office in Tallahassee, Florida. It is a corporation authorized to do business in the state of Florida. Petitioner has been a party to Respondent's formal administrative proceedings and is presently a party to such proceedings. In the past, Petitioner has filed post-hearing pleadings following formal administrative proceedings conducted by Respondent. Respondent holds hearings pursuant to Section 120.57, Florida Statutes, and prepares orders in accordance with that provision. The Florida Public Service Commission has five members. The Chairman of the Florida Public Service Commission has the responsibility to assign cases for hearing. See Sections 350.01 and 350.125, Florida Statutes. The assignment of formal proceedings is to an individual Public Service Commissione; a hearing officer with the Division of Administrative Hearings upon referral to the Division of Administrative Hearings; and panels constituted of two or more Commissioners. See also Rule 25-22.0355, Florida Administrative Code. Upon Petition in accordance with Section 350.01(6), Florida Statutes, and by decision made by a majority of the commissioners some proceedings may be assigned to the full Florida Public Service Commission for consideration. Commissioners who have been assigned to a proceeding act in a quasi- judicial capacity and are called upon to find facts as well as determine applicable law and are charged with making the ultimate decision in that proceeding. Commissioners vote on the issues considered in the cases presented. The voting occurs at a public agenda conference. A vote sheet is maintained. Legal staff assist the Commission in preparing the final order than memorializes that vote. There are no preliminary drafts or recommended orders (proposed orders) circulated to the parties unless the hearing was conducted by a single Commissioner serving as a hearing officer. Dissents from the majority vote in proceedings conducted by panels of Commissioners may or may not be reflected through a written dissenting opinion shown at the end of the final order. The final order discusses issues, makes fact finding and draws legal conclusions, and also makes ruling on proposed findings of fact submitted by the parties. There is no requirement for review or signature on the final order by persons assigned to the proceedings. The final order is issued by the Director of the Division of Records and Reporting or a person supervised by that individual. Opportunity is not presented to file exceptions to the staff advisory recommendations or to final orders of the Commission. Exceptions may be filed to proposed or recommended orders drawn by a single Commissioner sitting as a hearing officer or directed to recommended orders issued by a hearing officer from the Division of Administrative Hearings. Commissioners assigned to a proceeding receive copies of post-hearing submissions. In cases which are heard by two or more Commissioners, a recommended order (proposed order) is not prepared. Instead, in each case the Commissioners have available a staff memorandum concerning the issues in the proceeding for use at the agenda conference where a decision is reached in the case. That decision is rendered as a written final order. Advisory memoranda presented to assigned Commissioners in the various proceedings include discussions of issues found in prehearing orders, statements by each party concerning their position on those issues, staff recommendations as to resolution of issues, and an analysis of evidence and argument presented in the hearings and in the post-hearing filings, with citations to hearing testimony and reference to hearing exhibits. At times the advisory memoranda may include more than one recommended disposition on issues if the staff members do not concur as to the appropriate recommendation. Staff members may not prepare an advisory memorandum if they have testified in the proceeding. The advisory staff memoranda are not controlling when the assigned Commissioners deliberate cases. Commissioners who have been assigned to a case have heard the testimony and had the opportunity to review prefiled testimony, the hearing transcripts, transcripts of any argument that was permitted, the briefs of the parties and any proposed findings of fact and conclusions of law, as well as any statement of position of the parties and the staff advisory memorandum before deciding a case. The format for final orders is described in Rule 25-22.059, Florida Administrative Code. After a final order has been entered an adversely affected party may request reconsideration of the final order or take appeal to the appropriate court. See Rule 25-22.060, Florida Administrative Code. A motion for reconsideration addresses the substance in the final order, whereas, corrections which deal with scrivener's errors are made by informal contact through correspondence directed to the Florida Public Service Commission. A motion for reconsideration need not be correctly styled to be considered. Motions for reconsideration are voted upon by the Commissioners assigned to the proceeding. Separate written advisory memoranda are prepared directed to the disposition of motions for reconsideration. The motion is voted upon by the Commissioners assigned to the proceeding. The order directed to the motion for reconsideration is drafted by the legal staff for the Commission. The vote by the individual Commissioners assigned to the proceeding in deciding whether to reconsider is memorialized in a manner similar to the vote on the final order decision previously reached. The Subject Rules Rule 25-22.056(1)(a), Florida Administrative Code, describes the post- hearing opportunities for parties to a proceeding where two or more Commissioners or the full Commission conducts a hearing pursuant to Section 120.57, Florida Statutes. By contrast Rule 25-22.056(1)(b), Florida Administrative Code, describes the opportunities for post hearing submissions following a hearing conducted pursuant to Section 120.57, Florida Statutes, in which a single Commissioner sits as a hearing officer. Rule 25-22.056(4)(b), Florida Administrative Code, describes the opportunity for excepting to the proposed order of a single Commissioner sitting as a hearing officer or the recommended order in cases heard before a Hearing Officer employed by and assigned by the Division of Administrative Hearings. Rule 25-22.058, Florida Administrative Code, describes opportunities for oral argument before the Florida Public Service Commission associated with Section 120.57, Florida Statutes, formal hearings.
The Issue The issue presented is whether Florida Administrative Code Rule 2B-1.002 is an "invalid exercise of delegated legislative authority."
Findings Of Fact The following facts have been stipulated by the parties: Petitioner, Brian L. Blair, is a Respondent in a case before DOAH styled, Florida Elections Commission v. Brian L. Blair, Case No. 09-2069, wherein the Florida Elections Commission ("Commission") has charged Mr. Blair with two counts of willfully accepting campaign contributions in excess of $500.00 in violation of Subsection 106.19(1)(a), Florida Statutes. Petitioner filed a Petition to Determine Invalidity of Existing Rule on August 28, 2009, wherein he alleges that the Commission Rule, Florida Administrative Code Rule 2B-1.002, constitutes an invalid exercise of delegated legislative authority. As a person subject to Chapter 106, Florida Statutes, and accused of willfully violating one of its prohibitions, Mr. Blair is substantially affected by the Commission's application of Florida Administrative Code Rule 2B-1.002 to his case and, therefore, has the requisite standing to bring this action. In 2007, the Florida Legislature repealed Section 106.37, Florida Statutes (2006), which contained a definition of "willfulness" for purposes of Chapter 106, Florida Statutes. That section was repealed by CS/HB 537 (Section 51, Chapter 2007-30, Laws of Florida), effective January 1, 2008. Contemporaneous with the repeal of Section 106.37, Florida Statutes, the same legislation amended Subsection 106.25(3), Florida Statutes, to provide that willfulness is "a determination of fact." (§ 48, Chap. 2007-30, Laws of Florida, effective January 1, 2008). Subsection 106.25(3), Florida Statutes, currently provides: (3) For the purposes of commission jurisdiction, a violation shall mean the willful performance of an act prohibited by this chapter or chapter 104 or the willful failure to perform an act required by this chapter or chapter 104. Willfulness is a determination of fact; however, at the request of the respondent, willfulness may be considered and determined in an informal hearing before the commission. (Emphasis added.) The 2007 Legislative Session ended on May 4, 2007; CS/HB 537 was signed and approved by the Governor on May 22, 2007. On May 24 and 25, 2007, Barbara Linthicum, executive director of the Commission at the time, engaged in the following exchange via email with the Commission's attorney, Edward A. Tellechea, counsel of record in this case, regarding Florida Administrative Code Rule 2B-1.002: Ms. Linthicum: "Do you think we have authority to add chapter 106 to the willfulness rule?" Mr. Tellechea: ". . . Someone will challenge it[,] but what the heck[,] I'm game." Ms. Linthicum: "But, if you are game, I think we should definitely go ahead before January 1 comes along. You certainly do have a good track record defending our rules" The amendment of Florida Administrative Code Rule 2B-1.002 was effective December 25, 2007. The repeal of the definition of "willfulness" in Section 106.37, Florida Statutes, became effective January 1, 2008. The proposed rule amendment to Florida Administrative Code Rule 2B-1.002 that is the subject of this proceeding was reviewed in 2007 by the Joint Administrative Procedures Committee of the Florida Legislature, pursuant to Section 120.545, Florida Statutes, prior to its adoption, and the Committee made no written comments or filed any written objections. In order to determine whether willful violations of Chapter 106, Florida Statutes, have occurred, the Commission employs the definition of "willful" contained in Florida Administrative Code Rule 2B-1.002, when making the factual determination of willfulness.
The Issue Whether Respondent, when he voted April 18, 2002, as a member of the Palm Beach Gardens City Commission, on Resolution 54, 2002 and Resolution 57, 2002, relating to Parcel 6 and Parcel 24, respectively, of the Mirasol development project, knew that these measures would inure to the special private gain or loss of a principal by whom he was retained and thereby violated Section 112. 3143(3), Florida Statutes, as alleged in the Order Finding Probable Cause, and, if so, what is the appropriate penalty.
Findings Of Fact Based on the evidence adduced at the public hearing and the record as a whole, the following findings of fact are made to supplement and clarify the factual stipulations set forth in the parties' Joint Prehearing Stipulation2: Each of the "Sabatello construction companies" referred to in the parties' Stipulations of Fact 3 and 4 was wholly owned by Carl Sabatello and his brothers Paul, Theodore, and Michael Sabatello (Sabatello Brothers), with each brother owning an equal (25%) share of the company. Of these companies, only one, Sabatello Development Corporation IV (SD IV) was involved in the Mirasol Project. SD IV has been in continuous existence since its formation in or around the 1980's. Carl Sabatello serves as its president, "oversee[ing] all [of its] functions." SD IV is a Subchapter S corporation. As such, its profits are passed through to the Sabatello Brothers, its four shareholders, in equal amounts. Respondent is a certified public accountant. Since 1989, through his accounting firm, he has provided tax preparation services to SD IV and the Sabatello Brothers. His firm has derived "anywhere from 15 to 25%" of its total income from the monies received for providing these services. Before establishing his accounting firm in 1989, Respondent was SD IV's chief financial officer and one of its shareholders. Taylor Woodrow Communities (Taylor Woodrow) was the master developer of the Mirasol Project. Taylor Woodrow's Craig Perna had "overall responsibility for every aspect of the [Mirasol] development" project, including the "selection of builders." The builder selection process started with Mr. Perna getting the names of "prominent builders in the Palm Beach Gardens market" having "excellent reputation[s]" and then contacting them to inquire as to their interest in participating in the Mirasol Project. Carl Sabatello was among those Mr. Perna contacted. He was contacted (by telephone) in mid-May of 2000, and advised Mr. Perna he was "very interested" in having his company, SD IV, considered for selection as a builder in Mirasol. SD IV, was one of at least ten or 12 builders vying to be selected to participate in the Mirasol Project. Over a period of approximately eight months (from mid-May 2000, to mid-January 2001), Taylor Woodrow requested and obtained from SD IV and from the other would-be participants in the project (Other Builders) information and documents in order to evaluate these builders' qualifications for selection. In the latter part of 2000, prior to any selection having been made, Carl Sabatello requested the Palm Beach Gardens City Attorney, Leonard Rubin, Esquire, "to provide a [written] legal opinion as to [Mr. Sabatello's] obligation to abstain from voting in [his] official capacity on matters relating to Mirasol that come before the [Palm Beach Gardens] City Council." In response to Mr. Sabatello's request, Mr. Rubin prepared a written memorandum, dated December 5, 2000, which was provided, not only to Mr. Sabatello, but to all members of the Palm Beach Gardens City Council, including Respondent, as well as to the Interim City Manager. The memorandum read as follows: You have indicated that the Sabatello Companies, of which you are a principal, is currently in negotiations with the developers of the Mirasol Planned Community District ("PCD") to become a builder of homes within that community. Your activities as a builder would be limited to specific parcels or pods within the PCD. You asked this office to provide a legal opinion as to your obligation to abstain from voting in your official capacity on matters relating to Mirasol that come before the City Council. Voting conflicts for members of the City Council are governed by section 112.3143, Florida Statutes. Subsection (3)(a) provides that a municipal officer shall not vote in an official capacity on any measure that "would inure to the special gain" of the officer, a principal by whom the officer is retained, or a relative or business associate of the officer. According to the state Ethics Commission, the determination of whether the officer receives a special private gain is based upon the size of the class of persons affected by the vote at issue. The Mirasol PCD encompasses a variety of residential, commercial, recreational and community uses. The residential uses range from low density single family homes to high density multi-family apartments. It is anticipated that your company's activities will be limited to the construction of single family dwellings within a specific, identifiable parcel for which a site plan has already been approved. Because of this limited involvement, there does not appear to be any requirement that you abstain from every vote relating to the approval of plats, parcels and site plans within the entire Mirasol PCD. See CEO 85-62 (city council member not prohibited from voting on rezoning of property within a large redevelopment area where member's corporation owns a parcel of land within the same area). By way of example, the City Council's approval of the site plan for the fire station or the plat for Jog Road in no way inures to your or your company's special private gain. You would, however, be required to abstain from any additional votes relating to the specific parcels or pods within the community in which your company possesses or acquires an interest by virtue of a contractual relationship with the master developer. Where a conflict of interest exists, you are required to state the nature of your interest prior to the vote and file a voting conflict memorandum with the City Clerk, within 15 days. The existence of a voting conflict does not necessarily require you to abstain from all discussion relating to the matter (although you are free to do so). If you plan to participate in discussion of a matter in which you know you have a conflict, you must file a written conflict memorandum before the public meeting. You have also expressed concern that upon learning that your company will be building homes within Mirasol, members of the public may perceive a conflict of interest in all matters relating to Mirasol. To avoid the appearance of impropriety, it would be appropriate to make the following disclos[ure] prior to any vote: "While it is anticipated that the Sabatello Companies will be building homes within Mirasol, the matter before the City Council does not concern the areas in which such construction will take place and is wholly unrelated to any interest held by me or my corporations." Should you have any questions or be in need of additional information, please do not hesitate to contact this office. In January of 2001, Taylor Woodrow selected SD IV to build on Mirasol Parcel 4.3 It sent Carl Sabatello a letter dated January 22, 2001, advising him of the selection, along with a Parcel Builder Agreement and Exclusive Agency Brokerage Agreement for Mirasol Parcel 4. These agreements were fully executed in February of 2001. Sometime thereafter SD IV began building on Mirasol Parcel 4. SD IV was one of first builders to start construction in Mirasol. SD IV eventually purchased all 46 lots in Mirasol Parcel 4, constructing homes on each. All of the homes it built were sold. On or about October 18, 2001, at Respondent's request, Mr. Rubin prepared and distributed to Respondent and the other members of Palm Beach Gardens City Council a written memorandum designed to provide "clarification and confirmation from [the City Attorney's] office regarding a Council Member's obligation to vote on an item before the City Council." In this memorandum, Mr. Rubin made the following points: A council member must vote in the absence of a voting conflict or conflict of interest. Section 28[6].012, Florida Statutes, requires a member of the City Council, who is present at a meeting, to vote on an item before the Council unless there is, or appears to be, a conflict of interest or voting conflict pursuant to the Code of Ethics for Public Officers and Employees. * * * A voting conflict arises when the vote inures the Council member's own special private gain or loss of the special private gain or loss of the Council member's principal, family member or business associate. * * * The special private gain to the Council member depends on the size of the class of persons affected and is fact-specific. * * * The special private gain to the Council member must be direct and proximate. * * * In the event of a voting conflict, a Council member must disclose the nature of the conflict and abstain from voting. Mr. Rubin's memorandum "reinforced what [Respondent] already knew about the law." On April 18, 2002, the Palm Beach Gardens City Council voted on and passed two measures concerning the Mirasol Project, one, Resolution 54, 2002, dealing with Mirasol Parcel 6 (a 10.11 acre site within the development), and the other, Resolution 57, 2002, dealing with Mirasol Parcel 10 (a 14.6-acre site within the development). As the summary statement on its first page reflects, Resolution 54, 2002 was: A resolution of the City Council of the City of Palm Beach Gardens, Florida, providing for the approval of a site plan to allow for the development of 41 semi-custom homes, known as Mirasol Parcel 6, located within the Mirasol Planned Community District (PCD), as more particularly described herein; providing for conditions of approval; providing for waivers; providing for severability; providing for conflicts; and providing for an effective date. Section 5 of the resolution granted the following waivers: From Section 78-498 of the LDRs, to permit a 45-foot wide right-of-way. The code requires a minimum right-of-way width of 50 feet. From Section 78-141 of the LDRs, to permit a minimum lot width of 60 feet. The code requires a minimum width of 65 feet. From Section 78-141 of the LDRs, to permit lot coverage of 50%. The code requires a maximum lot coverage of 35%. From Section 78-141 of the LDRs, to permit a building side setback of 3 feet 1 inch on a "zero" side and 6 feet 11 inches on a "non-zero" side. The code requires a minimum side setback of 7.5 feet. From Section 78-141 of the LDRs, to permit a screen/accessory side setback of 3 feet 1 inch on a "zero" side and 5 feet on a "non-zero" side. The code requires a minimum side setback of 7.5 feet. From Section 78-141 of the LDRs, to permit a screen/accessory rear setback of 3 feet. The code requires a minimum setback of 10 feet. As the summary statement on its first page reflects, Resolution 57, 2002 was: A resolution of the City Council of the City of Palm Beach Gardens, Florida, providing for the approval of a site plan to allow for the development of 26 custom homes, known as Mirasol Parcel 10, located within the Mirasol Planned Community District (PCD), as more particularly described herein; providing for conditions of approval; providing for waivers; providing for severability; providing for conflicts; and providing for an effective date. Section 5 of the resolution granted the following waivers: From Section 78-498 of the LDRs, to permit a 45-foot wide right-of-way. The code requires a minimum right-of-way width of 50 feet. From Section 78-141 of the LDRs, to permit lot coverage of 45%. The code requires a maximum lot coverage of 35%. From Section 78-141 of the LDRs, to permit a building/screen side setback of 10 feet. The code requires a minimum side setback of 12 feet. From Section 78-141 of the LDRs, to permit an accessory structure setback of 5 feet. The code requires a minimum side setback of 12 feet. From Section 78-141 of the LDRs, to permit a screen/accessory rear setback of 3 feet. The code requires a minimum setback of 10 feet. The "waivers" that were granted by Resolution 54, 2002 and Resolution 57, 2002 were from the requirements of the Palm Beach Gardens Code that Taylor Woodrow, or whichever builder(s) it subsequently selected to build on the affected parcels, would otherwise have to meet. At the April 18, 2002, Palm Beach Gardens City Council meeting, Carl Sabatello orally announced to those in attendance, including Respondent, that he was going to abstain from voting on Resolution 54, 2002 and Resolution 57, 2002, explaining that he was involved in discussions regarding the possible purchase of the two parcels that were the subject of these measures. At the time of the vote on Resolution 54, 2002 and Resolution 57, 2002, although he may have been aware of the investment Mr. Sabatello's company had made in Mirasol Parcel 4, Respondent had no knowledge of any connection that Mr. Sabatello or his company may have had with Mirasol Parcel 6 and Mirasol Parcel 10 other than what Mr. Sabatello had told the audience at the meeting about the matter. As far as Respondent knew, neither Mr. Sabatello nor his company owned or had a contract to purchase Mirasol Parcel 6 or Mirasol Parcel 10. Respondent did not attempt to engage Mr. Sabatello in conversation or otherwise seek to find out more about the discussions Mr. Sabatello had referred to in his abstention announcement. Respondent did, however, consult with the Palm Beach Gardens City Attorney to determine whether or not he should vote on the resolutions. Respondent "knew [that the law required him] not to vote [on] things that a client had an interest in," but, based on what Mr. Sabatello had said at the meeting, he believed that Mr. Sabatello was merely "in a discussion phase" regarding the acquisition of an interest in Mirasol Parcel 6 and Mirasol Parcel 10 and that there had not been any agreement reached on the matter. He therefore voted on Resolution 54, 2002 and Resolution 57, 2002, consistent with the advice that the Palm Beach Gardens City Attorney had given. Approval of the site plans for Mirasol Parcel 6 and Mirasol Parcel 10 (which the passage of Resolution 54, 2002 and Resolution 57, 2002, respectively, accomplished) was needed before any permits for building on those two parcels could be obtained. Mr. Sabatello, on April 18, 2002, filled out a voting conflict form (Form 88, Memorandum of Voting Conflict) explaining why he did not vote on Resolution 54, 2002 and Resolution 57, 2002. On the form, he indicated that these votes "inured to the special gain of Sabatello Development Corp, IV, Inc, by whom I am retained," and then added that this "company," of which he was "an officer and owner[,] [was] in the process of negotiating [the] purchasing of Pod 6 & Pod 10." At the time he cast his votes for Resolution 54, 2002 and Resolution 57, 2002, Respondent was "not privy" to the contents of Mr. Sabatello's completed voting conflict form. On April 30, 2002, 12 days after the votes on Resolution 54, 2002 and Resolution 57, 2002, SD IV entered into an agreement with Taylor Woodrow to purchase all of the lots in Mirasol Parcel 6. It closed on lots 10, 11, 32, and 33 on September 25, 2002, and on the remaining lots in the parcel on January 3, 2003. SD IV built a home on every lot it purchased in Mirasol Parcel 6, and it sold every home it built. SD IV received a contract to purchase Mirasol Parcel 10, but it never executed the contract and therefore never acquired an interest in the parcel.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a public report finding the evidence presented at the public hearing in this case insufficient to clearly and convincingly establish that Respondent violated Section 112.3143(3), Florida Statutes, by voting at the April 18, 2002, Palm Beach Gardens City Council meeting on Resolution 54, 2002 and Resolution 57, 2002, and dismissing the complaint filed against Respondent. DONE AND ENTERED this 4th day of March, 2009, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 2009.
