The Issue The issue is whether Petitioner, Triple M Enterprises, Inc., employed persons in the State of Florida without obtaining workers' compensation insurance meeting the requirements of Chapter 440, Florida Statutes. If Petitioner did not obtain the required insurance, the subsequent issue is the amount of any penalty.
Findings Of Fact The Division is charged with the regulation of workers' compensation insurance in the State of Florida and is responsible for enforcing the statutory requirement that employers secure workers' compensation insurance for the benefit of their employees. Triple M, is a corporation located at 24393 North 71, Robertsdale, Alabama, and is a framing and drywall contractor. Dwain Sanders and Celina Sanders are principals of Triple M. On June 4, 2004, Triple M was engaged as a subcontractor in the construction of a building on the premises located at 334 Gulf Breeze Parkway, Gulf Breeze, Florida. On June 4, 2004, Patricia Jean Krossman was an investigator employed by the Division. Her duties include ensuring that the employers in the state are in compliance with the requirements of the Workers' Compensation Law. More specifically, she visits work sites, and determines if the workers are covered by workers' compensation insurance. The morning of the aforementioned date, Ms. Krossman visited 334 Gulf Breeze Parkway, in Gulf Breeze, Florida, and observed four men engaged in construction activities, including framing a building. Dwain Sanders, who was at the site, identified himself as the owner and president of Triple M, which was the employer of the four men who were working at the site. Ms. Krossman requested that Mr. Sanders provide her with proof that he had workers' compensation coverage effective in Florida. Mr. Sanders made an immediate effort to supply the requested proof. Pursuant to Mr. Sanders' request, his insurance agent in Montgomery, Alabama faxed a portion of Triple M's policy to the Division's Pensacola office. The documents received by Ms. Krossman caused her to conclude that Triple M had not complied with Florida law because she believed the document did not demonstrate that Florida premium rates were paid, or that Florida class codes were used, or that there was a Florida endorsement in place. Ms. Krossman conducted a database search of the Coverage and Compliance Automated System database and the National Council on Compensation Insurance database. The search did not demonstrate that Triple M had a policy then effective in Florida. Having concluded that the documents produced by Triple M failed to demonstrate coverage in accordance with Chapter 440, Florida Statutes, and after noting the absence of policy information in the databases, Ms. Krossman issued a Stop- Work Order to Triple M on June 4, 2004. The portion of Triple M's policy, provided by Triple M's insurance agent by facsimile, number 748-36-79, which was issued by the American Home Assurance Company to Triple M, had a classifications of operations page which related solely to work to be performed in Alabama. This page provided class codes, the rates, and the premium basis which provided the total estimated annual premium that Triple M was required to pay, based on Alabama law. The faxed document included a policy information page that provided in Item 2, that the policy period ran from January 1, 2004 until January 1, 2005. It provided in Item 3A, as follows: "Workers Compensation Insurance: Part One of the policy applies to the Workers' Compensation Law of the states listed here: AL." The policy information page provided in Item 3C that, "Part Three of the policy applies to the states, if any, listed here:" and lists 44 states, including Florida. The policy provides in Item 4, "Classifications of Operation," a statement of the rating group, and the "total classification premium increase limits," under the heading, "State of Alabama Totals." On June 25, 2004, Ms. Krossman received via facsimile machine, an endorsement to policy no. WC 748-36-79. This was the first time Ms. Krossman had seen this endorsement. It purported to add Florida coverage using Florida premium rates and class codes. It also purported to add the Gulf Breeze Parkway work-site where Ms. Krossman found Triple M engaged in construction activities. The base policy, on its face, indicated a date of January 1, 2004. The issue date of the endorsement was June 16, 2004. This endorsement was not in effect on June 4, 2004, the date of the Stop Work Order. Ms. Krossman served Triple M a "Request for Production of Business Records for Penalty Assessment Calculation." The Division has the statutory authority to request payroll records from an employer working in Florida and the "Request for Production of Business Records for Penalty Assessment Calculation" is the vehicle through which those records are sought. The payroll records provide the data required to calculate any penalties for failure to maintain required coverage. Penalties are calculated by determining the premium amount the employer would have paid based on his or her Florida payroll, and multiplying by a factor of 1.5. In response to the "Request for Production of Business Records for Penalty Assessment Calculation," Triple M provided payroll records. The records indicated that Triple M had employed workers in Florida in 2001, 2002, 2003, and 2004. Using the records provided by Triple M, the penalty was calculated by Ms. Krossman. After some interaction with Ms. Celina Sanders, of Triple M, she eventually determined that the proper penalty to be assessed was $36,521.61. The penalty was calculated using Florida premium rates and class codes in accordance with the dictates of Section 440.38, Florida Statutes. The penalty is correct. Triple M depends on its agent, the Goff Group, of Montgomery, Alabama, to provide proper insurance coverage. As noted above, Item 3.A of the policy listed the primary state of coverage as being Alabama. The policy plainly states at "Part Three - Other States Insurance, How This Insurance Applies," in paragraph 1, that "This other states insurance applies only if one or more states are shown in Item 3.C of the Information Page." One of the other states shown is Florida. At paragraph 2, of the section noted immediately above, the policy states, "If you begin work in any one of those states after the effective date of this policy and are not insured or are not self-insured for such work, all provisions of the policy will apply as though that state were listed in Item 3.A of the Information Page." At paragraph 3 of the policy, the following sentence is found: "We will reimburse you for the benefits required by the workers' compensation law of that state if we are not permitted to pay the benefits directly to persons entitled to them." At paragraph 3, the following sentence is found: "If you have work on the effective date of this policy in any state not listed in Item 3.A. of the Information Page, coverage will not be afforded for that state unless we are notified within thirty days." After that language is the following: "B. Notice. Tell us at once if you begin work in any state listed in Item 3.C. of the Information Page." The plain language of the policy reveals that Triple M's employees were covered by the policy, and that the employees would receive the same benefits, in case of injury, as if it were a Florida Policy with Florida rates and classifications, so long as the work at Gulf Breeze Parkway had not been going on for more than thirty days. Ms. Sanders testified under oath that she notified Triple M's carrier within 30 days of the inception of the work at the Gulf Breeze Parkway site. A letter to the Department of Financial Services signed by Dwain and Celina Sanders on behalf of Triple M, dated June 24, 2004, asserted that Triple M had just begun working in Florida, for the first time in 2004, the week that Ms. Krossman entered the work site. Triple M has been in business for 22 years and has never been bankrupt. Triple M has 401K plans for its employees as well as health insurance. Triple M would have difficulty paying the fine proposed by the Division. Triple M believed its workers were covered by workers' compensation insurance and they were covered. The parties agree that American Home Assurance Company is authorized to write insurance in Florida.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is, RECOMMENDED that the Division of Workers' Compensation affirm the Stop-Work Order issued to Petitioner on June 4, 2004, and assess a fine of $36,521.61. DONE AND ENTERED this 13th day of January, 2005, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of January, 2005. COPIES FURNISHED: Joe Thompson, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399 Dwain Sanders Triple M Enterprises, Inc. 24393 North 71 Robertsdale, Alabama 36567 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issues to be considered in the course of this Recommended Order concern the question of whether Baxter's Asphalt & Concrete, Inc. or White Construction Company, Inc. should be accepted as a successful bidder on State Project No. 53050-3514, Jackson County, Florida, as advertised by the State of Florida, Department of Transportation.
Findings Of Fact The State of Florida, Department of Transportation, (DOT), advertised for bids on State Project No. 53050-3514, Jackson County, Florida. This was a project in which DOT had determined that 10 percent of the funding within the State Department of Transportation Trust Fund, as allotted for the project, would be devoted to economically disadvantaged individuals, also referred to as Disadvantaged Business Enterprises (DBE). This decision was in keeping with Section 339.081, Florida Statutes. Consequently, interested bidders were called upon to submit bids reflecting a DBE participation of a minimum of 10 percent of the bid submitted. Baxter's Asphalt & Concrete, Inc. (Baxter) and White Construction Company, Inc. (White) responded to the bid opportunity. The bids were opened on July 25, 1984, and Baxter's bid was the apparent low bid. The bid amount was $882,641.25. White was the second low bidder offering a bid of $928,353. Both bids were within the DOT estimate of construction costs. When the bids were reviewed, Baxter's bid was rejected by DOT based upon the belief that the bid failed to meet the DBE 10 percent requirement or to offer explanation of good faith attempts by Baxter to comply with the DBE contract requirement amount. See Section 14-78.03(2)(b)4., Florida Administrative Code. No other claim of error was made by DOT on the subject of the acceptability of the Baxter bid. The White bid is conforming. In preparing the bid, bidders are required to use DBE Utilization Form No. 1 to reflect the amount of DBE participation as a percentage of the overall bid estimate. In submitting its form as part of its bid blank, Baxter indicated that the total project cost was $884,000, and indicated that Ozark Striping, a DBE subcontractor, would be given $20,000 of that work or 3 percent, and that Glenn Powell, DBE subcontractor, would be afforded 7 percent of the total contract in the amount of $55,000. The total percentage according to Baxter is 10 percent, thus meeting the required DBE participation. This form is found as part of the joint Exhibit No. 1 offered by the parties. In fact, the Ozark Striping participation was 2.26 percent, and the Glenn Powell participation was 6.22 percent, for a total of 8.48 percent of the estimate reflected in the Form No. 1. Contrasted against the actual estimate of $882,641.25, these projections constitute 8.49 percent of that estimate. Thus, they are less than the 10 percent required. Given the fact that this DBE projection is less than the 10 percent, and in the absence of any attempt to offer a good faith explanation why Baxter failed to comply with the requirement, the bid was rejected for this irregularity. The Contract Awards Committee of DOT, when confronted with the irregularity of the Baxter bid, then determined to recommend the rejection of all bids. This was in keeping with the fact that the difference between the unsuccessful apparent low bid, with irregularities, and the second low bid exceeded 1 percent of the contract amount. At the time of this decision to reject all bids, DOT felt that the difference would justify re-advertising the bids. That policy position had been abandoned at the point of final hearing in this cause, wherein DOT expressed the opinion that it would be better served to accept the bid of White, and not re-advertise, again for cost reasons. In the face of the initial action to reject all bids and in accordance with Section 120.53, Florida Statutes, Baxter and White appealed that decision and by that appeal requested recognition as a successful bidder. This led to the present Section 120.57(1), Florida Statutes hearing. Baxter has never attempted to offer a good faith explanation of its non-compliance. It chooses to proceed on the theory that the mistake in computation can be rectified by allowing Baxter to submit a supplemental Form No. 1, bringing its total above the DBE requirement. In its contention, Baxter indicates that Glenn Powell could have provided $126,000 of the DBE goal, which is in excess of the 10 percent requirement. Baxter also alludes to the fact that it had contacted other DBE enterprises, such as Oglesby and Hogg, Michael Grassing, and J.E. Hill. All told, Baxter indicates that if given the opportunity, it would allow $146,000 of DBE participation to include $126,000 by Glenn Powell, and $20,000 by Ozark. This comment is suspect, given the lack of compliance in the initial bid response, and the realization that within that bid response on the item related to Glenn Powell, the original amount of work attributed to Glenn Powell was $100,000, and was struck through in favor of the $55,000, leaving a fair inference that Baxter was attempting to meet the DBE goal with a projection as close to the 10 percent as could be achieved. They fell short because in adding the $20,000 for Ozark, and the $55,000 for Glenn Powell, the addition in the Form No. 1 showed $85,000, which is more than 10 percent of the $884,000 shown on the form, when in fact the two amounts were $75,000, and less than the 10 percent required. Baxter characterizes its mistake in computation as a technical error, which can be remedied without harm to the bid process. The Baxter position must be examined in the context of action by DOT relating to compliance with DBE requirements. Prior to June 1984, a time before the subject July 25, 1984 bid opening, bidders had been allowed to amend the Form No. 1 to show compliance with the DBE requirements or demonstrate good faith efforts of compliance. That amendment as to compliance through listing of the DBE subcontractors or submission of good faith effort documentation had to be offered within 10 days per former Section 14-78.03, Florida Administrative Code. Beginning with the June 1984 bid-lettings, all documentation had to be submitted with the bid, reflecting compliance or describing good faith efforts at compliance per Section 14-78.03(2)(b), Florida Administrative Code, effective May 1984. This change was brought about to prevent the apparent low bidder, as indicated at the point of bid-letting, from shopping the quotations by the DBE's found in its original quote against other quotes from DBE's not listed in the bid documents initially submitted, and by amendment to the DBE statement prejudicing the former DBE group. The change was also made to avoid the possibility that the apparent low bidder could evade his bid by rendering it non-conforming, in the sense of refusing to submit the required documentation of compliance with DBE requirements or to the offer of a good faith explanation of non-compliance after the bid-letting. The change of May 1984, removed the possibility of bid shopping and bid avoidance. Both versions of Section 14-78.03, Florida Administrative Code, pre and post May 1984, indicate that failure to satisfy the DBE requirements or offer a showing of a good faith attempt at compliance, would result in the contractor's bid being deemed non-responsive, and cause its rejection. Baxter has been able to comply with the DBE goals of DOT in its bidding prior to the present controversy.
The Issue Whether the Respondent, the Gadsden County School Board (Respondent or Board), acted illegally, arbitrarily, fraudulently, or dishonestly in rejecting all proposals for telecommunications services as set forth in its E-Rate application for the school year 2003-2004 (the sixth year).
Findings Of Fact The Petitioner is a municipal corporation operating under authority of law. NetQuincy is the utility/entity through which the City sought to provide "information technology resources" as requested by the Board's RFP. NetQuincy is capable of providing internet access and related telecommunication services. "T1" is a specific type of information technology that identifies internet access. It is undisputed that the Petitioner sought to provide such service in connection with the RFP at issue. On October 9, 2002, the Respondent posted a Form 470 requesting various telecommunication services to be provided during the 2003-2004 school year (the sixth year). T1 service was among the requested technological services identified. Form 470 is required pursuant to E-rate guidelines. In connection with the Form 470, the Board also posted the RFP that is the subject of the instant dispute. The original RFP was amended and reposted on October 25, 2002. T1 service for all eligible school sites was specifically noted on the revised RFP. A vendor's meeting regarding the revised RFP was conducted on October 31, 2002. The Petitioner's representative attended the vendor's meeting. On December 2, 2002, three vendors timely submitted responses to the RFP: the Petitioner, the Intervenor, and Trillion (not a party herein). None of the submittals was evaluated. Instead, the Respondent posted a notice on December 6, 2002, that rejected all responses. More specifically, the notice provided in connection with the service in dispute in this cause: **We would like to thank all those who submitted quotes for this section of our RFP, however, during the 28 day period of the bidding process, the School District learned that the Florida Learning Alliance will be providing this service for us. Since this means zero costs for the School District, we will NOT be filling [sic] for E-rate discounts for this service for the 2003-2004 (Year Six) time period. The rejection notice did not contain the language set forth in Section 120.57(3), Florida Statutes. Nevertheless, the City filed a Notice of Intent to Protest the decision to reject all responses. The timeliness of the Notice of Intent to Protest or the Petition for Administrative Hearing has not been challenged. On December 16, 2002, the Florida Learning Alliance (FLA) filed an RFP requesting vendors for the same services identified in the Respondent's revised request. That is, T1 service for all eligible school sites for E-rate (the sixth year). The deadline for submittals to FLA's RFP was January 16, 2003. No decision on FLA's RFP was rendered as the instant action was initiated on December 23, 2002. The parties contend that by operation of law the bid solicitation process for both RFPs (the Board's and FLA's) was suspended. Thus it is uncertain whether the Respondent will be able to participate in the E-rate program for the sixth year. The E-rate program has existed since the 1998-1999 school year. It provides funding to enable schools to obtain internet access and services. The Schools and Libraries Division (SLD) administers the program and offers funding to eligible school districts computed as a "discount." The level of discount is determined by the level of poverty within the population to be served. The Respondent has participated in the E-rate program for several years. Depending on the school to be served, the Respondent's discount is 86 or 87 percent. The remaining amount, the "undiscounted portion" is not paid by the SLD. Participants in the E-rate program are entitled to apply in two ways: individually (as the Respondent has done) or through a consortium. In this case, the FLA is an alliance through which the Respondent may receive E-rate services. FLA is comprised of three educational consortia covering 34 small rural school districts. The Panhandle Area Educational Consortium (PAEC) encompasses the geographical area within which the Respondent is located. As a member of PAEC, the Respondent is entitled to participate with FLA. By virtue of FLA's Technology Innovation Challenge Grant rural schools may receive T1 lines such as requested herein. More important, however, is FLA's ability to provide the undiscounted portion of the E-rate. That means FLA will provide the 13 or 14 percent not covered by the SLD. In order to benefit in this manner, the Form 470 for the services requested must be filed through the FLA. In this case, the Respondent confirmed this potential benefit of receiving the services at no cost only after its Form 470 and RFP had been posted. When they elected to withdraw their own RFP (to allow FLA to pursue the matter in their behalf) the instant protest followed. The Petitioner did file a response to FLA's RFP in order to be considered for the sixth year E-rate. The issue related to the sixth year is complicated by the fact that unbeknownst to the Respondent FLA acted on behalf of the Board for Year 5 T1 connectivity. As to Year 5, when no vendor replied to the FLA's RFP for T1 service, the Intervenor was selected as the "carrier of last resort." No contract was required or signed in connection with Year 5. The Intervenor was selected for Year 5 because TDS provided service in the areas designated for T1 service E-rate Year 5. That is how it was deemed "carrier of last resort." Other vendors provided services in other areas where they were similarly deemed the "carrier of last resort." In fact it was not until October 2002 that the Year 5 funding was made available. During the discussions over the Year 5 services (and with the deadline for filing the application for the sixth year fast approaching) Respondent filed Form 470 without knowing how or if FLA would participate in the sixth year process. When it later confirmed FLA would be available to administer the sixth year E-rate, the Respondent elected to abandon its revised RFP related to T1 service (thereby hoping to save the 13 or 14 percent not covered by the SLD funding). The revised RFP contained the following information: For Year 6 (July 1, 2003-June 30, 2004), the school district is planning to seek the services listed below. Any company that desires to submit a proposal for these services must meet the following criteria: * * * Be willing to enter into an agreement contingent upon E-Rate funding award. In other words, if the District is not successful in obtaining E-Rate funding on the particular service, the agreement will become invalid. Be willing to accept payment of only the non-discounted portion of the service from the school district and bill the SLD for the remaining portion. (this averages to be 86%) When a vendor is selected to provide E-rate services, SLD requires Form 471 to identify the provider and to complete the requisition started by the process (Form 470). The deadline for filing a Form 471 pertinent to this case (the sixth year) was February 6, 2003. Neither the Respondent nor FLA filed a Form 471 for the T1 services at issue. When the deadline for filing Form 471 passes, the opportunity to receive E-rate funding closes. As of the time of hearing in this cause the possibility of the Respondent receiving E-rate funding was slim to none. No entity filed a Form 471 for T1 services for the sixth year. The Respondent has not selected any vendor to provide E-rate services for the sixth year. The Respondent did not direct FLA to submit the Form 471 with the Intervenor as the provider for T1 during the E-rate sixth year. FLA has not submitted such form. The Respondent did not reject all bids for the purpose of avoiding the procurement process. The Respondent does not have a contract with the Intervenor for T1 services for E-rate, Year 6. The Respondent has not attempted to circumvent policies, rules, laws or statutes governing competitive procurement. The T1 services for the sixth year E-rate are "information technology resources" as defined in Section 282.303(13), Florida Statutes. As such they are not subject to any provision requiring competitive procurement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Amended Formal Notice of Protest/Petition for Administrative Hearing be dismissed. DONE AND ENTERED this 1st day of May, 2003, in Tallahassee, Leon County, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of May, 2003. COPIES FURNISHED: Sterling Dupont, Superintendent Gadsden County School Board 35 Martin Luther King Boulevard Quincy, Florida 32351-4400 Daniel J. Woodring, General Counsel Department of Education 325 West Gaines Street 1244 Turlington Building Tallahassee, Florida 32399-0400 Honorable Jim Horne Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Stephen C. Emmanuel, Esquire Ausley & McMullen 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302-0391 Roosevelt Randolph, Esquire Knowles, Marks & Randolph, P.A. 215 South Monroe Street, Suite 130 Tallahassee, Florida 32301 William E. Williams, Esquire Huey, Guilday, Tucker, Schwartz, & Williams, P. A. 1983 Centre Pointe Boulevard Suite 200 Post Office Box 12500 Tallahassee, Florida 32308
Findings Of Fact Petitioner is a Florida corporation located in Leon County, Florida. It prepares applications for CDBG funding for cities and counties. If those cities and counties are awarded grant funds, Petitioner administers the projects for the cities and counties. Having investigated the possibility for obtaining a grant to revitalize a water/sewer system in a neighborhood in Okaloosa County, and having rejected that project as infeasible, Petitioner made application for Okaloosa County for the project which is at issue here. The application was submitted to the Respondent on November 29, 1990, for grant award in the small cities CDBG housing category. The application stated that Okaloosa County had adopted a fair housing ordinance prior to the submission deadline date for applications that was consistent with state and federal housing laws. That feature in the application allowed Okaloosa County to receive 35 points in the scoring system in competition with other grant applicants. That 35 point score for the fair housing ordinance was crucial to the applicant's success in obtaining the grant funds. The record does not reveal that the Petitioner had any responsibility to assure itself that Okaloosa County had enacted a fair housing ordinance prior to the application submission deadline, although Petitioner does render advice to local governments concerning adoption of ordinances and other necessary policies in support of CDBG programs. Petitioner also estimates costs of projects, participates in public hearings to get comments from the public concerning the projects that Petitioner is involved with in connection with CDBG grants. The support role by Petitioner includes preparing needed documentation and advising local governments about associated activities within the grant programs. Those grants are in association with the United States Housing and Urban Development Agency and are known as Block Grants. The grants are to provide funding for the housing category at issue here, as well as neighborhood revitalization, commercial revitalization and economic development program categories. Here use of the term "CDBG" refers to the Florida Small Cities Community Development Block Grant Program. Respondent administers that program consistent with federal guidelines. In addition Respondent establishes applicant eligibility, application criteria, application procedures, a competitive scoring system for comparing applicants and specific program requirements for the various categories within the CDBG program, together with grant administration requirements for the various CDBG grant categories. On the same day that Okaloosa County, through Petitioner, submitted its application for CDBG funding in the housing category, it established procurement policies and procedures for CDBG programs and projects. That document pertains to the purchase or procurement of personal property, supplies, equipment and services, to be accomplished in accordance with applicable state and federal law. That document established a requirement for records keeping that basically indicated that appropriate arrangements would be made for generation and maintenance of all files, records and documentation that would be needed to evidence compliance with requirements delineated in the document itself. The document set forth procurement standards, procurement administration, procurement classification, solicitation and contract awards pursuant to invitations to bid and requests for proposals. The document spoke to the need for compliance with affirmative action/equal opportunity goals, contracts related to the provision of housing and the means to resolve protests over contracting procedures. The document was not designed to address the arrangements between Petitioner and Okaloosa County for administrative services provided to the county associated with the CDBG grant at issue. The agreement between Okaloosa County and the Petitioner by which Petitioner would provide administrative services was as set forth in a November 19, 1990 contract between those parties. Its effective date was contingent upon Okaloosa County receiving the applied for CDBG funding under an award agreement with Respondent. Subject to that award Petitioner agreed to provide services consistent with Section III to the contract with Okaloosa County which stated: III. Scope of Services Intent of the Contract CRA agrees, under the terms and conditions of this Contract and the applicable federal, state and local laws and regulations, to undertake, perform, and complete the necessary Administration Services required to implement and complete the County's CDBG project in compliance with applicable laws and regulations. Scope of Services The scope of services relevant to the CDBG project is included as Attachment "C" to this agreement. If the Agreement between the County and the Agency is amended, the scope of work for the project shall be amended to be consistent with the Agreement. The amount of consideration and the method of payment was as described in Section IV which stated: Consideration and Method of Payment Amount of Consideration CRA shall be paid by the County for Administrative Services the sum specified in the Scope of Work and Payment, attachment "C". Method of Payment CRA will submit a monthly (or other appropriate periodic) invoice specifying accomplishments toward meeting the Administration Services as specified in the Work Order. The invoice shall be submitted to the County for the County's review and approval. Payment will be issued within two days of approval of the invoice, subject to availability of project funds. Any intent to modify the terms of the contract between Okaloosa County and Petitioner had to comply with Section VII which stated: Modification of Contract Modifications of the provisions of this Contract shall only be valid when they have been reduced to writing, duly signed by the parties hereto, and attached top the original of this Contract. CRA hereby agrees to amend the Work Order pertaining to each project to remain consistent with the County/Agency Agreement if said Agreement is amended. The amount of compensation to be paid to CRA will not be amended without mutual agreement of the County and CRA, formally executed in writing, subject to availability of funds from the Agency. The fee and payment schedule between Okaloosa County and Petitioner was set forth in attachment "C". It stated: Fee and Payment Schedule For Administrative Services, the County will pay CRA the sum of 15 percent of the grant award. No more than $5,000 shall be obligated by the County for CRA's services under Phase I. Upon the Department's Release of Funds, Phase II shall be initiated by CRA and the County. The fee amount shall be issued by the County to CRA in 24 equal monthly payments. If the project is completed before the 24 month grant period expires, the balance of the administrative fee will be paid to Clark, Roumelis and Associates, Inc., by the tenth calendar day of the month after completion and submission of the close-out report to DCA. Okaloosa County obtained the CDBG grant funding which it applied for and entered into an award agreement with Respondent as executed on June 28, 1991. The grant was subject to Sections 290.041 through 290.049, Florida Statutes, as amended; Public Law 93-383, as amended; 24 C.F.R. Part 570; Chapter 9B-43, Florida Administrative Code; OMB Circulars and 25 C.F.R., Part 85. The agreement between Okaloosa County and Respondent was for a period of 24 months after signature unless terminated earlier in accordance with Clause (14). Clause (14) dealt with suspension or termination and it stated: SUSPENSION OR TERMINATION. The Department reserves the right to suspend payments to a Recipient when the reports required in Section (9) of this Agreement are delinquent. The Department may terminate this Agreement for cause upon such written notice as is reasonable under the circumstances. Cause shall include, but not be limited to, misuse of funds; fraud; lack of compliance with applicable rules, laws and regulations; failure to perform in a timely manner; and refusal by the Recipient to permit public access to any document, paper, letter, or other material subject to disclosure under Chapter 119, Fla. Stat. as amended. Suspension or termination is an appealable action under Chapter 120, Fla. Stat. as amended. Notification of suspension or termination shall include notice of appeal rights and time frames. The Department reserves the right to exercise corrective remedial actions including, but not limited to, requesting additional information from the Recipient to determine the reasons for, or extent of non-compliance or lack of performance; issuing a written warning advising that the Agreement may be suspended or terminated if the situation is not remedied; advising the Recipient to suspend, discontinue or not incur costs for activities in question; or requiring the Recipient to reimburse the Department for the amount of costs. The Recipient shall return grant funds to the Department if found in noncompliance with laws, rules, regulations governing the use of CDBG funds or this Agreement. If at any time after the effective date of this Agreement, the Department determines that an activity to be funded is not eligible pursuant to 24 C.F.R. Part 570 or any subsequent federal regulation which supersedes it, the Department may unilaterally amend this Agreement to delete the ineligible activity and deobligate any unencumbered funds attributable to the ineligible activity. The funding for the grant was in an amount not to exceed $650,000 for Respondent's share subject to the availability of federal funds to support that amount. Requests for disbursement of funds were to be made in accordance with Clause (4)(d) to the agreement which stated: Each request for funds shall be for an amount of not less than $5,000 unless it is the final request for funds and shall be on a form approved by the Department and shall be certified by an agent of the Department and shall be certified by an agent of the Recipient who has been identified as having signatory power on the signature form received by the Department. The Recipient shall immediately notify the Department in writing of any change in agents. The reporting requirements of Okaloosa County under the terms of the agreement were as set forth in Clause (10) which stated in pertinent part: (a) At a minimum, the Recipient shall provide the Department with quarterly reports, and with a close-out report, on forms provided by the Department. If program income is produced, a semi-annual program income report shall be provided. * * * (c) The close-out report is due 45 days after termination of this Agreement or upon completion of the activities contained in this Agreement. Under the terms of the agreement Respondent was required to make periodic review of the performance of Okaloosa County in completing the program contemplated by the CDBG grant. Clause (13) to the agreement sets forth Okaloosa County's liability in its dealings with other entities, to include Petitioner and holds Respondent harmless against claims by those third parties that arise from performance of the work under the terms of the agreement. The validity of the agreement between Okaloosa County and Respondent was contingent upon the truth and accuracy of information in the application, as required by Clause (18) (b) to the agreement. In the event that the application was not found to be truthful and accurate, Respondent upon 30 days written notice to Okaloosa County could cause the termination of the agreement and the release of the Respondent from obligations to Okaloosa County. Should Okaloosa County fail to honor its agreement with Respondent, Petitioner in its obligation to Okaloosa County could suspend or terminate services which were affected by the breach of the agreement between Okaloosa County and Respondent. This was in accordance Section VIII (D) to the contract between Okaloosa County and Petitioner. Section VIII (D) stated: If the County shall fail to fulfill in a timely manner its obligations under this Contract or its Agreement with the Agency, CRA may, at its option and without liability, suspend afforded services until such time the County remedies the breach. CRA may also, without liability, terminate the affected portion of this Contract for breach within 10 days of giving written notice to the County of such termination and the reason(s) therefore. Neither of these options shall operate to deprive CRA of entitlement to remuneration for services rendered in accordance with this Contract. As Grant Administrator Petitioner was entitled to $97,500 should the full $650,000 grant funding be disbursed. If the full amount was disbursed over the 24-month life of the grant then Petitioner would receive $4,062.50 for each monthly installment. Commencing September 12, 1991, and ending on May 5, 1992, Petitioner submitted monthly invoices for reimbursement of costs associated with administrative services. Those invoices in the total amount of $40,625.00 were honored by Respondent. This approximated the monthly disbursement contemplated by the agreement between Petitioner and Okaloosa County. The arrangement was one in which the invoices had been approved by Okaloosa County and provided to the Respondent for reimbursement through Requests for Funds. The invoices described were for administrative services provided through April, 1992. The overall reimbursement in the project through Requests for Funds, to include the January 7, 1992 period, was $208,816.00. Those cost reimbursements pertain to housing rehabilitation, temporary relocation and administration. That overall amount also reflected the circumstance on May 13, 1992. On April 23, 1992, Judith J. Foxworth, a grants administrator for Petitioner and Robert J. Rase, an employee for the Respondent, were performing a monitoring visit concerning the grant program at issue. At that time Ms. Foxworth had been assigned as administrator to the Okaloosa County grant program. The purpose of the monitoring visit was to insure program compliance with requirements of state and federal law. Janice A. Mack attended the monitoring visit as representative for Okaloosa County. During the monitoring visit Mr. Rase raised the question of whether the fair housing ordinance that has been referred to before had been passed on November 20, 1990, which would have indicated that the fair housing ordinance was in effect at the time the application was made for grant funding. To assure himself concerning this topic Mr. Rase asked Okaloosa County to provide the minutes of the meeting at which the fair housing ordinance is said to have been passed. While the passage of a fair housing ordinance had been discussed, as noted in the November 20, 1990 minutes, the ordinance was not shown to have been passed on that date. With this revelation through the minutes of the meeting, Ms. Foxworth became aware of this fact as did Mr. Rase. Someone in this conversation between the representatives of the Petitioner, Respondent and Okaloosa County suggested the possibility that tapes of the November 20, 1990 meeting might reveal the passage of the fair housing ordinance and the possibility that it was an oversight that the passage of the fair housing ordinance had not been noted in the minutes, given the busy agenda being considered by the Okaloosa County Board of County Commissioners on that date. Ms. Mack also referred Foxworth and Rase to Bob McQuire, a deputy clerk for Okaloosa County, to see if McQuire had some recollection of the passage of the fair housing ordinance on November 20, 1990. Mr. McQuire was unable to assist in the inquiry. Some other discussion was held with the clerk to the Board of County Commissioners about the possible transcription of tapes associated with the November 20, 1990 meeting. Ms. Mack indicated that they could possibly transcribe the tapes and listen to them; however, it was indicated that the county had some priority items to attend to and it probably would be several days or even a week before these arrangements could be made. No indication was given in the present record that tapes of the meeting of November 20, 1990 were prepared for consideration by the Petitioner or Respondent beyond April 23, 1992 or what the tapes of the meeting of November 20, 1990 may have revealed concerning the passage of the fair housing ordinance. However, based upon the record in this case, it has been established that the fair housing ordinance was passed upon a date subsequent to the time of the application for grant funding. This caused Respondent to revise the scores received by Okaloosa County. As a consequence Okaloosa County's application dropped below the fundable range in that inadequate points were received to allow the project to be funded. After April 23, 1993, neither Ms. Foxworth nor any other person affiliated with Petitioner took action to confirm that the fair housing ordinance had been passed on November 20, 1990. By contrast Respondent wrote to the Okaloosa County chairperson on May 20, 1992. The correspondence mentioned that Respondent had reviewed information received from the Deputy Clerk of Okaloosa County in response to a request to verify information in the application for funding. That review by Respondent's staff revealed that the fair housing ordinance had not been adopted until January 15, 1991, in a setting in which the deadline for submission of applications was November 29, 1990. As a consequence the 35 points were deducted from the application reducing the score from 824.18 to 789.18, hence the Okaloosa County application was outside the fundable range. The May 20, 1992 correspondence to the chairperson in Okaloosa County reminded the county that the Respondent believed that there had been a violation of Section 290.0475(7), Florida Statutes, which would allow rejection of the application based upon a misrepresentation in the application. Respondent was persuaded that the failure to pass a fair housing ordinance until January 15, 1991, in a setting in which Okaloosa County had reported the date of passage as November 20, 1990, specifically on March 1, 1991, in response to a completeness letter requested by Respondent on February 22, 1991, evidenced the misrepresentation by Okaloosa County. As a consequence, through the May 20, 1992 correspondence, Okaloosa County was given the following instructions by Respondent concerning the future of the CDBG award agreement: Based upon these findings, the Department is hereby providing the County with notice, pursuant to Section (18)(b) of your grant agreement, that the award agreement will be terminated in thirty (30) days from receipt of this letter. The validity of the award agreement was subject to the truth and accuracy of all the information, representations, and materials submitted or provided by the County in the application, in any subsequent submission, or response to a Department request. The lack of accuracy thereof or any material change shall, at the option of the Department and with thirty (30) days written notice to the County, cause the termination of the agreement and release of the Department from all its obligations to the County under the agreement. The County should incur no additional costs from the date of receipt of this letter. While the Department has the ability to recover any costs incurred under this grant contract, due to the fact that the grant funds were spent on eligible activities to assist low and moderate income persons, the Department will not seek to recover monies already expended. However, no additional funds shall be disbursed from the contract. The correspondence offered Okaloosa County the right to contest the preliminary agency action concerning termination of the grant agreement by resort to a formal hearing in accordance with Section 120.57(1), Florida Statutes, or an informal hearing in accordance with Section 120.57(2), Florida Statutes. In the end Okaloosa County accepted the termination upon the grounds stated in the May 20, 1992 correspondence. Okaloosa County received the notification of termination on May 26, 1992. Petitioner received a copy of the May 20, 1992 correspondence directed to Okaloosa County. The May 20, 1992 correspondence constituted notice to the county not to incur additional costs as well as notification of termination. Between April 23, 1992 and May 26, 1992, the dates when Petitioner first was made aware that there was a problem with passage of the fair housing ordinance and project fundability and the date upon which Respondent officially confirmed the significance of those problems, housing improvements contracts were entered into between home owners and contractors. A significant number of those contracts were entered into commencing April 28, 1992 and ending May 12, 1992. As project administrator Petitioner had been acting in the interest of the home owners in soliciting competitive bids from contractors who would do the home improvement work associated with the grant activities. Following the correspondence of May 20, 1992, Petitioner and Okaloosa County directed a number of inquiries to Respondent concerning proper use of remaining grant funds. As of May 20, 1992, when Respondent gave the termination notice, it had effectively informed Petitioner and Okaloosa County concerning Respondent's intention not to recover the $208,816.00 already disbursed, but had withheld details about the amount of money it might disburse in the future from what remained of the $650,000.00 award. Associated with the balance of the funds, what was known was that Respondent considered the agreement between itself and Okaloosa County terminated effective June 25, 1992. Respondent did not immediately honor a May 21, 1992 Request for Funds, which it mistakenly believed had been submitted subsequent to the May 20, 1992 notification to Okaloosa County that the agreement was terminated effective 30 days from receipt of notice of termination. Again the County did not receive that notice of termination until May 26, 1992, subsequent to its submission of the Request for Funds. One member of the Respondent's staff considered the submission of the May 21, 1992 Request for Funds to be a blatant attempt to obligate the balance of the grant monies with the "suspension pending". That was not the intention by Okaloosa County when submitting the May 21, 1992 Request for Funds. Suspension of funding is a consequence of the termination. By correspondence of June 17, 1992, directed to the chairperson of the Okaloosa County Commission, with a copy to Petitioner, Respondent replied to the inquiries from Petitioner and Okaloosa County concerning whether any additional costs could and would be reimbursed subsequent to the notice of suspension of funds and termination dated May 20, 1992. On June 17, 1992, Respondent informed Okaloosa County, and indirectly informed Petitioner, concerning the basis for determining cost reimbursement above the cost amounts already drawn and paid. Again, this is taken to mean that Okaloosa County and Petitioner were being told that $208,816.00 would not be reclaimed by Respondent and that the basis for deciding the issue of payment of other funds sought by Okaloosa County would be in accordance with guidelines set forth in 24 C.F.R., Part 85. In particular, Respondent had this to say concerning the basis for reimbursing any other costs: To aid the County, the Department offers the following guidelines which will be followed in determining which costs shall be reimbursed from the CDBG contract, beyond those already drawn and paid. The federal regulations in 24 CFR Part 85, Administrative Requirements for Grant to Sates and Local Governments, outlines the guidelines in the event of suspension and termination. Specifically, Section 85.43(c) states the following standards. Costs resulting from obligations incurred during a suspension or after termination of an award are not allowable without express authorization from the awarding agency, which in this case is the Department. Other costs during suspension or after termination which are necessary and not reasonably avoidable are allowable, provided the following tests are met. The costs result from obligations which were (1) properly incurred before the effective date of suspension or termination, (2) are not in anticipation of the suspension or termination, and (3) in the case of termination, whether the obligations are noncancellable; and The costs would have been allowable if the award had not be suspended or the contract had expired normally at the end of the funding period. Okaloosa County was further instructed in the June 17, 1992 correspondence as follows: The County should evaluate each cost that it seeks to have reimbursed from the grant and certify to the Department that the costs meet the above outlined standards. In addition, you should provide copies of all contracts obligating the costs, notices to proceed, and invoices for costs incurred to support each cost item requested for reimbursement. The Department will evaluate all costs on a case-by-case basis and make its determination applying the standards contained in 24 CFR Part 85.43(c). Once the determination is made, you will be notified in writing of the Department's final action. Consistent with the instructions set forth in the June 17, 1992 correspondence Okaloosa County through Petitioner submitted detailed documentation of costs incurred over and above the $208,816.00. The amounts claimed are discussed in Respondent's September 22, 1992 interoffice memorandum from Thomas Pierce, Planning CDBG Program to Pat Pepper, Director of the Division of Housing and Community Development. The memorandum describes the following costs claimed: Temporary relocation $ 1,600.00 Housing rehabilitation 214,967.36 Permanent relocation 88,063.00 Demolition 3,000.00 Administration 43,274.92 The memorandum sets out the position of the Respondent concerning payment of those costs where it says: Based on the review of the contracts submitted, the notices to proceed, and invoices, it appears that the direct assistance activity costs under temporary relocation, housing rehab, permanent relocation and demolition are justified for reimbursement. These costs were clearly obligated prior to our termination, and the contracts do not provide for costs avoidance in the event of grant cancellation. Therefore, the $307,630.36 for these direct assistance costs are recommended to be reimbursed by the grant to avoid undue hardship on the low and moderate income clients assisted. With regard to the payment of administrative costs, the review did not find adequate documentation to support reimbursement. The invoice submitted sought payment for preparation of the June 30, 1992 quarterly status report, attending a June 12, 1992 County Commission meeting and preparing request for funds and closeout reports. All of these are activities performed after the May 20 termination date, and therefore are not eligible for reimbursement, even though there was a contract executed for administrative services prior to the termination date. Therefore, we recommend that the administrative costs of $43,274.92 not be reimbursed by the CDBG Program. These costs are an obligation of County and would have to be paid by non-CDBG funds. Prior to this memorandum Respondent had received a July 8, 1992 Request for Funds and a July 23, 1992 status report which addressed the $43,279.92 claim for administrative costs. In addition, on July 1, 1992, Petitioner had prepared an Amended Administrative Services Invoice #15. On September 30, 1992, Okaloosa County wrote to Petitioner to inform Petitioner that the invoice was approved by Okaloosa County contingent upon receipt of funds from Respondent. On October 8, 1992, Petitioner transmitted this invoice to Respondent. Amended Administrative Services Invoice #15 gave the following account concerning claims for payment: DUE UPON RECEIPT Please issue payment to Clark, Roumelis and Associates, Inc., for services performed from May, 1992 through June 24, 1992, in accordance with out contract. Prepared and coordinated the signing of the final two rehab contracts. Prepared Notices to Proceed on the 3 demo/ relos and the final 12 rehabs. Monitored construction progress with inspections at least weekly on all the final units (3 demo/relos and 17 rehabs). Change Orders were prepared on three rehab units. Prepared and coordinated the necessary paperwork for pay request for the contractors, homeowners, rental unit and recording fees. Provided County Commission with project status report. Liaisoned with local financial record keeper to update and verify monthly financial transactions. Prepared Quarterly Status Report by compiling data on accomplishments and beneficiaries and thorough update of financial records on June 22, 1992. Discussed final Request for Funds and financial reimbursements by County for CDBG expenditure with Mike Arciola, Jan Mack and CRA housing Specialist. Prepared final Request for Funds on June 22, 1992, for signature by the County. Attended County Commission meeting June 16, 1992, to discuss alternatives associated with timely closeout of the grant contract. Presented an issue paper and pros/cons of various actions Attorney. Administrative Services discussed the with the County Contract amount $97,500.00 Previously Billed 40,625.00 Total billed to date including this invoice 83,899.92 Total Received to date 40,625.00 Total Due Upon Receipt 43,274.92 Later, when Respondent arrived at its proposed agency action concerning cost reimbursement it wrote to the chairman of the Okaloosa County Commission, with a copy to Petitioner. This correspondence was dated January 28, 1993. In its operative terms it stated: The Department of Community Affairs has reviewed the documentation submitted on the costs incurred under the above referenced Community Development Block Grant (CDBG) which was terminated by the Department in June 1992. Based on the provisions of 24 CFR 85.43 and our review of the documentation submitted, the Department finds that the following direct assistance costs were properly incurred before the effective date of the termination, were not incurred in anticipation of the termination, and were not cancellable. Further, the costs would otherwise have been eligible for grant reimbursement. These costs will be reimbursed by the Department immediately upon receipt of a Request for Funds form, signed by the County. Line Item Amount Temporary Relocation $ 1,600.00 Housing Rehabilitation 214,967.36 Permanent Relocation 88,063.00 Demolition 3,000.00 TOTAL $307,630.36 With regard to invoice #15 for administrative costs, the Department does not find adequate contract authority in your agreement with the grant consultant to make a payment for $43,274.92. As your contract was a lump sum contract, payable in equal monthly installments, the Department finds that the only authorized payments would be the monthly payment for May, given receipt by the County on May 26, 1992 of the Department's notice of termination of your grant and notice to incur no additional costs from that date. Further, the Department reads Section IV (B) of the contract for administrative services to condition payments upon the availability of grant funds by the County. Given the notice of termination, the Department finds that the County did not have funding available beyond May 26, 1992 upon which to make payments. Therefore, the Department finds that the administrative costs were cancellable and as such would not be allowable under the federal guidelines contained in 24 CFR Part 85.43 (c) (1). The Department will, however, process a revised invoice that covers the monthly fee for May, as that cost was allowable and eligible prior to the notice of termination and notice to incur no additional costs. On May 5, 1992, $4,062.50 in administrative services costs was approved by Okaloosa County through invoice #1501. This amount was in addition to the $40,625 already paid for administrative services. It is included within the $43,274.92 in dispute. As described in the January 28, 1993 proposed agency action it is an amount that Respondent would pay, notwithstanding that the invoice was not submitted to it. However, the $4,062.50 from May 1992 has not been paid to Petitioner. Okaloosa County did not proceed to contest the determination concerning disbursement of funds as described in the January 28, 1993 correspondence. While Petitioner was not specifically noticed of its rights to administrative relief it sought and was granted the opportunity to contest the refusal to pay $43,274.92 in administrative costs set forth in Amended Administrative Services Invoice #15. Under the circumstances wherein Respondent terminated its agreement with Okaloosa County prior to the normally anticipated concluding date, Petitioner did not prepare a close-out report. Petitioner did provide a status report dated July 23, 1992, which sets out its administrative claim of $43,274.92. Petitioner believes that it has performed its obligations pursuant to the agreement with Okaloosa County and is entitled to receive the disputed $43,274.92.
Recommendation Based upon consideration of the findings of facts found and the conclusions of law reached, it is, RECOMMENDED: That the final order be entered directing the payment of administrative costs in the amount of $43,274.92. DONE and ENTERED this 29th day of September, 1993, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1306 The following discussion is given concerning the proposed findings of fact submitted by the parties: Petitioner's Facts: Paragraphs 1 through 6 are subordinate to facts found. Paragraph 7 is contrary to facts found. Paragraphs 8 through 14 are subordinate to facts found. Paragraph 15 is not necessary to the resolution of the dispute. Paragraph 16 is subordinate to facts found. Paragraphs 17 and 18 are not necessary to the resolution of the dispute. Paragraph 19 is subordinate to facts found. Paragraphs 20 through 22 are not necessary to the resolution of the dispute. Paragraph 23 is subordinate to facts found. Paragraph 24 is not necessary to the resolution of the dispute. Paragraph 25 is subordinate to facts found. Paragraphs 26 through 28 are not necessary to the resolution of the dispute. Paragraphs 29 through 31 are subordinate to facts found. Paragraphs 32 and 33 are not necessary to the resolution of the dispute. Paragraphs 34 through 37 are subordinate to facts found. Paragraph 38 is not necessary to the resolution of the dispute. Paragraph 39 is subordinate to facts found. Paragraph 40 is not necessary to the resolution of the dispute. Paragraphs 41 and 42 are subordinate to facts found. Paragraphs 43 through 46 are not necessary to the resolution of the dispute. Paragraph 47 is subordinate to facts found. Paragraph 48 is not necessary to the resolution of the dispute. Paragraphs 49 and 50 are subordinate to facts found. Paragraphs 51 and 52 are not necessary to the resolution of the dispute. Paragraph 53 is subordinate to facts found. Paragraph 54 constitutes a conclusion of law. Paragraph 55 is subordinate to facts found. Paragraphs 56 through 59 are not necessary to the resolution of the dispute. Paragraph 60 is subordinate to facts found. Paragraph 61 is not necessary to the resolution of the dispute. Respondent's Facts: Paragraphs 1 through 7 are subordinate to facts found. Paragraph 8 with the exception of the second sentence is subordinate to facts found. The second sentence is contrary to facts found. Paragraphs 9 and 10 are subordinate to facts found. The Second Paragraph 10 is not necessary to the resolution of the dispute. Paragraphs 12 through 15 are subordinate to facts found. Paragraph 16 is not accepted in its suggestion that Petitioner as opposed to Respondent had some obligation to decide the point at which the agreement between Respondent and Okaloosa County would be terminated and the consequences that would pertain upon that termination. Paragraph 17 is subordinate to facts found. Paragraph 18 see discussion concerning Paragraph 16. Paragraph 19 is subordinate to facts found. The first two sentences to Paragraph 20 are subordinate to facts found. The remaining sentences within that paragraph are not necessary to the resolution of the dispute. Paragraphs 22 and 23 are subordinate to facts found with the exception that the date set forth in Paragraph 23 as September 19, 1992 should be September 20, 1992. Paragraphs 24 through 27 are subordinate to facts found. Paragraph 28 see discussion as to Paragraph 16. Paragraph 29 is not necessary to the resolution of the dispute. COPIES FURNISHED: Stephen Marc Slepin, Esquire 1114 East Park Avenue Tallahassee, Florida 32301 Alfred O. Bragg, Esquire Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Linda Loomis Shelley, Secretary Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100
Conclusions An Administrative Law Judge of the Division of Administrative Hearings has entered an Order Closing File and relinquishing jurisdiction in this proceeding. A copy of the Order is attached to this Final Order as Exhibit A.
Other Judicial Opinions REVIEW OF THIS FINAL ORDER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULES OF APPELLATE PROCEDURE 9.030(b)(1)(C) AND 9.110. TO INITIATE AN APPEAL OF THIS ORDER, A NOTICE OF APPEAL MUST BE FILED WITH THE DEPARTMENT’S AGENCY CLERK, 2555 SHUMARD OAK. BOULEVARD, TALLAHASSEE, FLORIDA 32399-2100, WITHIN 30 DAYS OF THE DAY THIS ORDER IS FILED WITH THE AGENCY CLERK. THE NOTICE OF APPEAL MUST BE SUBSTANTIALLY IN THE FORM PRESCRIBED BY FLORIDA RULE OF APPELLATE PROCEDURE 9.900(a). A COPY OF THE NOTICE OF APPEAL MUST BE FILED WITH THE APPROPRIATE DISTRICT COURT OF APPEAL AND MUST BE ACCOMPANIED BY THE FILING FEE SPECIFIED IN SECTION 35.22(3), FLORIDA STATUTES. YOU WAIVE YOUR RIGHT TO JUDICIAL REVIEW IF THE NOTICE OF APPEAL IS NOT TIMELY FILED WITH THE AGENCY CLERK AND THE APPROPRIATE DISTRICT COURT OF APPEAL. MEDIATION UNDER SECTION 120.573, FLA. STAT., IS NOT AVAILABLE WITH RESPECT TO THE ISSUES RESOLVED BY THIS ORDER. Final Order No. DCA11-GM-008 CERTIFICATE OF FILING AND SERVICE I HEREBY CERTIFY that the original of the foregoing has been filed with the undersigned Agency Clerk of the Department of Community Affairs, and that true and correct copies have been furnished to the persons listed below jn the manner described, on this — day of January, 2011. yy A fas 4 Paula Ford, Agency Clerk DEPARTMENT OF COMMUNITY AFFAIRS 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 By U.S. Mail and electronic mail: Thomas A. Cloud, Esq. Clayton Bricklemeyer, Esq. City Attorney, Polk City David Smolker, Esq. GRAY ROBINSON, P.A. Bricklemeyer & Smolker, P.A. Post Office Box 3068 500 East Kennedy Boulevard, Suite 200 Orlando, Florida 32802-3068 Tampa, Florida 33602-4708 tcloud@gray-robinson.com claytonb@bsbfirm.com davids@bsbfirm.com Jack P. Brandon, Esq. Michael T. Gallaher, Esq. Peterson & Myers, P.A. Post Office Box 1079 Lake Wales, FL 33859-1079 jbrandon@petersonmyers.com mgallaher@petersonmyers.com STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS DEPARTMENT OF COMMUNITY AFFAIRS, Petitioner, Case Nos. 10-0045GM 10-2797DRI vs. CITY OF POLK CITY, Respondent, and POLK CITY ASSOCIATES, LLC, AND COLE'S PROPERTY, LLC, Intervenors. ORDER CLOSING FILES This cause having come before the undersigned on the Notice of Voluntary Dismissal, filed January 10, 2011, and the undersigned being fully advised, it is, therefore, ORDERED that the files of the Division of Administrative Hearings in the above-captioned matter are hereby closed. DONE AND ORDERED this llth day of January, 2011, in Tallahassee, Leon County, Florida. Blac aad J. LAWRENCE JOHNSTON 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 EXHIBIT Filed with the Clerk of the Division of Administrative Hearings this llth day of January, 2011. COPIES FURNISHED: David L. Jordan, Esquire Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399 Jeffery Sullivan, Esquire Stidham & Stidham, P.A. 150 East Davidson Street Bartow, Florida 33831 Jack P. Brandon, Esquire Peterson & Myers Post Office Box 1079 Lake Wales, Florida 33859-1079 K. Clayton Bricklemyer, Esquire Bricklemyer, Smolker & Bolves, P.A. 500 East Kennedy Boulevard, Suite 200 Tampa, Florida 33602 Thomas A. Cloud, Esquire Gray Robinson, P.A. 301 East Pine Street, Suite 1400 Post Office Box 3068 Orlando, Florida 32802-3068
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
The Issue The issue before the Florida Land and Water Adjudicatory Commission (FLWAC) in this proceeding is whether to grant the Petition to Establish the Arborwood Community Development District (Petition), dated November 17, 2003. The local public hearing was conducted for the purpose of gathering information in anticipation of rulemaking by FLWAC.
Findings Of Fact Petitioner, Seminole Community Action, Inc. (SCA), is a community action agency serving Seminole County, Florida. The organization is a non- profit corporation located at 1101 Pine Avenue, Sanford, Florida and has been in operation since 1966. According to its by-laws, SCA administers the Community Services Block Grant (CSBG) program in Seminole County. The general purpose of the agency is to plan and mobilize resources to help improve the quality of life for low income families throughout the community. Its primary source of funding has been from the federal and state governments although it does receive a small amount of private funding through contributions. Effective July, 1982 the responsibility for administering the CSBG program was shifted from the federal government to respondent, Department of Community Affairs (DCA). This meant that applications for CSBG funding would thereafter be filed with respondent rather than the United States Department of Health and Human Services. After considerable difficulty in preparing its initial application, SCA filed an application with DCA on January 28, 1983 seeking a $95,435 CSBG grant retroactive to the period December 1, 1982 through September 30, 1983. The contract called for monthly payments to SCA of $9,543.50 and required SCA to serve an estimated 4,075 CSBG eligible low-income clients during the 10-month period. Prior to filing the application, DCA representatives spent two days with SCA officials assisting them in completing the application. At that time, SCA was told that its fiscal records and operations were inadequate, that certain changes would be necessary relative to recording liabilities on its books, that its purchasing procedures must be improved, and that its record- keeping in general was in poor condition. Because of these deficiencies, DCA advised SCA by letter dated February 18, 1983, that seven special conditions pertaining to fiscal accountability would attach to the grant of funds. These conditions are set forth in Attachment A to the contract. In addition, DCA advised SCA by letter dated February 24, 1983 of federal requirements pertaining to the composition of its board of directors. Information concerning SCA's compliance with the board requirements was requested no later than March 17, 1983. A contract was eventually signed by SCA on March 29, 1983 whereby it agreed to adhere to the seven special conditions. DCA representatives made two "monitoring visits" to SCA on May 18-20, 1983 and June 1-3, 1983 to determine if the organization's fiscal operation, board composition and program services were in compliance with state regulations and contract terms. Although SCA was given advance notice of the visits, and told to have appropriate records available to substantiate fiscal reports, client records, compliance with the seven special contract conditions, and other matters, the auditors found a "lack of compliance with the law for the structure of the Board," 1/ "lack of fiscal procedures and adequate controls for fiscal accountability," "no documentation that the agency (was) serving low income persons," and a "questionable effort" to provide services to that class of persons. A more detailed list of deficiencies is found in respondent's exhibit 8 received in evidence. As a result of the above deficiencies, SCA was advised by letter dated June 15, 1983 that "it (was) imperative that corrective measures be promptly undertaken to correct these problems." A deadline for compliance in eight specific areas was set for July 15, 1983, and if it did not do so, SCA was told the contract would be terminated. On July 15, 1983, SCA was notified by letter that its contract was being terminated effective June 30, 1983. Such action was appropriate because SCA failed (a) to comply with board of director structure requirements, (b) to resolve a carry-over debt from a prior year, (c) to justify a $9,544 budget amendment, (d) to resolve $3,700 in disallowed costs, and (e) to "demonstrate a continuing fiscal accountability to the satisfaction of the Department." Petitioner has also participated in the State Weatherization Assistance Program whereby it receives state funds for conservation purposes. These are federal grant monies funded under the Low-Income Home Energy Assistance Act of 1981, and are granted for the purpose of providing information, services and technical assistance concerning weatherization and energy conservation to the low income community. It received $21,432 in grant funds during the fiscal year 1982-83, and was subjected to an audit by a state monitoring team in July, 1983 to insure compliance with program goals. The team found SCA had paid salaries from the grant funds in violation of federal regulations and had constructed a "cooler room" to store surplus food with grant monies in violation of federal law. Then, too, CA's administrative expenses totaled 34.9 percent of total funds which was far in excess of the norm of 5 percent for other agencies. Finally, it spent on the average over $1,300 to weatherize each home when the maximum allowed was only $1,000 per home. Because of these deficiencies, SCA's application for renewal of the program during 1983-84 was properly denied. Petitioner has also made application for CSBG funds for fiscal year 1983-84. Since the time its 1982-83 contract was terminated, SCA has failed to satisfy the concerns which were raised in the letter of July 15, 1983 which terminated the contract. Specifically, its Board of Directors still does not comply with federal or state requirements, and its fiscal irregularities have not been resolved. Until it does so, it is ineligible for grant funds and DCA is justified in refusing to approve SCA's applications. SCA contends all matters raised in the July 15, 1983 termination letter have been satisfactorily resolved. In making this contention it relies primarily upon a letter dated February 15, 1984 from the United States Department of Health and Rehabilitative Services to SCA, and the adoption of amended by- laws which comply with federal guidelines pertaining to community action agency board of directors. However, neither the letter nor the amended by-laws satisfy the long-standing deficiencies cited by DCA.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the relief requested in Seminole Community Action, Inc.'s petition be DENIED. DONE and ORDERED this 1st day of March, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 1985.
