Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are found: At the present time, all purchased electric power for the main campus area of the University of Florida (University) is obtained from Florida Power Corporation (FPC). The power is routed through a single FPC substation and from there the university-owned system distributes power to eight campus substations. The University consumes approximately 1 billion pounds of steam and in excess of 200 million kilowatt hours (kwh) of electricity, for which the University paid approximately 4 million dollars and 10 million dollars, respectively in 1986. The University projects that it will consume nearly 300 million kwh of electricity by 1995. "Cogeneration" means the creation of two forms of energy from one energy source. Cogeneration at the University contemplates the creation of electrical and thermal (i.e., steam) power for the University from a single generation facility fueled by natural gas. Having been selected to participate in the cogeneration demonstration project, the University in consult with the Governor's Energy Office (GEO), Lane & Edson, a law firm retained earlier by the GEO as a consultant in this area, and Reynolds, Smith & Hill (RSH), an engineering and consulting firm with experience in cogeneration, decided to: (a) employ a "request for proposal" solicitation process under Section 287.012(11), Florida Statutes, rather than an "invitation to bid" process under Section 287.012(7), Florida Statutes; aid (b) conduct the process in two phases. A Request for Proposals was used because it was not feasible to specify in detail the precise form of technology, financial arrangements, and other factors that would be most beneficial to the University. Request For Proposal - Phase I (RFP-I) was designed to elicit qualifications from contractors and enable the University to select a limited number qualified to submit detailed proposals in response to Request For Proposal - Phase II (RFP-II). The purpose of RFP-II was to elicit detailed proposals from the pre-qualified contractors and select a contractor with whom the University would negotiate a final cogeneration contract. The University project was placed under the primary supervision of the University Physical Plant Division, overseen by Mr. Robert Cremer, Director. A Cogeneration Technical Advisory Committee was selected to assist Mr. Cremer and was composed of faculty members from the Department of Chemical Engineering, Department of Economics, Department of Finance, Insurance and Real Estate and the Department of Industrial and Systems Engineering. On December 5, 1985, the University issued RFP-I, with a response date of February 5, 1986, "to select contractors who will then be asked to submit final proposals under Phase-II." The RFP-I requested a statement of qualification from contractors who desired to develop a cogeneration facility and to enter into a "shared savings contract" with the University. Because of the complexity and expense of preparing and evaluating the subsequent cogeneration proposals, the RFP-I "anticipated" the number of contractors "chosen to receive" the RFP-II not to exceed five. The RFP-I advised those contractors receiving the RFP-I that any protest as to the reasonableness, necessity, or competitiveness of the RFP-I or any selection made under the terms of RFP-I should be filed in accordance with Rule 6C1-3.020(19), Florida Administrative Code. The RFP-I advised the potential contractor that the contractor ultimately selected would provide comprehensive services for the cogeneration facility, including: (a) the design and installation of the equipment; (b) the operation and maintenance of the facility; and (c) the financing for the facility under either a third party ownership agreement or a tax-exempt lease purchase. The contractor would either: (a) operate the facility and sell thermal (steam) and electrical output to the University pursuant to a service contract; or (b) lease the facility to the University pursuant to a tax-exempt lease purchase and operate it under an operating agreement. Seventeen responses to RFP-I were received by the University by the February 5, 1986, deadline. Among them were Babcock & Wilcox (B&W), Gainesville Regional Utility (GRU), Ebasco Services Inc. and Aptco Constructors (GRU/EBASCO/APTCO), a joint venture, and FPC. The RFP-I proposals were reviewed by an "evaluation team" (team) appointed by the University consisting of representatives of GEO, RSH, Lane & Edson and the University. The team was composed of Henry Erikson, Senior Analyst, GEO; Edwin Coxe, RSH (University's consultant); Marlene Michaelson, Lane & Edson (GEO consultant); Barbara Wingo, University's General Counsel's Office (Advisor); Dale Kirmse, University's Faculty Technical Advisory Committee ; Edgar Callaway, Physical Plant Division; and Richard Boe, Assistant Director, Physical Plant Division, Chairman. The team, using the criteria set out in the RFP-I, grouped the seventeen proposers into four categories: (1) Best Qualified; (2) Highly Qualified; (3) Qualified; and (4) Not Qualified. B&W and GRU/EBASCO/APTCO were found highly qualified and ranked three and four, respectively. Only the top seven proposers were ranked. Although FPC was found to be qualified, it was given no ranking. Three proposers were found not qualified. The team recommended that only four proposers be selected as finalists, i.e. eligible to submit responses to RFP-II: Foster-Wheeler Power Systems, Inc.; Impell Corp/FPL Energy Services; B&W; and GRU/EBASCO/APTCO. By memo dated May 7, 1986, Mr. Boe conveyed the team's ranking and recommendation to Mr. Cremer. Mr. Cremer did not fully agree with the team's recommendation. Having attended the oral presentation, Mr. Cremer reviewed the proposals and made his own evaluation. Mr. Cremer considered nine firms "highly qualified," five firms "qualified," and three firms "questionable." The principal difference was that Mr. Cremer considered FPC as one of the "very highest qualifiers." After discussing his evaluation of the proposers with Mr. Boe, Mr. Cremer interviewed FPC concerning its interest in the project. Once satisfied of FPC's capabilities and interest in the project, Mr. Cremer recommended to William Elmore, Vice President of Administrative Affairs, that FPC and Dravo Engineers, Inc. be added to the "finalists" list. To the extent that Mr. Cremer was motivated to include FPC in the RFP- II process as a result of FPC's long-standing supplier relationship, he was not motivated out of any bias or prejudice against GRU or in favor of FPC, but rather was motivated by a sincere belief that FPC's demonstrated reliability in providing electrical power in the past was a legitimate consideration under RFP- I. However, his recommendation is adequately supported by evidence of FPC's qualifications to proceed to RFP-II independent of FPC's prior service to University. Mr. Elmore requested that Mr. Cremer discuss his recommendation with the team and get their concurrence. Although individual members of the team were not overly enthusiastic about Mr. Cremer's recommendation, the team concurred in the recommendation. Because of Mr. Elmore's concern with adding only two of the seven proposers rated as "qualified" to the "finalists" list, he ultimately selected fourteen firms as qualified to continue on to RFP-II. The proposers selected by Mr. Elmore to continue on to RFP-II were rated by the team as "Best Qualified," "Highly Qualified" or "Qualified." Five proposers were found to have presented the most satisfactory response to RFP-I, and thus would automatically receive RFP-II, they were as follows: B&W, Dravo Engineers, Inc.., Foster-Wheeler Power Systems, Inc., GRU/EBASCO/APTCO and Impell Corporation/FPL Energy Services. The other nine proposers listed, including FPC, were required to request RFP-II in writing by July 15, 1986, if they wished to participate in RFP-II. FPC timely notified the University in writing of its desire to participate in RFP-II. Mr. Elmore's decision was conveyed to the proposers on June 23, 1986, by letter from James E. Theroux, Purchasing Director. The letter advised the proposers that this was "official notice of award for RFP-I" and that "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes." The letter also advised the proposers that all responses to RFP-II would be evaluated in accordance with RFP-II criteria. Mr. Elmore was a stockholder in Florida Progress Corporation, the parent company of FPC, during the time he was involved in the decision making process for the cogeneration project. Due to this possible conflict of interest, Mr. Elmore removed himself from the process on November 9, 1987. Mr. Elmore did not use his position with the University to influence or persuade anyone, including Mr. Cremer or President Criser, to include FPC on the "finalists" list or to rate the proposal of Gator Power (GP), a joint venture of B&W and FPC, over any other proposal. Also the evidence is clear that Mr. Elmore would not benefit financially from FPC or GP ultimately contracting with the University to design, construct, finance and operate its cogeneration facility any more so than he would had FPC continued furnishing electricity to the University. Mr. Elmore did not attempt to influence or dissuade anyone from moving forward with the cogeneration demonstration project at the University so that FPC could continue furnishing electricity to the University. Although GRU was not aware of Mr. Elmore's financial interest in the Florida Progress Corporation, or Mr. Elmore's and Mr. Cremer's involvement in the selection process in regard to FPC when RFP-I award was announced, GRU was aware that RFP-I had "anticipated" limiting those qualified to continue on to RFP-II to five and that fourteen proposers (FPC included) had been selected to continue on to RFP-II if they desired. Neither GRU/EBASCO/APTCO, as a joint venture, nor GRU, individually, filed a protest, petition or objection in response to the June 23, 1986 notice of RFP-I award until April 1, 1988. The University did not act arbitrarily or capriciously or abuse its discretion in its decision to allow the fourteen contractors rated as qualified to submit proposals for RFP-II. Nor was it erroneous or unreasonable for the University to allow the fourteen contractors rated as qualified to submit proposals for RFP-II. There was no prejudice to GRU by allowing the fourteen contractors rated qualified to submit proposals for RFP-II. Additionally, there is no competent, substantial evidence that FPC received unfair advantage or favored treatment in the University's evaluation of the proposals as a result of its long-standing relationship as supplier of electricity to the University, its various gifts to the University and sponsorship of the University programs, and its social and financial "ties" with the University officials, fund-raising entities, and alumni. On November 5, 1986, the University proceeded to the second phase of the cogeneration procurement and issued RFP-II, inviting each of the fourteen finalists selected in RFP-I to submit a final proposal. RFP-II required the proposer to provide comprehensive services, including the design, selection and installation of cogeneration equipment, and the operation, maintenance, servicing and financing of the facility. The proposer was required to provide thermal and electrical power from the facility to the University and to structure the University's payment obligations for those services. Each proposer was to determine for itself the system which could best satisfy the needs of the University and the proposer's requirements for return on investment. This was consistent with the demonstration character of the project and for flexibility. Section 1B, RFP-II, lists the project objectives as follows: Satisfy the site requirements for thermal and electrical power set forth in this RFP; Maximize the benefits, ,financial and otherwise, available to the University in connection with the facility; and Avoid any capital investment or financial guarantees by the University. Although RFP-II required the proposals to meet the project objectives set out above, the University was required to evaluate each proposal using the evaluation criteria which were clearly and separately set out in Section IIID of RFP-II. Section III, RFP-II, sets out certain rules and conditions for preparing and submitting the final proposal and the criteria and methodology to be used in evaluating the proposals. Additionally, the proposers are advised that selection to enter into contract negotiations with the University "does not mean that all aspects of the Final Proposal are acceptable to the University, and the University reserves the right to modify or reject terms and conditions ... as it deems necessary to ensure satisfactory development of the Facility." Comments, both verbal and written, made during the proposal process indicated that the University understood that it could not request or allow changes in the proposals considered to be material modifications that would change the relative ranking of the different proposals after the opening at 4:00 p.m. EDT on March 5, 1987. The selection under RFP-II only constituted a commitment by the University to enter into exclusive discussions with the selected contractor for the purpose of executing an agreement satisfactory to both parties after which the University would submit the proposed contract to the Board of Regents (BOR) for final approval. RFP-II stated that after the BOR approved the contract between the University and the selected contractor, the selected contractor would be required to submit to the University a conditional commitment for financing satisfactory to the University in its sole discretion. It was only after the University's approval of the financing to be used subsequent to the initial contract approval that the contract would be executed by the University and the selected contractor. Addendum I to RFP-II provided that to facilitate the contractor's ability to obtain financing the University would, upon request, execute the contract prior to the contractor's efforts to obtain financing under Section C, 5(c) of the RFP-II. Under this situation, all contractual obligations of the University would be contingent upon the contractor's ability to obtain satisfactory financing. RFP-II did not require proposers to have actually obtained their proposed financing at the time of proposal submission. Conditional commitments for financing could be submitted by the proposers 60 days after BOR contract approval. BOR's approval could occur as much as 105 days after selection of the successful contractor. Section III, RFP-II, required that the proposals "reflect and be based on" specified conditions, which in pertinent part, provides: The contractor must operate and maintain the Facility during the Contract Period. The Contractor must either (i) operate the Facility for its own account and sell thermal and electrical output from the Facility to the University pursuant to an energy services contract, or (ii) lease the Facility to the University pursuant to a tax-exempt lease purchase (conditional sale) arrangement, and operate the Facility for the account of the University pursuant to an operating agreement. The University's payment obligation must be based on the reduction in the University's present costs.... If a service contract is proposed: the University will agree to purchase all or part of its thermal and electrical requirements from the contractor as long as the terms of the contract are met. the contractor may sell excess electrical power to a public utility... (i) ... (ii) ... the University must be given the option, but must not be required, to purchase the Facility from the Contractor at the end of the Contract Period. If a lease purchase is proposed, the Facility must be transferred to the University for a nominal sum at the end of the Contract Period. The lease purchase must comply with all applicable laws and rules of the State of Florida. The Contract Period is negotiable, however, the Contractor should be willing to enter into an agreement of significant length (e.g. ten years or longer). 7. ... 8. The University intends that the Facility will be designed and built to accommodate all or part of the thermal and electrical power demands of the University.... The University will also consider proposals that include modifications to existing facilities (e.g. replacing a chiller) to increase efficiencies or compatibility with cogeneration system. 9. ... 10. ... In the event the University is given the option of purchasing the Facility from the Contractor prior to the end of the Contract Period, any such agreements must be assignable to the University. 11. ... 12. ... 13. The economic assumptions contained in Appendix C must be used in performing all financial analysis required by this RFP-II. This requirement is to allow for a comparable evaluation of competing proposals only, and the University makes no representations that those assumptions are valid. Appendix C supplied the methodology, assumptions, and formats for financial analysis which proposers were required to use in preparing their benefit analysis. Appendix C required that the financial analysis "cover an Operating Period of not less than 20 years..." Section IIID, RFP-II, entitled "Evaluation Methodology," listed four categories of criteria in order of their relative importance: (1) "Financial Terms and Risks," (2) "Technical Approach," (3) "Experience, Qualifications and Management Ability of the Respondent," and (4) "Ability to Implement Project Promptly." Each of the four listed criteria contained a number of subparagraphs reflecting "factors" to be considered. Factors listed under Financial Term and Risks were: the proposed term (length) of the development agreement; the projected net dollar benefit to the University; the guaranteed net dollar benefit to the University; the timing of projected and guaranteed economic benefits to the University; the specific formula that will be used to determine the payment obligations of the parties; the timing, terms and flexibility of the University's purchase options (both during and at the expiration of the term of the development agreement); project financing commitment and interest, credibility of financing sources, and likelihood that the project will be financed as proposed; respondent's strategies for minimizing the financial risk to the University, including insurance; and sensitivity of financial proposal to variations in future fuel costs and electrical power revenues. Factors listed under Technical Approaches were: engineering design -- soundness and expected reliability of performance, operating and maintenance requirements; efficiency and system size -- thermal and electrical production relative to side load requirements and physical size limitations overall efficiency based on fuel use; respondent's strategies for minimizing the technical risk to the University; effects on campus environment -- environmental and aesthetic aspects; security and access requirements; quality, completeness and level of detail of technical information; and conformity of proposed approach to all applicable rules, regulations, and laws. Although the four categories of criteria were listed in the order of their importance, RFP-II did not quantify the weight that would be given to any of the four categories or to the various "factors" that appeared within the categories of criteria, nor did it indicate whether those "factors" appeared in the order of their relative importance. On December 3, 1986, the University conducted the required on-site visit/conference with those contractors selected in RFP-I and wishing to respond to RFP-II. The University was represented by Mr. Cremer, Ms. Michaelson, Mr. Erikson, Ms. Wingo, Mr. Jack Winstead, Associate Director, University Purchasing Division, and Dr. Ed Coxe, RSH, the University's principal consultant in evaluating responses to RFP-II. Five potential Respondents attended, including representative of GRU, FPC and B&W. Those proposers who attended the December 3, 1986, conference were permitted to ask questions concerning RFP-II and University's technical requirements. While immediate verbal responses were given, subsequent written answers were provided to each proposer attending that were stated to be the official response of the University. This was in accordance with Section IIIB, 10, of RFP-II. In response to a question concerning the length of the operating agreement, the University indicated no preference but that longer was not necessarily better. In response to a question concerning weight to be given to the four evaluation criteria, the University answered that it had listed them in order of relative importance and felt it could make a fair evaluation without assigning weights. In response to a concern expressed by a contractor that the University may request changes during contract negotiations, the University responded that it did not contemplate requesting changes in any proposal that would change the relative ranking of different proposals. Although this was not stated as the official position of the University in its written synopsis of the conference, it was stated in writing on several occasions by the University's Purchasing Director, James E. Theroux to both Richard Boe and Robert Cremer in response to letters from both Power Ventures and GRU dated July 8, 1987 and July 13, 1987, respectively, expressing their concern over the answers given by GP to written questions posed by the University on May 11, 1987. It was reasonable for the University not to assign specific quantitative weights or relative weights to the various criteria or categories under the circumstances of this proposal. The proposal process was designed to create a demonstration project and develop a model contract. The University was not in a position, based on some prior experience or expertize, to know precisely what solution would exist to a problem never before formulated. It was, therefore, an appropriate exercise of discretion for the University to propound RFP-II in the fashion that it did. GRU filed no objection or protest to the reasonableness, necessity or competitiveness of any portion of RFP II prior to April 1, 1988. On December 9, 1986, FPC filed a written request with the University to permit FPC and B&W to form a joint venture (GP) for the purpose of responding to RFP-II. Both FPC and B&W were rated qualified to submit RFP-II. Such substitution was provided for under Section IIIB, II, RFP-II. On December 18, 1986, the University approved the formation of the joint venture arrangement. The proposers attending the conference on December 3, 1986, including GRU, were made aware of this joint venture arrangement and approval by the University at the time they received the written synopsis of the December 3, 1986 conference. A joint venture agreement had not been signed by FPC and B&W at the time GP submitted its proposal or at the time of University's review of GP's proposal. However, there is no prohibition to this being finalized at or before the contract is executed. GRU filed no objection, protest, or petition objecting to the University approving and allowing GP as a joint venture to respond to RFP-II prior to April 1, 1988. There is no evidence that the University acted arbitrarily or capriciously or abused its discretion in allowing GP, a joint venture formed by FPC and B&W, to respond to RFP-II. Certainly, all agreements, including the GP joint venture, must be finalized before the contract is signed. On March 5, 1987, GP, GRU, and Power Ventures (FP&L/Energy Services) submitted proposals in response to RFP II. GRU uncoupled the joint venture of GRU/EBASCO/APTCO and proceeded with the RFP-II process on its own. The proposal of Power Ventures is not at issue in this proceeding and is therefore not discussed. GRU's proposal can be summarized in its material parts: GRU would own the cogeneration facility and provide electricity and operating and maintenance services to the University. The facility would consist of an LM 2500 aircraft derivative gas turbine, generator and a separate steam turbine and generator. It would carry a capacity of approximately 25 megawatts (MW). The University would purchase all of its electrical power from the GRU system and all of its thermal requirements up to the capability of the cogeneration facility. The University would be expected to provide its own backup or peak demand steam beyond that produced by the cogeneration facility. GRU proposed an operating agreement of ten years beginning November 1, 1988, which was stated to be "renewable for five-year increments." The University interpreted this to mean that contract terms would have to be renegotiated at the beginning of each five-year term and it was not until December 3, 1987 in response to Dr. Coxe's finalized evaluation that GRU advised the University that "the option given the University to renew the contract has always meant that it world extend the terms of the contract as originally negotiated. The University would have the option to purchase the facility at "fair market value" at the end of the initial contract term or at the end of any renewal term. GRU's proposal included two pricing options: a shared savings option; and a guaranteed savings option. Under the shared savings option, the University and GRU would split equally the savings generated by the contractual arrangements when compared to the University's existing mode of electrical and thermal energy supply. The University would also share the losses, if any. Under the guaranteed savings option, GRU would provide "a reasonable guarantee of 15 percent savings for the supply of electricity when compared to that provided by its existing supplier and 5 percent savings for the supply for steam and chilled water when compared to the University's cost to generate Such energy. GRU would be responsible for all project risks but the University would bear the entire risk of increases in the applicable FPC rate because the savings rate was tied to the existing FPC rate. Under either option, the Florida Public Service Commission (PSC) has rate structure jurisdiction over GRU and therefore, GRU's proposal is conditioned on PSC taking no action to disallow contract pricing. GRU assumed in its financial analysis that it would need to build a new substation and transmission line for connection with the University. The cost for these facilities was estimated at $3.50 million. The total cost for the cogeneration facility as proposed by GRU was $28,033,000, including the substation and bond issuance costs. The unit would be financed by GRU through the sale of Tax Exempt Municipal Revenue Bonds. GRU utility system revenues would be pledged as collateral for the bonds. Repayment of the debt would be the sole obligation of GRU unless the University decided to "buy-out" the facility at the end of any contract period. In the event of a "buy-out" of the facility, the record is unclear whether any option existed for the University other than paying off the remaining debt at the time of the "buy- out." GRU's cogeneration facilities would not satisfy all of the University's needs for steam and electrical energy. The remaining electrical energy required by the University would be supplied by GRU from its existing generation units. The remaining thermal energy would be supplied by the University's present system. GRU's existing system currently has substantial excess capacity. GRU has a system-wide generating capacity, without the cogeneration facility, of approximately 470 MW, and a current peak demand of approximately 265 to 270 MW. Under GRU's proposal, the University would have to purchase part of its power from the GRU system beginning the first year of operation. GRU proposed to operate the cogeneration facility as a "satellite" of its system, rather than a "free-standing" facility supplying all of University's needs through cogeneration. It is estimated that by 1995 the GRU cogeneration facility would supply only 66 percent of the University's projected electric load. GRU calculated a total net present value (NPV) of benefits to the University of $26,529,000. GP's proposal can be summarized in its material parts: GP would lease the cogeneration facility to the University under a tax-exempt, lease- purchase arrangement. The maximum lease period would be 20 years. The University would pay the purchase price of the facility over 20 years. The installed cost of the cogeneration facility, including all associated development and financing costs, specifically the purchase of the substation from FPC for $2.4 million, was estimated at $40,020,00. The total lease payments payable over the twenty-year period would be approximately $74 million. At the end of this period, the University would own the facility for a nominal payment. However, the University could "buy-out" the GP facility at the end of any operating period without a large capital outlay by merely "taking-over" the lease or debt service payments. The GP facility would be capable of generating approximately 50 MW of electrical power and could supply 100 percent of the University's electrical needs for at least the 0-year period that the proposers had been instructed to assume for purposes of their proposals as the maximum contract term. However, it was evaluated by the University at only 92.5 percent reliability due to required down time for maintenance. The GP facility was based on an LM 5000 aircraft derivative gas turbine. The gas turbine would drive a generator and a heat recovery boiler and would utilize exhaust gases to generate steam for sale to the University and for steam injection. The gas turbine would be capable of operating in a fully steam-injected mode ("full STIG"), by which steam would be injected at various entry points into the gas turbine, generating higher power outputs. Without STIG, the LM 5000 would supply approximately 31 MW of electrical power. With "full STIG," the LM 5000 would supply approximately 50 MW of electrical power. GP would operate the facility and provide all of the University's electrical and thermal power. GP and the University would split equally the "net operating income" from the cogeneration facility, and this would constitute the University's savings. "Net operating income" would essentially be the difference between what it costs GP to generate the electrical and thermal power and what it would have cost the University to purchase the same electricity from FPC at tariff rates and to generate the steam itself. GP would lease the land on which the facility would be located from the University at an annual charge of $200,000. GP specifically provided that the $200,000 lease payment "shall be due and payable regardless of the economic viability of the project and shall remain in force throughout the term of the Operating Agreement." The ground lease payment, payable regardless of the economics of the project, would "assure the University that the sum of its fixed tax-exempt lease payment obligation and its Operating Agreement energy payment never exceeds the University's total avoided energy costs. GP proposed to operate the unit under an Operating Agreement with the University. However, due to possible limitations imposed by the federal tax laws on the tax-exempt lease, the Operating Agreement was subject to a five year maximum term, including renewals. It was stated to be the intent of GP "to renew the Agreement after each five year term, throughout the 20-year financing period." However, the mention of the five year restriction on the operating and maintenance agreement introduced ambiguity into the proposal which was later clarified by GP in answer to questions posed by the University. GP proposed to share the benefits of the project through two vehicles: a fixed cost ground lease of $200,000 per year; and a 50/50 sharing of profits between the University and GP. Using the University's standard set of assumptions the net present value (NPV) of the benefits discounted at 8 percent was projected at $28,161,000. Net present value means the present value of funds received in the future. The Operating Agreement would include a "carry forward, carry back" loss recovery provision which would subject the University's previous savings to recapture if losses were experienced in excess of GP's previous operating profits. Sales of excess power were to be made from the energy generated by the cogeneration facility. A renegotiation clause was included which would provide for renegotiation of the contract if natural gas prices were to exceed a negotiated threshold. The proposal contained a letter from Smith Barney, Harris Upham & Co., Inc. which explained the financing to be arranged in accordance with Section IV, D-2(c) of the RFP-II. The Lease Purchase Agreement would contain a non-appropriation clause. The non-appropriation clause was intended to allow the University to terminate the lease if the Legislature failed to appropriate funds beyond the current fiscal year or period. Unless the Legislature failed to make appropriations for the lease payment, the University would have an absolute and unconditional obligation to make lease payments. The Lease Purchase Agreement would contain a non-substitution clause "to inhibit exercise of the non-appropriation clause." The purpose of the non- substitution clause was to prevent the Legislature from failing to fund the University's obligation to make payments on the lease purchase obligation. The clause would provide that if the University were to terminate or default under the lease, it may not "replace the facility" or "acquire by contract" or "provide itself the service or function which the Facility is intended to provide." The precise language of the non-substitution clause that would make it acceptable to the parties and the State Comptroller and legally enforceable would have to worked out during negotiation. Non-substitution clauses are used in some of the State of Florida contracts, but must have the approval of the Comptroller. There was insufficient evidence to show that the non-substitution clause proposed by GP would be rejected by the Comptroller. This matter can be resolved before or during negotiation. Likewise, there was insufficient evidence to show that the non-substitution clause contained in the GP proposal was not responsive to RFP- II. Section D-8 of the proposal provided that in addition to the University being treated as the owner of the facility for tax purposes, the University had the "right to purchase the facility at any time for the outstanding principal amount of the COPs [Certificates of Participation]..." The total cost of the GP cogeneration facility would be approximately $40,020,000. In accordance with RFP-II the University conducted interviews with the proposers. The interviews, including presentation by the proposers, took place between April 21 and April 23, 1987. There was no intent on the part of the University, in proposing the verbal question to the proposers at the interviews, to somehow transmit to GP what the University was seeking so that GP could modify its proposal and thereby have a competitive edge on the other two proposers. The only purpose of the interviews was for clarification so that as many matters as possible could be resolved before negotiation with the selected contractor. In accordance with the RFP-II, the proposers could be required to "clarify its proposal or further explain the elements of its proposed cogeneration system," and reduce "any clarification to writing" which would "be considered part of the proposal." As a result of the University's review and questions developed during the presentation by proposers held on April 21-23, 1987, the University transmitted to each proposer a set of written questions on May 11, 1987. All responses to the questions were received by June 12, 1987, which date was considered by the University "to be the end of the proposal period." However, the University did not allow any material modifications that would change the relative ranking of the different proposals during the period of March 5, 1987, the date of proposal openings, and June 12, 1987, the date the University considered "to be the end of the proposal period," but did allow clarifications to the proposals during this period. The questions were divided into "financial" and "technical" questions, and were further subdivided into "general" and "specific" questions. The general" questions went to all proposers. The specific questions were addressed to specific provisions of each proposal and went only to the relevant proposer. Financial General Question No. 1 stated: The University wishes to finalize as many business terms of each proposal as possible prior to selecting a contractor and beginning negotiations. On any issue where the contractor is unable to provide a firm commitment in its proposal (e.g., gas prices) the University will assume the most conservative potential scenario and apply it equally to each proposer. Any guarantee of benefits to the University must be clearly stated and quantified or the University will not include it in its final analysis. In its response to Financial General Question No. 1, GRU stated that it had received letters of intent from three gas suppliers for the supply of natural gas to the project, but further stated that GRU would "require a commitment on the University's part before any agreement can be executed by GRU." GP responded to Financial General Question No. 1 as follows: Gator Power understands the University's intent to finalize as many business terms of each proposal as possible prior to selecting a contractor. We also understand the University's desires for guaranteed energy savings, based on predetermined formulas or algorithms. We have, therefore, structured an alternate proposal to meet those desires. The alternate proposal in simple terms is a guarantee of a specific minimum (2 percent) and maximum (15 percent) energy savings. In further response to the question GP stated: We have restructured our financing proposal to allow Gator Power to propose contractual terms that will meet the University's objectives. The tax- exempt lease structure has not been changed. However, the underlying tax-exempt bond issue will now be a private activity bond rather than a Governmental Bond. This change specifically avoids the five-year restriction on the term of the Operation and Maintenance Agreement and allows Gator Power to offer its guaranteed discount to the University over a contract period adequate to protect the University. Financial General Question No. 4 stated: Explain fully how your proposal fulfills the requirement of Section 255.258, Florida Statutes, which indicates that the Contractor must guarantee that the annual payments to the Contractor will always be less than the University's avoided costs. Clarify the minimum guaranty that you would offer and the split of revenues once revenues reach a fixed dollar amount. Please identify the value of the guarantee ... the point at which revenues would be shared with the University and the percentage of the revenues that would go to the University. Provide all information, including revised forms, that substantiate your response. In its response, GRU stated that it did not believe that Section 255.258, Florida Statutes was particularly relevant to this project but that "GRU's guaranteed savings option would meet an interpretation of the Section that required a guaranteed reduction in the University's costs." GRU also indicated that its desire was to enter into a shared savings contract with the University, where both parties share equally in the benefits associated with the project. GRU's response also stated that: As a clarification to GRU's reasonable guaranty ... we can make the following comments. GRU is willing to provide a floor on the savings and the shared savings option for example, some minimum savings to the University). However, GRU is not willing to make guarantees that, over the long haul, expose the citizens of Gainesville to a loss. Our calculations show that it would require a significant increase in the cost of gas before this project would become uneconomical to GRU and the University, but our willingness to guarantee a savings to the University must be tied to the gas contract that GRU will negotiate. Unfortunately, the gas contract cannot be completed until the University makes some commitment to GRU. In its response, GP advised the University that its "revised offer meets [the requirement of] Section 255.258, Florida Statutes, by offering a guaranteed discount on both electricity and steam delivered to the University." GP also stated: Gator Power's original "split-the-savings" proposal also fulfills the requirements of Section 255.258, Florida Statutes. Since it [the split-the- savings proposal] includes a guarantee that the University's lease payment plus its payments to Gator Power never exceed business-as-usual, and it includes a separate guarantee of an annual $200,000 land lease payment, the University is always guaranteed that its energy costs will be at least $200,000 below business-as-usual. Financial General Question No. 10 stated in pertinent part: If the proposer suggested a separate operating and maintenance agreement, the proposer must provide a firm, nonnegotiable cost for this service in its response... GRU responded that this question was not applicable to its proposal since there would be no separate O & M agreement. In pertinent part GP responded as follows: Our proposal dated March 4, 1987 assumed O & M costs in 1989 dollars itemized below. The maintenance estimate included allowances for planned overhauls and repairs, and minor unplanned outages, but did not specifically include reserves for undefined occurrences beyond the warranty period, where the risk is small. We have added $400,000/year in 1989 dollars to provide such a reserve and thus make the O & M costs firm for both our revised guaranteed savings proposal, as well as the original shared savings proposal which remains an option available to the University. Financial Specific Question No. 1 to GP states: As stated in the oral interviews, the University will not have the ability to carry forward or carry backward any portion of project revenues it receives. Please confirm your understanding of this situation with a statement in your response. GP responded as follows: Gator Power understands that the University does not have the ability to carry forward or carry backward any savings that it receives. Gator Power's original "split-the-savings" offer remains in effect with that provision deleted. The carry-forward, carry-back provision is not applicable to Gator Power's "guaranteed discount" offer. Financial Specific Question No. 2 to GP states: The proposal states that Gator Power will bear the risk of cost fluctuation for fuel supply, O & M, insurance, standby power, etc. Since the cost of each of these items will directly impact net revenues, and net revenues will be shared 50/50 with the University, it appears that the University shares the risk of cost increases. GP's response was as follows: In Gator Power's original "split-the-savings" offer, the University shares in subject cost increases only to the point where costs equal revenues and project income is zero. Beyond this point, Gator Power assumes 100 percent responsibility for cost increases. Therefore, because of the fixed savings provided by the $200,000 per year land lease, the University is guaranteed always to receive a minimum annual savings of $200,000, and it has no risk that its expenses will be greater than business-as- usual. In Gator Power's alternate guaranteed discount offer, the University shares no risk of fuel supply, O & M, insurance or other cost increases. The guaranteed discount is subtracted directly from "business-as-usual expenses regardless of the level of project costs. This is a major risk protection feature of our revised offer. Financial Specific Question No. 4 to GP states: Since an energy-producing facility is characterized as an "exempt" facility, is it necessary to limit the operating agreement to five years? If so, what assurances can you provide to the University that the cost of this agreement will not increase unreasonably when it is time to sign a new agreement at the end of five years? GP's response in pertinent part was as follows: After further consideration of the University's objectives and research into available financing alternatives, Gator Power is proposing that the project be financed through a Tax-Exempt Lease structured as a "private activity bond" rather than as a "Governmental Bond..." Review of the facts and circumstances by tax counsel indicates that this approach is feasible and appropriate. By structuring the financing as a "private activity bond," the Operation and Maintenance Agreement need not be limited to five years, but can be extended for the entire life of the issue consistent with other Agreements to provide the University with the desired cost protection. Financial Specific Question No. 5 to GP states: Please restate your position on a "renegotiation clause" as described on page D-3-4 of your proposal. If there is a provision that will allow Gator Power to negotiate in a situation in which gas prices increase substantially, would Gator Power be willing to consider allowing the University to renegotiate if major increases were to occur in the cost of the University's avoided power costs? GP responded as follows: As this question applies to its original split-the- savings proposal, the answer is "yes." The question is not applicable to our revised "guaranteed discount" proposal. Financial Specific Question No. 3 to GRU states: Is GRU willing to agree to provide standby and supplemental power and to negotiate a power purchase agreement with the University if the University decides to purchase the facility from GRU at some point in the future and become a qualifying facility? Would GRU be willing to help the University obtain QF status in the future, if such assistance is needed? GRU's response was as follows: GRU is very willing to provide standby and supplemental power and to negotiate a power purchase agreement with the University if the University decides to purchase the facility from GRU at some time in the future. GRU is also willing to help the University in obtaining QF status in the future if such assistance is needed and desired. GRU believes that the University should not be greatly concerned about potential changes of QF requirements in the future. The facility that GRU proposes does not marginally meet the QF "tests," but rather exceeds them by a wide margin. GRU believes that any changes to QF regulations in the future will be directed towards those facilities that are marginally eligible for QF status. When asked in Financial Specific Question No. 4 to "provide a pricing formula that will be used to calculate fair market value at the termination of the ten-year period," GRU stated that, while a "number of methods" exist for determining fair market value, GRU was proposing a method in its answer, and was willing to discuss and negotiate the issue of method and final amount. As an additional option, GRU proposed that the fair market value of the facility be based on the NPV of the remaining principal at the beginning of the eleventh year. Financial Specific Question No. 9 to GRU states: One of the options in your proposal, and the University's preferred option both include a provision for guaranteed savings. Have you received Public Service Commission feedback on the potential of offering a "guarantee" to one customer? GRU's response was as follows: We have discussed the guaranteed savings option with the PSC staff and have received mixed reactions. It is an obvious concern to the PSC if one customer is being subsidized by other customers. If the University requires that a guarantee be made, GRU may be unable to guarantee a fixed savings on electricity, but has complete flexibility to provide any discount to the steam and chilled water sold to the University, and can therefore guarantee that the total cost to the University will be some fixed amount less than they would have otherwise paid. This is the case because the PSC has absolutely no jurisdiction whatsoever with regard to steam and chilled water. GRU therefore sees no regulatory obstacle to providing the University with a guaranteed savings, but GRU must be concerned from a business perspective to achieve a return on its investment commensurate with the risk it assumes. The written question the University submitted to the three proposers on May 11, 1987, which required an answer, were for purposes of clarification only and were consistent with the University's rights under RFP-II to seek further explanation from the proposers. The University did not attempt to require or to solicit modification of the GRU, GP or Power Venture proposals with verbal questions or discussions during the interviews with the proposers between April 21-23, 1987. Neither did the University, during the interview, attempt to solicit the proposers "best offer," as in an auction atmosphere, but rather obtained bona fide clarification of the proposals. The possibility of GP's carry forward, carry back provision being invoked during the term of the Operating Agreement was highly unlikely, and GP's deletion of that provision in response to the University's Financial Specific Question No. 1 did not materially change GP's proposal such that GRU's proposal was placed in an economical disadvantaged position in the University's review. Deleting the carry forward, carry back provision did not give GP a competitive advantage over GRU in the University's review. Furthermore, there is insufficient evidence to show that even with the inclusion of the carry forward, carry back provision in the GP proposal that it was not responsive in that: (1) it constituted a financial guarantee by the University; (2) it did not ensure the University that each year its costs for electrical and thermal energy would be less than "business as usual" and; (3) a contract containing such a clause would not be approved by the Comptroller. Additionally, there is insufficient evidence to show that the University would be prohibited from establishing a contingency fund account allowing for the deposit of the savings that may be subject to the CFCB provision outside the State Treasury until the contingency no longer existed or that the BOR and the Executive Office of the Governor would not approve depositing such funds outside the State Treasury in accordance with Section 240.281(8), Florida Statutes. GP's proposal stated GP's willingness to enter into a 20 year relationship with University but also indicated that federal tax laws restricted GP from doing so except through separate 5-year operating agreements. GP proposed tax-exempt financing as a conceptual matter, not as a highly detailed or specific mechanism. There was no particular approach for achieving tax-exempt financing required in RFP-II. The change from the financing being treated as a "government bond" to being treated as a private activity bond (PAB) did not affect the tax-exempt nature of the financing structure. It remained tax exempt at all times since both government bonds and PABs are exempt from federal income taxation. The change in COP nomenclature did not result in the GP financing proposal being restructured. GP's response to Financial Specific Question No. 4 constitutes a permissible clarification of the effect of the federal tax laws on GP's stated willingness to enter into an operating agreement of up to 20 years, and is not an impermissible material modification. Furthermore, as an alternate analysis, Dr. Coxe assumed the University did not accept Gator Power's clarifications regarding the specific type of tax-exempt financing and evaluated the Gator Power proposal based on a tax-exempt lease with a five-year operating agreement arid concluded that even with a tax-exempt lease with a five year operating agreement, the GP proposal was significantly better than the GRU proposal. Therefore, any change from a government bond to a PAB was not a material modification of the GP Proposal. If GP's tax exempt financing structure is to be treated as a PAB, GP could not sell power to FPC from the cogeneration facility, except on an emergency basis. This is as a result of treasury regulations, which summarized, prohibit sales by such a facility to a utility which serves more than two contiguous counties. FPC serves more than the two contiguous counties. Nothing in the GP proposal establishes that such sales of electric power to FPC were essential or that the economic viability of the GP cogeneration facility was dependent upon such sale. The deletion of excess sales as contemplated in the original GP proposal amounted to no more than $8,000 revenue per year, out of a total "base cost" projected revenue of more than $2 million. Deletion of excess sales as contemplated in the original GP proposal does not constitute a material modification of the GP proposal nor does it place GRU in a less competitive position than it previously occupied. Furthermore, it had no effect on the responsiveness of the GP proposal. Although GP's "alternate" guaranteed savings was discussed by GP in its answers to both Financial Specific and Financial General Questions posed by the University and discussed by the University evaluators during the evaluation process, the "alternate," guaranteed savings was neither accepted by the University nor used by the University in its evaluation of the GP proposal. However, had the University accepted the "alternate" guaranteed savings proposed by GP and used it in its evaluation of the GP proposal, it would have been a permissible clarification and not an impermissible modification. The fixed O & M proposal set out in GP's response to Financial General Question No. 10 did not enter into the University's evaluation and ranking and therefore did not afford GP any competitive advantage over GRU. Although GP responded affirmatively to financial specific Question No. 5 in that it would consider a renegotiation clause, the renegotiation clause was not considered by the University in its evaluation or ranking and therefore did not afford GP any competitive advantage over GRU. A large portion of GRU's projected savings to the University comes from the way GRU prices the supplemental electricity which it will furnish to the University from its existing power plant. The savings to the University from this supplemental electricity was considered in the University's evaluation of GRU's proposal. However, had the NPV of GRU's projected savings been evaluated only on the basis of the savings coming from the cogeneration facility, the savings to the University would have dropped 27 percent from the projection used in the University's evaluation. Because a portion of the University's electricity needs was to come from GRU's existing facilities, resulting in price negotiation for the supplemental electricity in the event of a "buy-out" by the University, GRU's proposal contained a disincentive for "buy-out." There was no showing of any economic advantage in the University taking over GRU's cogeneration facility. GP offered a firm guarantee of savings while GRU's guarantee was conditioned on not exposing "the citizens of Gainesville to a loss," and not establishing such guarantee until after its selection as the contractor and negotiation of a gas contract. Additionally, any "guaranteed savings" on the energy produced at the cogeneration facility proposed by GRU, as well as any supplemental electrical power furnished from GRU's existing system, hinges, not only on GRU not exposing the citizens of Gainesville to a loss, but on the PSC not disallowing the rate structure as proposed by GRU or through reduced charges for the steam and chilled water to compensate for any possible changes in the rate charges for electrical power presently proposed by GRU. After considering all the evidence of whether GP's proposal would qualify for tax-exempt status as PAB (assuming the deletion of the sales of "excess" electricity to FPC), no definitive conclusion can be reached; however, there is a high probability that it will qualify for tax-exempt status. The University intends to require an unqualified opinion letter from bond counsel or a private letter ruling from the Internal Revenue Service on the question of tax exemption; therefore, this matter cannot be resolved until such time as GP moves forward on its financing arrangements which may not occur, under Addendum I to RFP-II, until after contract negotiations are finalized. The LM 5000 does not have extensive field experience operating in the full Stig mode. However, at those sites visited by Dr. Coxe where the LM 5000 with steam injection was operating, the LM 5000 had experienced very satisfactory performance and reliability. The availability of the LM 5000 was comparable to the LM 2500. There is competent, substantial evidence to conclude that the LM 5000 is technologically sound. There is insufficient evidence to conclude that GP's selection of the LM 5000 placed its proposal in a more technically risky position than the GRU proposal using the LM 2500. Additionally, under the GP proposal, the LM 5000 will, in the early years of operation, be able to supply all of the University's electrical power needs without operating in full Stig mode, thereby giving the industry additional time to work out any technical problems that may exist with the LM 5000. On June 16-18, 1987, Dr. Edwin Coxe conducted site visits with the three proposers and allowed them to review and comment on the economic model (model) developed to evaluate the financial aspects of the proposals. Dr. Coxe developed the model based upon proposed economic models submitted by GRU, GP and Power Ventures and contained as much detail or sophistication as contained in any of the models submitted by the three proposers. All three proposers were given the same opportunity to review, comment on, and question the model. GRU commented on and offered suggested changes to the model. All concerns about the model or the calculations were adequately resolved to the satisfaction of GRU, GP, Power Ventures and Dr. Coxe. Dr. Coxe prepared draft evaluations of the proposals and circulated them for review and comment to the University, GEO and Lane & Edson in August and October of 1987. Dr. Coxe prepared a finalized evaluation (Evaluation) and gave a formal presentation of the Evaluation on November 13, 1987 to University President Marshall Criser, the University staff, and representatives of GRU, GP and Power Ventures. In the Evaluation all proposals were evaluated using the specific criteria set out in RFP-II, including an early buy-out which was required by the authorizing legislation. The University in using buy-out as one of the evaluation criteria in the evaluation process was neither acting arbitrarily or capriciously nor abusing its discretion. At no time prior to April 1, 1988 did GRU file a protest or object to the University's use of buy-out as one of the evaluation criteria. Although GP and Power Ventures proposed variable rate financing with interest rates substantially lower than that posited by GRU, all proposals were assumed to require fixed-rate financing at the rate proposed by GRU to put all proposals on a comparable basis. However, in subsequent calculations different interest rates were used and the projected NPV savings were fairly insensitive to changes in interest rates. A one percent increase in interest rate would reduce the NPV savings for the GP proposal by 1.2 million dollars. Likewise, a reduction in the interest for GRU would not significantly affect the savings or change GRU's ranking. NPV figures were used as one of the evaluation tools in Dr. Coxe's financial analysis. An NPV of benefits to the University from a proposer represented a projection of benefits which might be gained. This projection was based on various assumptions and estimates. The NPV of benefits in Dr. Coxe's analysis were not based on fixed or firm costs and thus were strictly forecasts. Dr. Coxe's financial evaluation applied the factors in RFP-II and consisted of: (1) a review of the calculation methodology and the projected savings characteristics of each proposal; (2) a determination of evaluation parameters such as interest rates, ownership terms, and fuel and electric rates; (3) a calculation of net present value savings; (4) a performance of sensitivity evaluation; (5) a comparison of savings guarantees and; (6) an analysis of the risk/benefit scenarios depicted by each proposal. Although the three proposers projected savings based upon different assumptions, Dr. Coxe established evaluation parameters that made the assumptions consistent among the proposals and consistent with the proposed operating agreements. Similarly, Dr. Coxe made assumptions as to the conditions for the renewal/renegotiation of the operating agreement and for comparison evaluated the proposals by assuming that the University would purchase the GRU and GP facilities at the end of the first ten years of operation, and would purchase the Power Ventures facility at the end of the first five years of operation. Under this evaluation the GP proposal yields were substantially higher than GRU's proposed yields. These calculations are shown in Joint Exhibit 3, Tab 4, page 33-34. However, basing the calculations on a buy-out in the twentieth year, GRU's yield would be approximately $4 million more than GP's yield at the twentieth year. Dr. Coxe also considered the sensitivity of the projected NPV figures to higher gas rates, lower and higher availability, and various buy-out periods and did not factor into these figures any regulatory uncertainty with respect to the rates charged by GRU. Dr. Coxe evaluated GP's proposal without regard to the "renegotiation clause" because he assumed the University would not agree to such a clause in the negotiation process. Thereby Dr. Coxe ignored any implication of such clause changing the savings projection calculated by Dr. Coxe for the GP proposal. Although there were some questions concerning the ability of GP to obtain tax exempt financing, Dr. Coxe assumed those problems would be "worked out" in the negotiation process or during the financing under Addendum I. Dr. Coxe's assumed that the University could operate the GP facility at GRU's project cost rather than the higher project cost proposed by GP. That assumption was based on the University having the same type costs as GRU and not the additional corporate costs that GP would have. That assumption was reasonable. Dr. Coxe considered all of the criteria of RFP-II in making the Evaluation and did not rely solely on the estimated NPV savings in making his recommendation. After considering all the criteria, Dr. Coxe ranked GP first, GRU second and Power Ventures third. On December 3, 1987, the University received comments from the three proposers in response to the Evaluation and on January 5, 1988, Dr. Coxe responded to the comments from the three proposers. Dr. Coxe responded in detail to each of GRU's comments regarding the ranking and evaluation methodology used by him, and carefully reviewed and described how each of GRU's concerns did not change his evaluation based upon all of the required criteria set out in RFP-II. On January 13, 1988, Dr. Coxe gave a briefing to the Faculty Technical Advisory Committee. As a result of this briefing and in conjunction with the advise of Dr. Brigham, an economics professor at the University and a member of the committee, Dr. Coxe re-analyzed the NPV of the project to reflect the probability of the buy-out in a particular year. Dr. Coxe employed a uniform probability distribution, a recognized economic concept, since there was no certainty as to which year the buy-out might occur. Under that calculation, the GP proposal offers the greatest opportunity for the University to take over the project prior to the end of the 20-year horizon examined. Dr. Coxe's calculations are shown in Joint Exhibit 4, Tab 6, page 1-2. On January 14, 1988, Dr. Coxe submitted a supplement to the Evaluation, including the reanalyzed NPV, which showed the GP proposal to be the best proposal considering all the criteria contained in RFP-II. On February 11, 1988, Dr. Coxe gave a formal presentation of his response to the three proposers to President Criser, the Provost, and seven Vice-Presidents. Also at this same presentation, the three proposers, at the specific request of President Criser, were permitted to make a "live" presentation to him, the Provost and the seven Vice-Presidents, in order to expand upon their comments and criticisms of the Evaluation, the response and the supplemental report On February 26, 1988, Dr. Coxe submitted a response to the proposers presentations given on February 11, 1988. GRU submitted to President Criser comments on Dr. Coxe's response. On March 3, 1988, Mr. Cremer forwarded a report to Associate Vice President Schaeffer recommending that the University negotiate with GP ("Cremer Report"). Concurring with the Cremer Report were the Faculty Technical Advisory Committee, the GEO, the Lawson McWhirter law firm, and various University officials. After the Cremer Report, GRU was permitted to submit comments and those comments were evaluated. Coxe's evaluations, GRU's comments, and the Cremer Report, as well as other documents, were furnished to the Provost and Vice Presidents. The Vice Presidents attended two meetings with RSH, GRU and GP where the proposals were discussed. The Provost and Vice Presidents unanimously recommended GP. Thereafter, President Criser read the proposals and reports, and on April 1, 1988, determined that the University would proceed to negotiate the contractual relationship between the University and GP. Criser's determination was based upon his review of the proposals and reports, his presence at two meetings, the recommendations of RSH, Lane and Edson, GEO, University Faculty Technical Advisory Committee, Director of the Purchasing Division, Director of the Facilities Planning Division, Campus Engineers-Physical Plant Division, seven University Presidents, the Provost and Lawson McWhirter, the evaluation criteria set forth in RFP II and the requirements of Section 255.258, Florida Statutes. There is competent, substantial evidence in the record to show that the University's decision to negotiate with GP rather than GRU was neither arbitrary or capricious nor an abuse of its discretion. Dr. Coxe did not evaluate any of the responses to RFP-II for responsiveness, however there is competent, substantial evidence in the record to show that the University not only considered, but found both GP's and GRU's responses to RFP-II of March 5, 1987, to be responsive. Additionally, there is competent, substantial evidence in the record to show that both GP's and GRU's responses to RFP-II of March 5, 1987, were responsive. GRU's proposal, as well as those of GP and Power Ventures were subjected to criticism, although not unwarranted, during the evaluation process; however, there is insufficient evidence to show that such criticism resulted in the GRU proposal being treated unfairly, or the GP proposal being treated favorably at the expense of the GRU proposal. The State of Florida has a "volume cap" on the amount of funds available for PAB allocation. The balance of funds available, even a zero (0) balance, is subject to change on a day to day basis, depending on recaptured amounts. Therefore, trying to determine the availability of funds for PAB allocation at some point in the future when the bonds are to be issued is premature in that one can only speculate as to the availability of sufficient volume cap. GRU responded to both oral and written questions from University and to the consultant's report concerning its position on a building to enclose a portion of the facility, contract renewal terms, the regulatory issue and the determination of the "fair market value" of the facility at a given point. However, GRU's responses were for clarification only and did not constitute material modifications that would change the relative ranking of the different proposals. Furthermore, the University did not consider GRU's clarification concerning the enclosure for a portion of the facility or its intent concerning contract terms in its evaluation of GRU's proposal. In terms of barrels of oil saved over the 20 year period, the energy conservation benefits to the University are approximately 20 percent greater with the GP proposal than with the GRU proposal. Although a AAA rating for the COP's would lower the interest rate for the GP proposal, there was insufficient evidence to show that the COP's would obtain such a rating. The University's concerns over the possibility of PSC disallowing or modifying the lower rates at which GRU proposed to sell electrical power to the University under GRU's proposal at the time the University was evaluating GRU's proposal were legitimate. And, although GRU later obtained a declaratory statement from PSC supporting its contention that PSC had no jurisdiction over rates charged the University for steam and water by GRU, it does not prevent PSC from exercising its rate structure jurisdiction over the present electrical rates charged by GRU or any future electrical rates GRU may charge the University under changed circumstances such as in the case of a "buy-out" of the facility by the University.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the University enter a final order denying the City of Gainesville, Gainesville Regional Utilities' amended petition and confirming the Findings of University President Marshall Criser which authorized the designation of a negotiating team to finalize the contractual relationship between the University of Florida and Gator Power as the cogeneration developer to construct and operate the facility. Respectfully submitted and entered this 30th day of November, 1988, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2034BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Gainesville Regional Utilities Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(3); 3(4); 4(5); 6(8); 7-8(11); 11(12-13); 12(13); 13(14); 14(14); 15(15); 16(15); 17(16); 20(18); 21(18-19); 23(21); 25(23); 26(26); 27(27); 28(28); 29(32); 30(33); 31(34-36); 35-37(29-38); 42(37); 43(39); 44(40); 45(41); 46(41); 47(43); 50(45); 51-52(47); 53(48-50); 54(50); 55(52); 56(53-54); 58(43- 45); 59-60(58); 61(62); 62-63(58); 64(58-59); 65(60); 66(61); 93(32); 100(61); 104(63-64); 106(48); 108(58); 131(65); 138(67); 139-140(72); 158(70); 165(59); 171(67); 175-176(69); 180(41); 186(47); 190-191(127); 198(123-124); 202(125); 224(59); 228-229(58). Proposed finding of fact 2 is covered in the background. 3. Proposed findings of fact 9, 49, 57, 7, 83, 97, 101, 123, 169, 170, 172, 207-211, 230-236, 238, 245, 257 and 274-276 are unnecessary or irrelevant. 4. Proposed findings of fact 5, 10, 18, 33, 34, 75,80, 86, 89, 90, 94, 96, 107, 110, 113, 116-118, 122, 132, 133-136, 141, 145,147,148, 156, 159, 160, 177, 178, 182, 183, 185, 187- 189, 192-197, 199-201, 203-206, 212, 218, 221, 225, 254, 255 and 269-272 are subordinate to the facts actually found in this Recommended Order. 5. Proposed findings of fact 19, 24, 32, 38, 39, 48, 67-7'4, 78-79, 84-85, 92, 98, 99, 102, 103, 105, 109, 111, 112, 114, 115, 119-121, 124-127, 129, 130, 149-153, 157, 161- 164, 166,174, 179, 181, 219, 223, 227, 240, 243, 246-252, 259-263, 265-268, 273 and 277 are rejected as being unsupported by competent, substantial evidence in the record. 6. Proposed findings of fact 22, 40, 41, 81, 82, 137, 142-144, 146, 155 , 167, 168, 213-217, 244 and 258 are rejected as being argument rather than findings of fact even though certain facts set out in the proposed findings of fact have been adopted in the Findings of Fact of this Recommended Order or have been determined to be subordinate to the facts found in this Recommended Order or found to be unnecessary or irrelevant. Proposed findings of fact 76 and 207 are rejected as being a restatement of testimony rather than findings of fact. The first sentence in proposed finding of fact 77 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to facts actually found in this Recommended Order. The first sentence of proposed finding of fact 87 is adopted in Finding of Fact 62. The balance of proposed finding of fact 87 is rejected as being unsupported by competent, substantial evidence in the record. The first sentence of proposed finding of fact 88 is adopted in Finding of Fact 126. The balance of proposed finding of fact 88 is subordinate to the facts actually found in this Recommended Order. The first two sentences of proposed finding of fact 91 are rejected as being argument rather than a finding of fact, the balance is rejected as being a restatement of testimony rather than a finding of fact. The first two sentences of proposed finding of fact 95 are unnecessary or irrelevant, the balance is rejected as being unsupported by competent, substantial evidence in the record. The first sentence in proposed finding of fact 128 is adopted in Finding of Fact 65, the balance is subordinate to the facts actually found in this Recommended Order. The first sentence of proposed finding of fact 154 is rejected as being unsupported by competent, substantial evidence in the record, the balance is adopted in Findings of Fact 59 and 83. The first sentence of proposed finding of fact 173 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to the facts actually found in this Recommended Order. The proposed finding of fact 184 is rejected as being a restatement of testimony although it is subordinate to facts actually found in this Recommended Order. The first sentence of proposed finding of fact 220 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to facts actually found in this Recommended Order. The first sentence of proposed finding of fact 222 is subordinate to facts actually found in this Recommended Order, the balance is rejected as being unsupported by competent, substantial evidence in the record. The first and last sentence of propose finding of fact 226 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to the facts actually found in this Recommended Order. The first sentence of proposed finding of fact 237 is unnecessary or irrelevant, the balance is rejected as being argument rather than a finding of fact. The first sentence of proposed finding of fact 239 is subordinate to the facts actually found in this Recommended Order, the balance is unnecessary or irrelevant. The first two sentences of proposed finding of fact 241 are subordinate to the facts actually found in this Recommended Order, sentence 5 is unnecessary or irrelevant and the balance is rejected as being unsupported by competent, substantial evidence in the record. The first sentence of proposed finding of fact 242 is subordinate to the facts actually found in this Recommended Order, the balance is rejected as being unsupported by competent, substantial evidence in the record. Proposed finding of fact 253 is unnecessary or irrelevant since that fact alone is not determinative of "coming on line sooner" and the other evidence was insufficient to show that GRU would come on line sooner than the other proposers. The first two sentences of proposed finding of fact 256 are subordinate to facts actually found in this Recommended Order, the balance is rejected as being unsupported by competent, substantial evidence in the record. Proposed finding of fact 264 is rejected as being a restatement of opinions witnesses or their testimony rather than a statement of fact. Specific Rulings on Proposed Findings of Fact Submitted By Respondent, University of Florida 1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(122); 2- 3(119-121); 5(1); 6(2); 7(3); 14,26(4); 28-30(7); 31(8); 32(12); 33(6); 34(7); 35(15); 36-37(14); 38-39(15-16); 40(18); 41(19); 42-43(20); 44(23); 47-48); 49(43); 50(12,14); 51(45); 52(132); 53(38); 54-55(77); 56-61(21-22); 64(7); 66(21); 68(26); 69(27); 70-71(29); 72(64); 73(63); 74(13); 75(37; 76(45); 77(63); 78-79(65); 82(70); 83(77); 84(78); 85(61); 86(67); 87(92); 88-89(58); 90(67); 91-93(68,92); 94(27); 95-98(29); 99(30); 100(63,64,77); 101(63); 102(65- 77); 105-107(72,79-82); 109(30-31); 110-113(58,72,82); 114(28); 117-118(29,32); 119-123(32,101); 124(58); 125(101); 126(94)); 127(90,91); 129(47,54-56,90); 130- 134(58,94); 137-138(54,56,58); 139-140(102)); 146-147(95); 148-149(96); 150(97); 151,153(98); 154-157(100-101); 160(102); 161(103); 162(104'; 163(105); 164- 166(106); 167(107); 168(107); 169(111); 171(112); 172-173(113); 174,176(114); 178-180(115,116); 183(117); 184-185(118); 189(128); 205,208(119); 209-210(121); 211-212(122). 2. Proposed findings of fact 4, 12, 13, 15, 17, 18, 21, 22, 23, 24 and 25 are covered in the Background to this Recommended Order. 3. Proposed findings of fact 8, 9, 10, 11, 16, 19, 20, 116, 144, 145, 175, 197, 198, 199, 200, 215 and 216 are unnecessary or irrelevant. 4. Proposed findings of fact 27, 45, 46, 62, 63, 65, 67, 80, 81, 103, 104, 108, 115, 128, 135, 136, 143, 152, 158, 159, 170, 177, 186-188, 190-195, 201- 204, 206, 207, 213 and 214 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 141, 142 and 196 are rejected as being unsupported by competent, substantial evidence in the record. The first two sentences of proposed finding of fact 217 are unnecessary or irrelevant, the last sentence is adopted in Finding of Fact 122. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Gator Power Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 6(3); 7(2); 8(6); 9-11(4-5); 12-13(8); 14(10); 15(12); 16(13); 17(15); 18(14-15);19(14); 20(15); 21-23(16); 24-25(17-18); 26(19); 27-29 19-20); 30(24); 31(19); 32-35(26- 29); 36(29-31); 37(64); 38-39(33); 40(34); 41(36); 43(42); 44(37); 46-47(38-39); 48-50(43); 51-52(45-46); 53(47-51,53); 54(55); 55(54); 56-57(56-57); 58(58,62); 59-61(59); 62-67(60,61,59,58,63); 69(65-66); 70-71(67); 72-73(68); 74(75); 75(74); 76-77(76); 78-80(67,68,71); 81-84(72); 85(73); 86(94); 87- 90(99,100,112,113); 91-93(114); 94-100(116-122); 102(112); 107-108(76); 117- 119(108); 121-122(113-114); 125-126(114-116); 148-149(43); 160,164(17); 169(21); 180(78); 186(58); 187(70); 188,190(78); 191,193(67,87); 195(58); 197(58,79)); 198(72); 200(80); 201(32,80); 202(80); 203(72); 205,209(82); 213(72); 217(81); 219(82); 223-225(83,59,84); 227-228(85-86); 233-234(69); 237-239(88,58,73); 241(73,89); 243(89);250(42); 253(28); 261-262(40-34); 263(32-34); 294(93). Proposed findings of fact 1-5, 101, 130 and 172 are covered in the Background to this Recommended Order. 3. Proposed findings of fact 109, 110, 144-145, 162, 163, 208, 210, 222, 226, 231, 232, 240, 244, 245, 247, 295 and 320 are unnecessary or irrelevant. 4. Proposed findings of fact 42, 45, 68, 103-106, 111-116, 120,123, 124, 127, 129, 131, 132, 138, 156-159, 161, 170, 171, 173, 175, 176, 182, 196, 199, 204, 206, 207, 211, 214, 215, 218, 230, 235, 283, 285 310-312, 315-319, 321-328, 332, 333, 341, 344-347 and 350-353 are subordinate to the facts actually found in this Recommended Order. 5. Proposed findings of fact 128, 133-137, 139-143, 146, 147 150-155, 165- 168, 174, 177, 178, 181, 183-185, 189, 192, 194, 212, 216, 220, 221, 229, 236, 242, 246, 248, 249, 251, 252, 254-260, 264, 265-282, 287-289, 293, 296-298, 302, 305-309, 313, 314, 330, 334-340, 342, 343, 348-349 are rejected as being argument rather than findings of fact even though certain facts set out in these proposed findings of fact have been adopted in the Findings of Fact of this Recommended Order or have been determined to be subordinate to the facts actually found in this Recommended Order or have been rejected as being unnecessary or irrelevant. Proposed findings of fact 284, 286, 290-292, 299-301 and 303 have been rejected as being a restatements of testimony rather than findings of fact even though some of the testimony may have been adopted in the Findings of Fact of this Recommended Order or have been determined to be subordinate to the facts actually found in this Recommended Order or have been rejected as being unnecessary or irrelevant. Proposed finding of fact 179 is adopted in Finding of Fact 70 with the exception that the deletion of CFCB was in response to Financial Specific Question 1 rather than Financial Specific Question 4. The first sentence of proposed findings of fact 329 and 331 are unnecessary or irrelevant, the balance of proposed findings of fact 329 and 331 is rejected as being a restatement of testimony rather than a finding of fact. COPIES FURNISHED: Marshall M. Criser, President University of Florida 226 Tigert Hall Gainesville, Florida 32611 Ann Carlin, Esquire Post Office Box 490, Station 52 Gainesville, Florida 32602 Attorney for Petitioner Kenneth G. Oertel, Esquire R. L. Caleen, Jr., Esquire Oertel and Hoffman, P.A. 2700 Blairstone Road, Suite C Tallahassee, Florida 32301 Attorney for Petitioner Barbara C. Wingo, Esquire University of Florida 207 Tigert Hall Gainesville, Florida 32611 Attorney for Respondent John W. McWhirter, Jr., Esquire Lawson, McWhirter, Grandoff & Reeves 201 East Kennedy Boulevard, Suite 800 Tampa, Florida 32602 Attorney for Respondent James F. Stanfield, Esquire Senior Counsel Office of General Counsel Florida Power Corporation Post Office Box 14042 St. Petersburg, Florida 33733 Attorney for Intervenor Robert Pass, Esquire Carlton, Fields, Ward, Emmanuel Smith & Cutler, P.A. Post Office Box 3239 Tampa, Florida 32601 Attorney for Intervenor
The Issue Whether the Respondent, Michael E. Langton, violated Sections 112.313(6) and 112.3141(1)(c), Florida Statutes, and Section 8(e), Article II, Constitution of the State of Florida, by his activities and contacts with staff of the Department of Community Affairs on matters dealing with the Community Development Block Grant Program?
Findings Of Fact The Respondent. The Respondent, Michael E. Langton, took office as a member of the Florida House of Representatives, on October 22, 1985. The Respondent has continuously served as a Florida state representative since October 22, 1985. At all times relevant to this proceeding, the Respondent served as a public officer subject to Sections 112.313(6) and 112.3141(1)(c), Florida Statutes, and Section 8(e), Article II, of the Constitution of the State of Florida. Since October, 1981, the Respondent has been a grants consultant. The Respondent formed, owned and was employed by Langton Associates, Incorporated. Upon taking office as a Florida state representative in 1985, the Respondent requested an opinion of the Commission concerning his continued work for Langton Associates, Incorporated. The opinion of the Commission indicated that the Respondent could continue to work as a grants consultant but that he should not personally appear before state agencies. Langton Associates, Incorporated. The Respondent has been the sole stockholder of Langton Associates, Incorporated (hereinafter referred to as "Langton Associates"), since it was formed in October, 1981. The corporation is a for-profit-corporation. Among its functions, Langton Associates provides consulting services to governments eligible to apply for grants under the Community Development Block Grant Program and assists governments in preparing and submitting applications for grants under the program. During the period of time at issue in this proceeding, the Respondent was paid a salary from Langton Associates for his services to, and on behalf of, the corporation. The salary paid to the Respondent has been determined by the Respondent. Although the salary varies from year-to-year, it averages approximately $50,000.00 a year, including 1988, 1989 and 1990. The City of Macclenny, Florida, was among the clients of Langton Associates. Macclenny paid Langton Associates $12,000.00 a year for five to six years, including 1988. Income paid to Langton Associates by its clients was deposited in a business account from which the Respondent's salary was paid. During the five to six years prior to July, 1990, Langton Associates made approximately $350,000.00 for services to its clients. During the period of time at issue in this proceeding, the Respondent, through Langton Associates, provided services to a number of local governments. Several of these local governments paid Langton Associates an annual fee. The average fee was approximately $30,000.00 a year. Other clients of Langton Associates paid on a per grant application basis approximately $3,000.00 per grant application. The Community Development Block Grant Program. The Community Development Block Grant Program (hereinafter referred to as the "CDBGP"), is a Federal government program whereby funds are provided to States to use to improve small local communities. Funds received for the CDBGP in Florida are administered by the Florida Department of Community Affairs (hereinafter referred to as the "Department"), through the Department's Division of Housing and Community Development. Funds for the CDBGP are received and are distributed for four categories of grant projects: (1) housing; (2) neighborhood revitalization; (3) economic development; and (4) commercial revitalization. CDBGP funds are intended to be used in part to assist small local governments to revitalize homes and neighborhoods. Each year the Department adopts administrative rules governing the CDBGP and the manner in which annual funds are to be distributed in Florida. The Department's revised administrative rules provide the steps to be followed in each annual funding cycle. The procedures for determining which small governments receive CDBGP funds generally include the following steps: An applicant workshop is held at the beginning or the middle of the funding cycle; An opening date is established for when Applications are to be submitted; A closing date is established for when Applications are scored and awards of funds are made; Applications are initially ranked according to their scores; Site visits are conducted by the Department; Applications are ranked again. These rankings can be challenged; and Funds are awarded. The Secretary of the Department makes the final decision as to how CDBGP funds are awarded. All applications for CDBGP funds are "self-scored" prior to filing. Each applicant determines, based upon objective standards, the score of its application and informs the Department of the score on the application. When applications are filed they are initially ranked by the Department based upon the self-score determined by the applicant. Applications may be filed on behalf of small cities of less than 50,000 population or small counties of less than 200,000 population. Applications for CDBGP funds are technically filed by eligible applicants--a county or city. Private individuals and businesses are not eligible to apply for grants from the Department under the CDBGP. Applications are prepared 90 to 95% of the time by consultants, including Langton and Associates. The following question is included on applications from which it may be determined if an application was prepared by a consultant: "Who was the agency or firm responsible for preparing the application?" The eligible county or city for which an application is submitted is considered the "applicant." If a consultant prepared and filed an application on behalf of an applicant, however, it was common for Department staff associated with the CDBGP to refer to the consultant and/or the government entity as the "applicant." Although the number of consultants in Florida who prepared applications for CDBGP awards varied from year to year, there have been approximately six to ten consultants in Florida preparing applications for CDBGP awards. During 1988, there were a total of approximately 276 local governments which were eligible for awards under the CDBGP. Only a small number of these entities, however, actually filed applications for awards. The Department does not consider the identity of any consultant involved in filing a CDBGP application in determining which applicants should be awarded CDBGP grants. Following the filing of applications for CDBGP grants, additional information is not to be provided to the Department unless requested. Nor are arguments to be presented to the Department in support of any application. Target Area Maps and Gerrymandering. Applications filed during the 1988 (as well as prior years) annual funding cycle for CDBGP funds for the housing category were required to include a "target area map". A "target area map" was an area map of the local community of the applicant depicting the specific area that the proposed grant activities were to be conducted in. Therefore, a target area map for a housing grant would identify on the area map the specific houses for which the funds were being requested. Prior to the 1988 annual funding cycle many target area maps had been submitted which included oddly shaped target areas. These oddly shaped target areas were not square or rectangular; instead, the target area was drawn in such a way that houses that qualified for CDBGP funds were included and those that did not qualify, even if located right next door to a qualified house on the same block, were excluded. "[A]pplicants would draw their target area boundaries in such a way to exclude housing units that would adversely affect their score." Lines 24-25, page 73, and line 1, page 74, Transcript of September 30, 1991-October 1, 1991, Formal Hearing (hereinafter referred to as the "Transcript"). This practice was referred to as "gerrymandering." There had been concern and debate in and outside the Department concerning whether gerrymandering should be allowed. There were some who were not concerned about, or bothered by, gerrymandering because the use of gerrymandering to identify a target area did not cause persons who were not in need to be directly benefited from CDBGP funds. For example, in the housing grant area, only the houses of persons with low enough income levels could directly benefit from the CDBGP. Those that did not qualify for assistance could not be directly benefited even if an impacted area was gerrymandered. There were others, however, who were concerned about and bothered by gerrymandering because the use of gerrymandering allowed applicants to achieve higher scores for their applications by drawing the targeted area in such a way to insure that it included mainly or totally houses that were qualified for funding while excluding unqualified houses in the same neighborhood which would reduce their scores. Persons concerned with, and bothered by, gerrymandering, including the Respondent, believed that the CDBGP intended that only relatively box-shaped geographic neighborhoods should be allowed as the target area. At various times, the Department tried to devise a method of preventing gerrymandering, but could find no reasonable solution. The difficulty with preventing gerrymandering was explained by Lewis O. Burnside, the Director (beginning in January, 1989) of the Department's Division of Housing and Community Development: Every time I talked about target areas when we looked at it -- we tried to deal with target areas to see what shape should they be. Should they be square or circular and should they -- we couldn't find any rhyme or reason for that. Also, our program applies to urban and rural areas. And in rural areas it is quite normal to have a large property value farm across from what used to be tenant lands, where you have very low income people directly across the street from a multi-million-dollar piece of farmland. And so, we could not write anything, one that would give you a non-gerrymandered target area unless it was just arbitrary. We would just have to say it has got to be square, or it has got to be rectangular, and it can be no larger than a certain size. . . . Lines 8-20, page 141, Transcript. Most people associated with the CDBGP, other than the Respondent, did not consider the issue of gerrymandering to be a burning issue or a particularly improper practice. This lack of concern was caused by the fact that the general purpose of the CDBGP was to benefit low and moderate income people and gerrymandering did not circumvent this general purpose. Ultimately, individuals in the houses included in a target area, even in a gerrymandered target area, benefited only if they were in need of assistance as established under the CDBGP. There were members of the Florida Legislature, including the Respondent, who believed that gerrymandering in the CDBGP was inconsistent with the goals of the CDBGP. Through at least the 1988 annual funding cycle, gerrymandering of target area maps was not prohibited by federal or Florida law. The 1988 Funding Cycle. The general procedures for determining how CDBGP funds were to be awarded each funding cycle which are described in finding of fact 18, supra, were followed for the 1988 funding cycle. Legislation concerning the CDBGP was adopted during the 1988 legislative session and was codified as Chapter 88-201, Laws of Florida. As a result of the adoption of Chapter 88-201, Laws of Florida, and as was the practice of the Department prior to each funding cycle, the Department undertook to amend its administrative rules governing the CDBGP, Chapter 9B-43, Florida Administrative Code. Rule 9B-43.003(33), Florida Administrative Code, was renumbered as subparagraph (35) and was amended by the Department by adding the following underlined language: "Target area" means a distinct, locally designated slum or blighted area under Section 163.340, F.S.; or a designated Enterprise Zone under Section 290.065, F.S.; or a distinct locally designated area, totally contained and contiguous in nature, that is characterized by concentrations of low and moderate income persons, wherein low and moderate income persons comprise at least 51 percent or more of the target area population. It was believed in the Department when the Department amended the definition of "target area" in its Rules that gerrymandering had been eliminated or substantially reduced. Although no formal opinion was given, an attorney on the Department's legal staff indicated during a CDBGP application workshop conducted by the Department for the 1988 funding cycle that gerrymandering would no longer be allowed. A representative of the Department instructed potential CDBGP grant applicants during a CDBGP application workshop held sometime after October 11, 1988, the effective date of Rule 9B-43.003(35), Florida Administrative Code, that gerrymandered target area maps would not be permitted. The Respondent and Langton Associates were aware of this representation. At some time subsequent to the workshop at which it was announced that gerrymandering would not be allowed, applications for CDBGP housing grants for the 1988 funding cycle were submitted to the Department. There were a total of thirty-four applications received for CDBGP housing grants for the 1988 funding cycle. Langton Associates submitted applications for housing grants for the 1988 funding cycle for three applicants: (1) Macclenny; (2) Fellsmere, Florida; and (3) St. Johns County, Florida. The target areas proposed with the applications prepared and submitted by Langton Associates for Macclenny, Fellsmere and St. Johns County were not gerrymandered. Langton Associates did not submit gerrymandered target areas because the Respondent did not believe that gerrymandering was proper and because the Department had announced that it would not accept gerrymandered maps. Despite the Department employee's statement during the workshop that gerrymandered maps would not be allowed for the 1988 funding cycle, most of the target area maps submitted with applications for the 1988 funding cycle were gerrymandered. Only five applications received by the Department did not include gerrymandered target areas: (1) the three applications submitted by Langton Associates; (2) the application of Apalachicola, Florida; and (3) the application of Century, Florida. On December 1, 1988, a memorandum was sent from Earl H. Parmer, Jr., then Director of the Department's Division of Housing and Community Development, to the Department's General Counsel. Mr. Parmer informed the General Counsel of the target area maps which had been filed for the 1988 funding cycle and stated, in part, the following: As you know, the department has been attempting to reduce the grantsmanship in the CDBG program by substantially reducing the gerrymandering of CDBG target areas; however, we question whether our current rule language supports our position. Advocate's Exhibit 7. On December 2, 1988, the following response was given by the Department's legal staff to Mr. Parmer: "Maps appear to be in compliance with Rule." Advocate's Exhibit 7. The Department, therefore, determined that it could not, despite the previous instructions from a Department representative that gerrymandered target areas would not be accepted, prevent the use of gerrymandered target area maps for the 1988 funding cycle. On December 14, 1988, the applications for CDBGP housing grants were initially ranked by the Department based upon the scores determined by the applicants through self-scoring and reported to the Department. Applications were listed by highest score to lowest score. The total 1988 funding cycle housing grant funds available were sufficient to meet the requests for funds of only the top fifteen-ranked applications. There were not sufficient funds to fund those applicants who ranked below fifteenth. The applications filed by Langton Associates ranked as follows, based upon their self determined scores, on the initial ranking: (1) Macclenny was seventeenth; (2) St. Johns was thirtieth; and (3) Fellsmere was thirty-second. The scores for these applicants determined through self-scoring were not high enough to entitle any of the applicants to an award of a housing grant for the 1988 funding cycle. The Respondent's Contacts with Linda Frohock. During December, 1988, the Respondent was informed that most applications for CDBGP housing grants for the 1988 funding cycle included gerrymandered target area maps and that the Department intended to accept those maps. After learning of the Department's acceptance of gerrymandered target area maps, the Respondent telephoned Thomas Yeatman, an employee of the Department. The Respondent left a message requesting that his telephone call be returned. Between December 20 and 31, 1988, Linda Frohock, then Chief of the Bureau of Housing and Community Assistance, in the Department's Division of Housing and Community Development, returned the telephone call the Respondent had made to Mr. Yeatman. This telephone call probably took place on or about December 20, 1988. The Respondent's initial telephone call to Mr. Yeatman and his conversation with Ms. Frohock were the result of his frustration over the fact that the Department was going to allow gerrymandering of target areas. The Respondent had expressed concern over the Department's administration of the CDBGP prior to 1988. The Respondent described his frustration: I called Mr. [Yeatman] and Linda, and I wanted to speak to the secretary as Representative Langton. I made it very clear, I said, I don't care what this is going to cost me politically or financially; you guys have got to stop this craziness. You are disadvantaging tons of cities, cities that are doing this right, they are doing this fair. They have no shot at ever competing for these grants, if you are going to continue this abuse of a program. . . . . Lines 16-24, Page 35, September 12, 1991, Deposition of the Respondent. The Respondent admitted that when he called the Department he intended to put pressure on the Department through his position as a legislator and that he attempted to use his power as a public official to force the Department to take action. The Respondent let it be known to Ms. Frohock that he was calling in his capacity as a legislator. Ms. Frohock informed the Respondent that she was returning his telephone call at the direction of the Assistant Secretary of the Department and that she would report their conversation back to the Secretary and the Assistant Secretary of the Department. During Ms. Frohock's telephone conversation with the Respondent, she took notes of the nature of the conversation. During the telephone conversation with Ms. Frohock, the Respondent was very upset and angry. The Respondent was excited, and he talked loudly and rapidly. The Respondent was angry that his competitors were benefiting by being allowed to submit gerrymandered target area maps while the applications prepared for, and submitted on behalf of, Langton Associates' clients had not included gerrymandered target area maps. The Respondent believed that Langton Associates had lost money in the past because it had not gerrymandered target areas while the Respondent's competitor's had. During the Respondent's conversation with Ms. Frohock, the Respondent indicated the following: He had met with Mr. Parmer in the summer of 1988 and discussed gerrymandering. Mr. Parmer had promised him that gerrymandering would not be allowed. A Department employee had stated at a workshop that gerrymandering would not be allowed for the 1988 funding cycle. He wanted to be allowed to gerrymander the target area maps Langton Associates had submitted on behalf of its clients or he wanted the Department to require that those applicants that had gerrymandered their target area maps be punished. He indicated that he did not care what it cost him politically or financially to fight the Department's actions. He intended to shut down the CDBGP and see that all of the employees involved in the CDBGP were fired if the matter was not resolved to his satisfaction; "Heads would roll." He indicated that Florida Senator Carrie Meek and Florida Representative C. Fred Jones had asked him to play a major role in the Legislature in revising the CDBGP. He stated that the matter would end up in a court of law. He would get Fred Baggett and Jack Skelding, both of whom are attorneys, to assist him to fight the Department. He indicated that he would stop the 1988 funding cycle by suing the Department. He stated that he would probably only get two grants funded during the 1988 funding cycle. He stated that he would return to his office on January 2, 1989, and would have a legislative committee meeting on January 9, 1989; if he had not heard back from the Department about the problem, he wanted to talk to the Secretary of the Department after his return. If he was not satisfied after talking to the Secretary of the Department, he indicated he intended to speak to the then Lieutenant Governor and the Speaker of the House Designate. The Respondent asked Ms. Frohock to pass his concerns on to the Department's Secretary. The Respondent requested that Ms. Frohock provide him with copies of all target area maps submitted in the housing category and the neighborhood revitalization category for the 1988 funding cycle. These documents were public records. The Respondent's conversation with Ms. Frohock made her nervous, in part because he was a legislator. During the Respondent's conversation with Ms. Frohock, he did not specifically say that he was calling on behalf of himself, Langton Associates or any local government for which the Respondent or Langton Associates was working. Nor did the Respondent specifically mention being compensated for the call. Despite the foregoing finding of fact, it is obvious that the Department's actions which the Respondent complained of during his conversation with Ms. Frohock had directly affected applicants which had paid Langton Associates to prepare and file applications on their behalf during the 1988 funding cycle. It is also obvious that the alternative resolutions of the problem suggested by the Respondent had the potential to benefit those same applicants. In light of the fact that the Langton Associates' three applications were among only five applications out of thirty-four applications filed that were not gerrymandered, it was in the interest of Langton Associates and the Respondent that the Department take the actions the Respondent suggested or some other action to correct the Department's decision to accept gerrymandered target areas. It is also true that the Respondent did not specifically request any change in the scores of the applicants represented by Langton Associates; and that the specific actions recommended by the Respondent were suggested for the "entire set of eligible applicants." But the Respondent's suggestions included the applicants represented by Langton Associates and those applicants stood to gain more from the Respondent's suggestions than those applicants that had filed gerrymandered target area maps; especially if the applicants that had filed gerrymandered target area maps were penalized as suggested by the Respondent. While it is true that the concerns which the Respondent expressed to Ms. Frohock were to some degree concerns which the Respondent or any other legislator could have raised in their capacity as a legislator, the Respondent's actions also could have beneficially impacted clients of Langton Associates that had paid Langton Associates to prepare and file applications on their behalf in the funding cycle at issue. The fact that issues may have been raised by the Respondent in his capacity as a legislator does not negate the fact that the raising of those issues before the Department could also have benefitted the clients of his company, Langton Associates. The Respondent's actions in telephoning Mr. Parmer and talking to Ms. Frohock were also considered necessary by the Respondent because of the possible harm to the reputation of Langton Associates caused by the Department's actions. Langton Associates was one of the only consultants that heeded the Department's instructions concerning the use of gerrymandered target areas for the CDBGP 1988 funding cycle. When the Department reversed its position and accepted the gerrymandered target areas proposed by most of the applicants in the 1988 funding cycle for housing, the Respondent had to be concerned about those who would question why Langton Associates had not filed gerrymandered maps. In light of these concerns, the Respondent had to have felt compelled to take some action to force the Department to admit that it had been in error and not Langton Associates, even if the clients of Langton Associates were not directly benefited. Finally, some of the comments and requests made by the Respondent to Ms. Frohock may have been reasonable in light of the events which precipitated the conversation. If the Respondent had not been a member of the legislature who was prohibited from representing others for compensation before a state agency, some of his actions were actions which might be expected of, and considered reasonable if taken by, any consultant in light of some of the Department's actions. Some of the Respondent's actions were taken and some of his comments were made because he believed that the Department's actions had improperly misled Langton Associates. Some of his actions were taken and some of his comments were made, however, solely because of his position and power as a legislator. Following her telephone conversation with the Respondent, Ms. Frohock gave a copy of her notes to, and briefed, the Department's Assistant Secretary. She also gave a copy of her notes to Mr. Burnside. Ms. Frohock also subsequently wrote a memorandum memorializing her telephone conversation with the Respondent. The January 10, 1989, Meeting. Subsequent to the Respondent's telephone conversation with Ms. Frohock, the Respondent requested that a meeting be held with the Secretary of the Department in Representative C. Fred Jones' office. In January, 1989, Representative Jones was the Chairman of the House Committee on Community Affairs, the committee of the House of Representatives with jurisdiction over the Department's programs. The Respondent asked Mario Taylor, Staff Director of the House Committee on Community Affairs, to arrange the meeting with the Secretary of the Department. Mr. Taylor obtained approval for the meeting requested by the Respondent from Representative Jones, and Mr. Taylor informed Michael Richardson, the Department's legislative liaison, of the meeting. The meeting requested by the Respondent was scheduled for January 10, 1989 (hereinafter referred to as the "Meeting"). Mr. Richardson informed the then Secretary of the Department, Thomas Pelham, of the Meeting. Mr. Richardson told Mr. Pelham that the meeting was being held to discuss target area maps and gerrymandering. Mr. Pelham met with Mr. Burnside prior to the meeting to be briefed on the issue and requested that Mr. Burnside attend the Meeting with him. Prior to the Meeting, Ms. Frohock and Mr. Burnside met with Department staff to discuss the gerrymandering issues raised by the Respondent during his telephone conversation with Ms. Frohock. A "discussion paper" was drafted by Ms. Frohock as a result of this Department staff meeting and was dated January 10, 1989. It was agreed by Department staff that the Department had presented faulty instructions concerning gerrymandering during the workshop which took place before applications for the 1988 funding cycle were filed. There were some in the Department that wanted to take this incident into account in any recommended solution to the problem. There were others, including the Department's legal staff, who believed that the Department had done nothing illegal and, therefore, wanted to take no action. The following possible solutions to the gerrymandering issue were discussed and agreed upon by the Department's staff and were discussed in the discussion paper: Allow all applicants to resubmit target area maps (this would benefit the five applicants, including the three Langton Associates' applicants, that had submitted maps that had not been gerrymandered); Give the maximum score for the target area for all the proposals (this would also benefit the five applicants, including the three Langton Associates' applicants, that had submitted maps that were not gerrymandered); and Do nothing and allow any disappointed applicant to follow the Chapter 120, Florida Statutes, process to challenge the Department's actions. This is the option that was ultimately recommended in the discussion paper. The Meeting was attended by Representative Jones, the Respondent, Mr. Pelham, Mr. Burnside, Mr. Taylor and Mr. Richardson. The Meeting was held in Representative Jones' office. Representative Jones agreed to the meeting because he had a number of concerns about the manner in which the Department was administering the CDBGP. Representative Jones was not aware that the Respondent's company, Langton Associates, had filed applications on behalf of its clients which had been affected adversely by the Department's actions in accepting gerrymandered maps. Therefore, Representative Jones was not aware that the Respondent had not requested the Meeting solely in his legislative capacity. During the Meeting the Respondent was hostile, agitated, upset and "seemed about to explode". His manner was threatening. Mr. Pelham described the Respondent's actions as a "tirade". The Respondent did most of the talking during the Meeting: He expressed his displeasure with the Department's administration of the CDBGP and, in particular, the Department's actions in accepting the gerrymandered target area maps. Representative Jones also expressed concern about the Department's administration of the CDBGP. He indicated that he and others, in preparing applications on behalf of local governments for the 1988 funding cycle, had been misled by information presented at a workshop to the effect that gerrymandering would not be allowed for the 1988 funding cycle. The Respondent stated that "he and others had relied upon that misinformation, and now he feared that they were going to be penalized in the way those applications were scored." Lines 4-6, page 194, Transcript. He stated that he did not believe the Department was administering or interpreting the law correctly, especially with regard to gerrymandering. He stated that the law did not allow gerrymandering. He indicated his displeasure with staff of the Department and indicated that they should all, with one exception, be fired. He demanded that all applications be thrown out; that they should not be scored or acted upon. He suggested that the Department should do nothing until the Legislature could take a look at the problem. He threatened to take legal action to stop the Department if it did not stop the funding cycle. Later during the Meeting, he suggested that the Department accept redrawn target area maps that were not gerrymandered or at least require all the applicants to "play by the same set of rules." The Respondent wanted the Department to halt the 1988 funding cycle process so that legislation prohibiting gerrymandering could be adopted. As of the date of the Meeting, if the Department had halted the 1988 funding cycle process it would not have harmed the applicants represented by Langton Associates. All three applicants had scores at that time which were below the funding ranking cut off score. Without some action by the Department, those applicants did not appear destined to receive a grant for the 1988 funding cycle. While it is true that the suggestions made by the Respondent during the Meeting would apply in general to all applicants, it is also true that if all applicants were required to submit maps that were not gerrymandered, the applicants that had submitted gerrymandered maps would in all probability end up with reduced scores, depending on how their target areas were drawn. The applicants for which applications had been prepared by Langton Associates and two other applicants, on the other hand, would not suffer such a reduction in scores because they had already submitted target areas which were not gerrymandered. Those applicants which had the top fourteen scores for the 1988 funding cycle for housing at the time of the Meeting would have suffered disproportionately if the funding cycle were suspended: their status would have changed from prospective award winner to non-award winner. During the Meeting, although the Respondent did not specifically indicate that the Meeting had been called, or that he was voicing his displeasure, on behalf of himself, Langton Associates or its clients, the Respondent made reference to the fact that he was a consultant and that Langton Associates had prepared applications for local governments that had been filed in the 1988 funding cycle being discussed. This was apparent to the Department employees present at the Meeting. The Respondent, although expressing his concerns in terms of all applicants generally, was nonetheless also concerned about the impact on the Langton Associates' applicants and Langton Associates. The Department employees present at the Meeting were aware of this fact also. The Respondent indicated that unless the Department took the actions he had suggested, Langton Associates and the two other applicants that had not gerrymandered their target areas would be prejudiced. The Respondent, through Langton Associates, could have benefited if any of its 1988 funding cycle grants were approved for funding. For example, applicants which are approved will more often than not hire the consultant that prepared a successful application to administer the awarded funds. Fees for such services can be more profitable than the fees for preparing an application. Therefore, if the Respondent's actions during the Meeting could ultimately result in the awarding of a grant to one of the Langton Associates' clients, the Respondent would have benefited. The Respondent's actions in calling and participating in the Meeting were also considered necessary by the Respondent for the same reasons described in finding of fact 71, supra. As was true of the Respondent's conversation with Ms. Frohock, it is true that the concerns which the Respondent expressed during the Meeting were to some degree concerns which the Respondent or any other legislator could have raised in their capacity as a legislator. It is also true that the Respondent's actions also could have beneficially impacted clients of Langton Associates that had paid Langton Associates to prepare and file applications on their behalf in the funding cycle at issue. The fact that issues may have been raised by the Respondent in his capacity as a legislator does not negate the fact that the raising of those issues before Department employees could also have benefited the clients of his company, Langton Associates. It is also true that some of the comments and requests made by the Respondent during the Meeting may have been reasonable in light of the events which precipitated the conversation. If the Respondent had not been a member of the legislature who was prohibited from representing others for compensation before a state agency, some of his actions during the Meeting were actions which might be expected of, and considered reasonable if taken by, any consultant in light of some of the Department's actions. Some of the Respondent's actions were taken and some of his comments were made because he believed that the Department's actions had improperly misled Langton Associates. Some of his actions were taken and some of his comments were made, however, solely because of his position and power as a legislator. The 1988 Funding Cycle Awards in the Housing Category. Following the Meeting, Mr. Burnside met with Ms. Frohock and discussed the meeting. Following this discussion, Ms. Frohock, at Mr. Burnside's direction, prepared a revised discussion paper in the form of a memorandum from Mr. Burnside to Mr. Pelham. In the memorandum from Mr. Burnside to Mr. Pelham a fourth option was added: to cancel the funding cycle and start over. Mr. Burnside ultimately decided, after discussion with Ms. Frohock, to recommend that the Department adopt the option included in the original discussion paper described in finding of fact 83b: give the maximum score for the target area for all the proposals. This option was recommended, in part, because Mr. Burnside and Ms. Frohock had determined that awarding all applicants maximum scores for their target areas would not have any real impact on which applicants were ultimately awarded funds for the 1988 funding cycle for the housing category and the option recognized that the Department had made a mistake at the workshop. The option recommended was also chosen, in part, because the Department had taken a similar action in the past and because the Respondent was a legislator. Mr. Pelham ultimately approved Mr. Burnside's recommendation. The decision of the Department as to how to resolve the issues raised by the Respondent concerning the gerrymandered maps received during the 1988 funding cycle for housing was the direct result of the actions of the Respondent described, supra. After approval by Mr. Pelham of the recommended action, Mr. Burnside telephoned the Respondent to inform him of the Department's decision. This conversation took place sometime in February, 1989. After Mr. Burnside explained the decision to the Respondent, the Respondent went over the scores of the applicants and asked how the decision would affect those scores. Mr. Burnside, in response to the Respondent's question, indicated how the decision would impact the score for the application of Macclenny, one of Langton Associates' clients. This conversation took place after site visits had taken place and after an applicant previously ranked above Macclenny had been moved down in the rankings as a result of the site visits. Therefore, Mr. Burnside was able to inform the Respondent that Macclenny was within the fundable range of applicants. The Department's solution to the dispute was based in part on the fact that Macclenny was going to receive an award. The Respondent told Mr. Burnside that the result of the Department's solution, as explained by Mr. Burnside, might be acceptable to him. The Respondent was satisfied even though the solution did not resolve the ultimate problem of gerrymandering. , which the Respondent has suggested was the reason he was so upset about the Department's actions. The Respondent also asked Mr. Burnside whether the Department's decision could withstand a legal challenge. Mr. Burnside informed the Respondent that the Department's legal staff had opined that the decision was defendable. If the problem raised by the Respondent had been raised by any person who was not a member of the Florida Legislature, Mr. Burnside would have recommended to Mr. Pelham that the Department take no action and allow the complaining individual to take legal action. The Respondent, therefore, clearly affected the manner in which the Department administered the CDBGP. The Respondent's Contact with Department Staff Concerning the Monitoring of CDBGP Grants. During October, 1989, Terri Ganson was employed as a Community Assistant Consultant for the Department. Ms. Ganson's duties included, among other things, monitoring CDBGP grants. During late 1989, Ms. Ganson was responsible for monitoring three CDBGP grants that had been awarded to Marion County (hereinafter referred to as the "Marion Grants"). Ms. Ganson was required to write periodic monitoring reports concerning the Marion Grants. The Marion Grants were being administered on behalf of Marion County by a grant consultant and competitor of the Respondent, Fred Fox Enterprises. Prior to October 30, 1989, Marion County was awarded a fourth grant (hereinafter referred to as the "Fourth Marion Grant"), in the CDBGP. Marion County was seeking bids for the administration of the Fourth Marion Grant. Langton Associates and Fred Fox Enterprises had submitted proposals to administer the Fourth Marion Grant. As of October 30, 1989, Marion County had not yet decided who would administer the Fourth Marion Grant. On October 30, 1989, the Respondent telephoned Ms. Ganson. During this telephone call, the Respondent yelled at her and was very angry and upset. The Respondent believed that Ms. Ganson was cooperating with Fred Fox, his competitor, and he wanted her to stop. The Respondent feared that Ms. Ganson's monitoring reports for the Marion Grants would cause the administration of the Fourth Marion Grant to be awarded to Fred Fox Enterprises. The Respondent did not believe the monitoring reports were critical enough of Fred Fox Enterprises. The evidence failed to prove that Ms. Ganson in fact had favored Fred Fox Enterprises. During his telephone conversation with Ms. Ganson on October 30, 1989, the Respondent indicated the following to Ms. Ganson: He was concerned that Marion County would select Fred Fox Enterprises to administer the Fourth Marion Grant because of the monitoring reports Ms. Ganson had written concerning the Marion Grants. He accused Ms. Ganson of siding with Fred Fox. He told Ms. Ganson that she had "probably cost him a $96,000 administration grant because of the way [her] reports were written" Lines 2-4, page 181, Transcript. He demanded that a mistake in Ms. Ganson's monitoring reports for one of the Marion Grants be corrected. He requested that Ms. Ganson send him a copy of the current contracts and milestones, all of the monitoring reports and all requests for modifications pertaining to the Marion Grants. Ms. Ganson told the Respondent that she would check her reports to determine if she had made a mistake and, if so, would correct it. She ultimately determined that she had made a mistake and corrected it. She did not, however, totally modify her reports in the manner that the Respondent had demanded. Ms. Ganson reported the October 30, 1989, telephone conversation with the Respondent in a memorandum to her immediate supervisor. The Respondent's actions in telephoning Ms. Ganson on October 30, 1989, and his comments to Ms. Ganson were intended to avoid the loss by Langton Associates of the administration fees for the Fourth Marion Grant, which the Respondent believed could be $96,000.00. Although the decision as to who administered the Fourth Marion Grant was a local decision, the Respondent attempted to influence that decision by demanding that Ms. Ganson, an employee of the Department, modify her monitoring reports. The Respondent's conversation with Ms. Ganson was intended to benefit Langton Associates and, thus, benefit himself. The evidence failed to prove that the Respondent's conversation with Ms. Ganson was on behalf of any person or entity (other than Langton Associates) that he had received compensation from. Although the evidence proved that the Respondent was paid a salary by Langton Associates during the year in which his conversation with Ms. Ganson took place, the evidence failed to prove that Langton Associates had any clients at that time that were paying for Langton Associates' services. Although general testimony was elicited concerning Langton Associates' business and clients, testimony concerning clients that paid Langton Associates during any specific period of time was limited to the period of time preceding approximately July, 1989. The Respondent's Contact with Department Staff Concerning Awards of Multiple Service Grant Contracts. A copy of a letter dated September 22, 1989, was received by the Department. The letter was from Patricia Teems, the business manager of Langton Associates, to the Mayor of the City of Bunnell, Florida. The letter was on the letterhead of Langton Associates. In the September 22, 1989, letter Ms. Teems claimed that the City of Bunnell had awarded an administrative contract in violation of Florida law. In the last paragraph of the contract, Ms. Teems stated the following: Also, by this letter I am requesting DCA make a formal investigation into the procurement practices of the City of Bunnell. The complaint made by Ms. Teems in the September 22, 1989, letter, concerned the award of multi-service contracts. A "multi-service" contract includes the awarding of a contract to administer a grant to the same consultant that prepared the application for which the CDBGP grant was awarded. Under Florida law in effect during 1989, multi-service contracts were prohibited unless the local government awarding such a contract indicted in writing that the multi-service contract was in the best interest of the local government. Mr. Burnside was aware of the September 22, 1989, letter and the request of Langton Associates that the Department investigate its complaint against the City of Bunnell. The Department was investigating the complaint in October, 1989. During October, 1989, Mr. Pelham was walking through a hall in the House of Representatives' office building. The Respondent approached Secretary Pelham and indicated that he wanted to speak to him. During the Respondent's October, 1989, conversation with Mr. Pelham, the Respondent indicated the following: He indicated that the Department was not enforcing one of the laws governing the CDBGP. The Respondent indicated that the problem involved the services that could be performed by someone who contracted with a local government to administer a CDBGP grant. He indicated that he "was being hurt by . . . " the Department's failure to properly enforce the law. He threatened to sue the Department unless the Department enforced the law properly. The Respondent, who spoke in a low-key voice, was firm in expressing his position to Mr. Pelham that the law concerning multi-service contracts should be enforced as the Respondent interpreted the law. Shortly after the conversation with the Respondent concerning multi- service contracts, Mr. Pelham spoke to Mr. Burnside about the conversation. Mr. Burnside explained to Mr. Pelham that Langton Associates had filed a copy of the September 22, 1989, letter to the Mayor of the City of Bunnell and that the Department had been requested to investigate the matter. After Mr. Pelham and Mr. Burnside discussed the Secretary's encounter with the Respondent, they realized that the Respondent had been talking about the City of Bunnell incident when he spoke to Mr. Pelham. Mr. Pelham realized that the Respondent had been suggesting that the City of Bunnell had not followed the correct procedures in awarding the administration contract and the consultant that was awarded the administration contract should not have been the same consultant that had obtained the grant. Mr. Burnside responded on behalf of the Department to the request that the Department investigate the City of Bunnell incident by a letter to Ms. Teems dated January 22, 1990. Based upon information reviewed by the Department, including review by the Department's legal staff, the Department informed the Mayor of Bunnell and Ms. Teems that it had been concluded that the City had not violated the law. Although the Respondent admitted that he was aware that he should not directly request that the Department investigate the City of Bunnell, he approached Mr. Pelham to discuss the matter with him. The Respondent's conversation with Mr. Pelham was intended to benefit Langton Associates because Langton Associates was interested in obtaining the grant administration contract the City of Bunnell had awarded to another consultant and, thus, benefit himself. If the Department had agreed with Ms. Teems' and the Respondent's argument that the City of Bunnell had acted illegally, the City of Bunnell could have been forced to select a different administrator for its grant. The Respondent hoped Langton Associates would be the newly selected administrator. The evidence failed to prove that the Respondent's conversation with Mr. Pelham was on behalf of any person or entity (other than Langton Associates) that he had received compensation from. Although the evidence proved that the Respondent was paid a salary by Langton Associates during the year in which his conversation with Mr. Pelham took place, the evidence failed to prove that Langton Associates had any clients at that time that were paying for Langton Associates' services. Although general testimony was elicited concerning Langton Associates' business and clients, testimony concerning clients that paid Langton Associates during any specific period of time was limited to the period of time preceding approximately July, 1989. The Respondent's Contact with Department Staff Concerning Certain Department Policies. In January, 1990, Wanda A. Jones, worked in the Department's Bureau of Housing, Division of Housing and Community Development. On January 23, 1990, Ms. Jones attended a CDBGP workshop in Jacksonville, Florida, sponsored by the United States Department of Housing and Urban Development. The Respondent was introduced to Ms. Jones during the January 23, 1990, workshop by an employee of Langton Associates. The Respondent began questioning Ms. Jones about the Department's policy that allowed Noma, Florida, to continue to be awarded funds under the CDBGP year after year. Noma is a very small community that had received a number of grants and the Respondent was challenging the Department policy that allowed such a small community such as Noma to continue to receive grants. Ms. Jones attempted to explain the Department's policy to the Respondent. At the time of the Respondent's conversation with Ms. Jones, the Department was in the middle of a funding cycle. The weight of the evidence, however, failed to prove that any application had been filed by Langton Associates on behalf of any client during that funding cycle. The Respondent became upset with Ms. Jones' responses and raised his voice. The Respondent was aggressive, confrontational and he badgered Ms. Jones. Ms. Jones felt very uncomfortable. Her discomfort was caused in part by the fact that the Respondent was a legislator and he was holding her accountable for Department actions. The Respondent told Ms. Jones that the Department's policy was impacting on his business. By eliminating the situation that allowed governments like Noma to continue to obtain grants, other governments would become eligible to receive CDBGP funds. Some of those governments might include Langton Associates' clients or prospective clients. After Ms. Jones left the Respondent, he again approached her, apologized and then started to berate her again. During this conversation, the Respondent asked if Ms. Jones would speak to him "off the record" and express her personal opinions about Department actions. The Respondent's conversation with Ms. Jones was intended to benefit Langton Associates and, thus, benefit himself. The evidence failed to prove that the Respondent's conversation with Ms. Jones was on behalf of any person or entity (other than Langton Associates) that he had received compensation from. Although the evidence proved that the Respondent was paid a salary by Langton Associates during the year in which his conversation with Ms. Jones took place, the evidence failed to prove that Langton Associates had any clients at that time that were paying for Langton Associates' services. Although general testimony was elicited concerning Langton Associates' business and clients, testimony concerning clients that paid Langton Associates during any specific period of time was limited to the period of time preceding approximately July, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Ethics enter a Final Order and Public Report finding that the Respondent, Michael E. Langton, violated Sections 112.313(6) and 112.3141(1)(c), Florida Statutes, and Section 8(e), Article II, of the Constitution of the State of Florida, as alleged in Complaint No. 90-86. It is further RECOMMENDED that the Respondent be subjected to public censure and reprimand and be required to pay a civil penalty of $5,000.00 ($2,500.00 for each statutory violation). DONE and ENTERED this 27th day of November, 1991, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of November, 1991. APPENDIX TO RECOMMENDED ORDER The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Advocate's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection A. 1 1-3. 2 6-7. 3 8. 4 See 10. The weight of the evidence failed to prove what years the percentages apply. 5 11. 6 Hereby accepted. 7 5. B. 1 13-14 and 21-23. 2 See 25. 3 24. "Gerrymandering" 1 29-30, 38 and 41. 2 32-34. 3 31-33. 4 32-33 and 35. 5 35. 6 See 35. 7 37. The 1988-1989 Funding Cycle 1 18 and 38. 2 18. 3 44 and 51. 4 82 and hereby accepted. 5 46-47. 6 48-49. 7 19, 38 and 52. 8 52-53. 9 The first sentence is not relevant. 54-55. 10 55-56. 11 59. 12 56. 13 57 and 61-63. 14 58 and 61. 15 63. 16 58. 17 62-63. 18 59, 66 and 73. Hereby accepted. See 75 and 80. 21 76-77 and 80. 22 34. 23 81-83. 24 81. 83 and hereby accepted. Hereby accepted. 27 80. 28 84. 29 87. 30 86-87. 31 87. The testimony supporting these proposed findings was too speculative. 52 and hereby accepted. 34 89-90. 35 87 and 89-90. 36 90. 37 Not relevant. 38 92. 39 95, 97 and 101. 40 97. 41 101. 42 104. 43 100-101. 44-45 102. 46-47 Although these findings of fact are true, there could have been a number of reasonable explanations for why the Respondent did not proposed legislation concerning gerrymandering. 48 There proposed findings of fact are generally true. The fact that there are inconsistencies in testimony alone is not why some of the Respondent's testimony was not credible, however. The Respondent's explanation has been rejected based upon the weight of all of the evidence in this proceeding. C. 1 105. 2 Hereby accepted. 3 Not relevant. 4 106. 5 112-113. 6 114. 7 113. 8 114. 9 109-111. 10 113-114. 11 See 113. The evidence did not prove whether Ms. Ganson did or did not intend to favor Mr. Fox. 12 116. 13 118. D. 1-2 112. 3 120-121. 4 Hereby accepted. 5 124-125. 6 126. 7 127. 8 Not supported by the weight of the evidence or not relevant. 9 128. 10 129 and see 130. E. 1 131. 2 132. The meeting took place on January 23, 1990. 3 133 and 135. 4 133-134. 5 134 and 139. 6 See 136. 7 134. 8 138. 9-10 Not supported by the weight of the evidence. No weight has been given to the sworn statement of Ms. Jones. 11 Hereby accepted. 12 141. 13 Hereby accepted. 14 139. 15 Hereby accepted. 16 140. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1-2. 2 4, 6 and 8. 3 7. 4 13-14 and 16. 5 21-22. 6 22. Not supported by the weight of the evidence. The interrogatories were not offered into evidence. See 26. 9 5. 10 Not supported by the weight of the evidence. The interrogatories were not offered into evidence. 11 27. 12 28. 13 52. 14 57. 15-16 Hereby accepted. 31-32. The last sentence is not supported by the weight of the evidence. Respondent's exhibit 14 was offered and accepted into evidence only for impeachment purposes. Not relevant. 19 14. Hereby accepted. See 32 and 35. Hereby accepted. 23 39-42. 24 Although generally true, the intent of one legislator does not support a finding concerning the intent of the entire Legislature in enacting any law. 25 41. 26 40-42. 27 See 43. 28 44. 29 51. 30 56. 31 See 58. The Respondent's conversation with Ms. Frohock was not to raise "numerous complaints regarding the DCA's administration of the CDBG program." 32-36 See 67-72. 37 See 75 and 77-78. The evidence failed to prove that the Meeting was requested by the Respondent to discuss the general administration of the CDBGP. 38 76. 39 85. 40 78. 41 81. 42 79 and 84. 43 87. See 87. Not relevant. See 91. 47 See 87 and 89-90. See 91. Not relevant. Not supported by the weight of the evidence except as found in 101. See 100-104. 50-51 Not supported by the weight of the evidence. Ms. Frohock's sworn statement was hearsay. 52-54 Not relevant. 55 84. 56 Not relevant. 57 See 67-72 and 90-94. 58 124. 59 125. 60 See 120-121. The third sentence is not supported by the weight of the evidence. 61 See 130-131. 62 112-114. 63 114-115. 64 115. Not supported by the weight of the evidence. See 118. Not relevant. 67 See 118-119. 68 132. 69 133-134. 70 134. 71 137. 72 137 and 143. 73 See 142. 74 Not supported by the weight of the evidence. 51 COPIES FURNISHED: Virlindia Doss Bonnie J. Williams Craig B. Willis Executive Director Assistant Attorneys General Commission on Ethics Department of Legal Affairs The Capitol, Room 2105 The Capitol, Suite 1601 Post Office Box 6 Tallahassee, FL 32399-1050 Tallahassee, FL 32302-0006 Mark Herron, Esquire Jeffrey H. Barker, Esquire Akerman, Senterfitt, Eidson & Moffit 216 South Monroe Street Suite 300 Post Office Box 10555 Tallahassee, FL 32302-2555
The Issue The threshold issue in this case is whether the decisions giving rise to the dispute, which concern the allocation and disbursement of funds appropriated to Respondent by the legislature and thus involve the preparation or modification of the agency's budget, are subject to quasi-judicial adjudication under the Administrative Procedure Act. If the Division of Administrative Hearings were possessed of subject matter jurisdiction, then the issues would be whether Respondent is estopped from implementing its intended decisions to "de- obligate" itself from preliminary commitments to provide low- interest loans to several projects approved for funding under the Community Workforce Housing Innovation Pilot Program; and whether such intended decisions would constitute breaches of contract or otherwise be erroneous, arbitrary, capricious, or abuses of the agency's discretion.
Findings Of Fact Petitioners Pasco CWHIP Partners, LLC ("Pasco Partners"); Legacy Pointe, Inc. ("Legacy"); Villa Capri, Inc. ("Villa Capri"); Prime Homebuilders ("Prime"); and MDG Capital Corporation ("MDG") (collectively, "Petitioners"), are Florida corporations authorized to do business in Florida. Each is a developer whose business activities include building affordable housing. The Florida Housing Finance Corporation ("FHFC") is a public corporation organized under Chapter 420, Florida Statutes, to implement and administer various affordable housing programs, including the Community Workforce Housing Innovation Pilot Program ("CWHIP"). The Florida Legislature created CWHIP in 2006 to subsidize the cost of housing for lower income workers performing "essential services." Under CWHIP, FHFC is authorized to lend up to $5 million to a developer for the construction or rehabilitation of housing in an eligible area for essential services personnel. Because construction costs for workforce housing developments typically exceed $5 million, developers usually must obtain additional funding from sources other than CWHIP to cover their remaining development costs. In 2007, the legislature appropriated $62.4 million for CWHIP and authorized FHFC to allocate these funds on a competitive basis to "public-private" partnerships seeking to build affordable housing for essential services personnel.1 On December 31, 2007, FHFC began soliciting applications for participation in CWHIP. Petitioners submitted their respective applications to FHFC on or around January 29, 2008. FHFC reviewed the applications and graded each of them on a point scale under which a maximum of 200 points per application were available; preliminary scores and comments were released on March 4, 2008. FHFC thereafter provided applicants the opportunity to cure any deficiencies in their applications and thereby improve their scores. Petitioners submitted revised applications on or around April 18, 2008. FHFC evaluated the revised applications and determined each applicant's final score. The applications were then ranked, from highest to lowest score. The top-ranked applicant was first in line to be offered the chance to take out a CWHIP loan, followed by the others in descending order to the extent of available funds. Applicants who ranked below the cut-off for potential funding were placed on a wait list. If, as sometimes happens, an applicant in line for funding were to withdraw from CWHIP or fail for some other reason to complete the process leading to the disbursement of loan proceeds, the highest-ranked applicant on the wait list would "move up" to the "funded list." FHFC issued the final scores and ranking of applicants in early May 2006. Petitioners each had a project that made the cut for potential CWHIP funding.2 Some developers challenged the scoring of applications, and the ensuing administrative proceedings slowed the award process. This administrative litigation ended on or around November 6, 2008, after the parties agreed upon a settlement of the dispute. On or about November 12, 2008, FHFC issued preliminary commitment letters offering low-interest CWHIP loans to Pasco Partners, Legacy, Villa Capri, Prime (for its Village at Portofino Meadows project), and MDG. Each preliminary commitment was contingent upon: Borrower and Development meeting all requirements of Rule Chapter 67-58, FAC, and all other applicable state and FHFC requirements; and A positive credit underwriting recommendation; and Final approval of the credit underwriting report by the Florida Housing Board of Directors. These commitment letters constituted the necessary approval for each of the Petitioners to move forward in credit underwriting, which is the process whereby underwriters whom FHFC retains under contract verify the accuracy of the information contained in an applicant's application and examine such materials as market studies, engineering reports, business records, and pro forma financial statements to determine the project's likelihood of success. Once a credit underwriter completes his analysis of an applicant's project, the underwriter submits a draft report and recommendation to FHFC, which, in turn, forwards a copy of the draft report and recommendation to the applicant. Both the applicant and FHFC then have an opportunity to submit comments regarding the draft report and recommendation to the credit underwriter. After that, the credit underwriter revises the draft if he is so inclined and issues a final report and recommendation to FHFC. Upon receipt of the credit underwriter's final report and recommendation, FHFC forwards the document to its Board of Directors for approval. Of the approximately 1,200 projects that have undergone credit underwriting for the purpose of receiving funding through FHFC, all but a few have received a favorable recommendation from the underwriter and ultimately been approved for funding. Occasionally a developer will withdraw its application if problems arise during underwriting, but even this is, historically speaking, a relatively uncommon outcome. Thus, upon receiving their respective preliminary commitment letters, Petitioners could reasonably anticipate, based on FHFC's past performance, that their projects, in the end, would receive CWHIP financing, notwithstanding the contingencies that remained to be satisfied. There is no persuasive evidence, however, that FHFC promised Petitioners, as they allege, either that the credit underwriting process would never be interrupted, or that CWHIP financing would necessarily be available for those developers whose projects successfully completed underwriting. While Petitioners, respectively, expended money and time as credit underwriting proceeded, the reasonable inference, which the undersigned draws, is that they incurred such costs, not in reliance upon any false promises or material misrepresentations allegedly made by FHFC, but rather because a favorable credit underwriting recommendation was a necessary (though not sufficient) condition of being awarded a firm loan commitment. On January 15, 2009, the Florida Legislature, meeting in Special Session, enacted legislation designed to close a revenue shortfall in the budget for the 2008-2009 fiscal year. Among the cuts that the legislature made to balance the budget was the following: The unexpended balance of funds appropriated by the Legislature to the Florida Housing Finance Corporation in the amount of $190,000,000 shall be returned to the State treasury for deposit into the General Revenue Fund before June 1, 2009. In order to implement this section, and to the maximum extent feasible, the Florida Housing Finance Corporation shall first reduce unexpended funds allocated by the corporation that increase new housing construction. 2009 Fla. Laws ch. 2009-1 § 47. Because the legislature chose not to make targeted cuts affecting specific programs, it fell to FHFC would to decide which individual projects would lose funding, and which would not. The legislative mandate created a constant-sum situation concerning FHFC's budget, meaning that, regardless of how FHFC decided to reallocate the funds which remained at its disposal, all of the cuts to individual programs needed to total $190 million in the aggregate. Thus, deeper cuts to Program A would leave more money for other programs, while sparing Program B would require greater losses for other programs. In light of this situation, FHFC could not make a decision regarding one program, such as CWHIP, without considering the effect of that decision on all the other programs in FHFC's portfolio: a cut (or not) here affected what could be done there. The legislative de-appropriation of funds then in FHFC's hands required, in short, that FHFC modify its entire budget to account for the loss. To enable FHFC to return $190 million to the state treasury, the legislature directed that FHFC adopt emergency rules pursuant to the following grant of authority: In order to ensure that the funds transferred by [special appropriations legislation] are available, the Florida Housing Finance Corporation shall adopt emergency rules pursuant to s. 120.54, Florida Statutes. The Legislature finds that emergency rules adopted pursuant to this section meet the health, safety, and welfare requirements of s. 120.54(4), Florida Statutes. The Legislature finds that such emergency rulemaking power is necessitated by the immediate danger to the preservation of the rights and welfare of the people and is immediately necessary in order to implement the action of the Legislature to address the revenue shortfall of the 2008-2009 fiscal year. Therefore, in adopting such emergency rules, the corporation need not publish the facts, reasons, and findings required by s. 120.54(4)(a)3., Florida Statutes. Emergency rules adopted under this section are exempt from s. 120.54(4)(c), Florida Statutes, and shall remain in effect for 180 days. 2009 Fla. Laws ch. 2009-2 § 12. The governor signed the special appropriations bills into law on January 27, 2009. At that time, FHFC began the process of promulgating emergency rules. FHFC also informed its underwriters that FHFC's board would not consider any credit underwriting reports at its March 2009 board meeting. Although FHFC did not instruct the underwriters to stop evaluating Petitioners' projects, the looming reductions in allocations, coupled with the board's decision to suspend the review of credit reports, effectively (and not surprisingly) brought credit underwriting to a standstill. Petitioners contend that FHFC deliberately intervened in the credit underwriting process for the purpose of preventing Petitioners from satisfying the conditions of their preliminary commitment letters, so that their projects, lacking firm loan commitments, would be low-hanging fruit when the time came for picking the deals that would not receive funding due to FHFC's obligation to return $190 million to the state treasury. The evidence, however, does not support a finding to this effect. The decision of FHFC's board to postpone the review of new credit underwriting reports while emergency rules for drastically reducing allocations were being drafted was not intended, the undersigned infers, to prejudice Petitioners, but to preserve the status quo ante pending the modification of FHFC's budget in accordance with the legislative mandate. Indeed, given that FHFC faced the imminent prospect of involuntarily relinquishing approximately 40 percent of the funds then available for allocation to the various programs under FHFC's jurisdiction, it would have been imprudent to proceed at full speed with credit underwriting for projects in the pipeline, as if nothing had changed. At its March 13, 2009, meeting, FHFC's board adopted Emergency Rules 67ER09-1 through 67ER09-5, Florida Administrative Code (the "Emergency Rules"), whose stated purpose was "to establish procedures by which [FHFC would] de- obligate the unexpended balance of funds [previously] appropriated by the Legislature " As used in the Emergency Rules, the term "unexpended" referred, among other things, to funds previously awarded that, "as of January 27, 2009, [had] not been previously withdrawn or de-obligated . . . and [for which] the Applicant [did] not have a Valid Firm Commitment and loan closing [had] not yet occurred." See Fla. Admin. Code R. 67ER09-2(29). The term "Valid Firm Commitment" was defined in the Emergency Rules to mean: a commitment issued by the [FHFC] to an Applicant following the Board's approval of the credit underwriting report for the Applicant's proposed Development which has been accepted by the Applicant and subsequent to such acceptance there have been no material, adverse changes in the financing, condition, structure or ownership of the Applicant or the proposed Development, or in any information provided to the [FHFC] or its Credit Underwriter with respect to the Applicant or the proposed Development. See Fla. Admin. Code R. 67ER09-2(33). There is no dispute concerning that fact that, as of January 27, 2009, none of the Petitioners had received a valid firm commitment or closed a loan transaction. There is, accordingly, no dispute regarding the fact that the funds which FHFC had committed preliminarily to lend Petitioners in connection with their respective developments constituted "unexpended" funds under the pertinent (and undisputed) provisions of the Emergency Rules, which were quoted above. In the Emergency Rules, FHFC set forth its decisions regarding the reallocation of funds at its disposal. Pertinent to this case are the following provisions: To facilitate the transfer and return of the appropriated funding, as required by [the special appropriations bills], the [FHFC] shall: * * * Return $190,000,000 to the Treasury of the State of Florida, as required by [law]. . . . The [FHFC] shall de-obligate Unexpended Funding from the following Corporation programs, in the following order, until such dollar amount is reached: All Developments awarded CWHIP Program funding, except for [a few projects not at issue here.] * * * See Fla. Admin. Code R. 67ER09-3. On April 24, 2009, FHFC gave written notice to each of the Petitioners that FHFC was "de-obligating" itself from the preliminary commitments that had been made concerning their respective CWHIP developments. On or about June 1, 2009, FHFC returned the de- appropriated funds, a sum of $190 million, to the state treasury. As a result of the required modification of FHFC's budget, 47 deals lost funding, including 16 CWHIP developments to which $83.6 million had been preliminarily committed for new housing construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that FHFC enter a Final Order dismissing these consolidated cases for lack of jurisdiction. DONE AND ENTERED this 18th day of February, 2010, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 18th day of February, 2010.
The Issue Whether the Respondent, Christina M. Restauri, committed the violations alleged and, if so, what penalty should be imposed.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of regulating licensed community association managers pursuant to Florida law. At all times material to the allegations of this case, the Respondent was licensed as a community association manager, license number CAM 0019553. In May 1998, the Respondent became the community association manager for the Association. As such, the Respondent had duties and responsibilities in connection with the day-to-day management of the Association's business. In exchange for the performance of her manager duties, the Association paid the Respondent a salary, provided her with a condominium unit for her residence, paid her utilities, and covered her local telephone service. The Respondent's managerial duties included all office management for the Association, including the collection of fees owed to the Association, the payment of monies owed to vendors by the Association, and the accounting associated with payroll for salaries owed to employees of the Association. The Respondent and the Association entered into a written management agreement that outlined the terms of her employment. The agreement (Petitioner's Exhibit 1) did not require the Association to pay for the Respondent's family health insurance. Additionally, the agreement did not provide for paid sick leave in excess of four days per year. In connection with her responsibilities for payroll, the Respondent controlled the amount of checks made payable to herself for salary owed during the course of her employment. This authority also allowed her to control the amount of monies withheld from her salary to cover her family medical insurance and for the monies payable for federal withholding taxes and social security. On at least two occasions, the Respondent altered her withholding such that no monies were withheld for federal taxes. The Respondent failed or refused to produce a W-4 form that would have supported the change in withholding. Moreover, the Respondent did not produce a W-2 form that would have supported, after-the-fact, that the withholding forms had been modified to support the altered withholding amount. The Respondent failed or refused to produce documentation to establish that she repaid the Association for family medical benefits she received. Initially, the amount to cover the family health benefit was reportedly withheld from the Respondent's paycheck. The adequacy of the withheld amount came into question. Under the terms of her employment, the Respondent was to remit the monthly family health premium to the Association. She did not do so. In fact, copies of checks that were purportedly offered in support of her claim that she had made the payments were never deposited into the Association's account. When the Respondent was challenged as to the amounts owed for health premiums and the matter was to be further investigated, she tendered her resignation. She never produced any of the financial records requested to document any of the matters contested in this proceeding. In addition to the foregoing payroll discrepancies, the Respondent caused herself to be overpaid $125.00 for sick leave. On or about October 12, 2000, the Respondent took $700.00 from the Association's petty cash and loaned it to Sandy Schwenn. Ms. Schwenn was employed by the Association as a secretary and had agreed to repay the funds. The loan was never repaid. The Respondent was not authorized to loan monies from the Association's petty cash fund and admitted the error during a board of directors' meeting on November 15, 2000. Whether the Respondent made good on her promise to repay the loan herself is unknown. Clearly, at hearing the Respondent did not make such representation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation enter a Final Order against the Respondent that imposes an administrative fine in the amount of $2500.00, and revokes her license as a community association manager. DONE AND ENTERED this 13th day of November 2003, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of November 2003. COPIES FURNISHED: Julie Malone, Executive Director Regulatory Council of Community Association of Managers Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Christina Marie Restauri 4640 Northwest 30th Street Coconut Creek, Florida 33063 Jennifer Westermann Qualified Representative Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2022 Charles F. Tunnicliff, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202
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 APFEATL 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. Sep 14 2009 13:54 ga/ld/28e9 13:36 B589222679 DCA LEGAL PAGE 83/83 ‘Final Order Number DCAOQ9-GM-315 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 in the manner described, on this day of September, 2009. Paula Ford, Agency Clerk DEPARTMENT OF COMMUNITY AFFAIRS 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 (850) 488-0410 By U.S. Mail and Electronic Mail: Jerri A. Blair, Esq. Linda Loomis Shelley, Haq. city Attorney Fowler White Boggs Banker City of Wildwood Post Office Box 11240 Post Office Box 130 Tallahassee, FL 32302-3240 Tavares, FL 32778-3809 ishelley@fowlerwhite.com By Hand Delivery: By Interagency Mail: David L. Jordan, Esq. The Honorable Bram D.E. Canter Assistant General Counsel Administrative Law Judge DEPARTMENT OF COMMUNITY AFFAIRS Div. of Administrative Hearings 2555 Shumard O&k Boulevard The DeSoto Building Tallahassee, Florida 32399 1230 Apalachee Parkway Tallahassee, Florida 32399-3060
The Issue The issues in this protest are, first, whether Respondent clearly erred in determining that Petitioner's application for funding, which had failed to include all of the required financial information concerning its "non-corporation" lender, was ineligible for consideration due to a material, nonwaivable deviation from the specifications of the solicitation; if Petitioner's application was not, in fact, materially nonresponsive, then it will be necessary to decide whether Respondent should exercise its discretion to waive the minor irregularity in Petitioner's application.
Findings Of Fact Respondent Florida Housing Finance Corporation ("FHFC") is a statutorily created, public corporation whose mission is to dispense financial assistance intended to create affordable housing opportunities in the state of Florida. On January 22, 2016, FHFC issued Request for Applications 2016-101 (the "RFA"), whose full title——"Home Financing to Be Used for Rental Developments in Rural Areas"—— generally describes the developments for which FHFC expects to lend approximately $15 million available through the HOME Investment Partnerships Program. The loans are to be made on a competitive basis to selected applicants proposing to construct affordable housing in accordance with the specifications of the RFA, FHFC's generally applicable standards, and all other governing laws. Applications were due on February 25, 2016. Applicants were required to submit a completed and executed application, together with all applicable attachments. One part of the application, which is relevant to the instant dispute, comprised a multipage Development Cost Pro Forma ("Pro Forma"). To complete the Pro Forma, applicants needed to itemize their projected development costs and disclose the sources and amounts of their anticipating funding, the total of which was supposed to equal or exceed expected costs. The RFA divided lenders into two mutually exclusive classes: (a) Regulated Mortgage Lenders, a category which consists essentially of standard banks and credit unions whose operations are overseen by state or federal agencies that regulate financial institutions; and (b) all other lenders, referred to in the RFA as "Non-Corporation" sources. If an applicant chose to rely upon Non-Corporation funding for its project, then it was required under the RFA to provide evidence of the lender's ability to fund the loan, including the lender's financial statements. The failure to submit sufficient evidence of a Non-Corporation lender's wherewithal to finance the project constituted grounds for FHFC not to count that lender as a funding source, which might create a funding shortfall that would render the applicant ineligible. FHFC received nine applications in response to the RFA, including that of Petitioner National Development Foundation, Inc. ("NDF"), an Oviedo-based, Florida corporation that builds affordable housing. In accordance with the RFA, FHFC selected a review committee to evaluate, score, and rank the nine applications. NDF proposed to obtain a first mortgage loan from Neighborhood Lending Partners, Inc. ("NLPI"), to provide both construction and permanent financing for a 30-unit apartment complex to be developed in Macclenny, Florida. NLPI is a multi- bank lending consortium that provides financing to developers of affordable housing. Although NLPI is not a Regulated Mortgage Lender, its member banks are in that category. Nevertheless, it is undisputed that NLPI is a Non-Corporation lender for purposes of the RFA under consideration. Consequently, NDF was required to submit evidence of NLPI's ability to fund the mortgage loan. NDF provided a detailed Term Sheet from NLPI, which described the proposed financing. NDF did not, however, provide NLPI's financial statements with its application. There is no dispute that NDF's application did not strictly conform to the RFA's specifications in this regard. As will be seen, the most hotly contested issue here is whether this deficiency constitutes a nonwaivable material deviation or, rather, a minor irregularity which could be waived at FHFC's discretion. FHFC's review committee determined that, because NLPI did not meet the definition of a Regulated Mortgage Lender, and because NDF had failed to provide the necessary evidence of NLPI's ability to fund, NDF's proposed Non-Corporation funding should not be counted, which effectively removed essential first mortgage financing from NDF's Pro Forma, creating a disqualifying funding shortfall for the applicant. As a result, the committee deemed NDF's application ineligible for lack of financing. At its meeting on May 6, 2016, FHFC's Board of Directors (the "Board"), as urged by its staff, approved the review committee's recommendations with regard to the distribution of funds being allocated under the RFA, including the recommendation to reject NDF's application as ineligible to receive funding. No discussion was had concerning the relative materiality of NDF's failure to provide evidence of NLPI's ability to fund. The Board's action, however, strongly implies that it believed the defect was a nonwaivable material deviation, which is how, in this proceeding, FHFC currently characterizes the deficiency. The question of whether the Board clearly erred in determining that NDF's application was materially nonresponsive is made more complicated by the undisputed fact that, during the meeting on May 6 at which NDF's application was rejected, the Board voted to award funds being made available under a separate program to an applicant (Grove Pointe) whose application had the very same deficiency as NDF's. The material facts of that case, in brief, are that Grove Pointe applied under RFA 2016-104 (the "SAIL RFA") for State Apartment Incentive Loan funding. Grove Pointe was the only applicant. The SAIL RFA required documentation of a Non-Corporation lender's ability to finance, just as did the RFA in this case. Like NDF, Grove Pointe submitted a mortgage loan proposal from NLPI, but failed to provide the consortium's financial statements. The review committee accordingly declined to count the funds Grove Pointe expected to borrow from NLPI, thereby creating a funding shortfall which, in the committee's view, rendered Grove Pointe ineligible for an award. In short, Grove Pointe and NDF ended up in the same situation, for the same reason, after the respective review committees had completed their assigned tasks. At the Board meeting, however, the two similarly situated applicants' fortunes diverged, as staff recommended that the Board offer funding to Grove Pointe on the condition that, within 21 days after the meeting, Grove Pointe cure the deficiency in its application by submitting acceptable evidence of NLPI's ability to provide financing. The Board adopted this recommendation, tacitly waiving the irregularity in Grove Pointe's application (the "Grove Pointe Decision"). The rationale for the Grove Pointe Decision is not entirely clear. When a variance exists between the response to a competitive solicitation and the specifications of the request, the agency must, as a threshold matter, determine whether the variance is a "material deviation" or a "minor irregularity." This is because a material deviation cannot be waived; a response suffering from a material deviation is fatally flawed and must be rejected. If the agency determines, as a matter of ultimate fact, that the deviation is material, therefore, the inquiry is over. If, however, the agency determines that the deviation is not material, but rather is merely a minor irregularity, then it must make another decision, namely whether to waive the minor irregularity, which requires the exercise of discretion. In making the Grove Pointe Decision, the Board did not explicitly decide the threshold question, and even here, in this proceeding, FHFC has not plainly taken an unequivocal position as to whether, in its view, Grove Pointe's failure to provide NLPI's financial statements was a material deviation or a minor irregularity. Careful examination of the Grove Pointe Decision is necessary to assess the strength of NDF's position, which relies heavily upon that "precedent." That is, NDF argues that considerations of consistency and fairness (sometimes called administrative stare decisis) require FHFC to follow the Grove Pointe Decision, which NDF believes is on all fours, in determining NDF's substantial interests. Simply put, it is NDF's contention that FHFC, having approved Grove Pointe's identically defective application, must likewise approve NDF for funding. For its part, FHFC argues that the Grove Pointe Decision is distinguishable and hence inapposite. (Notably, FHFC does not suggest that the decision to fund Grove Pointe was incorrect and should be disregarded for that reason.) Because the parties disagree as to what the Board "held" in the other case, it is important to ascertain the reasoning behind the Grove Pointe Decision. The record shows that the Grove Pointe Decision was taken on three grounds——although one was arguably something of an afterthought, and the others are really two sides of the same coin. The interrelated reasons boil down to the fact that because Grove Pointe was the sole applicant, FHFC could fund Grove Pointe, despite its ineligibility, without having to deny any other applicant's request for funding. Grove Pointe's win, in other words, was not someone else's loss——not, at least, someone identifiable. The absence of other applicants led FHFC to conclude that awarding funding to Grove Pointe would not give the developer a "competitive advantage" over other applicants. Thus, one basis for the Grove Pointe Decision was the supposed lack of a competitive advantage. That there was more funding available than could be awarded to all the applicants——or to the one applicant, as it happened——also prompted FHFC to invoke the "Returned Allocation provision" in the SAIL RFA, which stated as follows: Funding that becomes available after the Board takes action on the Committee's recommendations, due to an Applicant withdrawing its Application, an Applicant declining its Invitation to enter credit underwriting, or an Applicant's inability to satisfy a requirement outlined in this RFA, will be distributed as approved by the Board. Putting aside whether this language actually applies under the circumstances facing FHFC at the time, the reasons for the agency's reliance on the Returned Allocation provision focused, again, on the fact that Grove Pointe was the only applicant, which meant that there was lots of leftover money to distribute, and no one to complain if Grove Pointe received funding, so FHFC might as well get the deal done with the applicant it had, notwithstanding Grove Pointe's apparent ineligibility. The no competitive advantage/unallocated balance grounds can be summed up as the "no harm, no foul" rationale, which, ultimately, provided the principal justification for the Grove Pointe Decision. Notice, however, that this rule applies equally to the waiver of any variance, whether a material deviation or a minor irregularity, for the determinative factor is not the significance of the variance, but rather on how its waiver actually——i.e., not in theory, but in fact——would affect competitors.1/ As mentioned, FHFC has never clearly articulated its determination regarding the materiality of the Grove Pointe application's deficiency, leaving open two possibilities: (a) FHFC believes it has the authority to waive a material deviation where doing so results in "no harm"; or (b) FHFC believes that a variance which, if waived, would result in "no harm" is, for that reason, a minor irregularity that, in the exercise of sound discretion, should be waived. Either of these, therefore, could be considered the rule of the Grove Pointe Decision. The third basis for funding Grove Pointe, which the Board considered but arguably did not view as essential, was FHFC's favorable experience with NLPI, whose ability to provide financing had been proven in past projects, and whose financial statements FHFC had reviewed within the preceding 17 months. FHFC, in other words, was already familiar with the fact of NLPI's fiscal health despite Grove Pointe and NDF's failure to provide evidence thereof. NDF interprets the Grove Pointe Decision as standing for the proposition that the failure to provide financial statements for NLPI is a minor irregularity that should be waived because FHFC knows from experience that NLPI is able to fund mortgage loans.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order (i) determining that NDF's failure to include with its application evidence of NLPI's ability to lend funds to NDF constitutes a minor irregularity and (ii) waiving the minor irregularity on the condition that NDF supply the missing information within 21 days after the entry of the final order; or, alternatively, stating the facts and circumstances upon which its discretionary decision not to waive the minor irregularity has been based, so that the outcome will not appear to be arbitrary or capricious, and also to enable a reviewing court to determine whether or not the agency's discretion was abused. DONE AND ENTERED this 18th day of July, 2016, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 2016.
The Issue The issues in this case are twofold: (1) Did the Respondent properly adopt its bid methodology for processing VOCA grants and, if not, (2) did the Respondent demonstrate a suitable factual base for its non-rule policy.
Findings Of Fact The Federal Victim of Crimes Act ("VOCA"), 42 U.S.C., Sections 10601- 10605, authorizes the granting of federal funds to the individual states for the purpose of awarding grants to eligible subgrantees who provide direct assistance to victims of crime. The U.S. Department of Justice, Office of Victims of Crime, has published guidelines for the implementation of the program. Listed among the factors that a state should take into account when distributing VOCA awards are (1) the range of victim services needed throughout the state, (2) the track record of continuation programs, and (3) the extent to which other sources of funding are available for proposed programs. See, 54 Fed. Reg. 21499, 21503 (May 18, 1989)(Respondent's Exhibit The federal guidelines provide, inter alia, that the states which receive these monies have sole discretion as to which programs within the state shall be awarded subgrants, as long as the subgrantees meet the eligibility criteria of VOCA and the guidelines. The Department of Labor and Employment Security, Division of Workers' Compensation, Bureau of Crimes Compensation and Victim Witness Services (the "Bureau") is the agency of the State of Florida responsible for administering the VOCA subgrant program. The Petitioner, Metro-Dade Department of Justice Assistance ("MDJA"), is a nonprofit organization based in Dade County, Florida, which is devoted to providing specialized psychological counseling and related services to victims of child sexual abuse and domestic violence in previously underserved populations; both priority areas under VOCA. Petitioner has been a VOCA grant recipient for the last four years. Petitioner's subject VOCA grant application for FY 1990-91 is the fifth consecutive year in which it has sought VOCA funds through Respondent. Petitioner is currently the only program in Dade County providing free specialized counseling to victims of child sexual abuse and domestic violence. The VOCA award Petitioner is seeking for FY 1990-91 would fund specialized counseling, outreach programs, intervention services, and other related services for between 450-550 victims of child sexual abuse and domestic violence in Dade County. Since the inception of the VOCA program, the Bureau has solicited applications from the State's victim services organizations by means of a request for bid process. The Bureau annually prepares and distributes a VOCA grant manual and application and awards subgrants on the basis of a scoring system set forth in the VOCA grant manual. On March 6, 1990, Respondent sent all prospective applicants, who had indicated by telephone or letter of intent to apply for FY 1990-1991 VOCA funding, a grant manual and application packet, including necessary forms, instructions and filing deadlines, with which to apply for FY 1990-1991 VOCA continuation funding and new and expanded funding. Included with these materials was a grant application timetable notifying respective applicants of deadlines for filing both a Notice of Intent to submit an application and the grant application itself. In addition, this timetable advised prospective applicants that an applicants' conference would be held in Tallahassee, Florida, on March 22, 1990, at 1:00 p.m., "to provide all applicants the opportunity to ask specific questions about the manual or the application process." Although MDJA did not attend the applicants' conference, at the applicants' conference, no one commented or questioned the requirement for filing a Notice of Intent or objected to the deadline for filing the same. The applicants' conference provided a question and answer session through which the Bureau was able to clarify most of the questions posed by the 50 or so potential applicants who attended the conference. No substantive changes to the VOCA grant manual or forms were recommended by the attendees and the Bureau did not make any substantive revisions to the VOCA grant application requirements; specifically, no comment or revisions were made on the Notice of Intent provisions. The manual required for the first time a Notice of Intent. The provisions relating to the Notice of Intent are found in three (3) separate parts of the VOCA grant manual and the application: Page 1 of the VOCA Grant Manual reads: Deadlines for the submission of Notices Intent to Submit a Proposal and Grant Application deadlines must be followed. Any Notices of Intent to Submit a Proposal and Grant Application deadlines must be followed. Any Notices of Intent to Submit a Proposal and Applications received after the deadline will not be considered for funding and will be returned to the applicant. Section II.A.2. of the VOCA Grant Manual provides: 2. Notice of Intent to Submit a Proposal. A Notice of Intent to Submit a Proposal must be submitted by all programs intending to file a proposal or they will not be permitted to submit an application. Applicants must complete the entire form provided in the, Application. The purpose of the Notice of Intent is to estimate the number of proposals and the total amount of money being requested. A Notice of Intent to Submit a Proposal does not constitute an application for VOCA funds. The Notice of Intent to: Submit a Proposal must be signed by the appropriate agency representative designated to sign on behalf of the agency. The original Notice and one copy must be submitted for it to be accepted by the department. The deadline for accepting a Notice of Intent to Submit a Proposal is March 29, 1990, at 2:00 p.m. Eastern Standard Time. Notices arriving after this time will not be considered for funding and will be returned. (FAXED COPIES ARE NOT ORIGINALS AND THEREFORE WILL NOT BE ACCEPTED.) Notice of Intent to Submit a Proposal for the 1990- 91 Victims of Crime Act Funding ("VOCA"), also provides: Notices are due no later than March 29, `1990 at 2:00 p.m. Eastern Standard Time. Any Notices received after this time and date will be returned to the applicant and will not be considered for funding. In late February or early March of 1991 Respondent received a telephone call from an employee of Petitioner notifying the Respondent that MDJA would be filing a grant application for FY 1990-91 VOCA funds and specifically requesting Respondent to send to MDJA a VOCA grant manual and related application forms. It is uncontroverted that MDJA, made this telephone call, that it was received by Respondent, and that pursuant thereto, Respondent sent the aforementioned VOCA packet and related forms to MDJA. The Executive Director of MDJA completed and signed the Notice of Intent form provided by Respondent on Friday, March 23, 1990. This form was sent certified mail to Respondent on Monday morning, March 26, 1990, via courier. Although dispatched from MDJA's office on March 26, 1990, for some inexplicable reason, the Notice of Intent was not postmarked and dispatched from the mail room until Wednesday afternoon, March 28, 1990, and was not received by the office of Respondent until 10:05 a.m. on Friday, March 30, 1990, approximately four business hours after the March 29, 1990, 2:00 p.m. deadline. It was postmarked March 28, 1990. On March 30, 1990, fearing that MDJA's Notice of Intent may have been delayed in the mail, the Bureau telephoned MDJA at approximately 9:00 a.m. to inquire if it had mailed the Notice of Intent form. MDJA then informed Respondent that its Notice of Intent had been sent on Monday, March 26 1990, and that such Notice should have been received by the Thursday deadline. Shortly thereafter, at 10:05 a.m., on March 30, 1990, MDJA's Notice of Intent did arrive at Respondent's office, via certified mail. MDJA filed its actual application for VOCA funding for FY 1990-91 prior to the April 12, 1990 for applications. It is not disputed that Respondent received oral notification from MDJA, prior to March 29, 1990, that MDJA would be filing an application for VOCA funding far FY 1990-91. It is not disputed that MDJA was a four-year continuation program. All of the information sought in the Notice of Intent form, including MDJA's name, contact person, address, telephone number, whether the applicant was a continuation program, and the 1990-91 amount sought (which is limited by what the MDJA received the previous year, plus 5%), was already in Respondent's possession prior to the March 29, 1990 filing deadline. It is uncontroverted that MDJA's Notice of Intent being received approximately four business hours after the deadline in no way inconvenienced Respondent or in any way impaired their ability to carry out their duties aid responsibilities. The Respondent, by letter dated April 3, 1990, advised MDJA that it was ineligible for funds in the 1990-91 grant year due to its failure to comply with the March 29, 1990 deadline. Notices of Intent to Submit a Proposal were submitted by 91 applicants. Two (2) of those Notices were received after the deadline (including MDJA's), and the Bureau advised both of them that they were ineligible for funding. One such ineligible applicant, I-Care, also filed a protest. A hearing was held on March 1, 1990, before a Hearing Officer of the Division of Administrative Hearings. Said Hearing Officer issued a Recommended Order on May 11, 1990 recommending that the Department enter a Final Order denying I-Care's petition.
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.
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.
