The Issue The issue for determination in this consolidated bid protest proceeding is whether the Florida Housing Finance Corporation’s (“FHFC”) intended award of tax credits for the preservation of existing affordable housing developments was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact FHFC and Affordable Housing Tax Credits FHFC is a public corporation that finances affordable housing in Florida by allocating and distributing low income housing tax credits. See § 420.504(1), Fla. Stat. (providing that FHFC is “an entrepreneurial public corporation organized to provide and promote the public welfare by administering the governmental function of financing or refinancing housing and related facilities in this state.”); § 420.5099(2), Fla. Stat. (providing that “[t]he corporation shall adopt allocation procedures that will ensure the maximum use of available tax credits in order to encourage development of low-income housing in the state, taking into consideration the timeliness of the application, the location of the proposed housing project, the relative need in the area for low-income housing and the availability of such housing, the economic feasibility of the project, and the ability of the applicant to proceed to completion of the project in the calendar year for which the credit is sought.”). The tax credits allocated by FHFC encourage investment in affordable housing and are awarded through competitive solicitations to developers of qualifying rental housing. Tax credits are not tax deductions. For example, a $1,000 deduction in a 15-percent tax bracket reduces taxable income by $1,000 and reduces tax liability by $150. In contrast, a $1,000 tax credit reduces tax liability by $1,000. Not surprisingly, the demand for tax credits provided by the federal government exceeds the supply. A successful applicant/developer normally sells the tax credits in order to raise capital for a housing development. That results in the developer being less reliant on debt financing. In exchange for the tax credits, a successful applicant/developer must offer affordable rents and covenant to keep those rents at affordable levels for 30 to 50 years. The Selection Process FHFC awards tax credits through competitive solicitations, and that process is commenced by the issuance of a Request for Applications (“RFA”). Florida Administrative Code Rule 67-60.009(2) provides that unsuccessful applicants for tax credits “may only protest the results of the competitive solicitation process pursuant to the procedures set forth in Section 120.57(3), F.S., and Chapter 28-110, F.A.C.” For purposes of section 120.57(3), an RFA is equivalent to a “request for proposal.” See Fla. Admin. Code R. 67.60.009(4), F.A.C. FHFC issued RFA 2015-111 on October 23, 2015, and responses from applicants were due on December 4, 2015. Through RFA 2015-111, FHFC seeks to award up to $5,901,631 of tax credits to qualified applicants that commit to preserve existing affordable multifamily housing developments for the demographic categories of “Families,” “the Elderly,” and “Persons with a Disability.” FHFC only considered an application eligible for funding from RFA 2015-111, if that particular application complied with certain content requirements. FHFC ranked all eligible applications pursuant to an “Application Sorting Order” set forth in RFA 2015-111. The first consideration was the applicants’ scores. Each application could potentially receive up to 23 points based on the developer’s experience and the proximity to services needed by the development’s tenants. Applicants demonstrating that their developments received funding from a U.S. Department of Agriculture (“USDA”) Rural Development program known as RD 515 were entitled to a 3.0 point proximity score “boost.” That proximity score boost was important because RFA 2015-111 characterized counties as small, medium, or large. Applications associated with small counties had to achieve at least four proximity points to be considered eligible for funding. Applications associated with medium-sized counties and those associated with large counties had to achieve at least seven and 10.25 proximity points respectively in order to be considered eligible for funding. Because it is very common for several tax credit applicants in a particular RFA to receive identical scores, FHFC incorporated a series of “tie-breakers” into RFA 2015-111. The tie-breakers for RFA 2015-111, in order of applicability, were: First, by Age of Development, with developments built in 1985 or earlier receiving a preference over relatively newer developments. Second, if necessary, by a Rental Assistance (“RA”) preference. Applicants were to be assigned an RA level based on the percentage of units receiving rental assistance through either a U.S. Department of Housing and Urban Development (“HUD”) or USDA Rural Development program. Applicants with an RA level of 1, 2, or 3 (meaning at least 75 percent of the units received rental assistance) were to receive a preference. Third, by a Concrete Construction Funding Preference, with developments incorporating certain specified concrete or masonry structural elements receiving the preference. Fourth, by a Per Unit Construction Funding Preference, with applicants proposing at least $32,500 in Actual Construction Costs per unit receiving the preference. Fifth, by a Leveraging Classification favoring applicants requiring a lower amount in housing credits per unit than other applicants. Generally, the least expensive 80 percent of eligible applicants were to receive a preference over the most expensive 20 percent. Sixth, by an Applicant’s specific RA level, with Level 1 applicants receiving the most preference and Level 6 the least. Seventh, by a Florida Job Creation Preference, which estimated the number of jobs created per $1 million of housing credit equity investment the developments were to receive based on formulas contained in the RFA. Applicants achieving a Job Creation score of at least 4.0 were to receive the preference. Eighth, by lottery number, with the lowest (smallest) lottery number receiving the preference. Rental assistance from the USDA or HUD is provided to existing developments in order to make up for shortfalls in monthly rent paid by tenants. For example, if an apartment’s base rent is $500 per month and the tenant’s income limits him or her to paying only $250 towards rent, then the USDA or HUD rental assistance pays the other $250 so that the total rent received by the development is $500. As evident from the tie-breakers incorporated into RFA 2015-111, the amount of rental assistance, or “RA Level,” played a prominent role in distinguishing between RFA 2015-111 applicants having identical scores. RFA 2015-111 required that applicants demonstrate RA Levels by providing a letter containing the following information: (a) the development’s name; (b) the development’s address; (c) the year the development was built; (d) the total number of units that currently receive PBRA and/or ACC;/3 (e) the total number of units that would receive PBRA and/or ACC if the proposed development were to be funded; (f) all HUD or RD financing program(s) originally and/or currently associated with the existing development; and (g) confirmation that the development had not received financing from HUD or RD after 1995 when the rehabilitation was at least $10,000 per unit in any year. In order to determine an applicant’s RA Level Classification, RFA 2015-111 further stated that Part of the criteria for a proposed Development that qualifies as a Limited Development Area (LDA) Development to be eligible for funding is based on meeting a minimum RA Level, as outlined in Section Four A.7.c of the RFA. The total number of units that will receive rental assistance (i.e., PBRA and/or ACC), as stated in the Development Category qualification letter provided as Attachment 7, will be considered to be the proposed Development’s RA units and will be the basis of the Applicant’s RA Level Classification. The Corporation will divide the RA units by the total units stated by the Applicant at question 5.e. of Exhibit A, resulting in a Percentage of Total Units that are RA units. Using the Rental Assistance Level Classification Chart below, the Corporation will determine the RA Level associated with both the Percentage of Total Units and the RA units. The best rating of these two (2) levels will be assigned as the Application’s RA Level Classification. RFA 2015-111 then outlined a Rental Assistance Level Classification Chart to delineate between the RA Levels. That chart described six possible RA Levels, with one being developments that have the most units receiving rental assistance and six pertaining to developments with the fewest units receiving rental assistance. A development with at least 100 rental assistance units and greater than 50 percent of the total units receiving rental assistance was to receive an RA Level of 1. FHFC also utilized a “Funding Test” to assist in the selection of applications for funding. The Funding Test required that the amount of unawarded housing credits be enough to satisfy any remaining applicant’s funding request. In other words, FHFC prohibited partial funding. In addition, RFA 2015-111 applied a “County Award Tally” designed to prevent a disproportionate concentration of funded developments in any one county. As a result, all other applicants from other counties had to receive an award before a second application from a particular county could be funded. After ranking of the eligible applicants, RFA 2015-111 set forth an order of funding selection based on county size, demographic category, and the receipt of RD 515 financing. The Order was: One RD 515 Development (in any demographic category) in a medium or small county; One Non-RD 515 Development in the Family Demographic Category (in any size county); The highest ranked Non-RD 515 application or applications with the demographic of Elderly or Persons with a Disability; and If funding remains after all eligible Non- RD 515 applicants are funded, then the highest ranked RD 515 applicant in the Elderly demographic (or, if none, then the highest ranked RD 515 applicant in the Family demographic). Draft versions of every RFA are posted on-line in order for stakeholders to provide FHFC with their comments. In addition, every RFA goes through at least one workshop prior to being finalized. FHFC often makes changes to RFAs based on stakeholder comments. No challenge was filed to the terms, conditions, or requirements of RFA 2015-111. A review committee consisting of FHFC staff members reviewed and scored all 24 applications associated with RFA 2015-111. During this process, FHFC staff determined that none of the RD-515 applicants satisfied all of the threshold eligibility requirements. On June 24, 2016, FHFC’s Board of Directors announced its intention to award funding to five applicants, subject to those applicants successfully completing the credit underwriting process. Pineda Village in Brevard County was the only successful applicant in the Non-RD 515 Family Demographic. The four remaining successful applicants were in the Non-RD 515 Elderly or Persons with Disability Demographic: Three Round Tower in Miami-Dade County; Cathedral Towers in Duval County; Isles of Pahokee in Palm Beach County; and Lummus Park in Miami- Dade County. The randomly-assigned lottery number tie-breaker played a role for the successful Non-RD 515 applicants with Three Round Tower having lottery number one, Cathedral Towers having lottery number nine, and Isles of Pahokee having lottery number 18. While Lummus Park had a lottery number of 12, the County Award Tally prevented it from being selected earlier because Three Round Tower had already been selected for funding in Miami-Dade County. However, after the first four applicants were funded, only $526,880 of credits remained, and Lummus Park was the only eligible applicant with a request small enough to be fully funded. All Petitioners timely filed Notices of Protest and petitions for administrative proceedings. The Challenge by Woodcliff, Colonial, and St. Johns Woodcliff is seeking an award of tax credits in order to acquire and preserve a 34-unit development for elderly residents in Lake County.4/ Colonial is seeking an award of tax credits in order to acquire and preserve a 30-unit development for low-income families in Lake County.5/ St. Johns is seeking an award of tax credits to acquire and preserve a 48-unit development for elderly residents in Putnam County.6/ FHFC deemed Woodcliff, Colonial and St. Johns to be ineligible because of a failure to demonstrate the existence or availability of a particular source of financing relied upon in their applications. Specifically, FHFC determined that the availability of USDA RD 515 financial assistance was not properly documented. For applicants claiming the existence of RD 515 financing, RFA 2015-111 stated: If the proposed Development will be assisted with funding under the United States Department of Agriculture RD 515 Program and/or RD 538 Program, the following information must be provided: Indicate the applicable RD Program(s) at question 11.b.(2) of Exhibit A. For a proposed Development that is assisted with funding from RD 515 and to qualify for the RD 515 Proximity Point Boost (outlined in Section Four A.6.b.(1)(b) of the RFA), the Applicant must: Include the funding amount at the USDA RD Financing line item on the Development Funding Pro Forma (Construction/Rehab Analysis and/or Permanent Analysis); and Provide a letter from RD, dated within six (6) months of the Application Deadline, as Attachment 17 to Exhibit A, which includes the following information for the proposed Preservation Development: Name of existing development; Name of proposed Development; Current RD 515 Loan balance; Acknowledgment that the property is applying for Housing Credits; and Acknowledgment that the property will remain in the USDA RD 515 loan portfolio. (emphasis added). FHFC was counting on the letter mentioned directly above to function as proof that: (a) there was RD 515 financing in place when the letter was issued; and that (b) the RD 515 financing would still be in place as of the application deadline for RFA 2015-111. FHFC deemed Woodcliff, Colonial and St. Johns ineligible because their RD letters were not dated within six months of the December 4, 2015, deadline for RFA 2015-111 applications. The Woodcliff letter was dated May 15, 2015, the Colonial letter was dated May 15, 2015, and the St. Johns letter was dated May 5, 2015. FHCA had previously issued RFA 2015-104, which also proposed to award Housing Credit Financing for the Preservation of Existing Affordable Multifamily Housing Developments. The deadline for RFA 2015-104 was June 23, 2015, and Woodcliff, Colonial, and St. Johns applied using the same USDA letter that they used in their RFA 2015-111 applications. Woodcliff, Colonial, and St. Johns argued during the final hearing that FHFC should have accepted their letters because: (a) they gained no competitive advantage by using letters that were more than six months old; (b) waiving the six- month “shelf life” requirement would enable FHFC to satisfy one of its stated goals for RFA 2015-111, i.e., funding of an RD 515 development; and (c) other forms of financing (such as equity investment) have no “freshness” or “shelf life” requirement. However, it is undisputed that no party (including Woodcliff, Colonial, and St. Johns) challenged any of the terms, conditions, or requirements of RFA 2015-111. In addition, Kenneth Reecy (FHFC’s Director of Multifamily Programs) testified that there must be a point at which FHFC must ensure the viability of the information submitted by applicants. If the information is “too old,” then it may no longer be relevant to the current application process. Under the circumstances, it was not unreasonable for FHFC to utilize a six-month shelf life for USDA letters.7/ Furthermore, Mr. Reecy testified that excusing Woodcliff, Colonial, and St. Johns’ noncompliance could lead to FHFC excusing all deviations from all other date requirements in future RFAs. In other words, applicants could essentially rewrite those portions of the RFA, and that would be an unreasonable result. Excusing the noncompliance of Woodcliff, Colonial, and St. Johns could lead to a “slippery slope” in which any shelf- life requirement has no meaning. The letters utilized by Woodcliff, Colonial, and St. Johns were slightly more than six months old. But, exactly when would a letter become too old to satisfy the “shelf life” requirement? If three weeks can be excused today, will four weeks be excused next year? St. Elizabeth’s and Marian Towers’ Challenge St. Elizabeth is seeking low-income housing tax credit financing in order to acquire and preserve a 151-unit development for elderly residents in Broward County, Florida. Marian Towers is an applicant for RFA 2015-111 funding seeking low-income housing tax credits to acquire and preserve a 220-unit development for elderly residents in Miami-Dade County, Florida. The same developer is associated with the St. Elizabeth and Marian Towers projects. In its scoring and ranking process, FHFC assigned St. Elizabeth an RA Level of two. RFA 2015-111 requires that Applicants demonstrate RA Levels by providing a letter from HUD or the USDA with specific information. That information is then used to establish an RA Level for the proposed development. As noted above, the RFA requires the letter to contain several pieces of information, including: (a) the total number of units that currently receive PBRA and/or ACC; and (b) the total number of units that will receive PBRA and/or ACC if the proposed development is funded. RFA 2015-111 provided that a development with at least 100 rental units would receive an RA Level of one. St. Elizabeth included with its application a letter from HUD’s Miami field office stating in pertinent part that: Total number of units that currently receive PBRA and/or ACC: 99 units. Total number of units that will receive PBRA and/or ACC if the proposed Development is funded: 100 units*. The asterisk in the preceding paragraph directed readers of St. Elizabeth’s HUD letter to a paragraph stating that: HUD is currently processing a request from the owner to increase the number of units subsidized under a HAP Contract to 100 by transferring budget authority for the one additional unit from another Catholic Housing Services Section 8 project under Section 8(bb) in accordance with Notice H-2015-03. Because of the foregoing statement from HUD, FHFC concluded that St. Elizabeth did not have 100 units receiving rental assistance as of the application deadline. Accordingly, FHFC used 99 units as the total number of units that would receive rental assistance when calculating St. Elizabeth’s RA Level, and that led to FHFC assigning an RA Level of two to St. Elizabeth’s application.8/ If St. Elizabeth had been deemed eligible and if FHFC had used 100 units as the total number of units that would receive rental assistance, then St. Elizabeth would have received an RA Level of one. Given the application sorting order and the selection process outlined in RFA 2015-111, St. Elizabeth (with a lottery number of six) would have been recommended for funding by FHFC, and that outcome would have resulted in Intervenors Isles of Pahokee and Lummus Park losing their funding. St. Elizabeth asserted during the final hearing that the 100th unit had obtained rental assistance financing since the application deadline on December 4, 2015. However, FHFC could only review, score, and calculate St. Elizabeth’s RA Level based on the information available as of the application deadline. While St. Elizabeth argues that the asterisk paragraph sets forth a “condition,” Kenneth Reecy (FHFC’s Director of Multifamily Housing) agreed during the final hearing that the asterisk paragraph was more akin to information that was not explicitly required by RFA 2015-111. FHFC did not use that additional information to declare St. Elizabeth’s application ineligible for funding. Despite being assigned an RA Level of two, St. Elizabeth’s application still could have been selected for funding because RFA 2015-111 merely established RA Level as a basis for breaking ties among competing applications. However, too many applicants for RFA 2015-111 had identical scores, and RFA 2015-111’s use of RA Level as a tiebreaker forced St. Elizabeth’s application out of the running. Under the circumstances, FHFC’s treatment of St. Elizabeth’s application was not clearly erroneous, contrary to competition, arbitrary, or capricious. As noted above, tie- breakers are very important, because there is often very little to distinguish one application for tax credits from another. Given that there was a degree of uncertainty about whether St. Elizabeth’s would have 100 qualifying units, FHFC acted reasonably by assigning St. Elizabeth’s application an RA Level of two for this tie-breaker rather than an RA Level of one. St. Elizabeth and Marian Towers argue that other applications contained language that indicated a degree of uncertainty. Nevertheless, those other applications received an RA Level of one. For example, FHFC assigned an RA Level of one to Three Round and Haley Sofge even though their HUD letters stated that both developments would be “subject to a Subsidy Layering Review to be conducted by HUD.” Marian Towers argued that if FHFC does not accept HUD or RD letters containing conditional language about the number of units that will be subsidized, then FHFC should have assigned an RA Level of six to Three Round and Haley Sofge. If Three Round and Haley Sofge had been assigned an RA Level of six, then Marian Towers (with a lottery number of five) would have been recommended for funding. St. Elizabeth and Marian Towers cited another instance in which an application received an RA Level of one, even though its application contained a letter from the RD program stating that “USDA Rural Development will consent to the transfer if all regulatory requirements are met.” (emphasis added). However, St. Elizabeth and Marian Towers failed to demonstrate that the language cited above applied only to those particular applications rather than to all applications for tax credits. For example, if all applications are subject to a subsidy layering review and compliance with all regulatory requirements, then inclusion of such language in a HUD letter (in and of itself) should not prevent an applicant from being assigned an RA Level of one. St. Elizabeth and Marian Towers also cited a HUD Letter used in another recent RFA by an applicant that received an RA Level of one. The HUD letter in question contained an asterisk followed by the following statement: “It is HUD’s understanding that two separate applications are being submitted – one for each tower comprising St. Andrew Towers. If funded, HUD will consider a request from the owner to bifurcate the St. Andrew Towers HAP contract in order to facilitate the separate financing of each tower.” However, St. Elizabeth and Marian Towers failed to demonstrate why the language quoted directly above should have resulted in the applicant in question being awarded an RA Level less than one. There is no indication that the total number of units receiving rental assistance would change.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order awarding funding to Three Round Tower A, LLC; Cathedral Towers, Ltd; Isles of Pahokee Phase II, LLC; SP Manor, LLC; and Pineda Village. DONE AND ENTERED this 18th day of October, 2016, in Tallahassee, Leon County, Florida. S G.W. CHISENHALL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of October, 2016.
Findings Of Fact The cities of Sebring, Monticello, Mascotte, Greenville and Vernon, and other cities in Florida made application to DCA for block grants under the Small Cities Community Development Block Grant (FFY) 1987, Commercial Revitalization. The deadline for submission of those applications was February 26, 1988. The applications were submitted under the auspices of the application manual related to that program, a copy of which may be found as Respondent's Exhibit 1 admitted into evidence. This application manual is drawn in keeping with requirements of the Community Development Block Grant under Title I of the Housing and Community Development Act of 1974, as amended, and under Section 290, Florida Statutes, and Chapter 9B-43, Florida Administrative Code. The references in the Florida Statutes specifically are at Sections 290.0401-290.049, Florida Statutes, known as the "Florida Small Cities Community Development Block Program Act." The applications by the various cities previously described were timely made. In accordance with the instructions set forth in the application manual, and per the review procedures of the DCA, each named community received a score of 10 points for the adoption of a community redevelopment plan and an additional 10 points for creation of a community redevelopment agency. To comply with the application form and receive those points it was necessary for the clerk of the community to give certification that those items were on file in the clerk's office. There was a further necessity to sign, date and seal the response. Following the receipt of the applications from the cities, the DCA received a complaint from a representative of Monticello concerning the existence of some possible irregularities related to the applications of Vernon, Mascotte and Greenville. Those claims involved the issue of whether those cities had adopted redevelopment plans and established redevelopment agencies at the application deadline on February 26, 1988. In the face of the allegations the DCA determined to follow-up and wrote to each city, namely the cities of Mascotte, Vernon, Greenville, Monticello and Sebring. Copies of the correspondence may be found in the Composite Exhibit Number 7 by the Respondent. The correspondence described the award of 10 points for creation of a redevelopment agency and 10 additional joints for creation of a redevelopment plan under authority of Chapter 163, Florida Statutes. It further described the need for certification by the Clerk of the town to gain the award of points. The correspondence went on to describe the possibility that information that would be needed to document the existence of the community redevelopment agency and the approval of the community redevelopment plan might not be on file in the community as required. As a consequence, each community was requested to confirm that documentation existed in its file by submission of the following information within seven (7) working days. A copy of the ordinance appointing a board of commissioners of the community redevelopment agency (pursuant to s. 163.356(2), F.S.) or a copy of the resolution declaring the member of the governing body as the community redevelopment agency (pursuant to s. 163.357, F.S.); and A copy of the City Community Redevelopment Plan and documentation that is was reviewed and adopted pursuant to s. 163.360(1)-(9), F.S. Absent the submission of this documentation the cities were told that they would not receive the points for establishing the redevelopment agencies and plans. In turn, each of the subject communities responded to the requirements by sending copies of minutes, ordinances and resolutions related to adoption of plans and in creation of agencies. Copies of those documents may be found as Respondent's Composite Exhibit 8. They all evidence compliance with the February 26, 1988 deadline for adoption of plans and creation of agencies. Having received this Information, DCA made its evaluation and on May 12, 1988, noticed the various applicants of its decision concerning the applications for grant money. Copies of the individual correspondence related to the subject cities who have been named may be found as part of the Respondent's Composite Exhibit 6 admitted into evidence. Attached to the correspondence was a breakdown of total points awarded, a description of the grant request and the money assigned in response to that request, all by way of stated intended agency action. The effect of the point awards was to disallow the grants sought by Sebring and Monticello in that there were insufficient funds to honor their applications and others with higher point totals. The stated agency action would allow the cities of Vernon, Greenville and Mascotte to receive all monies sought. In the face of this decision to award the proceeds to Vernon, Greenville and Mascotte to the exclusion of the cities of Sebring and Monticello the latter cities made timely petition to challenge the agency decision and in particular the decision to award 20 points to Vernon, Greenville and Mascotte for establishment of redevelopment plans and the creation of redevelopment agencies. Even if the 20 points were disallowed for Vernon, they would still be entitled to the full proceeds. That would not be the situation with Greenville and Mascotte, in that they would be replaced by Sebring and Monticello, Sebring as to its entire request of $575,000 and Monticello as to part of its request in the amount of $76,518 of the $500,000 sought. The city of Mascotte also filed challenges directed to Monticello and Sebring in the points assigned them for community redevelopment plans and agencies in the applications by those communities. No proof was offered at the hearing in futherance of this claim. The proof submitted was not sufficient to establish that there was any impropriety by the City of Vernon in urging the DCA to award the 20 points in question. The proof that was presented in the course of the hearing related to the activities of the cities of Mascotte and Greenville in establishing community redevelopment agencies and adopting redevelopment plans raised some suspicions about whether those activities had occurred prior to the February 26, 1988 deadline, but it was not complete enough to prove that the agencies had not been established and the plans had not been adopted prior to the February 26, 1988 date.
The Issue The issue is whether the actions of Florida Housing concerning the review and scoring of the responses to Request for Applications 2019-102 (“RFA”), titled “Community Development Block Grant--Disaster Recovery (‘CDBG- DR’) to be Used in Conjunction with Tax-Exempt MMRB and Non- Competitive Housing Credits in Counties Deemed Hurricane Recovery Priorities,” were contrary to the agency’s governing statutes, rules, policies, or the RFA specifications.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: THE PARTIES Berkeley is an applicant in the RFA that requested an allocation of $6,500,000 in CDBG Development funding; $2,500,000 in CDBG Land Acquisition funding; and $844,699 in non-competitive housing credits. The Berkeley Application, assigned number 2020-017D, was preliminarily deemed ineligible for consideration for funding. Brisas is an applicant in the RFA that requested an allocation of $5,000,000 in CDBG Development funding and $1,674,839 in non-competitive housing credits. The Brisas Application, assigned number 2020-056D, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Northside is an applicant in the RFA that requested an allocation of $7,300,000 in CDBG Development funding; $1,588,014 in non-competitive housing credits; and $24,000,000 in Multifamily Mortgage Revenue Bonds (“MMRB”). The Northside Application, assigned number 2020-024D, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Beacon Place is an applicant in the RFA that requested an allocation of $6,925,500 in CDBG Development funding; $4,320,000 in CDBG Land Acquisition funding; $1,764,203 in non-competitive housing credits; and $24,000,000 in MMRB. The Beacon Place Application, assigned number 2020-045DB, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Bella Vista is an applicant in the RFA that requested an allocation of $8,000,000 in CDBG Development funding; $1,450,000 in CDBG Land Acquisition funding; $609,629 in non-competitive housing credits; and $13,000,000 in MMRB. The Bella Vista Application, assigned number 2020-038DB, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Solaris is an applicant in the RFA that requested an allocation of $3,420,000 in CDBG Development funding; $4,500,000 in CDBG Land Acquisition funding; and $937,232 in non-competitive housing credits. The Solaris Application, assigned number 2020-039D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Metro Grande is an applicant in the RFA that requested an allocation of $3,175,000 in CDBG Development funding and $1,041,930 in non-competitive housing credits. The Metro Grande Application, assigned number 2020-041D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Sierra Bay is an applicant in the RFA that requested an allocation of $3,650,000 in CDBG Development funding; $3,300,000 in CDBG Land Acquisition funding; $1,074,173 in non-competitive housing credits; and $16,000,000 in MMRB. The Sierra Bay Application, assigned number 2020-040DB, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Bembridge is an applicant in the RFA that requested an allocation of $7,800,000 in CDBG Development funding; $564,122 in non-competitive housing credits; and $10,100,000 in MMRB. The Bembridge Application, assigned number 2020-046DB, was deemed eligible and preliminarily selected for funding under the terms of the RFA. East Pointe is an applicant in the RFA that requested an allocation of $4,680,000 in CDBG Development funding and $690,979 in non-competitive housing credits. The East Pointe Application, assigned number 2020-053D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Florida Housing is a public corporation organized pursuant to Chapter 420, Part V, Florida Statutes, and, for purposes of these consolidated cases, is an agency of the State of Florida. Florida Housing is tasked with distributing a portion of the CDBG-DR funding allocated by the U.S. Department of Housing and Urban Development (“HUD”), pursuant to the State of Florida Action Plan for Disaster Recovery. THE COMPETITIVE APPLICATION PROCESS AND RFA 2019-102 Florida Housing is authorized to allocate low-income housing tax credits and other named funding by section 420.507(48). Florida Housing has adopted Florida Administrative Code Chapter 67-60 to govern the competitive solicitation process. Rule 67-60.009(1) provides that parties wishing to protest any aspect of a Florida Housing competitive solicitation must do so pursuant to section 120.57(3), Florida Statutes. Funding is made available through a competitive application process commenced by the issuance of a request for applications. Rule 67-60.009(4) provides that a request for application is considered a “request for proposal” for purposes of section 120.57(3)(f). The RFA was issued on July 30, 2019, with responses due on August 27, 2019. The RFA was modified four times and the application deadline was extended to September 24, 2019. No challenges were made to the terms and specifications of the RFA. Section Five of the RFA included a list of 48 “eligibility items” that an applicant was required to satisfy to be eligible for funding and considered for funding selection. Applications that met the eligibility standards would then be awarded points for satisfying RFA criteria, with the highest scoring applications being selected for funding. No total point items are in dispute. Proximity Point items are contested as to the Beacon Place, East Pointe, and Bembridge Applications. Applicants could select whether they would be evaluated as Priority I, II, or III applications. All of the parties to these consolidated cases identified themselves as Priority I applications. Through the RFA, Florida Housing seeks to award an estimated $76,000,000 of CDBG Land Acquisition Program funding to areas impacted by Hurricane Irma, and in areas that experienced a population influx because of migration from Puerto Rico and the U.S. Virgin Islands due to Hurricane Irma. Florida Housing will award up to $66,000,000 for CDBG Development funding and an additional $10,000,000 for CDBG Land Acquisition Program funding. Applicants were not required to request CDBG Land Acquisition Program funding. Forty-four applications were submitted in response to the RFA. A Review Committee was appointed to review the applications and make recommendations to Florida Housing’s Board of Directors (the “Board”). The Review Committee found 34 applications eligible for funding. The Review Committee found 8 applications ineligible, including that of Berkeley. Two applications were withdrawn. The Review Committee developed charts listing its eligibility and funding recommendations to be presented to the Board. On December 13, 2019, the Board met and accepted the recommendations of the Review Committee. The Board preliminarily awarded funding to 12 applications, including those of Sierra Bay, Solaris, Metro Grande, East Pointe, and Bembridge. Petitioners Berkeley, Brisas, Northside, Beacon Place, and Bella Vista timely filed Notices of Protest and Petitions for Formal Administrative Hearing. THE BERKELEY APPLICATION As an eligibility item, the RFA required applicants to identify an Authorized Principal Representative. According to the RFA, the Authorized Principal Representative: must be a natural person Principal of the Applicant listed on the Principal Disclosure Form; must have signature authority to bind the Applicant entity; (c) must sign the Applicant Certification and Acknowledgement form submitted in this Application; (d) must sign the Site Control Certification form submitted in this Application; and (e) if funded, will be the recipient of all future documentation that requires a signature. As an eligibility item, the RFA required applicants to submit an Applicant Certification and Acknowledgment form executed by the Authorized Principal Representative. As an eligibility item, the RFA also required applicants to submit a Site Control Certification form executed by the Authorized Principal Representative. In section 3.e.(1) of Exhibit A of the RFA, the applicant is directed to enter the contact information of its Authorized Principal Representative. Berkeley entered the name, organization, and contact information for Jennie D. Lagmay as its Authorized Principal Representative, in response to section 3.e.(1). The name of Jennie D. Lagmay was not disclosed on the Principal Disclosure form required by the RFA. The Applicant Certification and Acknowledgment form and the Site Control Certification form were executed by Jonathan L. Wolf, not Jennie D. Lagmay, the designated Authorized Principal Representative. On both forms, Mr. Wolf is identified as “Manager of Berkeley Landing GP, LLC; General Partner of Berkeley Landing, Ltd.” Jonathan L. Wolf is listed on the Principal Disclosure Form. Aside from section 3.e.(1) of Exhibit A, Jennie D. Lagmay’s name is not found in the Berkeley Application. Florida Housing determined that the Berkeley Application was ineligible for an award of funding for three reasons: 1) the Authorized Principal Representative listed was not disclosed on the Principal Disclosure form; 2) the Applicant Certification and Acknowledgement form was not signed by the Authorized Principal Representative; and 3) the Site Control Certification was not signed by the Authorized Principal Representative. Two other applications for this RFA were found ineligible for identical reasons: Thornton Place, Application No. 2020-020D; and Berkshire Square, Application No. 2020-034D. In these, as in the Berkeley Application, Jennie D. Lagmay was named as the Authorized Principal Representative in section 3.e.(1) of Exhibit A, but Jonathan L. Wolf executed the Applicant Certification and Acknowledgement form and the Site Control Certification form as the Authorized Principal Representative. Berkeley concedes it made an error in placing the name of Ms. Lagmay in section 3.e.(1), but argues that this constituted a minor irregularity that should have been waived by Florida Housing. Berkeley contends that the entirety of its Application makes plain that Jonathan D. Wolf is in fact its Authorized Principal Representative. Berkeley argues that Florida Housing should waive the minor irregularity and determine that the Berkeley Application is eligible for funding. Berkeley points out that only two members of the Review Committee, Rachel Grice and Heather Strickland, scored the portions of the Berkeley Application that led to the ineligibility recommendation. Ms. Grice determined that the Authorized Principal Representative listed in the Berkeley Application was not disclosed on the Principal Disclosure form. Ms. Strickland determined that neither the Applicant Certification and Acknowledgement form nor the Site Control Certification form was executed by the Authorized Principal Representative. Neither Ms. Grice nor Ms. Strickland conducted a minor irregularity analysis for the Berkeley Application. Rule 67-60.008, titled “Right to Waive Minor Irregularities,” provides as follows: Minor irregularities are those irregularities in an Application, such as computation, typographical, or other errors, that do not result in the omission of any material information; do not create any uncertainty that the terms and requirements of the competitive solicitation have been met; do not provide a competitive advantage or benefit not enjoyed by other Applicants; and do not adversely impact the interests of the Corporation or the public. Minor irregularities may be waived or corrected by the Corporation. Berkeley contends that because a minor irregularity analysis was not conducted by the Review Committee members, the Board was deprived of a necessary explanation for the preliminary recommendations of Ms. Grice and Ms. Strickland. Marisa Button, Florida Housing’s Director of Multifamily Allocations, agreed that the Review Committee members did not perform a minor irregularity analysis but testified that none was required given the nature of the discrepancy in the Berkeley Application. Ms. Button performed a minor irregularity analysis as Florida Housing’s corporate representative in this proceeding and concluded that the error could not be waived or corrected without providing an unfair competitive advantage to Berkeley. Ms. Button testified that the fact that the person identified as the Authorized Principal Representative was not the same person who signed the certification forms could not be considered a minor irregularity because the application demonstrated conflicting and contradictory information, creating uncertainty as to the applicant’s intentions. She stated that Florida Housing is required to limit its inquiry to the four corners of the application. Ms. Button stated that Florida Housing cannot take it upon itself to decide what the applicant intended when the information provided in the application is contradictory. Berkeley points to the fact that the Application Certification and Acknowledgement form, signed by Mr. Wolf, includes the following language: “The undersigned is authorized to bind the Applicant entity to this certification and warranty of truthfulness and completeness of the Application.” Berkeley argues that it should have been clear to Florida Housing that Mr. Wolf is the person authorized to bind the company and that the inclusion of Ms. Lagmay’s name in section 3.e.(1) was in the nature of a typographical error. Florida Housing points out that the Application Certification and Acknowledgement form also includes the following language below the signature line: “NOTE: Provide this form as Attachment 1 to the RFA. The Applicant Certification and Acknowledgement form must be signed by the Authorized Principal Representative stated in Exhibit A.” Florida Housing notes that the Site Control Certification form includes similar language: “This form must be signed by the Authorized Principal Representative stated in Exhibit A.” Berkeley contends that Florida Housing was well aware that Jonathan L. Wolf has been the named Authorized Principal Representative on multiple applications filed under the umbrella of Wendover Housing Partners, the general developer behind Berkeley. In at least one of those previous applications, Ms. Lagmay, an employee of Wendover Housing Partners, was identified as the “contact person.” Ms. Button responded that Review Committee members are specifically prohibited from using personal knowledge of a general development entity in a specific application submitted by a single purpose entity. She further testified that if Florida Housing employees were to use their personal knowledge of an experienced developer to waive errors in a specific application, applicants who had not previously submitted applications would be at a competitive disadvantage. Ms. Button testified that Berkeley was established as a single purpose entity in accordance with the RFA’s requirements. She testified that she has known general developers to structure these single purpose entities in different ways, depending on the requirements of an RFA. An applicant might designate an employee, such as Ms. Lagmay, as a principal to give her experience as a developer. Again, Ms. Button emphasized that Florida Housing is not in a position to decide what the applicant “really meant” when there is a discrepancy in the information provided. Ms. Button testified that Florida Housing has determined in prior RFAs that an applicant was ineligible because the person identified as the Authorized Principal Representative was not the same person who signed the certification forms. Florida Housing rightly concluded that there are only two possible ways to interpret the Berkeley Application. If Ms. Lagmay was the Authorized Principal Representative, then the application is nonresponsive because she was not listed on the Principal Disclosure form and she did not sign the required certification forms. If Ms. Lagmay was not the Authorized Principal Representative, the application is nonresponsive because no Authorized Principal Representative was identified. There is no way to tell from the four corners of the application which of these alternatives is the correct one. Florida Housing cannot step in and cure the defect in the application by making its own educated guess as to the intended identity of the Authorized Principal Representative. Berkeley has failed to demonstrate that Florida Housing’s preliminary determination of ineligibility was contrary to the applicable rules, statutes, policies, or specifications of the RFA, or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE SIERRA BAY APPLICATION The parties stipulated to the facts regarding the Sierra Bay Application, which are incorporated into this Recommended Order. Florida Housing deemed the Sierra Bay Application eligible and, pursuant to the terms of the RFA, preliminarily selected Sierra Bay for funding. In order to demonstrate site control, the RFA required execution of the Site Control Certification form. Site control documentation had to be included in the application. One way to demonstrate site control was to include an “eligible contract.” The RFA required that certain conditions be met in order to be considered an “eligible contract.” One of those requirements was that the contract “must specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance.” Sierra Bay acknowledged that the site control documentation included within its application did not meet the “eligible contract” requirement because it failed to include language regarding specific performance as a remedy for the seller’s default. Sierra Bay agreed that the omission of the specific performance language was not a minor irregularity and that Sierra Bay’s Application is ineligible for funding under the terms of the RFA. THE SOLARIS APPLICATION The RFA specified that a Local Government, Public Housing Authority, Land Authority, or Community Land Trust must hold 100 percent ownership in the land of any qualifying Priority I application. The RFA defined “Community Land Trust” as: A 501(c)(3) which acquires or develops parcels of land for the primary purpose of providing or preserving affordable housing in perpetuity through conveyance of the structural improvement subject to a long term ground lease which retains a preemptive option to purchase any such structural improvement at a price determined by a formula designed to ensure the improvement remains affordable in perpetuity. The RFA provided that if a Community Land Trust is the Land Owner, the Community Land Trust must provide the following documentation as Attachment 2 to the application to demonstrate that it qualifies as a Community Land Trust: The Community Land Trust must provide its Articles of Incorporation or Bylaws demonstrating it has existed since June 28, 2018 or earlier and that a purpose of the Community Land Trust is to provide or preserve affordable housing; and The Community Land Trust must provide a list that meets one of the following criteria to demonstrate experience of the Community Land Trust with owning property: (i) at least two parcels of land that the Community Land Trust currently owns; or (ii) one parcel of land that the Community Land Trust owns, consisting of a number of units that equals or exceeds at least 25 percent of the units in the proposed Development. The RFA required that the proposed development must be affordable in perpetuity. For purposes of the RFA, “perpetuity” means 99 years or more. Solaris identified Residential Options of Florida, Inc. (“Residential Options”), as the Community Land Trust owner in its Priority 1 Application. Attachment 2 of the Solaris Application included the Articles of Incorporation of Residential Options (“Original Articles”), filed with the Division of Corporations on July 30, 2014. The purpose of the corporation as stated in the Original Articles was as follows: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Attachment 2 of the Solaris Application also included Amended and Restated Articles of Incorporation of Residential Options (“Amended Articles”), filed with the Division of Corporations on September 20, 2019. The Amended Articles retained the boilerplate statement of purpose of the Original Articles, but added the following paragraph: This shall include the purpose of empowering individuals with intellectual and developmental disabilities to successfully obtain and maintain affordable and inclusive housing of their choice and to provide affordable housing and preserve the affordability of housing for low- income or moderate income people, including people with disabilities, in perpetuity. Attachment 2 of the Solaris Application also included the Articles of Incorporation of ROOF Housing Trust, Inc. (“ROOF Housing Trust”) filed with the Division of Corporations on July 17, 2017. The purpose of the corporation as stated in these Articles includes the following: “to acquire land to be held in perpetuity for the primary purpose of providing affordable housing for people with developmental disabilities.” Finally, Attachment 2 of the Solaris Application included Articles of Merger, which were filed with the Division of Corporations on September 10, 2019. The Articles of Merger indicated that the Residential Options and ROOF Housing Trust had merged, with Residential Options standing as the surviving corporation. The petitioners contesting the Solaris Application raise several issues. The first issue is whether the RFA requires only that the entity named as the Community Land Trust have been in existence in some form as of June 28, 2018, or whether the entity had to exist as a Community Land Trust as of that date. The Community Land Trust named in the Solaris Application, Residential Options, existed prior to June 28, 2018, but not as a Community Land Trust. The second issue is whether the June 28, 2018, date applies only to the existence of the Community Land Trust or whether the RFA requires that the Community Land Trust have been in existence and have had a stated purpose to provide or preserve affordable housing and have met the ownership experience criteria as of June 28, 2018. It is questionable whether Solaris would be eligible for funding if the RFA required the latter, because Residential Options did not have a stated purpose of providing or preserving affordable housing prior to its merger with ROOF Housing Trust, at least no such purpose as could be gleaned from the four corners of the Solaris Application. The third issue is whether the RFA’s definition of “Community Land Trust” requires the qualifying entity to have existing ground leases at the time of the application. Florida Housing and Solaris concede that Residential Options did not have operative ground leases at the time Solaris submitted its application. Hurricane Irma struck Puerto Rico and Florida in September 2017. Ms. Button testified that in creating this RFA, Florida Housing wanted to weed out opportunistic community land trusts created only for the purpose of obtaining this funding. Florida Housing initially proposed an RFA requirement that the community land trust have existed as of September 2017, but discovered through workshops with interested parties that the early date would exclude legitimate Community Land Trusts that had been established in response to the storm. Ms. Button testified that Florida Housing’s intent was to make this RFA as inclusive as practicable. Florida Housing therefore selected June 28, 2018, as a date that would exclude opportunists without penalizing the genuine responders to the natural disaster. Both Florida Housing and Solaris point to the text of the RFA requirement to demonstrate that the date of June 28, 2018, should be read to apply only to whether the Community Land Trust existed as of that date. Solaris argues that the RFA states three independent criteria for eligibility: 1) that the Community Land Trust “has existed since June 28, 2018 or earlier”; 2) that a purpose of the Community Land Trust is1 to provide or preserve affordable housing; and 3) the Community Land Trust must demonstrate its property ownership experience, one means of doing which is to name at least two parcels of land that the Community Land Trust currently owns. Florida Housing argues that Solaris met the first criterion by providing its Articles of Incorporation showing it has existed since July 30, 2014. Florida Housing argues that Solaris met the second criterion by providing its Amended and Restated Articles of Incorporation, which stated the purpose of providing or preserving affordable housing in perpetuity. Florida Housing argues that Solaris met the third criterion by identifying two properties in Immokalee, Independence Place, and Liberty Place as parcels that it currently owns. Florida Housing thus reached the conclusion that Residential Options met the definition of a Community Land Trust in the RFA as of June 28, 2018. Florida Housing argues that, according to the definition in the RFA, a Community Land Trust must be a 501(c)(3) corporation, which Residential Options clearly is. It must acquire or develop parcels of land, which it has done. Finally, it must have the “primary purpose of providing or preserving affordable housing in perpetuity through conveyance of the structural improvement subject to a long term ground lease.” Ms. Button testified that Florida Housing’s interpretation of the RFA’s Community Land Trust definition was that if Residential Options had the primary purpose of providing affordable housing in perpetuity through the use of long term ground leases, the definition has been met even if Residential Options had not actually entered into any ground leases at the 1 Both Florida Housing and Solaris emphasize that the second criterion is stated in the present tense, which suggests that it does not intend a backward look to June 28, 2018. time it submitted its application. This is not the only way to read the RFA’s definition, but it is not an unreasonable reading, particularly in light of Florida Housing’s stated intent to make the RFA as inclusive as possible in terms of the participation of legitimate community land trusts. Sheryl Soukup, the Executive Director of Residential Options, testified via deposition. Ms. Soukup testified that in 2017, Residential Options realized there was a need for housing for people with disabilities and decided to become a nonprofit housing developer of properties that would be kept affordable in perpetuity. To that end, ROOF Housing Trust was created to act as the community land trust for the properties developed by Residential Options. The two companies had identical Boards of Directors and Ms. Soukup served as Executive Director of both entities. In its application to the IRS for 501(c)(3) status, ROOF Housing Trust included the following: The organization does not own any property yet. ROOF Housing Trust intends to own vacant land, single family homes, and multi-family units. Some of the units will be provided as rental units. ROOF Housing Trust will sell some of the houses for homeownership, while retaining the land on which they are located. The land will be leased to homeowners at a nominal fee to make the purchase price affordable, using the community land trust model. Ground leases and warranty deeds not been developed yet [sic], but will be based on the sample documents provided by the Florida Community Land Trust Institute.[2] Ms. Soukup described ROOF Housing Trust as “a vehicle by which Residential Options of Florida could act as a community land trust…. [I]t was always the intention of Residential Options of Florida to develop and put into 2 The ROOF Housing Trust 501(c)(3) application was not a part of the Solaris Application. It was included as an exhibit to Ms. Soukup’s deposition. a community land trust property so that it would remain affordable in perpetuity for use by people of intellectual and development [sic] disabilities.” Residential Options acquired the aforementioned Independence Place and Liberty Place properties but never conveyed ownership to ROOF Housing Trust. Residential Options acted as a de facto community land trust. No ground leases have yet been entered into because the properties are at present rented directly by Residential Options to persons with developmental disabilities. Ms. Soukup testified that at the time ROOF Housing Trust was created, the Board of Residential Options was undecided whether to create a separate entity to act as a community land trust or to incorporate that function into the existing entity. The decision to incorporate ROOF Housing Trust was based on the Board’s intuition that a separate corporation would “allow us the most flexibility in the future.” In any event, Residential Options and ROOF Housing Trust were functionally the same entity. Ms. Soukup testified that plans to merge the two companies emerged from a situation in which Collier County refused to allow Residential Options to convey its two properties to ROOF Housing Trust. The Board that controlled both companies decided that there was no point in maintaining separate legal entities if ROOF Housing Trust could not perform its main function. As noted above, Articles of Merger were filed on September 10, 2019. Northside points to minutes from Residential Options’s Board meetings in August and September 2019, as indicating that the Board itself did not believe that Residential Options was a community land trust prior to the merger with ROOF Housing Trust. Northside contends that the September 2019 merger was initiated and completed mainly because Residential Options had been approached about serving as the Community Land Trust for the applications of Solaris and Sierra Bay in this RFA. Northside points to the “frenzied activity” by Residential Options to create an entity meeting the definition of Community Land Trust in the days just before the September 24, 2019, application deadline. Northside argues that Residential Options is the very kind of opportunistic community land trust that the June 28, 2018, date of creation was intended to weed out. Northside’s argument is not persuasive of itself, but it does point the way to an ultimate finding as to the Solaris Application. Both Florida Housing and Solaris gave great emphasis to Ms. Soukup’s testimony to refute the suggestion that Residential Options acted opportunistically. Ms. Soukup was a credible witness. Her explanation of the process by which Residential Options first created then merged with ROOF Housing Trust dispelled any suggestion that Residential Options was a community land trust created solely to cash in on this RFA. The problem is that Ms. Soukup’s explanation was not before the Review Committee when it evaluated the Solaris Application. The only information about Residential Options that the Review Committee possessed was Attachment 2 of the Solaris Application. The dates of the merger documents and Amended Articles certainly give some credence to the suspicions voiced by Northside. However, the undersigned is less persuaded by the implications as to the intentions of Residential Options than by the contradictions between Florida Housing’s statements of intent and its reading of the RFA in relation to the Solaris Application. The decision to find the Solaris Application eligible for funding founders on the first issue stated above: whether the RFA requires only that the Community Land Trust have been in existence in some form as of June 28, 2018, or whether it had to exist as a Community Land Trust as of that date. Ms. Button testified that the June 28, 2018, date was settled upon as a way of including community land trusts created in the wake of Hurricane Irma, while excluding those created to cash in on this RFA. During cross- examination by counsel for Northside, Ms. Button broadened her statement to say that Florida Housing’s intention was to exclude entities that had not been involved in affordable housing at all prior to June 28, 2018. Nonetheless, the RFA language is limited to Community Land Trusts. The RFA states: “The Community Land Trust must provide its Articles of Incorporation or Bylaws demonstrating that it has existed since June 28, 2018 or earlier…” The Solaris Application shows that Residential Options existed prior to June 28, 2018, but not as a Community Land Trust. Residential Options did not become a Community Land Trust until it completed its merger with ROOF Housing Trust and filed the Amended Articles on September 20, 2019. Ms. Button’s statement of intent is accepted as consistent with the plain language of the RFA: the date of June 28, 2018, excludes Community Land Trusts created subsequently. It is inconsistent for Florida Housing to also read the RFA language to say that the qualifying entity need not have existed as a Community Land Trust prior to June 28, 2018. It would be arbitrary for Florida Housing to set a date for the creation of Community Land Trusts then turn around and find that the date does not apply to this particular Community Land Trust. Ms. Soukup’s testimony was that Residential Options and ROOF Housing Trust were effectively a single entity and that Residential Options was in fact operating as a community land trust prior to the September 10, 2019, merger. However, Ms. Soukup’s explanation was not before the Review Committee, which was limited to one means of ascertaining whether an entity was a Community Land Trust prior to June 28, 2018: the Articles of Incorporation or Bylaws. Residential Options’s Original Articles included no language demonstrating that it was a Community Land Trust prior to the September 10, 2019, merger with ROOF Housing Trust and the filing of the Amended Articles on September 20, 2019.3 As set forth in the discussion of the Berkley Application above, Florida Housing is required to limit its inquiry to the four corners of an application. It was contrary to the provisions of the RFA for Florida Housing to find that Residential Options’s mere existence as a legal entity prior to June 28, 2018, satisfied the requirement that the Community Land Trust must demonstrate that it existed prior to June 28, 2018. Ms. Button’s own testimony demonstrated that Florida Housing intended to exclude Community Land Trusts created after June 28, 2018. ROOF Housing Trust existed as a Community Land Trust in 2017, but ROOF Housing Trust was not the Community Land Trust named in the Solaris Application. Ms. Soukup’s explanation of the circumstances showed that Residential Options was well intentioned in its actions, but her explanation was not a part of the Solaris Application that was before Florida Housing’s Review Committee. THE METRO GRANDE APPLICATION Florida Housing deemed the Metro Grande Application eligible. Pursuant to the terms of the RFA, the Metro Grande Application was preliminarily selected for funding. Petitioner Brisas contends that the Metro Grande Application should have been found ineligible for failure to include mandatory site control documentation. Metro Grande submitted a Priority I application that was not seeking Land Acquisition Program funding. The site control requirements for such applicants are as follows: 3 This finding also disposes of Solaris’s arguments regarding the legal effect of corporate mergers. The RFA provided one simple way of demonstrating whether an entity was a Community Land Trust as of June 28, 2018. Florida Housing’s Review Committee could not be expected to delve into the complexities of corporate mergers to answer this uncomplicated question. The Local Government, Public Housing Authority, Land Authority, or Community Land Trust must already own the land as the sole grantee and, if funded, the land must be affordable into Perpetuity.[4] Applicants must demonstrate site control as of Application Deadline by providing the properly executed Site Control Certification form (Form Rev. 08-18). Attached to the form must be the following documents: A Deed or Certificate of Title. The deed or certificate of title (in the event the property was acquired through foreclosure) must be recorded in the applicable county and show the Land Owner as the sole Grantee. There are no restrictions on when the land was acquired; and A lease between the Land Owner and the Applicant entity. The lease must have an unexpired term of at least 50 years after the Application Deadline. Metro Grande did not include a deed or certificate of title in its application. In fact, no deed or certificate of title for the Metro Grande site exists. Miami-Dade County owns the Metro Grande site. Miami-Dade County acquired ownership of the Metro Grande site by eminent domain. The eminent domain process culminated in the entry of four Final Judgments for individual parcels which collectively compose the Metro Grande site. The Final Judgments were not attached to Metro Grande’s Application. There was no requirement in the RFA that Metro Grande include these Final Judgments in its application. The Final Judgments were produced during discovery in this proceeding. In its application, Metro Grande included a Land Owner Certification and Acknowledgement Form executed by Maurice L. Kemp, as the Deputy Mayor of Miami-Dade County, stating that the county holds or will hold 100 percent ownership of the land where Metro Grande’s proposed 4 The RFA defined “Perpetuity” as “at least 99 years from the loan closing.” development is located. Additionally, in its application, Metro Grande stated that Miami-Dade County owned the property. The RFA expressly states that Florida Housing “will not review the site control documentation that is submitted with the Site Control Certification form during the scoring process unless there is a reason to believe that the form has been improperly executed, nor will it in any case evaluate the validity or enforceability of any such documentation.” Florida Housing reserves the right to rescind an award to any applicant whose site control documents are shown to be insufficient during the credit underwriting process. Thus, the fact that no deed or certificate of title was included with Metro Grande’s site control documents was not considered by Florida Housing during the scoring process. Ms. Button testified that while this was an error in the application, it should be waived as a minor irregularity. The purpose of the documentation requirements was to demonstrate ownership and control of the applicant’s proposed site. There was no question or ambiguity as to the fact that Miami- Dade County owned the Metro Grande site. Florida Housing was not required to resort to information extraneous to the Metro Grande Application to confirm ownership of the site. The Land Owner Certification and Acknowledgement form, executed by the Deputy Mayor as the Authorized Land Owner Representative, confirmed ownership of the parcels. Metro Grande’s failure to include a deed or certificate of title, therefore, created no confusion as to who owned the property or whether Miami-Dade County had the authority to lease the property to the applicant. There was no evidence presented that the failure to include a deed or certificate of title resulted in the omission of any material information or provided a competitive advantage over other applicants. Brisas contends that the RFA was clear as to the documents that must be included to satisfy the site control requirements. Metro Grande failed to provide those documents or even an explanation why those documents were not provided. Florida Housing ignored the fact that no deed or certificate of title was provided, instead relying on information found elsewhere in the application. It is found that Metro Grande failed to comply with an eligibility item of the RFA, but that Florida Housing was correct to waive that failure as a minor irregularity that provided Metro Grande no competitive advantage, created no uncertainty as to whether the requirements of the RFA were met, and did not adversely affect the interests of Florida Housing or the public. Brisas has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE BEACON PLACE APPLICATION Florida Housing deemed the Beacon Place Application eligible. Pursuant to the terms of the RFA, Beacon Place was not preliminarily selected for funding. The RFA provides that an application may earn proximity points based on the distance between its Development Location Point and the selected Transit or Community Service. Proximity points are used to determine whether the Applicant meets the required minimum proximity eligibility requirements and the Proximity Funding Preference. Beacon Place is a Large County Application that is not eligible for the “Public Housing Authority Proximity Point Boost.” As such, the Beacon Place Application was required to achieve a minimum Transit Point score of 2 to be eligible for funding. Beacon Place must also achieve a total Proximity Point score of 10.5 in order to be eligible for funding. Beacon Place must achieve a total Proximity Point score of 12.5 or more in order to receive the RFA’s Proximity Funding Preference. Based on the information in its Application, Beacon Place received a Total Proximity Point score of 18 and was deemed eligible for funding and for the Proximity Point Funding Preference. The Beacon Place Application listed a Public Bus Rapid Transit Stop as its Transit Service. Applying the Transit Service Scoring Charts in Exhibit C of the RFA, Florida Housing awarded Beacon Place 6 Proximity Points for its Transit Service. The Beacon Place Application listed a Grocery Store, a Pharmacy, and a Public School in its Community Services Chart in order to obtain Proximity Points for Community Services. Using the Community Services Scoring Charts in Exhibit C of the RFA, Florida Housing awarded Beacon Place 4 Proximity Points for each service listed, for a total of 12 Proximity Points for Community Services. Beacon Place has stipulated, however, that the Public School listed in its application does not meet the definition of “Public School” in the RFA and Beacon Place should not receive the 4 Proximity Points for listing a public school. The RFA defines a “Public Bus Rapid Transit Stop” as: [a] fixed location at which passengers may access public transportation via bus. The Public Bus Rapid Transit Stop must service at least one bus that travels at some point during the route in either a lane or corridor that is exclusively used by buses, and the Public Bus Rapid Transit Stop must service at least one route that has scheduled stops at the Public Bus Rapid Transit Stop at least every 20 minutes during the times of 7am to 9am and also during the times of 4pm to 6pm Monday through Friday, excluding holidays, on a year- round basis. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. The Beacon Place Application included Metrobus Route 38 (“Route 38”) as a Public Bus Rapid Transit Stop. Route 38 has scheduled stops at the location identified in the Beacon Place Application at the following times during the period of 7 a.m. and 9 a.m. Monday through Friday: 7:01, 7:36, 7:56, 8:11, 8:26, 8:41, and 8:56. Brisas and Northside contend that Route 38 does not meet the definition of a Public Bus Rapid Transit Stop because there is a gap of more than 20 minutes between the 7:01 a.m. bus and the 7:36 a.m. bus. Applicants are not required to include bus schedules in the application. Florida Housing does not attempt to determine whether an identified stop meets the RFA definitions during the scoring process. During discovery in this litigation, Florida Housing changed its position and now agrees that Route 38 does not satisfy the definition. Nonetheless, the standard of review set forth in section 120.57(3) is applicable to Florida Housing’s initial eligibility determination, not its revised position. All parties stipulated that Route 38 meets the definition of a Public Bus Rapid Transit Stop as to scheduled stops during the hours of 4 p.m. to 6 p.m. Monday through Friday. If the bus stop listed by Beacon Place does not also meet the definition of a Public Bus Rapid Transit Stop as to scheduled stops during the hours of 7 a.m. to 9 a.m., Beacon Place would not be entitled to any Transit Service Proximity Points and would be ineligible for funding. Beacon Place cannot contest the fact that there is a 35 minute gap between the 7:01 and the 7:36 buses. Beacon Place has attempted to salvage its situation by comparing the language used in the RFA definition of a Public Bus Stop with that used in the definition of a Public Bus Rapid Transit Stop. The RFA defines Public Bus Stop in relevant part as [a] fixed location at which passengers may access one or two routes of public transportation via buses. The Public Bus Stop must service at least one bus route with scheduled stops at least hourly during the times of 7am to 9am and also during the times of 4pm and 6pm Monday through Friday, excluding holidays, on a year round basis…. Florida Housing has interpreted the “hourly” requirement of the Public Bus Stop definition to mean that a bus must stop at least once between 7:00 a.m. and 8:00 a.m., and at least once between 8:00 a.m. and 9:00 a.m. Beacon Place suggests that Florida Housing should interpret the “every 20 minutes” requirement for a Public Bus Rapid Transit Stop similarly, so that a bus must stop at least once between 7:00 a.m. and 7:20 a.m., once between 7:20 a.m. and 7:40 a.m., and once between 7:40 a.m. and 8:00 a.m. Florida Housing has rejected this interpretation, however, noting that the language in the two definitions is explicitly different. Ms. Button testified that if Florida Housing had intended these two distinct definitions to be interpreted similarly, it could easily have worded them differently. It could have required a Public Bus Stop to have stops “at least every 60 minutes,” rather than “hourly.” It could have required a Public Bus Rapid Transit Stop to have “three stops per hour” rather than “every 20 minutes.” Ms. Button observed that the purpose of the Public Bus Rapid Transit Stop definition is to award points for serving the potential residents with frequent and regular stops. The idea was to be sure residents had access to the bus during the hours when most people are going to and from work. Florida Housing’s interpretation of “every 20 minutes” is consonant with the plain language of the phrase and reasonably serves the purpose of the definition. Florida Housing also rejected the idea that the failure of the identified stop to meet the definition of a Public Bus Rapid Transit Stop in the RFA should be waived as a minor irregularity. Ms. Button testified that allowing one applicant to get points for a stop that did not meet the definition would give it a competitive advantage over other applicants, including some potential applicants who did not apply because they could not satisfy the terms of the definition. Because the bus stop listed by Beacon Place does not meet the definition of a Public Bus Rapid Transit Stop, Beacon Place is not entitled to any Transit Service Proximity Points and is thus ineligible for funding. Brisas and Northside have demonstrated that Florida Housing’s preliminary determination of eligibility for Beacon Place was contrary to the specifications of the RFA. Florida Housing’s original recommendation would have been contrary to the terms of the RFA. THE EAST POINTE APPLICATION Florida Housing deemed the East Pointe Application eligible. Pursuant to the terms of the RFA, East Pointe was preliminarily selected for funding. Bella Vista challenged Florida Housing’s action alleging that the Medical Facility selected by East Pointe did not meet the definition found in the RFA. East Pointe proposed a Development in Lee County, a Medium County according to the terms of the RFA. Applicants from Medium Counties are not required to attain a minimum number of Transit Service Points to be considered eligible for funding. However, such applicants must achieve at least 7 total Proximity Points to be eligible for funding and at least 9 Proximity Points to receive the Proximity Funding Preference. The East Pointe Application identified three Public Bus Stops and was awarded 5.5 Proximity Points based on the Transit Service Scoring Chart in Exhibit C to the RFA. However, East Pointe has stipulated that Public Bus Stop 1 listed in its application does not meet the definition of a Public Bus Stop because it does not have the required scheduled stops. Based on the Transit Service Scoring Chart, East Pointe should receive a total of 3.0 Proximity Points for Transit Services for Public Bus Stops 2 and 3. East Pointe listed a Grocery Store, a Medical Facility, and a Public School in its Community Services Chart. Based on the Community Services Scoring Charts in Exhibit C to the RFA, East Pointe received 1 Proximity Point for its Grocery Store, 4 Proximity Points for its Medical Facility, and 3 Proximity Points for its Public School, for a total of 8 Proximity Points for Community Services. East Pointe listed Lee Memorial Health System at 3511 Dr. Martin Luther King Jr. Boulevard, Ft. Myers, Florida, as its Medical Facility. The RFA defines “Medical Facility” as follows: A medically licensed facility that (i) employs or has under contractual obligation at least one physician licensed under Chapter 458 or 459, F.S. available to treat patients by walk-in or by appointment; and (ii) provides general medical treatment to any physically sick or injured person. Facilities that specialize in treating specific classes of medical conditions or specific classes of patients, including emergency rooms affiliated with specialty or Class II hospitals and clinics affiliated with specialty or Class II hospitals, will not be accepted. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. If East Pointe’s selected Medical Facility does not meet the definition of “Medical Facility” in the RFA, East Pointe will lose 4 Proximity Points, reducing its total Proximity Points to 7. The East Pointe Application would still be eligible but would not receive the Proximity Funding Preference and, therefore, would fall out of the funding range of the RFA. Bella Vista alleged that East Pointe should not have received Proximity Points for a Medical Facility because the Lee Community Healthcare location specified in its application “only serves adults and therefore only treats a specific group of patients.” Lee Community HealthCare operates nine locations in Lee County, including the “Dunbar” location that East Pointe named in its application. Lee Community Healthcare’s own promotional materials label the Dunbar location as “adults only.” Robert Johns, Executive Director for Lee Community Healthcare, testified by deposition. Mr. Johns testified that as of the RFA application date of September 24, 2019, the Dunbar office provided services primarily to adults 19 years of age or over, by walk-in or by appointment. A parent who walked into the Dunbar office with a sick or injured child could obtain treatment for that child. A parent seeking medical services for his or her child by appointment would be referred to a Lee Community HealthCare office that provided pediatric services. Mr. Johns testified that the Dunbar office would provide general medical treatment to any physically sick or injured person who presented at the facility, including children. Children would not be seen by appointment at the Dunbar facility, but they would be treated on a walk-in basis. The RFA requires a Medical Facility to treat patients “by walk-in or by appointment.” Ms. Button testified that Florida Housing reads this requirement in the disjunctive. A Medical Facility is not required to see any and all patients by walk-in and to see any and all patients by appointment. Florida Housing finds it sufficient for the Medical Facility to see some or all patients by walk-in or by appointment. Ms. Button opined that the Dunbar office met the definition of a Medical Facility because it treated adults by walk-in or appointment and treated children on a walk-in basis. Florida Housing’s reading is consistent with the literal language of the RFA definition. While it would obviously be preferable for the Dunbar facility to see pediatric patients by appointment, the fact that it sees them on a walk-in basis satisfies the letter of the RFA provision. Bella Vista has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE BEMBRIDGE APPLICATION Florida Housing deemed the Bembridge Application eligible. Pursuant to the terms of the RFA, Bembridge was preliminarily selected for funding. Bembridge proposed a development in Collier County, a Medium County in RFA terms. As an applicant from a Medium County, Bembridge was required to achieve at least 7 total Proximity Points to be eligible for funding and at least 9 Proximity Points to receive the Proximity Funding Preference. Medium County applicants are allowed, but not required, to claim both Transit Service points and Community Service points. As to Community Services, the RFA provides that an applicant may receive a “maximum 4 Points for each service, up to 3 services.” The RFA goes on to state: Applicants may provide the location information and distances for three of the following four Community Services on which to base the Application’s Community Services Score.[5] The Community Service Scoring Charts, which reflect the methodology for calculating the points awarded based on the distances, are outlined in Exhibit C. In its Application, Bembridge listed four, not three, Community Services. Bembridge was one of six Applicants that mistakenly submitted four Community Services instead of three. The Review Committee scorer reviewing Community Services in the applications stated on her scoring sheet: “After removing points for the service with the least amount of points, all still met the eligibility requirement.” 5 The four listed Community Services were Grocery Store, Public School, Medical Facility, and Pharmacy. Florida Housing interpreted the RFA as not specifically prohibiting an applicant from listing four Community Services, but as providing that the applicant could receive points for no more than three of them. As to the six applicants who submitted four Community Services, Florida Housing awarded points only for the three Community Services that were nearest the proposed development.6 Bembridge received 3 Proximity points for its Grocery Store, 3.5 Proximity Points for its Pharmacy, and 4 Proximity Points for its Public School, for a total of 10.5 Proximity Points for Community Services. Thus, as originally scored, Bembridge met the Proximity Funding Preference. Florida Housing did not score the Medical Facility listed by Bembridge, which was the farthest Community Service from the proposed development. Ms. Button testified that this fourth Community Service was treated as surplus information, and because it did not conflict with any other information in the application or cause uncertainty about any other information, it was simply not considered. Ms. Button likened this situation to prior RFAs in which applicants included pharmacies as Community Services even though they were not eligible in proposed family developments. Florida Housing disregarded the information as to pharmacies as surplus information. It did not consider disqualifying the applicants for providing extraneous information. Ms. Button also made it clear that if one of the three Community Services nearest the proposed development was found ineligible for some reason, the fourth Community Service submitted by the applicant would not be considered. The fourth Community Service was in all instances to be disregarded as surplusage in evaluating the application. 6 When queried as to whether the fourth Community Service was removed because it was worth the fewest points, as the reviewer’s notes stated, or because it was farthest away from the proposed development, Ms. Button replied that the distinction made no difference because the service that is farthest away is invariably the one that receives the fewest points. Florida Housing did not consider disqualifying Bembridge and the other five Applicants that mistakenly listed an extra Community Service in their applications. Ms. Button stated, “They provided in all of them, Bembridge and the others that were listed in this, they did provide three Community Services. And so I don’t think it is reasonable to throw out those applications for providing a fourth that we would just not consider nor give benefit to for those point values.” Bella Vista contends that Florida Housing should have rejected the Bembridge application rather than award points for the three nearest Community Services. Ms. Button testified that this was not a reasonable approach if only because there was nothing in the RFA stating that an application would be rejected if it identified more Community Services than were required. Ms. Button also noted that this was one of the first RFAs to allow applicants to select among four Community Services. She believed the novelty of this three-out-of-four selection process led to six applications incorrectly listing four Community Services. She implied that the Community Services language would have to be tweaked in future RFAs to prevent a recurrence of this situation, but she did not believe it fair to disqualify these six applicants for their harmless error. The Review Committee scorer did not perform a minor irregularity analysis relating to the fourth Community Service provided by Bembridge and the other applicants. Ms. Button opined that the addition of an extra Community Service amounts to no more than a minor irregularity because it provided no competitive advantage to the applicant and created no uncertainty that the terms and requirements of the RFA have been met. The RFA allows up to six proximity points for Transit Services. It specifically provides: Up to three Public Bus Stops may be selected with a maximum of 2 points awarded for each one. Each Public Bus Stop must meet the definition of Public Bus Stop as defined in Exhibit B, using at least one unique bus route. Up to two of the selected Public Bus Stops may be Sister Stops that serves the same route, as defined in Exhibit B. The RFA defines “Sister Stop” as: two bus stops that (i) individually, each meet the definition of Public Bus Stop, (ii) are separated by a street or intersection from each other, (iii) are within 0.2 miles of each other, (iv) serve at least one of the same bus routes, and (v) the buses travel in different directions. The Bembridge Application listed two Public Bus Stops, the definition of which is set forth at Finding of Fact 107 above. Based on the Transit Service Scoring Chart, Bembridge received a total of 1.0 Proximity Point for Transit Services for its two Public Bus Stops. Numerous questions were asked at the hearing about whether Bembridge’s identified bus stops were “Sister Stops” as defined in the RFA, and the evidence on that point was not definitive. However, whether they are Sister Stops is irrelevant because each stop identified by Bembridge independently met the definition of “Public Bus Stop” in the RFA and was therefore eligible for Transit Proximity Points. Bella Vista has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order as to RFA 2019-102 finding that: The Berkeley Application is ineligible for funding; The Sierra Bay Application is ineligible for funding; The Solaris Application is ineligible for funding; The Metro Grande Application is eligible for funding; The Beacon Place Application is ineligible for funding; The East Pointe Application is eligible for funding and entitled to the Proximity Funding Preference; and The Bembridge Application is eligible for funding. DONE AND ENTERED this 6th day of April, 2020, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 2020. COPIES FURNISHED: Christopher Dale McGuire, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson & Varn, P.A. Suite 820 106 East College Avenue Tallahassee, Florida 32301 (eServed) Amy Wells Brennan, Esquire Manson Bolves Donaldson & Varn, P.A. Suite 300 109 North Brush Street Tampa, Florida 33602 (eServed) Hugh R. Brown, General Counsel Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed) Michael P. Donaldson, Esquire Carlton Fields, P.A. 215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190 (eServed) Donna Elizabeth Blanton, Esquire Radey Law Firm, P.A. Suite 200 301 South Bronough Street Tallahassee, Florida 32301 (eServed) M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 (eServed) Anthony L. Bajoczky, Jr., Esquire Ausley & McMullen, P.A. Post Office Box 391 Tallahassee, Florida 32301 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC Suite 3-231 1400 Village Square Boulevard Tallahassee, Florida 32312 (eServed) Michael J. Glazer, Esquire Ausley & McMullen, P.A. 123 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 (eServed) Seann M. Frazier, Esquire Parker, Hudson, Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 (eServed) Corporation Clerk Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed)
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
The Issue As stated by the parties in the joint stipulation to limit issues: whether the costs of $70,455.00 associated with the Moore Haven office of Petitioner are eligible costs under the Community Services Block Grant (CSBG) administered by Respondent.
Findings Of Fact At all times material to the issues of this matter, the Petitioner was the grantee of a community services block grant. Generally, the Department enters into CSBGs for a defined period of time for defined work to be performed by the grantee. The work normally entails defined services to low income people. In this case, the COFFO was to provide personnel, materials, services, and facilities as set forth by their agreements to low income persons in Collier, Dade, Glades, Okeechobee, Polk, Hardee, Indian River, DeSoto, Highlands, Hendry, Lee, and Palm Beach Counties. At all times material to this matter, COFFO acknowledged that it is governed by applicable laws and rules related to CSBGs, including, but not limited to: The Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35, as amended), 45 C.F.R. Part 96, and Chapter 9B-22, Florida Administrative Code. Rules governing CSBGs require written documentation both as to the person served and the activity or service provided to such individual. On September 14, 1995, the Department notified COFFO that an audit had determined a lack of justification for funds to continue operation of the COFFO Moore Haven field office Such notice claimed that the field work performed by an independent audit firm found "no documentation to support the expensing of CSBG funds at the Moore Haven field office." The Department invited COFFO to provide the needed documentation to support its claim for reimbursement. For the three year period at issue, COFFO was unable to provide documentation for the individuals served at the Moore Haven office. While COFFO claimed twenty-seven persons appeared at that office for service, it also maintained that such persons would have been routed to the COFFO office at Immokalee for services. Regardless, neither office produced records to verify that eligible individuals received eligible services. COFFO maintains that since it met the overall terms of its agreements, whether at the Moore Haven office or elsewhere, it should be entitled to all funds claimed. Additionally, COFFO claims that since the Department did not cite inadequate records at Moore Haven to them at an earlier time, they were unable to correct any deficiencies timely and thus avoid the issue inherent in this case. Normally, exit interviews conducted by Department staff incidental to a monitoring visit alert grantees of any deficiencies noted during the visit. In this case, Department staff attempted a monitoring visit at Moore Haven, but an exit interview was not conducted. COFFO did not have staff or anyone at the location at the time of the visit. At all times material to this case, the major programs for COFFO were implemented at its main office in Homestead and a field office at Immokalee. The office at Moore Haven did not have equipment or other resources to provide services. In the past, although not documented as to time, the Moore Haven office had been used to distribute emergency food, for job and budget counseling, and for recreation.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Community Affairs enter a final order determining the costs associated with the Moore Haven office of Petitioner to be ineligible under the community services block grant program. DONE AND ENTERED this 23rd day of September, 1996, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH, 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 23rd day of September, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5694 and 95-5695 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 2, 3, 5, and 9 are accepted. With regard to paragraph 1, with the clarification that it is accepted that COFFO provided services to migrant and seasonal farmworkers but could have provided services to any eligible recipient; the paragraph is otherwise accepted. The first three sentences of paragraph 4 are accepted; the remainder is rejected as contrary to the weight of the evidence or argument of law. With the clarification that forms were not maintained at the Moore Haven office demonstrating eligible services were rendered to eligible recipients, paragraph 6 is accepted. Paragraphs 7 and 8 are rejected as irrelevant or immaterial to the issue of this case, or not supported by reference to the record. The first two sentences of paragraph 10 are accepted; the remainder is rejected as contrary to the weight of credible evidence or irrelevant as stated. With regard to paragraph 11, the first sentence is accepted. The remainder of the paragraph is rejected as irrelevant or contrary to the weight of the credible evidence as stated. Paragraph 12 is rejected as contrary to the weight of the credible evidence. Rulings on the proposed findings of fact submitted by the Respondent: None submitted. COPIES FURNISHED: Arturo Lopez Coalition of Florida Farmworker Organizations, Inc. Post Office Box 388 Homestead, Florida 33090 Pedro Narezo Coalition of Florida Farmworker Organizations, Inc. Post Office Box 388 Homestead, Florida 33090 Barbara Jo Finer Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Carol Soliz, Board Chairperson Coalition of Florida Farmworker Organizations, Inc. P.O. Box 1987 Sebring, Florida 33871-1987 James F. Murley Secretary Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 100 Tallahassee, Florida 32399-2100 Stephanie M. Gehres General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 325-A Tallahassee, Florida 32399-2100
The Issue The issue for determination in this bid protest proceeding is whether the Florida Housing Finance Corporation’s (“Florida Housing”) intended award of tax credits for the preservation of existing affordable housing developments was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Based on the oral and documentary evidence presented at hearing, and the entire record in this proceeding, the Findings of Fact are as follows: Parties Petitioner, Madison Point, is a Florida limited liability company and the designated applicant for funding through the RFA to construct an 85-unit development for low- income elderly persons in Pinellas County, Florida. Petitioner, American Residential Development, LLC, is the designated developer for the proposed development. Intervenor, Heritage Oaks, is a Florida limited liability limited partnership in the business of providing affordable housing. Heritage Oaks is an applicant for financing in response to the RFA to construct an 85-unit development for low-income elderly persons in Pinellas County, Florida. Intervenor, HTG Hudson, is a Florida limited liability company in the business of developing affordable housing. HTG Hudson was an applicant for financing in response to the RFA to construct an 87-unit development for low-income elderly persons in Pinellas County, Florida. However, all issues regarding HTG Hudson have been resolved pursuant to a settlement agreement which was attached as Exhibit “A” to the Joint Prehearing Stipulation. Pursuant to the settlement agreement, HTG Hudson’s application is ineligible for funding. Florida Housing is a public corporation created pursuant to section 420.504, Florida Statutes, and for the purpose of this proceeding, an agency of the State of Florida. Its purpose is to promote public welfare by administering the governmental function of financing affordable housing in Florida. Pursuant to section 420.5099, Florida Housing is designated as the housing credit agency for Florida within the meaning of section 42(h)(7)(A) of the Internal Revenue Code and has the responsibility and authority to establish procedures for allocating and distributing low income housing tax credits. Affordable Housing Tax Credits The low-income housing tax credit program (commonly referred to as “tax credits” or “housing credits”) was enacted to incentivize the private market to invest in affordable rental housing. These tax credits are awarded competitively to housing developers in Florida for rental housing projects which qualify. These credits are then normally sold by developers for cash to raise capital for their projects. The effect is that it reduces the amount that the developer would have to borrow otherwise. Because the total debt is lower, a tax credit property can (and must) offer lower, more affordable rents. Developers also covenant to keep rents at affordable levels for periods of 30 to 50 years as consideration for receipt of the tax credits. The demand for tax credits provided by the federal government exceeds the supply. Florida Housing is authorized to allocate tax credits, State Apartment Incentive Loan (“SAIL”) funding, and other funding by means of request for proposal or other competitive solicitation in section 420.507(48), and adopted Florida Administrative Code Chapter 67-60, to govern the competitive solicitation process for several different programs, including the program for tax credits. Chapter 67-60 provides that Florida Housing allocate its tax credits, which were made available to Florida Housing on an annual basis by the U.S. Treasury, through the bid protest provisions of section 120.57(3). Application Process In their applications, applicants request a specific dollar amount of housing credits to be given to the applicant each year for a period of 10 years. Applicants will normally sell the rights to that future stream of income tax credits (through the sale of almost all of the ownership interest in the applicant’s entity) to an investor to generate the amount of capital needed to build the development. The amount which can be received depends upon the accomplishment of several factors such as a certain percentage of the projected “total development cost” (total costs incurred in the completion of a development); a maximum funding amount per development based on the county in which the development will be located; and whether the development is located within certain designated areas of some counties. This, however, is not an exhaustive list of the factors considered. Tax credits are made available through a competitive application process commenced by the issuance of an RFA. An RFA is equivalent to a “request for proposal” as indicated in rule 67-60.009(3). The RFA at issue here is RFA 2016-113, Housing Credit Financing for Affordable Housing Developments Located in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties. The RFA was issued on October 28, 2016, and responses were initially due December 8, 2016. The RFA was modified on November 10, 2016, and, among other revisions, the application deadline was extended to December 30, 2016. Through the RFA, Florida Housing seeks to award up to an estimated $14,669,052 of housing credits to qualified applicants in Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties. In response to RFA 2016-113, 43 applications were submitted for funding, including Madison Point and Heritage Oaks. Madison Point submitted application No. 2017-232C seeking $1,660,000 in annual allocation of housing credits to finance the construction of an 80-unit development in Pinellas County. Heritage Oaks submitted application No. 2017-201C, seeking $1,660,000 in annual allocation of housing credits to finance the construction of an 85-unit development in Pinellas County. The RFA sets forth the information required to be provided by an applicant, which includes a general description of the type of projects that will be considered eligible for funding and delineates the submission requirements. In order to be considered for funding selection, the application must meet all of the eligibility requirements set forth in the RFA. The eligibility requirements include, among other things, “[a]ll “Mandatory Items” described in section five of the RFA.” The RFA sets forth a list of mandatory items that must be included in a response including, but are not limited to, appropriate zoning, site control, development category, and occupancy status of any existing units. As part of the general development information, the RFA requires applicants to select a development category applicable to its proposed development. This is a mandatory item of the RFA. Applicants are instructed to select amongst the following categories: New Construction (where 50 percent or more of the units are new construction) Rehabilitation (where less than 50 percent of the units are new construction) Acquisition and Rehabilitation (acquisition and less than 50 percent of the units are new construction) Redevelopment (where 50 percent or more of the units are new construction) Acquisition and Redevelopment (acquisition and 50 percent or more of the units are new construction) Once disclosed in the application, the development category cannot be changed. In the RFA, “new construction” while capitalized is not a defined term. However, rule 67-48.002(98), defines “redevelopment” as follows: With regard to a proposed Development that involves demolition of multifamily rental residential structures currently or previously existing that were originally built in 1986 or earlier and either originally received financing or are currently financed through one or more of the following HUD or RD programs: Sections 202 of the Housing Act of 1959 (12 U.S.C. §1701q), 236 of the National Housing Act (12 U.S.C. §1701), 514, 515, or 516 of the U.S. Housing Act of 1949 (42 U.S.C. §1484), 811 of the U.S. Housing Act of 1937 (42 U.S.C. §1437), or have PBRA; and new construction of replacement structures on the same site maintaining at least the same number of PBRA units; or With regard to proposed Developments that involve demolition of public housing structures currently or previously existing on a site with a Declaration of Trust that were originally built in 1986 or earlier and that are assisted through ACC; and new construction of replacement structures on the same site, providing at least 25 percent of the total new units with PBRA, ACC, or both, after Redevelopment. Although the Rehabilitation Category is defined, it is not relevant for purposes of this proceeding. Additionally, the RFA requires applicants to answer whether the proposed development consists of: a) 100 percent new construction units; b) 100 percent rehabilitation units; or c) a combination of new construction units and rehabilitation units, and state the quantity of each type. This is a mandatory item of the RFA. Selection Process Florida Housing received 43 applications seeking funding in RFA 2016-113. Florida Housing’s executive director appointed a Review Committee of Florida Housing staff to evaluate the applications for eligibility and scoring and to make recommendations to Florida Housing’s Board of Directors. Pursuant to the terms of the RFA, the applications were received, processed, deemed eligible or ineligible, scored, and ranked. The Review Committee determined that, among other applicants, the applications of Heritage Oaks and Madison Point were eligible for funding. Through the ranking and selection process outlined in the RFA, Heritage Oaks was recommended to the Board of Directors to be selected for funding within Pinellas County. The Review Committee developed a chart listing its funding recommendations for the RFA to be presented to Florida Housing’s Board of Directors. On May 5, 2017, Florida Housing’s Board of Directors met and considered the recommendations of the Review Committee for RFA 2016-113. Also, on May 5, 2017 following the Board meeting, Petitioners, and all other applicants in RFA 2016-113, received notice that Florida Housing’s Board of Directors determined whether applications were eligible or ineligible for consideration for funding, and that certain eligible applicants were selected for award of tax credits. Such notice was provided by the posting of two spreadsheets, one listing the “eligible” and “ineligible” applications in RFA 2016-113 and one identifying the applications which Florida Housing proposed to fund on the Florida Housing website, www.floridahousing.org. Of the 43 applications submitted, 37 were deemed “eligible” and six were deemed “ineligible.” In that May 5, 2017, posting, Florida Housing announced its intention to award funding to seven applications, including Heritage Oaks. Madison Point was deemed eligible but not selected for funding. Madison Point timely filed a Notice of Protest and Petition for Formal Administrative Proceedings. Heritage Oaks intervened as a named party and intervention was granted. The scoring decisions at issue in this proceeding are related to Florida Housing’s decision to award funding to Heritage Oaks based on its responses regarding occupancy status and local government contribution. The RFA specifies an “application sorting order” to rank applicants for potential funding. The first consideration in sorting eligible applications for potential funding is application score. The maximum score an applicant can achieve is 28 points. In the case of a tie score, Florida Housing incorporated a series of “tie breakers” into the sorting process. The tiebreakers for this RFA, in order of applicability, are: First, by Development Category Funding Preference; Second, by a Per Unit Construction Funding Preference; Third, by a Leveraging Classification based on the amount of total Florida Housing funding per set-aside unit; Fourth, by the eligibility for the 75 or More Total Unit Funding Preference; Fifth, by satisfaction of a Florida Job Creation Funding preference, which applies a formula to reflect the estimated number of jobs created per $1 million of funding; Lastly, if necessary, by randomly assigned lottery number. The RFA set out a selection process for eligible applicants, after the sorting and ranking process outlined above. That selection process consisted of selecting the highest ranking eligible application for a proposed development in each of the following counties first: Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas. If funding remained after those selections, then the highest ranking eligible unfunded application in Broward would be selected next. Heritage Oaks and Madison Point selected the elderly non-Assisted Living Facility (“ALF”) demographic and the proposed developments were located in Pinellas County. Florida Housing’s preliminary agency action selected Heritage Oaks for funding for Pinellas County. Heritage Oaks’ Application Heritage Oaks’ proposed development site consists of approximately 4.99 acres. Heritage Oaks’ proposed development site contains existing roads owned by Pinellas County. Heritage Oaks indicates that its proposed development site was comprised of scattered sites. There are existing housing units on Heritage Oaks’ development site. However, Heritage Oaks’ application indicates that “there are no existing units.” Heritage Oaks’ application selected “new construction” as its development category. Heritage Oaks’ proposed development involves demolition of currently-occupied, multifamily, public housing rental structures that were originally built in 1986 or earlier and either originally received financing or are currently financed through one or more of the following HUD or RD programs: Sections 202 of the Housing Act of 1959 (12 U.S.C. § 1701 q); 236 of the National Housing Act (12 U.S.C. § 1701); 514, 515, or 516 of the U.S. Housing Act of 1949 (42 U.S.C. § 1484); and 811 of the U.S. Housing Act of 1937 (42 U.S.C. § 1437). Development Category In response to the RFA requirements, Heritage Oaks selected “New Construction” as its development category. Heritage Oaks also indicated that its proposed development consists of 100 percent new construction. Mr. Evjen acknowledged that Heritage Oaks’ proposed development involves the demolition of existing structures on the proposed development site and the construction of 85 new units. Mr. Evjen explained that the proposed development includes 71 senior units in a three-story, mid-rise building, and seven duplex buildings, which would include the other 14 units on the proposed development site. The testimony at hearing indicated that at the time of the application deadline, Heritage Oaks’ proposed development did not satisfy all of the criteria set forth in the definition of redevelopment, as set forth in paragraph 18, supra. At hearing, Mr. Evjen and Ms. Blinderman testified that to qualify as redevelopment, at least 25 percent of the new units must receive Project Based Rental Assistance (“PBRA”). PBRA units are those with a rental subsidy through a contract with the United States Department of Housing and Urban Development (“HUD”) or the Rural Development Services (formerly the Farmer’s Home Administration) of the United States Department of Agriculture. See Fla. Admin. Code Rules 67-48.002(72), (85), and (98). Heritage Oaks intends to develop the proposed development with Pinellas County Housing Authority (“Housing Authority”). At the time of the application deadline, the Housing Authority was in discussions with HUD regarding the final count, if any, of PBRA units. The lack of a resolution with HUD is beyond the authority of Heritage Oaks and remains uncertain. As of the application deadline, Heritage Oaks could not know if 25 percent of its new units would receive PBRA and, therefore, could not classify the proposed development as redevelopment. While it may be possible that Heritage Oaks’ proposed development may meet the definition of redevelopment at some point in the future, at the time of the application it did not meet the definition. At hearing, no testimony or documentary evidence was offered to establish that the proposed development currently falls within the definition of redevelopment. Respondent found this classification to be acceptable. Petitioners assert that it is reasonable that Heritage Oaks would meet the threshold to satisfy the criteria for the redevelopment category. However, it was more reasonable that Heritage Oaks would not meet the threshold and be ineligible for funding, if the redevelopment category had been incorrectly selected. Therefore, the evidence supports that it was reasonable for Heritage Oaks to identify its development project as new construction. Occupancy Status Petitioners also argue that Heritage Oaks should not be awarded funding because it failed to disclose the occupancy status of existing units on the proposed development site. In the RFA, the subheading and language for section four (A)(5)(e)(3) provides as follows: Number of Units in Proposed Development: The Applicant must indicate which of the following applies with regard to the occupancy status of any existing units: Existing units are currently occupied Existing units are not currently occupied There are no existing units The section then instructs the applicant to refer to section four (A)(5)(e) of the RFA instructions before answering the occupancy status question. The RFA instructions at section four (A)(5)(e) provide as follows: e. Number of Units in Proposed Development: The Applicant must state the total number of units. Note: The proposed Development must consist of a minimum of 50 total units. Proposed Developments consisting of 75 or more total units will be eligible for the 75 or More Total Unit Funding Preference (outlined at Section Four B.2. of the RFA). If the Elderly Demographic Commitment (ALF or Non- ALF) is selected at question 2.b. of Exhibit A, the proposed Development cannot exceed the maximum total number of units outlined in Item 1 of Exhibit C of the RFA. The Applicant must indicate whether the proposed Development consists of (a) 100% new construction units, (b) 100% rehabilitation units, or (c) a combination of new construction units and rehabilitation units, and state the quantity of each type. The Applicant must indicate the occupancy status of any existing units at question 5.e.(3) of Exhibit A. Developments that are tentatively funded will be required to provide to the Credit Underwriter a plan for relocation of existing tenants, as outlined in Item 2.b.(6) of the Applicant Certification and Acknowledgement form. The plan shall provide information regarding the relocation site; accommodations relevant to the needs of the residents and length of time residents will be displaced; moving and storage of the contents of a resident’s dwelling unit; as well as the approach to inform and prepare the residents for the rehabilitation activities. In response to this RFA requirement and the cited RFA Instructions concerning Occupancy Status, Heritage Oaks indicated that “there are no existing units” in its proposed development. However, Mr. Evjen testified that there were existing units on the development site as of the application deadline and some of those units were occupied. Heritage Oaks pointed out that a review of the RFA reflects that it is organized in an outline format with headings and subheadings. For example, section four concerns information to be provided in the application. Section four A(5) then requests general development information. Section four (A)(5)(e) requests information concerning the number of units in the proposed development. Mr. Evjen further testified that, based on review of the RFA and the instructions, Heritage Oaks took a three-step approach in responding to the occupancy status question. Heritage Oaks properly answered the first two questions. First, Heritage Oaks provided the total number of units as 85. Second, Heritage Oaks indicated that “all 85 units would be new construction.” In the final question, Heritage Oaks considered whether any existing units would remain as a “part of its proposed development.” Because no existing units would be part of its proposed development, Heritage Oaks responded “there are no existing units” in its proposed development. However, the term “proposed” was not used in question 5.e.(3) as was the case in the prior questions in the same subsection. Mr. Evjen also testified that he read the question as “if there are rehab[ilitation] units, are they occupied? Heritage Oaks’ erroneous interpretation of the question resulted in its failure to provide an accurate answer. The question simply requested the “occupancy status of any existing units.” The question was clear and unambiguous. The parties have stipulated that there are existing housing units on the Heritage Oaks proposed development site. However, Heritage Oaks’ application indicates that there are no existing units. The representation that there were no existing units was a false statement of material fact. It is worth noting that the parties stipulated at the beginning of the hearing that there is no allegation of fraud or intentional deception. There is also no evidence in the record of intentional deception and therefore, there is no finding by the undersigned that Heritage Oaks engaged in intentional misconduct. However, whether intentional or not, Heritage Oaks’ representation of no existing units is a false statement. According to Mr. Reecy, Florida Housing asks the question regarding occupancy status of existing units because Florida Housing wants to make sure that the developer can handle the cost issues related to relocation and that the relocation needs of the existing tenants will be met. Additionally, Mr. Reecy testified that Florida Housing relies upon applicants to accurately respond to questions in the RFA because, at the time of scoring, no independent research is conducted to verify responses. Regarding a relocation plan, Heritage Oaks relies on the Declaration of Trust’s requirement to have a tenant relocation plan as a remedy for the failure to properly respond to the occupancy status question. However, the Declaration of Trust is a HUD requirement that is not controlled by Florida Housing. In fact, Mr. Evjen testified that Heritage Oaks’ co-developer was researching terminating the Declaration of Trust. Given the fact that Heritage Oaks could terminate its Declaration of Trust, the Declaration of Trust does not provide adequate assurance that the tenants in the existing housing units will be adequately relocated once Florida Housing allocates its funding. Florida Housing has a material interest in ensuring that tenants located in existing housing units are properly and adequately relocated during the development phase of any Florida Housing-funded development. Accordingly, Florida Housing’s scoring decision with regard to Heritage Oaks’ response to the occupancy status question was contrary to the terms of the RFA and clearly erroneous. Heritage Oaks is ineligible for funding under RFA 2016-113. Local Government Contribution At section four (A)(10)(b), an applicant can obtain 10 points if it can demonstrate a high level of local government interest in its project via an increased amount of local government contribution. To satisfy this requirement, an applicant must attach a properly completed and executable Florida Housing Finance Corporation Local Government Verification of Contribution-Loan Form (“loan form”). The RFA establishes a contribution threshold amount which qualifies an application for the local government area of opportunity points. The RFA defines “local government areas of opportunity” as follows: Developments receiving a high level of Local Government interest in the project as demonstrated by an irrevocable funding contribution that equals or exceeds 2.5 times the Total Development Cost Per Unit Base Limitation (exclusive of any add-ons or multipliers), as provided in Item 7 of Exhibit C to the RFA, for the Development Type committed to for the proposed Development. The minimum local government areas of opportunity funding amounts are outlined in section four A.10.b. of the RFA. A single jurisdiction (i.e., the county or a municipality) may not contribute cash loans and/or cash grants for any other proposed development applying in the same competitive solicitation in an amount sufficient to qualify as Local Government Areas of Opportunity, per the competitive solicitation. In response to this RFA requirement, Heritage Oaks submitted Attachment 15, a loan form from Pinellas County, Florida, in the amount of $551,000. Based upon the minimum local government area of opportunity funding amounts established in the RFA, this amount qualified Intervenor Heritage Oaks for 10 points. Petitioners challenge Intervenor Heritage Oaks’ loan form for two reasons. First, Petitioners opine that the face value of the commitment and the net present value included in the loan form cannot be the same amount and, therefore, a calculation error must have occurred. Petitioners rely on examples of various calculations found in the RFA. Next, Petitioners allege that the loan form was not properly signed and no final approval was given by Pinellas County. Intervenor Heritage Oaks provided a loan form from Pinellas County. The loan form committed Pinellas County to a loan in the amount of $551,000. Mr. Bussey, the individual who processed the application and award of commitment, indicated that the commitment was a loan that would be forgiven as long as certain requirements were met and kept. Mr. Bussey further indicated that there were no loan payments or interest rates associated with the loan. Accordingly, he indicated that the loan value was the net present value of the loan, which means the commitment amount and the net present value for the Pinellas County loan is the same number, $551,000. While Petitioners allege that the loan form was not appropriately signed and no final approval had occurred, the greater weight of the evidence shows otherwise. Specifically, Petitioners opine that either a resolution or some action by the Pinellas County Board of County Commissioners or the County Administrator was necessary as asserted by their witness, Mr. Banach. While Mr. Banach was critical of the loan verification form, he acknowledged that he is not an expert regarding the process for Pinellas County loan contribution and he did not process the loan application. He further acknowledged that Mr. Bussey, the individual who processed the loan, found no error with the form. The evidence shows that the loan form was executed by Charles Justice, who at the time of the loan form’s execution was the Chairman of the Pinellas County Board of County Commissioners. Mr. Bussey explained the process for approving the loan form and indicated that Mr. Justice, as Chairman, had the authority to sign the loan form. Mr. Bussey also pointed out language in the loan form which provides as follows: “This certification must be signed by the chief appointed official (staff) responsible for such approval, . . . Chairperson of the Board of the County Commissioners.” Mr. Justice is one of the designated individuals the form itself indicated is acceptable. Mr. Bussey indicated that no further approvals were necessary. At hearing, Florida Housing indicated that the loan form submitted by Heritage Oaks satisfied the requirements of the RFA and this position was not shown to be erroneous or unreasonable.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order rescinding the intended award to Heritage Oaks and designating Madison Point and America Residential Development, LLC, as the recipients of the funding under RFA 2016-113. DONE AND ENTERED this 11th day of August, 2017, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 2017. COPIES FURNISHED: Hugh R. Brown, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed) Marisa G. Button, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Michael G. Maida, Esquire Michael G. Maida, P.A. 1709 Hermitage Boulevard, Suite 201 Tallahassee, Florida 32308 (eServed) Douglas P. Manson, Esquire Manson Bolves Donaldson & Varn, P.A. 1101 West Swann Avenue Tampa, Florida 33606-2637 (eServed) Paria Shirzadi, Esquire Manson Bolves Donaldson & Varn, P.A. 1101 West Swann Avenue Tampa, Florida 33606-2637 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson Varn, P.A. 204 South Monroe Street, Suite 201 Tallahassee, Florida 32301 (eServed) J. Timothy Schulte, Esquire Zimmerman, Kiser, & Sutcliffe, P.A. 315 East Robinson Street, Suite 600 Orlando, Florida 32801 (eServed) Sarah Pape, Esquire Zimmerman, Kiser, & Sutcliffe, P.A. 315 East Robinson Street, Suite 600 Orlando, Florida 32801 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC 1725 Capital Circle Northeast, Suite 304 Tallahassee, Florida 32308 (eServed) Michael P. Donaldson, Esquire Carlton Fields Jorden Burt, P.A. Post Office Drawer 190 215 South Monroe Street, Suite 500 Tallahassee, Florida 32302-0190 (eServed) Kate Flemming, Corporation Clerk Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed)
Findings Of Fact The Petitioner Florida Farmworker's Council, Inc., applied or funding under the Community Service Block Grant (CSBG) Program for the fiscal year beginning July 1, 1982, and ending June 30, 1983, with the Respondent Department of Community Affairs. Since the Respondent Department had recently assumed administration of the program from the federal government and neither rules nor funding information was available, the Department entered into an agreement with the Petitioner for interim funding covering a two-month period. The first month funding of $33,727.25 was released to the Petitioner subject to certain conditions. When the Department determined that the conditions were not fully met, the second month's funding was not released. Subsequently, as a result of various reviews, the Department determined that the original application was unacceptable, and a determination was made to withhold the remainder of the grant request totaling $370,999.75. An informal hearing was held in Fort Lauderdale, Florida, and resulted in a Final Order which gave the Petitioner an opportunity to resubmit its application with conditions. Following an exchange of correspondence and meetings between the parties, the Department agreed to fund the Council to the extent it operated a program in accordance with state and federal lab and pursuant to the program described in its application. A program review audit was conducted by the Department in June, 1983. In the audit is was concluded that while considerable funds were expended, the Petitioner's program activities were at a level which was unacceptable.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a Final Order be entered by the Department denying the Petitioner's request for funding in the amount of $370,999.75, which represents eleven months of funding for fiscal year 1982-1983. DONE and ENTERED this 14th day of December, 1983, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14 day of December, 1983. COPIES FURNISHED: W. George Allen, Esquire 116 Southeast Sixth Court Post Office Box 14738 Fort Lauderdale, Florida 33302 Mary Clark, Esquire General Counsel Department of Community Affairs 2571 Executive Center Circle, East Tallahassee, Florida 32301 John M. DeGrove, Secretary Department of Community Affairs 2571 Executive Center Circle, East Tallahassee, Florida 32301
