The Issue The issues in this case are whether the issuance of a license to Abbey Hills to operate a perpetual care cemetery would promote competition and whether Abbey Hills' application is complete and truthful.
Findings Of Fact By application dated September 9, 1992, Willard I. Timmer and his wife, Marilyn Timmer, as "proponents," applied for a license to operate a new cemetery on Denton Avenue, Hudson, Pasco County, Florida. The Timmers filed the application on behalf of Abbey Hills Memory Gardens, Inc. (Abbey Hills). By letter dated September 16, 1992, the Department of Banking and Finance (Department) requested additional information, including financial statements for Mr. and Mrs. Timmer and Abbey Hills and a copy of the sales contract for the real property on which the proposed cemetery would be located. By letter dated November 12, 1992, the attorney for Mr. and Mrs. Timmer forwarded to the Department financial statements for the Timmers and Abbey Hills and a copy of the contract for the purchase of the cemetery property. The personal financial statements, which were identical, showed, among other things, a market value for all of the Timmers' funeral homes and cemeteries of $30,000,000 and a net worth of $30,691,111. The "company report" of Abbey Hills showed assets of an initial capitalization of $2000 cash and $5000 in organizational costs. The "company report," which disclosed no liabilities, listed the purchase and sale contract as an asset worth the sales price of $200,000. The net worths of Mr. and Mrs. Timmers and Abbey Hills are overstated. The Timmers' net worth was based on gross retail sales values of all of the vacant cemetery lots in all of their cemeteries. The company's net worth treated the sales price of the land as an asset equal in value to the contract sales price. In fact, Abbey Hills is a new corporation without any net worth. In the case of Mr. and Mrs. Timmer, it is impossible to determine the extent of the overstatement, but they appear to have substantial net worth. Mr. Timmer owns and operates several well-established, profitable cemeteries in and out of Florida and has over 40 years' experience in the cemetery business. The contract to purchase the property describes the site as consisting of about 58 acres. The contract lists Memory Gardens Acquisition, Inc. as the purchaser and contains a closing date of June 25, 1992. The closing date has since been duly extended to April 1, 1994. Memory Gardens is a corporation formed by the Timmers to acquire the cemetery property for Abbey Hills. By memorandum dated December 1, 1992, Andrew Grosmaire, a Department financial specialist, informed his supervisor, W. T. Sims, a Department financial supervisor, that Pasco County contained three licensed cemeteries with a fourth "approved for licensure." After a discussion of various factors, the memorandum recommends that Mr. Sims waive the need survey. On December 8, 1992, Mr. Sims noted on a copy of the memorandum that he agreed to waive the need survey. On December 15, 1992, Mr. Grosmaire signed an internal Department form indicating his recommendation to approve the application. As a result, the Department, in approving Abbey Hills' application, waived the requirement of need based on a determination that the addition of Abbey Hills would promote competition. On December 24, 1992, the Department published in the Florida Administrative Law Weekly a notice of intent to "approve an application for a new cemetery company to Mr. Willard Timmer, the majority owner of the following cemetery company: Abbey Hills Memory Gardens, Inc." On December 31, 1992, the Department sent a letter to the attorney for the Timmers informing him that the Department has "tentatively approved the application of Abbey Hills Memory Gardens, Inc. . . . to establish a new cemetery company in Pasco County." The letter advises that, if no objections were received within 21 days of the date of publication of the notice of intent to issue, then the Department must receive, within 12 months of the date of the letter, 13 items: a legal description of the property including acreage; development plans for the cemetery; written approval from the governing zoning authority; a certified report from a registered testing laboratory concerning the water table at the site; written approval from the local board of health; designation of a general manager who must be of good moral character with not less than one year's experience in the Florida cemetery business; a trust agreement for perpetual care; evidence of a $25,000 deposit into the trust fund; a trust agreement for merchandise; certification that the real property is free and clear of any financial encumbrances; a copy of the recorded deed showing the notice required by Section 497.006(4)(f); documentation of the development of at least two acres including a paved road from a public highway; and a $250 license fee. On the day before the beginning of the final hearing, Abbey Hills supplemented its application without objection. The new information indicated that Mr. Timmer had merely attended rather than graduated from Illinois Institute of Technology. The new information also included a soils report and site development plan. There is not yet any approval from the local zoning board or the local health department. The soils report states that Geoscience & Materials Engineers, Inc. had conducted 10 standard percolation tests on the site on July 21, 1993, and reviewed other data sources. Finding a range of water table elevations on the property, which contains three lakes, the report states that the seasonal high water line at the test sites, which are characterized generally by rapidly draining soils, ranges from depths of 35" to 66". The average depth is about 52". The report concludes that the "majority of the area designated for ground burial is adequately drained and suitable for these purposes." The site development plan, which is tentative, shows initial development only for the northern two-thirds of the property, of which only five acres will be used at first for interments. The cemetery entrance and some of the space reserved for ground burials, covers, among other areas, a relatively small area characterized by a relatively high seasonal water table and poorly drained soils that may be under standing water for 6-9 months annually. However, there is no reason why this problem cannot be managed through the use of fill and careful selection of actual burial sites. The proposed cemetery would be landscaped in a garden style with numerous plantings, featuring indigenous vegetation and low density burials at a rate of no more than 900 units per acre as opposed to the more typical 1200 units per acre. The proposed cemetery would highlight the lakes and use treated wastewater effluent from a nearby source in order to irrigate the vegetation and maintain the cemetery's aesthetic appeal. Initially at least, Mr. Timmer does not plan to operate either a funeral home or a crematorium on-site, but he would sell a full range of funeral merchandise, such as caskets, vaults, and markers. Mr. Timmer owns Parklawn Cemetery in Pinellas County about 29 miles south of Abbey Hills. He intends to reduce operating expenses at Abbey Hills by sharing the sales and maintenance staff between the two cemeteries as much as possible. He is willing and able to fund the investment without short- or medium-term returns. Abbey Hills would be located about 1.5 miles east of US Rte. 19 in the northwest corner of Pasco County about 3.5 miles east of the Gulf of Mexico and 10-11 miles north of New Port Richey. US Rte. 19 is the main north-south artery through west Pasco County. Abbey Hills would be only about three to four miles south of the Hernando County line. Grace Memorial Cemetery is owned by Cemetery Investments, Inc. The closest licensed cemetery to the proposed Abbey Hills, Grace is one to two miles from Abbey Hills and is located directly on US Rte. 19 about two miles south of Hernando County. Encompassing 52 acres, Grace has 42 acres developed for cemetery use. Just over 12 miles in a direct line from Abbey Hills' proposed location, but considerably further via roads, is Florida Hills Cemetery, which is the only licensed cemetery in Hernando County. Florida Hills is located near the Hernando County Airport about two miles west of US Rte. 41, which, when it passes through Pasco County, is, with I-75, one of the two major north- south arterials running through the central part of the County. Florida Hills, which was started in 1974, consists of 84 acres, of which only 13 acres are developed for cemetery use. Florida Hills contains 54,000 unused spaces. Florida Hills markets largely in the Spring Hill area, which consists of a number of residential subdivisions mostly in south Hernando County. Meadowlawn, which is in New Port Richey, is just over 12 miles in a direct line from the proposed location of Abbey Hills and somewhat further via road. Started in 1965, Meadowlawn consists of 51 acres, of which 24 acres are developed. It has roughly a 63-year supply of burial spaces. The aesthetic appeal of Meadowlawn and, to a lesser extent, Grace is less than that planned by Mr. Timmer for Abbey Hills. Meadowlawn is presently owned by SCI Funeral Services of Florida, Inc., which is the largest owner and operator of cemeteries in Florida. The corporate parent of SCI Funeral Services of Florida, Inc. is one of the largest owners and operators of cemeteries and funeral homes in the United States. A new licensed cemetery known as Trinity is to be located about six miles east of Meadowlawn. Trinity will serve a residential subdivision known by the same name. The record does not clearly disclose the size or scope of Trinity's planned cemetery operations. The only other licensed cemetery in Pasco County is Chapel Hills, which is south of Dade City in southeast Pasco County. Chapel Hills is over 27 miles from the proposed Abbey Hills location. The cemetery market in Pasco County is divided into west and east Pasco County, so Chapel Hills does not affect, and will not be affected by, the cemeteries located in west Pasco County. More important to the west Pasco County cemetery market are cemeteries in north Pinellas County. Cycadia, which is nearly 18 miles south in a direct line from the proposed Abbey Hills location, is about two miles south of the Pinellas County line on US Rte. 19. Cycadia is a Greek cemetery and captures much of the Greek business in Pinellas and Pasco counties. Almost three miles south of Cycadia on US Rte. 19 is Curlew Hills. Two miles south of Curley Hills is Mr. Timmer's Parklawn. Sylvan Abbey, which is in Safety Harbor, is about six miles in a direct line southeast of Parklawn. Each of these cemeteries does some business in west Pasco County, especially the southern end of west Pasco County. National Cemetery is about 45 miles northeast of Abbey Hills' proposed location, via State Road 52 and I-75. Located in Bushnell, which is in Sumter County, National Cemetery is limited to military veterans and their immediate families. Although distant from the cemeteries in this case, National Cemetery has a significant impact upon their market due to the inexpensiveness of its goods and services, as described below. Less significant competition to licensed cemeteries comes from unlicensed cemeteries operating in the area. These are operated by religious or private organizations or municipalities. Funeral homes are a more important source of competition for licensed cemeteries. Funeral homes market the same goods and services marketed by cemeteries. Funeral homes even broker burial spaces that they purchase from customers who have bought them from cemeteries. There are 16 funeral homes in west Pasco County. SCI Funeral Services of Florida, Inc. owns six of them, including the funeral home located directly in front of Grace. However, two of Grace's minority owners each owns a funeral home in the area. And the funeral home located in front of Florida Hills is owned by a minority owner of Florida Hills. Licensed cemeteries also face serious competition from crematoria. Cremations are performed by some funeral homes, such as one owned by SCI Funeral Services of Florida, Inc. near Hudson, as well as cemeteries. Cremations without a service cost about $700-$800, but, with a service, may run $1600- $2000. Direct-disposers perform cremations for even less--about $500-- because they have relatively little capital tied up in equipment. By contrast, a funeral often costs over $3000. The demand for cemetery services is influenced by population growth. Pasco County has grown from 36,785 persons in 1960 to 281,131 persons in 1990. From 1980 to 1990, the County's population increased 45 percent, while the population of the entire state increased only 33 percent during the same time period. Pasco County's population is concentrated at older age levels than is the statewide population, and Pasco's growth during the past 30 and especially 10 years has been most dramatic in the age groups over 69 years old. In 1960, residents over 69 years of age in Pasco County constituted 1.34 percent of the total population of these age groups residing in Florida. By 1980, the figure had risen to 3.07 percent, and by 1990, the figure had risen to 3.77 percent. Residents aged 65 years and over are projected to be the second fastest-growing age group in Pasco County through 2010, and Pasco's share of Florida's residents over 65 years of age is projected to continue to grow through 2010. Correspondingly, the average number of deaths in Pasco County has risen from 463 in 1960 to 2835 in 1980 to 4206 in 1990, with a death rate significantly higher than the statewide death rate for each of these years. About 4500 residents of Pasco County are projected to die in 1993. Applying the same projected average death rates to projected populations, Pasco County will experience over 5200 deaths in 2000 and 6200 deaths in 2010. Overall, there will be considerable, ongoing demand for cemetery services in Pasco County for the foreseeable future. Pasco ranks sixth among counties in Florida for population aged over 65 years, eighth for projected increase in population aged over 65 years from 1990 to 2010, and seventh for projected population aged over 65 years in 2010. However, the strong demand for cemetery services driven by favorable population increases, demographics, and death rates is tempered by several factors. Not all persons dying in Pasco County are interred or entombed there. Many County residents are from elsewhere and wish to be returned after death to their homes in the north or midwest. As many as 20-25 percent of the Pasco County corpses are shipped out of the County. On the other hand, "ship-ins" of corpses into the County evidently are not statistically significant. Another factor limiting demand for cemetery services is the increasing popularity of cremation. For various cultural and personal reasons, more persons or their survivors are choosing the alternative of cremation. Increasing at the rate of 1-2 percent points annually for the past five years, the cremation rate presently is about 35 percent. It is difficult to predict where the cremation share of the market will plateau, but market shares of as much as 55-60 percent may someday be reached. Sarasota County, where only 900 burials took place in 1992, presently experiences about a 60 percent cremation rate, and Pinellas County's cremation rate is in the 50-59 percent range. Thus, after taking into consideration the 35 percent of the deaths cremated and 25 percent shipped out of Pasco County, only 40 percent of Pasco County deaths remain available for the existing cemeteries to inter or entomb. In 1991, about 14 percent of the full-casket burials in Pasco and Hernando Counties went to the National Cemetery. The National Cemetery is a federally operated cemetery offering veterans and their immediate families free burial spaces, openings and closings, vaults, and markers. Operating only since 1988, the impact of National Cemetery upon cemeteries in Pasco and Hernando counties will unlikely lessen in the foreseeable future. The effect of National Cemetery, which has been expressed as a percentage of full-casket burials, will leave something less than 40 percent of the Pasco County entombments and interments for the remaining cemeteries. After also factoring in the increasing rate of cremations, it may be estimated that about 33 percent of the deaths in Pasco County will yield interments or entombments for area cemeteries between 1990 and 2010. One-third of 4500 deaths for 1993 means 1500 local interments or entombments; one-third of 5200 deaths in 2000 means 1733 local interments or entombments; and one-third of 6200 deaths in 2010 means 2067 local interments or entombments. From 1988-92, Grace Memorial respectively had, for each year, 353, 389, 365, 378, and 426 entombments and interments. Grace Memorial performed 581, 661, 666, and 658 cremations each year, respectively, from 1989-92. From 1988-92, Meadowlawn respectively had, for each year, 811, 707, 682, 701, and 721 entombments and interments. Meadowlawn performed 151, 154, 169, and 139 cremations each year, respectively, from 1989-92. Annualizing six months' figures for entombments and interments, on the one hand, and cremations, on the other hand, Meadowlawn projects 810 entombments and interments and 226 cremations for 1993. The record does not disclose interment and entombment figures for Chapel Hills cemetery in east Pasco County, although there is a 4:1 ratio of funeral homes in west Pasco County versus east Pasco County (16 versus 4) and there would be a 4:1 ratio of licensed cemeteries in west Pasco County versus east Pasco County if Abbey Hills were approved. Given its proximity to Polk and Hillsborough Counties, Chapel Hills probably does not capture more than 20 percent of Pasco County deaths. In south Hernando County, Florida Hills performed 210 entombments and interments in 1990, 233 entombments and interments in 1991, and 236 entombments and interments in 1992. The majority of these entombments and interments are of residents of Hernando County, whose favorable demographics and population growth assure that it will be a fertile source of cemetery business in years to come. It is very unlikely that Florida Hills' capture of Pasco residents approaches in absolute numbers the number of out-of-county residents captured by Meadowlawn and Grace. It is impossible to project the market share of Trinity Cemetery, which has been approved but has not yet begun operating. The record does not disclose the scope of Trinity planned operations, but a significant part of Trinity's market will consist of a large Pasco County residential subdivision known as Trinity. Only a very rough approximation of the number of entombments and interments available to local cemeteries can be calculated. The record permits only imprecise assumptions: the number of interments and entombments of Pasco County residents performed by Florida Hills will not be greater than the number of interments and entombments performed by licensed cemeteries in Pasco County for out-of-county residents, Chapel Hills will capture 20 percent of the interments and entombments of Pasco County residents, and unlicensed cemeteries will have no significant impact on the number of available interments or entombments. Combined, Grace and Meadowlawn accounted for 1147 entombments and interments in 1992. The projected number of available deaths in 1993 is 1500. After taking away Chapel Hills' 20 percent, this would leave 53 deaths for Trinity and Abbey. As the number of projected deaths not lost to ship-outs, cremation, or National Cemetery grows to 1733 in 2000 and 2067 in 2010, the number of deaths available to Grace, Meadowlawn, Trinity, and Abbey would be correspondingly greater. From 1988-1992, the total number of entombments and interments at Meadowlawn and Grace declined 1.4 percent. If the number of entombments and interments remained unchanged at Grace and Meadowlawn through 2010, there would be, after eliminating Chapel Hills' 20 percent share, 239 available deaths in 2000 and 507 deaths available in 2010. Given the necessarily rough nature of the assumptions, it is difficult to conclude much from the figures of available deaths and projections of each licensed cemetery's share of this business. It appears, though, that the addition of Abbey Hills would have some economic impact upon Grace, Meadowlawn, and Florida Hills because there does not appear to be an oversupply of deaths available to the licensed cemeteries. However, the existing licensed cemeteries could increase their business by capturing some of the fairly large number of ship-outs. The existing licensed cemeteries could also increase business by intensifying their marketing efforts in selling new preneed contracts and reloading existing preneed customers with more goods and services. Aggressive marketing may be able to slow down, though probably not reverse, the rising numbers of cremations, and licensed cemeteries may be able to capture a greater share of cremations. Grace already performs a large number of cremations. Although Meadowlawn performs substantially fewer, an SCI-owned funeral home in west Pasco County performs a large number of cremations. Although not as profitable as interments or entombments, cremations nonetheless represent a profit center for licensed cemeteries that can likely be more fully exploited. In addition to available marketing strategies still available to the existing licensed cemeteries, any assessment of the economic impact of a new cemetery upon existing licensed cemeteries must take into consideration their current financial health. Grace's total revenue has increased in all but one year between 1988 and 1992. The approximate figures (and annual percentage increases) are: 1988--$763,000; 1989--$740,000 (-3 percent); 1990--$775,000 (5 percent); 1991--$871,000 (12 percent); and 1992--$1,268,000 (46 percent). Meadowlawn's total revenue has increased each year between 1988 and 1992. The approximate figures (and annual percentage increases) are: 1988--$1,008,000; 1989--$1,074,000 (7 percent); 1990--$1,493,000 (39 percent); 1991--$1,742,000 (17 percent); 1992--$1,940,000 (11 percent). These revenues are important indicia of profitability given the relatively high markups that prevail in the cemetery industry, as described below. In fact, Grace has enjoyed net profits, as a percentage of revenue, of 7 percent in 1988, 11 percent in 1989, 11 percent in 1990, 16 percent in 1991, and 24 percent in 1992. Meadowlawn has, for the same years, had profits of 23 percent, 33 percent, 22 percent, 28 percent, and 30 percent. During the same time period, Grace has averaged a return on investment of 11.8 percent (with a high of 24 percent in 1992) and a return on net worth of 58 percent (with a high of 80 percent in 1992). Meadowlawn has, for the same years, averaged a return on investment of 9 percent (with highs of 11 percent and 10 percent in 1991 and 1992, respectively) and a return on net worth of 13.2 percent (with highs of 15 percent and 16 percent in 1991 and 1992, respectively). The situation is different for Florida Hills in Hernando County. Its total revenue has dropped 6 percent from about $478,000 in 1988 to about $450,000 in 1992. With net profits of 12 percent and 11 percent, respectively, in 1988 and 1989, Florida Hills' profitability exceeded that of Grace for the same period. But Florida Hills' profits were 4 percent in 1990, 3 percent in 1991, and 5 percent in 1992. And Florida Hills may face a net loss in 1993. Florida Hills' return on investment has deteriorated in the past five years, and especially the past three years: 20 percent in 1988, 12 percent in 1989, 4 percent in 1990, 3 percent in 1991, and 5 percent in 1992. A similar pattern exists in Florida Hills' return on net worth: 29 percent in 1988, 20 percent in 1989, 8 percent in 1990, 5 percent in 1991, and 8 percent in 1992. Florida Hills enjoys a low debt-to-equity ratio, which allows it to withstand a certain amount of financial adversity. Florida Hills is the closest of the subject licensed cemeteries to National Cemetery, and its losses have been exacerbated by the fact that Florida Hills is a veterans-oriented park. Florida Hills' profits have been eroded by its failure to control rising costs, which is especially troublesome during a period of flat or declining revenues. Although it might face less financial pressure in a market with less competition, Florida Hills's problems concerning National Cemetery, the trend toward cremation, and, perhaps to a lesser extent, spiraling costs would remain, even if Abbey Hills' application were denied. The key fact in this case is that, although the relevant cemetery market displays a certain degree of competitiveness through advertising and marketing campaigns, there is a clear practice among existing licensed cemeteries to refrain from price competition. The current ownership of Grace inherited its prices from its predecessor and has found no need to revisit these prices significantly in the 20 months following the acquisition. Grace sells over 90 percent of its goods and services at list price. Insensitivity to price is even more marked at Meadowlawn. Representatives of Meadowlawn, which is the price leader in the area, disclaim any knowledge of competitors' prices. Although SCI Funeral Services of Florida, Inc. insists that its funeral homes perform two annual reviews of competing funeral home prices, it does not require any review of its competitors' cemetery prices. Refusing to acknowledge the importance even of market share, Florida Hills' ownership shares the unwillingness of its more successful competitors to compete by reduced pricing. Despite its financial troubles, the ownership of Florida Hills declines to sell caskets, so as to leave such potentially lucrative business to funeral homes, as long as area funeral homes decline to sell markers to Florida Hills' customers, so as to leave such business to Florida Hills. By declining to sell caskets, Florida Hills fails to take advantage of an important profit center. Running from $1300 on up, caskets are marked up by three or four times cost. Vaults and markers are typically marked up somewhat less, but cemetery lots may be marked up by a factor of 10. When the customer is living and making pre-need arrangements, the mark-up is somewhat less, but when the customer is dead and the subject of at-need arrangements, the mark-up is greater. It is unclear to what extent Trinity will pose serious competition to Meadowlawn, which is its nearest Pasco County neighbor. Due to its superior size, location, and common ownership of six local funeral homes, Meadowlawn will unlikely be forced to redirect substantially its marketing efforts northward due to the competitive presence of Trinity. Abbey Hills would likely have a greater impact on Grace than Trinity will have on Meadowlawn due to the smaller size of Grace when compared to Meadowlawn and the closer proximity of Abbey Hills to US Rte. 19 when compared to Trinity's distance from US Rte. 19. It is likely that the addition of Abbey Hills would cut into sales in Pasco and Hernando Counties by Grace and, to a lesser extent, Florida Hills. However, Grace is in a relatively strong position to meet this competition, and Florida Hills, although lately less profitable than Grace, relies less on Pasco County business where the impact of Abbey Hills would be greatest. If the licensed cemetery market had already undergone significant price competition, the relatively greater economic impact upon the stronger Grace and relatively slighter economic impact upon the weaker Florida Hills would militate against a finding that the addition of Abbey Hills would promote competition. But, thus far, existing licensed cemeteries have not even reviewed their pricing structures in the face of the twin threats of National Cemetery and cremation, even though the appeal of both of these competitive forces lies largely in their much lower cost when compared to the prevailing costs of interment and entombment. The existing licensed cemeteries have thus far responded to the competition of National Cemetery, as well as cremation, by increasing advertising. But, at least in the case of Florida Hills, this strategy has not been enough. The record does not support any inference that reducing the cost advantage of National Cemetery would be futile. After all, National Cemetery suffers from the serious disadvantages of distance from local family and friends and unavailability of interment for members of the nonimmediate family. The same is true if the cost difference between interments or entombments and cremations were lessened. More people would likely choose the more traditional interment or entombment if it were less costly than it is at present, even though it will remain more costly than cremation. Abbey Hills has shown that the relevant market can support the presence of four licensed cemeteries in west Pasco County. The demographic data, together with the high prevailing markups, historic profitability of the local cemetery industry, and opportunity for more aggressive marketing of cemetery goods and services through lower pricing, establish that competition is best promoted and the public interest best served by approving Abbey Hills' application. Although Florida Hills is, at present, clearly more sensitive than Grace (and obviously Meadowlawn) to the introduction of new competition, Abbey Hills would have less impact on Florida Hills because fewer of Abbey Hills' sales would be in Hernando County and fewer of Florida Hills' sales are in Pasco County. Also, Florida Hills has only recently suffered reduced profits and is able to absorb a few down years due to its strong capitalization. In addition, the evidence suggests that Florida Hills may not have fully responded to the challenges of National Cemetery and cremation. Recent reductions in revenue and profits suggest that, with or without the introduction of Abbey Hills, Florida Hills probably cannot continue to conduct business as usual. Thus, even if the evidence were to have shown a greater economic impact upon Florida Hills than is likely, competition would not be promoted nor the public interest served by allowing the financial pressures presently experienced by Florida Hills to preclude the approval of a new licensed cemetery into a price- insensitive market. This is especially true when, consistent with the prevailing anticompetitive market conditions, Florida Hills resists analyzing its market share, expanding its limited product offerings to include caskets, and, most importantly, revising its pricing structure to meet the competition of, first, National Cemetery and cremations and, second, other licensed cemeteries in the area.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Banking and Finance enter a final order dismissing the petitions of Grace and Meadowlawn. ENTERED on August 30, 1993, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 1993.
Findings Of Fact By application not presented at this hearing, Garden of Memories, Ltd., Petitioner, seeks a license to establish a perpetual care cemetery in Springfield, Florida, a community with a population of approximately 7,500 located just east of Panama City, Florida. Intervenors are owned by Cem-A-Care of Panama City, Florida, are operated as one cemetery with one manager, and services are offered at the same price at both cemeteries (Exhibit 2.) These are the only private, perpetual care cemeteries in Bay County. Several cities in Bay County have cemeteries but in almost all of these cemeteries no spaces are available for sale. In others, the lots available are restricted to the residents of the community where the lot is located, while one city charges non-resident 150% of the fee for lots charged to residents. In the city-owned cemeteries east of Panama City, no additional lots are available. The population of Bay County is growing and, although specific demographic projections were not submitted, the county planners estimate a 100% increase in residential acreage in unincorporated areas by 1990, with most of this growth to the east of Panama City. The evidence of need for an additional private cemetery in the proposed location, which was attested to be at least six witnesses, was unrebutted. Likewise, the testimony that the introduction of another perpetual care cemetery in Bay County will create needed competition, and thereby improve service, was not rebutted. People generally prefer to bury their loved ones reasonably close to their homes. For those residents in the eastern part of Bay County, there is no cemetery available to allow this preference. Opening the proposed cemetery will alleviate this problem.
The Issue The issue presented is whether Petitioner is entitled to a consumer certificate of exemption as a religious institution.
Findings Of Fact Petitioner, Greater Miami Jewish Cemetery Association, Inc., is a Florida not-for-profit corporation chartered on June 23, 1931, and is an exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1954. Petitioner is a non-stock membership corporation which has three constituent members, namely, Beth David Congregation of Miami, Florida; Beth El Congregation of Miami Beach, Florida; and Beth Jacob Congregation of Miami Beach, Florida, which synagogues are existing Florida not-for-profit corporations exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. Petitioner maintains and operates two cemeteries in Miami, Dade County, Florida, which are dedicated to burial of members of its constituent member synagogues and other persons of the Hebrew faith, including free burial plots for indigent persons of the Hebrew faith, and, as such, have been classified under the State of Florida Funeral and Cemeteries Act as "church cemeteries." It is a religious obligation of the Hebrew faith to provide for and bury the dead. It is usual for synagogues to maintain cemeteries for their members. No synagogue is located on the premises of Petitioner because some Jews are forbidden to be on the grounds near dead bodies. Accordingly, Jewish cemeteries do not have synagogues on the premises, and, conversely, synagogues do not have cemeteries on their premises, as some churches do. Petitioner does have, however, a room or chapel area where religious services are conducted by Petitioner's constituent members, the three synagogues. Those religious services and activities conducted there include burial services, services on religious holy days, and memorial services.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered granting Petitioner's application for a consumer certificate of exemption. DONE AND ENTERED this 24th day of September, 1998, in Tallahassee, Leon County, Florida. LINDA M. RIGOT Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1998. COPIES FURNISHED: Max R. Silver, Esquire Silver & Silver 150 Southeast Second Avenue, Suite 500 Miami, Florida 33131 William B. Nickell, Esquire Department of Revenue 501 South Calhoun Street, Suite 304 Tallahassee, Florida 32301 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399
