Findings Of Fact Florida Export Tobacco Co., Inc., Petitioner, operates, as a concessionaire, duty-free stores at Miami International Airport. The premises are owned by the Dade County Aviation Department and the stores are leased to Petitioner pursuant to the terms of a lease and concession agreement dated 19 July 1977, effective 1 August 1977 and continuing until 30 September 1987. (Exhibit 1 to Deposition) Pursuant to this agreement Petitioner occupies six stores and additional warehouse space at the Terminal Building and the International Satellite Facility. Article II in Exhibit 1 entitled Rental Charges and Payments provides for rental payments for each store and space occupied based upon a fixed fee of $X per square foot per year with the dollar per square foot cost varying with the space occupied. In addition to this minimal rental fee, Section 2.03 of this agreement provides: County Profit Participation: As additional consideration for the rights and privileges granted Concessionaire herein, Concessionaire shall pay the County a portion of its profits. As a convenience and in order to eliminate requirements for detailed auditing of expenditures, assets and liabilities and in order to provide an even flow of annual revenues for budgeting and bond financing purposes, said portion of the profits of the Concessionaire shall be calculated as the amount by which sixteen percent of the monthly gross revenues, as defined in Arti- cle 2.07, exceeds the sum of monthly rental payments required by Articles 2.01 and 2.04. Concessionaire shall pay such portion of its profits to County by the twentieth (20th) day of the month following the month in which the gross revenues were received or accrued. For the period October 1, 1982 through September 30, 1987, the percent of monthly gross revenues to be paid by Concessionaire as a portion of its profits shall be eighteen percent, payable and calculated in the same manner as above. The lessor provides air conditioning, garbage and sewage disposal facilities, security, and many other services to the lessee in addition to the space leased. From October 1976 through September 1977 Petitioner paid $40,499.66 in additional sales tax over the guaranteed minimum amount; for the year ending September 1978 this additional sales tax was $66,284.85; for the year year ending September 1979 this additional sales tax was $93,837.15; and for the year ending September 1980 this additional sales tax was $137,521.87. (Exhibit 2 to the Deposition) As the owner of the facility Dade County has the option of operating the various facilities and services available to the public or having these operated by a concessionaire. Dade County has opted for the manner it believed more profitable to the county and in the case of the duty free stores this has resulted in leasing the space to a concessionaire. The hotel at the airport is operated by the Aviation Department under a management contract. It is Petitioner's and Dade County's position that a sales tax should not be paid on the county profit participation charges because, if the Aviation Department operated the stores there would be no sales tax on any rental income and the County operates the facilities at the airport so as to maximize profits to the county. Therefore by requiring the concessionaire to pay sales tax, this reduces the profit available to share with the County.
The Issue The issues presented concern the request by Petitioner for a refund of $700 paid to the Florida Public Service Commission as a filing fee related to an application for a rate increase of its passenger fares.
Findings Of Fact The facts presented are based upon a stipulation offered by the parties. Those facts were accepted for purposes of this Recommended Order by the interlocutory Order of November 21, 1983. In keeping with that action and pursuant to the parties' stipulation of facts, the following facts are found: (See Stipulation of Facts and all exhibits attached to this Recommended Order.)
Findings Of Fact At all times material hereto, Edward P. Skiff has been the owner and operator of Petitioner Skiff's Workingman's Nursery. For 28 years the nursery was located on State Road 7 (US 441), one of the busiest traffic arteries in Broward County. In 1981, Respondent Department of Transportation first contacted Skiff to advise him that he would be required to relocate his business due to the construction of I-595, the Port Everglades Expressway. In 1985 Respondent purchased the property on which Skiff's Workingman's Nursery was located and ordered Skiff to vacate the property by January 1, 1986. Between 1981 and 1985 Skiff searched for a comparable piece of property on which to operate a retail nursery in Broward County. As requested by the Respondent, Skiff submitted to the Department a list of six properties he was considering, only 2 or 3 of which were platted. There is no indication that Department employees objected to any of sites under consideration. Skiff closed on his new site located on Hillsboro Boulevard in Broward County in 1985. At the time, that site was not yet platted, and Skiff was required by Broward County to plat the property. Prior to his purchase of the site, no mention was made of impact fees by the Department or anyone else. Skiff began processing his application for plat approval with Broward County. During the processing, he was advised that he would be required to pay impact fees to Broward County for the relocation site, a requirement that had been imposed by Broward County for any site within that county and not just for the relocation site selected by Skiff. The Department of Transportation knew at the time that impact fees had been imposed for any development in Broward County so that relocating businesses would be required to pay such fees. When Skiff was several months into the platting process with Broward County he was further advised that his relocation site had been annexed by the City of Coconut Creek, Broward County, Florida. Accordingly, Skiff became obligated to pay impact fees assessed by the City of Coconut Creek in addition to the impact fees assessed by Broward County. Skiff was required to pay to Broward County transportation impact fees as a condition precedent to recording the plat for Skiff's Workingman's Nursery. He was also required to pay to the City of Coconut Creek water, sewer, and street connection charges as a condition precedent to obtaining a building permit and a certificate of occupancy. Skiff paid to Broward County, in order to record his plat, impact fees in the amount of $32,887.00. Skiff also paid to the City of Coconut Creek water and wastewater impact fees in the amount of $4,499.20 and sewage and street connection charges in the amount of $24,634.00. None of the connection fees paid to the City of Coconut Creek involved bringing the utilities from the right-of-way to a building or improvement upon Skiff's property. The impact fees imposed by the City of Coconut Creek and by Broward County were necessary and reasonable. The fees were derived according to a specific formula which has a correlation to estimated usage, and they were not arbitrary numbers. Likewise, the mandatory sewage connection charges were both reasonable and necessary and involved the construction of a lift station required by the City of Coconut Creek. When Skiff submitted to Respondent his claim for reimbursement of the impact fees paid by him to Broward County and the City of Coconut Creek, Respondent preliminarily denied that claim reasoning that operating expenses of a business are not reimbursable under the Department's relocation assistance program. The Department never considered whether an impact fee is reimbursable as a license, permit, or certification required of a displaced person at the replacement location. The sole basis for the Department's denial was a memorandum written by an employee of the United States Department of Transportation Federal Highway Administration in a different case which did not address the question of whether an impact fee qualifies as a reimbursable permit, license, or certification required by a governmental entity prior to the creation of a new business. At the time that Respondent denied Skiff's claim for reimbursement of impact fees, the district relocation administrator believed those fees to be reimbursable. However, the state relocation administrator who was new to her job, who could not define the term "operating expense of a business," who was unaware of the regulations qualifying permits and licenses and certifications as expenses eligible for reimbursement, and who did not consider whether the impact fees were eligible under those provisions, denied the claim. Her successor also believed the claim to be reimbursable. There are no definitional guidelines as to the terms "operating expense", "license, permit or certification", or any of the other terms relevant to these proceedings, contained in either the Code of Federal Regulations or in the Florida Department of Transportation guidelines. Accordingly, those terms must be given their common, everyday meaning. An impact fee is a developmental permit fee, i.e., a one-time fee mandated by a governmental entity which must be paid prior to that governmental entity's permitting development; it is a charge which allows a new or relocating business to start conducting business activities at a new location. An impact fee is therefore a start-up cost and not an operating expense since an operating expense is an ongoing cost of doing business for an existing business. The Department's decision-making personnel who testified in this proceeding all agree that the term "operating expense" assumes that a business is in operation. The Department has failed to consider whether impact fees are reimbursable under the proper criteria. In preparation for its move to the relocation site, Skiff's Workingman's Nursery paid professional consultant's fees (architectural and engineering) in the amount of $14,915.85 for site planning and site preparation planning for the a nursery. Skiff submitted his claim for reimbursement for design services to Respondent. Although the district relocation administrator believed those costs to be reimbursable under the specific provision allowing reimbursement for professional services related to the move of personal property, the claim was denied by the state relocation administrator who was new to her job and who stated that nurseries were excluded, without identifying where in the law such an exclusion was written. While the Department was considering Skiff's claims for reimbursement for impact fees and design services, it conducted its own survey of nurseries asking those nurseries for information pertaining to relocation of a nursery, asking specifically about eligible move costs and necessary land and soil preparations if a nursery had to be relocated to virgin land. Responses received by the Department indicated the importance of site location, plant layout, and soil considerations required by both the plants and customers of the nursery and the importance of paying impact fees. There is no evidence that the information the Department gleaned from its own survey was considered in determining whether the payment of impact fees by a nursery and whether the payment of professional design services by a nursery were reasonable and necessary expenses incurred by a displaced nursery required by the government to relocate to a new site. The Department took the position that although nurseries were an exclusion from the provision that businesses were entitled to be reimbursed for professional services attendant to relocation, an exception to the exclusion could be granted based upon appropriate documentation. It concluded, however, that Skiff's had not submitted the appropriate documentation. Yet it failed to advise Skiff as to what documentation would be appropriate and failed to request any additional documentation. After Skiff's plat was recorded, he filed an application with Broward County to modify that plat in order to provide access to the nursery from Hillsboro Boulevard, the main thoroughfare, rather than requiring customers to gain access to the nursery from the back of the nursery off a side street. Access from Hillsboro Boulevard was approved, and Skiff paid $7,500.00 to construct a traffic turn lane from Hillsboro Boulevard onto the nursery property. The first claim for reimbursement for that cost which would give Skiff's Workingman's Nursery access to a major thoroughfare comparable to the major thoroughfare from which it had been displaced by the Department was made during the course of the final hearing in this cause.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered: Granting Petitioner's claim for reimbursement for water and wastewater impact fees imposed by the City of Coconut Creek in the amount of $4,499.20; Granting Petitioner's claim for reimbursement for transportation impact fees imposed by Broward County in the amount of $32,887.00; Granting Petitioner's claim for reimbursement for sewage and street connection charges imposed by the City of Coconut Creek in the amount of $24,634.00; Granting Petitioner's claim for reimbursement for professional consultant's fees for design services in the amount of $14,915.85; and Denying without prejudice Petitioner's claim for reimbursement for the cost of constructing a traffic turn lane in the amount of $7,500.00 which was not properly a part of this proceeding. DONE and RECOMMENDED this 28th day of November, 1988, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1652 The first unnumbered paragraph of Petitioner's proposed findings of fact has been rejected as being unnecessary for determination of the issues herein. Petitioner's second through sixth unnumbered paragraphs of Petitioner's proposed findings of fact have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 1-3 have been rejected as not being supported in their entirety by the weight of the evidence in this cause. COPIES FURNISHED: Kaye N. Henderson, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301 J. Philip Landsman, Esquire Emily Tracey, Esquire Broward Financial Centre 500 East Broward Boulevard Suite 1850 Fort Lauderdale, Florida 33394 Vernon L. Whittier, Jr., Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32301 Thomas H. Bateman III, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32301 =================================================================
The Issue The issue posed herein is whether or not the Petitioner remitted to Respondent, pursuant to Chapter 212.05(1), Florida Statutes, the, proper amount of sales tax on the boat "Captain Deebold" which was purchased on November 29, 1976. A related issue, assuming that the proper sales taxes were not remitted by Petitioner, is whether or not a levy of penalty and interest is warranted under the circumstances.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, legal memoranda submitted by the parties and the entire record compiled herein, the following relevant facts are found. Petitioner purchased the vessel "Captain Deebold" on November 29, 1976, and alleged that the purchase price of the boat was $20,000.00. Accordingly, Petitioner remitted to the Department sales taxes based on the declared value of $20,000.00. Respondent maintained that the subject boat was purchased for the sum of $75,000.00 and has, therefore, issued an assessment against Petitioner for the additional taxes, penalty and interest. By letter dated November 29, 1978, Respondent's Revenue Investigator, Leslie J. Smithling, advised Petitioner that a routine verification concerning his purchase of the subject boat revealed a transaction amount of $75,000.00 upon which the four percent Florida Sales Tax is $3,000.00. Petitioner was further advised therein that his remittance in the amount of $4,202.00 was due no later than December 15, 1979. Taxes, penalties and interest were calculated as follows: Purchase Price $75,000.00 Tax Rate 4% Tax $ 3,000.00 Minus Tax Paid (Based on $20,000.00) $ 800.00 Tax Due $ 2,200.00 Administrative Penalty (Ch. 212.12[2], F.S.) $ 550.00 Fraud Penalty (Ch. 212.12[2], F.S.) $ 1,100.00 Interest: 1% per month from 8/1/77 to 12/1/77 16% Plus $.72 daily thereafter Total Interest Accrued $ 352.00 Total Tax, Penalties & Interest Due $ 4,202.00 In support of its position that the true purchase price of the boat was only $20,000.00, Petitioner points out that the seller of the boat, Frank Deebold, had neglected the boat and had only made repairs that were absolutely necessary to operate the vessel. Thus, when Petitioner purchased the vessel, numerous repairs were made to make it seaworthy including 1) repaired electrical wiring; 2) sealed the deck seams; 3) reconnected the port fuel tank; 4) repaired the clutch in the port engine; 5) repaired leaks in the starboard stern quarter; 6) replaced and rebolted the chines; 7) replaced a section of the keel; 8) rebuilt the main clutch; 9) caulked deck; 10) replaced or repaired the winch on the anchor; 11) reworked and/or repaired the engine room, including insulation, lighting, lining, painting and hauling. To perform these repairs, Petitioner places the value on materials utilized at approximately $18,000.00. Additionally, Petitioner estimated that the value of his labor involved in making the approximately $25,000.00. The articles of agreement for the purchase of the boat provides in pertinent part as follows: Witnesseth, that if the said party of the second part shall (purchaser) first make the payments and perform the covenants hereinafter mentioned on his part to be made and performed, the said party of the first part (seller) hereby covenants and agrees to convey and assure to the said party of the second part, his heirs, personal represent- atives or assigns, clear of all encumbrances, whatever by a good and sufficient bill of sale the Oil Screw vessel, Captain Deebold, o/n294675, gross tons-36, its equipment, hull, machinery, present insurance policies and business including fifty or more used rods and reels, one 3.5 KW Lister auxiliary generator, used and in need of repair, spare Jabsco water pump (used and in need of repair), spare 24 volt DC alternator, spare 24 volt DC main engine starter, spare stub shaft, three spare propellers (used and in need of repair) and a spare UHF Pierce- Simpson radio transceiver (used and in need of repair) and the said party of the second part hereby covenants and agrees to pay to the said party of the first part the sum of seventy-five thousand and 00/100 ($75,000.00) dollars in the manner following. . . . Nevertheless, Petitioner stressed that inasmuch as the Articles of Agreement provided that the seller only required Petitioner to maintain insurance coverage in the amount of $50,000.00 indicating that the purchase price was something less than $75,000.00 and in fact was no more than $50,000. Pursuant to the Articles of Agreement, the amount insurance coverage required was $50,000.00. Petitioner also declared that included in the $75,000.00 purchase price were other items which included the business (dock space), and reduced prices for miscellaneous supplies and fuel prices. In this regard, an examination of the Articles revealed that these items were provided Petitioner on a cost plus basis and the dock space was leased for an amount based on a rebate of the percentage of ticket sales or charter fees received. Petitioner ultimately sold the boat for 95,000.00. Petitioner initially tried to sell the boat for the sum of $105,000.00 of which $10,000.00 represented the value he (Petitioner) placed on the business. An examination of the accounting records introduced indicated that Petitioner placed the sum of $75,000.00 as the purchase price for the boat. Petitioner thought that his estimation of the labor and materials necessary to properly repair the boat were items that could be used as a setoff to reduce the amount of taxes due. Petitioner testified that he, in no way, intended to defraud the Respondent of taxes properly due and owing. Petitioner's testimony in this regard is credited.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that: Petitioner remit to the Respondent the proper interest as set forth herein in paragraph 4 of the Conclusions of Law. Petitioner remit to the Respondent an administrative penalty of 5 percent of the aggregate taxes due as set forth herein in Paragraph 5 of the Conclusions of Law. Petitioner not be held liable for payment of for allegedly filing a "false or fraudulent" return for reasons set forth herein in Paragraph 6 of the Conclusions of Law. RECOMMENDED this 27th day of February 1981, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 27th day of February 1981.
The Issue The issue in this case is whether the Respondent's proposed award of DCPHU Bid I-90 to the Intervenor, Meyers Parking Systems, Inc., for the management of a parking facility located at 1350 Northwest 14th Street should be upheld.
Findings Of Fact For approximately the last ten years, Kinney has operated the parking lot at the Dade County Public Health Unit building located at 1350 N.W. 14th Street in Miami, Florida (the "Parking Lot") pursuant to a contract with HRS. The existing contract between Kinney and HRS for the management of the Parking Lot was entered in June 1989 and was scheduled to expire on June 30, 1990. That contract included two one-year options to renew. The contract also included a provision that allowed either party to terminate the contract upon thirty days notice. The contracts for management of the Parking Lot in previous years were substantially identical in form to the existing contract. In February of each year, a contract review committee consisting of the head of the administrative services department of the facility (the "Contract Manager') and several other employees of the facility would meet to discuss the Parking Lot contract and to determine whether to renew the contract or rebid it. (This Committee will be referred to as "Parking Lot Committee.") The Contract Manager (whose title has been recently changed to Administrative Services Director) essentially chaired the Parking Lot Committee and appointed the other employees who served on the Committee. For the last ten years the Contract Manager has been responsible for overseeing this contract. During this time, his main contacts at Kinney were Chuck Adams, who was usually at the Parking Lot on a daily basis, and Mr. Adams' supervisor, Ken Deutsch. Both Mr. Deutsch and Mr. Adams left the employ of Kinney sometime prior to February, 1990. The exact date of their departure was not established. Both Mr. Deutsch and Mr. Adams now work for Meyers. Kinney's new representative with respect to the Parking Lot contract was Tony Benyon, who assumed those responsibilities on February 1, 1990. Mr. Benyon had previously worked for Meyers and was on the job only twenty two days before the decision was made to rebid the contract. On February 22, 1990, the Parking Lot Committee met and determined not to renew the contract with Kinney. At the time this decision was made, the Contract Manager was aware that the former Kinney employees had switched jobs and were now working for Meyers. However, it does not appear that he brought the job changes to the attention of the Parking Lot Committee because at least one member of the Committee was not aware of the job changes. On or about March 23, 1990, HRS issued an invitation to bid for the management and operation of the Parking Lot (the "Invitation to Bid.") Although the evidence did not establish exactly how many time this contract had been bid in the past, it appears that bids were solicited for this contract on at least two prior occasions during the ten years that Kinney had been operating the Parking Lot. On each occasion, the Invitation to Bid form was substantially identical to the form used in March of 1990. Page 6 of the Invitation to Bid requested bidders to submit a resume of their backgrounds. Page 8 of the Invitation to Bid was entitled "Bid Sheet" and required bidders to submit the following information: "(1) Proposal for Operating the Lot; (2) Proposed Rates, (3) Proposed Net Income Distribution." The Invitation to Bid did not require the bidders to provide any documentation regarding their financial condition nor did it indicate that prior job performance would be considered in evaluating the bids. The Invitation to Bid contained a provision that "any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening." Between the time the Invitation to Bid was sent out and the bids were received, the Contract Manager admits that he "probably" had conversations with some of the bidders and responded to questions about the bid. The Contract Manager could not specifically recall any such discussions with potential bidders between the time the Invitation to Bid was sent out and the date the bids were submitted. However, he admitted that it was likely that some discussions took place. Kinney was never advised of any such discussions between the Contract Manager and other potential bidders. Three sealed bids (including proposals from Kinney and Meyers) were received and opened by HRS at a bid opening on April 4, 1990. A fourth bid was disqualified because it was not sealed. The members of the Parking Lot Committee and representatives of the bidders were present at the bid opening. The bid submitted by Kinney proposed a net income distribution to HRS of 82.5 percent with the remaining 17.5 percent being retained by Petitioner. The Kinney bid also contained a specific breakdown of anticipated costs, fees and expenses to be deducted from the projected gross income to achieve projected net income, a resume and a list of references regarding other-lots being managed by the Petitioner in the area. Meyers and Hi-Rise Parking Systems, Inc. ("Hi- Rise") also submitted bids. Both of those bids contained a proposed net income distribution of 90 percent to HRS. Neither the Hi-Rise nor the Meyers' bids contained a resume or a list of local references of other lots being managed by the companies nor did they contain a listing of anticipated costs, fees and expenses. At the bid opening, the Contract Manager indicated that the bids submitted by Meyers and Hi-Rise were the low bids and the Parking Lot Committee would meet to determine how to "break the tie." At this point, Kinney was effectively eliminated from consideration. By letter dated April 10, 1990, the Contract Manager requested additional information from Meyers and Hi-Rise as follows: Company background information including officers, organization and latest financial/management audit; [and] At least three references to include name of contact person, firm, mailing address and telephone number. The Contract Manager did not request any additional information from Kinney or the disqualified bidder. On or about April 16, 1990, Meyers submitted the requested information to the Contract Manager. On or about April 17, 1990, Hi-Rise submitted the requested information to the Contract Manager. Thus, it is clear that information regarding the financial condition of Meyers and Hi-Rise was not submitted until after the bids were opened. On May 1, 1990, the Parking Lot Committee met to discuss the additional information received from Meyers and Hi- Rise. At that meeting, the members of the Committee completed a "bid selection review form" that listed (1) net income distribution (2) references and (3) company management and financial condition as the criteria for evaluation of the bids. The Committee determined that Meyers and Hi--Rise were "tied" in all categories except financial condition. At best, the submitted financial information provides a cloudy picture of Meyers' financial status. The information indicates that Meyers showed an income loss for the year 1988-1989 of $3,670,000. While a large portion of this loss is apparently related to corporate restructuring, it does not appear that any members of the Parking Lot Committee understood or fully considered this financial information nor did they seek to have the submitted financial information reviewed by an accountant. Hi-Rise's financial records indicate that it is a significantly smaller company, but its records indicated a positive cash flow for the preceding year. Notwithstanding these facts, the Committee decided to award the contract to Meyers. This decision was essentially made on the recommendation of the Contract Manager. The bid selection review form stated as follows: Based on bids and additional information provided, the Parking Lot Management Bid Selection Team recommended award of DCPH Bid No. I-90 to Meyers Parking System, Inc. On May 9, 1990, HRS provided all interested parties with a notice of its selection of Meyers as the successful bidder. In the Notice of Selection, HRS indicated that Meyers had been selected based on the proposed net income distribution, references, background and financial condition. Petitioner timely filed a protest of the proposed award of the contract. The Parking Lot Committee excluded Kinney from consideration based solely upon the net income distribution percentage. However, since the Invitation to Bid did not require the bidders to specify or limit in any way the expenses that could be deducted from gross revenues prior to distributing proceeds to HRS, there was an insufficient basis to accurately evaluate the proceeds that HRS could reasonably expect pursuant to any of the bid proposals. HRS and Meyers have argued that, because HRS has many years experience and expense records relating to the operation of the Parking Lot, the information provided pursuant to the Invitation to Bid provided HRS with sufficient information to make a reasonable evaluation of the financial terms of the proposals. This contention is rejected. To permit such uncertainty and discretion to be built into the bid process would substantially undermine the integrity and dependability of the process. Item 12 on page 6 of the Invitation to Bid required that "bidders will submit a resume of their background and other local lots they are currently managing." No such resume or lists were provided by Meyers. Meyers contends that its response to Item 1 on Page 8 of 8 adequately addressed this requirement. That response provided as follows: PROPOSAL FOR OPERATING LOT. Meyers Parking System, Inc. proposes to operate the Dade County Health department's parking lot with the same high degree of professionalism that we are known for and have demonstrated to our other clients throughout the county. The facility will be managed by trained, uniformed, courteous employees and supervised regularly and closely with our field supervisors and our Regional Vice-President... This statement is not a sufficient response to Item 12 of the Invitation to Bid. During the Parking Lot Committee meeting on February 22, 1990, several complaints were made regarding Kinney's performance under the existing contract. However, no efforts were ever undertaken by HRS to terminate the existing contract with Kinney. While HRS contends that the complaints were part of the reason for deciding to rebid the contract, no steps were taken to disqualify Kinney from bidding on the new contract. In any event, most of the complaints voiced on February 22, 1990 would have been the responsibility of the prior managers of Kinney who now work for Meyers. In February and March of 1990, the disbursements to HRS under the existing contract diminished significantly. This decrease in payments was the result of embezzlement by Kinney employees. While HRS has cited this shortage to justify its decision in awarding the contract to Meyers, there is no evidence that HRS ever attempted to terminate the existing contract nor does it appear that the Parking Lot Committee considered this fact in deciding to eliminate Kinney's bid from consideration. Similarly, the evidence established that there have been problems during the months of March, April and May of 1990 with attendants failing to appear at work on time or leaving the job site. Again, however, there is no indication that HRS attempted to terminate the existing contract or that the Parking Lot Committee relied upon these factors in deciding to eliminate the Kinney bid from consideration. There have been recurring complaints made to Kinney under the existing contract regarding excessive towing of cars from the Parking Lot. The problem of parking lot attendants ordering cars towed without the permission of HRS has existed off and on for sometime. Even though HRS representatives had voiced complaints about the. towing policies, the evidence indicates that this recurring problem became worse in the late spring and early summer of 1990. Nonetheless, HRS never sought to terminate the existing contract because of the towing problems nor did the Parking Lot Committee rely upon this fact in deciding to eliminate the Kinney bid from consideration.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for DCPHU Bid I-90 and issue a new Invitation to Bid. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 31 day of October, 1990. J. STEPHEN MENTON 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 31 day of October, 1990.
The Issue Whether the Respondent, Christina M. Restauri, committed the violations alleged and, if so, what penalty should be imposed.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of regulating licensed community association managers pursuant to Florida law. At all times material to the allegations of this case, the Respondent was licensed as a community association manager, license number CAM 0019553. In May 1998, the Respondent became the community association manager for the Association. As such, the Respondent had duties and responsibilities in connection with the day-to-day management of the Association's business. In exchange for the performance of her manager duties, the Association paid the Respondent a salary, provided her with a condominium unit for her residence, paid her utilities, and covered her local telephone service. The Respondent's managerial duties included all office management for the Association, including the collection of fees owed to the Association, the payment of monies owed to vendors by the Association, and the accounting associated with payroll for salaries owed to employees of the Association. The Respondent and the Association entered into a written management agreement that outlined the terms of her employment. The agreement (Petitioner's Exhibit 1) did not require the Association to pay for the Respondent's family health insurance. Additionally, the agreement did not provide for paid sick leave in excess of four days per year. In connection with her responsibilities for payroll, the Respondent controlled the amount of checks made payable to herself for salary owed during the course of her employment. This authority also allowed her to control the amount of monies withheld from her salary to cover her family medical insurance and for the monies payable for federal withholding taxes and social security. On at least two occasions, the Respondent altered her withholding such that no monies were withheld for federal taxes. The Respondent failed or refused to produce a W-4 form that would have supported the change in withholding. Moreover, the Respondent did not produce a W-2 form that would have supported, after-the-fact, that the withholding forms had been modified to support the altered withholding amount. The Respondent failed or refused to produce documentation to establish that she repaid the Association for family medical benefits she received. Initially, the amount to cover the family health benefit was reportedly withheld from the Respondent's paycheck. The adequacy of the withheld amount came into question. Under the terms of her employment, the Respondent was to remit the monthly family health premium to the Association. She did not do so. In fact, copies of checks that were purportedly offered in support of her claim that she had made the payments were never deposited into the Association's account. When the Respondent was challenged as to the amounts owed for health premiums and the matter was to be further investigated, she tendered her resignation. She never produced any of the financial records requested to document any of the matters contested in this proceeding. In addition to the foregoing payroll discrepancies, the Respondent caused herself to be overpaid $125.00 for sick leave. On or about October 12, 2000, the Respondent took $700.00 from the Association's petty cash and loaned it to Sandy Schwenn. Ms. Schwenn was employed by the Association as a secretary and had agreed to repay the funds. The loan was never repaid. The Respondent was not authorized to loan monies from the Association's petty cash fund and admitted the error during a board of directors' meeting on November 15, 2000. Whether the Respondent made good on her promise to repay the loan herself is unknown. Clearly, at hearing the Respondent did not make such representation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a Final Order against the Respondent that imposes an administrative fine in the amount of $2500.00, and revokes her license as a community association manager. DONE AND ENTERED this 13th day of November 2003, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of November 2003. COPIES FURNISHED: Julie Malone, Executive Director Regulatory Council of Community Association of Managers Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christina Marie Restauri 4640 Northwest 30th Street Coconut Creek, Florida 33063 Jennifer Westermann Qualified Representative Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2022 Charles F. Tunnicliff, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202
The Issue Whether Petitioner Florida Public Utility Company's application to increase its gas service rates should approved. CONCLUSION and RECOMMENDATION Petitioner's application should be granted to the extent of allowing it to file new tariff rates, consistent with the findings of fact, designed to generate additional gross revenues of $056,907. Such rates are fair, just, and reasonable, in accordance with Sections 306.041 and 366.06(1), Florida Statutes (Supp. 1980).
Findings Of Fact Based upon the stipulation of the parties and the evidence submitted at hearing, the following facts are determined: I. Stipulated or Uncontroverted Facts Florida Public Utilities Company ("COMPANY") is a public utility which provides gas service to 29,700 customers in DeLand, Sanford, and eastern Palm Beach County, Florida. Its present base rates have been in effect since March 3, 1977, in accordance with COMMISSION Order No. 7629 entered in Docket No. 760469-GU. (Prehearing Stipulation.) A test period is a rate-making device used to compute current levels of investment and income; In this proceeding, the appropriate test period is the 1979 calendar year. Rate base should be computed on the basis of a 13-month average. (Prehearing Stipulation.) After reviewing the COMPANY's August 7, 1980, application to increase its rates, together with its books, records, and facilities, the COMMISSION proposed various adjustments to the COMPANY's submittal. The COMPANY'S acceptance of the COMMISSION's proposed adjustments results in the following schedules 13 MONTHS AVERAGE RATE BASE 12/31/79 Rate Base Adjusted Per Company (P-3) $10,984,968 Commission Adjustments Accepted by Company: Common Plant-Other-Net of Accumulated Depreciation (118,250) Common Plant-General Office Building Net of Accumulated Depreciation (23,056) 1/8th Operating and Maintenance Expense Allowance (617) 20 Percent Income Tax Lag (3,683) Adjusted Rate Base $10,839,645 Additional Company Adjustment: Increase in Rate Base Expense (P-8; Uncontroverted by Commission) 1/8th Working Capital Allowance $ 159 20 Percent Income Tax Lag 124 Adjusted Rate Base $10,839,645 (B) NET OPERATING INCOME 12/31/79 Net Operating Income Adjusted per Company (P-3) 630,420 Commission Adjustments Accepted by the Company: Unbilled Revenues 24,652 x 51.3 12,646 Advertising-Non-Utility 7,239 x 51.3 3,714 Miscellaneous Out of Period and Non-Utility Expenses 2,285 x 51.3 1,172 Odorant Expense (4,590) x 51.3 (2,355) Property Taxes-Common Use Plant 3,253 x 51.3 1,669 Depreciation Expense- 3,237 x 51.3 1,661 1,734 x 51.3 890 Common Use Plant Other Depreciation Expense- General Office Building Adjusted Net operating income $649,817 Additional Company Adjustment: Increase in Rate Base Case Expense (P-8; Uncontroverted by the COMMISSION) Increase of $3,814 (Over Original Estimate of $10,000) Divided by Three Years = $1,271 x 51.3 percent $(652) Adjusted Net Operating Income $649,165 CAPITAL STRUCTURE, COST OF CAPITAL, AND RATE OF RETURN 12/31/79 Common Equity $ 8,709,710 37.69 15.00 5.65 percent percent Preferred Stock 1,082,300 4.69 4.81 .23 Long-Term Debt. 8,686,000 37.59 7.17 2.70 Customer Deposits 1,511,612 6.54 8.00 .52 Deferred Tax 3,000,000 12.98 -0- -0- Investment Tax Credit 116,920 .51 -0- -0- TOTAL $23,106,542 100.00 9.10 percent The parties agree that utilizing a+1 percent range on equity, the allowed rate of return should be 8.73 - 9.48 percent, with a 9.10 percent mid-point. REVENUE EXPENSION FACTOR 12/31/79 Revenue 100.000 Less: COMMISSION Assessment (.125) Gross Receipts Tax (1.500) Remainder 98.375 State Income Tax (5 percent) 4.919 Income Subject to Federal Income Tax (46 perc)42.990 Revenue Expansion Factor 51.338 ADDITIONAL REVENUE REQUIREMENTS Adjusted Rate Base - Item (a) $10,839,645 Mid-Point of Recommended Return - Item (c) 9.10 Net Operating Income $ 986,408 Adjusted Net Operating Income - Item (b) 649,165 Net Operating Income Deficiency $ 337,243 Expension Factor - Item (d) .51338 ADDITIONAL REVENUE REQUIREMENT $ 656,907 The rate-making factors depicted in (a) through (e), infra, are not disputed by the parties. Apart from the COMPANY'S proposed posthearing adjustment to rate case expense, they have been expressly agreed to by written stipulation. The COMPANY's $3,814 posthearing expense adjustment proposed by late-filed Exhibit No. P-8 was not opposed by the COMMISSION, and was reasonably anticipated by the parties. The original $10,000 rate case expense allocation was only an estimate and subject to final adjustment at the conclusion of hearing. Accordingly, the rate-making factors set out in (a) through (e), above--agreed to or uncontroverted by the parties--must be and are accepted as fact. In order to earn a fair and reasonable return on its rate base (net investment), the COMPANY must be allowed the opportunity to earn increased annual revenues of $656,907. (Testimony of Troy, Jerauld; R-1, P-1, P-2, P-3, P-4, P-8.) II. Quality of Service In advance of each hearing, customers of the COMPANY received written notice that they would be given an opportunity to present complaints about the quality of the COMPANY's gas service. Although six customers testified about the quality or adequacy of the COMPANY's service. Thus, it is concluded that the quality of the COMPANY's gas service is adequate. (Testimony of Tompkins, Rose, Winchell, Stout, Mirenda.) III. Issues in Dispute: Rate Structure, Design, and Allocation The parties dispute in this case centers on the rate structure design, and revenue allocation which should be approved by the COMMISSION in conjunction with this rate increase application. Each issue is addressed separately below. Treatment of Housing Authority Contracts The COMPANY proposes to retain the various base rates it charges six housing authorities which operate eleven low-rent housing projects in West Palm Beach, Sanford, and DeLand. The rates were originally established by contract with the authorities; since FHA provided contributions toward the construction of the gas system serving the projects, ranging 28-120 percent of the total construction costs, the projects have paid lower rates than other customers. This level of construction contribution is higher than those made by other base gas rate for housing authority projects. (Testimony of Jerauld; P-6, R-2.) However, the disparity between the base rates charged the various housing projects has not been adequately explained or justified by the COMPANY. The 1979 base rate range from $16.35/ Therm (projects no. 16-5, 16-5, and 72-1) to $25.15/Therm (project no. 16-1). The COMPANY attributes the different rates to different levels of gas usage and initial FHA contribution with this explanation: Project no. 16-1 is charged the highest base rate, yet it has neither the lowest level of contribution nor gas usage. Moreover, although the different housing authority rates were originally based on the COMPANY's net investment in constructing the systems, gas usage, operating expenses, taxes, and return, the COMPANY submitted no information showing the costs and rate of return attributed to each housing authority. Under such circumstances, it is determined that a uniform rate should be charged all housing authority customers. A single rate which is sufficient to produce revenue equal to that generated by this class during the test year will increase rates for one housing authority, and lower rates for two others. The uniform ratio will provide more equitable rate treatment of low-rent housing residents whose housing needs are subsidized by a common federal agency. (Testimony of Jerauld; P-5, P-6, R-2.) Declining Block Rates or Flat Rates A declining block rate is one which, for successive increments of use, a different price is charged. Here the COMPANY proposes to retain its declining block rate structure (although with fewer blocks) which applies to general service, residential service, and large volume service customer classes. A flat rate structure is retained for its employee, standby, and housing authority classes. The COMMISSION, without presenting any affirmative evidence on this question, argues that a flat rate structure should be adopted because of the inconsistency which would result from having declining block rates for some customer classes and flat rates for others. (See, Proposed Recommended Order, p. 9.) But, if adequately justified, different rate treatment of different customer classes is permissible. In this case, the three classes which would retain flat rate treatment do not have wide fluctuations of customer use, as do the three classes which would receive declining block rate treatment. The COMPANY established that application of flat rates to those classes with fluctuating customer use would inequitably recover fixed costs from different levels of users within a class: small users within a class would pay less than their share of fixed utility costs, while large users would pay more than theirs. It is concluded that the proposed mix of flat and declining block rates is justifiable, fair, and reasonable. Moreover, the COMMISSION presented no evidence to support application of a flat rate structure to all customer classes. Neither was evidence presented to establish that the proposed declining block rate structure conflicts with conservation goals or encourages inefficient energy use. (Testimony of Jerauld; P-3, P-5, P-7.) Standby Service The COMPANY's present tariff for the standby service class has a negative return of 9.82 percent. The proposed rate increase for this class will yield a return of 3.82 percent, is compensable, and properly allocated. (Testimony of Jerauld; P-5.) Connection Charge The COMPANY proposes to raise the connecting and reconnecting charge to $8.00, the change of account charge to $3.00. Cost analysis shows that these increases are necessary to defray the actual costs associated with such services, and the COMMISSION agrees that they are warranted. (Testimony of Jerauld, Proposed Recommended Order, Paragraph L; P-5.) Appropriateness of Tariff Rental Rates The COMPANY proposes no increases to Rate Schedules 8, 9, and 10. Since these schedules were closed to new rental agreements after March 1, 1975, and there were no customers on these schedules during the test year, they should be eliminated - from the COMPANY's tariffs. (Testimony of Jerauld; R-2.) Customer Charges The customer charge should recover minimum costs unrelated to the use of gas. These costs include accounting, administrative, and general expenses. The charge should also provide a return, together with depreciation on the plant invest- ment attributable to servicing a specific customer, e.g. service line, meter, and regulator. The COMPANY has included these costs in the following proposed customer charges: RATE PROPOSED CUSTOMER CHARGE General Service $ 4.00 Residential Service 3.50 Large Volume 13.00 Interruptible -0- Standby 30.00 The COMMISSION presented no affirmative evidence to overcome or negate the effect of the COMPANY's presentation. In its proposed findings of fact, the COMMISSION suggests approval of an alternative schedule of customer charges; but the evidence offered in support of the schedule is insubstantial and unpersuasive. (Testimony of Jerauld, COMMISSION Proposed Recommended Order, Paragraph I; P-5.) Cost of Service and Rate Design The COMPANY performed a cost of service study to determine the appropriate allocation of rate increases among the various customer rate classes. The study showed that four classes-- outdoor lighting (Rate No. 2) , residential service (Rote No. 3) employee service (Rate No. 4), and standby service (Rate No. 7)-- had negative rates of return during the test year. The COMPANY proposes rate increases to those classes sufficient to achieve a positive rate of return; it proposes increases to general service (Rate No. 1) and barge volume (Rate No. 5) in order to retain a reasonable balance between rates and prevent customers from switching classes for more favorable rate's. No increase is proposed for interruptible service (Rate No. 6) because tie study showed that that class was yielding an ample rate of return--101.64 percent. No increase is proposed for the housing authority class because it also yields a sufficient return. (Testimony of Jerauld; P-5. With the exception of the rate increase proposed for the employee service (Rate No. 4), it is found that the proposed allocation of revenue and rate increases among rate classes are fair, reasonable, and supported by the costs of providing service to the affected classes. 2/ In its proposed findings of fact, the COMMISSION suggests an alternative revenue allocation schedule and rate design. However, the fixing of rates is a complex process requiring the consideration of numerous factors and the exercise of professional judgment; the process is neither ministerial, nor mechanical. The affirmative schedule proposed by the COMMISSION was not presented at hearing or subject to cross-examination by the COMPANY. Lacking evidentiary support in the record, it must be rejected. (Testimony of Jerauld; P-5.) Employee Service Rate The COMPANY offers employees a special gas service rate lower than that charged other residential customers. It considers it a benefit for employees and an inducement to them to use gas in their homes. Thirty-one percent of the eligible employees receive the benefit of this special rate. The COMPANY experienced a negative return of 2.79 percent from this class during the test year; a 23.16 percent rate increase is proposed, resulting in a positive rate of return of .84 percent. (Testimony of Jerauld; P-5, R-2.) The favorable rate offered employees (Rate No. 4) is unrelated to the cost of providing them gas service. It, admittedly, represents a COMPANY personnel decision; it is not supported by cost of service analysis or any other acceptable rate-making methodology. When viewed as a form of compensation, almost two-thirds of the eligible employees have not realized its benefit. It is found that this special rate for employees--subsidized by other rate-payers-- is unfair, unreasonable, and unsubstantiated by the costs of service. It represents a departure from the rate-making methodology used by the COMPANY in setting its other rates, and should be eliminated. (Testimony of Jerauld; P-5, R-2.) Base Gas Cost The COMPANY proposed tariffs which do not reflect the increase in purchased gas cost since its last rate case. It assumed that the current purchased gas adjustment ("PGA") , on a per therm basis, could be added to the proposed tariffs, as it has been to the existing tariffs. Due to substantial increases in the cost of gas, the COMPANY does not oppose rolling the existing PGA into the base rates. Accordingly, the COMPANY should adjust its base roles pursuant to the PGA in effect at the time of final COMMISSION action in this case. The COMMISSION's suggestion in its proposed findings of fact of a .20 per therm PGA roll-in to the proposed tariffs is unsupported by the evidence of record and must be rejected. (Testimony of Jerauld, COMMISSION Proposed Recommend Order, Paragraph ii; P-5. Extension of Housing Authority Rates to Other Customers Customers testified in favor of extending the lower housing authority gas service rates to other low-income persons residing outside the designated housing authority projects. Many low-income and elderly persons on limited fixed incomes residing within the service area do not live in housing projects; it is as burdensome for them to pay rising energy prices as it is for those living in government subsidized housing. However, the lower rate granted to housing authority residents is based on major FHA contributions to construction of the gas systems which serve them; it is not based on the limited financial resources of the customers. To extend housing authority rates to those customers who have not made comparable contributions to construction would force customers in other classes to subsidize preferential rates. To impose such a burden on other classes would be unfair, unreasonable, and discriminatory. (Testimony of Tompkins, Rose; P-5.)
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Florida Public Utilities Company's application for rate increase be granted to the extent of allowing it to file new tariff rates, in the manner outlined above, designed to generate additional annual gross revenues of $656,907. DONE AND ORDERED this 6th day of February, 1981, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of February, 1981.
