The Issue The issue in this proceeding is whether the proposed award of a contract to PCL Civil Contractors, Inc. ("PCL"), for the rehabilitation of the Jewfish Creek Bridge in Monroe County, Florida violates Section 120.57(3), Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated.)
Findings Of Fact On September 24, 1998, Respondent issued an invitation to bid ("ITB") on a proposed contract for the rehabilitation of the Jewfish Creek Bridge in Monroe County, Florida. The ITB identified the project as Financial Project No. 250533-1-52-01 and contract number E-6844. Respondent budgeted $707,323 for the project and established two disadvantaged business enterprise ("DBE") goals. Eight percent of the total amount actually expended for the project was reserved for non-minority female DBEs. Four percent of the total project expenditure was reserved for Black American DBEs. On October 1, 1998, five bidders submitted bids. Petitioner submitted the lowest bid in the amount of $855,899.74. PCL submitted the second lowest bid of $940.471.50, and Coastal submitted the third lowest bid of $951,071.11. The fourth and fifth lowest bids were submitted by M&J Construction Co. ("M&J") and by The Walsh Group dba Archer Western ("Archer"). The respective bids of M&J and Archer were $1,100,471.88 and $1,149,000. Respondent determined that the bids from M&J and Archer were non-responsive. Neither M&J nor Archer protested Respondent's determination, and Respondent's determination is not at issue in this proceeding. Respondent proposes to award the contract to PCL as the second lowest bidder. Respondent proposes that the bid submitted by Petitioner is non-responsive because it does not meet established DBE goals; and because it fails to demonstrate Petitioner's good faith effort to meet applicable DBE goals. In addition, Respondent proposes that the bids submitted by PCL and Coastal are responsive because each meets applicable DBE goals for the project. It is uncontroverted that Petitioner failed to meet applicable DBE goals. The issues for determination are whether Respondent's proposed evaluation of Petitioner's good faith efforts to meet applicable DBE goals and Respondent's proposed determination that PCL and Coastal met DBE goals is contrary to governing statutes, rules, and policies; and, if so, whether Respondent's proposed agency action is "clearly erroneous, contrary to competition, arbitrary, or capricious." Contrary to Applicable Statutes As a threshold matter, Respondent's proposed agency action is contrary to Section 120.57(3)(d)3. Section 120.57(3)(d)3 provides that if the subject of a protest is not resolved within seven days after the receipt of a formal written protest, "the agency shall refer the protest" to DOAH. (emphasis supplied) Petitioner first filed its formal protest of the proposed agency action on November 11, 1998. For reasons discussed hereinafter, Respondent did not refer the protest to DOAH within seven days. Rather, Respondent referred the protest to DOAH on May 20, 1999, approximately 190 days after the formal protest. On March 14, 1999, Respondent issued a second notice of intent to award the contract to PCL. Petitioner timely filed a second formal written protest on March 18, 1999. Respondent did not refer the matter to DOAH until May 20, 1999, approximately 33 days later. Unlike Section 120.57(3)(e), there is no provision in Section 120.57(3)(d)3 which authorizes Respondent to ignore the seven-day requirement upon stipulation by all of the parties. Even if such authority exists by implication in Section 120.57(3)(d)3, no evidence shows that the seven-day requirement in Section 120.57(3)(d)3 was waived by an express stipulation, written or oral, knowingly executed by all of the parties. Any stipulation would arise from a combination of implied statutory authority and tacit acquiescence or waiver by the all of the parties. Contrary to Applicable Rules Respondent's proposed evaluation of Petitioner's good faith efforts to comply with applicable DBE goals is contrary to Florida Administrative Code Rule 14- 78.003(2)(b)3.f.(IV), Rule 14-78.003(2)(b)6.c and d, and Rule 14-78.003(2)(b)f and h. (Unless otherwise stated, all references to rules are to rules promulgated in the Florida Administrative Code in effect on the date of this Recommended Order.) Rule 14-78.003(2)(b)3.f.(I)-(XI) prescribes the criteria by which Respondent must evaluate Petitioner's good faith efforts to meet applicable DBE goals. Rule 14-78.003(2)(b)3.f.(IV) requires Respondent to consider whether applicable DBE goals were met by the other bidders. Applicable DBE goals were not met by either PCL or Coastal. The information needed to consider whether PCL and Coastal met applicable DBE goals was included in their respective bids and available for Respondent's consideration in accordance with Rule 14-78.003(2)(b)3.f.(IV). Respondent did not consider the relevant information in the bids submitted by PCL and Coastal. Rather, Respondent merely accepted the conclusion of each bidder, on the face of its bid, that each bidder met applicable DBE goals. The PCL Bid The PCL bid contained two DBE utilization forms. One indicated an intent to subcontract $76,000, or approximately eight percent of the bid amount, to ABC Barricade Co. ("ABC") for traffic management. The other utilization form indicated an intent to subcontract $38,000, or approximately four percent of the bid amount, to TCOE Corporation ("TCOE") to furnish and install roadway steel. ABC is certified by Respondent as a non-minority female DBE, and TCOE is certified by Respondent as a Black American DBE, defined in Rule 14-78.002(18)(a)1. The bids of Petitioner and Coastal also included subcontracts with ABC. However, the amount of the subcontract in the PCL bid was approximately twice the amount of the respective subcontracts in the bids from Petitioner and Coastal. Of the $76,000 PCL was to pay to ABC, the PCL bid showed that $53,430, or approximately 70 percent, was designated for payment to off-duty law enforcement officers. The PCL bid did not specify whether ABC would perform a commercially useful function for the $53,430 earmarked for law enforcement or whether ABC would subordinate over 70 percent of its contract to a non-DBE, the law enforcement agency. Rule 14-78.003(2)(b)6.c authorizes Respondent to count toward the DBE goals achieved by PCL only those expenditures to DBEs that perform a commercially useful function. The rule states that a DBE such as ABC performs a commercially useful function when: . . . it is responsible for execution of a distinct element of the work of a contract and carrying out its responsibilities by actually performing, managing, and supervising the work involved. If ABC did not perform a commercially useful function, ABC would subordinate more than 49 percent of the subcontract work. In such a case, Rule 14-78.003(2)(b)6.d provides that none of the DBE subcontract amount may be counted toward the DBE goals for PCL. Respondent counted the ABC contract toward PCL's DBE goals without considering whether the ABC contract complied with the requirements in Rule 14-78.003(2)(b)6.c and d, pertaining to a commercially useful function and the subordination of more than 49 percent of the contract amount. Respondent has no authority under its rules to count the ABC contract toward PCL's DBE goals unless the contract complies with applicable requirements in Rule 14-78.003(2)(b)6.c and d. Respondent violated Rule 14-78.003(2)(b)3.f.(IV) by counting the ABC contract toward PCL's DBE goals without considering whether the ABC contract qualified under Rule 14- 78.003(2)(b)6 c and d. Respondent's proposed evaluation of Petitioner's good faith efforts to comply with applicable DBE goals is contrary to Rule 14-78.003(2)(b)6.c and d and Rule 14-78.003(2)(b)3.f(IV). The PCL subcontract with TCOE did not require TCOE to perform a commercially useful function. The vice-president of TCOE could not recall another project in which TCOE had ever furnished and installed roadway steel and did not recall any current jobs in which TCOE is performing such work. TCOE did not have a supplier lined up to supply the necessary steel. TCOE does not fabricate the particular type of steel required to be furnished and installed in this project. The vice-president for TCOE could not state a price for roadway steel which TCOE agreed to fabricate and supply to PCL. He could not state the factors TCOE used in preparing the estimate given to PCL. The square-foot price of the steel quoted by TCOE was between a half and a third less than the price quoted by the other two low bidders and approximately one third less than Respondent's average. In addition, the TCOE bid included 400 tons less than the other two bids. Respondent counted the TCOE contract toward PCL's DBE goals without considering whether the TCOE contract complied with the requirements in Rule 14-78.003(2)(b)6.c and d, pertaining to a commercially useful function and the subordination of more than 49 percent of the contract amount. Respondent has no authority under its rules to count the TCOE contract toward PCL's DBE goals unless the contract complies with applicable requirements in Rule 14-78.003(2)(b)6.c and d. Respondent violated Rule 14-78.003(2)(b)3.f.(IV) by failing to consider whether PCL's subcontract with TCOE could be counted toward PCL's DBE goals under Rule 14- 78.003(2)(b)6.c and d. Respondent's proposed evaluation of Petitioner's good faith efforts to comply with applicable DBE goals is contrary to Rule 14-78.003(2)(b)6.c and d and Rule 14-78.003(2)(b)3.f(IV). The Coastal Bid The bid submitted by Coastal included three DBE utilization forms. Coastal submitted one form indicating an intent to subcontract $44,992 to ABC, or approximately 4.7 percent of the project. The subcontract with ABC is not at issue. Coastal also indicated an intent to subcontract Jayaldon Enterprises, Inc. ("Jayaldon") and Acutec, Inc. ("Acutec") for separate types of roadway steel. Jayaldon and Acutec are each certified as a DBE. The contract amounts were $51,973.36 for Jayaldon and $97,823.22 for Acutec. Pursuant to Rule 14-78.003(2)(b)6.f, Respondent counted 60 percent of each contract, or $31,184.01 for Jayaldon and $58,693.93 for Acutec, toward Coastal's DBE goals. Jayaldon would not perform a commercially useful function within the meaning of Rule 14-78.003(2)(b)6.c. In addition, Jayaldon is a sales representative company for Florida Structural Steel and is not a regular dealer. A regular dealer is defined in Rule 14-78.002(15) to mean: . . . a firm that owns, operates, or maintains a store, warehouse, or other establishment in which the materials or supplies required for the performance of the contract are brought, kept in stock, and regularly sold to the public in the usual course of business. To be a regular dealer, the firm must engage in, as its principal business and in its own name, the purchase and sale of the products in question. A regular dealer in such bulk items as steel, cement, gravel, stone, and petroleum products does not need to keep such products in stock, if the dealer owns or operates the appropriate distribution facility. Brokers and packagers shall not be regarded as . . . regular dealers within the meaning of these rules. Jayaldon does not stock steel in a warehouse and does not fabricate steel. If Coastal had been awarded the contract, Jayaldon would have submitted an order to Florida Structural Steel and Florida Structural Steel would have fabricated the steel and shipped it directly to Respondent at the project site. Jayaldon would not have been responsible for execution of a distinct element of work by actually performing, managing, and supervising the work involved. Acutec is an electrical contractor and is not a regular dealer in roadway steel within the meaning of Rule 14- 78.002(15). Coastal contacted Acutec after the bids were submitted and asked Acutec to serve as a pass-through for supplying steel roadway floor. If awarded the contract, Acutec would have ordered the structural steel from an independent supplier, marked it up, and had the supplier ship the steel to Coastal. Rule 14-78.003(2)(b)6.h authorizes Respondent to count toward Coastal's DBE goals only prescribed expenditures from the Jayaldon and Acutec contracts. Pursuant to Rule 14- 78.003(2)(b)6.h.(I), Respondent is authorized to count only the fees or commissions charged by each company for assistance in the procurement of materials or supplies. However, Respondent did not count the expenditures in the contracts with Jayaldon and Acutec pursuant to Rule 14-78.003(2)(b)6.h. Pursuant to Rule 14-78.003(2)(b)6.f, Respondent counted 60 percent of the contested expenditures toward Coastal's DBE goals. Rule 14-78.003(2)(b)6.f authorizes Respondent to do so only if Jayaldon and Acutec are regular dealers. Neither Jayaldon nor Acutec is a regular dealer in roadway steel as defined in Rule 14-78.002(15). When Respondent counted 60 percent of the expenditures to Jayaldon and Acutec toward Coastal's DBE goals, Respondent violated Rule 14-78.003(2)(b)3.f (IV) by failing to consider whether Coastal met its DBE goals. Respondent's proposed evaluation of Petitioner's good faith efforts to comply with applicable DBE goals is contrary to Rule 14-78.003(2)(b)3.f.(IV) and Rule 14-78.003(2)(b)6.f and h(I). Contrary to Policy On February 9, 1994, Respondent issued a memorandum entitled, "Disadvantaged Business Enterprise Good Faith Efforts Review Committee" (the "Memorandum"). The Memorandum officially stated agency policy for the organization of the Good Faith Efforts Review Committee (the "Committee") and the Committee's review and recommendations concerning contractors' documentation of their good faith efforts to comply with DBE goals established by Respondent in a bid or request for proposal. The policy applies to local districts as well as the central office. The Committee consists of three primary and two alternate members. The chairperson is appointed by the director of administration. The other two members of the Committee are the manager of the minority programs office and an employee from the office of construction who is appointed by the director of construction. Alternate members are appointed by the director of administration and the director of construction. Prior to any meeting of the Committee, the minority programs office must prepare copies of relevant bid documents and other working papers to assist the Committee in its analysis. The Committee members then meet and review the bidders' good faith efforts in accordance with the criteria set forth in Rule 14-78.003(2)(b)3.f. The chairperson must prepare minutes to document the Committee meeting. At the conclusion of the meeting, a member of the Committee must write a Committee report. The report must include the Committee's recommendations and its rationale in support of the recommendations. The report must also include copies of all materials used by the Committee in its analysis. Each member of the Committee must sign the report. The Committee must distribute the report to all members of the technical review committee as well as the members of the contracts award committee. Respondent's review of Petitioner's good faith efforts was contrary to officially stated agency policy in the Memorandum. After the bids were opened and evaluated on October 1, 1998, Respondent's Contracts Administrator for District 6 prepared a memorandum to the Technical Review Panel. The memorandum summarized the bids and stated that the "lowest bidder has not met DBE goals. Second lowest bidder has met goals." The memorandum recommended that the contract be awarded to PCL. The memorandum, including its recommendation, was distributed to members of Respondent's technical review committee. Rather than conducting a meeting of the technical review committee, each member of the committee submitted a memorandum indicating whether to reject or to accept the recommendation to award the contract to PCL. The Contracts Administrator for District 6 distributed Petitioner's bid, including the evidence of Petitioner's good faith effort to meet DBE goals, only to Respondent's district compliance officer. When the District Compliance Officer received Petitioner's bid from the Contracts Administrator, the District Compliance Officer reviewed the documents with the Assistant District Engineer for District 6. The District Compliance Officer and Assistant District Engineer discussed and evaluated Petitioner's good faith submittal, but did not report their conclusion to other members of the technical review committee. Rather, the District Compliance Officer submitted a memorandum to the Contracts Administrator stating, "Quinn Construction did not meet the goal therefore it's my recommendation to reject their bid." The District Compliance Officer submitted the memorandum in the name of his supervisor concluding that "Quinn Construction did not meet DBE goals." On October 29, 1998, Respondent posted its notice of intent to award the contract to PCL. On November 2, 1998, Petitioner timely filed its notice of protest. On November 11, 1998, Petitioner timely filed its formal written protest of the notice of intent to award the contract to PCL. As a result of Petitioner's protest, District 6 determined that it should formalize the process by which it reviewed good faith effort submittals. The supervisor for the District Compliance officer appointed the District Compliance Officer and the Assistant District Construction Engineer to the newly created District 6 Good Faith Efforts Committee. By telephone conference, the three District 6 employees met with three individuals from Respondent's central office. The three individuals in the central office were the Manager of the Minority Programs Office, a representative of Respondent's administration office, and a representative of Respondent's office of construction. The manager of the minority programs office prepared minutes of the meeting. The minutes are in evidence in this proceeding. The participants in the telephone conference concluded that Petitioner's bid was non-responsive. The Committee based its conclusion on several grounds. The Committee determined that Petitioner did not solicit from 47 of 68 companies listed in the DBE Directory as doing the types of work being solicited by the prime contractor in the geographic area where the work was to be performed. The Committee also determined that Petitioner sent solicitation letters by fax rather than by certified mail. Finally, the Committee determined that the second and third low bidders achieved applicable DBE goals. On March 14, 1999, Respondent posted its second notice of intent to award the contract to PCL. On March 18, 1999, Petitioner timely filed its second protest of Respondent's proposed agency action. The first proposed evaluation of Petitioner's good faith efforts to comply with applicable DBE goals is contrary to officially stated agency policy in the Memorandum. The first District 6 good faith review committee did not include the three members required by agency policy. The committee did not receive required information in advance of the meeting. The committee neither prepared minutes of the meeting nor authored a report which included the committee's recommendations and supporting rationale. The committee did not otherwise disseminate its findings to the contracts awards committee or to the technical review committee. The second evaluation of Petitioner's good faith efforts to comply with applicable DBE goals was contrary to officially stated agency policy in the Memorandum. The Committee was not constituted in accord with membership requirements prescribed in the Memorandum. A member of the Committee did not write a report, and all of the Committee members failed to sign the required report. Copies of materials used by the Committee in its analysis were not attached to a report of the Committee. A report was not distributed to all members of the contract awards technical review committee and the contracts award committee. Minutes of the telephone conference conducted by the Committee were sent only to the minority programs office. The minutes were not disseminated either to the contracts awards technical review committee nor to the contract awards committee. After the telephone conference meeting of the Committee, a subsequent meeting of the technical review committee did not occur. The technical review committee received no further information for their consideration in voting whether to award or to reject the bid. Petitioner's Good Faith Efforts Petitioner's bid contains a DBE utilization summary form indicating an intent to subcontract with ABC in the amount of $38,000, or approximately five percent of the total project. Petitioner's bid also contains documentation of Petitioner's good faith effort to obtain additional minority participation. Both the DBE utilization summary form and the documentation of good faith efforts comply with the requirements of Rule 14-78.003(2)(b)3. In its bid, Petitioner submitted proof of solicitation of 26 qualified DBE firms. Each firm is listed in Respondent's monthly DBE Directory as performing work included in the project, either in Monroe County or statewide. In relevant part, Respondent's proposed evaluation of Petitioner's good faith effort to comply with applicable DBE goals states that Petitioner failed to contact 47 companies listed in the DBE Directory as doing work solicited by the contractor for the project. Of the 47 DBEs, 22 were maintenance or traffic subcontractors. Petitioner had a firm agreement with ABC. ABC was the same DBE used by PCL and Coastal. Another 17 of the 47 DBEs were painters who did not have the QP2 certification required for the project specifications. There was no reason for Petitioner to contact painters who were not QP2 certified. Another three of the 47 DBEs did not perform any item of work available on the project. Another four of the 47 DBEs had telephone numbers that were either disconnected or answered by different parties or entities. The remaining DBE was TCOE. TCOE was not interested in submitting a bid to Petitioner for this project. Rule 14-78.003(2)(b)3.f.(I) requires Respondent to consider whether a contractor contacts DBEs by certified mail. Although Respondent prefers that bidders contact DBEs by certified mail, Respondent does not require notice by certified mail. Petitioner provided reasonable notification to DBEs by fax. Petitioner included a fax log with its bid to show that the transmittals were successful. Petitioner selected economically feasible portions of the work to be performed by DBEs. Petitioner made all items in the contract available for subcontracting. Petitioner offered to assist DBEs in reviewing the contract plans and specifications. Petitioner submitted all quotations received from DBEs. Petitioner was not asked to assist any DBE in obtaining bonding, lines of credit, or insurance. Within the last six months, Petitioner has used DBEs on other contracts. Petitioner's utilization of DBEs has exceeded contract goals established by Respondent in each case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order finding that Petitioner submitted the lowest responsive bid to Financial Project No. 250533-1-52-01 and that Respondent's proposed evaluation of Petitioner's good faith efforts to comply with applicable DBE goals is contrary to applicable rules and officially stated agency policies, and is clearly erroneous. DONE AND ENTERED this 3rd day of August, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 3rd day of August, 1999. COPIES FURNISHED: Thomas F. Barry, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0450 Mike Piscitelli, Esquire 560 East Broward Boulevard Fort Lauderdale, Florida 33394 Suzanne Grutzner, Esquire 1321 77th Street East Palmetto, Florida 34221 Brian F. McGrail, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0458 Daniel Te Young, Esquire Post Office Box 589 Tallahassee, Florida 32302-0589
Findings Of Fact Petitioner is a Florida corporation located in Leon County, Florida. It prepares applications for CDBG funding for cities and counties. If those cities and counties are awarded grant funds, Petitioner administers the projects for the cities and counties. Having investigated the possibility for obtaining a grant to revitalize a water/sewer system in a neighborhood in Okaloosa County, and having rejected that project as infeasible, Petitioner made application for Okaloosa County for the project which is at issue here. The application was submitted to the Respondent on November 29, 1990, for grant award in the small cities CDBG housing category. The application stated that Okaloosa County had adopted a fair housing ordinance prior to the submission deadline date for applications that was consistent with state and federal housing laws. That feature in the application allowed Okaloosa County to receive 35 points in the scoring system in competition with other grant applicants. That 35 point score for the fair housing ordinance was crucial to the applicant's success in obtaining the grant funds. The record does not reveal that the Petitioner had any responsibility to assure itself that Okaloosa County had enacted a fair housing ordinance prior to the application submission deadline, although Petitioner does render advice to local governments concerning adoption of ordinances and other necessary policies in support of CDBG programs. Petitioner also estimates costs of projects, participates in public hearings to get comments from the public concerning the projects that Petitioner is involved with in connection with CDBG grants. The support role by Petitioner includes preparing needed documentation and advising local governments about associated activities within the grant programs. Those grants are in association with the United States Housing and Urban Development Agency and are known as Block Grants. The grants are to provide funding for the housing category at issue here, as well as neighborhood revitalization, commercial revitalization and economic development program categories. Here use of the term "CDBG" refers to the Florida Small Cities Community Development Block Grant Program. Respondent administers that program consistent with federal guidelines. In addition Respondent establishes applicant eligibility, application criteria, application procedures, a competitive scoring system for comparing applicants and specific program requirements for the various categories within the CDBG program, together with grant administration requirements for the various CDBG grant categories. On the same day that Okaloosa County, through Petitioner, submitted its application for CDBG funding in the housing category, it established procurement policies and procedures for CDBG programs and projects. That document pertains to the purchase or procurement of personal property, supplies, equipment and services, to be accomplished in accordance with applicable state and federal law. That document established a requirement for records keeping that basically indicated that appropriate arrangements would be made for generation and maintenance of all files, records and documentation that would be needed to evidence compliance with requirements delineated in the document itself. The document set forth procurement standards, procurement administration, procurement classification, solicitation and contract awards pursuant to invitations to bid and requests for proposals. The document spoke to the need for compliance with affirmative action/equal opportunity goals, contracts related to the provision of housing and the means to resolve protests over contracting procedures. The document was not designed to address the arrangements between Petitioner and Okaloosa County for administrative services provided to the county associated with the CDBG grant at issue. The agreement between Okaloosa County and the Petitioner by which Petitioner would provide administrative services was as set forth in a November 19, 1990 contract between those parties. Its effective date was contingent upon Okaloosa County receiving the applied for CDBG funding under an award agreement with Respondent. Subject to that award Petitioner agreed to provide services consistent with Section III to the contract with Okaloosa County which stated: III. Scope of Services Intent of the Contract CRA agrees, under the terms and conditions of this Contract and the applicable federal, state and local laws and regulations, to undertake, perform, and complete the necessary Administration Services required to implement and complete the County's CDBG project in compliance with applicable laws and regulations. Scope of Services The scope of services relevant to the CDBG project is included as Attachment "C" to this agreement. If the Agreement between the County and the Agency is amended, the scope of work for the project shall be amended to be consistent with the Agreement. The amount of consideration and the method of payment was as described in Section IV which stated: Consideration and Method of Payment Amount of Consideration CRA shall be paid by the County for Administrative Services the sum specified in the Scope of Work and Payment, attachment "C". Method of Payment CRA will submit a monthly (or other appropriate periodic) invoice specifying accomplishments toward meeting the Administration Services as specified in the Work Order. The invoice shall be submitted to the County for the County's review and approval. Payment will be issued within two days of approval of the invoice, subject to availability of project funds. Any intent to modify the terms of the contract between Okaloosa County and Petitioner had to comply with Section VII which stated: Modification of Contract Modifications of the provisions of this Contract shall only be valid when they have been reduced to writing, duly signed by the parties hereto, and attached top the original of this Contract. CRA hereby agrees to amend the Work Order pertaining to each project to remain consistent with the County/Agency Agreement if said Agreement is amended. The amount of compensation to be paid to CRA will not be amended without mutual agreement of the County and CRA, formally executed in writing, subject to availability of funds from the Agency. The fee and payment schedule between Okaloosa County and Petitioner was set forth in attachment "C". It stated: Fee and Payment Schedule For Administrative Services, the County will pay CRA the sum of 15 percent of the grant award. No more than $5,000 shall be obligated by the County for CRA's services under Phase I. Upon the Department's Release of Funds, Phase II shall be initiated by CRA and the County. The fee amount shall be issued by the County to CRA in 24 equal monthly payments. If the project is completed before the 24 month grant period expires, the balance of the administrative fee will be paid to Clark, Roumelis and Associates, Inc., by the tenth calendar day of the month after completion and submission of the close-out report to DCA. Okaloosa County obtained the CDBG grant funding which it applied for and entered into an award agreement with Respondent as executed on June 28, 1991. The grant was subject to Sections 290.041 through 290.049, Florida Statutes, as amended; Public Law 93-383, as amended; 24 C.F.R. Part 570; Chapter 9B-43, Florida Administrative Code; OMB Circulars and 25 C.F.R., Part 85. The agreement between Okaloosa County and Respondent was for a period of 24 months after signature unless terminated earlier in accordance with Clause (14). Clause (14) dealt with suspension or termination and it stated: SUSPENSION OR TERMINATION. The Department reserves the right to suspend payments to a Recipient when the reports required in Section (9) of this Agreement are delinquent. The Department may terminate this Agreement for cause upon such written notice as is reasonable under the circumstances. Cause shall include, but not be limited to, misuse of funds; fraud; lack of compliance with applicable rules, laws and regulations; failure to perform in a timely manner; and refusal by the Recipient to permit public access to any document, paper, letter, or other material subject to disclosure under Chapter 119, Fla. Stat. as amended. Suspension or termination is an appealable action under Chapter 120, Fla. Stat. as amended. Notification of suspension or termination shall include notice of appeal rights and time frames. The Department reserves the right to exercise corrective remedial actions including, but not limited to, requesting additional information from the Recipient to determine the reasons for, or extent of non-compliance or lack of performance; issuing a written warning advising that the Agreement may be suspended or terminated if the situation is not remedied; advising the Recipient to suspend, discontinue or not incur costs for activities in question; or requiring the Recipient to reimburse the Department for the amount of costs. The Recipient shall return grant funds to the Department if found in noncompliance with laws, rules, regulations governing the use of CDBG funds or this Agreement. If at any time after the effective date of this Agreement, the Department determines that an activity to be funded is not eligible pursuant to 24 C.F.R. Part 570 or any subsequent federal regulation which supersedes it, the Department may unilaterally amend this Agreement to delete the ineligible activity and deobligate any unencumbered funds attributable to the ineligible activity. The funding for the grant was in an amount not to exceed $650,000 for Respondent's share subject to the availability of federal funds to support that amount. Requests for disbursement of funds were to be made in accordance with Clause (4)(d) to the agreement which stated: Each request for funds shall be for an amount of not less than $5,000 unless it is the final request for funds and shall be on a form approved by the Department and shall be certified by an agent of the Department and shall be certified by an agent of the Recipient who has been identified as having signatory power on the signature form received by the Department. The Recipient shall immediately notify the Department in writing of any change in agents. The reporting requirements of Okaloosa County under the terms of the agreement were as set forth in Clause (10) which stated in pertinent part: (a) At a minimum, the Recipient shall provide the Department with quarterly reports, and with a close-out report, on forms provided by the Department. If program income is produced, a semi-annual program income report shall be provided. * * * (c) The close-out report is due 45 days after termination of this Agreement or upon completion of the activities contained in this Agreement. Under the terms of the agreement Respondent was required to make periodic review of the performance of Okaloosa County in completing the program contemplated by the CDBG grant. Clause (13) to the agreement sets forth Okaloosa County's liability in its dealings with other entities, to include Petitioner and holds Respondent harmless against claims by those third parties that arise from performance of the work under the terms of the agreement. The validity of the agreement between Okaloosa County and Respondent was contingent upon the truth and accuracy of information in the application, as required by Clause (18) (b) to the agreement. In the event that the application was not found to be truthful and accurate, Respondent upon 30 days written notice to Okaloosa County could cause the termination of the agreement and the release of the Respondent from obligations to Okaloosa County. Should Okaloosa County fail to honor its agreement with Respondent, Petitioner in its obligation to Okaloosa County could suspend or terminate services which were affected by the breach of the agreement between Okaloosa County and Respondent. This was in accordance Section VIII (D) to the contract between Okaloosa County and Petitioner. Section VIII (D) stated: If the County shall fail to fulfill in a timely manner its obligations under this Contract or its Agreement with the Agency, CRA may, at its option and without liability, suspend afforded services until such time the County remedies the breach. CRA may also, without liability, terminate the affected portion of this Contract for breach within 10 days of giving written notice to the County of such termination and the reason(s) therefore. Neither of these options shall operate to deprive CRA of entitlement to remuneration for services rendered in accordance with this Contract. As Grant Administrator Petitioner was entitled to $97,500 should the full $650,000 grant funding be disbursed. If the full amount was disbursed over the 24-month life of the grant then Petitioner would receive $4,062.50 for each monthly installment. Commencing September 12, 1991, and ending on May 5, 1992, Petitioner submitted monthly invoices for reimbursement of costs associated with administrative services. Those invoices in the total amount of $40,625.00 were honored by Respondent. This approximated the monthly disbursement contemplated by the agreement between Petitioner and Okaloosa County. The arrangement was one in which the invoices had been approved by Okaloosa County and provided to the Respondent for reimbursement through Requests for Funds. The invoices described were for administrative services provided through April, 1992. The overall reimbursement in the project through Requests for Funds, to include the January 7, 1992 period, was $208,816.00. Those cost reimbursements pertain to housing rehabilitation, temporary relocation and administration. That overall amount also reflected the circumstance on May 13, 1992. On April 23, 1992, Judith J. Foxworth, a grants administrator for Petitioner and Robert J. Rase, an employee for the Respondent, were performing a monitoring visit concerning the grant program at issue. At that time Ms. Foxworth had been assigned as administrator to the Okaloosa County grant program. The purpose of the monitoring visit was to insure program compliance with requirements of state and federal law. Janice A. Mack attended the monitoring visit as representative for Okaloosa County. During the monitoring visit Mr. Rase raised the question of whether the fair housing ordinance that has been referred to before had been passed on November 20, 1990, which would have indicated that the fair housing ordinance was in effect at the time the application was made for grant funding. To assure himself concerning this topic Mr. Rase asked Okaloosa County to provide the minutes of the meeting at which the fair housing ordinance is said to have been passed. While the passage of a fair housing ordinance had been discussed, as noted in the November 20, 1990 minutes, the ordinance was not shown to have been passed on that date. With this revelation through the minutes of the meeting, Ms. Foxworth became aware of this fact as did Mr. Rase. Someone in this conversation between the representatives of the Petitioner, Respondent and Okaloosa County suggested the possibility that tapes of the November 20, 1990 meeting might reveal the passage of the fair housing ordinance and the possibility that it was an oversight that the passage of the fair housing ordinance had not been noted in the minutes, given the busy agenda being considered by the Okaloosa County Board of County Commissioners on that date. Ms. Mack also referred Foxworth and Rase to Bob McQuire, a deputy clerk for Okaloosa County, to see if McQuire had some recollection of the passage of the fair housing ordinance on November 20, 1990. Mr. McQuire was unable to assist in the inquiry. Some other discussion was held with the clerk to the Board of County Commissioners about the possible transcription of tapes associated with the November 20, 1990 meeting. Ms. Mack indicated that they could possibly transcribe the tapes and listen to them; however, it was indicated that the county had some priority items to attend to and it probably would be several days or even a week before these arrangements could be made. No indication was given in the present record that tapes of the meeting of November 20, 1990 were prepared for consideration by the Petitioner or Respondent beyond April 23, 1992 or what the tapes of the meeting of November 20, 1990 may have revealed concerning the passage of the fair housing ordinance. However, based upon the record in this case, it has been established that the fair housing ordinance was passed upon a date subsequent to the time of the application for grant funding. This caused Respondent to revise the scores received by Okaloosa County. As a consequence Okaloosa County's application dropped below the fundable range in that inadequate points were received to allow the project to be funded. After April 23, 1993, neither Ms. Foxworth nor any other person affiliated with Petitioner took action to confirm that the fair housing ordinance had been passed on November 20, 1990. By contrast Respondent wrote to the Okaloosa County chairperson on May 20, 1992. The correspondence mentioned that Respondent had reviewed information received from the Deputy Clerk of Okaloosa County in response to a request to verify information in the application for funding. That review by Respondent's staff revealed that the fair housing ordinance had not been adopted until January 15, 1991, in a setting in which the deadline for submission of applications was November 29, 1990. As a consequence the 35 points were deducted from the application reducing the score from 824.18 to 789.18, hence the Okaloosa County application was outside the fundable range. The May 20, 1992 correspondence to the chairperson in Okaloosa County reminded the county that the Respondent believed that there had been a violation of Section 290.0475(7), Florida Statutes, which would allow rejection of the application based upon a misrepresentation in the application. Respondent was persuaded that the failure to pass a fair housing ordinance until January 15, 1991, in a setting in which Okaloosa County had reported the date of passage as November 20, 1990, specifically on March 1, 1991, in response to a completeness letter requested by Respondent on February 22, 1991, evidenced the misrepresentation by Okaloosa County. As a consequence, through the May 20, 1992 correspondence, Okaloosa County was given the following instructions by Respondent concerning the future of the CDBG award agreement: Based upon these findings, the Department is hereby providing the County with notice, pursuant to Section (18)(b) of your grant agreement, that the award agreement will be terminated in thirty (30) days from receipt of this letter. The validity of the award agreement was subject to the truth and accuracy of all the information, representations, and materials submitted or provided by the County in the application, in any subsequent submission, or response to a Department request. The lack of accuracy thereof or any material change shall, at the option of the Department and with thirty (30) days written notice to the County, cause the termination of the agreement and release of the Department from all its obligations to the County under the agreement. The County should incur no additional costs from the date of receipt of this letter. While the Department has the ability to recover any costs incurred under this grant contract, due to the fact that the grant funds were spent on eligible activities to assist low and moderate income persons, the Department will not seek to recover monies already expended. However, no additional funds shall be disbursed from the contract. The correspondence offered Okaloosa County the right to contest the preliminary agency action concerning termination of the grant agreement by resort to a formal hearing in accordance with Section 120.57(1), Florida Statutes, or an informal hearing in accordance with Section 120.57(2), Florida Statutes. In the end Okaloosa County accepted the termination upon the grounds stated in the May 20, 1992 correspondence. Okaloosa County received the notification of termination on May 26, 1992. Petitioner received a copy of the May 20, 1992 correspondence directed to Okaloosa County. The May 20, 1992 correspondence constituted notice to the county not to incur additional costs as well as notification of termination. Between April 23, 1992 and May 26, 1992, the dates when Petitioner first was made aware that there was a problem with passage of the fair housing ordinance and project fundability and the date upon which Respondent officially confirmed the significance of those problems, housing improvements contracts were entered into between home owners and contractors. A significant number of those contracts were entered into commencing April 28, 1992 and ending May 12, 1992. As project administrator Petitioner had been acting in the interest of the home owners in soliciting competitive bids from contractors who would do the home improvement work associated with the grant activities. Following the correspondence of May 20, 1992, Petitioner and Okaloosa County directed a number of inquiries to Respondent concerning proper use of remaining grant funds. As of May 20, 1992, when Respondent gave the termination notice, it had effectively informed Petitioner and Okaloosa County concerning Respondent's intention not to recover the $208,816.00 already disbursed, but had withheld details about the amount of money it might disburse in the future from what remained of the $650,000.00 award. Associated with the balance of the funds, what was known was that Respondent considered the agreement between itself and Okaloosa County terminated effective June 25, 1992. Respondent did not immediately honor a May 21, 1992 Request for Funds, which it mistakenly believed had been submitted subsequent to the May 20, 1992 notification to Okaloosa County that the agreement was terminated effective 30 days from receipt of notice of termination. Again the County did not receive that notice of termination until May 26, 1992, subsequent to its submission of the Request for Funds. One member of the Respondent's staff considered the submission of the May 21, 1992 Request for Funds to be a blatant attempt to obligate the balance of the grant monies with the "suspension pending". That was not the intention by Okaloosa County when submitting the May 21, 1992 Request for Funds. Suspension of funding is a consequence of the termination. By correspondence of June 17, 1992, directed to the chairperson of the Okaloosa County Commission, with a copy to Petitioner, Respondent replied to the inquiries from Petitioner and Okaloosa County concerning whether any additional costs could and would be reimbursed subsequent to the notice of suspension of funds and termination dated May 20, 1992. On June 17, 1992, Respondent informed Okaloosa County, and indirectly informed Petitioner, concerning the basis for determining cost reimbursement above the cost amounts already drawn and paid. Again, this is taken to mean that Okaloosa County and Petitioner were being told that $208,816.00 would not be reclaimed by Respondent and that the basis for deciding the issue of payment of other funds sought by Okaloosa County would be in accordance with guidelines set forth in 24 C.F.R., Part 85. In particular, Respondent had this to say concerning the basis for reimbursing any other costs: To aid the County, the Department offers the following guidelines which will be followed in determining which costs shall be reimbursed from the CDBG contract, beyond those already drawn and paid. The federal regulations in 24 CFR Part 85, Administrative Requirements for Grant to Sates and Local Governments, outlines the guidelines in the event of suspension and termination. Specifically, Section 85.43(c) states the following standards. Costs resulting from obligations incurred during a suspension or after termination of an award are not allowable without express authorization from the awarding agency, which in this case is the Department. Other costs during suspension or after termination which are necessary and not reasonably avoidable are allowable, provided the following tests are met. The costs result from obligations which were (1) properly incurred before the effective date of suspension or termination, (2) are not in anticipation of the suspension or termination, and (3) in the case of termination, whether the obligations are noncancellable; and The costs would have been allowable if the award had not be suspended or the contract had expired normally at the end of the funding period. Okaloosa County was further instructed in the June 17, 1992 correspondence as follows: The County should evaluate each cost that it seeks to have reimbursed from the grant and certify to the Department that the costs meet the above outlined standards. In addition, you should provide copies of all contracts obligating the costs, notices to proceed, and invoices for costs incurred to support each cost item requested for reimbursement. The Department will evaluate all costs on a case-by-case basis and make its determination applying the standards contained in 24 CFR Part 85.43(c). Once the determination is made, you will be notified in writing of the Department's final action. Consistent with the instructions set forth in the June 17, 1992 correspondence Okaloosa County through Petitioner submitted detailed documentation of costs incurred over and above the $208,816.00. The amounts claimed are discussed in Respondent's September 22, 1992 interoffice memorandum from Thomas Pierce, Planning CDBG Program to Pat Pepper, Director of the Division of Housing and Community Development. The memorandum describes the following costs claimed: Temporary relocation $ 1,600.00 Housing rehabilitation 214,967.36 Permanent relocation 88,063.00 Demolition 3,000.00 Administration 43,274.92 The memorandum sets out the position of the Respondent concerning payment of those costs where it says: Based on the review of the contracts submitted, the notices to proceed, and invoices, it appears that the direct assistance activity costs under temporary relocation, housing rehab, permanent relocation and demolition are justified for reimbursement. These costs were clearly obligated prior to our termination, and the contracts do not provide for costs avoidance in the event of grant cancellation. Therefore, the $307,630.36 for these direct assistance costs are recommended to be reimbursed by the grant to avoid undue hardship on the low and moderate income clients assisted. With regard to the payment of administrative costs, the review did not find adequate documentation to support reimbursement. The invoice submitted sought payment for preparation of the June 30, 1992 quarterly status report, attending a June 12, 1992 County Commission meeting and preparing request for funds and closeout reports. All of these are activities performed after the May 20 termination date, and therefore are not eligible for reimbursement, even though there was a contract executed for administrative services prior to the termination date. Therefore, we recommend that the administrative costs of $43,274.92 not be reimbursed by the CDBG Program. These costs are an obligation of County and would have to be paid by non-CDBG funds. Prior to this memorandum Respondent had received a July 8, 1992 Request for Funds and a July 23, 1992 status report which addressed the $43,279.92 claim for administrative costs. In addition, on July 1, 1992, Petitioner had prepared an Amended Administrative Services Invoice #15. On September 30, 1992, Okaloosa County wrote to Petitioner to inform Petitioner that the invoice was approved by Okaloosa County contingent upon receipt of funds from Respondent. On October 8, 1992, Petitioner transmitted this invoice to Respondent. Amended Administrative Services Invoice #15 gave the following account concerning claims for payment: DUE UPON RECEIPT Please issue payment to Clark, Roumelis and Associates, Inc., for services performed from May, 1992 through June 24, 1992, in accordance with out contract. Prepared and coordinated the signing of the final two rehab contracts. Prepared Notices to Proceed on the 3 demo/ relos and the final 12 rehabs. Monitored construction progress with inspections at least weekly on all the final units (3 demo/relos and 17 rehabs). Change Orders were prepared on three rehab units. Prepared and coordinated the necessary paperwork for pay request for the contractors, homeowners, rental unit and recording fees. Provided County Commission with project status report. Liaisoned with local financial record keeper to update and verify monthly financial transactions. Prepared Quarterly Status Report by compiling data on accomplishments and beneficiaries and thorough update of financial records on June 22, 1992. Discussed final Request for Funds and financial reimbursements by County for CDBG expenditure with Mike Arciola, Jan Mack and CRA housing Specialist. Prepared final Request for Funds on June 22, 1992, for signature by the County. Attended County Commission meeting June 16, 1992, to discuss alternatives associated with timely closeout of the grant contract. Presented an issue paper and pros/cons of various actions Attorney. Administrative Services discussed the with the County Contract amount $97,500.00 Previously Billed 40,625.00 Total billed to date including this invoice 83,899.92 Total Received to date 40,625.00 Total Due Upon Receipt 43,274.92 Later, when Respondent arrived at its proposed agency action concerning cost reimbursement it wrote to the chairman of the Okaloosa County Commission, with a copy to Petitioner. This correspondence was dated January 28, 1993. In its operative terms it stated: The Department of Community Affairs has reviewed the documentation submitted on the costs incurred under the above referenced Community Development Block Grant (CDBG) which was terminated by the Department in June 1992. Based on the provisions of 24 CFR 85.43 and our review of the documentation submitted, the Department finds that the following direct assistance costs were properly incurred before the effective date of the termination, were not incurred in anticipation of the termination, and were not cancellable. Further, the costs would otherwise have been eligible for grant reimbursement. These costs will be reimbursed by the Department immediately upon receipt of a Request for Funds form, signed by the County. Line Item Amount Temporary Relocation $ 1,600.00 Housing Rehabilitation 214,967.36 Permanent Relocation 88,063.00 Demolition 3,000.00 TOTAL $307,630.36 With regard to invoice #15 for administrative costs, the Department does not find adequate contract authority in your agreement with the grant consultant to make a payment for $43,274.92. As your contract was a lump sum contract, payable in equal monthly installments, the Department finds that the only authorized payments would be the monthly payment for May, given receipt by the County on May 26, 1992 of the Department's notice of termination of your grant and notice to incur no additional costs from that date. Further, the Department reads Section IV (B) of the contract for administrative services to condition payments upon the availability of grant funds by the County. Given the notice of termination, the Department finds that the County did not have funding available beyond May 26, 1992 upon which to make payments. Therefore, the Department finds that the administrative costs were cancellable and as such would not be allowable under the federal guidelines contained in 24 CFR Part 85.43 (c) (1). The Department will, however, process a revised invoice that covers the monthly fee for May, as that cost was allowable and eligible prior to the notice of termination and notice to incur no additional costs. On May 5, 1992, $4,062.50 in administrative services costs was approved by Okaloosa County through invoice #1501. This amount was in addition to the $40,625 already paid for administrative services. It is included within the $43,274.92 in dispute. As described in the January 28, 1993 proposed agency action it is an amount that Respondent would pay, notwithstanding that the invoice was not submitted to it. However, the $4,062.50 from May 1992 has not been paid to Petitioner. Okaloosa County did not proceed to contest the determination concerning disbursement of funds as described in the January 28, 1993 correspondence. While Petitioner was not specifically noticed of its rights to administrative relief it sought and was granted the opportunity to contest the refusal to pay $43,274.92 in administrative costs set forth in Amended Administrative Services Invoice #15. Under the circumstances wherein Respondent terminated its agreement with Okaloosa County prior to the normally anticipated concluding date, Petitioner did not prepare a close-out report. Petitioner did provide a status report dated July 23, 1992, which sets out its administrative claim of $43,274.92. Petitioner believes that it has performed its obligations pursuant to the agreement with Okaloosa County and is entitled to receive the disputed $43,274.92.
Recommendation Based upon consideration of the findings of facts found and the conclusions of law reached, it is, RECOMMENDED: That the final order be entered directing the payment of administrative costs in the amount of $43,274.92. DONE and ENTERED this 29th day of September, 1993, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1306 The following discussion is given concerning the proposed findings of fact submitted by the parties: Petitioner's Facts: Paragraphs 1 through 6 are subordinate to facts found. Paragraph 7 is contrary to facts found. Paragraphs 8 through 14 are subordinate to facts found. Paragraph 15 is not necessary to the resolution of the dispute. Paragraph 16 is subordinate to facts found. Paragraphs 17 and 18 are not necessary to the resolution of the dispute. Paragraph 19 is subordinate to facts found. Paragraphs 20 through 22 are not necessary to the resolution of the dispute. Paragraph 23 is subordinate to facts found. Paragraph 24 is not necessary to the resolution of the dispute. Paragraph 25 is subordinate to facts found. Paragraphs 26 through 28 are not necessary to the resolution of the dispute. Paragraphs 29 through 31 are subordinate to facts found. Paragraphs 32 and 33 are not necessary to the resolution of the dispute. Paragraphs 34 through 37 are subordinate to facts found. Paragraph 38 is not necessary to the resolution of the dispute. Paragraph 39 is subordinate to facts found. Paragraph 40 is not necessary to the resolution of the dispute. Paragraphs 41 and 42 are subordinate to facts found. Paragraphs 43 through 46 are not necessary to the resolution of the dispute. Paragraph 47 is subordinate to facts found. Paragraph 48 is not necessary to the resolution of the dispute. Paragraphs 49 and 50 are subordinate to facts found. Paragraphs 51 and 52 are not necessary to the resolution of the dispute. Paragraph 53 is subordinate to facts found. Paragraph 54 constitutes a conclusion of law. Paragraph 55 is subordinate to facts found. Paragraphs 56 through 59 are not necessary to the resolution of the dispute. Paragraph 60 is subordinate to facts found. Paragraph 61 is not necessary to the resolution of the dispute. Respondent's Facts: Paragraphs 1 through 7 are subordinate to facts found. Paragraph 8 with the exception of the second sentence is subordinate to facts found. The second sentence is contrary to facts found. Paragraphs 9 and 10 are subordinate to facts found. The Second Paragraph 10 is not necessary to the resolution of the dispute. Paragraphs 12 through 15 are subordinate to facts found. Paragraph 16 is not accepted in its suggestion that Petitioner as opposed to Respondent had some obligation to decide the point at which the agreement between Respondent and Okaloosa County would be terminated and the consequences that would pertain upon that termination. Paragraph 17 is subordinate to facts found. Paragraph 18 see discussion concerning Paragraph 16. Paragraph 19 is subordinate to facts found. The first two sentences to Paragraph 20 are subordinate to facts found. The remaining sentences within that paragraph are not necessary to the resolution of the dispute. Paragraphs 22 and 23 are subordinate to facts found with the exception that the date set forth in Paragraph 23 as September 19, 1992 should be September 20, 1992. Paragraphs 24 through 27 are subordinate to facts found. Paragraph 28 see discussion as to Paragraph 16. Paragraph 29 is not necessary to the resolution of the dispute. COPIES FURNISHED: Stephen Marc Slepin, Esquire 1114 East Park Avenue Tallahassee, Florida 32301 Alfred O. Bragg, Esquire Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Linda Loomis Shelley, Secretary Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100
The Issue The sole issue to be addressed is whether the Petition to establish the Durbin Crossing Community Development District meets the applicable criteria set forth in Chapter 190, Florida Statutes, and Chapter 42-1, Florida Administrative Code.
The Issue The issue is whether the application of Westinghouse Gateway Communities, Inc. for approval of the Area Master Plan 2 in the Gateway Development of Regional Impact in Lee County, Florida should be approved, approved with conditions, or denied.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: The Parties Petitioner, Westinghouse Gateway Communities, Inc. (WGC), is a real estate developer that owns and operates a project known as the Gateway new community (Gateway) in Lee County, Florida. Gateway lies in central unincorporated Lee County, adjacent to I-75. It is located southwest of Lehigh Acres, immediately north of the Southwest Florida Regional Airport, and just east of the City of Fort Myers. The community is planned and approved for not more than 19,932 residential dwelling units, 816 acres of business, commercial and office uses and required support facilities on approximately 5,464 acres of land. To date, WGC has expended more than $38.9 million on the project, and more than 180 homes and 49,000 square feet of non-residential uses and a golf course country club are under construction or have been constructed. Petitioner, Department of Community Affairs (DCA), is the state land planning agency charged with the responsibility of administering and enforcing Chapter 380, Florida Statutes, and the development of regional impact (DRI) programs pursuant to that chapter. Petitioner, Southwest Florida Regional Planning Council (SWFRPC), is the regional planning agency for the region in which Gateway is located. It is charged with various DRI-related responsibilities under chapter 380. Respondent, Lee County Board of County Commissioners (County), is the local government unit authorized by chapter 380 to issue local development orders for DRIs and to adopt land use and zoning policies under other legal authority. This proceeding involves three separate and timely appeals under Section 380.07, Florida Statutes (1989) from a development order rendered by the County on January 4, 1990. The development order pertains to the Gateway DRI. Many of the issues raised by the parties are factually and legally complex with little, if any, agency and judicial precedent to use as a guide. The issues are dealt with in separate portions of this Recommended Order. Finally, all parties presented fact and expert testimony on the various issues raised by the pleadings. As might be expected, the testimony is sharply conflicting in many respects. In resolving these conflicts, the undersigned has accepted the more credible and persuasive testimony, and that testimony is embodied in the findings below. Background WGC purchased its Gateway acreage in 1982. At that time, it obtained an appraisal of the land showing a value of approximately $5,000 per acre, based on the highest and best use of the then agriculturally-zoned property for residential development. According to WGC, it purchased the land because of its single ownership, location in the path of growth, surrounding transportation network, and the adjacent Southwest Florida Regional Airport which was then under construction. At present, WGC owns approximately one-half of the Gateway land and holds the balance under options with a takedown rate of approximately 350 acres per year. (Schmoyer, Tr. 131-32; Respondent's Exhibit 3; Paragraph 2, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Koste, Tr. 607-08, 615-16). Prior to 1984, the Gateway property was zoned agricultural. In 1984, the County adopted the 1984 Lee County Comprehensive Plan pursuant to Chapter 163, Florida Statutes. Under the plan, public expenditures for roads and other infrastructure were targeted to an Urban Services Area, which the County's local planning agency recommended stop at Interstate 75. Gateway was located east of the Urban Services Area and beyond I-75 and designated rural under the local planning agency's plan. Although WGC desired to have Gateway included in the Urban Services Area, the local planning agency did not change its recommendation to the County. WGC accordingly proposed a "New Community" land use category in the comprehensive plan. (Spikowski, Tr. 1781; Bigelow, Tr. 1709-1712). In 1984 WGC developed the "New Community" land use concept, drafted the language, and submitted the proposal to the County. Among other things, WGC represented to the County that: Such lands are capable of being planned and developed as a cohesive unit in order to be free-standing economic units which do not impose negative fiscal impacts on the County. We've requested a non-urban services district designation. Thus, we have not affected the efficiency of the urban services area. We are not going to cost the County anything. This will not add to the cost of the plan. (Paragraphs 9 and 10, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Respondent's Exhibits 16 and 517). In proposing the new community designation, WGC sought to establish a category that would work with the location and the proposed plan of development of the Gateway DRI, while also fulfilling the 1984 comprehensive plan requirements. On December 21, 1984, the County adopted the new community designation proposed by WGC with only minor changes in the 1984 comprehensive plan. The Gateway property is designated as a new community in accordance with Section III, Land Use Plan Element of the 1984 comprehensive plan. When the new community designation was adopted by the County, the County included such statements as follows: New Community areas will be developed as free-standing economic units and will not impose negative fiscal impacts on the County. The land shall be developed as a free- standing community offering a complete range of land uses, e.g., a full mix of housing types for a range of household incomes... Off-site impacts shall be mitigated. (Paragraphs 11-14, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Respondent's Exhibits 10 and 28). The new community designation was specifically created for Gateway and agreed to because WGC indicated to the County that it would provide its own infrastructure, not cost the County anything, and be a freestanding economic unit. In light of the County's inability at that time to finance the infrastructure outside urban areas, it agreed to allow urban densities in non- urban areas only if the developer privately provided infrastructure. The new community designation has benefited WGC by increasing the valuation of the property. While the 1982 appraisal valued the property at $5,000 per acre, seven years later WGC requested an appraised value of $75,000 per acre for a land donation. Finally, it is noted that the Gateway lands are the only lands designated as new community within the entire county. (Spikowski, Tr. 1781-83; 1785-88; Respondent's Exhibits 3, 239, and 517; Nicholas, Tr. 3372-78; Paragraphs 15, 16, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement). The 1985 DRI Order The WGC development known as Gateway is a development of regional impact (DRI) pursuant to the provisions of Section 380.06, Florida Statutes. A DRI is a development which, because of "its character, magnitude, or location," substantially affects the health, safety and welfare of citizens of more than one county. Gateway's ultimate buildout development of 19,932 residential units and 816 acres of commercial/office uses is the equivalent of 20 DRIs, based on commercial acreage alone. Indeed, Gateway is the second largest DRI in Lee County history. (Paragraph 26, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Starnes, Tr. 2414; Gibbs, Tr. 2117-18). An application for development approval for the Gateway DRI was determined to be sufficient under the provisions of Section 380.06, Florida Statutes (Supp. 1984) by SWFRPC on August 17, 1984. SWFRPC's report and recommendations were issued on October 18, 1984, recommending that the Gateway DRI be approved subject to certain enumerated conditions. (Paragraphs 28 and 29, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Respondent's Exhibit 22). In the DRI process, the regional planning council takes a lead coordination role in the review of a DRI. According to SWFRPC's executive director, SWFRPC staff recommended only conceptual approval of the Gateway DRI at the outset in 1984 under a process in Section 380.06, Florida Statutes, known as the Application for Master Development Approval (AMDA) process because the proposed 40-year buildout of Gateway exceeded local planning horizons and the proposed Gateway DRI was very large. Moreover, it is impossible to accurately plan a development over twenty years or more. SWFRPC staff worked with WGC to find a way to allow the development to move forward with certain planning and analysis delayed. The staff concerns were eventually resolved when WGC proposed phased or incremental review to provide for more specific analysis of Gateway as portions were proposed for development and to provide for a continued review role by the regional planning council. (Daltry, Tr. 2626, 2628; Burr, Tr. 2691- 92, 2701). In 1984 and early 1985 County planning staff also advocated the master application review approval and found the application information inadequate to analyze the project's impacts 40 years into the future. Staff indicated that the Gateway DRI application raised concerns about whether infrastructure needs would be mitigated in later phases. (Gibbs, Tr. 2119-22; Respondent's Exhibits 23, 37, 45 and 46). On May 31, 1985, the County approved, with conditions, restrictions and limitations, WGC's illustrative concept plan in the Gateway DRI Development Order #1-8384-36 (1985 DO). The illustrative concept was a delineation of the land use program specified in the area master plan (AMP) development program in the 1985 DO. The County granted approval for WGC to develop not more than 19,932 residential dwelling units, 816 acres of business/commercial/office uses, and required support facilities in accordance with the AMP development program set forth in Exhibit C to the 1985 DO and subject to certain conditions, limitations, and restrictions. Gateway included a total of approximately 5,319 acres and was proposed to be developed in nine areas over a 40-year buildout. (Paragraphs 33 and 35, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Respondent's Exhibits 45, 46, 63, and 809). On May 31, 1990, the County also adopted Planned Unit Development (PUD) Ordinance No. 85-15 to implement the Gateway DRI in terms of local procedures. (Respondent's Exhibit 62; Gibbs, Tr. 2118). The 1985 DO created an area master plan (AMP) process to determine the "precise location of land uses within each area," or the "precise location and character of land uses within the DRI," "in order to logically and rationally coordinate the phasing of development with available facilities." However, the 1985 DO did not assess the particular impacts of development of any area within Gateway or the mitigation WGC would be required to pay for them. (Respondent's Exhibits 63 and 809). Under the 1985 DO, no development within Gateway could occur without submission to the County of an AMP for the area sought to be developed. This prohibition was in accordance with a provision of the DO which provided that "Prior to carrying out any development of the parcel proposed for development, WGC shall prepare and submit to Lee County an Area Master Plan." The PUD ordinance adopted for WGC on May 31, 1985, and which is referred to in finding of fact 16, provided a process for further refinements of each AMP and also precluded commencement of "any development or construction within GATEWAY" without submission of an AMP to the County for review and approval. (Respondent's Exhibits 62, 63, 809 and 810). Under the 1985 DO, information in each AMP application must address drainage, conservation, transportation impact, wetlands, potable water, sewer, parks and recreation, schools, threatened and endangered species and fire protection, among other issues. The County must also determine whether to approve, approve with conditions, or deny the AMP according to the following standards for determination as to the extent to which the proposed AMP is: Consistent with the land uses authorized by this Development Order and the general distribution of uses set forth in paragraph 1 of this Order; Consistent with the PUD Ordinance #85-15 and the Lee County Comprehensive Plan; Consistent with sound land planning principles; Served, or will be served, by adequate public facilities, including: Water, Sewer, Roads, Surface Water Management, Law Enforcement, Fire Protection, Schools, Parks and Recreation. Consistent with the specific conditions set forth in this Development Order.. Finally, as part of its determination, the County must make a determination of whether the AMP is a "substantial deviation" pursuant to then Subsection 380.06(17), Florida Statutes, now Subsection 380.06(19), Florida Statutes. After approval, the AMP is the "controlling instrument" concerning the "location, character and magnitude of specific uses" within that area of the Gateway DRI. (Respondent's Exhibits 63 and 809). The 1985 DO further highlights the importance of the AMP process and the fact that issues would be subject to later adopted regulations for mitigation of impacts identified in that process in the following specific subject areas: Drainage. WGC must comply with every applicable rule, regulation, or requirement of the South Florida Water Management District (SFWMD) prior to any development of "any portion of the Gateway DRI". Energy. WGC must provide a bicycle/pedestrian system consistent with Lee County requirements. Transportation. WGC must submit a traffic impact statement (TIS) with each AMP application and approval or approval with conditions of Gateway phases is dependent on the results of the TIS and review and recommendations of various agencies, including SWFRPC. WGC must agree to pay for its "proportionate share" of needed road improvements as a "condition for area master plan approval." Water Supply and Sewer Service. During each AMP review, WGC must document adequate water supply and sewer service and comply with all SFWMD and Florida Department of Environmental Regulation (DER) regulations prior to development. Wetlands. WGC must delineate jurisdictional wetlands and submit plans for mitigation of impacted wetlands during the AMP process and comply with all applicable SFWMD and DER regulations. Education. School sites will be located during the AMP process. Protective Services. Sites for fire protection, emergency medical services and law enforcement will be dedicated during the AMP process. Each AMP application must demonstrate availability of fire protection services. Fiscal Impact. WGC must demonstrate with each AMP submittal that Gateway will not have a negative fiscal impact on the County. Parks. Parks will be located during the AMP process. Housing. WGC must cause the provision of a "range of housing types to be addressed" during AMP review. (Respondent's Exhibits 63 and 809). The 1985 DO also provides that the approval is further limited because it does not "obviate the duty of the applicant to comply with all other applicable local or state permitting procedures." (Respondent's Exhibits 63 and 809). The SWFRPC planning director agreed that (a) the 1985 DO did not confer blanket approval to develop the Gateway DRI, (b) information in the 1984 DRI application by Gateway did not satisfy regulatory requirements for DRI review of area 2, and (c) the original 1985 DO does not permit WGC to develop area 2 of the DRI due to missing details. In particular, the original application was not sufficient to fully address transportation concerns for every phase. (Burr, Tr. 2695-96, 2705-05). County planning staff viewed the 1985 DO as atypical, because it did not confer any authority to begin construction without further review under the AMP process. In essence, the County deferred impact mitigation to the AMP process because there was no 40-year impact assessment. The 1985 DO did not establish the specific development conditions for each area within Gateway. (Gibbs, Tr. 2118-20, 2173; Spikowski, Tr. 1789). Doctor Earl M. Starnes, the County's outside planning expert and the first state planning director, found that the 1985 DO did not address specific impacts in detail or by time frame, deferring those issues. Instead, it established a broad scheme for the location of future land uses and their intensities, subject to detailed AMP review for assessment and mitigation of impacts. The 1985 DO gave WGC no right to build future areas before availability and adequacy of public facilities and services and required mitigation were determined, but instead established a mechanism to make such determinations. (Starnes, Tr. 2415, 2429-30, 2509-10). WGC's president and chief operating officer indicated that the original DRI application addressed all issues, but provided for traffic mitigation on a more current basis. In a letter written to the County in March 1985 before approval of the DO, he stated that the AMP process offered continual County review of impacts. Under the 1985 DO, he agreed that WGC needed AMP approval and development orders before construction can occur. By stating that the 1985 DO authorized a "fully approved" DRI for the entire community, he meant it authorized a conceptual plan, as opposed to final approval of all of Gateway. (Koste, Tr. 616-23, 631, 646; Respondent's Exhibit 52). AMP Review Process The AMP process is similar but not identical to the application for master development approval (AMDA) process established in Subsection 380.06(21), Florida Statutes, and Rule 9J-2.028, Florida Administrative Code, in that both identify information needed for further review of later development phases or increments, identify the issues subject to further review and issues that could result in denial, and provide for review by substantial deviation procedures. The ADMA process was designed to deal with large projects with long buildouts and complex issues. The important parts of the AMDA process were addressed for the Gateway DRI by providing for the AMP process. According to the SWFRPC's executive director, who participated in the Gateway DRI review and approval process, the 1985 DO essentially gave WGC the right to submit more detailed applications and to continue to participate in the process. Future AMP applications and reviews were to address and resolve how the approved dwelling units could be supported by infrastructure, what mitigation was needed for impacts and the timing of that mitigation. This is consistent with SWFRPC's desire to limit the original approval to what was currently planned for roads and public services. (Daltry, Tr. 2660-61, 2627, 2641; Respondent's Exhibit 809). The DCA planner who reviewed the 1985 DO concurred that the AMDA and AMP processes were similar, stating: "This project is not a master incremental DRI, but it will be reviewed in that fashion." (Respondent's Exhibit 67). The County's expert witness Starnes also found the AMP process similar to the AMDA process, which was developed while he was state planning director. Under both processes, the developer was allowed to proceed subject to assurances that infrastructure would be addressed later. Both processes look first at future land uses and intensities and then refine them later to coordinate with infrastructure timing issues based on details that cannot be addressed over a 40-year period. An example would be in the transportation area where WGC submitted a DRI application in 1984 addressing that issue, but the County wanted to reassess the mitigation to relate to the development and proportionate share payment due in the AMP time frame proposed. (Starnes, Tr. 2431-37, 2464-65, 2467). According to the County's acting zoning director and the planner principally responsible for County review of the Gateway 2 application, the AMP process is similar to the AMDA or phased DRI process in that a long list of issues must be addressed in an AMP application. The acting zoning director also established that the AMP process is not a typical Lee County review or a strictly local review. This was further confirmed by witness Starnes, who concluded that the AMP review was not a local review process in general. (Gibbs, Tr. 2119-22; Starnes, Tr. 2437-38). The County's understanding and intent for the AMP approval process was expressed in an April 26, 1985, letter from an assistant county attorney and county director of development review to a member of the County Commission: Some concerns were raised about fire protection services and proper funding for water, sewer, police, EMS and other services. The L. P. A. was very concerned about Westinghouse Gateway Communities meeting their financial obligations. The comprehensive plan requires that the "New Community areas will be developed as free- standing economic units and will not impose negative fiscal impacts on the County." The L. P. A. required WGC to come back through the L. P. A. with each Area Master Plan to insure that when the specifics were known, the impacts of those specifics would be addressed in every respect, including financial. If there was any shortfall utilizing the funding mechanisms provided for, WGC would have to make up its financial shortages. (Respondent's Exhibit 57). WGC's intent and understanding of the AMP review process was expressed in the following: A letter dated March 22, 1985, to the County's director of the division of county development in which WGC acknowledged that: "The Board of County Commissioners are the ultimate decision-makers with respect to an Area Master Plan." A letter dated March 28, 1985, to the chairman of the Board of County Commissioners dated March 28, 1985, in which WGC represented that the DRI development order and PUD ordinance scheduled for adoption on April 19, 1985: "... will represent a beginning not an end, of an approval process which will involve many governmental agencies on an ongoing basis over the projected life of the [40- year] development period. The Area Master Plan approval process (phase) requires that each Area Master Plan be approved by the Lee County staff ... the Local Planning Agency, and the Board of County Commissioners. This process offers several advantages to both the developer and the County. The developer obtained a Development Order for the entire property and a set of rules to live by which will allow it to make the business decisions necessary to begin development. The County will be able, through the Area Master Plan process, to continually review impacts of the Gateway Community and react accordingly during the Area Master Plan approval reviews. We believe the County staff and WGC have developed a proper program for a larger scale development to gain approval while allowing the County a continuing opportunity to thoroughly review the land uses and impacts of the community. (Emphasis added) (Respondent's Exhibits 51, 52, 54; paragraph 38, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement). Area 1 Development Order The County amended the 1985 DO on May 21, 1986, and approved with conditions the Area 1 Master Plan. That amendment authorized development of two hundred and ten acres of office/commercial/industrial uses and 1,850 residential dwelling units. Under the transportation-related terms and conditions of the Area 1 DO: WGC is required to submit a new Traffic Impact Statement and to mitigate additional adverse traffic impacts where approval is requested for the next AMP. (Emphasis added) WGC is required to pay a proportionate share for traffic mitigation of $3.5 million (1985 dollars). To satisfy that requirement WGC must pay road impact fees (estimated at $2.8 million in 1985 dollars) in effect at the time building permits are issued for all residential and non-residential development in Area 1. In addition, WGC agreed to construct the four-lane extension of Daniels Road at no cost to Lee County. However, WGC is not eligible for credits against road impact fees for the construction and right- of-way dedication associated with the construction of the four-lane extension of Daniels Road during Area 1 and subsequent areas of Gateway. WGC may claim a credit against future road impact fees in the later phases of Area 1 or subsequent phases of Gateway if WGC's actual costs for the construction of the four-lane extension exceed $700,000. WGC is also required to pay a proportionate share of the cost of the Southwest Florida Regional Airport (SWFRA) and the extension of Daniels Road; and to pay 70% of the cost of an at-grade intersection at Daniels Road and SWFRA entrance, if the design study indicates such an improvement is necessary. WGC's payment of a proportionate share for at-grade improvements are to be in addition to payments of road impact fees and other obligations specified in the amendment. WGC's payment of a proportionate share of the cost of at-grade improvements at the Daniels Road extension and the SWFRA entrance intersection will not reduce WGC's obligation for proportionate share contribution for future improvements needed at this intersection, but the contribution of the $125,000 may be credited against WGC's obligation for future proportionate share contributions for further improvements at that intersection. However, WGC is not eligible for credits against road impact fees during Area 1 or subsequent areas of Gateway for any proportionate share payments for at- grade improvements at that intersection. WGC's president acknowledges that Area 1 is the only area in which WGC has approval to construct. After approval of AMP 1, WGC commenced development activities and has done so continuously since that time. (Respondent Exhibit 107; Koste, Tr. 651). The County stated in the Area 1 DO that its highest priority for expenditure of road impact fees collected from Gateway Area 1 and other developments along the Daniels Road corridor was for road improvements necessary to mitigate traffic impacts along Daniels Road. (Respondent's Exhibit 107). Area 2 Application On January 17, 1989, WGC submitted a notification of proposed change to a previously approved DRI, the state's standard substantial deviation determination request, which included related DO amendments. This request indicated specifically that "Approval of the Second Area Master Plan" was among "PROPOSED CHANGES-TO THE APPROVED DRI." The request stated that the complete AMP application was attached. (Respondent's Exhibit 229; Montgomery, Tr. 419; Gibbs, Tr. 2125-26). The Area 2 application was submitted February 1, 1989. In the same time frame, WGC's attorney indicated that the new community designation required assurance that adequate public facilities would exist at the time of demand and that the issues for Area 2 review included determination of the AMP 2 proposal's consistency with "the Lee County Comprehensive Plan" and sound land planning principles, as well as availability of adequate infrastructure. After a meeting with County staff, WGC waived the time frame for initial staff review. (Respondent's Exhibit 239; Montgomery, Tr. 419; Gibbs, Tr. 2127-28, 2224). While the 1985 DO anticipated that Gateway would consist of nine areas developed over a 40-year period, the Area 2 Master Plan submitted in 1989 actually included geographical Areas 2 through 5 of the original nine areas. As a result, the Area 2 application also included assessment of Area 1 in the transportation portion of the application in order to look at cumulative traffic impacts. In the Area 2 application, WGC requested approval of development of 2,481 total acres including 5,244 residential dwelling units and approximately 504 acres of non-residential office/commercial uses, with non-residential square footage initially limited to 1,670,000 square feet of office and 177,000 square feet of commercial use. The buildout period proposed by WGC for Area 2 was the year 2000. (Gibbs, Tr. 2130-31, 2220; WGC Exhibit 6; Respondent's Exhibit 237). A substantial deviation determination by the County was required for evaluation of the Area 2 application. The substantial deviation process reviews new, additional or previously unreviewed regional impacts. While the 1985 DO allowed review of more than one area at a time, submission of original Areas 2-5 as the Area 2 application resulted in half the total property coming in for review at one time and an area boundary modification in violation of the spirit and intent of the 1985 DO. This change also suggested a potential shifting of development density from the southern portions of Gateway near Daniels Road and other development toward the environmentally sensitive Six-Mile Cypress area. WGC also requested amendments to and changes in the 1985 DO, provided the County with public hearing notices treating the Area 2 proposal as a DO amendment and a substantial deviation request under Subsection 380.06(19), Florida Statutes, and proposed an Area 2 development order as part of amendments to the 1985 DO, despite protestations from WGC witnesses at final hearing that DO amendments were not needed. Under standard DRI practice, submission of a substantial deviation notice like the one WGC submitted in January 1989 calls for an amendment to the original DO. (Gibbs, Tr. 2132-42, 2255-56, 2181-83; Respondent's Exhibits 220 and 302; Montgomery, Tr. 505-06, 509; WGC Exhibit 155). Based on statutory criteria that consider new or additional or unreviewed regional impacts to be substantial deviations, the County's DRI reviewer concluded that the AMP 2 proposal would constitute a substantial deviation. However, the County ultimately approved a final Area 2 development order on December 20, 1989, that found the proposal would not be a substantial deviation "if subject to the conditions enumerated herein." The formal order itself was rendered on January 4, 1990. The DO approved the amount of development requested by WGC through the year 2000 subject to numerous detailed conditions. It is from those conditions that these appeals ensued. Finally, on September 5, 1990, the County receded from a number of conditions imposed in the January 4, 1990 order. This action is formalized in respondent's exhibit 742. (Gibbs, Tr. 2205-06; Respondent's Exhibits 606 and 742; WGC Exhibit 1). Applicability of Post-1985 Regulations to the Project A key disputed issue was whether various regulatory requirements adopted after the May 1985 DO were applicable to the Area 2 proposal or whether it was vested by virtue of the DO against their application. Such later-adopted regulations included the 1989 Lee County Comprehensive Plan adopted under Chapter 163, Florida Statutes, general County ordinances, and state and local "concurrency" regulations requiring development to meet level of service standards for public infrastructure and services concurrently with actual development. According to the County's deputy director of the department of community development, its acting zoning director and the assistant county attorney in charge of the Gateway 2 review in 1989, only the Gateway Area 1 development may have vested rights against concurrency and other regulations adopted after that DO was approved in 1986. Further, from his expert planning perspective, Dr. Starnes concluded that the 1985 DRI DO did not protect Gateway from applicability of new regulations for issues subject to future assessment, such as transportation and housing. Doctor Starnes also concluded that to the extent the DO approved activities, such as the establishment of conceptual boundaries, those things are protected under DRI vesting provisions of chapter 163, but activities that were not approved or assessed and mitigated are open to further regulation. (Spikowski, Tr. 1870-71; Gibbs, Tr. 2200; Ciccarone, Tr. 2850, 2860-61; Starnes, Tr. 2444-46, 2474; Respondent's Exhibits 199 and 402). From a local regulation perspective, the County's acting zoning director indicated that the proposed development submitted for approval in the County, including a Gateway AMP proposal, is evaluated under the County comprehensive plan in effect at submission. This approach is appropriate for review of AMP 2 for several reasons. First, the 1985 DO contains no language indicating that other County ordinances would not apply. Secondly, WGC was only entitled to rely on express conditions of the 1985 DO. Third, under the Gateway PUD ordinance, County ordinances and regulations should apply unless pre-empted by the provisions of that ordinance. Fourth, the 1985 DO requires that future AMPs satisfy "sound land planning principles," which are included in the 1989 comprehensive plan. Finally, it is illogical to assume that the single 1984 Gateway DO would apply over 40 years of development, with the comprehensive plan changing throughout that period. It is noted that other Lee County DRIs that may be exempt from later adopted comprehensive plan amendments either contained specific mitigation requirements, which the 1985 Gateway did not, or contained specific DRI DO conditions allowing election of one or another plan. (Gibbs, Tr. 2123-24, 2161-64, 2166-2167, 2194-95, 2204, 2272-73) At hearing, one of WGC's current attorneys, who was assistant county attorney at the time the 1985 DO was approved, testified she advised WGC that the 1985 DO was vested and that only the 1984 comprehensive plan applied. However, because the County staff took the position that both the 1984 and 1989 comprehensive plans applied, WGC instructed her to cooperate with the County on that basis. The former assistant county attorney also took the position that except for the PUD ordinance, no other development ordinance would apply to Gateway. She further interpreted condition 58 of the 1985 DO, which states that the DO does not obviate WGC's duty "to comply with all other applicable local or state permitting procedures," to mean local building or state environmental permits. However, the same witness' testimony was contradicted by her own prior statements and other testimony given at hearing. For example, while employed as assistant county attorney, she authored documents indicating that Gateway would need to be consistent with other laws if areas of regulation were not covered in the DRI DO or PUD ordinance and that Gateway would be subject to continuing review. She also told County staff in April 1989 that Gateway should be under the 1984 comprehensive plan for one purpose, but under the 1989 plan for another purpose if it were to Gateway's advantage, such as for transportation conditions. The witness also confirmed that Gateway had sought to apply the 1989 plan to avoid disadvantage to Gateway. The witness further conceded that the 1985 DO standards for AMP approval include consistency with the "Lee County Comprehensive Plan," not the "Lee Plan" as the 1984 Plan was called, and consistency with sound land planning principles, on which she placed no temporal limitation. (Montgomery, Tr. 408, 482-84, 488, 490-91, 495-96, 539; Gibbs, Tr. 2146-47, 2203-04,). Transportation Issues Generally An Overview The 1985 DO on appeal determined that, based on its then current analysis, the transportation proportionate share for Gateway Areas 1 and 2 through the year 2000 was approximately $26 million, plus costs for additional needed road improvements not yet identified. It required WGC to pay $15 million of that amount within one year and required a reanalysis after five years of the appropriate additional proportionate share. (Respondent's Exhibit 606). The principal transportation issues in these appeals are how much WGC should pay for mitigation of its Areas 1 and 2 traffic impacts through the year 2000 and how that amount should be determined. Based upon the more credible and persuasive testimony, it is found that a transportation proportionate share contribution of $21,367,457, plus approximately $8.6 million anticipated in future costs, is the appropriate amount of mitigation. It is also found that identification of impacts through a widely used transportation computer model and calculation of proportionate share by publicly accepted mathematical formulas are a standard DRI methodology appropriate for use by the County. Alternate DRI mitigation methodologies proposed by WGC are rejected as contrary to accepted public policy, precedent and professional practice. It is further found that transportation mitigation consisting of a DRI proportionate share payment may be required in advance of development by Gateway under standard DRI policy. Advance payment would secure WGC certain development and transportation concurrency rights based upon the County's evidence at hearing. WGC's Expectations as to Traffic Mitigation When it purchased the Gateway property in 1982, WGC recognized that funding mechanisms for traffic improvements were evolving and that it would be required to participate in the funding of transportation improvements on the public road network surrounding the proposed project. However, WGC did not study the costs of such funding participation as part of its acquisition analysis because the answers would depend on when and where WGC commenced development on its property. Ultimately, development of Gateway commenced toward the southern end of the project nearest the new regional airport and Daniels Road, which WGC considered a "growth corridor". (Paragraph 5, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement; Koste, Tr. 2000-01). Internal WGC meeting notes dated December 3, 1982, reveal that WCG recognized even then that traffic impacts would be significant for Gateway. With respect to Daniels Road, they contained statements such as "capacity captured by airport" and "Need to capture capacity any way we can." With respect to Colonial Boulevard, the notes contained statements such as "do whatever it takes to get it built --even help pay for it" and "potentially serious capacity problems". With respect to traffic levels of service, they stated "Need educational process to get level of service D." With respect to development phasing, they stated "Colonial or Daniels 1st? Go to north if can capture capacity on Daniels." WGC's then director of planning and permitting, who wrote the notes, testified at hearing that the idea of "capturing capacity" was not an important objective or main idea to Gateway in the sense that "if ... you are there first ... there would be adequate capacity on the road to handle the levels of traffic." Rather, he testified that "Westinghouse was looking to make sure that the roads would not be congested because that is not a good marketing for a community." He conceded that, from a marketing standpoint, free-flowing roads in the vicinity are a "benefit to any development." (Respondent's Exhibit 4; Widmer, Tr. 1733). One WGC reviewer of a draft of WGC's original DRI application for development approval (ADA) noted in a June 13, 1983, memorandum to WGC's president: After the ADA is submitted, the probability of getting the County to participate or to build (Daniels Road) on their own will be negligible. To offer to make improvements to County roads is foolhardy. We will be negotiating from a very weak position. Why not let them tell us what they expect? (Respondent's Exhibit 9) In its evaluation of the transportation section of the original Gateway ADA filed in early 1984, SWFRPC estimated that the DRI would require: two additional lanes on Daniels Road from U.S. 82 to the airport entrance by 1988; two further lanes on Daniels Road from U.S. 41 to the airport entrance by 2010; interchange modifications at I-75 and the airport entrance from 1997 through 2015; two lanes on Daniels Road from the airport entrance to S.R. 82 by 1985; two further lanes on Daniels Road from the airport entrance to S.R. 82 by 2000; additional lanes and access controls on Daniels Road between the airport and Gateway entrances by 2010; four lanes on Colonial Boulevard from I-75 to S.R. 82 by 1988; two additional lanes on Colonial Boulevard from Metro Parkway to I-75 by 2010, with access control by 2020; two further lanes on Colonial Boulevard from I-75 to the Gateway entrance by 2020; and control devices and auxiliary lanes at the junction of S.R. 82 and Colonial Boulevard by 1988 and 2020, respectively. The SWFRPC evaluation of WGC's ADA rejected WGC's assertion that certain improvements would not be needed by Gateway and advised that "planned improvements on several regional roadways must be pushed forward to accommodate Gateway ..." In its 40-year application, WGC had committed to direct funding of internal roads, intersection improvements at entrances, right-of-way donations for roads along its boundaries, 50% participation in construction of Daniels Road from the airport to S.R. 82 and of a Colonial Boulevard extension to the DRI. (Respondent's Exhibit 22) On January 30, 1985, approximately four months before adoption of the original Gateway development order, the president of WGC's corporate parent wrote WGC's president with respect to the development order as it then was proposed: The one area that is rather ambiguous is in the area of the road construction (transportation).... We commit to build two lanes here, two lanes, there.... (Respondent's Exhibit 40) On April 15, 1985, or approximately six weeks before adoption of the 1985 DO, WGC's president wrote the corporate parent's president and identified, among other "liabilities", the following feature of the proposed DO and PUD: Regional transportation improvements "open- ended" -- to be imposed at each phase based on periodic studies of actual and projected impacts. At hearing, WGC's president testified that there were changes in the final documents "but the areas (of liability) as far as I know, were all still included, and I know none of them went away." In his deposition received in evidence, he testified that with respect to the AMP process, which was adopted: The mitigation costs are not determined up front, they are determined as you go through the process, and should we ever conclude what the costs will be for Area Master Plan 2, that will only be as good as Area Master Plan 2 and Area Master Plan 1 together. Area Master Plan 3 remains a question mark. By not appealing the original DO, WGC accepted the deferral of impact mitigation determinations until each area master plan review. (Respondent's Exhibit 54; Koste, Tr. 621, 634-35, 2002-03; Paragraph 38c, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement). Before filing an application for approval of AMP 1, WGC's vice president informed the WGC staff that potential transportation issues included "how proportionate share would be calculated, what would be the appropriate timing of the road improvements and receiving due credit ... with regard to impact fees for advanced payment if there was a question of timing of a road improvement." (Schmoyer, Tr. 135-36, Respondent's Exhibit 69). During the review of Gateway AMP 1, both DCA and the County took issue with WGC's assumption that the widening of Daniels Road to four and six lanes and the extension of Daniels Road to S.R. 82 would be available when needed because the improvements were "programmed." In response, WGC recognized that the improvements were not "committed" and stated that they were "necessary to support all area developments" and "a function not only of Gateway Area 1 development but also other area developments in the Daniels Road Corridor." (Respondent's Exhibits 77, 78, and 81) On April 3, 1986, while AMP 1 was still under review, WGC's traffic consultant for AMP 1 wrote WGC's director of planning and permitting as follows: As you requested, we have prepared an estimate of the likely roadway network in the Gateway Study Area at buildout of Westinghouse Gateway Communities. The future Study Area roadway network will be dependent not only on Gateway development but also other area development. Improvements of particular importance include the widening of Daniels Road to six lanes from west of US 41 to SR 82, the extension and widening of Colonial Boulevard to six lanes from west of US 41 to SR 82, a new east/west arterial (north of Daniels Road) from US 41 to SR 82, an interchange with I-75 at the new east/west arterial, and the Airport Flyover at Daniels Road. That portion of the new east/west arterial from Palomino Lane to the Six Mile Parkway, due to environmental permitting problems, may be very difficult to construct. In fact, the Development Order for Gateway (1-8384-36, Condition 17) states that access to Gateway Area 9 "... shall not be permitted through, over or under the slough." Nevertheless, as east/west access along Daniels Road becomes more difficult in the future due to area developments, the County in combination with area developers may consider alternative east/west access routes. Any alternative east/west in the area would require bridging the Six Mile Cypress. Without doing more detailed traffic studies, it is difficult to estimate with any degree of certainty the roadway requirements for Gateway Area 2. Those roadway requirements will be dependent on the level of development anticipated in Area 2 (and in particular the retail/office component), other area developments, and roadway improvements undertaken by the County, State and area developers. At this time, we would anticipate the following Study Area roadway improvements be considered during Area 2. Daniels Road widened to six lanes divided from the Airport Entrance to Gateway Boulevard, four lanes divided from Gateway Boulevard to SR 82 and six lanes divided from I-75 to US 41. Colonial Boulevard extended as four lanes divided from Gateway Boulevard to SR 82. East/West Arterial extended as four lanes divided from Gateway Boulevard to SR 82. East/West Arterial extended as four lanes divided from Gateway Boulevard to Treeline Road (and possibly to I-75 with an interchange at I-75). Treeline Road widened to four lanes divided from Daniels Road to the East/West Arterial. North/south connection from Gateway to Colonial Boulevard (four lane divided). Airport Entrance/Daniels Road flyover. It is very likely that Area 2 will be treated in the same manner as Area 1. That is Area 2 would be assessed a proportionate share of all roadway improvements with impact fees representing a portion of that proportionate share. At some time in the future, beyond Area 2, it would be anticipated that impact fee payments would represent the total proportionate share. (Emphasis added) (Respondent's Exhibit 97; Widmer, Tr. 1742-44). WGC's knowledge and understanding of the transportation conditions of the May 1986 Area 1 DO were reflected in an August 6, 1986, internal memorandum in which WGC's director of planning and permitting stated that: If a road improvement is needed at some future point which jeopardizes our continuance of development, there is always the option to make the road improvement ourselves (within reason) and receive credits against impact fees, which is provided for in our DO. (Paragraph 56b, Respondent's August 15, 1990 Draft Stipulated Facts, as stipulated in WGC's Prehearing Statement). A WGC staff member's notes of a November 16, 1988 internal strategy meeting concerning the pre-AMP 2 application reflects the following strategic considerations, among others: DRI proportionate share number should be brought in line with impact fee number; Consider pipelining impact fee money to County for construction of needed roads -- this will help AMP approval with County, RPC and DCA; Neale (Montgomery) will determine dollars to pipeline and where on Daniels Road (dollars needed for four-laning and east of I-75). At that time, the staff member recognized the impact fees and a calculated proportionate share could differ. (Anderson, Tr. 2018-31; Respondent's Exhibit 213). In a November 23, 1988 letter to Chris Knotts, U. S. Army Corps of Engineers, concerning the Area 2 mitigation, a WGC staff member wrote: A development designated as `New Community' must be able to obtain a complete mixture of land uses, in order to be economically self-sufficient (as possible). This type of development is an appropriate response in order to refrain from contributing to negative fiscal impacts to Lee County, which is already suffering from inadequate infrastructure. This lack of infrastructure ranges from roads operating at acceptable levels of service to proper sewer and water distribution lines and treatment facilities. (Respondent's Exhibit 217) County's Road Financing Efforts Lee County is one of the fastest growing metropolitan areas in the United States. The County seeks to accommodate rather than limit growth by devising funding mechanisms to meet infrastructure needs. For transportation funding, the County has relied on user fees, gas taxes, impact fees, state road funds and assessments against benefited individuals or properties, including DRI exactions. The County has adopted every tax within its authority to fund roads, including all optional gas taxes, and was one of the first counties in the State to adopt road impact fees. (Nicholas, Tr. 3364-70, 3440-41; Spikowski, Tr. 1790- 91; Respondent's Exhibit 733) Unmet road needs in Lee County are overwhelming. According to SWFRPC's executive director, traffic problems in the four Southwest Florida coastal counties, including Lee, are going to be as bad as Dade and Broward Counties in southeast Florida. Therefore, the goal of the DRI planning process is to have DRIs charged for the full impact of their traffic. (Daltry, Tr. 2640). According to a former member of the Board of County Commissioners from 1986-1990, the County's philosophy concerning new development was that infrastructure needs should be met by the public and private sectors collectively. The County directed its administrator to move the County to "get about the business of putting infrastructure in the ground." (Bigelow, Tr. 1713- 15; Segal-George, Tr. 1182-84). The County is continuing its efforts to finance road needs. It is seeking approval of a one-cent optional sales tax for roads by public referendum in the spring of 1991 and lobbying for state approval of a 1% real estate transfer tax for road financing. In addition, the County has had prepared a major report identifying major options for future road funding in the County. (Segal-George, Tr. 1189-90; Spikowski, Tr. 1942-43; Respondent's Exhibit 733). Mitigation for Road Impacts of Areas 1 and 2 Requirements of 1985 DO The 1985 DO required submission of a Traffic Impact Statement (TIS) by WGC for each area master plan. After submission of the TIS, the 1985 DO required the county engineer to determine off-site road and intersection improvements required due to that Gateway area to maintain a Level of Service D during the peak season and to determine Gateway's proportionate share of the cost of needed improvements, which could be 100%. As a condition for AMP approval, WGC was required to enter into an agreement with the County concerning how and when payments would be made. (Respondent's Exhibits 63 and 809). By mutual acquiescence of the County and WGC, key features of the DO requirements were not followed during the processing of WGC's application for AMP 2. The county engineer played essentially no role in the required determinations. The county administrator delegated determination of a proportionate share jointly to the County's department of community development and department of transportation and engineering, but final decision-making authority on that subject was left to the Board of County Commissioners. Generally, the department of community development assures that mitigation imposed is appropriate, adequate and consistent with other DRIs and coordinates its activities with the department of transportation and engineering. There was no agreement ever entered by WGC and the County regarding proportionate share, as required by the 1985 DO as a condition for AMP approval. (Brown, Tr. 2521; M. Swanson, Tr. 1657-58, 1683-84; Segal-George, Tr. 1192, 1196). Under the 1985 DO, the TIS was to be prepared "as per Attachment E" to the DO. There was disagreement among the transportation planners at final hearing as to what was required by Attachment E to the DO, and by the methodology discussed and agreed to in 1988 by County, SWFRPC and WGC planners and as to whether the TIS submitted by WGC followed Attachment E and the methodology the planners discussed. The more credible and persuasive evidence supports a finding that the 1985 DO did not require the use of the difference between results of the "with DRI" and "without DRI" analyses to determine proportionate share, as advocated by WGC, that both County and SWFRPC staff objected to this method and that it is not standardly accepted DRI practice. (Respondent's Exhibits 63 and 809). Attachment E did not call for a "with and without" approach in which the difference between "with DRI" and "without DRI" analyses would equal project impacts, but rather called for identification of traffic generated specifically by the DRI or DRI trips. The generally accepted definition of a "DRI trip" is a trip that has one "end," or an origin or destination within the DRI. Indeed, WGC's expert planner agreed that Attachment E did require assignment of DRI trips to the road network and he did not do that in the TIS submitted to the County or ever send that information to the County. (Respondent's Exhibit 809; M. Swenson, Tr. 1590-91, 1593-94, 1597-99, 1654-55; Horner, Tr. 870-71, 2880-81, 2901-02, 2926, 2931; Hall, Tr. 3086, 3112-14, 3322-24; Jackson, Tr. 768). Concerning the TIS methodology agreed to by the County, SWFRPC and WGC planners in 1988 for AMP 2, the County and SWFRPC planners established a methodology in June 1988 calling for identification of DRI trips on the road network by means of a manual assignment of those trips from a transportation computer model projecting total traffic on the road network at the buildout of the Area 2 phase. The methodology agreed to did ask for a "without Gateway" model run to give a basic idea of what the roadway network would need to look like without Gateway, but that run was not used to identify DRI trips. The planners rejected WGC's suggestion that project impacts be modeled as the difference between the total traffic "with and without" the Gateway project. (Respondent's Exhibits 154 and 165; M. Swenson, Tr. 1593-96, 1652-54, 1597-99; Horner, Tr. 2874-77). The TIS submitted to the County in February 1989 used the "with and without" methodology, contrary to County and SWFRPC staff positions. This use of the "with and without" approach meant that County staff could not use the TIS to identify project traffic and future roadway needs to determine mitigation because project or DRI trips were not identified. Both County and SWFRPC staff objected to the TIS because it used only a "with and without" approach and failed to identify DRI trips as needed to determine whether a DRI's trips are "significant" on a particular road link and therefore require mitigation. (M. Swenson, Tr. 1657, 1660-61, 1663-64, 1697-98; Loveland, Tr. 2935, 2941-43; Respondent's Exhibits 169, 249, 265, 271 and 273). The TIS also failed to follow SWFRPC DRI policies and had other deficiencies. Under the SWFRPC Comprehensive Regional Policy Plan, DRI traffic is deemed "significant" for purposes of determining which roads should be studied and which roads should be improved or impacts mitigated if DRI traffic is 5% of the Level of Service D peak hour capacity of a road. WGC's planner conceded that his use of a 10% significance factor in the TIS was inconsistent with the SWFRPC adopted plan, which he had been given a copy of prior to the preparation of the TIS. (Respondent's Exhibit 125; Daltry, Tr. 2630, 2681-82; Loveland, Tr. 2942; Horner, Tr. 2920; Jackson, Tr. 775-76; Montgomery, Tr. 498- 99). The TIS also included no calculation by WGC of a proportionate share to be paid by WGC and WGC did not submit an estimated total proportionate share to the County before late July 1989. Prior to-the adoption of the AMP 2 DO by the County on December 20, 1989, WGC's planner never submitted to the County a spread sheet containing his independent determination of a proportionate share. As contemplated by the original DO and as a result of WGC's actions, determination of the proportionate share required of WGC for the traffic impacts of Gateway Areas 1 and 2 fell to the County staff. (M. Swenson, Tr. 1666, 1700- 01; Jackson, Tr. 796). County Methodology As a result of these and other factors, County staff conducted an independent assessment of the road impacts of Gateway Areas 1 and 2 and determination of the proportionate share WGC was required to pay as a result. It is noted that the TIS and DO for Area 2 included Area 1 for purposes of traffic analysis due to the need to cumulate traffic impacts and as a result of prior DO conditions. (Gilbertson, Tr. 2725; Jackson, Tr. 776-78). The basic methodology used by the County staff to determine the WGC proportionate share relied on a transportation computer modeling program known as FSUTMS (Florida Standard Urban Transportation Model Structure) to determine the road impacts of Gateway Areas 1 and 2 in the Area 2 buildout year of 2000 and on a variation of an adopted DCA proportionate share rule for DRIs used to calculate the proportionate share dollar amount owed. (M. Swenson, Tr. 1667-75). County staff agreed with WGC representatives to do various FSUTMS computer runs in August 1989. The staff used a FSUTMS run to identify total traffic on the road network. It also identified DRI trips with a FSUTMS module known as "module 4" or the "DRI trips" or "selected link" methodology. These computer runs were performed and the output was in the form of oversized drawings known as "plots," which identify the road network and traffic volumes projected in the year 2000 on those roadways. Information from the plots for the total traffic and DRI trips FSUTMS runs was then used with a separate Lotus 1-2-3 spread sheet computer program to determine a proportionate share contribution for roads. (M. Swenson, Tr. 1666-68, 1670-72; Faris, Tr. 859; Johnson, Tr. 1483-85; Jackson, Tr. 716; Hall, 3092-93; Respondent's Exhibits 443, 446 and 450). The County used its standard DRI policies at the time to determine proportionate share. Those standard policies follow a variation of the DCA DRI transportation policy rule (Rule 9J-2.0255, Florida Administrative Code) minimum proportionate share policy. Those County policies were that if a roadway was operating at an inadequate level of service (less than level of service D), or the adversity test, and the road was impacted by the DRI by more than 5% of the level of service D capacity of the road (the "significance" test), then a proportionate share for that particular roadway link is calculated. The formula assesses the DRI a proportionate share of needed improvements if future traffic projected at project or phase buildout exceeds capacity, not if the addition of DRI traffic alone causes a road to exceed capacity. However, the DRI is only assessed a share of those total improvement costs. The spread sheet program uses information, including the total trips and DRI trips volumes, determined by FSUTMS, and a number of mathematical calculations to determine whether a proportionate share contribution is required for each roadway link studied, the share for that road link and the total proportionate share due for all road links. (M. Swenson, Tr. 1619-22, 1659-60, 1678-83; Hall, Tr. 3073). According to SWFRPC's executive director, SWFRPC has its own list and map of regional road links to be studied for DRI impacts adopted as part of its Regional Comprehensive Policy Plan. That plan and map show certain roads in the vicinity of Lehigh Acres, such as Alabama Road, as regional. Other roads may be reviewed in the DRI process for local impacts in agreement with the County's MPO. The SWFRPC encourages local governments not to overlook their local roads. It is noted that WGC's planner did not indicate any problem with the list of roads studied by the County for proportionate share purposes and he included them in his own spread sheets offered in evidence. (Daltry, Tr. 2663-65, 2683; Respondent's Exhibit 125; WGC Exhibit 95). The 5% test used by the County to determine if a proportionate share should be determined for a particular roadway link is the SWFRPC's 5% significance test. The basic mathematical formula used by the County to determine Gateway's percentage or proportionate share of a road improvement needed as a result of Gateway's traffic was received from SWFRPC staff. In addition to the 5% significance factor, the SWFRPC staff formula differed from the DCA proportionate share rule in that it allocated "reserve" or presently unused road capacity on road links studied first to non-DRI trips and then to the DRI in the year 2000. (M. Swenson, Tr. 1673-74; Hall, Tr. 3099-3101; Respondent's Exhibit 465). The County's use of FSUTMS and the SWFRPC proportionate share approach resulted in a final County staff spread sheet in November 1989 with a proportionate share for Gateway Areas 1 and 2 of $25,951,738 due to an error in one of the computer formulas for one road link. This total did not include additional improvements still needed by the year 2000 to Daniels Road and Colonial Boulevard. SWFRPC's executive director conducted an independent proportionate share estimate in November 1989 determining a $23.5 million cost. He found the County's $26 million share "within the range." (M. Swenson, Tr. 1677-78; Hall, Tr. 3075-78; Daltry, Tr. 2633, 2635-36; Respondent's Exhibits 525, 541 and 688; WGC Exhibit 187). The settlement of a County-DCA dispute over the 1989 comprehensive plan in the fall of 1989 had no bearing on the $26 million Area 2 proportionate share amount included in the Gateway Area 2 DO. (Bigelow, Tr. 1715-17; Segal- George, Tr. 1191) Using the same basic FSUTMS/SWFRPC staff proportionate share formula, in 1990 the County's expert planner recalculated the proportionate share based on an updated FSUTMS base year model for Lee County and on updated land use, road network and road cost information, all available after County staff acted in 1989. Based on this updated and more accurate information, in October 1990 he calculated a new proportionate share for Gateway Areas 1 and 2 as WGC sought to develop them through the year 2000 of $21,367,457, which reduces the amount imposed in the County's Area 2 DO on appeal by more than $4 million. In conjunction with an alternate five-year development program approving Area 1 and one-half the proposed Area 2 development through 1995 only, the planner in October 1990 also calculated a proportionate share of $11,386,657. (Hall, Tr. 3120-37; Respondent's Exhibits 896 and 897). None of those proportionate share calculations included the cost of additional improvements still needed beyond the six-laning of Daniels Road and Colonial Boulevard. Those improvements could consist of expressway-type improvements to Daniels Road. The County estimated, without challenge, that WGC's proportionate share of them was $8.6 million. (Hall, Tr. 3128-33; M. Swenson, Tr. 1681-82). FSUTMS Model Use Transportation computer modeling of future traffic projections began in the 1960s and has been evolving continuously. Such modeling is the representation of road network and land use date to project future travel demands and road improvement requirements. In the early 1980s, access to computer technology and modeling became more widely available as a result of the creation of microcomputers and minicomputers. Model systems have become extremely "bullet-proof" over many years of use, according to witness Fennessy, a national expert and pioneer in the field of transportation computer modeling. (Fennessy, Tr. 2977-85). The County's expert transportation planner, while working for the Florida Department of Transportation (FDOT) in the late 1970s, developed the concept of a standard computer traffic model for use in all urban areas in Florida and the research needed to implement the concept. The Florida standard model became known as FSUTMS. FDOT's goal was to create a standard model to be used by all public agencies in Florida and private consultants to evaluate future traffic conditions. (Hall, Tr. 3065-66; Faris, Tr. 838). The FSUTMS model, as developed in the late 1970s and early 1980s by FDOT, could only be used on large mainframe computers at first. When microcomputers became available, FDOT was aware that they would allow extended use of FSUTMS by public agencies such as local transportation planning groups known as Metropolitan Planning Organizations (MPOs). MPOs play an important role in growth management and local comprehensive planning issues concerning roads, developing future road improvement design and construction plans for their areas. FDOT wanted all urban areas to continue to plan and analyze long- range transportation needs similarly and in 1985 selected Fennessy as the software author for the FSUTMS model for micro- and minicomputers. The software program became available for use in late 1987 and early 1988 after several years of FDOT testing and refinement. Indeed, Florida is the most advanced state in the United States in the field of transportation computer systems modeling. (Faris, Tr. 844-47). The FSUTMS model simulates human travel behavior. It has three basic operational steps. In simplified terms, based on in-home surveys, the model determines how many trips will be generated for what purpose from each traffic area or zone, distributes them based on the shortest path of travel by time, and assigns them to a particular road network. Old "manual" methods of using a hand calculator, standard industry trip generation rules and guesswork cannot simulate the complex sets of interactions among land uses determined by FSUTMS. Those methods are not as dynamic as FSUTMS is in assessment of DRI traffic impacts. (Faris, Tr. 849-58; Hall, Tr. 3083-88). The FSUTMS model is widely used and accepted. It is used by all Florida MPOs and many local governments and major private transportation planning firms. It is the most commonly used model in Florida today. (Faris, Tr. 863; C. Swenson, Tr. 1341). Over the years, the FSUTMS model has evolved to the point where it is appropriate for use to measure transportation impacts of a particular development using a "selected link" or DRI trips analysis developed by Fennessy which is as accurate as the model in general. Fennessy developed the selected link capability from another computer model in response to inquiries from private consultants and government staff who wanted to know which development had traffic using a particular road link. This technique can be used with a high degree of confidence to isolate trips generated by a particular development and their impact on a particular road. (Faris, Tr. 859; Fennessy, Tr. 2969-75, 2989). The FDOT recommends use of FSUTMS and the selected link methodology to evaluate the transportation impacts of larger DRIs and to determine DRI trips. This recommendation in favor of FSUTMS is contained in official FDOT guidelines for DRI review issued in April 1990. The selected link analysis is the method taught to analyze DRI road impacts in FDOT training courses for private and public planners. One of WGC's transportation planners agreed that FDOT intends in its guidelines that FSUTMS be used to identify the transportation impacts of DRIs and pointed out that Gateway Area 2 is of such a size that it would fit the recommended category for use of FSUTMS. The FDOT has implemented the guidelines in its district offices to require FSUTMS use if recommended by them. If a developer wants to use any other computer model or a manual method, he must go through a justification process as to why he is departing from use of the model studied, supported and recommended by FDOT. (Faris, Tr. 860-61, 888-89; Fennessy, Tr. 2972-73; Hall, Tr. 3078-79, 3081-82, 3143-44, 3212-13; Mierzejewski, Tr. 1152-53; Respondent's Exhibit 674). The DCA's chief of the bureau of state planning agreed that transportation computer modeling is a very common approach for large DRIs and that a computer is needed to help determine the distribution of DRI trips and significance of their impact on the roadway. FSUTMS is the model encouraged and accepted to identify DRI transportation impacts in the DCA's new application form for DRIs projected at time of hearing to be adopted in November 1990. Departure from use of computer modeling would require a demonstration that another method is appropriate. The new DRI application form promotes use of FSUTMS by name to determine traffic generation and assignment to the network and this is the first time a specific transportation model has ever been mentioned in an agency rule. Most of the DRI applicants in the SWFRPC area who use computer modeling are also using the selected link analysis to identify DRI trips as well. (Beck, Tr. 1978, 1987-88, 1993-95; Hall, Tr. 3215-17; Loveland, Tr. 2944; Respondent's Exhibit 734). In the private transportation planning field, it is now routine to use FSUTMS for large DRIs. The old "manual" techniques are only used under standard practice on small DRIs and those with short buildouts. FSUTMS is more accurate than manual techniques in reflecting traffic impacts on a systemwide basis. It provides an objective starting place using land use data in a model validated for accuracy without favoring or disfavoring any particular development. It replaces the subjective manual approach where planners and engineers used to estimate that 5% of a project's trips would head in one direction or 10% in another. The 1984 original Gateway DRI application used those outdated methods. (Hall, Tr. 3081-82; C. Swenson, Tr. 1434-35; Crawford, Tr. 2750, 2752; WGC Exhibit 3). The FDOT has high confidence in the accuracy of FSUTMS. Each model with a particular urban area's land uses projected to a future year goes through a formal accuracy determination called validation. Indeed, no model duplicates observed traffic behavior and no computer model is infallible. However, FDOT standards for accuracy call for traffic projected by FSUTMS to be within 10% of actual ground traffic counts for a prior year on roads with high traffic volumes and within 20% on lower volume roads. During the validation process, adjustments to the model are made to correlate model traffic projections to ground counts. The models are achieving that accuracy generally. The accuracy on individual links may vary by much greater percentages, but if a road link has an inaccuracy greater than 10% or 20%, that variance needs to be explained in order to validate a model. (Faris, Tr. 838, 857-58, 864-65, 881-83; Mierzejewski, Tr. 1145; Nicholas, Tr. 3448). WGC's consultant Mierzejewski questioned using the County FSUTMS model to assess the impacts of a particular development on individual road segments based on illustrations from a December 1989 validation study prepared by Kimley- Horn, a private transportation firm that is a Lee County consultant. In particular, he highlighted the post-validation range of correlation between actual counts and traffic projections for four road segments studied in the Kimley-Horn validation report, although he stated that the Kimley-Horn adjustments to the FSUTMS model during the validation process were generally within accepted modeling practice. However, the Kimley-Horn transportation planner and engineer in charge of the validation report established that plus or minus 20% is the general range for accuracy on individual road links although in some very rare cases there may be significantly higher errors on individual links. Moreover, overall the FSUTMS model as validated for the County is the best method to project traffic for any development within the County, including Gateway, and those model outputs can be used to calculate a proportionate share reliably. The County validated model is more likely to underpredict actual traffic than overpredict it. (Mierzejewski, Tr. 1115-17; 1143-44; C. Swenson, Tr. 1339, 1341, 1359, 1408, 1411, 1415-16, 1434). The model results for four road segments in the validation report Mierzejewski criticized were the four worst of eighty-three studied in the report. However, if the model traffic projections for those road links were adjusted to match actual ground traffic counts, the result would increase the WGC proportionate share for Gateway Areas 1 and 2 by about $1 million, due to the model's tendency to underproject. (Hall, Tr. 3055). Both WGC and County experts agreed that the computer models should be more accurate in the five to ten year timeframe, due to land use projection accuracy, than for longer periods. Thus, FSUTMS and the selected link technique can be used with confidence for analysis of DRI transportation impacts for the DRI-related level of detail in a five and ten year buildout, such as Gateway Area 2. (Mierzejewski, Tr. 1166; Faris, Tr. 881, 937-38) In his private consulting business, WGC's transportation planner routinely uses FSUTMS computer modeling on DRI projects and also uses the output of DRI trips or selected link technique as a guide to identify and assign DRI trips to the road network and as an input to calculation of a proportionate share. Both he and County experts agreed that transportation planning and engineering judgment should be applied to analysis and use of the traffic volumes projected using the FSUTMS and the DRI trips technique. If sound engineering judgment indicates that the model outputs are logical, both also agreed that no adjustments to the output of FSUTMS may be needed. The FDOT April 1990 DRI review guidelines also call for use of judgment in using modeling results. (Jackson, Tr. 710, 804-05, 816, 820-21, 971, 3568-69, Hall, 3057-58, 3092-93; Respondent's Exhibit 674). Concerning the total future traffic projections and DRI trip projections as a result of the County's FSUTMS runs in September 1989, WGC's expert witness Jackson did not have any major problems with using the data without adjustment from computer runs as input into the County's proportionate share spread sheet. The expert was present at County offices in mid-September 1989 when the County prepared its output "plots" from the FSUTMS DRI trips runs. The record reflects that the expert (and his staff) actually helped input the data from FSUTMS computer plots into the County's proportionate share spread sheet program, and concluded that the output was reasonable for use and that the DRI trips model run was valid. (Jackson, Tr. 802-03, 806-08, 1023-24; Johnson, Tr. 1490-94, 1499-1500). DCA Rule and County Variations The DCA established the basis from which the County derived its proportionate share methodology in a DRI transportation policy rule (Rule 9J- 2.0255, FAC) adopted in early 1987. According to the DCA's chief of bureau of state planning, there was extensive debate over the rule and input from many formal and informal advisory groups, but the rule was a consensus as far as one could be reached. The goal of the rule was to bring some consistency to DRI transportation impact assessment and evaluation. The rule has had the intended effect. (Beck, Tr. 1966-67, 1976-77). The DCA rule includes three mitigation options: "staging" of development with the timing of road improvements by government or others so they accommodate the development, "pipelining" proportionate share dollars for road impacts to one or more major improvements, and a creative third option which combines those two. In "pipelining," the most commonly used option, a mathematical formula is used to calculate a proportionate share and those dollars are paid up front before development occurs and expeditiously committed to actual road building. WGC transportation experts agree proportionate share dollars are usually paid up front and devoted to road building in advance of development. If these minimum criteria are met, then a DRI has, to DCA's satisfaction, met the requirements of Subsection 380.06(15)(e), Florida Statutes, that a DRI makes "adequate provision" to accommodate its road impacts. (Beck, Tr. 1964, 1967-68, 1972; Jackson, Tr. 962-63; Mierzejewski, Tr. 1164). The DCA rule options establish minimum criteria. Both the rule and DCA practice allow regional planning councils and local governments to impose more stringent criteria or mitigation requirements. For example, the SWFRPC, and other regions, use the 5% significance test, rather than the DCA's 10% test. Transportation monitoring of actual traffic conditions as the DRI develops and determination of whether a road should be considered "committed" for improvement or subject to a proportionate share charge are other areas where the local government could be more stringent, based upon local or regional conditions. (Beck, Tr. 1964, 1969-70, 1972, 1974; Bittaker, Tr. 1476-77) The proportionate share formula used by the County as obtained from SWFRPC staff had another more stringent feature than the DCA rule. The formula used by the County allows any "reserve" capacity on a road segment to be used first by non-DRI traffic before it is used by the DRI being analyzed. The DCA formula gives first call on use of the reserve capacity to the DRI being reviewed. Even prior to submitting the TIS, WGC was aware that this reserve capacity issue had a major effect involving millions of dollars on proportionate share amount and that reviewing agencies often ignored the reserve feature of the DCA rule. (Hall, Tr. 3099-3101; Horner, Tr. 2882-83; Jackson, Tr. 783; Anderson, Tr. 2026-27; Respondent's Exhibits 218 and 736). The specific SWFRPC staff formula supplied to County staff was used for the Omni DRI in Fort Myers and gave other development first call on reserve capacity before the DRI. SWFRPC staff did not feel that DRIs should have first call on existing capacity. The southwest Florida region has a large number of approved subdivisions with one million lots that have a vested right to develop and the County has 400,000 such lots. There is no available reserve capacity near those projects and they should get priority over a new expanding DRI. In other words, the latest DRI should not be first in line. Those projects include Lehigh Acres near Gateway and Cape Coral and will require use of existing reserve road capacity. (Horner, Tr. 2882-83; Loveland, Tr. 1207-08; Daltry, Tr. 2630-33, 2644). The SWFRPC has not formally adopted a formula to deal with the vested project issue due to diversity but the SWFRPC itself has continually indicated that vested projects were more entitled to use capacity than a new DRI. Its staff recently has been taking a position of equivalent use by DRIs and non-DRIs but vested growth constitutes a public policy reason for the approach taken in the formula used by the County. The County used the formula because it was more representative of conditions in the County concerning the use of excess or reserve capacity than the DCA rule in light of the large, vested Lehigh Acres and Cape Coral projects in the County. (Daltry, Tr. 2653-54, 2680-81; M. Swenson, Tr. 1674-75; Spikowski, Tr. 1817). It is not inequitable to give other developments use of reserve road capacity before Gateway because surplus capacity should belong to the general public or the County, which is paying for 80% of the road needs in the vicinity of Gateway. This use of reserve capacity is a legitimate public policy choice so long as the County treats other DRIs similarly. First come, first served is a normal approach to use of available road capacity. (Nicholas, Tr. 3432-34, 3461-62). Proportionate Share for Daniels Road Widening Daniels Road is a major east-west road that serves and will serve the Gateway DRI. Daniels Road to the south of Gateway, Colonial Boulevard to the north, Metro Parkway to the west and S.R. 82 to the east form the principal road network surrounding Gateway on all four sides. (Hall, Tr. 3096-97; Respondent's Exhibit 738). The inadequate condition of Daniels Road as a two-lane facility was of particular concern to the County in the late summer and early fall of 1989. It was the general consensus that Daniels Road should be widened to six lanes rather than four, and the County approved imposition of two additional cents of local gas taxes and bonded those revenues in order to accommodate the six- laning. The County bonded ten years worth of these gas taxes to get the Daniels Road and Colonial Boulevard Extension improvements, among others, built although its most important development areas lie elsewhere, in Cape Coral, Bonita Springs, and South Fort Myers. (Segal-George, Tr. 1185-87; Spikowski, Tr. 1820, 1931; WGC Exhibit 16). The Gateway DRI benefits from the Daniels Road widening. The County accelerated the Daniels and Colonial improvements ahead of other pressing needs elsewhere to serve development needs, including those of Gateway. Gateway is a major contributor to the need for the Daniels Road widening, although not the sole cause, and Daniels Road was substantially impacted under the 5% significance test by the proposed development of Gateway Areas 1 and 2. A conservative estimate of Gateway's proportionate share use of the Daniels Road to the year 2000 was 20%. (Jackson, Tr. 991; Spikowski, Tr. 1848-50; M. Swenson, Tr. 1687; Hall, Tr. 3130-31). The County advance-funded the Daniels Road widening based on knowledge since 1983 of the Gateway development. If a county such as Lee County advances road funding in order to get ahead of development, it should not bear the risk that it cannot recover those funds in part from benefited developers. If the County cannot require Gateway's participation, the County would not participate in future forward funding. The County also demonstrated responsibility by determining the amount of development expected east of I-75 and initiating improvements rather than waiting for severely congested conditions, given the long lead time needed to plan, design, and build roads. It is unsafe to wait until a road is over capacity to initiate improvements. (Hall, Tr. 3098, 3249-50; Nicholas, Tr. 3472-73, 3508-09, 3519-22). If the Daniels Road widening to six lanes were considered a road "committed" to improvement, under the County's proportionate share methodology WGC would pay nothing for the widening of Daniels Road from two to six lanes, despite Gateway's traffic impact on that road. In any event, however, WGC would need to participate in funding improvements beyond six-laning. (Hall, Tr. 3342) The County staff initially considered the Daniels Road widening committed and calculated no proportionate share for WGC on that facility. When the county administrator learned of this, she determined it made no sense to charge nothing of a development that would significantly impact Daniels Road and established a policy that developers' road impacts should be assessed and a proportionate share calculated, regardless of whether the road improvement was in the County's capital improvement budget. It is the County's present general practice and policy to follow this approach for all developments. The County staff followed this policy for Gateway Areas 1 and 2 for roads including Daniels Road, the Colonial Boulevard Extension, and Metro Parkway. It would not be a true picture of Gateway's traffic impact and resulting responsibility to assume that improvements to those roads, which are now underway, were in place without a proportionate share contribution required from WGC. (Segal-George, Tr. 1187- 89; M. Swenson, Tr. 1610-12; Hall, Tr. 3096-97, 3169-70). Other DRIs in the vicinity of Daniels Road have been assessed a proportionate share for that road widening and it is reasonable to expect WGC to pay along with other anticipated causes of growth for that project. (Crawford, Tr. 2840-41, 2844-47) Other DRI review agencies agree that the issue of whether a road improvement is considered "committed" or should be assessed a proportionate share may depend on local circumstances. The DCA transportation policy rule does not address what is a committed road. Rather, that is an area left to local government based on local and regional conditions. In addition, committed roads usually include those under construction, but the source of the funding commitment is important and those revenue sources commonly include anticipated developer proportionate share payments. (Beck, Tr. 1974; Daltry, Tr. 2659, 2678- 79; Hall, Tr. 3243-44). If the County were to follow DCA's staging option approach to mitigation, the Gateway Area 2 development, as proposed by WGC in a single 10- year phase, would be required to wait until Daniels Road improvements beyond six-laning were planned and in place. Segments of Colonial Boulevard, as well as Daniels Road, would also fail by 1995 and 2000 even after identified improvements have been made. (Hall, Tr. 3104-05, 3128, 3342-43, 3351-53, 3575). County Estimated Road Improvement Costs In determining a proportionate share, the DRI's percentage of the demand for a needed road improvement is multiplied times the estimated cost of the improvement. In the County proportionate share spread sheets prepared in 1989, costs were based on estimates from the County project manager in charge of road projects under design or improvement and on FDOT average costs. The DCA generally relies on FDOT and local government cost data for estimated road costs under its proportionate share rule. (M. Swenson, Tr. 1673, 1681, 1683; Beck, Tr. 1973). As part of his updated 1990 determination of a proportionate share contribution for Gateway Areas 1 and 2, the County's expert planner Hall made adjustments to the cost per mile data based on actual bid and other updated information prepared by the County staff. The updated costs came from County staff, FDOT and adjustments made by Hall. For County roads under construction or bid, Hall used costs determined by the county engineer in September 1990. Those costs for Cypress Lake, Daniels Road, Metro Parkway, Six-Mile Cypress and the Colonial Boulevard Extension were cost per centerline mile averages derived from actual or estimated right-of-way, engineering, construction, project management and miscellaneous costs. Those costs were the most accurate reasonable costs available to the County as of September 1990. WGC's transportation engineer and civil engineering consultant agreed that specific actual or bid costs for particular road projects were better to use than other types of estimates. (Hall, Tr. 3149-50, Brown, Tr. 2535-37; Hill, Tr. 1088; Jackson, Tr. 991; Respondent's Exhibit 739). The County's expert Hall found that the cost data he used for his $21.4 million proportionate share estimate in the year 2000 were considerably more refined than data often used to calculate proportionate shares for DRIs and that it was the best data available from FDOT and the County for specific construction projects. (Hall, Tr. 3343-44). Most of the WGC criticisms of the road costs used by the County were directed at estimated costs before they were updated for actual bid costs. The principal witness who leveled these criticisms, Hill, had never done a DRI proportionate share calculation and had no road design or road engineering experience in Lee County. Hill estimated costs calculated by the County were too high based on actual bids and on cost data in a March 1989 road impact fee study prepared by Kimley-Horn, an engineering consulting firm used by the County. Hill selected the Kimley-Horn data as the best estimate of cost in instances where there was no bid. However, the author of that study established that the cost numbers in the study should not be used to calculate a proportionate share except as a gross check against other estimates. (Hill, Tr. 1064-65, 1066-70, 1092-93; C. Swenson, Tr. 1348-49; WGC Exhibit 101). WGC witness Jackson also criticized the county engineer's costs used by County witness Hall because those costs were not further broken down for each road segment along Daniels Road per lane mile. However, the county engineer established that it was not appropriate to calculate a lane mile per cost by dividing the cost per centerline line mile by the number of lanes on a road segment because a cost per lane mile needed to be based on actual engineering analysis of the work being done. In addition, further understanding of design and engineering factors would be needed to refine further the costs used for Daniels Road. Witness Jackson acknowledged that he had done no significant study of design plans for the Daniels Road widening, although he proposed a reduction in the proportionate share for Daniels Road on a lane mile basis. Like witness Hall, WGC witness Hill used a uniform cost per mile for all Daniels Road segments and indicated that was a legitimate approach if the cost per mile were based on actual bids, as Hall's was. In a proportionate share estimate offered by witness Jackson during the final day of hearing, Jackson assumed a uniform cost per mile for Daniels Road, just as Hall did. (Brown, Tr. 2552-53; Hall, Tr. 3155; Jackson, Tr. 3562-63, 3573, 3578; WGC Exhibit 101). WGC witness Jackson also questioned whether costs used by Hall for S.R. 82 were "somewhat" too high because they assumed a uniform cost for segments in the heart of downtown Fort Myers and those near downtown. However, Jackson did not independently estimate what the cost should be, did not adjust 1986 or 1987 FDOT cost estimates for S.R. 82 for inflation and did not study property values along S.R. 82 concerning right-of-way. State road costs in general may exceed county costs due to more stringent bidding and engineering factors. (Jackson, Tr. 3564-65, 3580-81; Hall, Tr. 3285, 3587). Impact of Gateway by DRI trips v. "With and Without" Methodology WGC witness Jackson contended that the traffic impacts of a DRI should be assessed using a "with and without" approach rather than the DRI trips method used by the County. He based this contention in part because the "with and without" method is a better way of assessing "new" trips added to the roadway as a result of the DRI. However, Jackson himself in his work has used a DRI trips approach rather than the "with and without" method to calculate a DRI proportionate share. (Jackson, Tr. 3554-57, 3568-69). Jackson never submitted a proportionate share calculation using the "with and without" method to County staff and WGC introduced no evidence of the monetary effect of that method of analysis on the total proportionate share assessed by the County in 1989 or redetermined by County witness Hall in October 1990. Moreover, he agreed with the County and SWFRPC that the DCA proportionate share formula, on which the County formula is based, does not use the difference between "with and without" trip projections (variously called "impact trips" or "travel demand" by WGC witnesses and counsel) as the measure of a DRI's traffic impact. The DCA and County formula call for determination of DRI trips (trips with an origin or destination in the DRI) and use of that number in the proportionate share calculation. (M. Swenson, Tr. 1682; Jackson, Tr. 990, 3569- 70 Crawford, Tr. 2842-43; Hall, Tr. 3108-09; Loveland, Tr. 2961-62; Horner, Tr. 2878). The FDOT recommends the DRI trips approach to assess impact instead of the "with and without" method. One major problem is that the "with and without" method fails to identify trips leaving or entering the DRI on roads at its front door. (Faris, Tr. 860, 914-15, 934-35). The SWFRPC staff generally does not accept the use of the "with and without" methodology to assess DRI impacts because it identifies the effect of diversion of traffic due to a DRI rather than specific DRI volumes on each roadway. The "with and without" approach tends to understate the impact of the DRI on roads near the DRI. In the case of the Omni DRI, for example, the "with and without" approach showed a major DRI would result in fewer trips right at the DRI's front door. (Loveland, Tr. 2943; Horner, Tr. 2878-80, 2915, 2917, 2925-26). The "without project" trip volumes and "with project" volumes represent two entirely different traffic projections assuming different land uses. The difference does not equal DRI trips on any particular road link. The "with and without" method could operate so that multiple DRIs could set up a domino theory in which each DRI evades responsibility to mitigate a major portion of traffic coming to a DRI destination. (Hall, Tr. 3108-12; Respondent's Exhibit 737). Concepts related to "new" versus "old" trips, including trips diverted to the DRI, are not relevant when FSUTMS modeling is used. The model looks at sophisticated land use interactions and determines how many trips there will be on each road link in the future, eliminating the need to focus on trips existing today. The model also makes the concept of a diverted trip unnecessary to consider in looking at future impacts. WGC witness Jackson also assumed in an impact fee calculation he prepared, where a determination of percentage of "new" trips was required as an input factor, that 100% of trips generated by Gateway Areas 1 and 2 would be "new." He further agreed that FSUTMS takes diverted trips into account and that County witness Hall's final proportionate share determination of $21.4 million should not be adjusted to reflect the concept of new trips versus old trips. (Hall, Tr. 3338-40, 3048-49, 3088-90; C. Swenson, Tr. 1352-53, 1435-36; Faris, Tr. 861-62; Jackson, Tr. 819, 1001-02, 3582) Division of Proportionate Share by Two From the outset of the Gateway Area 2 application preparation process in April 1988, it was a WGC internal goal or desire of considerable importance to keep transportation mitigation using a DRI proportionate share approach below the amount of impact fees, which are charged all new County developments. WGC was preoccupied with this subject throughout 1988 and 1989. From November 1988 through 1989, WGC witness Jackson prepared numerous memoranda and analyses for WGC comparing proportionate share contribution estimates with anticipated road impact fees owed by Gateway for Areas 1 and 2. The proportionate share estimate by Jackson rose from $500,000 to $14 million during this time period. In some of these analyses, Jackson advised his client that current road impact fees should cover all WGC proportionate share contribution requirements In July 1989, Jackson's highest proportionate share estimates for Areas 1 and 2 were still slightly lower than anticipated impact fees, both of which were in the $13.5 - $14 million range. Jackson's proportionate share estimate was shared with the County for the first time in a July 25, 1989 letter to the county administrator from WGC's executive vice-president who maintained that traffic mitigation should not exceed impact fees. During the same November 1988 to July 1989 timeframe there was no discussion between WGC and Jackson about dividing the proportionate share in half. (Jackson, Tr. 757-58, 760-63, 779-99, 1024; Anderson, Tr. 2024-25, 2032-34; Respondent's Exhibits 156, 175, 209, 212, 218, 260, 264, 295, 296, 306, 317, 334, 360, 368-370 and 602) In mid-September 1989, Jackson visited the County's offices and his staff and subconsultant inputted FSUTMS data into proportionate share spread sheets. He was aware at that time that the DRI trips approach, not the "wish and without" method, was going to be used by the County to calculate proportionate share. During this same timeframe, the County had created spread sheets determining proportionate share dollar amounts owed by WGC. A County spread sheet available by September 21, 1989, showed that the County proportionate share had reached $17 million (if not divided by two) more than impact fees. On September 15, 1989, Jackson proposed for the first time to County staff that the proportionate share should be divided by two if the County wanted to use DRI trips. (Johnson, Tr. 1490-91, 1494; Jackson, Tr. 802-04, M. Swenson, Tr. 1675-76; Respondent's Exhibit 459). By memorandum dated September 19, 1989, Jackson argued the proportionate share should be divided by two because the DRI was responsible for only one end of a DRI trip. Although a County staff person agreed to division by two in a September 21, 1989 letter, the staff person did not discuss the content of that letter with anyone before he wrote it. The staff person based his decision on an inaccurate conclusion from questions he asked others about the model. Based on further discussions with experts and study of model workings, the staff member later concluded he was wrong. A full staff consensus was subsequently reached that the proportionate share should not be divided by two and the final decision was up to the Board of County Commissioners. Standard county policy is not to divide DRI proportionate share calculations in half. (Gilbertson, Tr. 272 6-28, 2730-31, 2745-47; M. Swenson, Tr. 1627-28; Jackson, Tr. 977-78; Segal-George, Tr. 1192; Gibbs, Tr. 2234-35; Respondent's Exhibits 454 and 459). The DCA, SWFRPC and County experts all reject the divide by two approach for a number of reasons. The DCA considered and rejected it during consideration of its DRI transportation policy rule because it is an impact fee methodology, not a DRI exaction methodology. The County agrees that division by two is an impact fee principle that is not properly applied to DRI proportionate share calculations. It is one of the simplifying assumptions used in impact fees that assumes there will be an impact-fee-paying development at each end of the trip. However, that is often not the case, so the impact fee tends to undercharge. The SWFRPC staff also rejects division by two because to do so would provide a double benefit since the proportionate share approach already only imposes a proportionate share charge for DRI trips if they are significant (greater than 5%) on a road segment that will operate at an "adverse" level of service. Transportation planners for SWFRPC since 1984 have never seen this type of division by two approved for a DRI. (Beck, Tr. 1981-82; Nicholas, Tr. 3399-3400, 3402; Daltry, Tr. 2636-37; Horner, Tr. 2884; Loveland, Tr. 1211, 2948). The County's expert Hall also found it completely inappropriate to divide by two and was not aware of any transportation consultant in Florida that had used that approach to assess DRI transportation impacts. A proportionate share charge is only imposed on adversely operating roads where DRI trips are significant and those limitations naturally reduce or eliminate proportionate share costs as DRI trips get farther away from the DRI. Based on Hall's October 1990 proportionate share calculation, this effect resulted in a proportionate share charge for only about half, or 53%, of all miles traveled by DRI trips. It is logical to divide by two for impact fees due to simplifying and averaging assumptions used, but not for site-specific DRI proportionate share assessments that focus on charging the DRI for DRI trips occurring near the DRI on roads that will fail. Other County experts concurred in this assessment. At hearing, WGC witness Jackson also corrected any implication in his written testimony that Gateway was charged a share for all DRI trips rather than only for those where the significance and adversity tests were met. (Hall, Tr. 3115-20, 3345-46; Crawford, Tr. 2759-60; C. Swenson, Tr. 1356-57; Jackson, Tr. 825, 946-49, 966- 67, 985-86). Division by two was also out of WGC witness Jackson's realm of experience until this case. Of the more than fifteen DRIs he has worked on, none involved division by two of a proportionate share calculated using the FSUTMS model. Finally, WGC expert witness Mierzejewski conceded there are no state or regional public agencies that espouse his view that if a proportionate share method is used, the proportionate share should be divided between both ends of the trip. (Jackson, Tr. 808; Mierzejewski, Tr. 1162-63). i. Gas Tax Credit Issue The County rejected witness Jackson's suggestion in 1989 that gas taxes attributable to development of Gateway Areas 1 and 2 should be deducted from the proportionate share. WGC expert Fishkind also argued that the present value of gas tax credit should be deducted from the proportionate share. However, there is no such deduction provided for in the DCA's DRI transportation policy rule. Indeed, during the rule adoption proceeding, DCA rejected the idea that the gas tax credit should be subtracted from the proportionate share because there was no way to assure that those funds would be allocated to address the site-specific impacts of a DRI. (Fishkind, Tr. 1238-41; Jackson, Tr. 737-38, 965, 3559-60, 3571; Beck, Tr. 1977-78). County expert Nicholas established that there should be no deduction from the proportionate share for gas taxes so long as WGC receives impact fee credit for the total proportionate share contribution. Impact fees include a credit for gas taxes. Giving both impact fee credit and separate gas tax credit for payment of proportionate share would give the same gas tax credit twice. The County was the first local government in the State to create a transferable impact fee credit program so the impact fee credits above those Gateway can use should be valuable and marketable to other developers. Finally, it is noted that gas taxes attributable to Gateway Areas 1 and 2 could "dribble" in over the next 25 years and thus not be available to provide road improvements by the time they are needed. Gateway did not appear willing to wait 25 years for road improvements to be phased in. (Nicholas, Tr. 3402-03, 3424-25, 3473-77, 3479, 3384-85, 3441, 3533-36, 3467-68, 3533-36; C. Swenson, Tr. 1340-41, 1401-02) 1989 Area 2 DO Issues DCA Concerns DCA witnesses identified two areas of concern in the 1989 DO on appeal: (a) a condition on page 19 of the DO requiring Gateway to pay to correct certain roads after 1995 without attribution of the road deficiency to Gateway; and (b) a condition on page 17 of the DO requiring Gateway to undergo further DRI review although it may have mitigated for road impacts. On September 5, 1990, the County modified its position in this proceeding by abandoning (deleting) the two provisions opposed by DCA. (Bittaker, Tr. 1446-48, 1460-61; Spikowski, Tr. 1825-27; Respondent's Exhibits 606 and 742). Impact Fee Credit The County should grant Gateway impact fee credits for the full proportionate share imposed if it exceeds impact fees and both exactions are imposed for the same need. The County's revised position, as reflected in its exhibit 742, gives full credit and thus resolves the issue. It is noted, however, that the County would continue not to give credit for approximately $1 million for obligations for which no credit was given under the Area 1 DO. (Nicholas, Tr. 3390, 3519, 3527-28; Spikowski, Tr. 1804-05, 1904-05; Respondent's Exhibit 742). Monitoring of Actual Traffic Conditions related to traffic monitoring involve an area where local governments may be more stringent than the DCA transportation rule or regional policies. Standard SWFRPC practice is to monitor all significantly impacted roads using the 5% significance test. The 1989 DO contained a list of intersections and roadways to be monitored. Monitoring is needed to see if WGC may be responsible for road improvements beyond those for which it has paid by means of a proportionate share. There are a number of roads for which no proportionate share would be imposed because traffic is not significant or the road would not operate adversely, but where conditions are being approached. It is possible that over the course of actual development of Gateway Areas 1 and 2 that those conditions will be reached, thus triggering a need for mitigation. If so, in order for WGC to continue development, improvements needed to restore an acceptable level of road service must be made by the public, WGC or other entities (the staging approach). However, any additional costs would be paid by WGC only if, despite best efforts today to identify future road impacts, additional roads fail and Gateway's impact on such roads is significant under the 5% significance test. As reflected in witness Hall's testimony, the County has receded from its original position and now proposes to monitor only those roads and intersections where the significance and adversity conditions are being approached and on roads immediately adjacent to Gateway. They include Daniels Road, Metro Parkway, S.R. 82 and Colonial Boulevard, all having proximity to where the proposed development will have the greatest impact. By monitoring only those roads, the County has insured that there is no overlap or double assessment of mitigation. (Beck, Tr. 1970; Loveland, Tr. 2950; Spikowski, Tr. 1805, 1911-17, 1934-35; Hall, Tr. 3135-37; Respondent's Exhibits 606 and 742) While recognizing that DRI development orders often contain requirements for traffic mitigation that are open-ended based on monitoring, WGC witness Fishkind criticized this element of the 1989 DO and suggested that it would cause WGC difficulty in obtaining bank financing for its development. However, he did not know if WGC relies on this type of financing for its development. Even so, the County's abandonment of its more stringent monitoring requirements substantially reduces its open-endedness. Moreover, witness Fishkind acknowledged that open-endedness is a general statewide consequence of modern "concurrency" requirements. Finally, the record establishes that developers and local governments have found ways to assure sufficient certainty so that front-end development financing can be obtained. (Fishkind, Tr. 1250-52, 1301, 1304-05; Nicholas, Tr. 3436-43). Five-Year Traffic Reanalysis The 1989 DO includes a reanalysis of the Gateway Areas 1 and 2 proportionate share in five years and a potentially greater proportionate share but no lesser one. There are sound transportation planning reasons for a five- year review based on new conditions and such re-reviews are not uncommon for DRIs. One particular reason for re-review in 1995 in this case is because both Daniels Road and Colonial Boulevard are projected to operate at unacceptable levels of service by 1995 and by 2000 and it is reasonable to anticipate that further improvements may have been identified by 1995. However, rather than mandate a 1995 re-review for a ten-year approval as required in the 1989 Area 2 DO, County planners believed it fair to give WGC a choice of a five-year approval for one-half the proposed Area 2 development or a full ten-year approval without mandatory review. However, proportionate shares assessed for those periods would not be refunded. The proportionate share "pipelining" approach is designed to collect those funds up front and actually spend them expeditiously for road construction. The DCA proportionate share rule does not provide for any refund of "pipelined" dollars paid at the beginning of a phase. This concession by the County resolves an issue raised by WGC. (Hall, Tr. 3125, 3128; Nicholas, Tr. 3436-37; Spikowski, Tr. 1803-04; Beck, Tr. 1968, 1980; Respondent's Exhibits 742, 896 and 897). Concurrency Requirements Upon further consideration, the County staff determined that if WGC pays a proportionate share toward improvement of certain roads, WGC should be granted "concurrency" protection for its contribution to those improvements on those roads. The 1989 DO provided no such protection. On September 5, 1990, the County abandoned its original position and took the position that WGC has met concurrency provisions for the roads where a proportionate share is imposed in witness Hall's October 1990 spread sheet to the extent of the road capacity considered in assessing the proportionate share. Full transportation concurrency for roads, such as Daniels Road, where additional improvements are still needed to serve the proposed Area 2 development in the year 2000, cannot be determined until later. (Spikowski, Tr. 1798-99, 1805, 1907-08, 2139-40; Respondent's Exhibits 606 and 742). Colonial Boulevard Extension Credit After the 1989 DO was rendered, the County determined that credit should be given to WGC for amounts assessed or paid by WGC under an October 11, 1989, agreement between landowners, including WGC, and the County to fund the extension of Colonial Boulevard from I-75 to S.R. 82. By making such a concession, the County has resolved an issue raised by WGC. (Hall, Tr. 3131-32; Respondent's Exhibits 742 and 819). Restrictions on Additional Applications to Five-Year Periods On September 5, 1990, the County agreed to amend the 1985 DO and the 1989 Area 2 DO to provide that future Area Master Plan increments of development, either as new AMPs or additions to Areas 1 and 2, must have buildout dates of no less and no greater than five years. Additions to Areas 1 and 2 may be submitted every three years and, in all instances, the County may permit more frequent applications if unique circumstances warrant in the public interest. The 1989 DO included a five-year phasing concept, but the restrictive amendment would make it more precise. (Spikowski, Tr. 1799-1801; Gibbs, Tr. 2140). The 1985 DO contemplated development of nine areas within Gateway over a forty-year period, or an average increment of just under five years in length. The inclusion of original Areas 2-5 in a single Area 2 violated the spirit and intent of that arrangement. There are numerous general and specific reasons why a five-year phasing approach is appropriate. In the planning field, five-year planning periods have been used historically throughout the United States in conjunction with revenue cycles. Five years is the period of time most commonly used by the planning profession. Five year planning periods are used in the County for the County's capital improvement program, FDOT and MPO transportation improvement plans and DRI development orders. The five year period is particularly appropriate for estimating road impacts and needed mitigation because land use assumptions and cost data are more accurate in the five year horizon. In fact, FDOT recommended in 1984, after reviewing the original Gateway DRI application, that only "tentative conceptual approval" should be granted subject to and dependent on the results of incremental transportation impact analyses every five years. In addition, because it takes five to seven years to plan and build a major road, the five year period provides a realistic view of whether roads actually may be built during a five year development phase. More fundamentally, as the Gateway Area 2 case illustrates, determining mitigation beyond five years involves assumptions subject to debate and the mitigation required for a ten-year period may be too high for developer acceptance. These considerations indicate that the five-year period is an appropriate one to use in the AMP process and fulfills the 1985 DO's finding that the AMP process should "logically and rationally coordinate the phasing of development with available facilities." (Gibbs, Tr. 2132-34, 2255-56; Starnes, Tr. 2439-41; Spikowski, Tr. 1792-94, 1799-1801, 1877; Respondent's Exhibits 22, 63, 742 and 809). The proposed five-year phasing approach also gives WGC adequate flexibility to plan and structure its development program. WGC can elect a ten- year approval under the County's restrictive amendment and still apply for a new AMP development approval as early as 1995. It can apply for additions of residential units and non-residential square footage in Areas 1 and 2 in three years. If WGC has developed all approved uses in shorter periods, it can seek relief from the County under the proposed special circumstances provision giving the County great latitude to accept and approve an AMP application early. While initial start-up may be slow, in the five-year Area 1 phase from 1985-90 WGC had sold perhaps two hundred of the 1,850 dwelling units approved in Area 1, raising questions about WGC's need for further early approvals. This restrictive amendment resolves an issue raised by WGC. (Spikowski, Tr. 1800, 1879-81; Koste, Tr. 615; Schmoyer, Tr. 90). WGC has also recognized in its own planning the viability of five- year planning periods and the need to address changes as development proceeds. In the original ADA, WGC stated: Complete development of Gateway is anticipated to require 40 years, commencing in 1985. For purposes of discussion, the 40- year phasing of Gateway has been separated into eight 5 year periods for Residential, Business, and School classifications . Data shown are estimated for 5-year phasing periods for residential dwelling units, business acreage, and number of schools by type. In addition, WGC witness Schmoyer testified: The Community Plan consists of planning areas showing generalized land areas. Each area is to be developed in accordance with the Area Master Plan Program set forth in the 1985 development order for the Gateway DRI. Dividing the property into planning areas allows the flexibility needed to meet the constantly changing needs of an evolving community. As each area master plan is submitted to the County for review and approval, specific information is provided such as the precise location and character of residential units ... plus the locations and types of facilities required by a thriving community. (WGC Exhibit 3; Schmoyer, Tr. 82). Additional Improvements to Colonial Boulevard and Daniels Road As previously found, portions of Colonial Boulevard and Daniels Road are projected to fail even after six-laning. Therefore, it is appropriate to impose a requirement that WGC mitigate for its significant impacts on those roads when additional improvements are identified. On September 5, 1990, the County proposed to impose a proportionate share of the cost of those additional improvements on WGC, which is in relation to its use of the capacity of those roads. This restrictive amendment resolves an issue raised by WGC. (Spikowski, Tr. 1805-06; Respondent's Exhibit 742). Other Revisions The position taken by the County on September 5, 1990, contains other conforming changes to Areas 1 and 2 transportation conditions in the 1989 DO. It also updates provisions of the 1985 DO to lodge the county engineer's transportation review responsibilities in the Board of County Commissioners, to replace a required proportionate share agreement with DO conditions, and to require WGC to propose traffic mitigation in the TIS. All such changes are found to be reasonable and appropriate. (Spikowski, Tr. 1801-02; Gibbs, Tr. 2138; Respondent's Exhibit 742). Inflation Index If a revised Gateway Area .2 DO allows payment of a portion of the proportionate share by WGC after 1990, as the County now proposes if a year 2000 development program is used, then those future payment amounts should be adjusted for inflation at the time of payment. The year 2000 program allows payment over the first six years of the ten-year Area 2 development phase. The appropriate inflation index to use is the state highway construction cost index published in the Engineering News-Record (McGraw-Hill). (Crawford, Tr. 2768-69; Spikowski, Tr. 1804; Respondent's Exhibit 742). Substantial Deviation By its position taken on September 5, 1990, the County also proposed to find that, due to the fact that the Gateway Area 2 application addressed new, additional or previously unreviewed substantial impacts, such as road impacts, there is a substantial deviation to the 1985 original DO, but if the proposed conditions are met, the application may be approved. The SWFRPC planner who coordinated SWFRPC review of the original Gateway DRI application established that the application did not include the detailed information for Area 2 required for DRI review and that the Area 2 transportation impacts under 1989 road conditions could be different than those originally reviewed. Gateway Area 2 will require improvements beyond the six-laning of Daniels Road by 1995 or 2000, for example, while the SWFRPC's 1984 impact assessment projected that six lanes were all that would be needed by 2010. (Spikowski, Tr. 1607, 1892; Burr, Tr. 2692, 2695-96, 2710-11; Respondent's Exhibits 22 and 742). WGC Alternate Mitigation Proposals During the course of this proceeding, WGC witnesses discussed at least five different approaches to the determination of appropriate mitigation for the transportation impacts of Gateway Areas 1 and 2. They included: A so-called regional planning council method of division of a proportionate share by two; The DCA rule proportionate share method; A method correlating projected WGC trips to a percentage of projected County road costs in the year 2000; Road impact fees including an independent fee assessment for Gateway; and The proportionate share variation of the DCA rule used by Lee County, previously described. Only the last two methods were shown to be potentially applicable to this case. These proposed approaches are discussed below. (Kendig, Tr. 266-67; WGC Exhibit 46). Regional planning council division by two method WGC witness Kendig suggested that the SWFRPC had a mitigation method resulting in a $15.9 million proportionate share. However, this suggestion was disavowed by SWFRPC staff and other witnesses. One premise for the $15.9 million proportionate share is apparently a calculation by County staff in 1989 using a 1% rather than 5% significance test which determined that the WGC proportionate share for Areas 1 and 2 would be approximately $31 million. A second premise for the $15.9 million amount is apparently a statement in a November 2, 1989 memorandum by SWFRPC staff concerning proportionate share issues. The memorandum contains a statement at the bottom of the first page that "the act of `cutting in half' is only appropriate when 100% of all trips are counted for their full length." However, it was explained that the statement is meant to require assessment of all DRI trips (not just those that were significant at 5% or more) over their full length of travel, even on roads not operating at an adverse level of service, and that the memorandum was not an endorsement of the proposed method. (Spikowski, Tr. 1937-39; Jackson, Tr. 741- 42, 978-79; Loveland, Tr, 1206-07; Daltry, Tr. 2637-38, 2645). WGC's Calculations Under DCA Rule Under the DCA DRI transportation policy rule, the County was specifically authorized to impose greater monetary mitigation than the required proportionate share contribution minimum under the DCA rule. The "DCA rule" proportionate share of $14.6 million calculated by WGC witness Jackson on August 31, 1990, using assumptions taken from DCA witness Bittaker and of $12 million determinined by Jackson on the last day of hearing are questionable and inapplicable. (Jackson, Tr. 1006, 3560-61, 3571-72; WGC Exhibit 95). The August 31, 1990, calculation underestimates the proportionate share by failing to cumulate the impacts of Gateway trips from 1990 to 2000 as should have been done. That understatement on one road link alone was shown to be $850,000. This calculation also ignores significant environmental, permitting, and right-of-way cost and acquisition problems related to an assumed four-lane improvement on Penzance Road. The analysis inexplicably assumes also that all Gateway DRI trips will be removed from major portions of Daniels Road and put on Penzance Road. The only improvement to Penzance Road presently under consideration is an extension of a two-lane road. Even that improvement will be extremely controversial environmentally, due to a proposed crossing of the Six Mile Cypress Slough. Permitting for another road crossing of the Six Mile Cypress Slough took twelve years and permitting related to this route has not begun. Problems with the proportionate share calculation under the DCA rule proposed by Jackson also included a $1 million per mile understatement of the actual cost of improving Daniels Road as determined by witness Brown. (Jackson, Tr. 777, 1008-13, 1015-23, 3572-73; Segal-George, Tr. 1185, 1189; Brown, Tr. 2521, 2535-36; Hall, Tr. 3062-63; Respondent's Exhibit 739). Mitigation as Percentage of Year 2000 Road Costs Another mitigation method suggested by WGC was to assess WGC $12.4 million as a percentage of total costs for new roads needed in the County for growth between 1987 and 2000, because Areas 1 and 2 trips would constitute 5% of new trips in the County during that time period. However, the supporting testimony and mathematical assumptions used by WGC witnesses Kendig and Jackson for this calculation were confusing and questionable and County witnesses identified a number of infirmities in that approach. Moreover, it is noted that no regulatory agency in the State has ever used this methodology in analyzing proportionate share mitigation. Accordingly, the proposed mitigation method should not be used. (Kendig, Tr. 256-64; Jackson, Tr. 709, 744, 956-61; C. Swenson, Tr. 1357-58; Hall, Tr. 3048; WGC Exhibit 42). WGC's Independent Impact Fee Analysis At final hearing, WGC witness Jackson maintained that the best method of determining the transportation mitigation owed for Gateway Areas 1 and 2 was by independent impact fee calculation approach provided for under the 1989 and 1990 Lee County road impact fee ordinances and that the resulting dollar mitigation was $14.6 million. The 1989 impact fee ordinance established specific criteria and procedures to be followed when a developer proposes to use an independent impact fee calculation rather than standard impact fee rates. However, witness Jackson did not have the information needed to do an independent calculation in accordance with the ordinance and did not submit any such calculation in accordance with the ordinance before final County action on the Area 2 DO in December 1989. (Jackson, Tr. 751-52, 795-96, 799-800, 973; WGC Exhibits 85 and 94; Respondent's Exhibits 564 and 891). The calculation proposed by Jackson makes assertions that did not go through the required pre-review procedure established by the ordinance and lacks supporting documentation that should be subjected to review. Indeed, the ordinance established a rational administrative procedure for such calculations and does not allow for adjustment outside its terms. (Nicholas, Tr. 3420-21, 3458-61). DRI Proportionate Share v. Impact Fee Mitigation Both sides agree that the DRI proportionate share approach under the DCA rule and the County variation and the impact fee approach are two different methods unlikely to produce the same dollar amount mitigation requirements. WGC representatives were aware of this during review of AMP 2. Other County DRIs have had proportionate share mitigation imposed that was greater than County impact fees. One such example is the Airport Expansion DRI which had a proportionate share that was $5 million more than impact fees. (Jackson Tr. 811; C. Swenson, Tr. 1354-56, 1389-90; Hall, Tr. 3118-19, Nicholas, Tr. 3391-92; Anderson, Tr. 2031; Spikowski, Tr. 1810-13; Respondent's Exhibit 682). The proportionate share approach is preferable for DRI transportation mitigation because it is site-specific and precise, focused on DRI traffic near the DRI and the identification of specific roads that are significantly impacted by traffic reasonably attributable to the DRI. This approach also considers the fact that trips to and from the DRI will congregate around the DRI, cause the most congestion there, and therefore result in needed mitigation where those trips are traveling. The nature of the proportionate share approach moots WGC's argument that development of Gateway will not alter total County growth since a theoretical shift of new population to a DRI should also theoretically result in fewer road needs in less developed portions of the County. (Hall, Tr. 3119, 3328, 3346-47; Kendig, Tr. 253). The DCA firmly believes that a DRI proportionate share approach is preferable to local road impact fees to mitigate a DRI's road impacts. This is because impact fees and a DCA rule proportionate share calculation can differ, DRI exactions are site-specific, and different mathematical formulas are used. For example, while the impact fees charged a DRI in one location versus another could be the same, the proportionate share calculation for that same DRI could differ by several million dollars. (Beck, Tr. 1978-79, 1981). Impact fee methodology is based on simplified averaging assumptions that do not relate to the impact of a particular project on any particular roads and that do not consider the actual conditions of those roads. It is important to consider specific levels of service on specific roads to determine the total magnitude of the problem. The impact fee approach in the County only calculates the hypothetical lane miles that are projected to be used by a project. Moreover, the impact fee formula does not identify specific links that will have trips on them from a DRI or look at whether a road is operating beyond capacity. Further, the impact fee ordinance does not fund any particular roads or implement any County long-range road improvement plan. Finally, while a proportionate share approach tries to be project specifics an impact fee uses averages. (Hall, Tr. 3118-19, 3142, 3346-47; C. Swenson, Tr. 1364-65, 1431; Jackson, Tr. 972, 980-81; Mierzejewski, Tr. 1146-47, 1179-80; Fishkind, Tr. 1285) Impact fees are based on averages and several simplifying assumptions: all new developments are average; all types of development proceed evenly; roads can be built one foot at a time as fees are collected; site- specific or development-specific problems are handled at development or DRI approval stage because they are assumed away at the later building permit stage when impact fees are collected; and each new development sends its trips to a destination where another impact fee is paid. The impact fee approach allocates the fair share cost of road facilities on a road capacity basis for an average road, whereas a DRI proportionate share looks at specific improvements needed. (Nicholas, Tr. 3400-02, 3439-40, 3506-07). When the DCA developed its DRI transportation policy rule, and since that time, it has been lobbied by various interests to adopt an impact fee approach to DRI mitigation but that approach has always been rejected. The reasons for rejection include the fact that impact fees are calculated only to mitigate local impacts while a DRI must mitigate regional impacts. Proportionate share "pipelining" also causes road improvements to occur more expeditiously than impact fees which are paid at the building permit stage and which must be pooled until there is enough money to fund a road improvement. Also, impact fees can be spent anywhere in an impact fee benefit district, while proportionate share "pipelining" generally results in improvements of roads near the DRI. (Beck, Tr. 1963, 1979, 1980-81, 1997-98). It was established that the County did not adopt its impact fee ordinance as the sole method of transportation impact mitigation. The ordinance was intended to be in addition to other County regulatory activities, including DRI regulation. (Nicholas, Tr. 3413-16; WGC Exhibit 85). There are a number of general reasons, including the project-specific nature of a proportionate share, why the dollar amounts calculated under the DRI proportionate share approach and an impact fee differ. A proportionate share contribution for a DRI includes mitigation of regional impacts and logically requires mitigation above local impact fees for local roads. Even if there is no local impact fee a DRI must mitigate its regional transportation impacts through the DRI process. In practice, private developers also find that DRI exact ions commonly exceed impact fees because they may cover both regional and local impacts and impact fees are only charged for local road impacts. In fact, the transportation mitigation required for Gateway Area 1 was a DRI proportionate share exceeding impact fees. The Area 1 DO also made it clear that the proportionate share should be imposed, even if an independent impact fee calculation reducing standard fees was performed. (Crawford, Tr. 2841-42; Beck, Tr. 1964, 1973, 1978-79; Hopping, Tr. 2608; Jackson, Tr. 778; Respondent's Exhibit 107). There are additional reasons why impact fees and DRI proportionate share calculations may vary. The County impact fee ordinance was designed to keep fees as low as possible. The road construction and right-of-way costs assumed in the most recent County impact fee study are conservative due to exclusions of a number of items from the cost base, including road projects with high environmental mitigation costs, toll facilities, urban interchanges, and business damages to and damages for destruction of buildings on right-of-way property. Indeed, the impact fee average costs for construction and right-of- way may be 20 to 40 percent below median, based on those factors. On the other hand, a DRI proportionate share may be greater because it is designed to pay for the cost of major improvements up front in exchange for development approval in advance of actual road capacity. (Nicholas, Tr. 3383; C. Swenson, Tr. 1345-47, 1350-51, 1364-65, 1371, 1432). County witness Hall identified three site-specific reasons that account for the present value difference between impact fee and DRI proportionate share amounts for Gateway, all relating to the roads in the vicinity of Gateway. First, Interstate 75 to the west of Gateway functions like a "Great Wall of China" where it is easy to travel along the top but difficult to pass through. There are only three crossings of I-75 available in Gateway's vicinity. Second, there is no traditional grid pattern of streets in Gateway's vicinity. Those grids are essential to disperse traffic, but expensive to implement. Third, the roads that have surrounded Gateway and need to be improved as a result of its and other development are two-lane roads. These three factors call for very expensive solutions, which an independent impact fee method cannot address because it does not focus on specific roads and their locations and conditions. (Hall, Tr. 3044-48). When inflation is taken into account, the difference between the DRI proportionate share and impact fees for Gateway Areas 1 and 2 is relatively narrow. This finding comports with the testimony of County witnesses Nicholas, C. Swenson and Hopping. (C. Swenson, Tr. 1353-54; Nicholas, Tr. 3393-98; Hopping, Tr. 2618; Respondent's Exhibits 731, 891, 896 and 897). L. Affordable Housing The original DO granted to WGC the right to develop 19,932 dwelling units subject to the following housing condition found in paragraph 51: WGC shall cause to be provided a range of housing types to be addressed during the Area Master Plan review. The amendment to the original DO adopted on January 4, 1990, provided the following conditions relative to housing in paragraph J: WGC will provide a full range of housing types in Area 2, in conformance with the Lee Plan definition of New Community. WGC shall ensure that appropriate levels of low and moderate income housing will be provided within Gateway. When 1990 census results are available (approximately 1992), these results shall be analyzed to determine if a minimum of 10% of all new and existing housing units are attainable to low and moderate income families (utilizing the Census Bureau definition). If the County determines that this cannot be verified, then Gateway Areas 1 and 2 shall be required to provide the appropriate levels of such housing. WGC contends that the condition in paragraph 2. is unwarranted and that the County has no basis for imposing this condition on a previously approved DRI, particularly in light of the condition in paragraph 51 of the original DO. In its revised position adopted on September 5, 1990, the County proposed that approval of Area 2 be conditioned on amending paragraph 51 of the 1985 DO Condition to read as follows: WGC shall demonstrate to the satisfaction of the Board of County Commissioners the existence of, or cause to be provided a range of housing types (e.g., a full mix of housing types for a full range of household incomes, including low and moderate incomes) that will enable people to find adequate housing reasonably accessible to their places of employment within the Gateway community. The County would further condition approval of Area 2 on making the requirement applicable for all future development approvals. (Respondent's Exhibits 606 and 742). This compromise proposal is reasonable and is supported by the evidence because it: Removes the 10% countywide affordable housing criterion, which is no longer a requirement of the County's comprehensive plan; Ties together housing and employment, like the statutory criterion for DRI review (Subsection 380.06(12)(a)5., F.S.) which is currently the subject of emerging DCA policy; Is consistent with the linkage between housing and employment which is a basic rationale for Gateway's New Community classification under the County's comprehensive plan; and Recognizes the advantage of using current census data, among others, during each incremental review. (Cook, Tr. 2337, 2344, 2351; Keyes, Tr. 1519-20, 1563; Beck, Tr. 2006-09; Spikowski, Tr. 1802-03, 1806; Starnes, Tr. 2451, 2507, 2510-11; Kendig, Tr. 216, 218, 224-225; Schmoyer, Tr. 118-119). Airport-Related Restrictions The Southwest Florida Regional Airport (the airport) in Lee County officially opened in May 1983, before approval of the Gateway DRI. It is located on approximately 3,515 acres to the southeast of the Gateway DRI. The original 1977 master plan for the airport recommended establishment of airport noise/hazard zones near the airport and they were adopted as part of Lee County Ordinance No. 78-12. A portion of the property now owned by WGC was included in a zone category prohibiting residential development. Those zones were delineated by quarter-, half- and full section lines to reflect the fact that they were based on annual average, not peak season, noise conditions and to avoid splitting small parcels between zones. In 1985 and 1987, the airport conducted a Federal Aviation Regulations Part 150 Noise Compatibility Study, which also recommended adoption of airport noise zones to restrict development in areas around the airport based on noise contours. (Barnes-Buchanan, Tr. 2059- 60; WGC Exhibit 17; Respondent's Exhibits 682 and 697). The Lee County Port Authority (Port Authority) reviews developments in the vicinity of the airport for issues related to land use and noise compatibility and use of navigational airspace under various state and federal laws. In agreements for airport funding, the Port Authority has assured the federal government that it will restrict land uses near the airport for compatibility with airport operations. These regulations mandate that the Port Authority prevent airport hazards, which are structures or land uses that obstruct airspace needed for aircraft flights or that are otherwise hazardous to aircraft. (Barnes-Buchanan, Tr. 2049-50, 2053-54). The County has implemented the federal and state requirements by adopting the 1987 Airport Part 150 Noise Compatibility Study, 1989 amendments to its local comprehensive plan under Chapter 163, Florida Statutes, and 1989 zoning code amendments in Ordinance No. 89-31. (Barnes-Buchanan, Tr. 2042, 2053- 54; Respondent's Exhibits 236, 410 and 697). The 1989 County local comprehensive plan adopted January 31, 1989, included a land use policy establishing airport noise zones as overlay designations on the future land use map. Zone 2 does not allow mobile homes. Zone 3 does not allow residential uses, churches, libraries, schools, hospitals, correctional institutions, or nursing homes. The policy also provides that prior to issuance of all building permits and development orders in Zones 2 and 3, noise and avigation easements must be dedicated to the County by the property owner. (Respondent's Exhibit 236). In developing the avigation easement concept, the County recognized that, although the location chosen for the airport was remote, it was important that the airport have room for expansion. In determining what kind of regulations to impose on land uses near the airport, the County decided that, rather than forbidding certain types of development, it would allow less noise sensitive development as an alternative. The County has regulations that may deny noise sensitive development incompatible with the airport to protect the public health, safety and welfare. Indeed, WGC concedes that the County also can prohibit construction of tall structures due to their adverse effects on flight safety, human safety and radar interference. (Spikowski, Tr. 1920; Barnes-Buchanan, Tr. 2071-72; Dolan, Tr. 658). The Part 150 study and 1989 comprehensive plan provisions were implemented through August 31, 1989 zoning code amendments in Ordinance No. 89- 31, which substantially revised Section 483 of the zoning code. The purposes of the regulations in Section 483 of the zoning code include promotion of the "maximum safety of aircraft" at county airports, the "maximum safety of residents and property" near the airports, establishment of building height standards for lands beneath aircraft flight paths and regulation of land uses in airport noise zones. The County declares that airport obstructions that may be hazardous to aircraft operations and persons and property in their vicinity are public nuisances and that it is necessary to the public health, safety and welfare that the creation of airport obstructions and incompatible land uses in the airport noise zones be prevented. (Barnes-Buchanon, Tr. 2053-54, 2080; Respondent's Exhibit 410; WGC Exhibit 112). A portion of the 1989 zoning code amendments creates airport noise zones in the vicinity of the airport, with Zones 2 and 3 implementing the land use restrictions contained in the 1989 comprehensive plan. The locations of Zones 2 and 3 are determined by legal descriptions contained in the zoning code, which followed the quarter-, half- and full-section approach in the 1978 county regulations for the same reasons. These legal descriptions are based on noise contours in the 1987 Part 150 study. The zoning amendments also require execution and recordation of a noise and avigation easement to the County before issuance of building permits or subdivision platting in Zones 2 or 3. (Barnes- Buchanan, Tr. 2060-61, 2069; Dolan, Tr. 586-87; Respondent's Exhibit 410; WGC Exhibit 112). Under the 1978 County noise zones, which remain in effect in addition to the 1989 zoning code designations, a portion of Gateway along its southern boundary has been and is located in Zone 3, prohibiting residential and other noise sensitive uses. The 1978 noise zones were expanded under the 1987 Part 150 study to include areas based on a different noise contour. A portion of Gateway along its eastern boundary also currently lies within Airport Noise Zone 2 under the 1989 comprehensive plan and zoning code. (Barnes-Buchanan, Tr. 2057, 2069, 2081-82; WGC Exhibit 115). The avigation easement required under the comprehensive plan and zoning code has several public purposes, including assurance of noise and other compatibility of neighboring land uses, regulation of tall structures and airport hazards, and provision of notice of airport operations to prospective buyers. A form that has been used as an "Avigation Easement and Release" provides for the grant by the landowner of a perpetual avigation easement and right of flight through navigable airspace above the owner's property and, separately, the release of claims by the landowner as a result of airport operations or aircraft activities and noise levels. The easement regulates land uses on the ground by precluding landowners from interfering with aircraft flights over the property. The release is intended to cover normal airport and aircraft operations. (Barnes-Buchanan, Tr. 2068A, 2072, 2085-86, 2091-92; WGC Exhibit 31; Respondent's Exhibit 721). The 1989 Area 2 DO on appeal included certain airport-related conditions. They implemented the 1989 comprehensive plan and zoning amendments by requiring that "[p]rior to the issuance of all building permits and development orders in Airport Noise Zones 2 and 3 (as defined in the 1989 Lee Plan) noise and avigation easements must be dedicated to Lee County." This language in the 1989 Area 2 DO was mutually agreed to by the Port Authority staff and WGC, and WGC anticipated such conditions. Indeed, WGC representatives had assumed as early as March 1988 that the airport would want to impose avigation easements as conditions of the next Gateway AMP. Language included in the final 1989 DO and a statement concerning inclusion of avigation easement language as required in the comprehensive plan were read over the telephone to WGC's manager of operations by Port Authority staff and WGC agreed the language was acceptable. (Barnes-Buchanan, Tr. 2048-49, 2053, 2062-64; Fisher, Tr. 2093- 98; Widmer, Tr. 1746-47; Anderson, Tr. 2034-35; Dolan, Tr. 582-83; Respondent's Exhibits 350, 356, 371, 381 and 895). At final hearing, WGC raised questions about the location of Airport Noise Zones 2 and 3 on the Gateway property. However, WGC failed to avail itself of any administrative remedies available to seek changes to the location of Noise Zones 2 and 3 on Gateway property. Although WGC brought the issue to the attention of Port Authority staff in November 1988, or prior to adoption of the 1989 comprehensive plan, it did not make a written request to adjust the noise zones then, did not file an administrative challenge to the comprehensive plan concerning location of the noise zones, did not seek a variance from the zoning amendments locating noise zones, and did not indicate problems with the location of the noise zones after adoption of the comprehensive plan on January 31, 1989. (Dolan, Tr. 561-63, 572-76, 588-89, 670-71; Barnes-Buchanan, Tr. 2069- 70, 2072-73) None of the maps presented by WGC at hearing showing noise contour lines relating to Noise Zones 2 and 3 was based on the Part 150 Study, although one WGC map (WGC Ex. 113) was so labelled. In fact, the WGC maps were based on unmonitored contour lines from the 1990 airport master plan update, which are conceptual lines that have not been adopted by the FAA as part of the Part 150 study. The last monitored noise contour lines are in the 1987 Park 150 study, which was used for the legal descriptions contained in the 1989 Zoning Code amendments. WGC conceded that the best existing monitored information is in the 1987 Part 150 Study, which contains a map of those noise contours. (Dolan, Tr. 584-88, 593-97, 654; Barnes-Buchanan, Tr. 2070-71, 2078-79; Respondent's Exhibit 697; WGC Exhibits 17, 113-115). The current designation of certain Gateway lands as Noise Zone 3, as carried forward from the 1978 zoning regulations, is based on inclusion of a northern general utility runway in the airport layout. The Noise Zone 3 designation on Gateway can be removed once the FAA approves the Port Authority's recommendation to remove that runway. Until then, it is prudent for planning purposes to ensure the Zone 3 protection. WGC concedes that the Noise Zone 3 issue is moot once the FAA acts to implement the Port Authority's recommendation and that WGC has not actively asked for deletion of the Noise Zone 3 overlay. (Barnes-Buchanan, Tr. 2069-70, 2081-82; Dolan, Tr. 589-90, 670). The land uses proposed in the AMP 2 application for Gateway lands included in Noise Zone 3 under the comprehensive plan are business and commercial uses, as allowed in that zone. The proposed land uses included in Noise Zone 2 are a utilities site, a park site, multi-family residential, commercial and school uses, all of which are allowed. If there is any error in mapping of Noise Zones 2 or 3 in Gateway, WGC knows of no logic for changing the proposed land uses in either zone and no proposals to do so were made. WGC presented no quantification of damages to WGC's property interest as a result of the avigation easement in favor of the County. (Dolan, Tr. 659-61). To clarify its intent concerning avigation easements, the County has proposed to incorporate a change providing that only the effects of normal airport operation, aircraft activities and noise levels would be covered by the easement. (Spikowski, Tr. 1807; Respondent's Exhibit 742). Other 1989 Development Order Conditions Fiscal Conditions Doctor Nicholas, the County's outside fiscal expert who provided fiscal analysis to the County in the development of the 1984 comprehensive plan testified: It became clear very early in the planning process that Lee County had more areas designated for development than were required to accommodate the anticipated growth and that it would be economically infeasible for Lee County to attempt to provide publicly financed infrastructure to a sprawled form of development. This policy decision ultimately led to the comprehensive planning classification of Gateway as a "New Community" requiring private, not public, provision of infrastructure. (Nicholas, Tr. 3372-75). In reviewing WGC's original ADA, County staff determined that neither it nor subsequent submittals had demonstrated that Gateway would be developed as a freestanding economic unit and would not impose negative fiscal impacts on the County, as required by the New Community provision of the Comprehensive Plan. Therefore, paragraph 46 of the 1985 Gateway DO provided that: WGC shall demonstrate with each Area Master Plan submittal that Gateway will not impose a negative fiscal impact upon the County. The first Area Master Plan will be based upon projections; subsequent Area Master Plan[s] shall include appropriate data from previously approved Area Master Plan[s] to support compliance with this condition. (Respondent's Exhibits 63 and 809). The DO Amendment for Area 1 added Condition H, "[c]onsistent with Gateway Development Order Condition No. 46:" WGC shall be required to monitor fiscal impact and present evidence of fiscal neutrality as part of its next Area Master Plan submittal, but in no case later than 5 years from the effective date of approval of Area Master Plan 1. Should Gateway not be determined to be fiscally neutral or fiscally positive, WGC will be required to remedy the deficiency prior to approval of the next Area Master Plan. The assumptions to be monitored include, but are not limited to: The number of dwelling units built and other constructed improvements and their sales prices; Percentage of units receiving homestead exemption and other applicable exemptions; The number of undeveloped acres and their value as assessed by the Lee County Property Appraiser; Factors relating to property taxes (assessment ratio, cost of sale factor, millage rate); Factors relating to expenditures (per capital expenditures for capital and operating); Factors relating to revenues; Cost factors relating to parks (acquisition and development cost per acre and acreage standards for parks); Rate of commercial development as compared to the initial projections; and The accuracy of the fiscal model used by WGC for projecting costs and revenues for the Gateway development. By its terms, this requirement applies to Area 2 and possibly "the next Area Master Plan." (Respondent's Exhibit 107). WGC's fiscal analysis for Area 2, dated April 19, 1989, stated: It is premature to monitor the fiscal impacts from Area 1 since there are certificates of occupancy only for the model center and offices. Until more construction activity occurs, monitoring should be delayed. Fairly soon after WGC submitted the Area 2 fiscal analysis its economic consultant discovered an error in the development absorption period used (20 years instead of 10 years). However, WGC decided not to call the error to the attention of the County during its review of Area 2. The error was corrected shortly before final hearing in the instant case. (Fishkind, Tr. 122 3-5, 1265- 6; WGC Exhibits 103 and 104). In the staff report to the Local Planning Agency dated June 5, 1989, County staff analyzed the WGC fiscal analysis for Gateway AMP 2 as follows: Gateway's economic consultant has done an analysis of the fiscal impacts of the project using a range of variables in response to staff questions. Although staff generally accepts the various computer runs, there are still outstanding concerns and questions: Any computer model is only as accurate as the variables used in the calculations. In the case of a long term project such as Gateway, the major assumption is that the project will be constructed and sold as it is currently phased, planned and priced. In other words, the fiscal impact model assumes from the beginning the project will be an economic success. If this assumption is accurate, the project will, after 3 to 5 years, be yielding a net positive cash flow to local government. However, the future fiscal impacts are difficult to predict due to changes in taxable values, residential and commercial development variables, and the project phasing and construction period. If any of these items should change significantly, the fiscal impact of the project could be very different. Gateway has a requirement (Area 1 Development Order Condition 46) to perform a fiscal analysis for each area when submitted and to monitor the fiscal impacts of previously submitted areas. It is not possible to monitor Area 1 because there has been no substantive construction for use in the fiscal impact model. When originally submitted, the phasing schedule estimated that by 1990 there would be 2,080 dwelling units and 119 acres of commercial development existing in the project. DRI projects typically do not meet their phasing schedules, and this invalidates the fiscal impact model. As part of the DRI annual monitoring report required by Chapter 380, Florida Statutes, Gateway should provide sufficient information to allow staff to update the fiscal impact model rather than having to wait until the submission of the next area plan in addition to the existing monitoring requirement. The applicant's consultant has added one variable not generally used by staff. The variable is the tax dollars generated by the undeveloped land that is part of the project. The addition of this variable has the effect of causing the project to demonstrate a net positive cash flow much sooner than it normally would. The fiscal impact model uses average county values and assumes that all locations of all projects in the county are equivalent when, in fact, they are not. For the above reasons staff recommends that there be no further Area Master Plan submittals until Areas 1 and 2 have been developing for at least three to five years and there is sufficient information to monitor and update the impacts from Areas 1 and 2. (WGC Exhibit 128). In the staff report to the County dated July 31, 1989, County staff abbreviated their comments on the fiscal analysis as follows: Gateway's economic consultant has done an analysis of the fiscal impacts of the project using a range of variables in response to staff questions. The concern with fiscal impact analysis is the long-term build-out of the project. Gateway has a requirement (Area 1 Development Order Condition 46) to perform a fiscal analysis for each area when submitted and to monitor the fiscal impacts of previously submitted areas. It is not possible to monitor Area 1 at this time because there has been no substantive construction for use in the fiscal impact model. When originally submitted, the phasing schedule estimated that by 1990 there would be 2,080 dwelling units and 119 acres of commercial development existing in the project. DRI projects typically do not meet their phasing schedules. Gateway has provided language that would allow for monitoring at five-year intervals until it is determined that fiscal neutrality occurs. Staff is reviewing this language, which initially appears to resolve this issue. (WGC Exhibit 133). At the December 11, 1989, final County hearing leading to adoption of the 1989 DO for Gateway Area 2, WGC's economic consultant stated that: The last thing I would offer for your consideration is that this project generates a rather large fiscal surplus of the county budget after accounting as best we can for fiscal impacts. That was one of the conditions that this Commission required of Area One and now requires of Area Two. And we have a monitoring provision in the development order that as soon as there is support development to monitor we'll be able to get a better appreciation on what it is. But the numbers are -- the positives are quite large. I'm confident after monitoring that's how the equation will turn out. The County responded by adding Paragraph 46b. to the 1985 DO: 46b. If staff can not determine at the time of the Area Master Plan submittal whether or not Gateway will impose a negative fiscal impact upon the County, due to the lack of available data or lack of agreement on the fiscal model, then WGC shall submit a fiscal monitoring analysis in five years from the date of the most recent Area Master Plan approval, and every five years thereafter, until staff has sufficient data to undertake a valid analysis on the fiscal neutrality issue. WGC accepted this treatment of the issue. (Gibbs, Tr. 1248; Respondent's Exhibits 588 and 606). There is general agreement that, in the long run, Gateway's overall fiscal impact on the County should be positive. Although the point that it becomes positive has not yet been shown through monitoring, WGC suggested that any general revenue surplus could be used by the County to offset Gateway's road impacts. WGC also acknowledged, however, that the County could have higher priorities to which such funds may be devoted. WGC's fiscal analysis, dated September 13, 1990, points out that, at least in the short run, the County's expenditures, like those of local governments throughout much of Florida, substantially exceed revenues. The general policy throughout the federal, state and local governments is that transportation should be financed through user fees and "that general taxation should not be used to finance transportation unless there is a clear and extraordinary benefit accruing to the general public." The County does not utilize ad valorem tax revenues to build roads. (Koste, Tr. 611; Fishkind, Tr. 1228, 1296; Spikowski, Tr. 1857; Nicholas, Tr. 3365-66, 3368, 3382-83, 3428-30; Respondent's Exhibits 10 and 236). In its petition filed in this case, despite its earlier agreement, WGC asserted that paragraph 46.b. "goes far beyond the substantive scope of review of an area master plan under the Gateway DRI Development Order." Accordingly, in an effort to be fair to WGC, the County has proposed a less stringent requirement which deletes paragraph 46.b. and states in lieu thereof: "Condition H of Master Plan 1 shall also apply to Area 2." (Gibbs, Tr. 2305-06; Respondent's Exhibit 742). WGC's corrected fiscal analysis for Area 2 dated September 13, 1990, and submitted at hearing in the instant case, remains a projection and does not purport to contain the monitoring data required for Area 1. WGC conceded that its projections for non-residential development at Gateway are "aggressive". It is reasonable, therefore, to leave Condition H of the Area Master Plan 1 DO Amendment applicable to Area 2 as proposed by the County. In addition to proposing a revision for fiscal conditions, County planning staff has proposed other minor changes to the 1989 DO on appeal, which are set forth in respondent's exhibit 742. (Gibbs, Tr. 2305-06; Fishkind, Tr. 1276-76; WGC Exhibit 104; Respondent's Exhibit 742). Abandonment of DRI In the 1989 DO which was appealed, the County added a condition to the 1985 DO related to the abandonment of the Gateway DRI. It provided that if no significant development activity occurred for five years, the DRI would be required to cease development pending further County consideration. After further examination of state regulations concerning abandonment, County planners concluded that this condition was unnecessary, and the County has subsequently proposed to delete this condition. This proposal resolves an issue raised by WGC. (Spikowski, Tr. 1803, 1888; Respondent's Exhibit 742). Protective Services The 1989 Area 2 DO on appeal contained a provision limiting credits toward impact fees imposed for police, fire and emergency medical protective services to 57% of the value of any land dedicated by WGC for such purposes. After further consideration, County planners concluded that provisions related to impact fee credits for land dedications by WGC for provision of these services should be instead subject generally to the credit provisions of the protective services impact fee ordinance. The County now proposes to delete the 5% limitation and provide that WGC would be eligible for impact fee credits based on the fair market value of protective services sites dedicated under the terms of impact fee ordinances addressing protective services needs. This resolves an issue raised by WGC. (Spikowski, Tr. 1806; Respondent's Exhibits 606 and 742). Roadway Maintenance The 1985 DO contained a provision requiring that WGC or a Community Development District created by WGC pay for operation and maintenance of all roads within the Gateway DRI, except for arterial and collector roads built as a result of the Lee County Official Trafficways Map. The 1989 DO on appeal modified this provision to require the County to pay the operation and maintenance costs for arterial roads serving a countywide function and shown on the Official Trafficways Map, while leaving responsibility for operation and maintenance of other arterial up to future Board determination. To address this issue raised by WGC, the County has now proposed to reinstate the original 1985 DO condition, which was unchallenged by WGC. (Respondent's Exhibits 505, 742, and 809). General Governmental Facilities and Park Site Hearing Procedures The 1989 Area 2 DO contained provisions related to procedures for locating sites within Gateway for general governmental facilities and park sites. These provisions established that if WGC and County staff could not agree on location of such sites, the issue would be sent to the County's Hearing Examiner for resolution. The County has proposed to add procedural details for appeals to the Hearing Examiner making it clear that such proceedings will be administrative appeals like others governed by the provisions of the Lee County Zoning Ordinance. (Spikowski, Tr. 1806-07; Respondent's Exhibits 606 and 742). Wildlife and Vegetation Condition The parties have agreed that a stipulation and agreement dated September 6, 1990, resolves the appeals in regard to the vegetation and wildlife condition.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Land and Water Adjudicatory Commission adopt an amended final development order for Gateway Area 2 approving the application subject to conditions. Those conditions should incorporate the proposed September 5, 1990 revisions to the County's 1989 Area 2 Development Order, including the County's October 1990 determination of the required transportation proportionate share contribution and the further payment option described in conclusion of law 213. Respectfully submitted this 14th day of January, 1991, in Tallahassee, Florida. DONALD R. ALEXANDER 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 14th day of January, 1991. APPENDIX Petitioner WGC: 1-2. Partially adopted in finding of fact 5. 3. Rejected as being unnecessary. 4-5. Partially adopted in finding of fact 5. 6. Covered in preliminary statement. 7-8. Rejected as being unnecessary. 9-12. Covered in preliminary statement. Partially adopted in finding of fact 15. Partially adopted in finding of fact 1. 15-16. Partially adopted in finding of fact 15. 17-21. Partially adopted to the extent they are consistent with findings of fact 11 through 25. 22-28. Adopted in conclusion of law 203 to the extent the undersigned found the project is not an AMDA. 29. Partially adopted in finding of fact 15. 30. Partially adopted in finding of fact 11. 31. Partially adopted in finding of fact 15. 32. Partially adopted in finding of fact 20. 33-34. Partially adopted in finding of fact 16. 35-36. Partially adopted in finding of fact 19. 37. Partially adopted in finding of fact 42. 38. Partially adopted in finding of fact 38. 39. Partially adopted in finding of fact 17. 40. Partially adopted in finding of fact 18. 41. Partially adopted in finding of fact 19. Rejected as being a conclusion of law. Partially adopted in finding of fact 18. 44-46. Partially adopted in findings of fact 17-25. 47. Partially adopted In finding of fact 32. 48. Partially adopted in finding of fact 35. 49. Partially adopted in finding of fact 42. 50. Partially adopted in finding of fact 38. 51-52. Partially adopted in finding of fact 37. 53-58. Partially adopted in finding of fact 38. 59-63. Partially adopted in finding of fact 64-65. Partially adopted in finding of fact 9. Rejected as being contrary to the more credible evidence. Rejected as being unnecessary. 68-69. Rejected as being a conclusion of law. Covered in conclusion of law 201. Rejected as being contrary to the more credible evidence. 72-77. Partially adopted in finding of fact 1. Rejected as being unnecessary. Rejected as being contrary to the more credible evidence. 80-81. Rejected as being unnecessary 82-83. Partially adopted in finding of fact 193. 84-86. Partially adopted in findings of fact 183-192. 87-105. Partially adopted in findings of fact 164-167. 106-111. Partially adopted in findings fact 168-181. 112-116. Partially adopted in finding of fact 194. 117-119. Partially adopted in finding of fact 196. 120. Rejected as being contrary to the evidence. 121-127. Partially adopted in finding of fact 195. 128-131. Partially adopted in findings of fact 132-134. 132-137. Partially adopted in finding of fact 196. 138-140. Partially adopted in finding of fact 197. 141-315. Partially adopted in findings of fact 43-163. Petitioner DCA: 1. Partially adopted in finding of fact 2. 2-3. Partially adopted in finding of fact 5. 4. Partially adopted in finding of fact 17. 5. Partially adopted in finding of fact 20. 6-7. Partially adopted in finding of fact 32. 8. Partially adopted in finding of fact 35. 9. Partially adopted in finding of fact 63. Rejected as being unnecessary. Partially adopted in finding of fact 44. Partially adopted in findings of fact 97-99. 13-14. Partially adopted in findings of fact 94-95. Partially adopted in findings of fact 96-97. Partially adopted in findings of fact 61-100. Partially adopted in finding of fact 82. Partially adopted in finding of fact 92. 19-20. Partially adopted in finding of fact 130. 21. Rejected as being a conclusion of law. 22-23. Partially adopted in finding of fact 19. 24. Partially adopted in finding of fact 154 25-27. Partially adopted in findings of fact 72 and 155. 28. Partially adopted in finding of fact 95. 29-30. Partially adopted in finding of fact 96. Covered in preliminary statement. Rejected as being contrary to the more credible evidence. Note -- Where proposed findings have been partially adopted, the remainder has been rejected as being irrelevant, unnecessary, subordinate, cumulative, not supported by the more credible evidence, or a conclusion of law. Respondent: Respondent's proposed findings of fact have been substantially adopted in this Recommended Order. COPIES FURNISHED: Douglas M. Cook, Secretary Florida Land and Water Adjudicatory Commission Carlton Building, Room 415 Tallahassee, FL 32399-0001 Charles L. Siemon, Esquire Andrew C. Stansell, Esquire Laura E. Peck, Esquire 2 East Camino Real Boca Raton, FL 33432 Peter D. Doragh, Esquire 11691 Gateway Boulevard Fort Myers, FL 33913 M. D. Adelson IV, Esquire 2740 Centerview Drive Tallahassee, FL 32399-2100 Gary P. Sams, Esquire Elizabeth C. Bowman, Esquire Diana M. Parker, Esquire O. Box 6526 Tallahassee, FL 32314 David E. Bruner, Esquire 1114-B North Collier Boulevard Marco Island, FL 33937 James G. Yeager, Esquire 1831 Hendry Street Fort Myers, FL 33901
The Issue Whether Amendment 95-2 to the Town of Jupiter Comprehensive Plan, as originally adopted by Ordinance 68-93 on October 3, 1995, and amended by Ordinance 13-96 on March 19, 1996, is “in compliance” as defined in Chapter 163, Part II, Florida Statutes (1995).
Findings Of Fact The Parties Petitioners are all political subdivisions of the State of Florida. Petitioner, Board of County Commissioners of Palm Beach County (hereinafter referred to as “Palm Beach County”), is a county located on the southeast coast of Florida. Petitioner, Martin County, is a county located adjacent to, and north of, Palm Beach County. Part of Martin County’s boundary is located adjacent to the Town of Jupiter. Petitioner, the Village of Tequesta (hereinafter referred to as “Tequesta”), is a municipality located in Palm Beach County. Tequesta’s western boundary abuts the eastern boundary of the Town of Jupiter. Respondent, the Town of Jupiter (hereinafter referred to as “Jupiter”) is a municipality located in Palm Beach County. The plan amendment at issue in this proceeding was adopted by Jupiter. Jupiter has a population of approximately 39,000 people. Respondent, the Department of Community Affairs (hereinafter referred to as the “Department”), is the state agency charged with the responsibility of, among other things, implementing Part II, Chapter 163, Florida Statutes, the Local Comprehensive Planning and Land Development Regulation Act (hereinafter referred to as the “Act”). Intervenor, the Shores of Jupiter Homeowners’ Association, Inc., is a not-for-profit Florida corporation. Intervenor represents the interest of the Shores of Jupiter residential development. The Shores of Jupiter is located in Jupiter. The Geographic Area at Issue. The boundary of northeastern Palm Beach County which abuts the southwestern boundary of Martin County extends westerly from the Atlantic ocean for a couple of miles. The boundary then turns south for less than a mile before returning to the west. The area at issue in this proceeding consists of an area within the jurisdiction of four different local governments: Palm Beach County, Martin County, Jupiter and Tequesta. Jupiter and Tequesta are located in the northeast corner of Palm Beach County. See Palm Beach County exhibit 39. Tequesta is located in the extreme northeast corner of Palm Beach County. Part of the northern border of Tequesta abuts the southern boundary of Martin County. Jupiter is located primarily to the south of Tequesta. Most of Jupiter and Tequesta are separated by the Loxahatchee River (hereinafter referred to as the “River”). The River also has two branches separating Jupiter and Tequesta. See Palm Beach County exhibit 39. The northernmost portion of Jupiter abuts the Martin County-Palm Beach County boundary where the boundary turns to the south and then back to west. Most of the area at issue is comprised of residential subdivisions. Jupiter’s current and projected land uses are primarily residential. Land uses in Jupiter in 1995 and projected for 2000 in the Data and Analysis for the Jupiter Comprehensive Plan (hereinafter referred to as the “Plan”), suggest that residential uses and projected residential land uses of vacant land to be developed by the year 2000 will predominate in Jupiter. There is a relatively large tract of undeveloped land, referred to as “Section 28” during the formal hearing, which is not now used for residential purposes. Section 28 is located in the west, north-west portion of Jupiter. Section 28 abuts Martin County where the boundary of Palm Beach County and Martin County turn back to an east-west direction after the north-south turn. Section 28 is located to the east of Interstate 95 and the Sunshine Parkway, west of the River, north of Indiantown Road and south of the Martin County line. Existing Transportation Corridors. The roads that are at issue in this proceeding are depicted on Palm Beach County exhibit 1. The road identified in red as Roosevelt Street is conceptual only. The depicted connection of Island Way and Northfork Drive is also conceptual. To the western boundary of Jupiter and the area at issue in this proceeding is located Interstate 95 and the Sunshine Parkway. Both roads begin a turn from a northerly direction to the northwest. The main corridor along the eastern portion of Jupiter located to the west of the North Fork of the River is Loxahatchee River Road. Loxahatchee River Road runs to the north from the intersection with Center Street and then follows the northwestern route of the North Fork of the River to the boundary of Martin County. The road continues into Martin County and connects with Island Way. Loxahatchee River Road functions as a county collector road. This means that it carries a high volume of traffic and is intended to connect and lead traffic from one set of local street connections to another. Loxahatchee River Road is bordered by unincorporated subdivisions, including Whispering Trails, Imperial Woods, Fox Run and Eagle’s Nest. Loxahatchee River Road is a two-lane road. It has been used for a number of years as a traffic corridor between Palm Beach and Martin Counties. It is poorly designed for this purpose. Its design pre-dates contemporary transportation planning. Houses face onto the road and have direct driveway access to the road. These houses are not protected from the road by a buffer. To the west of Loxahatchee River Road and to the east of I-95, the main north-south road corridor is made up of Longshore Drive and Northfork Drive (hereinafter referred to as the “Northfork/Longshore Corridor”). The Northfork/Longshore Corridor is a two-lane road. Longshore Drive runs in a generally northern direction from Central Boulevard until it connects with Northfork Drive. Northfork Drive continues in a generally northern direction. It parallels a portion of the boundary of Martin and Palm Beach Counties which runs north-south. The Northfork/Longshore Corridor is bordered by residential subdivisions, including the Shores of Jupiter, Northfork, The Preserve and Cypress Cove. All of these subdivisions were annexed by Jupiter in March, 1993. Northfork Drive was designed to accommodate a thoroughfare. Residents are buffered from the road and face away from it. Traffic from residents along Northfork Drive is directed to limited access roads to Northfork Drive. Northfork Drive terminates about a quarter of a mile south of the portion of the boundary of Martin and Palm Beach Counties that runs east to the Atlantic Ocean and where the boundary turns to the south. Approximately a quarter of a mile north of the termination point of Northfork Drive is the southern termination point of Island Way. Island Way is located in Martin County. An unpaved right-of-way separates the southern terminus of Island Way and the northern terminus of the Northfork/Longshore Corridor. In the south, the main east-west corridor is Indiantown Road and Center Street. Indiantown Road is a primary commercial area for residents of the area at issue. Residents in the area use the Northfork/Longshore Corridor and Loxahatchee River Road to access these commercial areas. The road system of the area at issue is dominated by the River and its tributaries. The River creates a physical barrier to travel by the residents of the area. Due to this barrier, Central Boulevard, Church Street and Roebuck Road, which all connect with the Northfork/Longshore Corridor and Loxahactchee River Road, provide the primary routes for residents of the area to access Indiantown Road. Transportation Planning for the Area. A number of factors have caused difficulties in planning for the traffic needs of the area at issue in this proceeding. The area is constricted by the River, the area is under the jurisdiction of four local governments, all of which are involved in this proceeding, and the north-south jog in the boundary of Palm Beach and Martin Counties has the potential to create greater traffic impacts between the two counties. The fact that the area is primarily residential and largely existing development also contributes to the problem. Most motor vehicle trips generated in the area involve travel to and from residents in the area to destinations outside the area. The fact that the development already exists makes it difficult to establish a comprehensive internal grid street system with a continuous and unfragmented regional road network. Future planned developed will only add to this problem. The projected development of Section 28 could significantly add to the traffic problems of the area. Section 28 is bounded on the west by I-95 and the turnpike. Traffic generated in the area will have to travel north into Martin County or south and east through Jupiter. Roads required for travel into Martin County from Section 28 do not exist. Prior to 1993 the Northfork/Longshore Corridor was located in unincorporated Palm Beach County. In 1986 Palm Beach County undertook a transportation study for northern Palm Beach County. Public meetings were conducted and studies were undertaken to evaluate roadway corridors for the area necessary to accommodate existing and future traffic. The evaluation included a consideration of the needs of traffic moving between Palm Beach and Martin Counties. As a result of Palm Beach County’s study, it was ultimately concluded that three intercounty thoroughfares were needed for the area: (a) Loxahatchee River Road; (b) Longshore Drive(connected to Northfork Drive, connected to Island Way); and (c) a new corridor, the “Western Corridor”. Loxahatchee River Road and the Northfork/Longshore Corridor were added to the Palm Beach County Thoroughfare Identification Map. Loxahatchee River Road was already being utilized as an intercounty traffic corridor despite design limitations for such use. Hearings were conducted by Palm Beach County in November, 1987, at which the use of Longshore Drive was considered as a possible second corridor. The Jupiter transportation planner at the time presented a report comparing possible thoroughfare alignments, including the suggestion that Longshore Drive be connected to a thoroughfare to be constructed through the area where Northfork Drive was ultimately constructed and that the thoroughfare be connected with Island Way. Palm Beach County accepted this suggestion. The Western Corridor, if constructed, would run through Section 28 and probably connect Indiantown Road with Island Way. The exact route for such a corridor has not been decided. Nor has right-of-way for the corridor be acquired or funding for the corridor been set aside. The Loxahatchee River Road and the Northfork/Longshore Corridor were added to Palm Beach County’s Thoroughfare Right-of- Way Identification Map (hereinafter referred to as the “TIM”). Although the TIM is not used to identify capital improvements, it is used by Palm Beach County in the Traffic Circulation Element of Palm Beach County’s comprehensive plan as a land use planning tool. Annexation of the Shores of Jupiter. Palm Beach County suggested in 1989 that the various municipalities in the county should look at areas which could be annexed into the municipality while promoting the efficient delivery of urban services. Jupiter looked at unincorporated areas surrounding it as possible areas to annex, consistent with Palm Beach County’s suggestion. Jupiter looked at areas which might be annexed also in order to comply with its own Plan, which was adopted in 1990. As part of its consideration of areas which it considered desirable to annex, Jupiter routinely sent letters to communities explaining the benefits of annexation by Jupiter. Jupiter also addressed concerns expressed about annexation by businesses and residents of areas it was considering. Since 1990, Jupiter annexed approximately 50 different properties. Among the areas considered for annexation by Jupiter were subdivisions located along Northfork Drive, including the Shores of Jupiter. Discussions between Intervenor and Jupiter about annexation of the Shores of Jupiter began in 1992. Intervenor made it clear to Jupiter that it would consider supporting annexation only in Jupiter supported its efforts to avoid the connection of the Northfork/Longshore Corridor to Island Way. Counsel for Jupiter informed the then Town Manager of Intervenor’s position in a memorandum dated July 23, 1992: The Shores does not want a through road or “T” intersection at the northern boundary of the Northfork subdivision . . ., which allows Longshore Drive to be extended into Martin County. The Shores is intractable on this issue. Anything less than the Town’s vigorous support of the Shores in this regard will doom the annexation unless the Town supports to the fullest extent the prevention of Longshore Drive’s extension into Martin County. Consequently, if there is to be another corridor in northern Palm Beach County, The Shores would only support the “western corridor.” . . . See Palm Beach County exhibit 28. As a solution to Intervenor’s concerns, Jupiter’s attorney suggested the following solution: The proper vehicle for the Town to address the concerns of The Shores is through the Town’s comprehensive plan. Of course, the Town’s comprehensive plan can only be applied to The Shores, Northfork, Shorewood and Cypress Cove subdivisions and the Longshore Drive corridor, if these areas are within the municipal jurisdiction of the Town. Nevertheless, the Town Council can publicly describe its intention to adopt appropriate goals, objectives and policies it proposes to adopt as part of amendments to its comprehensive plan to address the concerns of The Shores. It may also be appropriate for the Town to address corridor planning issues, in particular, appropriate alignments, if any, of a “western corridor” in the Transportation Element Plan. Finally, the Town should consider including the alignment of a “western corridor” as part of its western interchange planning study. In a letter dated February 16, 1993, the Mayor of Jupiter, the Honorable Karen J. Golonka, informed residents of the Shores of Jupiter of a special referendum election on the issue of annexation of the Shores of Jupiter into Jupiter. Mayor Golonka suggested that residents vote “Yes” on the referendum and gave the “top three reasons” why Jupiter believed annexation would be in the best interest of residents of the Shores of Jupiter. In addition to the improved law enforcement protection and the protection of property values, Mayor Golonka informed residents that, while members of the Palm Beach County commission were supporting the connection of the Northfork/Longshore Corridor to Island Way, Jupiter was opposed to the connection. Mayor Golonka indicated that Jupiter had adopted Resolution 47-92 expressing the following: the Town’s opposition to making Longshore Drive a major arterial, and the Town’s intention, if the annexation is successful, is to amend our Comprehensive Plan to ensure that Longshore Drive remains the treelined collector street seen today. Palm Beach County exhibit 7. Resolution 47-92 had been adopted by Jupiter in September of 1992 because Intervenor had asked Jupiter to take a formal position on the question of the Northfork/Longshore Corridor connection with Island Way. In March, 1993, a dual referendum was conducted concerning the annexation of certain areas, including the Shores of Jupiter. The Shores of Jupiter was subsequently annexed by Jupiter. While the position taken by Jupiter with the Intervenor prior to the adoption of the amendment at issue in this proceeding does not conclusively prove that the amendment is not “in compliance” with the Act due to the lack of adequate data and analysis to support the amendment, the evidence did prove that Jupiter had already decided to take a position similar to the position established in the amendment without determining whether adequate data and analysis for that position existed. The Challenged Amendment Adopted Through Ordinance 68-93. Subsequent to the annexation of the Shores of Jupiter, Jupiter proposed an amendment to its Plan which included, among other things, a proposed Policy 1.4.4 providing, in part, that “[t]he Town will discourage any connections of Northfork Drive to Island Way or any other road or roadway corridor located in Martin County.” The plan amendment proposed by Jupiter (hereinafter referred to as the “Original Plan Amendment”) was not transmitted to the Department until September of 1994. Following its review of the Original Plan Amendment in October, 1994, the Department issued its Objections, Recommendations and Comment Report (hereinafter referred to as the “First ORC”). The Department raised several objections to the Original Plan Amendment. Among other things, the Department objected on the basis of the lack of supporting data and analysis, lack of specificity of the proposed policies, lack of intergovernmental coordination and the creation of internal inconsistencies in Jupiter’s Plan. Jupiter responded to the First ORC on October 9, 1995. In response to the objections raised by the Department with regard to Policy 1.4.4, Jupiter responded that it intended to change the policy to provide that the policy to discourage the connection of Northfork Drive would only apply in the absence of a “demonstrated need “for the connection. See Palm Beach County exhibit 33. Jupiter also informed the Department that the data and analysis that supported Policy 1.4.4 consisted of a 1994 traffic planning study, the Joint Local Government Traffic Engineering Study (hereinafter referred to as the “Joint Traffic Study”), and Jupiter’s analysis of the Joint Traffic Study. While Jupiter suggested that it relied upon other “data and analysis”, the response to the Department’s First ORC only indicates that Jupiter relied upon the Joint Traffic Study. On October 3, 1995, following a public hearing, Jupiter adopted Ordinance 68-93 and the Original Plan Amendment therein. On December 1, 1995, the Department issued a Notice of Intent to Find Not in Compliance Jupiter’s Original Plan Amendment. A Statement of Intent describing numerous inconsistencies found by the Department between the Original Plan Amendment and the Act was entered with the notice. Petition for Formal Hearing, Settlement Negotiations and Adoption of the Remedial Amendment. On or about December 6, 1995, a petition challenging Jupiter’s Original Plan Amendment was filed by the Department with the Division of Administrative Hearings. The matter was designated case number 95-5930GM and was assigned to the undersigned. Palm Beach County and the Shores of Jupiter Homeowners’ Association, Inc., were allowed to intervene in case number 95- 5930GM by Order entered January 8, 1996. Tequesta was allowed to intervene in case number 95-5930GM by Order entered March 22, 1996. The formal hearing of case number 95-5930GM was abated to give the parties an opportunity to settle their dispute. The Department, Jupiter and the Shores of Jupiter ultimately reached a stipulated settlement. Palm Beach County and Tequesta did not, however, enter into the settlement. Upon the filing of the Stipulated Settlement Agreement, the abeyance of case number 95-5930GM was extended. Pursuant to the Stipulated Settlement Agreement, Jupiter modified Amendment 95-2 by Ordinance 13-96 on March 15 and 19, 1996. On or about April 20, 1996, the Department of Community Affairs caused a Notice of Intent to find Amendment 95-2 (hereinafter referred to as the “Remedial Amendment”), in compliance to be published. On or about May 2, 1996, Martin County filed a petition in response to the April 20, 1996 Notice of Intent to find the Remedial Amendment in compliance. The Petition was filed with the Division of Administrative Hearing on May 23, 1996. Martin County’s petition was designated case number 96-2563GM. Palm Beach County and Tequesta filed amended petitions in response to the Remedial Amendment. The amended petitions were accepted by Order entered June 5, 1996. By Order dated July 9, 1996, the parties in case number 95-5930GM were realigned, the two cases were consolidated, the stay was lifted and Martin County was allowed to intervene in case number 95-5930GM. The Remedial Amendment. The Remedial Amendment adopted by Jupiter and found in compliance by the Department includes an addition to the Traffic Circulation Element of Jupiter’s Plan. The Remedial Amendment adds Goal 4, Objective 4.1 and eight policies to implement the Goal and Objective to the Traffic Circulation Element of the Plan. The Remedial Amendment adopted by Jupiter provides the following, with modifications to the Original Plan Amendment noted: Neighborhood Protection The Town of Jupiter recognizes the need for a traffic circulation system that serves the needs of its residents, provides roadways with the least amount of congestion, promotes business and economic development of the community, and protects existing and proposed residential neighborhoods. The construction of new roads or expansion of existing roads should be accomplished in a manner that minimizes any impacts on the Town’s residential neighborhoods. The Town can minimize the impacts of road construction or expansion through such means as : diverting the flow of through traffic away from streets that serve existing neighborhoods, discouraging future thoroughfare or traffic circulation plans which encourage nonresidential or non- resident use of neighborhood streets, requiring that the functional classification of local roadways may not be changed without amending the Comprehensive Plan, and coordinating/cooperating with all appropriate governmental agencies to ensure new or expanded roadways will not adversely affect the Town’s residential areas. With respect to intergovernmental coordination/cooperation, the Town should work closely with both Palm Beach County and Martin County adjacent local governments and any other appropriate governmental entities to ensure that future transportation planning, roadway construction, and development approvals are supportive of efforts to protect and enhance existing and proposed residential neighborhoods. GOAL 4: To accommodate a variety of regional, intercounty, intracounty, and local travel demands in ways that minimize traffic congestion; encourage pedestrians; reduce the overall amount of travel for daily goods and services; and protect the integrity of existing neighborhoods. Objective 4.1: The Town of Jupiter will continue to study and evaluate whether or not an additional intercounty or intracounty transportation corridor for the area west of Loxahatchee River Road, east of I-95, and north of Indiantown Road is desired or needed in this geographic area; and assuming such a corridor is necessary, shall coordinate/cooperate with adjacent local governments and any other appropriate and governmental entities to identify the appropriate thoroughfare route of that corridor. Policy 4.1.1 The Town of Jupiter, in coordination/cooperation with Palm Beach County, Martin County, the Village of Tequesta, the Metropolitan Planning Organization, and other appropriate governmental agencies, shall encourage and participate in long range transportation planning efforts that protect existing or proposed residential neighborhoods by locating new or expanded roadways in a manner that does not adversely affect such neighborhoods. Policy 4.1.2 The Town of Jupiter, to the extent possible, shall encourage the construction of new roads and the expansion of existing roads in a manner that protects existing or proposed residential neighborhoods by diverting or eliminating the flow of non-resident or through traffic, and requiring that the functional classification of local roadways may not be changed without amending the Comprehensive Plan. Policy 4.1.3 The Town Shall rReview planning and other data generated by the Town’s western interchange study and other appropriate sources to determine whether or not the County’s western corridor should be aligned with Island Way or other right-of- way in Martin County west of The Shores. Policy 4.1.4 The Town shall coordinate/cooperate with adjacent local governments and affected neighborhoods to further the Town’s policy to discourage any connection of Northfork Drive to Island Way or to any other road or roadway corridor located in Martin County that cannot be justified based on demonstrated need. ‘Demonstrated need’ is determined by coordinated analysis of the existing and planned road network with and without the connection, maintenance of level of service standards over the planning timeframe, and consideration of other traffic, roadway and land use alternatives, balanced along with the Town’s policy to protect residential neighborhoods. Coordination/cooperation may include mediation. Policy 4.1.5 In the event an additional intercounty or intracounty roadway serving Palm Beach County and Martin County via Island Way or other right-of- way is necessary, this corridor’s route shall be aligned to a north-south route west of the present Jupiter Community Park. Policy 4.1.6 If an additional intercounty or intracounty corridor is constructed, the Town shall coordinate/cooperate with adjacent local governments to not align the corridor so as to not adversely impact existing residential neighborhoods. Policy 4.1.7 The Town shall coordinate/cooperate with Palm Beach County, Martin County, the Village of Tequesta, and any other affected governmental agencies to establish an overall vehicular circulation plan, including any additional north-south transportation corridors needed to alleviate existing or anticipated traffic congestion. Policy 4.1.8 The Town shall coordinate/cooperate with Martin County, Palm Beach County, the Village of Tequesta, and any other affected governmental agencies to discourage the creation of intercounty or intracounty traffic circulation patterns that provide ingress and egress to residential or nonresidential developments in Martin County solely through the Town of Jupiter and Palm Beach County. [Additions indicated by underlined words and eliminated words struck through]. Pursuant to the Remedial Amendment, Jupiter essentially modified the Original Plan Amendment, found to be not in compliance by the Department, by: Changing the term “cooperate” to “coordinate/cooperate”; Indicating that Jupiter will involve “adjacent local governments and any other appropriate governmental entities” in its efforts; and Modifying Policy 4.1.4 (formerly numbered Policy 1.4.4) as follows: The Town shall coordinate/cooperate with adjacent local governments and affected neighborhoods to further the Town’s policy to discourage any connection of Northfork Drive to Island Way or to any other road or roadway corridor located in Martin County that cannot be justified with respect to based on demonstrated need. ‘Demonstrated need’ is determined by coordinated analysis of the existing and planned road network with and without the connection, maintenance of level of service standards over the planning timeframe, and consideration of other traffic, roadway and land use alternatives, balanced along with the Town’s policy to protect residential neighborhoods. Coordination/cooperation may include mediation. [Additions indicated by underlined words and eliminated words struck through]. The Adequacy of Data and Analysis. The data and analysis submitted by Jupiter in support of the Original Plan Amendment and found to be inadequate by the Department consisted of the Joint Traffic Study and Jupiter’s analysis thereof. No additional data and analysis has been provided by Jupiter. The Department, while disagreeing with Jupiter and Intervenor as to the relevancy and adequacy of the Joint Traffic Study, suggested at hearing that the Remedial Amendment is supported by data contained in the Plan. In particular, the Land Use Intergovernmental Coordination and Traffic Circulation Elements. The stated purpose of the Joint Traffic Study was to: . . . determine existing traffic patterns crossing the Martin/Palm Beach Count Line in the vicinity of Jupiter and Tequesta for todays travel and to make a reasonable projection of probable future traffic patterns when the area reaches build-out that the engineering professionals of the affected jurisdictions could agree upon. Elected officials would then be able to look at regional roadway issues and needs required to meet the projected levels of traffic. Joint Exhibit 7 The Joint Traffic Study was a collaborative effort of the local governments involved in these proceedings. In order to understand whether the Joint Traffic Study provides data and analysis which can be relied upon to support the Remedial Amendment, it must be understood what portion of the Remedial Amendment is at issue. The Remedial Amendment reflects several policy choices of Jupiter. For example, the Remedial Amendment reflects the policy of Jupiter of protecting the character of its neighborhoods. See, e.g., Objective 4.1. The data of the Plan is sufficient to support this broad, general policy. Policy 4.1.4 of the Remedial Amendment also reflects a policy choice of Jupiter that the connection of Northfork Drive and Island Way, or any similar connection, should be discouraged. This policy choice reflects a conclusion that such a connection is not necessary or, if necessary, the detriments to the surrounding neighborhoods of the Northfork/Longshore Corridor will outweigh the need for the connection. Neither the Plan nor the Joint Traffic Study support these conclusions. Policy 4.1.5 and 4.1.8 also go beyond establishing a general policy of protecting neighborhoods. Policy 4.1.5 reflects a policy of Jupiter that if there is a need to connect Island Way with a corridor in Palm Beach County it should be accomplished through construction of a Western Corridor. Policy 4.1.8 reflects a policy that no ingress and egress should be allowed through any neighborhood in Jupiter. While a general policy of protecting neighborhoods may be supported by the Plan, the application of Policies 4.1.4, 4.1.5 and 4.1.8 requires more than a mere assumption that the connection of Northfork Drive to Island Way will result in detriments that outweigh any benefits of the connection, that the Western Corridor is THE method of connection between Martin and County and Palm Beach County which should be pursued, and that under no circumstances should ingress and egress be allowed through any neighborhood. Such conclusions require more. Jupiter has recognized that plan provisions which control land use and development activities and those addressing specified minimum criterion of the law must be supported by the highest level of data and analysis. Jupiter suggests, however, that the Remedial Amendment is merely an “aspirational provision, one which projects more subjective community-desired-outcomes and is not intended to satisfy one of the mandated minimum criteria areas”. Jupiter argues, therefore, that the Remedial Amendment “demands a less rigorous foundation in data and analysis.” While Jupiter may be correct that the policy choice of the Remedial Amendment concerning general neighborhood protection is aspirational, it is not correct as to the other policy choices concerning the need for the connection of Northfork Drive and Island Way, the need for the Western Corridor or the need to prevent all ingress and egress road in Jupiter. Those policy choices directly reflect land use and development activities as they relate to transportation. Simply assuming that the connection of Northfork Drive and Island Way and that ANY road providing ingress and egress through a Jupiter neighborhood will be harmful to the neighborhoods that border the Northfork/Longshore Corridor ignores the possibility that the connection could be beneficial to other areas of Jupiter due to reductions in traffic in those areas. It also ignores the possibility that steps can be taken to minimize any detrimental impacts. It also ignores the possibility that there may be an insignificant increase in traffic as a result of the connection and/or that the impacts of any increase in traffic may be eliminated through design modifications of the Corridor. Likewise, Jupiter’s assumption that the only way of resolving the need for north-south connector roads between Martin and Palm Beach Counties or within north Palm Beach County should only be accomplished by a Western Corridor ignores other solutions that will better serve the residents of the areas involved. Jupiter’s assumption or intuition also fails to take into account the impact of its policy choices on other governments. For example, the impact on the residents surrounding Church Street if the connection is not made is reflected in the Joint Traffic Study. Jupiter’s assumption allows it to ignore this possible impact. The Joint Traffic Study is deficient for a number of reasons. First, the Joint Traffic Study does not reflect current conditions in the area studied. At the time the Original Plan Amendment was submitted, Jupiter also submitted a land use change for a 183 acre tract of land known as the Weiser Tract. The submittal reflected a change of 158 acres from industrial use to residential use. The Joint Traffic Study had been prepared a year and a half prior to this proposed change and, therefore, does not take this significant modification into account. The modification of the land use of the Weiser Tract could have a significant impact on traffic and, therefore, the conclusions and information contained in the Joint Traffic Study. Because of the land use modification not reflected in the Joint Traffic Study, the Joint Traffic Study cannot be said to constitute the best available data to support the Remedial Amendment. The Joint Traffic Study purports to project or forecast traffic volumes in the area as a result of the build-out of land uses reflected in the comprehensive plans of the local governments involved in the study. In fact, however, the data gathered for the study was data on development and zoning, not projected plan build-out. The evidence failed to prove that development and zoning reflects projected plan build-out. Therefore, it cannot be concluded that the data contained in the Joint Traffic Study was collected and applied in a professionally acceptable manner. The methodology utilized for the Joint Traffic Study also does not support its use as data and analysis to support Jupiter’s policy choice concerning the connection of Northfork Drive and Island Way. The Joint Traffic Study was not intended to provide a formal transportation analysis of alternatives from which one of the local governments involved would elect one alternative. While the Joint Traffic Study may utilize a methodology used by traffic planning engineers on an everyday basis, the evidence failed to prove that traffic planning engineers would use it for the purpose that Jupiter has used it. For Jupiter to rely on the Joint Traffic Study to conclude that the connection of Northfork Drive and Island Way is not necessary and that the policies reflected in Policies 4.1.5 and 4.1.8 are necessary, it would be necessary for the Joint Traffic Study to include an alternative analysis or the data to perform such an analysis. It does not. Such an analysis should compare construction costs and environmental impacts of alternative traffic alignments. Such a study should also include short and long-range projections for traffic conditions, land use data, level-of-service standards and functional classifications for area roads, or existing level-of- service standards. Jupiter’s analysis of the Joint Traffic Study is also inadequate. The Joint Traffic Study discusses four different scenarios. Jupiter, however, elected to only utilize two of those scenarios. As to the existing Plan, the portions of the Plan relied upon by Jupiter and the Department, while recognizing the importance of the coordination of issues related to roads and traffic safety, do not support the specific objective of the Remedial Amendment to discourage the connection of specific roads, the location of the Western Corridor or the prevention of roads of ingress and egress in Jupiter. Nor do the provisions of Plan which provide an inventory of pertinent agencies and provide that the agencies should be contacted and worked with on common problems. While data and analysis support the other provisions of the Remedial Amendment, data and analysis does not support Policies 4.1.4, 4.1.5 and 4.1.8. Conditional Policy or Self-Amending Policy. Policy 4.1.4 provides that the general policy of Jupiter is (in cooperation/coordination with other agencies) to discourage the connection of Northfork Drive and Island Way UNLESS there is a “demonstrated need” for the connection. It has been suggested by Petitioners that this provision creates a self- amending policy--a policy that may change without the need to follow the amendment procedures required in the Act. In support of this position Petitioners have argued that if demonstrated need is found by Jupiter to have been shown, the policy to discourage automatically ceases to be the policy of Jupiter even though the amendment process of the Act has not been fulfilled--that the policy of discouragement becomes “inoperative”. A self-amending policy is one which changes as the result of an event that is unknown and unspecified at the time the policy is adopted. Typically, a self-amending policy is one that provides that certain things will occur if some other event, such as the amendment of a law by another jurisdiction, takes place. For example, if the policy is “X” unless law “Z” is modified, then the policy will be whatever law “Z” requires even though law “Z” may be amended in the future. Because it cannot be known how law “Z” may be amended in the future, policy “X’s” reliance on law “Z” is self-amending.. Obviously, that is not the type of policy at issue in this proceedings. A conditional policy, which Jupiter suggests Policy contains, is one which may change if certain clear contingencies or alternatives, described at the time of adoption of the Policy, are provided. For example, a policy that allows a general residential density but provides that, if land is to be used for affordable housing, a different density will be allowed, is an example of a conditional policy. The policy at issue in this proceeding is not a self- amending policy. It sets out a clear general policy: to discourage the connection of Northfork Drive and Island Way. And it sets out specific conditions for changing that policy: the showing of demonstrated need, which is further defined by the policy. The evidence failed to prove that Policy 4.1.4 is a self-amending policy. Unbridled Discretion? Petitioners have suggested that Policy 4.1.4, in particular, the portion of the Policy providing for the determination of whether there is a “demonstrated need” for a connection of Northfork Drive and Island Way, vests unbridled discretion in Jupiter. In support of this position, Petitioners have pointed to the failure of Policy 4.1.4 to specify the following: a) the specific office or person that will make the determination; and (b) the specific time(s) when the determination will be made. Petitioners have also argued that the Policy fails to specify sufficient objective criteria to be considered in determining whether there has been a showing of demonstrated need and argue that Jupiter is not capable of performing the balancing of need against its policy to protect its neighborhoods. As to the lack of specificity as to which office or person will perform the needs analysis, a reading of the Plan, with the Remedial Amendment, makes it clear that the ultimate responsibility rests with Jupiter and its governing body. Whether the alleged need is raised from within or without Jupiter need not be specified. The Act does not require more than that Jupiter be ultimately responsible. As to when the analysis will or may be performed, the lack of specificity would not be fatal in and of itself if the policy to discourage were supported by data and analysis. If the general policy to discourage the connection were supported by data and analysis, then the needs analysis could be performed at any time. Having failed to provide data and analysis to support the general policy, the lack of specificity as to when an initial determination of need will take place is contrary to the Act. The evidence also failed to prove that the definition of “demonstrated need” is inadequate. The “demonstrated needs” analysis specified by the Policy is similar to the type of analysis that would be required for Jupiter to make the policy choices concerning the lack of need for the connection of Northfork Drive and Island Way. Had it performed such an analysis before adopting the Remedial Amendment, there might have been sufficient data and analysis to support its policy choices. Finally, the question of whether Jupiter is capable of carrying out the balancing of demonstrated need and its neighborhood protection policy involves the application of the Policy. This is not an issue of whether the language of the Policy is “in compliance” with the Act. The Use of the Term “Discourage”. Evidence was presented by Petitioners to suggest that the term “discourage” as used in Policy 4.1.4 is vague and, therefore, violative of the Act. The term “discourage” is not a technical term. Therefore, it should be given its plain ordinary dictionary meaning. Whether the term, as defined in its ordinary sense, is so vague as to be violative of the Act must be determined in the context of the policy in which it is used. In this matter, the lack of specificity as to what specific actions Jupiter will take to “discourage” the connection of Northfork Drive and Island Way does not render Policy 4.1.4 so vague as to be violative of the Act. What is violative of the Act is the policy choice of Jupiter to “discourage” the connection without first adequately considering whether this particular connection should be discouraged. Inconsistency with Palm Beach County’s Thoroughfare Identification Map. Palm Beach County’s charter gives it control over the levels of service allowable on certain collector and arterial roads within the county, even if they are within the boundary of municipalities. This provision allows Palm Beach County to comprehensively plan a countywide transportation network. Palm Beach County’s responsibility for a comprehensive countywide transportation network is reflected in its comprehensive plan. In particular the plan includes a concurrency management system and a thoroughfare identification map (hereinafter referred to as the “TIM”). The TIM reflects the collector and arterial roads over which Palm Beach County exercises transportation authority. The purpose of the TIM is to identify right-of-way required to carry out Palm Beach County’s provision of a countywide transportation network. The TIM has reflected the connection of Northfork Drive and Island Way as part of the countywide transportation network since 1989. Jupiter suggests that the use of the word “discourage” rather than the more absolute language contained in the Original Plan Amendment, eliminates any inconsistency with the TIM. Jupiter has also suggested that all the TIM does is identify right-of-way and the Remedial Amendment does nothing to eliminate that right-of-way. Jupiter’s position concerning the TIM is rejected. The use of the term “discourage” does not eliminate the fact that Jupiter is taking the position in its Plan that Northfork Drive and Island Way should not be connected. Until demonstrated otherwise, this is the stated policy of Jupiter. The TIM on the other hand reflects a decision of Palm Beach County that the connection may be necessary for the benefit of the countywide transportation network. The narrow view of the purpose of the TIM, that it only is intended to protect right-of-way, ignores the broader purpose for which right-of-way is being protected: to insure that Palm Beach County can carry out its countywide transportation network plans. Policy 4.1.4 is inconsistent with that purpose. Impact of the Remedial Amendment on Petitioners. The Petitioners are all local governments that adjoin Jupiter. Palm Beach County has responsibility in the area at issue to insure that the road system in Palm Beach County is in place to accommodate growth as it occurs, to have an appropriately planned system that will handle growth and to maintain the system once it is in place. The Remedial Amendment eliminates one of the possible corridors which Palm Beach County has identified as necessary to carry out its responsibility. It also specifies the location of the Western Corridor as a means of solving north-south corridor needs and eliminates alternatives involving ingress and egress to Jupiter. The use of the Northfork/Longshore Corridor connected to Island Way could be accomplished at a cost of approximately $200,000.00 plus the cost of acquiring the right-of-way. The cost of constructing the Western Corridor, which has been suggested as an alternative to the connection with Island Way of Northfork Drive would be 6 to 7 million dollars. There would be other costs that may be incurred to raise the levels of service on other roads if Northfork Drive is connected with Island Way. The impact of the Remedial Amendment on Palm Beach County could result in delays in its ability to meet its responsibility to meet the needs for improvements in the road system of the area due to increased growth. The Remedial Amendment could also eliminate consideration of the connection and cause the need to pursue more costly alternative road corridors necessary to meet growth in the area. The Remedial Amendment could have the same impact on Martin County and Tequesta. Without the connection the area involved will have an additional traffic burden what will fall on the roads of Martin County, Palm Beach County and Tequesta, requiring the improvement of facilities in those jurisdiction. The evidence, while not proving the specific costs, does suggest that there will be a need for the road system of the area to handle greater and greater amounts of traffic due to increased growth in the future. The road system of the area will have to be improved to meet that increased traffic. The Remedial Amendment eliminates an alternative method of handling the increased traffic and, therefore, requires that the increased traffic be handled by infrastructure which will have to be provided by one or more of the Petitioners.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Administration Commission enter a Final Order finding Policies 4.1.4, 4.1.5 and 4.1.8 not in compliance with the Act. DONE AND ENTERED this 24th day January, 1997, in Tallahassee, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 24th day of January, 1997. COPIES FURNISHED: Paul R. Bradshaw, Esquire Bryant, Miller & Olive 201 South Monroe Street Tallahassee, Florida 32301 Barbara Alterman Assistant County Attorney Palm Beach County Attorney’s Office Post Office Box 1989 West Palm Beach, Florida 33402 Scott G. Hawkins, Esquire Post Office Box 3475 West Palm Beach, Florida 33402 Gary K. Oldehoff Assistant County Attorney Martin County 2401 S.E. Monterey Road Stuart, Florida 33408 Sherry A. Spiers Assistant General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Thomas J. Baird, Esquire 11891 U. S. Highway 1 North Palm Beach, Florida 33408 Thomas G. Pelham, Esquire David Russ, Esquire APGAR & PELHAM 909 East Park Avenue Tallahassee, Florida 32301 Bob Bradley Executive Office of the Governor Administration Commission 1601 The Capitol Tallahassee, Florida 32399 Barbara Leighty, Clerk Growth Management and Strategic Planning Administration Commission 2105 The Capitol Tallahassee, Florida 32399 Gregory Smith, Esquire Administration Commission 209 The Capitol Tallahassee, Florida 32399-0001
The Issue The issue in this case is whether the Department of Transportation (DOT) acted correctly in deeming the bid of Petitioner White Construction Co., Inc. (White), to be nonresponsive for failure to meet the Disadvantaged Business Enterprise (DBE) goal for Project No. 220517-1-52-01 (the project) and whether the proposed award to Intervenor Mitchell Brothers, Inc. (Mitchell) is in accordance with governing rules and statutes or is arbitrary, capricious, or contrary to competition.
Findings Of Fact The project is for work in Wakulla County. The deadline for submission of bids was June 17, 1998. White and Mitchell bid on the Project. Upon the opening of the bids on or about June 17, 1998, White was the apparent low bidder at $4,140,400.14, and Mitchell was the apparent second low bidder at $5,237,848.89. Pursuant to Rule 14-78, Florida Administrative Code, bidders have three days after bid opening in which to submit detailed information regarding compliance with the project’s DBE requirements. The requirements of this project were that eight percent of the contract work be performed by DBEs. With the bid itself, a bidder only needs to submit a DBE summary, noting whether it will meet the DOT established goal of eight percent. Within the three day period, White submitted DBE utilization forms, one of which listed HSD as one of its DBEs, for work in the amount of $55,326.36. Mitchell submitted the required forms, showing compliance with the DBE goals. The DOT publishes a DBE directory for each bidding cycle. The directory indicates the bidding cycle to which it is to be applied. If a company is not listed in the directory, a contractor is on notice that such company is not a certified DBE. White is an experienced bidder and contractor with the Department of Transportation. The bid and the DBE submission in this case were prepared by a White estimator who had been an estimator for many years. White’s estimator admitted that, while he usually reviewed the DBE directory prior to submission of bids, he failed to do so in this case. White received a copy of the DBE directory for the June Letting, but did not consult it to confirm that HSD was listed. While White has substituted DBE subcontractors on jobs after performance has begun where the DBE cannot complete the work for which it was hired, White has never substituted a DBE subcontractor prior to the performance of the contract or changed subcontractors on its bid after the bid opening because a subcontractor it listed for purposes of meeting the DBE goal was not DBE certified. White, as a common practice, keeps a supply of HSD forms in its office for use in submitting the DBE Utilization Form that indicates White will meet the DBE goal for a particular project. White did not contact HSD or any of the DBEs it listed on the DBE Utilization Form and DBE Utilization Summary Form to confirm that they were DBE certified for the June Letting. White is aware that subcontractors may lose their DBE certification or not apply for recertification. White is also aware that it should not use subcontractors for purposes of meeting the DBE goal that are not listed in the DBE directory unless one calls the Minority Programs Office and confirm directly that a particular company which is not listed is DBE certified for that letting cycle. HSD was not aware that White listed it on the DBE Utilization Form submitted with White’s bid. For White, that is not an uncommon practice. Neither DOT or HSD are depicted by the evidence of having misled White into believing that HSD was a qualified DBE. It is the bidder’s (White) responsibility to verify whether a DBE is authorized for use on a particular project. White personnel did not do this and the applicable DBE directory clearly did not have HSD listed. HSD was not a qualified DBE at the time of the bid letting or proposed bid award. HSD sent a quote for work on the project to Mitchell and White. The quote sent to Mitchell contains a letter in which HSD notes that the company . . . is not listed in the DBE Directory for the June Letting. Unfortunately this means you will not be able to utilize Highway Safety Devices for DBE Goals for the June Letting. At the final hearing, a witness for White asserted that White did not receive the explanatory letter received by Mitchell. Such assertion cannot be credited in view of the demeanor of the witness when testifying. Subsequent to the final hearing in this matter, White submitted information indicating that HSD had received certification as a DBE, effective October 26, 1998. However, White’s submission does not change the fact that HSD was not certified at the time of the bid letting or opening in this matter. White’s bid was evaluated by DOT’s GFEC to determine whether or not White met the DBE goal or provided a good faith effort evaluation for the Project. DOT interprets Rule 14-78.003(2)(b)5, Florida Administrative Code, as not permitting the substitution of a certified DBE for HSD, a circumstance that would have permitted White to meet the DBE goal for the Project. DOT’s Minority Programs Office does the initial evaluation of the DBE portion of the goal. If the goal has not been met, the bid will be reviewed by the GFEC. The GFEC makes a recommendation to the TRC, and the dollar amount of the bid is not a factor considered by the GFEC. The TRC will take into consideration the bid price in its evaluation. The GFEC reviews the bid package by going through every criteria set forth in Rule 14-78.003(2)(b)3,b, Florida Administrative Code, to see if there are any circumstances that would credit the prime contractor in meeting the DBE goal. The GFEC’s evaluation of White’s bid was to determine if the information submitted by White indicated whether good faith efforts were made to meet the DBE goal, not whether White could change HSD for a certified DBE. The GFEC reviewed White’s bid for compliance with the DBE goal and to determine if good faith efforts were made to meet the goal. White did not meet the DBE goal or submit documentation of its good faith effort to do so. The GFEC recommended to the TRC to deem White nonresponsive. The TRC reviewed the GFEC report and accepted the recommendation to deem White nonresponsive. The GFEC determined that Mitchell, however, did meet the DBE goal for the Project. The TRC determined that Mitchell’s bid was within the automatic award criteria and recommended Mitchell be awarded the contract. The TRC recommended to the CAC that White be deemed nonresponsive and award the contract to Mitchell. The review of White’s bid to determine whether it met the DBE goal by the GFEC, the TRC and the CAC were done in accordance with the governing statutes, rules and DOT policy and procedures. Although substitution of DBEs in the performance of a contract after bid-letting is permitted by DOT, the total amount of the bid submitted by a contractor is affected by the bids it receives from DBEs. White selected HSD, without confirming its present status at the time, because White had used this presumed DBE on previous occasions to obtain the best deal for White. White also asserted that, as it may change DBEs after a contract is awarded, the failure to submit a correct DBE is not a material error. However, a contractor may not change DBEs without good cause, such as its inability to perform the work, pursuant to Rule 14-78, Florida Administrative Code. That there is a procedure available after the contract is awarded does not affect the materiality of the failure to submit a qualified DBE in the first instance. If the DOT believes the responsive bids which it receives are too high, it can reject all bids. The bid submitted by Mitchell, at $5,237,848.89, was within the automatic award criteria. DOT’s decision to reject White’s bid for failure to comply with the DBE requirements is consistent with its practice and past policy. The use of an unqualified DBE is a material variation in a bid, as it may impact the price. DOT’s decision to reject White’s bid as non-responsive was not contrary to statute, rule, or policy, or the bid specifications. White did not show that DOT’s action was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order awarding the contract on State Project Nos. 220517-1-52-01 and 220511-1-52-01 to Intervenor, Mitchell Brothers, Inc. DONE AND ENTERED this 16th day of November, 1998, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 16th day of November, 1998. COPIES FURNISHED Mary M. Piccard, Esquire Vezina, Lawrence and Piscitelli, P.A. 318 North Calhoun Street Tallahassee, Florida 32301 Brian McGrail, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Donna H. Stinson, Esquire Broad and Cassel 215 South Monroe Street, Suite 400 Tallahassee, Florida 32302 James C. Myers, Agency Clerk Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450
The Issue Whether the Respondent, Michael E. Langton, violated Sections 112.313(6) and 112.3141(1)(c), Florida Statutes, and Section 8(e), Article II, Constitution of the State of Florida, by his activities and contacts with staff of the Department of Community Affairs on matters dealing with the Community Development Block Grant Program?
Findings Of Fact The Respondent. The Respondent, Michael E. Langton, took office as a member of the Florida House of Representatives, on October 22, 1985. The Respondent has continuously served as a Florida state representative since October 22, 1985. At all times relevant to this proceeding, the Respondent served as a public officer subject to Sections 112.313(6) and 112.3141(1)(c), Florida Statutes, and Section 8(e), Article II, of the Constitution of the State of Florida. Since October, 1981, the Respondent has been a grants consultant. The Respondent formed, owned and was employed by Langton Associates, Incorporated. Upon taking office as a Florida state representative in 1985, the Respondent requested an opinion of the Commission concerning his continued work for Langton Associates, Incorporated. The opinion of the Commission indicated that the Respondent could continue to work as a grants consultant but that he should not personally appear before state agencies. Langton Associates, Incorporated. The Respondent has been the sole stockholder of Langton Associates, Incorporated (hereinafter referred to as "Langton Associates"), since it was formed in October, 1981. The corporation is a for-profit-corporation. Among its functions, Langton Associates provides consulting services to governments eligible to apply for grants under the Community Development Block Grant Program and assists governments in preparing and submitting applications for grants under the program. During the period of time at issue in this proceeding, the Respondent was paid a salary from Langton Associates for his services to, and on behalf of, the corporation. The salary paid to the Respondent has been determined by the Respondent. Although the salary varies from year-to-year, it averages approximately $50,000.00 a year, including 1988, 1989 and 1990. The City of Macclenny, Florida, was among the clients of Langton Associates. Macclenny paid Langton Associates $12,000.00 a year for five to six years, including 1988. Income paid to Langton Associates by its clients was deposited in a business account from which the Respondent's salary was paid. During the five to six years prior to July, 1990, Langton Associates made approximately $350,000.00 for services to its clients. During the period of time at issue in this proceeding, the Respondent, through Langton Associates, provided services to a number of local governments. Several of these local governments paid Langton Associates an annual fee. The average fee was approximately $30,000.00 a year. Other clients of Langton Associates paid on a per grant application basis approximately $3,000.00 per grant application. The Community Development Block Grant Program. The Community Development Block Grant Program (hereinafter referred to as the "CDBGP"), is a Federal government program whereby funds are provided to States to use to improve small local communities. Funds received for the CDBGP in Florida are administered by the Florida Department of Community Affairs (hereinafter referred to as the "Department"), through the Department's Division of Housing and Community Development. Funds for the CDBGP are received and are distributed for four categories of grant projects: (1) housing; (2) neighborhood revitalization; (3) economic development; and (4) commercial revitalization. CDBGP funds are intended to be used in part to assist small local governments to revitalize homes and neighborhoods. Each year the Department adopts administrative rules governing the CDBGP and the manner in which annual funds are to be distributed in Florida. The Department's revised administrative rules provide the steps to be followed in each annual funding cycle. The procedures for determining which small governments receive CDBGP funds generally include the following steps: An applicant workshop is held at the beginning or the middle of the funding cycle; An opening date is established for when Applications are to be submitted; A closing date is established for when Applications are scored and awards of funds are made; Applications are initially ranked according to their scores; Site visits are conducted by the Department; Applications are ranked again. These rankings can be challenged; and Funds are awarded. The Secretary of the Department makes the final decision as to how CDBGP funds are awarded. All applications for CDBGP funds are "self-scored" prior to filing. Each applicant determines, based upon objective standards, the score of its application and informs the Department of the score on the application. When applications are filed they are initially ranked by the Department based upon the self-score determined by the applicant. Applications may be filed on behalf of small cities of less than 50,000 population or small counties of less than 200,000 population. Applications for CDBGP funds are technically filed by eligible applicants--a county or city. Private individuals and businesses are not eligible to apply for grants from the Department under the CDBGP. Applications are prepared 90 to 95% of the time by consultants, including Langton and Associates. The following question is included on applications from which it may be determined if an application was prepared by a consultant: "Who was the agency or firm responsible for preparing the application?" The eligible county or city for which an application is submitted is considered the "applicant." If a consultant prepared and filed an application on behalf of an applicant, however, it was common for Department staff associated with the CDBGP to refer to the consultant and/or the government entity as the "applicant." Although the number of consultants in Florida who prepared applications for CDBGP awards varied from year to year, there have been approximately six to ten consultants in Florida preparing applications for CDBGP awards. During 1988, there were a total of approximately 276 local governments which were eligible for awards under the CDBGP. Only a small number of these entities, however, actually filed applications for awards. The Department does not consider the identity of any consultant involved in filing a CDBGP application in determining which applicants should be awarded CDBGP grants. Following the filing of applications for CDBGP grants, additional information is not to be provided to the Department unless requested. Nor are arguments to be presented to the Department in support of any application. Target Area Maps and Gerrymandering. Applications filed during the 1988 (as well as prior years) annual funding cycle for CDBGP funds for the housing category were required to include a "target area map". A "target area map" was an area map of the local community of the applicant depicting the specific area that the proposed grant activities were to be conducted in. Therefore, a target area map for a housing grant would identify on the area map the specific houses for which the funds were being requested. Prior to the 1988 annual funding cycle many target area maps had been submitted which included oddly shaped target areas. These oddly shaped target areas were not square or rectangular; instead, the target area was drawn in such a way that houses that qualified for CDBGP funds were included and those that did not qualify, even if located right next door to a qualified house on the same block, were excluded. "[A]pplicants would draw their target area boundaries in such a way to exclude housing units that would adversely affect their score." Lines 24-25, page 73, and line 1, page 74, Transcript of September 30, 1991-October 1, 1991, Formal Hearing (hereinafter referred to as the "Transcript"). This practice was referred to as "gerrymandering." There had been concern and debate in and outside the Department concerning whether gerrymandering should be allowed. There were some who were not concerned about, or bothered by, gerrymandering because the use of gerrymandering to identify a target area did not cause persons who were not in need to be directly benefited from CDBGP funds. For example, in the housing grant area, only the houses of persons with low enough income levels could directly benefit from the CDBGP. Those that did not qualify for assistance could not be directly benefited even if an impacted area was gerrymandered. There were others, however, who were concerned about and bothered by gerrymandering because the use of gerrymandering allowed applicants to achieve higher scores for their applications by drawing the targeted area in such a way to insure that it included mainly or totally houses that were qualified for funding while excluding unqualified houses in the same neighborhood which would reduce their scores. Persons concerned with, and bothered by, gerrymandering, including the Respondent, believed that the CDBGP intended that only relatively box-shaped geographic neighborhoods should be allowed as the target area. At various times, the Department tried to devise a method of preventing gerrymandering, but could find no reasonable solution. The difficulty with preventing gerrymandering was explained by Lewis O. Burnside, the Director (beginning in January, 1989) of the Department's Division of Housing and Community Development: Every time I talked about target areas when we looked at it -- we tried to deal with target areas to see what shape should they be. Should they be square or circular and should they -- we couldn't find any rhyme or reason for that. Also, our program applies to urban and rural areas. And in rural areas it is quite normal to have a large property value farm across from what used to be tenant lands, where you have very low income people directly across the street from a multi-million-dollar piece of farmland. And so, we could not write anything, one that would give you a non-gerrymandered target area unless it was just arbitrary. We would just have to say it has got to be square, or it has got to be rectangular, and it can be no larger than a certain size. . . . Lines 8-20, page 141, Transcript. Most people associated with the CDBGP, other than the Respondent, did not consider the issue of gerrymandering to be a burning issue or a particularly improper practice. This lack of concern was caused by the fact that the general purpose of the CDBGP was to benefit low and moderate income people and gerrymandering did not circumvent this general purpose. Ultimately, individuals in the houses included in a target area, even in a gerrymandered target area, benefited only if they were in need of assistance as established under the CDBGP. There were members of the Florida Legislature, including the Respondent, who believed that gerrymandering in the CDBGP was inconsistent with the goals of the CDBGP. Through at least the 1988 annual funding cycle, gerrymandering of target area maps was not prohibited by federal or Florida law. The 1988 Funding Cycle. The general procedures for determining how CDBGP funds were to be awarded each funding cycle which are described in finding of fact 18, supra, were followed for the 1988 funding cycle. Legislation concerning the CDBGP was adopted during the 1988 legislative session and was codified as Chapter 88-201, Laws of Florida. As a result of the adoption of Chapter 88-201, Laws of Florida, and as was the practice of the Department prior to each funding cycle, the Department undertook to amend its administrative rules governing the CDBGP, Chapter 9B-43, Florida Administrative Code. Rule 9B-43.003(33), Florida Administrative Code, was renumbered as subparagraph (35) and was amended by the Department by adding the following underlined language: "Target area" means a distinct, locally designated slum or blighted area under Section 163.340, F.S.; or a designated Enterprise Zone under Section 290.065, F.S.; or a distinct locally designated area, totally contained and contiguous in nature, that is characterized by concentrations of low and moderate income persons, wherein low and moderate income persons comprise at least 51 percent or more of the target area population. It was believed in the Department when the Department amended the definition of "target area" in its Rules that gerrymandering had been eliminated or substantially reduced. Although no formal opinion was given, an attorney on the Department's legal staff indicated during a CDBGP application workshop conducted by the Department for the 1988 funding cycle that gerrymandering would no longer be allowed. A representative of the Department instructed potential CDBGP grant applicants during a CDBGP application workshop held sometime after October 11, 1988, the effective date of Rule 9B-43.003(35), Florida Administrative Code, that gerrymandered target area maps would not be permitted. The Respondent and Langton Associates were aware of this representation. At some time subsequent to the workshop at which it was announced that gerrymandering would not be allowed, applications for CDBGP housing grants for the 1988 funding cycle were submitted to the Department. There were a total of thirty-four applications received for CDBGP housing grants for the 1988 funding cycle. Langton Associates submitted applications for housing grants for the 1988 funding cycle for three applicants: (1) Macclenny; (2) Fellsmere, Florida; and (3) St. Johns County, Florida. The target areas proposed with the applications prepared and submitted by Langton Associates for Macclenny, Fellsmere and St. Johns County were not gerrymandered. Langton Associates did not submit gerrymandered target areas because the Respondent did not believe that gerrymandering was proper and because the Department had announced that it would not accept gerrymandered maps. Despite the Department employee's statement during the workshop that gerrymandered maps would not be allowed for the 1988 funding cycle, most of the target area maps submitted with applications for the 1988 funding cycle were gerrymandered. Only five applications received by the Department did not include gerrymandered target areas: (1) the three applications submitted by Langton Associates; (2) the application of Apalachicola, Florida; and (3) the application of Century, Florida. On December 1, 1988, a memorandum was sent from Earl H. Parmer, Jr., then Director of the Department's Division of Housing and Community Development, to the Department's General Counsel. Mr. Parmer informed the General Counsel of the target area maps which had been filed for the 1988 funding cycle and stated, in part, the following: As you know, the department has been attempting to reduce the grantsmanship in the CDBG program by substantially reducing the gerrymandering of CDBG target areas; however, we question whether our current rule language supports our position. Advocate's Exhibit 7. On December 2, 1988, the following response was given by the Department's legal staff to Mr. Parmer: "Maps appear to be in compliance with Rule." Advocate's Exhibit 7. The Department, therefore, determined that it could not, despite the previous instructions from a Department representative that gerrymandered target areas would not be accepted, prevent the use of gerrymandered target area maps for the 1988 funding cycle. On December 14, 1988, the applications for CDBGP housing grants were initially ranked by the Department based upon the scores determined by the applicants through self-scoring and reported to the Department. Applications were listed by highest score to lowest score. The total 1988 funding cycle housing grant funds available were sufficient to meet the requests for funds of only the top fifteen-ranked applications. There were not sufficient funds to fund those applicants who ranked below fifteenth. The applications filed by Langton Associates ranked as follows, based upon their self determined scores, on the initial ranking: (1) Macclenny was seventeenth; (2) St. Johns was thirtieth; and (3) Fellsmere was thirty-second. The scores for these applicants determined through self-scoring were not high enough to entitle any of the applicants to an award of a housing grant for the 1988 funding cycle. The Respondent's Contacts with Linda Frohock. During December, 1988, the Respondent was informed that most applications for CDBGP housing grants for the 1988 funding cycle included gerrymandered target area maps and that the Department intended to accept those maps. After learning of the Department's acceptance of gerrymandered target area maps, the Respondent telephoned Thomas Yeatman, an employee of the Department. The Respondent left a message requesting that his telephone call be returned. Between December 20 and 31, 1988, Linda Frohock, then Chief of the Bureau of Housing and Community Assistance, in the Department's Division of Housing and Community Development, returned the telephone call the Respondent had made to Mr. Yeatman. This telephone call probably took place on or about December 20, 1988. The Respondent's initial telephone call to Mr. Yeatman and his conversation with Ms. Frohock were the result of his frustration over the fact that the Department was going to allow gerrymandering of target areas. The Respondent had expressed concern over the Department's administration of the CDBGP prior to 1988. The Respondent described his frustration: I called Mr. [Yeatman] and Linda, and I wanted to speak to the secretary as Representative Langton. I made it very clear, I said, I don't care what this is going to cost me politically or financially; you guys have got to stop this craziness. You are disadvantaging tons of cities, cities that are doing this right, they are doing this fair. They have no shot at ever competing for these grants, if you are going to continue this abuse of a program. . . . . Lines 16-24, Page 35, September 12, 1991, Deposition of the Respondent. The Respondent admitted that when he called the Department he intended to put pressure on the Department through his position as a legislator and that he attempted to use his power as a public official to force the Department to take action. The Respondent let it be known to Ms. Frohock that he was calling in his capacity as a legislator. Ms. Frohock informed the Respondent that she was returning his telephone call at the direction of the Assistant Secretary of the Department and that she would report their conversation back to the Secretary and the Assistant Secretary of the Department. During Ms. Frohock's telephone conversation with the Respondent, she took notes of the nature of the conversation. During the telephone conversation with Ms. Frohock, the Respondent was very upset and angry. The Respondent was excited, and he talked loudly and rapidly. The Respondent was angry that his competitors were benefiting by being allowed to submit gerrymandered target area maps while the applications prepared for, and submitted on behalf of, Langton Associates' clients had not included gerrymandered target area maps. The Respondent believed that Langton Associates had lost money in the past because it had not gerrymandered target areas while the Respondent's competitor's had. During the Respondent's conversation with Ms. Frohock, the Respondent indicated the following: He had met with Mr. Parmer in the summer of 1988 and discussed gerrymandering. Mr. Parmer had promised him that gerrymandering would not be allowed. A Department employee had stated at a workshop that gerrymandering would not be allowed for the 1988 funding cycle. He wanted to be allowed to gerrymander the target area maps Langton Associates had submitted on behalf of its clients or he wanted the Department to require that those applicants that had gerrymandered their target area maps be punished. He indicated that he did not care what it cost him politically or financially to fight the Department's actions. He intended to shut down the CDBGP and see that all of the employees involved in the CDBGP were fired if the matter was not resolved to his satisfaction; "Heads would roll." He indicated that Florida Senator Carrie Meek and Florida Representative C. Fred Jones had asked him to play a major role in the Legislature in revising the CDBGP. He stated that the matter would end up in a court of law. He would get Fred Baggett and Jack Skelding, both of whom are attorneys, to assist him to fight the Department. He indicated that he would stop the 1988 funding cycle by suing the Department. He stated that he would probably only get two grants funded during the 1988 funding cycle. He stated that he would return to his office on January 2, 1989, and would have a legislative committee meeting on January 9, 1989; if he had not heard back from the Department about the problem, he wanted to talk to the Secretary of the Department after his return. If he was not satisfied after talking to the Secretary of the Department, he indicated he intended to speak to the then Lieutenant Governor and the Speaker of the House Designate. The Respondent asked Ms. Frohock to pass his concerns on to the Department's Secretary. The Respondent requested that Ms. Frohock provide him with copies of all target area maps submitted in the housing category and the neighborhood revitalization category for the 1988 funding cycle. These documents were public records. The Respondent's conversation with Ms. Frohock made her nervous, in part because he was a legislator. During the Respondent's conversation with Ms. Frohock, he did not specifically say that he was calling on behalf of himself, Langton Associates or any local government for which the Respondent or Langton Associates was working. Nor did the Respondent specifically mention being compensated for the call. Despite the foregoing finding of fact, it is obvious that the Department's actions which the Respondent complained of during his conversation with Ms. Frohock had directly affected applicants which had paid Langton Associates to prepare and file applications on their behalf during the 1988 funding cycle. It is also obvious that the alternative resolutions of the problem suggested by the Respondent had the potential to benefit those same applicants. In light of the fact that the Langton Associates' three applications were among only five applications out of thirty-four applications filed that were not gerrymandered, it was in the interest of Langton Associates and the Respondent that the Department take the actions the Respondent suggested or some other action to correct the Department's decision to accept gerrymandered target areas. It is also true that the Respondent did not specifically request any change in the scores of the applicants represented by Langton Associates; and that the specific actions recommended by the Respondent were suggested for the "entire set of eligible applicants." But the Respondent's suggestions included the applicants represented by Langton Associates and those applicants stood to gain more from the Respondent's suggestions than those applicants that had filed gerrymandered target area maps; especially if the applicants that had filed gerrymandered target area maps were penalized as suggested by the Respondent. While it is true that the concerns which the Respondent expressed to Ms. Frohock were to some degree concerns which the Respondent or any other legislator could have raised in their capacity as a legislator, the Respondent's actions also could have beneficially impacted clients of Langton Associates that had paid Langton Associates to prepare and file applications on their behalf in the funding cycle at issue. The fact that issues may have been raised by the Respondent in his capacity as a legislator does not negate the fact that the raising of those issues before the Department could also have benefitted the clients of his company, Langton Associates. The Respondent's actions in telephoning Mr. Parmer and talking to Ms. Frohock were also considered necessary by the Respondent because of the possible harm to the reputation of Langton Associates caused by the Department's actions. Langton Associates was one of the only consultants that heeded the Department's instructions concerning the use of gerrymandered target areas for the CDBGP 1988 funding cycle. When the Department reversed its position and accepted the gerrymandered target areas proposed by most of the applicants in the 1988 funding cycle for housing, the Respondent had to be concerned about those who would question why Langton Associates had not filed gerrymandered maps. In light of these concerns, the Respondent had to have felt compelled to take some action to force the Department to admit that it had been in error and not Langton Associates, even if the clients of Langton Associates were not directly benefited. Finally, some of the comments and requests made by the Respondent to Ms. Frohock may have been reasonable in light of the events which precipitated the conversation. If the Respondent had not been a member of the legislature who was prohibited from representing others for compensation before a state agency, some of his actions were actions which might be expected of, and considered reasonable if taken by, any consultant in light of some of the Department's actions. Some of the Respondent's actions were taken and some of his comments were made because he believed that the Department's actions had improperly misled Langton Associates. Some of his actions were taken and some of his comments were made, however, solely because of his position and power as a legislator. Following her telephone conversation with the Respondent, Ms. Frohock gave a copy of her notes to, and briefed, the Department's Assistant Secretary. She also gave a copy of her notes to Mr. Burnside. Ms. Frohock also subsequently wrote a memorandum memorializing her telephone conversation with the Respondent. The January 10, 1989, Meeting. Subsequent to the Respondent's telephone conversation with Ms. Frohock, the Respondent requested that a meeting be held with the Secretary of the Department in Representative C. Fred Jones' office. In January, 1989, Representative Jones was the Chairman of the House Committee on Community Affairs, the committee of the House of Representatives with jurisdiction over the Department's programs. The Respondent asked Mario Taylor, Staff Director of the House Committee on Community Affairs, to arrange the meeting with the Secretary of the Department. Mr. Taylor obtained approval for the meeting requested by the Respondent from Representative Jones, and Mr. Taylor informed Michael Richardson, the Department's legislative liaison, of the meeting. The meeting requested by the Respondent was scheduled for January 10, 1989 (hereinafter referred to as the "Meeting"). Mr. Richardson informed the then Secretary of the Department, Thomas Pelham, of the Meeting. Mr. Richardson told Mr. Pelham that the meeting was being held to discuss target area maps and gerrymandering. Mr. Pelham met with Mr. Burnside prior to the meeting to be briefed on the issue and requested that Mr. Burnside attend the Meeting with him. Prior to the Meeting, Ms. Frohock and Mr. Burnside met with Department staff to discuss the gerrymandering issues raised by the Respondent during his telephone conversation with Ms. Frohock. A "discussion paper" was drafted by Ms. Frohock as a result of this Department staff meeting and was dated January 10, 1989. It was agreed by Department staff that the Department had presented faulty instructions concerning gerrymandering during the workshop which took place before applications for the 1988 funding cycle were filed. There were some in the Department that wanted to take this incident into account in any recommended solution to the problem. There were others, including the Department's legal staff, who believed that the Department had done nothing illegal and, therefore, wanted to take no action. The following possible solutions to the gerrymandering issue were discussed and agreed upon by the Department's staff and were discussed in the discussion paper: Allow all applicants to resubmit target area maps (this would benefit the five applicants, including the three Langton Associates' applicants, that had submitted maps that had not been gerrymandered); Give the maximum score for the target area for all the proposals (this would also benefit the five applicants, including the three Langton Associates' applicants, that had submitted maps that were not gerrymandered); and Do nothing and allow any disappointed applicant to follow the Chapter 120, Florida Statutes, process to challenge the Department's actions. This is the option that was ultimately recommended in the discussion paper. The Meeting was attended by Representative Jones, the Respondent, Mr. Pelham, Mr. Burnside, Mr. Taylor and Mr. Richardson. The Meeting was held in Representative Jones' office. Representative Jones agreed to the meeting because he had a number of concerns about the manner in which the Department was administering the CDBGP. Representative Jones was not aware that the Respondent's company, Langton Associates, had filed applications on behalf of its clients which had been affected adversely by the Department's actions in accepting gerrymandered maps. Therefore, Representative Jones was not aware that the Respondent had not requested the Meeting solely in his legislative capacity. During the Meeting the Respondent was hostile, agitated, upset and "seemed about to explode". His manner was threatening. Mr. Pelham described the Respondent's actions as a "tirade". The Respondent did most of the talking during the Meeting: He expressed his displeasure with the Department's administration of the CDBGP and, in particular, the Department's actions in accepting the gerrymandered target area maps. Representative Jones also expressed concern about the Department's administration of the CDBGP. He indicated that he and others, in preparing applications on behalf of local governments for the 1988 funding cycle, had been misled by information presented at a workshop to the effect that gerrymandering would not be allowed for the 1988 funding cycle. The Respondent stated that "he and others had relied upon that misinformation, and now he feared that they were going to be penalized in the way those applications were scored." Lines 4-6, page 194, Transcript. He stated that he did not believe the Department was administering or interpreting the law correctly, especially with regard to gerrymandering. He stated that the law did not allow gerrymandering. He indicated his displeasure with staff of the Department and indicated that they should all, with one exception, be fired. He demanded that all applications be thrown out; that they should not be scored or acted upon. He suggested that the Department should do nothing until the Legislature could take a look at the problem. He threatened to take legal action to stop the Department if it did not stop the funding cycle. Later during the Meeting, he suggested that the Department accept redrawn target area maps that were not gerrymandered or at least require all the applicants to "play by the same set of rules." The Respondent wanted the Department to halt the 1988 funding cycle process so that legislation prohibiting gerrymandering could be adopted. As of the date of the Meeting, if the Department had halted the 1988 funding cycle process it would not have harmed the applicants represented by Langton Associates. All three applicants had scores at that time which were below the funding ranking cut off score. Without some action by the Department, those applicants did not appear destined to receive a grant for the 1988 funding cycle. While it is true that the suggestions made by the Respondent during the Meeting would apply in general to all applicants, it is also true that if all applicants were required to submit maps that were not gerrymandered, the applicants that had submitted gerrymandered maps would in all probability end up with reduced scores, depending on how their target areas were drawn. The applicants for which applications had been prepared by Langton Associates and two other applicants, on the other hand, would not suffer such a reduction in scores because they had already submitted target areas which were not gerrymandered. Those applicants which had the top fourteen scores for the 1988 funding cycle for housing at the time of the Meeting would have suffered disproportionately if the funding cycle were suspended: their status would have changed from prospective award winner to non-award winner. During the Meeting, although the Respondent did not specifically indicate that the Meeting had been called, or that he was voicing his displeasure, on behalf of himself, Langton Associates or its clients, the Respondent made reference to the fact that he was a consultant and that Langton Associates had prepared applications for local governments that had been filed in the 1988 funding cycle being discussed. This was apparent to the Department employees present at the Meeting. The Respondent, although expressing his concerns in terms of all applicants generally, was nonetheless also concerned about the impact on the Langton Associates' applicants and Langton Associates. The Department employees present at the Meeting were aware of this fact also. The Respondent indicated that unless the Department took the actions he had suggested, Langton Associates and the two other applicants that had not gerrymandered their target areas would be prejudiced. The Respondent, through Langton Associates, could have benefited if any of its 1988 funding cycle grants were approved for funding. For example, applicants which are approved will more often than not hire the consultant that prepared a successful application to administer the awarded funds. Fees for such services can be more profitable than the fees for preparing an application. Therefore, if the Respondent's actions during the Meeting could ultimately result in the awarding of a grant to one of the Langton Associates' clients, the Respondent would have benefited. The Respondent's actions in calling and participating in the Meeting were also considered necessary by the Respondent for the same reasons described in finding of fact 71, supra. As was true of the Respondent's conversation with Ms. Frohock, it is true that the concerns which the Respondent expressed during the Meeting were to some degree concerns which the Respondent or any other legislator could have raised in their capacity as a legislator. It is also true that the Respondent's actions also could have beneficially impacted clients of Langton Associates that had paid Langton Associates to prepare and file applications on their behalf in the funding cycle at issue. The fact that issues may have been raised by the Respondent in his capacity as a legislator does not negate the fact that the raising of those issues before Department employees could also have benefited the clients of his company, Langton Associates. It is also true that some of the comments and requests made by the Respondent during the Meeting may have been reasonable in light of the events which precipitated the conversation. If the Respondent had not been a member of the legislature who was prohibited from representing others for compensation before a state agency, some of his actions during the Meeting were actions which might be expected of, and considered reasonable if taken by, any consultant in light of some of the Department's actions. Some of the Respondent's actions were taken and some of his comments were made because he believed that the Department's actions had improperly misled Langton Associates. Some of his actions were taken and some of his comments were made, however, solely because of his position and power as a legislator. The 1988 Funding Cycle Awards in the Housing Category. Following the Meeting, Mr. Burnside met with Ms. Frohock and discussed the meeting. Following this discussion, Ms. Frohock, at Mr. Burnside's direction, prepared a revised discussion paper in the form of a memorandum from Mr. Burnside to Mr. Pelham. In the memorandum from Mr. Burnside to Mr. Pelham a fourth option was added: to cancel the funding cycle and start over. Mr. Burnside ultimately decided, after discussion with Ms. Frohock, to recommend that the Department adopt the option included in the original discussion paper described in finding of fact 83b: give the maximum score for the target area for all the proposals. This option was recommended, in part, because Mr. Burnside and Ms. Frohock had determined that awarding all applicants maximum scores for their target areas would not have any real impact on which applicants were ultimately awarded funds for the 1988 funding cycle for the housing category and the option recognized that the Department had made a mistake at the workshop. The option recommended was also chosen, in part, because the Department had taken a similar action in the past and because the Respondent was a legislator. Mr. Pelham ultimately approved Mr. Burnside's recommendation. The decision of the Department as to how to resolve the issues raised by the Respondent concerning the gerrymandered maps received during the 1988 funding cycle for housing was the direct result of the actions of the Respondent described, supra. After approval by Mr. Pelham of the recommended action, Mr. Burnside telephoned the Respondent to inform him of the Department's decision. This conversation took place sometime in February, 1989. After Mr. Burnside explained the decision to the Respondent, the Respondent went over the scores of the applicants and asked how the decision would affect those scores. Mr. Burnside, in response to the Respondent's question, indicated how the decision would impact the score for the application of Macclenny, one of Langton Associates' clients. This conversation took place after site visits had taken place and after an applicant previously ranked above Macclenny had been moved down in the rankings as a result of the site visits. Therefore, Mr. Burnside was able to inform the Respondent that Macclenny was within the fundable range of applicants. The Department's solution to the dispute was based in part on the fact that Macclenny was going to receive an award. The Respondent told Mr. Burnside that the result of the Department's solution, as explained by Mr. Burnside, might be acceptable to him. The Respondent was satisfied even though the solution did not resolve the ultimate problem of gerrymandering. , which the Respondent has suggested was the reason he was so upset about the Department's actions. The Respondent also asked Mr. Burnside whether the Department's decision could withstand a legal challenge. Mr. Burnside informed the Respondent that the Department's legal staff had opined that the decision was defendable. If the problem raised by the Respondent had been raised by any person who was not a member of the Florida Legislature, Mr. Burnside would have recommended to Mr. Pelham that the Department take no action and allow the complaining individual to take legal action. The Respondent, therefore, clearly affected the manner in which the Department administered the CDBGP. The Respondent's Contact with Department Staff Concerning the Monitoring of CDBGP Grants. During October, 1989, Terri Ganson was employed as a Community Assistant Consultant for the Department. Ms. Ganson's duties included, among other things, monitoring CDBGP grants. During late 1989, Ms. Ganson was responsible for monitoring three CDBGP grants that had been awarded to Marion County (hereinafter referred to as the "Marion Grants"). Ms. Ganson was required to write periodic monitoring reports concerning the Marion Grants. The Marion Grants were being administered on behalf of Marion County by a grant consultant and competitor of the Respondent, Fred Fox Enterprises. Prior to October 30, 1989, Marion County was awarded a fourth grant (hereinafter referred to as the "Fourth Marion Grant"), in the CDBGP. Marion County was seeking bids for the administration of the Fourth Marion Grant. Langton Associates and Fred Fox Enterprises had submitted proposals to administer the Fourth Marion Grant. As of October 30, 1989, Marion County had not yet decided who would administer the Fourth Marion Grant. On October 30, 1989, the Respondent telephoned Ms. Ganson. During this telephone call, the Respondent yelled at her and was very angry and upset. The Respondent believed that Ms. Ganson was cooperating with Fred Fox, his competitor, and he wanted her to stop. The Respondent feared that Ms. Ganson's monitoring reports for the Marion Grants would cause the administration of the Fourth Marion Grant to be awarded to Fred Fox Enterprises. The Respondent did not believe the monitoring reports were critical enough of Fred Fox Enterprises. The evidence failed to prove that Ms. Ganson in fact had favored Fred Fox Enterprises. During his telephone conversation with Ms. Ganson on October 30, 1989, the Respondent indicated the following to Ms. Ganson: He was concerned that Marion County would select Fred Fox Enterprises to administer the Fourth Marion Grant because of the monitoring reports Ms. Ganson had written concerning the Marion Grants. He accused Ms. Ganson of siding with Fred Fox. He told Ms. Ganson that she had "probably cost him a $96,000 administration grant because of the way [her] reports were written" Lines 2-4, page 181, Transcript. He demanded that a mistake in Ms. Ganson's monitoring reports for one of the Marion Grants be corrected. He requested that Ms. Ganson send him a copy of the current contracts and milestones, all of the monitoring reports and all requests for modifications pertaining to the Marion Grants. Ms. Ganson told the Respondent that she would check her reports to determine if she had made a mistake and, if so, would correct it. She ultimately determined that she had made a mistake and corrected it. She did not, however, totally modify her reports in the manner that the Respondent had demanded. Ms. Ganson reported the October 30, 1989, telephone conversation with the Respondent in a memorandum to her immediate supervisor. The Respondent's actions in telephoning Ms. Ganson on October 30, 1989, and his comments to Ms. Ganson were intended to avoid the loss by Langton Associates of the administration fees for the Fourth Marion Grant, which the Respondent believed could be $96,000.00. Although the decision as to who administered the Fourth Marion Grant was a local decision, the Respondent attempted to influence that decision by demanding that Ms. Ganson, an employee of the Department, modify her monitoring reports. The Respondent's conversation with Ms. Ganson was intended to benefit Langton Associates and, thus, benefit himself. The evidence failed to prove that the Respondent's conversation with Ms. Ganson was on behalf of any person or entity (other than Langton Associates) that he had received compensation from. Although the evidence proved that the Respondent was paid a salary by Langton Associates during the year in which his conversation with Ms. Ganson took place, the evidence failed to prove that Langton Associates had any clients at that time that were paying for Langton Associates' services. Although general testimony was elicited concerning Langton Associates' business and clients, testimony concerning clients that paid Langton Associates during any specific period of time was limited to the period of time preceding approximately July, 1989. The Respondent's Contact with Department Staff Concerning Awards of Multiple Service Grant Contracts. A copy of a letter dated September 22, 1989, was received by the Department. The letter was from Patricia Teems, the business manager of Langton Associates, to the Mayor of the City of Bunnell, Florida. The letter was on the letterhead of Langton Associates. In the September 22, 1989, letter Ms. Teems claimed that the City of Bunnell had awarded an administrative contract in violation of Florida law. In the last paragraph of the contract, Ms. Teems stated the following: Also, by this letter I am requesting DCA make a formal investigation into the procurement practices of the City of Bunnell. The complaint made by Ms. Teems in the September 22, 1989, letter, concerned the award of multi-service contracts. A "multi-service" contract includes the awarding of a contract to administer a grant to the same consultant that prepared the application for which the CDBGP grant was awarded. Under Florida law in effect during 1989, multi-service contracts were prohibited unless the local government awarding such a contract indicted in writing that the multi-service contract was in the best interest of the local government. Mr. Burnside was aware of the September 22, 1989, letter and the request of Langton Associates that the Department investigate its complaint against the City of Bunnell. The Department was investigating the complaint in October, 1989. During October, 1989, Mr. Pelham was walking through a hall in the House of Representatives' office building. The Respondent approached Secretary Pelham and indicated that he wanted to speak to him. During the Respondent's October, 1989, conversation with Mr. Pelham, the Respondent indicated the following: He indicated that the Department was not enforcing one of the laws governing the CDBGP. The Respondent indicated that the problem involved the services that could be performed by someone who contracted with a local government to administer a CDBGP grant. He indicated that he "was being hurt by . . . " the Department's failure to properly enforce the law. He threatened to sue the Department unless the Department enforced the law properly. The Respondent, who spoke in a low-key voice, was firm in expressing his position to Mr. Pelham that the law concerning multi-service contracts should be enforced as the Respondent interpreted the law. Shortly after the conversation with the Respondent concerning multi- service contracts, Mr. Pelham spoke to Mr. Burnside about the conversation. Mr. Burnside explained to Mr. Pelham that Langton Associates had filed a copy of the September 22, 1989, letter to the Mayor of the City of Bunnell and that the Department had been requested to investigate the matter. After Mr. Pelham and Mr. Burnside discussed the Secretary's encounter with the Respondent, they realized that the Respondent had been talking about the City of Bunnell incident when he spoke to Mr. Pelham. Mr. Pelham realized that the Respondent had been suggesting that the City of Bunnell had not followed the correct procedures in awarding the administration contract and the consultant that was awarded the administration contract should not have been the same consultant that had obtained the grant. Mr. Burnside responded on behalf of the Department to the request that the Department investigate the City of Bunnell incident by a letter to Ms. Teems dated January 22, 1990. Based upon information reviewed by the Department, including review by the Department's legal staff, the Department informed the Mayor of Bunnell and Ms. Teems that it had been concluded that the City had not violated the law. Although the Respondent admitted that he was aware that he should not directly request that the Department investigate the City of Bunnell, he approached Mr. Pelham to discuss the matter with him. The Respondent's conversation with Mr. Pelham was intended to benefit Langton Associates because Langton Associates was interested in obtaining the grant administration contract the City of Bunnell had awarded to another consultant and, thus, benefit himself. If the Department had agreed with Ms. Teems' and the Respondent's argument that the City of Bunnell had acted illegally, the City of Bunnell could have been forced to select a different administrator for its grant. The Respondent hoped Langton Associates would be the newly selected administrator. The evidence failed to prove that the Respondent's conversation with Mr. Pelham was on behalf of any person or entity (other than Langton Associates) that he had received compensation from. Although the evidence proved that the Respondent was paid a salary by Langton Associates during the year in which his conversation with Mr. Pelham took place, the evidence failed to prove that Langton Associates had any clients at that time that were paying for Langton Associates' services. Although general testimony was elicited concerning Langton Associates' business and clients, testimony concerning clients that paid Langton Associates during any specific period of time was limited to the period of time preceding approximately July, 1989. The Respondent's Contact with Department Staff Concerning Certain Department Policies. In January, 1990, Wanda A. Jones, worked in the Department's Bureau of Housing, Division of Housing and Community Development. On January 23, 1990, Ms. Jones attended a CDBGP workshop in Jacksonville, Florida, sponsored by the United States Department of Housing and Urban Development. The Respondent was introduced to Ms. Jones during the January 23, 1990, workshop by an employee of Langton Associates. The Respondent began questioning Ms. Jones about the Department's policy that allowed Noma, Florida, to continue to be awarded funds under the CDBGP year after year. Noma is a very small community that had received a number of grants and the Respondent was challenging the Department policy that allowed such a small community such as Noma to continue to receive grants. Ms. Jones attempted to explain the Department's policy to the Respondent. At the time of the Respondent's conversation with Ms. Jones, the Department was in the middle of a funding cycle. The weight of the evidence, however, failed to prove that any application had been filed by Langton Associates on behalf of any client during that funding cycle. The Respondent became upset with Ms. Jones' responses and raised his voice. The Respondent was aggressive, confrontational and he badgered Ms. Jones. Ms. Jones felt very uncomfortable. Her discomfort was caused in part by the fact that the Respondent was a legislator and he was holding her accountable for Department actions. The Respondent told Ms. Jones that the Department's policy was impacting on his business. By eliminating the situation that allowed governments like Noma to continue to obtain grants, other governments would become eligible to receive CDBGP funds. Some of those governments might include Langton Associates' clients or prospective clients. After Ms. Jones left the Respondent, he again approached her, apologized and then started to berate her again. During this conversation, the Respondent asked if Ms. Jones would speak to him "off the record" and express her personal opinions about Department actions. The Respondent's conversation with Ms. Jones was intended to benefit Langton Associates and, thus, benefit himself. The evidence failed to prove that the Respondent's conversation with Ms. Jones was on behalf of any person or entity (other than Langton Associates) that he had received compensation from. Although the evidence proved that the Respondent was paid a salary by Langton Associates during the year in which his conversation with Ms. Jones took place, the evidence failed to prove that Langton Associates had any clients at that time that were paying for Langton Associates' services. Although general testimony was elicited concerning Langton Associates' business and clients, testimony concerning clients that paid Langton Associates during any specific period of time was limited to the period of time preceding approximately July, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Ethics enter a Final Order and Public Report finding that the Respondent, Michael E. Langton, violated Sections 112.313(6) and 112.3141(1)(c), Florida Statutes, and Section 8(e), Article II, of the Constitution of the State of Florida, as alleged in Complaint No. 90-86. It is further RECOMMENDED that the Respondent be subjected to public censure and reprimand and be required to pay a civil penalty of $5,000.00 ($2,500.00 for each statutory violation). DONE and ENTERED this 27th day of November, 1991, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of November, 1991. APPENDIX TO RECOMMENDED ORDER The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Advocate's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection A. 1 1-3. 2 6-7. 3 8. 4 See 10. The weight of the evidence failed to prove what years the percentages apply. 5 11. 6 Hereby accepted. 7 5. B. 1 13-14 and 21-23. 2 See 25. 3 24. "Gerrymandering" 1 29-30, 38 and 41. 2 32-34. 3 31-33. 4 32-33 and 35. 5 35. 6 See 35. 7 37. The 1988-1989 Funding Cycle 1 18 and 38. 2 18. 3 44 and 51. 4 82 and hereby accepted. 5 46-47. 6 48-49. 7 19, 38 and 52. 8 52-53. 9 The first sentence is not relevant. 54-55. 10 55-56. 11 59. 12 56. 13 57 and 61-63. 14 58 and 61. 15 63. 16 58. 17 62-63. 18 59, 66 and 73. Hereby accepted. See 75 and 80. 21 76-77 and 80. 22 34. 23 81-83. 24 81. 83 and hereby accepted. Hereby accepted. 27 80. 28 84. 29 87. 30 86-87. 31 87. The testimony supporting these proposed findings was too speculative. 52 and hereby accepted. 34 89-90. 35 87 and 89-90. 36 90. 37 Not relevant. 38 92. 39 95, 97 and 101. 40 97. 41 101. 42 104. 43 100-101. 44-45 102. 46-47 Although these findings of fact are true, there could have been a number of reasonable explanations for why the Respondent did not proposed legislation concerning gerrymandering. 48 There proposed findings of fact are generally true. The fact that there are inconsistencies in testimony alone is not why some of the Respondent's testimony was not credible, however. The Respondent's explanation has been rejected based upon the weight of all of the evidence in this proceeding. C. 1 105. 2 Hereby accepted. 3 Not relevant. 4 106. 5 112-113. 6 114. 7 113. 8 114. 9 109-111. 10 113-114. 11 See 113. The evidence did not prove whether Ms. Ganson did or did not intend to favor Mr. Fox. 12 116. 13 118. D. 1-2 112. 3 120-121. 4 Hereby accepted. 5 124-125. 6 126. 7 127. 8 Not supported by the weight of the evidence or not relevant. 9 128. 10 129 and see 130. E. 1 131. 2 132. The meeting took place on January 23, 1990. 3 133 and 135. 4 133-134. 5 134 and 139. 6 See 136. 7 134. 8 138. 9-10 Not supported by the weight of the evidence. No weight has been given to the sworn statement of Ms. Jones. 11 Hereby accepted. 12 141. 13 Hereby accepted. 14 139. 15 Hereby accepted. 16 140. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1-2. 2 4, 6 and 8. 3 7. 4 13-14 and 16. 5 21-22. 6 22. Not supported by the weight of the evidence. The interrogatories were not offered into evidence. See 26. 9 5. 10 Not supported by the weight of the evidence. The interrogatories were not offered into evidence. 11 27. 12 28. 13 52. 14 57. 15-16 Hereby accepted. 31-32. The last sentence is not supported by the weight of the evidence. Respondent's exhibit 14 was offered and accepted into evidence only for impeachment purposes. Not relevant. 19 14. Hereby accepted. See 32 and 35. Hereby accepted. 23 39-42. 24 Although generally true, the intent of one legislator does not support a finding concerning the intent of the entire Legislature in enacting any law. 25 41. 26 40-42. 27 See 43. 28 44. 29 51. 30 56. 31 See 58. The Respondent's conversation with Ms. Frohock was not to raise "numerous complaints regarding the DCA's administration of the CDBG program." 32-36 See 67-72. 37 See 75 and 77-78. The evidence failed to prove that the Meeting was requested by the Respondent to discuss the general administration of the CDBGP. 38 76. 39 85. 40 78. 41 81. 42 79 and 84. 43 87. See 87. Not relevant. See 91. 47 See 87 and 89-90. See 91. Not relevant. Not supported by the weight of the evidence except as found in 101. See 100-104. 50-51 Not supported by the weight of the evidence. Ms. Frohock's sworn statement was hearsay. 52-54 Not relevant. 55 84. 56 Not relevant. 57 See 67-72 and 90-94. 58 124. 59 125. 60 See 120-121. The third sentence is not supported by the weight of the evidence. 61 See 130-131. 62 112-114. 63 114-115. 64 115. Not supported by the weight of the evidence. See 118. Not relevant. 67 See 118-119. 68 132. 69 133-134. 70 134. 71 137. 72 137 and 143. 73 See 142. 74 Not supported by the weight of the evidence. 51 COPIES FURNISHED: Virlindia Doss Bonnie J. Williams Craig B. Willis Executive Director Assistant Attorneys General Commission on Ethics Department of Legal Affairs The Capitol, Room 2105 The Capitol, Suite 1601 Post Office Box 6 Tallahassee, FL 32399-1050 Tallahassee, FL 32302-0006 Mark Herron, Esquire Jeffrey H. Barker, Esquire Akerman, Senterfitt, Eidson & Moffit 216 South Monroe Street Suite 300 Post Office Box 10555 Tallahassee, FL 32302-2555
Findings Of Fact In 1984 and for many years prior Petitioner held a Certificate of Qualification to bid on and be awarded contracts let by the Department. On April 10, 1984, Petitioner entered into a voluntary plea, and was convicted of a one-count criminal violation of Title 15, USC, Section 1, which is commonly known as "The Sherman Antitrust Act." The charge involved a public contract with the Florida Department of Transportation in which Petitioner received a complimentary bid from another contractor who was bidding on the same project which was awarded to Petitioner. This practice is commonly known as "bid rigging." The conviction took place in the U. S. Northern District Court of Florida. Petitioner would have submitted the same bid on this project without the benefit of the complimentary bid. 33 C.F.R, Part 16, provides for a maximum debarment on first conviction of 36 months by a federal agency. Petitioner was debarred by the Federal Highway Administration for only six (6) months based upon a review and determination of culpability of the Petitioner in the crime of which Petitioner was convicted. Immediately subsequent to December 17, 1984, Petitioner was declared acceptable for employment on highway projects which required approval or concurrence of the Federal Highway Administration. On June 18, 1984, Respondent revoked the Petitioner's Certificate of Qualification for a period of 36 months pursuant to Florida Statutes 337.165(2)(a). The only reason given for the revocation was the aforementioned conviction. With the exception of Petitioner, who has never had a decision rendered on a Petition for Reinstatement by Respondent, every contractor who has been debarred and/or had its Certificate of Qualification revoked by Respondent pursuant to Section 337.165, Florida Statutes, who has petitioned for reinstatement, has been reinstated by Respondent. Exhibit "A" hereto is a list of contractors who were debarred by Respondent and were reinstated. It was in the public interest to reinstate each of these contractors. It is in the public interest and the interest of the Respondent to build roads, build them at a good price, and have a competitive bidding system with integrity. Petitioner has promptly and voluntarily continued to pay its fine of $65,000 to the Federal Court. No payment of damages has ever been requested by the State as a result of the Petitioner's violation of state or federal antitrust laws. The Petitioner notified the Respondent within thirty (30) days after his conviction of the contract crime. Petitioner has the manpower, equipment, financial resources, and contracting experience to meet the Respondent's requirements in those areas for the purpose of a Certificate of Qualification. Howard H. Hewitt became affiliated with Square D Contracting Company in 1967 when he acquired a minority interest in the company. He subsequently increased that interest to 50 percent. In 1980 he acquired the remainder of the stock and changed the name of the company to Hewitt Contracting Co., Inc. In 1980 the Florida Attorney General's Office commenced an investigation of bid rigging by road contractors. In February 1983 the Attorney General's Office subpoenaed Hewitt to appear under their Civil Investigative Demand procedures and give evidence about his knowledge of bid rigging in Florida. He appeared and, on the advice of counsel, refused to give testimony claiming protection under the Fifth Amendment. By Court Order, Exhibit 8, dated June 24, 1983, Hewitt was directed to give testimony to the Florida Attorney General under grant of immunity from criminal prosecution and from any civil penalty as provided in s. 542.21(1), Florida Statutes (1981), as to those transactions about which he testifies. In compliance with that order he submitted documents and testified before assistant attorneys general three times. A grant of immunity by the Florida Attorney General's Office would not shield Hewitt from federal prosecution. Following the filing of charges by the Federal District Attorney, Hewitt provided testimony to federal officials several times regarding his knowledge of contract crimes, dropped his membership in the Florida Road Builders Association, started using a different hotel during his appearances in Tallahassee, and limited his contacts with fellow contractors to those necessary to conduct business. In a subsequent damage trial brought by the Attorney General's Office against Ezelle Construction Company, Hewitt advised both parties that he would testify for neither and, upon advice of counsel, would claim the Fifth Amendment if subpoenaed. Neither side subpoenaed Hewitt. The jury found Ezelle not liable for damages as claimed by the Attorney General. The only witness called by Respondent, Assistant Attorney General Bayard W. Heath, testified that the critical part of the bid rigging investigation in which he was involved occurred in 1983 at which time Hewitt asserted the Fifth Amendment privilege and caused a change in the investigation plans of the antitrust division. When Hewitt's counsel in January 1985 advised Heath that Hewitt would take the Fifth Amendment if subpoenaed to testify in the civil damages suit brought against Frank Ezelle, et al., he released Hewitt from the subpoena and did not attempt to enforce the subpoena. Petitioner presented one rebuttal witness, the attorney who represented Hewitt during the civil investigative demand procedures by the antitrust division of the Attorney General's Office. He testified that he was never advised by Heath or any other attorney from the Florida Antitrust Division that there was a critical period during which Hewitt's testimony was wanted, or that they were in any manner dissatisfied with the cooperation given by Hewitt after the grant of immunity. This witness also testified that an offer by Hewitt to settle any charges against him by an offer to pay damages to the state was flatly rejected by the antitrust division and that he was told that if Hewitt cooperated with the antitrust division they would decide after the fact what action they would take against petitioner. Prior to the revocation of its Certificate of Qualification in 1984, Square D and subsequently Hewitt Contracting Co., Inc., enjoyed a reputation as a competitive bidder who completed projects in a timely and professional manner. Two witnesses employed by Respondent in the area of Petitioner's headquarters opined that reinstatement of Petitioner's Certificate of Qualification would enhance the road building and construction work in Florida by the addition of Petitioner as an active participant in the bidding process. Subsequent to the conviction in the Federal Court Petitioner prepared a Code of Conduct for Employees of Hewitt Contracting Company (Exhibit 4) and distributed this to all personnel involved in preparing bids for Petitioner. Additionally, Howard H. Hewitt personally approves all bids submitted by Petitioner and supervises those preparing these bids. Howard H. Hewitt expressed remorse about the company's prior activity leading to the conviction and is committed to ensuring that it never occurs again.
The Issue The issue before the Florida Land and Water Adjudicatory Commission (FLWAC) in this proceeding is whether to grant the Petition to Establish the Arborwood Community Development District (Petition), dated November 17, 2003. The local public hearing was conducted for the purpose of gathering information in anticipation of rulemaking by FLWAC.
