Findings Of Fact The Petitioner, a nonprofit corporation, was licensed by the Respondent to operate as a vocational, technical, or trade school during 1977. The school was designed to teach business machine repair and maintenance skills to students. The Petitioner applied for a renewal of the license with the Respondent for 1978. By letter dated August 14, 1978, the Respondent advised the Petitioner that it would not reissue the license. The Petitioner requested an administrative hearing, and this proceeding ensued. Beginning in January, 1977, the Petitioner was funded by the "CETA Administration" as a service delivery agent. Under this funding, the Petitioner would submit requests for reimbursement based upon its expenditures in providing an educational program to its students, and the Petitioner was funded directly. Petitioner enjoyed this status from January through September, 1977, and received a total of $87,806.07 in direct funding. As of October 1, 1977, the Petitioner's funding status with CETA changed. After that date the Petitioner became what was called a "sub-subgrantee" of the vocational education component of the local CETA Administration. The vocational education component of CETA became the service delivery agent, and was directly funded. The Petitioner thereafter was not able to do its own recruiting of students, and no longer received direct funding from CETA. Rather, CETA would pay to students a stipend adequate to compensate them for tuition, and other costs of the program. On October 1, the Petitioner had eleven students. Despite the Petitioner's efforts to provide the new service delivery agent with the names of persons interested in participating in the Petitioner's program, CETA did not refer new students to the program. The school lost approximately one student per month from October, 1977 through May, 1978. CETA discontinued all funding of the Petitioner on June 7, 1978. Since that date the Petitioner has had no students. The financial statement submitted by the Petitioner to the Respondent in connection with the renewal application revealed that the Petitioner was operating with a net income loss of $524.76; had total assets of minus $203.57; a fund balance of minus $446.96; and total liabilities of more than two hundred dollars. The projected finances for the period October 1, 1978 through September 30, 1979 indicates that the school will lose approximately ten thousand dollars. The Petitioner, in its renewal application, did not reveal that it had had a drastic change in its funding status, and that it had lost all of its students. During the time that it was in operation, only approximately five persons completed the Petitioner's course work. The Petitioner submitted with its renewal application, a copy of its school catalog. The catalog revealed that certain persons remained on the school's board of directors, who in fact had resigned from these positions. This failure is excusable. The catalog that was submitted was the same catalog that had been used the year before. Due to the loss of its CETA funding, the Petitioner could not afford to have new catalogs printed.
The Issue Whether Petitioner, David Oness, is eligible to receive the remuneration from the 2015 state of Florida Best and Brightest Scholarship program.
Findings Of Fact Mr. Oness is employed by the SCSB and is in his 11th year as a teacher at Sarasota High School. The 2015 Florida Legislature Appropriations Act created the Best and Brightest Teacher Scholarship Program (the scholarship), chapter 2015-232, p. 27, Item 99A. The eligibility pre-requisites for applying to and being awarded the scholarship (up to $10,000) were established in the scholarship. The scholarship provided the following: Funds in Specific Appropriation 99A are provided to implement Florida's Best and Brightest Teacher Scholarship Program. The funds shall be used to award a maximum of 4,402 teachers with a $10,000 scholarship based on high academic achievement on the SAT or ACT. To be eligible for a scholarship, a teacher must have scored at or above the 80th percentile on either the SAT or the ACT based upon the percentile ranks in effect when the teacher took the assessment and have been evaluated as highly effective pursuant to section 1012.34, Florida Statutes, or if the teacher is a first-year teacher who has not been evaluated pursuant to section 1012.34, Florida Statutes, must have scored at or above the 80th percentile on either the SAT or the ACT based upon the percentile ranks in effect when the teacher took the assessment. In order to demonstrate eligibility for an award, an eligible teacher must submit to the school district, no later than October 1, 2015, an official record of his or her SAT or ACT score demonstrating that the teacher scored at or above the 80th percentile based upon the percentile ranks in effect when the teacher took the assessment. By December 1, 2015, each school district, charter school governing board, and the Florida School for the Deaf and the Blind shall submit to the department the number of eligible teachers who qualify for the scholarship. By February 1, 2016, the department shall disburse scholarship funds to each school district for each eligible teacher to receive a scholarship. By April 1, 2016, each school district, charter school governing board, and the Florida School for the Deaf and the Blind shall provide payment of the scholarship to each eligible teacher. If the number of eligible teachers exceeds the total the department shall prorate the per teacher scholarship amount. Mr. Oness timely filed an application to participate in the scholarship. Mr. Oness was evaluated as “highly effective” pursuant to section 1012.34, Florida Statutes. Mr. Oness was raised and educated in Canada. Mr. Oness did not take either the ACT3/ or the SAT4/ when he went to college, as it was not necessary in Canada. Mr. Oness took the ACT in Las Vegas, Nevada, on September 12, 2015. On “The ACT® Student Report” (pages 6 and 7 of Exhibit A), it recorded Mr. Oness’s ACT score as: Composite Score 24 U.S. RANK 74%|STATE RANK 81% No credible testimony or evidence was received from any authoritative figure from the ACT entity or otherwise that clearly establishes what is meant by the “STATE RANK” percentile. The form provides: U.S. Rank and State Rank: Your ranks tell you the approximate percentages of recent high school graduates in the U.S. and your state who took the ACT and received scores that are the same as or lower than yours. It remains unclear whether the term “STATE RANK” means: the state of Nevada, where Mr. Oness took the ACT; the state of Florida, where Mr. Oness lives and works; or some other state. On November 13, 2015, SCSB’s Human Resources Salary Specialist, Mary McCurry, advised Mr. Oness that he did not qualify for the scholarship award “because your ACT test scores do not reflect the 80th national percentile or higher.” Mr. Oness asked Respondent to review the non- qualification determination by e-mail dated November 13, 2015, and received an e-mail in return from the SCSB’s Employee Relations and Equity Administrator, Al Harayda, advising that the DOE provided “the percentiles that we had to use” in determining eligibility. The DOE provided guidance to the SCSB that “the national percentile score should be used to meet eligibility requirements.”
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Sarasota County School Board enter a final order that Petitioner is not eligible for a Best and Brightest Scholarship. DONE AND ENTERED this 29th day of March, 2016, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 29th day of March, 2016.
Findings Of Fact Petitioner, who is black, was hired by Respondent on September 28, 1987. Respondent is in the business of providing health care institutions with management personnel to supervise environmental-services employees of the institutions. The management personnel supplied by Respondent for the typical customer consist of an on-site director, assistant director, and several supervisors. Respondent hired Petitioner as a supervisor for assignment to Holmes Regional Medical Center (Holmes). At the time, Respondent had six employees working at Holmes. The responsibilities of a supervisor typically include the management of 10-25 persons. The management responsibilities require, among other things: 1) "daily informal walk-through inspections of each area"; 2) "formal written inspections of each area or the job supervised with the employee at least every month"; 3) "aggressive[ness] in becoming acquainted with all key hospital personnel"; 4) the "develop[ment of] a good professional relationship with each [key hospital employee]"; and 5) the recruitment of personnel to be hired by the customer for assignment to the supervisor's department. Petitioner had limited relevant experience before joining Respondent. Petitioner had operated his own janitorial business, but had limited experience in supervision. As was the case with all employees, Respondent provided Petitioner with a fairly extensive orientation and training process. Prior to assuming his supervisory responsibilities, Petitioner successfully completed the training program, although he showed signs of ignoring the Medi-Dyn way of doing things and adhering to the ways of his former janitorial business. On December 28, 1987, Petitioner received his three-month evaluation, which employed a five-point rating. Petitioner averaged ratings of about "3," but received "marginal" ratings of "4" in areas such as initiative, planning, development of subordinates, training effectiveness, administrative ability, organization, and personnel management. Petitioner was responsible for supervising various areas of Holmes, including certain outbuildings, primarily during the late-evening and early- morning shift. The condition of these areas did not improve following the three-month evaluation. On January 25, 1988, a Holmes representative sent Respondent's director, Jeff Wahlen, a memorandum listing several complaints concerning the cleanliness of the diagnostic services area, for which Petitioner was responsible. On February 4, 1988, a representative of a user of one of the outbuildings for which Petitioner was responsible sent Petitioner a letter expressing "deep concern and frustration over the highly unsatisfactory work by [Respondent] at our hospital." On February 8, 1988, the supervisor of the health and fitness area at the hospital sent Mr. Wahlen a memorandum complaining that the cleanliness of the health and fitness area, for which Petitioner was responsible, was "getting worse." On February 9, 1988, Mr. Wahlen sent a memorandum to Petitioner itemizing numerous ;operational concerns" and establishing deadlines for achieving corrections of the noted problems. All of these deadlines were within February. On February 10, 1988, a representative of the bloodmobile/donor center sent a memorandum to Mr. Wahlen objecting to the uncleanliness of their work areas. Mr. Wahlen met with Petitioner that day and discussed cleaning problems in the bloodmobile/donor center areas. On February 18, 1988, Mr. Wahlen sent Petitioner a follow-up memorandum. Mr. Wahlen reminded Petitioner that the February 9 memorandum required that several objectives should already have been satisfied, but Mr. Wahlen had not received confirmation that these matters had been taken care of. On February 29, 1988, the supervisor of the health and fitness center sent Petitioner a memorandum informing him that many items on checklists dating from the prior November had still not been addressed. She advised Petitioner that she was considering the termination of the center's contract with Respondent. On March 10, 1988, Petitioner received a six-month evaluation in which his performance was rated as marginal, and he was placed on probation for 45 days. Petitioner received various tasks that he was to complete during the probationary period. He subsequently completed a large number of them. From April 13-15, 1988, Alfred Tambolio, who is the national operations director for Respondent, conducted a hospital-wide audit of the Holmes facility. He found that the areas within Petitioner's responsibility were unclean and in unsatisfactory condition. A week or two later, Mr. Tambolio returned to Holmes for a follow-up inspection. While examining the operating room, for which Petitioner was responsible, a physician told Mr. Tambolio and Petitioner that the area was "filthy." Leaving the operating room, with which Petitioner had displayed insufficient familiarity, Mr. Tambolio asked Petitioner to take him to the labor and delivery area, for which Petitioner was also responsible. Petitioner was unable even to find the area, and they had to ask a hospital employee for directions. Numerous other problems surfaced and many problems previously identified by Mr. Tambolio had not been corrected. By memorandum dated May 13, 1988, Mr. Wahlen reviewed Mr. Tambolio's second visit and informed Petitioner that he was being terminated. Mr. Wahlen acknowledged that Petitioner had recently been recommended for a satisfactory evaluation, but that Mr. Wahlen had declined to approve the tentative evaluation. Mr. Wahlen explained that, in essence, Petitioner's realization of certain goals did not outweigh his failure to provide satisfactory service in many other respects. Respondent replaced Petitioner with a person of Hispanic origin. As of May 1, 1988, Respondent employed a total of five blacks, one Hispanic, and one American Indian among its 27 employees serving as supervisors, assistant directors, and directors. Two of the eight directors were black.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Petition for Relief filed by Petitioner be dismissed. ENTERED this 26th day of June, 1989, in Tallahassee, Florida. ROBERT E. MEALE 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 26th day of June, 1989. COPIES FURNISHED: Donald A. Griffin Executive Director Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Dana Baird, Esquire General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Margaret Agerton, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Arthur Dennis, pro se 792 Cecilia Street Palm Bay, Florida 32909 Lynn Dunning Vice President, Operations Medi-Dyn, Inc. 8400 East Prentice Avenue Suite 800 Englewood, Colorado 80111
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 grounds exist to deny the application of Respondent, Academy of Education School (6979), to participate in the Florida state scholarship programs under chapter 1002, Florida Statutes.
Findings Of Fact The Commissioner is the chief educational officer for the State of Florida. The Commissioner is responsible for assisting the State Board of Education in enforcing compliance with the mission and goals of the K-20 education system. See § 1001.10(1), Fla. Stat. The Academy is a private school formed in Orlando, Florida. The Academy registered as a private school with the Florida Department of Education (the “Department”) in March 2020. On March 25, 2020, the Academy submitted a request to participate in the state educational scholarship programs established under chapter 1002. These programs include the John M. McKay Scholarship for Students with Disabilities Program, the Florida Tax Credits Scholarship Program, the Gardiner Scholarship Program, the Hope Scholarship Program, the Reading 3 The Academy’s motion for extension was filed after the expiration of the ten-day deadline it sought to extend, which is contrary to Florida Administrative Code Rule 28-106.204(4). However, the Commissioner did not oppose the undersigned’s consideration of Academy’s Proposed Recommended Order. Scholarship Program, and the Family Empowerment Scholarship Program (collectively referred to as the “Scholarship Programs”).4 The Scholarship Programs distribute state funds to pay tuition for students who come from low-income families or have disabilities. The scholarships help children attend their (private) school of choice. For a school to be eligible to receive money from one or more of the Scholarship Programs, it must comply with the requirements set forth in section 1002.421. The Commissioner's is the state government entity charged with administering and overseeing the Scholarship Programs. Pertinent to this matter, section 1002.421(3) authorizes the Commissioner to deny a private school’s eligibility to participate in the Scholarship Programs if it is determined that the owner or operator of the school has exhibited a previous pattern of failure to comply with section 1002.421. After reviewing the Academy’s application, on May 21, 2020, the Commissioner issued a letter denying the Academy’s request. The Commissioner explained that its decision was based on the (alleged) inappropriate relationship between the Academy and another private school named Agape Christian Academy (“Agape”). Agape was the subject of prior discipline from the Commissioner regarding its improper activity involving the Scholarship Programs. As background information, Agape was founded as a private school in 2002, and remained operational until 2018. Agape was housed in a building located at 2425 N. Hiawassee Road, Orlando, Florida. From 2015 through 2018, Ingrid Bishop served as president of Agape’s corporate entity. Also during this time, Cassandra Cook was an employee of Agape, and served on Agape’s board of directors. After its formation, Agape requested, and was granted, eligibility to participate in the Scholarship Programs. 4 See §§ 1002.385, 1002.39, 1002.394, 1002.395, 1002.40, and 1002.411, Fla. Stat. In March 2016, however, the Commissioner initiated an action to revoke Agape’s eligibility. The revocation was based on the Commissioner’s findings that Agape was operating from an unapproved location and had filed a fraudulent annual fire inspection report with the Department. Thereafter, in August 2016, Agape and the Commissioner entered into a Settlement Agreement wherein the Commissioner allowed Agape to remain eligible for the Scholarship Programs on a probationary status, if Agape agreed to reimburse the Commissioner for past scholarship funds received while not in compliance with state law. Soon thereafter, however, Agape breached the terms of the Settlement Agreement. Consequently, on May 11, 2018, the Department issued a Final Order terminating Agape’s authority to participate in the Scholarship Programs. The Commissioner further ordered that: Agape’s … officers, directors, principal, or controlling persons [are] ineligible to participate in the Gardiner, McKay or Florida Tax Credit Scholarship Programs for a period of ten years from the date of the Final Order. Regarding the action against the Academy, as articulated in its May 21, 2020, letter, the Commissioner bases its decision to deny the Academy’s application on the following reasons: The Academy’s relationship with Cassandra Cook: Ms. Cook was employed as an officer, director, principal, or controlling person of Agape. Pursuant to the Agape Final Order, Ms. Cook is ineligible to participate in the Scholarship Programs for ten years. The Commissioner asserts that the circumstances surrounding the creation of the Academy indicate that the Academy is “operating as a proxy or surrogate for Agape and/or Cassandra Cook.” Consequently, the Academy’s association with Ms. Cook renders the Academy ineligible to participate in the Scholarship Programs. The Academy’s relationship with Ingrid Bishop: Ingrid Bishop was employed as an officer, director, principal, or controlling person of Agape. Pursuant to the Agape Final Order, Ingrid Bishop is ineligible to participate in the Scholarship Programs for ten years. The Commisioner asserts that the circumstances surrounding the creation of the Academy indicate that the Academy is “operating as a proxy or surrogate for Agape and/or … Ingrid Bishop.” Consequently, the Academy’s association with Ingrid Bishop renders the Academy ineligible to participate in the Scholarship Programs. The relationship between Academy officers or employees and Ingrid Bishop: The Academy intends to employ Blaire Bishop, Braelyn Bishop, and Brooke Bishop in some capacity. All three women are related to Ingrid Bishop (her daughters). The Commissioner's position is that the relationship between these Academy personnel and Ingrid Bishop renders the Academy ineligible to participate in the Scholarship Programs. The Academy’s relationship with Northwestern Learning Center, Inc. (“Northwestern”): In addition to Agape, the Commissioner previously denied Northwestern’s eligibility to participate in the state scholarship programs. Northwestern’s denial was based on its relationship with Ms. Cook. The Academy intends to set up its school on property owned by Northwestern. The business relationship between the Academy and Northwestern (and Ms. Cook) renders the Academy ineligible to participate in the Scholarship Programs. In short, the Commissioner believes that the same parties who owned and operated Agape (Ingrid Bishop and Ms. Cook) are behind the formation of the Academy. This time, however, Ingrid Bishop’s children (Blaire, Braelyn, and Brooke Bishop) are the named officers, directors, principals, or controlling persons. The Commissioner alleges that Blaire Bishop is not the legitimate owner/operator of the Academy, and the Academy’s “true” founders (Ingrid Bishop and Ms. Cook) are fraudulently conducting a shell game in “an effort to circumvent the Department’s Final Order.” To support its position, the Commissioner first called Phylea Daugherty to testify regarding the Commissioner’s investigation into the connection between Agape and the Academy. As a “site visit specialist” for the Department’s Office of Independent Education and Parental Choice (“IEPC”), Ms. Daugherty is tasked with visiting private schools that apply to participate in the Scholarship Programs. She explained that a school must pass her inspection prior to becoming eligible to receive scholarship funds for its students. Ms. Daugherty expressed that the Academy’s application raised concerns when her office noticed that the Academy’s facilities were located close by a school (Agape) whose eligibility to receive scholarship funds had been revoked. Her office also noted that the last name of the person who signed the Academy’s application (“Bishop”) matched the name of an individual who the Commissioner had deemed ineligible to participate in the Scholarship Programs. That being said, Ms. Daugherty divulged that, aside from the possible issues regarding the relationship between the Academy and Agape (the schools’ locations and biologically related officers or employees), the Academy’s application was complete. Therefore, nothing else on the face of the application explicitly indicated that the Commissioner should deny it. Whitney Blake, a Compliance Specialist for IEPC, also testified regarding the Commissioner’s decision to deny the Academy’s application. As part of her responsibilities, Ms. Blake reviews applications from Florida private schools that request to take part in the Scholarship Programs. Echoing Ms. Daugherty’s testimony, Ms. Blake expressed that the Academy’s application raised two concerns: 1) the Academy’s intended location suggested a close association with a sanctioned entity (Agape), and 2) the fact that the Academy’s officers and employees might be related to the officers or employees of another school (Agape) whose authority to participate in the Scholarship Programs was revoked. Ms. Blake explained that the Commissioner’s Final Order from May 11, 2018, banned Ingrid Bishop and Ms. Cook from participating in the Scholarship Programs for a period of ten years. Consequently, neither Ingrid Bishop nor Ms. Cook may personally serve as officers, directors, principals, or controlling parties at any other private school that is authorized to accept scholarship funds. In June 2018, however, Ms. Cook5 became involved in a new school that registered with the Department called Orlando Christian Academy (“Orlando Christian”). Soon thereafter, Orlando Christian applied to participate in the Scholarship Programs. In November 2019, after discovering its association with Ms. Cook, the Commissioner denied Orlando Christian’s application. Moreover, Ms. Blake testified that Orlando Christian’s listed address, 2425B N. Hiawassee Drive, Orlando, Florida, is situated very near the Academy’s intended address of 2332 N. Hiawassee Drive, Orlando, Florida. This address is also close to Agape’s former location at 2425 N. Hiawassee Road, Orlando, Florida. In addition, based on Orange County, Florida, property records, the current owner of 2332 N. Hiawassee Drive is Northwestern. Ms. Cook served on Northwestern’s board of directors from 2017 through 2019. (Ms. Cook is not listed as an officer or director on Northwestern’s annual corporate report for 2020.) Northwestern acquired the property in 2012 from Agape via a quitclaim deed executed by Ingrid Bishop. Ms. Blake expressed that the facts and circumstances surrounding the Academy’s formation insinuate a similar attempt by Ms. Cook to start another private school to unlawfully take advantage of the state scholarship funds. Ms. Blake testified that based on all the circumstantial evidence connecting the Academy to Agape, Northwestern, Ms. Cook, and Ingrid 5 Ms. Cook has used several names over the past twenty years including Cassandra Cook Wood, C. D. Wood, and Sandra Wood. When Orlando Christian applied for scholarship eligibility in 2019, Ms. Cook identified herself as "Sandra Wood." Bishop, the Commissioner had serious cause for concern that Ms. Cook and/or Ingrid Bishop were also involved in the administration, management, and operation of the Academy. According to Ms. Blake, such “undue participation” by prohibited persons in the Academy’s attempt to obtain scholarship funds is grounds to deny the Academy’s application. Despite these facts, Ms. Blake acknowledged that no former officer, director, principal, or controlling party from Agape is included or referenced in any corporate document related to the Academy’s formation or application. In particular, neither Ingrid Bishop nor Ms. Cook are listed on any Academy corporate records. Further, Ms. Blake repeated Ms. Daugherty’s statement that, other than the Academy’s proposed location and the fact that Ingrid Bishop is related to the Academy’s officers and employees, the Academy’s application does not contain information that would cause the Commissioner to automatically deny it. At the final hearing, the Academy argued that the Commissioner’s decision to deny its application is based on false and unsupported assumptions regarding the relationship between the Academy’s founders and officers (Blaire, Braelyn, and Brooke Bishop) and Agape’s founders and officers (Ingrid Bishop and Ms. Cook). The Academy charges that the Commissioner unfairly ties Ms. Bishop to the sins of her mother, with no proof that Ingrid Bishop is connected to the Academy in any way. Blaire Bishop testified on behalf of the Academy. Ms. Bishop founded the Academy and serves as president of its board of directors. She also intends to fill the role of the Academy’s first principal. Ms. Bishop described herself as a product of her community. She attended Agape from kindergarten through high school. Upon graduation from college at Florida A&M University (“FAMU”) in 2018, she returned to Orlando and is pursuing a master’s degree in educational leadership from the University of Central Florida. Ms. Bishop expressed that she now finds herself in a position to give back to the community in which she grew up. She has dreamed of opening a school for some time. Ms. Bishop voiced that she created the Academy as a way to provide educational opportunities for underprivileged children who live in northwest Orlando. Ms. Bishop explained that, currently, the Academy is still in the development and planning stage. She envisions opening her school with about 100 students. She would like to offer classes from kindergarten through high school. At this time, however, she has not hired any employees. Neither has she enrolled any students. She anticipates, however, that her two sisters, Braelyn and Brooke Bishop, who have agreed to serve as officers of the Academy’s corporate entity, will also have a role with the school. Ms. Bishop conveyed that, from an administrative standpoint, she is ready to open the Academy. However, to effectively operate as a private institution, her school will be dependent upon money from the Scholarship Programs. The vast majority of the low-income children she hopes to attract cannot afford private school tuition. Consequently, scholarship money is essential to help fund their enrollment. Ms. Bishop estimates that each student who qualifies for a scholarship will receive approximately $4,500 - $5,000 a year, which will be forwarded to the Academy if its application is approved. Ms. Bishop disclosed that she cannot feasibly run her school unless the Commissioner allows it to participate in the Scholarship Programs. Ms. Bishop expounded that, with the financial assistance awarded through the Scholarship Programs, the Academy will offer free, private school education to low-income students living nearby. Consequently, the Commissioner’s decision to disallow the Academy from accepting scholarship funds only serves to negatively impact needy children in the Orlando area. Ms. Bishop urges that she independently founded the Academy, and her school has no connection with the now-defunct Agape or any of its previous officers, directors, or employees. Ms. Bishop insists that the Academy is not a strawman or surrogate for Agape. She has not allowed anyone associated with Agape to help her incorporate or organize her school. Specifically, Ms. Bishop testified that neither her mother nor Ms. Cook have played any role in creating the Academy. They have not provided any financial assistance to the Academy. Neither will they receive any benefits or compensation from Academy income or resources. In addition, Ms. Bishop asserted that she was not involved in, nor did she have any connection with, the administration, creation, or management of Agape. Ms. Bishop further testified that she was not personally bound by, named, identified, or referenced in the Settlement Agreement between Agape and the Commissioner. Accordingly, she argues it is fundamentally unfair to deny the Academy the ability to participate in the Scholarship Programs based on the breach of an agreement to which she was not a party. Regarding the Academy’s location, Ms. Bishop explained that she is interested in leasing the building located at 2332 N. Hiawassee Drive, which is currently owned by Northwestern. Ms. Bishop explained that the property would provide a great location for the Academy. It is located within her community and was previously used as a school. Further, while the building the Academy may use is situated across the street from the former Agape site (2425 N. Hiawassee Drive), Ms. Bishop proclaimed that, other than being located in close proximity with each other, there is no connection between the two schools. Further, while setting up in the 2332 N. Hiawassee Drive location will require her to rent property from Northwestern, no one associated with Northwestern helped her create the Academy. Neither does she plan on conferring with or employing anyone who currently works for Northwestern, or who previously worked for Agape. Ms. Bishop’s testimony describing the relationship between the Academy and Agape, Northwestern, Ingrid Bishop, and Ms. Cook was credible and is credited. Ms. Bishop spoke with conviction, and no documents or other witness testimony refute her representation that she was not involved in the administration or management of Agape. Neither does the competent, substantial evidence prove that any individual associated with Agape or Northwestern will be involved in the administration or management of the Academy. Ingrid Bishop testified at the final hearing to support the Academy’s application. Ingrid Bishop is Ms. Bishop’s mother. Ingrid Bishop and her husband, Richard (Ms. Bishop’s father), founded Agape. Ingrid and Richard Bishop also lead the Agape Assembly Baptist Church (“Agape Church”). Agape Church is located at 2425 N. Hiawassee Drive, which was the same location as the Agape school. Ingrid Bishop expressed that Agape served as an outreach ministry for the Agape Church. According to Ingrid Bishop, Agape was founded in 2002 as an independent non-profit corporation. The school’s initial board members included Ingrid Bishop, Richard Bishop, and Cassandra Cook. These three individuals remained Agape’s corporate officers through the school’s dissolution in 2018, and are subject to the Commissioner’s 2018 Final Order. Mirroring her daughter’s intentions for the Academy, Ingrid Bishop explained that Agape’s goal was to provide a private school option for low- income children and children with disabilities from the local community. Ingrid Bishop relayed that 98 percent of the students who matriculated at Agape were from underprivileged families. Based on that population, Agape’s ability to operate relied heavily on the funds its students received through the Scholarship Programs. Ingrid Bishop further stated that Agape elected not to charge tuition to any student. Instead, the school relied on the scholarship funds as its sole source of revenue. At its peak, Agape averaged about 300 students on scholarships during a school year. Ingrid Bishop freely recounted that Agape ran into trouble with the Commissioner in 2016 based on a fire inspection report that one of her employees had allegedly forged. Agape and the Commissioner subsequently entered into the Settlement Agreement. Ingrid Bishop signed the Settlement Agreement on behalf of Agape. Regarding her daughter’s involvement in Agape, Ingrid Bishop credibly testified that Ms. Bishop never served as an employee, administrator, agent, or director of Agape. Ms. Bishop’s only interaction with Agape was when she attended the school as a student from kindergarten through high school. Ingrid Bishop further asserted that her daughter had no involvement in the underlying issues between Agape and the Commissioner. She conveyed that Ms. Bishop graduated from Agape high school in 2014 and was a student at FAMU in Tallahassee when the Commissioner began its investigation into Agape. Neither did Ms. Bishop play any part in Agape’s decision to settle with the Commissioner or negotiating the terms of the Settlement Agreement. Ingrid Bishop acknowledged that Agape has not been an active school since 2018. After the Commissioner revoked Agape’s authority to receive funds from the Scholarship Programs in 2017, Agape could only effectively operate for one more year. Agape’s corporate entity was administratively dissolved in September 2018. Finally, Ingrid Bishop convincingly represented that Ms. Bishop is acting completely independently in creating the Academy, as well as drafting the Academy’s application to participate in the Scholarship Programs. Ingrid Bishop asserted that she has not been included in her daughter’s designs and plans for the Academy. She denied that she will work for the Academy in any capacity. Neither will she have any financial interest in the school. Similarly, Ingrid Bishop commented that the location the Academy selected to use, 2332 N. Hiawassee Road, is not the same location as Agape. It is across the street. Ingrid Bishop disclosed that Agape, at one point, leased this site to use as a separate facility for its high school, but it currently does not own or use this property. As a final declaration, Ingrid Bishop readily recognized that her involvement in the Academy’s affairs would jeopardize her daughter’s efforts to run her own school. Therefore, she has deliberately avoided any participation in the Academy’s formation. Ingrid Bishop expressed that she understands that she must keep Agape’s past dispute with the Commissioner completely separate from her daughter’s application for scholarship funds. Ms. Cook also testified to support Ms. Bishop’s representation that the Academy is not connected to either Agape or herself. Ms. Cook declared that she has no involvement or relationship with the Academy. She was not consulted when Ms. Bishop formed the school. Neither has Ms. Bishop asked Ms. Cook to work there. Regarding her relationship with Ms. Bishop, Ms. Cook relayed that she has known Ms. Bishop since she was a student at Agape. Addressing her time with Agape, Ms. Cook admitted that she worked for the school in a number of roles between 2003 and 2018. Her responsibilities included administrator and dean of students. However, she declared that Ms. Bishop was not involved in the administration or management of Agape. Ms. Cook never saw Ms. Bishop in the Agape administrative offices when she was in school there. Regarding Orlando Christian, Ms. Cook stated that this school was to be located at 2425B N. Hiawassee Road in a building just next to the Agape Church. However, neither Orlando Christian nor the Agape school occupied the same proposed site as the Academy (2332 N. Hiawassee Road). Finally, Ms. Cook confirmed that Northwestern owns the property located at 2332 N. Hiawassee Drive, where the Academy may be located. However, Ms. Cook offered that she no longer serves on Northwestern’s board of directors. She represented that in 2019, she was dismissed from the board due to lack of participation. During the final hearing, Ms. Cook’s testimony came across as self- serving and lacking in details. However, no evidence or testimony directly refutes her representation that she is not involved, and will not be involved, in the Academy’s formation, administration, management, or operation. Accordingly, Ms. Cook’s testimony is credited to the extent that it was corroborated by Ms. Bishop and Ingrid Bishop. Based on the competent substantial evidence presented at the final hearing, the greater weight of the facts do not establish that the Academy is inappropriately associated with Agape, Ingrid Bishop, Ms. Cook, or Northwestern, or that the Academy is “operating as a proxy or surrogate for Agape and/or Cassandra Cook and/or Ingrid Bishop.” Neither do the facts in the record show that the Academy is attempting to perpetrate a fraud on the Commissioner in order to qualify for scholarship eligibility by concealing or misrepresenting its relationship with Agape, Ingrid Bishop, Ms. Cook, or Northwestern. Consequently, the Academy demonstrated that the preponderance of the evidence does not support the Commissioner’s decision to deny the Academy’s application based on the reasons cited in the Commissioner’s letter, dated May 21, 2020. Accordingly, the Commissioner should continue to process the Academy’s application under section 1002.421, and, if appropriate, grant the Academy eligibility to participate in the Scholarship Programs.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner withdraw its letter, dated May 21, 2020, indicating its intent to deny the Academy’s application and continue to review the Academy’s eligibility to participate in the Scholarship Programs under chapter 1002. DONE AND ENTERED this 8th day of December, 2020, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 8th day of December, 2020. 6 This Recommended Order should not be interpreted to mean that the Commissioner should automatically approve the Academy’s application. As the Commissioner emphasized in its Proposed Recommended Order, the Academy must still complete several additional steps in order to gain eligibility to participate in the Scholarship Programs under chapter 1002. The focus of this administrative proceeding is restricted to the allegations and issues specifically raised in the Commissioner’s letter, dated May 21, 2020, which notified the Academy of the Commissioner’s intended action to deny the application. COPIES FURNISHED: Robert Leroy Ehrhardt, Esquire Department of Education Suite 1544 325 West Gaines Street Tallahassee, Florida 32399 (eServed) James Sweeting, III, Esquire James Sweeting, III, LLC Post Office Box 215 Churchville, Maryland 21028 (eServed) Jason Douglas Borntreger, Esquire Department of Education Suite 1544 325 West Gaines Street Tallahassee, Florida 32310 (eServed) Chris Emerson, Agency Clerk Department of Education Turlington Building, Suite 1520 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Matthew Mears, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Richard Corcoran Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed)
Findings Of Fact The Respondent, Lydia Miller, ran for election to the Hillsborough County Commission, District 4, in 1992. It was her first campaign for election to public office. She declared her candidacy in September, 1991, and appointed her husband as her campaign treasurer and herself as deputy campaign treasurer. She ran as a Republican and had several Republican opponents in the primary. She did not have the backing of the Republican Party and had difficulty attracting financial support, especially at first. Of necessity, she ran a "grass roots" campaign and spent countless hours going door-to-door in her district asking for support and, when possible, making public appearances. She also tried to capitalize on the "grass roots" nature of her campaign. Trying to emulate a campaign technique that worked for Governor Lawton Chiles, she pledged that she would not accept financial contributions in excess of $100 (versus the $500 statutory maximum) and would not accept financial contributions (or endorsements) from "special interests." To substantiate the strength of her "grass roots" campaign, the Respondent saw value in her campaign treasurer's reports showing as large a number of relatively small contributions from individuals. In all, the Respondent raised less than $14,000. Yet, she was able to survive the first primary, win the second primary, and beat her Democrat opponent in the general election. Cash Not Deposited or Reported The Respondent admitted that she accepted a $20 cash contribution from Irene Herring and put it in her campaign's petty cash without reporting it in her campaign treasurer's reports. Herring made two other cash contributions to the Respondent's campaign- -one in the amount of $20 and another in the amount of $30. Neither contribution was reported. Both contributions were given to Susie Farmer, a campaign worker. Similarly, David Gill contributed between $50 and $100 cash to the Respondent's campaign, but the contribution was not reported. This contribution also was given to Susie Farmer. The Respondent denied specific knowledge of the two other cash contributions from Herring and the cash contribution from Gill. The only evidence which could support a finding that the Respondent knew of them was testimony of Larry Sweat, an aide the Respondent hired after her election but fired three months later. From an evaluation of the testimony of the Respondent and Sweat, taking into account all of the relevant evidence as well as their demeanor and overall credibility, and it is found that Sweat's testimony was not sufficient to overcome the Respondenet's denials by a preponderance of the evidence. By her own admission, however, it would not have been unusual for the Respondent to use small cash contributions (or allow and approve their use) to replenish her campaign's petty cash without reporting them in her campaign treasurer's reports. It certainly is possible that the other two cash contributions from Herring and the cash contribution from Gill were handled in that manner. The Respondent was aware that all contributions had to be deposited in her campaign account and reported in her campaign treasurer's report. Yet, for reasons not fully explained in her testimony, the Respondent also thought that it was permissible to use small cash contributions to replenish her campaign's petty cash. It is possible that the Respondent misread or misunderstood the election campaign financing laws dealing with petty cash and the reporting of expenditures from petty cash. See Conclusions of Law 79 through 81, below. The Respondent certainly was not handling the small cash contributions that way to "beef up" her campaign treasurer's reports. Cash Deposited and Reported But Donor Allegedly Unknown The Respondent's campaign treasurer's reports show the following cash contributions: $100 from Phillip Preston on August 17, 1992 $ 90 from Robert Preston on August 17, 1992 $100 from Kelley Preston on August 22, 1992 Robert, Kelley, and Phillip are the minor children of Allen and Rosina Preston, aged 16, 4, and 2. It is possible but improbable that Robert donated $100 of his own cash to the Respondent's campaign; it is all but impossible that Kelley or Phillip did. The Prestons were supporters of the Respondent and contributors to her campaign. The Respondent's Sun City Center campaign headquarters was in office space donated by Allen Preston. The offices of Preston's business also was in the same building. Allen Preston often visited the campaign headquarters and helped with the campaign, in addition to his financial contributions. Yet, Preston denied donating $290 cash in the names of his children. Preston does not think his wife would have done so without telling him, but his wife did not testify. The Respondent denies any specific knowledge concerning the $290 in cash contributions attributed to the Preston children. But it would not have been unusual for Susie Farmer or other campaign workers to leave cash contributions with "Post-It" notes attached to identify the donors. The campaign treasurer's reports normally would be prepared using the information on the "Post-It" notes. Especially in the days leading up to the three elections, the campaign headquarters became hectic and confused, and it is possible that incorrect information inadvertently was placed on the "Post-It" notes for these cash contributions. When the Respondent saw cash contributions from the Preston children in preparing or reviewing reports, she would not have questioned the accuracy of the information. She would have assumed that the Prestons had made the donations in the names of their children. She did not think there was anything wrong with adults making campaign contributions in the names of their minor children. She denies intentionally misreporting the contributions in order to hide contributions from Allen and Rosina Preston, or their businesses, or artificially to "beef up" the number of small contributions reflected in her campaign treasurer's reports. The evidence was not sufficient to overcome the Respondenet's denials by a preponderance of the evidence. The Respondent's campaign treasurer's reports also show a $25 cash contribution from Evelyn Ackerman on October 14, 1992. The parties stipulated in their Joint Prehearing Stipulation that Ackerman is an elderly woman on a fixed income and that Ackerman denies making the contribution. But the Respondent has a specific recollection that Ackerman offered the contribution, that the Respondent tried to decline in view of Ackerman's meager financial means, and that Ackerman insisted. It is found that the Respondent's testimony outweighs the statements from Ackerman, who has been know to hallucinate and whose memory may not be trustworthy. The Respondent's campaign treasurer's reports also showed a $100 cash contribution from Henry Farmer on October 18, 1992. Henry Farmer denies making the contribution and does not believe that his wife, Susie, would have donated $100 cash in his name without telling him. Susie did not testify, but she was an enthusiastic supporter, campaign worker and fund-raiser for the Respondent's campaign, and it certainly is possible that she donated the cash in her husband's name without his knowing it. Regardless of the actual source of the cash, the Respondent testified to her recollection of seeing a $100 cash contribution with a "Post-It" notes attached indicating that it was from Henry Farmer. She indicated that she had no reason to think it was not a contribution from Susie's husband, and it would not have been unreasonable for the Respondent to believe, without question, that the information on the "Post-It" note was accurate. The evidence was not sufficient to overcome the Respondent's testimony by a preponderance of the evidence. The evidence did not prove that the Respondent knew her campaign treasurer's report of the $100 cash contribution from Henry Farmer was not accurate. The Respondent's campaign treasurer's reports also showed a $100 cash contribution from Marie Schrag on October 18, 1992. Neither she nor her husband made the contributions. The Respondent did not testify to any specific recollection about the Schrag contribution. But Schrag was Allen Preston's bookkeeper and worked in the same building of Preston's where the Respondent's Sun City Center campaign headquarters was. Although she was not an active campaign worker for the Respondent, she did type one letter for the campaign, and her husband stuffed envelopes for the campaign on at least one occasion. In addition, she had been friends with Susie Farmer, one of the Respondent's most successful fund-raiser, for over 20 years. If the Respondent saw a $100 cash contribution with a "Post-It" notes attached indicating that it was from Marie Schrag, she would have had no reason not to believe, without question, that the information on the "Post-It" note was accurate. The evidence did not prove that the Respondent knew her campaign treasurer's report of the $100 cash contribution from Marie Schrag was not accurate. Alleged Business Contributions Allegedly Falsely Reported From Individuals The Respondent's campaign treasurer's reports listed a June 1, 1992, contribution in the amount of $25 from "Phil Boggs, Occupation (if over $100), Boggs Jewelry," when the check was written on the account of Boggs Jewelry, and signed by Phil R. Boggs. The Respondent reasonably did not think there was anything wrong with the way the Boggs contribution was reported. When the Respondent pledged not to take financial contributions or endorsements from "special interests," she did not intend to indicate that she would not accept financial support from any businesses or corporations. (In her mind, "special interests" meant political action committees, not any and all businesses and corporations.) The Respondent does not know Phil Boggs, and Boggs Jewelry had no business before the County Commission during the Respondent's term. The Respondent reasonably did not perceive the Boggs contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the Boggs contribution or make it look like it was coming from Boggs, individually, instead of the business, Boggs Jewelry. The Respondent's campaign treasurer's reports listed a contribution on June 2, 1992, in the amount of $25 from "Charles Hostetter, Occupation (if over $100), Fisher Beauty Salon," when the check was written on the account of Fisher's Beauty Salon, and signed by Charles Hostetter. The Respondent reasonably did not think there was anything wrong with the way the Hostetter contribution was reported. The Respondent reasonably did not perceive the Hostetter contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the Hostetter contribution or make it look like it was coming from Hostetter, individually, instead of the business, Fisher's Beauty Salon. The Respondent's campaign treasurer's reports listed a contribution on June 22, 1992, in the amount of $25 from "Charles Bingham, Occupation (if over $100), c/o Floral Decor Florist," when the check was written on the account of Floral Decor Florist, and signed by Charles Bingham. The Respondent reasonably did not think there was anything wrong with the way the Bingham contribution was reported. Bingham is a personal friend of the Respondent and personally gave the check to the Respondent. The Respondent reasonably did not perceive the Bingham contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the Bingham contribution or make it look like it was coming from Bingham, individually, instead of the business, Floral Decor Florist. The Respondent's campaign treasurer's reports listed a contribution on June 24, 1992, in the amount of $100 from "John Williams Coppes Kitchen, Occupation (if over $100), Owner," when the check was written on the account of Williams Kitchens & Baths, Inc. The Respondent reasonably did not think there was anything wrong with the way the John Williams contribution was reported. The Respondent knows Williams's business as "John Williams Coppes Kitchens," the name on the business's signage. (Coppes is the name of the brand Williams sells.) The Respondent reasonably did not perceive the John Williams contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the John Williams contribution or make it look like it was coming from Williams, individually, instead of the business, whether known as Williams Kitchens & Baths, Inc., or as John Williams Coppes Kitchens. The Respondent's campaign treasurer's reports listed a contribution on August 16, 1992, in the amount of $100 from "Ann Williams, Guys & Dolls," when the check was written on the account of Guys 'N Dolls of Brandon, Inc., and signed by Ann Williams. The Respondent reasonably did not think there was anything wrong with the way the Ann Williams contribution was reported. Ann Williams is the Respondent's regular hairdresser and personally gave the check to the Respondent at the beauty parlor. The Respondent reasonably did not perceive the Ann Williams contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the Ann Williams contribution or make it look like it was coming from Ann Williams, individually, instead of the business, Guys 'N Dolls of Brandon, Inc. The Respondent's campaign treasurer's reports listed a contribution on September 12, 1992, in the amount of $50 from "Martha Simmons, Tropical Fish Farms," when the check was written on the account of Gerald Simmons Tropical Fish Farm, and signed by Martha Simmons. The Respondent reasonably did not think there was anything wrong with the way the Simmons contribution was reported. The Simmonses were neighbors of the Farmers. The Respondent reasonably did not perceive the Simmons contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the Simmons contribution or make it look like it was coming from Martha Simmons, individually, instead of the business, Gerald Simmons Tropical Fish Farm. The Respondent's campaign treasurer's reports listed a contribution on September 23, 1992, in the amount of $50 from Tommy Brock, when the check was written on the account of Brock Farms, and signed by Tommy Brock. The Respondent reasonably did not think there was anything wrong with the way the Tommy Brock contribution was reported. The Respondent reasonably did not perceive the Brock contribution to have come from a "special interest," and it was not proven that the Respondent was trying to hide the true source of the Brock contribution or make it look like it was coming from Tommy Brock, individually, instead of the business, Brock Farms. The Respondent's campaign treasurer's reports listed a contribution on October 15, 1992, in the amount of $100 from William Stearns, when the check was written on the account of F.E. Stearns Peat Co., Inc., and signed by William Stearns. If the Respondent had carefully compared check to the report, she probably should have known that the Stearns contribution was not reported properly. The check arrived in the mail, and there was no reason to think it was not from the F.E. Stearns Peat Co., Inc. Nonetheless, the Respondent reasonably did not perceive the Stearns contribution to have come from a "special interest," and it was not proven that the Respondent intentionally was trying to hide the true source of the Stearns contribution or make it look like it was coming from Williams Stearns, individually, instead of the business, F.E. Stearns Peat Co., Inc. It just as easily could have been a mistake or oversight. The Respondent's campaign treasurer's reports listed a contribution on October 15, 1992, in the amount of $100 from "William Bishop, c/o L.L. Corporation," when the check was written on the account of Leslie Land Corporation, signed by William Bishop, with the "memo": "William L. Bishop." If she had carefully compared check to the report, the Respondent probably should have known that the Leslie Land Corporation contribution was not reported properly. However, the "memo" on the check indicated "William L. Bishop," and the report gave Bishop's address as "c/o L. L. Corporation." It was not proven that the Respondent intentionally was trying to hide the true source of the Leslie Land Corporation contribution or make it look like it was coming from William Bishop, individually, instead of the business, Leslie Land Corporation. It is just as possible that the intention was to include all of the information on the check for full disclosure and that the initials "L. L." were used instead of the full name of the Leslie Land Corporation by mistake or oversight, or to compress all of the information into the limited space allotted on the report form. The Respondent's campaign treasurer's reports listed a contribution on October 22, 1992, in the amount of $100 from the "Bill Kincaid Company," when the check was written on the account of the Kincaid Company, and signed by William F. Kincaid. The Respondent reasonably did not think there was anything wrong with the way the Kincaid contribution was reported. All the report did was provide the additional information of Kincaid's first name, along with the company name. It was not proven that the Respondent was trying to hide the true source of the Kincaid contribution or make it look like it was coming from Kincaid, individually, instead of from the Kincaid Company. The Respondent also reasonably did not perceive the Kincaid contribution to have come from a "special interest." The Respondent's campaign treasurer's reports listed a contribution on October 29, 1992, in the amount of $50 from Kenneth Wetherington, when the check was written on the account of the Morgan and Wetherington Chiropractic, and signed by Kenneth Wetherington. The Respondent did not think there was anything wrong with the way the Wetherington contribution was reported. She thought that a chiropractor in partnership with other chiropractors acted in his own behalf when making a political contribution, even when writing a partnership check. Although the Respondent probably incorrectly reported this contribution, the Respondent reasonably did not perceive the Wetherington contribution to have come from a "special interest," and it was not proven that the Respondent intentionally was trying to hide the true source of the Wetherington contribution or make it look like it was not coming from the partnership of Morgan and Wetherington Chiropractic. The Respondent's campaign treasurer's reports listed a contribution on October 28, 1992, in the amount of $100 from Paul Rozeman, when the check was written on the account of the McCaw Communications of Florida, Inc., and signed by someone other than Rozeman. (The signature was illegible, and it could not be identified through testimony.) However, the check was delivered by Rozeman, who worked in McCaw's local office, and who introduced himself to the Respondent. Although McCaw Communications is a large corporation, the Respondent was not familiar with it and was willing to assume that the contribution was from Rozeman's company and to decided err on the side of using his name. Obviously, her assumption was incorrect, and the report was in error. In any event, the Respondent probably should have known that the contribution was not reported properly. (See Finding of Fact 36, above.) But the evidence did not prove that the Respondent was lying, and that she actually perceived McCaw Communications to be a "special interest," and intentionally was trying to hide the true source of the contribution and make it look like it was coming from Rozeman, individually, instead of from McCaw Communications. In all, the Respondent's campaign treasurer's reports that were admitted in evidence listed 216 separate contributions. ($3,052 in cash and check contributions and $1615.80 of in-kind contributions would have been listed in earlier reports that were not admitted in evidence.) Of the 216 separate contributions, 31 (aside from the ones discussed in paragraphs 15 through 43, above) unambiguously and properly listed the contributions as coming from corporations, businesses or organizations. Contributions Allegedly Over $100 And Falsely Reported As Several $100 Contributions On or about October 5, 1992, the Respondent's campaign received a $500 check on the account of, and signed by Allen Preston, with explicit instructions to consider it and report it as being a $100 contribution from each of the five family members: Allen; his wife, Rosina; and their three children, Robert, Kelley, and Phillip. On or about September 3, 1992, the Respondent's campaign received a $300 check on the account of Aquarius Water Refinery, Inc., and signed by Joe Gaskill, with explicit instructions to consider it and report it as being a $100 contribution from him, another $100 contribution from his wife, and another $100 contribution from his company, Aquarius Water Refinery, Inc. On or about September 3, 1992, the Respondent's campaign received a $200 check on the account of Care Animal Hospital, Inc., and signed by Richard Kane, a veterinarian and the corporation's president, with explicit instructions to consider it and report it as being one $100 contribution from him and another $100 contribution from his corporation. The Respondent did not specifically request that the Preston, Gaskill and Kane contributions be considered and reported as being several contributions of $100. Preston, Gaskill and Kane all were aware of the Respondent's campaign pledge to limit contributions to $100, and it was their desire and intention not to cause the Respondent to violate the pledge. The Respondent did not think it was improper or illegal or inaccurate to reports the Preston, Gaskill and Kane contributions as requested. It appears that the Petitioner has issued an advisory opinion that contributions in excess of the statutory maximum by check drawn on a joint account only can be divided into smaller contributions from more than one account holder if all of the donors sign the check. (The Petitioner's investigator testified to the existence of such an advisory opinion, but none was admitted in evidence at the hearing. The Petitioner attached to its proposed recommended order a copy of what purports to be its advisory opinion on the subject, designated DE 93-10, but technically the advisory opinion still is not in evidence in this case.) But there is no evidence that the advisory opinion was furnished to the Respondent or that she was aware of it. If the Respondent were aware of the advisory opinion, she should at least have been on notice to inquire whether it was permissible to report the contributions as she did. But it still would not have been clearly impermissible. Allegedly False Termination Report And Improper Disposition of Surplus Funds The deadline for submission of the Respondent's termination campaign treasurer's report was 90 days after the general election, or Monday, February 1, 1993. As the deadline approached, the Respondent reasonably thought she needed two things in order to file the termination report: first, the January, 1993, bank statement on the campaign account; and, second, the resolution of a dispute she had with the phone company (GTE of Florida, Inc., or GTE) about charges on bills she received after having the campaign headquarters phone disconnected. On the weekend before the termination report was due, the Respondent attempted to obtain the bank statement but was told that it just had been put in the mail and could not be regenerated by the bank's computer at that time. The bank personnel advised the Respondent to wait until the statement arrived in the mail. Without the bank statement, the Respondent reasonably could not prepare the termination report before the deadline. She asked officials at the local elections supervisor's office for advice and was told to write a note explaining the reasons why she could not meet the deadline. She wrote a note dated February 1, 1993, stating that she "could not report on the closing of my campaign account until I received the final Banking Statement." It is found that the note was truthful and that she did not have the January, 1993, bank statement at the time she wrote it. Testimony from Larry Sweat to the effect that the Respondent came into her office that day and gave him the bank statement to hide in a drawer is rejected as false or mistaken. The Respondent did not receive the bank statement in the mail until later that week. It is possible, as testified by Sweat, that he and the Respondent had a discussion to the effect that it was to the Respondent's advantage that her termination report would not be available for public scrutiny on the deadline, along with the reports of other candidates (assuming they were filed on time). But it is as likely, or more likely, that Sweat thought of the fortuitous side- benefit of filing late. In any event, it is found that the Respondent did not intentionally file late in order to reap the perceived side-benefit that might have been discussed. It is possible that, when the January, 1993, bank statement was received in the mail, the Respondent brought it into the office and gave it to Sweat to keep in his desk drawer until she was in a position to prepare the termination report. (The dispute with the telephone company still was not resolved.) But it is found that, contrary to Sweat's testimony, the Respondent did not give the bank statement to Sweat to "hide" in his desk drawer. On February 18, 1993, the Respondent filed the termination report. It showed a January 6, 1993, check on the campaign account (check number 1070) in the amount of $88.45, made out to cash. The check memo stated, "petty cash reimbursement," but the report clarified that the cash actually was paid to the Respondent and two others for the purchase of party goods for the celebration of the Respondent's victory in the general election. The February 18, 1993, termination report also showed that a February 16, 1993, check for $48.95 to GTE of Florida (check number 1072) "on account, balance due in dispute" was written on the campaign account on the day of the report. The report also showed a zero balance in the account. Check number 1072 never was presented to the bank, and its whereabouts is not known. The Petitioner contends that check number 1072 and the disputed telephone bill were fabrications to cover the improper disbursement of $48.95 of surplus to the Respondent. But the check just as easily could have been lost or, for some reason, simply not presented to the bank for payment. Besides, as reflected in the following Findings of Fact, the evidence was clear both that there was in fact a dispute regarding the GTE bill and that the $48.95 was not disbursed to the Respondent in February, 1993. The Petitioner presented the GTE telephone records for the Respondent's campaign office telephone account in an apparent attempt to prove that, as of November 10, 1992, there was only a $1.02 balance on the account and that GTE was not pursuing collection of the $1.02. But, while only a $1.02 balance appeared on the campaign telephone account as of November 10, 1992, approximately $154.68 was transferred at that time from the campaign telephone account to the Respondent's personal home telephone account. It was the transferred charges that the Respondent was disputing. For reasons not apparent from the record, on or about December 10, 1992, GTE reduced the balance transferred to the Respondent's home phone bill to $131.37. Apparently, GTE further reduced the transferred balance to $84.09 on December 19, 1992; again, no explanation for the further reduction is apparent. The $84.09 charge remained on the GTE records at least until an entry on one of the records indicating that GTE wrote it off as uncollectible on or about February 12, 1993. Although the records include the notation dated February 12, 1993, indicating that GTE was writing off the $84.09 charge as being uncollectible, the Petitioner did not call a witness from GTE to explain the GTE records, and the records presented at the hearing do not go beyond the February 12, 1993, entry. It is not clear from the records that GTE stopped soliciting payment of the charge at that time. On May 12, 1993, the Respondent filed an amended termination report showing a March 30, 1993, disbursement to the Respondent in the amount of $36.95 for reimbursement for partial payment of the campaign's GTE bill. It also attached a copy of the March 31, 1993, bank statement on the campaign account showing a beginning balance as of March 1, 1993, in the amount of $36.95 and one withdrawal/debit in the same amount during the month, for a zero balance at the end of the month. The Respondent testified that she paid the $84.09 charge in June, 1993. Unfortunately, the Respondent's testimony was not corroborated by any records. But the GTE records presented by the Petitioner did not go beyond February 12, 1993, and without testimony from a witness from GTE, they were insufficient to disprove the Respondent's contention that she paid the charge in June, 1993. If the June, 1993, payment date is correct, the amended termination report filed on or about May 12, 1993, would indicate that the Respondent disbursed the $36.95 balance of the campaign account (representing the $48.95 she thought she had paid to GTE on or about February 16, 1993, less a $12 bank service charge for February, 1993) to herself on or about March 30, 1993, believing that there still was a disputed $84.09 charge to GTE, and that she held the money pending resolution of the disputed charge. When she paid the GTE charge, she considered the March 30, 1993, disbursement to herself to be reimbursement for her payment of the GTE charge. The Respondent knew or should have known that it was improper to disburse surplus from the campaign account to herself, except to reimburse her own contributions to her campaign. But, according to the Respondent's testimony, she did not consider the $36.95 payment to herself to be "surplus" since she considered there to be an outstanding disputed liability to GTE.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Elections Commission enter a final order dismissing the charges against the Respondent, Lydia Miller. RECOMMENDED this 6th day of April, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 6th day of April, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6612 To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. First sentence, accepted but subordinate and unnecessary. The rest is conclusion of law. 2.-3. Last two sentences, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Last two sentences, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated. Rejected as not proven. (Rather, she complied with the donors' instructions as to the source of the donations and how to report them.) First sentence, rejected as argument. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven that the Respondent willfully filed false reports. As to Ackerman, rejected as not proven that the report was inaccurate. Otherwise, accepted and incorporated. First sentence, rejected as not proven that he admitted his wife did not make the contribution. (He said it was possible that she made it but he does not think she did.) Second sentence, rejected as not proven as to Ackerman but otherwise, accepted and incorporated. Third sentence, rejected as not proven that she said Suzie Farmer was responsible; the Respondent admitted to handling the Ackerman contribution and testified that said that someone, quite possibly Farmer, attached an explanatory "Post-It" note to the other cash contributions. Last sentence, rejected as not proven. Third, fifth and last sentences, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven that the Respondent willfully made false reports. Otherwise, accepted and incorporated. First, sixth penultimate and ultimate sentences, accepted but subordinate and unnecessary. The rest is rejected as not proven. (A review shows that she usually followed Barr's advice although not in each and every case.) Penultimate sentence, rejected as not proven as to petty cash. Otherwise, accepted and incorporated. Rejected as not proven. Last sentence, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated. Third sentence, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Penultimate and ultimate sentences, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. First and last sentences, ejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. First, sixth, seventh and eighth sentences, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Last sentence, rejected as not proven as to petty cash. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Respondent's Proposed Findings of Fact. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary or argument. Third paragraph, fourth sentence (that the small size of the individual alleged "masked" cash donations makes the allegation "absurd"), rejected as contrary to the greater weight of the evidence. (The point of the Petitioner's argument that a single fairly large cash contribution--which could have been in addition to reported contributions--could have been "masked" by fabricating many small cash contribution.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary or argument. Second paragraph, first sentence (that the dispute concerned check #1072), rejected as contrary to the greater weight of the evidence. Third paragraph, first sentence, rejected in part (omission of January, 1993, bank statement as a cause of initial delay) as contrary to the greater weight of the evidence and in part (the Respondent's first campaign and the amounts involved) as irrelevant on the issue whether she willfully violated the law. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary or argument. COPIES FURNISHED: David R. Westcott, Esquire Assistant General Counsel Department of State, Division of Elections The Capitol, Room 2002 Tallahassee, Florida 32399-0250 Ralph C. Stoddard, Esquire Hampton, Stoddard, Griffin & Runnells 915 Oakfield Drive, Suite F Brandon, Florida 33511 Carlos Alvarez, Chairman Florida Elections Commission Room 1802, The Capitol Tallahassee, FL 32399-0250
The Issue Whether Petitioner's protest, challenging Respondent's decision to award to Intervenor, "pending a successful interview," the "Federal Relations Governmental Liaison" contract advertised in Request for Proposal 99-01, should be sustained?
Findings Of Fact Gibbons and Company, Inc. Gibbons and Company, Inc. (Petitioner) is a Washington, D.C.-based firm, 1/ which was incorporated in December of 1993, and whose primary business is advising clients on matters of public policy before the United States Congress, the White House, and federal agencies. It also provides advice and counsel to multinational businesses on market access around the globe. Petitioner's President is Clifford Gibbons, who has been with the firm since its formation. Its Chairman of the Board is Sam Gibbons, Clifford Gibbons' father. Sam Gibbons joined the firm as its Chairman of the Board on January 4, 1997, 2/ after serving, with great distinction, for 34 years as a United States Congressman from Florida. Sam Gibbons was an effective and influential member of Congress. He was Chairman of the Ways and Means Committee and head of the Florida delegation (which, with 23 members, is the fourth largest state delegation). Before his election to Congress, he served ten years in the Florida Legislature (six years as a member of the Florida House of Representatives and four years as a member of the Florida Senate). As a Florida legislator, he played a key role in the passage of legislation that created the University of South Florida, Florida Atlantic University, and the University of West Florida. James Pirius James Pirius is a graduate of the University of Minnesota with a double degree in political science and journalism. After graduating from college, Mr. Pirius (who has a certificate to teach in the State of Illinois) taught eighth grade communications and social sciences for two years. The following two years, he taught at the National College of Education in Evanston, Illinois. In 1975, Mr. Pirius returned to Minnesota to become the Minnesota State Senate's Director of Public Information. In 1977, Mr. Pirius went to work for Minnesota Congressman Bruce Vento as Congressman Vento's executive assistant. He was responsible for managing the Congressman's Washington, D.C. office (which was located in the House of Representative's Cannon Office Building). He remained in this position for four years. After the United States Department of Education (U.S. DOE) was created, Mr. Pirius received a call from Richard Moe, Vice President Walter Mondale's chief of staff, who asked him (Mr. Pirius) to be on the team to "open up the Department of Education." Mr. Pirius accepted the offer and became the Director of Legislative Policy at the U.S. DOE. As the Washington, D.C.-based Director of Legislative Policy, a position he held from 1981 to 1987, his primary duties involved lobbying education issues in the United States Congress. 3/ He was one of the agency's three key lobbyists on Capitol Hill. 4/ Mr. Pirius left his position with the U.S. DOE to become the Washington, D.C./federal relations representative for the Florida Department of Education (Florida DOE). He was hired by then Florida Commissioner of Education Betty Castor (who subsequently became the President of the University of South Florida). Mr. Pirius was the Florida DOE Washington, D.C./federal relations representative from 1987 to 1995. For the first four years, he provided such representation as a state employee. From 1991 to 1995, he operated as a paid consultant. After leaving the employ of the Florida DOE and becoming a paid consultant, Mr. Pirius was hired to become a Vice President of APCO Associates (APCO), a Washington, D.C. public affairs/governmental relations firm. Mr. Pirius headed the firm's education practice. APCO's Chief Executive Officer allowed Mr. Pirius to maintain his Florida DOE consultant contract "separate from [his] work at APCO." Since 1995, Mr. Pirius has served (as a paid consultant) as the Washington, D.C./federal relations representative of the University of South Florida. Although he does have direct dealings with the President of the University, Betty Castor, his immediate supervisor is Kathleen Betancourt, the University of South Florida's Associate Vice President for Government Relations. Mr. Pirius has also represented in Washington, D.C. (as a paid federal relations consultant) the Indiana and Minnesota Departments of Education. The Association of Governing Boards of Colleges and Universities has also been among his clients. At present, Mr. Pirius is technically on leave of absence from APCO. On July 1, 1998, Mr. Pirius moved his office from APCO to his home at 7910 West Boulevard Drive in Alexandria, Virginia (which is in the Washington, D.C. metropolitan area, inside the Beltway). He has resided at this location since 1987. In rush hour, it takes 30 minutes (by automobile) to reach the Capitol from Mr. Pirius' residence/office. When there is not rush hour traffic, the trip takes 20 minutes. Mr. Pirius has an agreement to sublease space from Broderick and Associates in the Hall of States Building (which is presently unoccupied and being reserved for Mr. Pirius) should he receive the contract that is the subject of the instant controversy. In addition, Dr. Lynda Davis, the President of Davis, O'Connell, Inc., a government relations consulting firm, has verbally agreed to provide Mr. Pirius space in her firm's office in the Hall of the States Building should the Broderick and Associates space become unavailable. The Hall of States Building, which is located at 444 North Capitol Street, is one of the best office locations in Washington, D.C. inasmuch as it offers easy foot access to the Capitol. It houses the Washington, D.C. offices of many governors and state education agencies, and has an excellent reference library, which includes educational journals and materials. Mr. Pirius has been continuously registered as a lobbyist with the Clerk of the United States House of Representatives and the Secretary of the United States Senate since 1994. He is currently registered under his own name (with the University of South Florida identified as his client 5/) and as a member of APCO's lobbying team. Mr. Pirius began doing business as JCP Associates in 1992. JCP Associates is not an incorporated entity. Mr. Pirius, who operates as a sole proprietor, does business as JCP Associates only when he needs to hire others to assist him in fulfilling the requirements of a project. 6/ (He does so for accounting purposes.) A federal tax identification number has not been assigned to JCP Associates; however, Mr. Pirius uses his social security number when he does business under the name JCP Associates. No registration under the name JCP Associates has been made under the federal Lobbying Disclosure Act of 1995. Mr. Pirius discussed the registration of JCP Associates with the Clerk of the United States House of Representatives and the Secretary of the United States Senate offices. He was told that it did not make any difference whether he registered under his own name (which he has) or under JCP Associates. State University System The State University System (SUS) consists of the Board of Regents and the ten state universities. Board of Regents The Board of Regents is responsible for establishing SUS policy and overseeing SUS activities. Chancellor Herbert Dr. Adam Herbert is the current Chancellor of the SUS. He has been Chancellor since 1998. He succeeded Charles Reed, who served as Chancellor from 1992 to January of 1998. Prior to becoming Chancellor, Chancellor Herbert was the President of the University of North Florida for approximately ten years. Vice Chancellor Healy Dr. Thomas Healy is now, and has been since June 1, 1998, the SUS's Vice Chancellor for Governmental Affairs and Development. 7/ Before becoming Vice Chancellor, he worked at the University of North Florida for approximately 26 years; first as a faculty member (the first seven years) and then as an administrator. The last position he held at the University of North Florida was Vice President for Governmental Affairs. As the SUS's Vice Chancellor for Governmental Affairs and Development, Dr. Healy reports directly to Chancellor Herbert and serves as Chancellor Herbert's "general adviser" on matters relating to governmental affairs. Among his responsibilities is to coordinate the state and federal lobbying efforts made on behalf of the ten state universities. SUS Representation in Washington, D.C. A team of private firms and individuals (the Advocacy Group team), paid with foundation monies from the ten state universities, began providing the SUS with federal relations representation in Washington, D.C. in 1992. These firms included: George Ramonas' and Robert Mills' firm, the Advocacy Group, Inc. (the Ramonas/Mills firm), with which the SUS contracted to provide such representation; Dona O'Bannon's and Clifford Gibbons' firm, O'Bannon and Gibbons; and Tom Spulak's firm, Shaw, Pittman, Potts and Trowbridge (Shaw Pittman). Gibbons and Company, Inc., replaced O'Bannon and Gibbons on the SUS representation team upon the dissolution of the latter and the formation of the former in December of 1993. The foundation monies used to pay for SUS representation in Washington, D.C. were collected and paid to the Ramonas/Mills firm. The Ramonas/Mills firm, in turn, paid the other two firms (which had a contractual relationship with the Ramonas/Mills firm) for the services they performed and their expenses. The contract into which the Ramonas/Mills firm entered to provide SUS representation was the culmination of a procurement effort that started in or around April of 1992, when the following "Request for Information" was sent to "Washington Consulting Firms" by Dr. John Lombardi, the President of the University of Florida, acting in his capacity as the Chairman of the SUS's Washington Representation Review Committee: The Washington Representation Review Committee of the State University System of Florida is seeking information from consulting firms conducting business in Washington, D.C. This committee is comprised of four University presidents, representing the Council of Presidents of the State University System. Consultants who are interested in further discussion with the State of Florida's State University System should submit materials that demonstrate: Proven ability to represent institutions of higher learning, both in Congress and in agencies of the U.S. government, including: Working relationship with key leaders, committee members and staff within the U.S. Congress and the White House; Federal agency contacts and regular communication system that enhances capabilities in identifying and securing grants in specified research fields; Systematic approach to representing a statewide system that includes universities with differentiated missions. Ability specifically to represent each of the universities of Florida's public system. The Committee is comprised of President Frederick Humphries, Florida A&M University; Modesto A. Maidique, Florida International University; Dale W. Lick, Florida State University; and John V. Lombardi, University of Florida. Interested firms should submit a brief narrative describing the types of assistance they could provide and the associated costs of such services to the State University System of Florida and documentation as outlined above by May 31 to: Dr. John V. Lombardi Office of the President University of Florida Gainesville, Florida 32611 The Ramonas/Mills firm, joined by the other members of the Advocacy Group team, responded to this "Request for Information," and on or about June 22, 1992, made a written presentation to the Washington Representation Review Committee. The written presentation revealed that George Ramonas founded the "Advocacy Group" in 1991, and was the "Advocacy Group's" President. It also provided information concerning the backgrounds of Clifford Gibbons, Thomas Spulak, Dona O'Bannon, and Robert Mills. On or about November 1, 1992, the Ramonas/Mills firm, along with the other Advocacy Group team members, submitted a "Supplemental Response to Washington Representation Review Committee," which contained the following "background information on the Advocacy Group and Organizational Structure":
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Board of Regents enter a final order denying Petitioners' protest of the Chancellor's decision to award the contract advertised in RFP to Mr. Pirius "pending a successful interview." DONE AND ENTERED this 17th day of September, 1999, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 17th day of September, 1999.
The Issue The issue is whether Respondent's lottery prize is subject to an outstanding debt owed to Petitioner.
Findings Of Fact Respondent applied for a student loan in the amount of $2,500 under the Florida Guaranteed Student Loan Program in an application dated August 8, 1986. Respondent needed the loan to pay the cost of her attendance at Roffler Hair Design College (school) for the period of September 1986 through January 1987. Petitioner guaranteed Respondent's loan. The loan number is 0000522112. Glendale Federal Savings and Loan Association (Glendale) issued the loan proceeds in two equal disbursements. The first disbursement took place on or about September 26, 1986. The second disbursement took place on or about November 7, 1986. Glendale subsequently sold the loan to Student Loan Marketing Association/Student Loan Services (SLS). The loan accrues interest at the rate of eight percent (8%) per year unless Respondent is in deferment status, i.e. attending school on a minimum part-time basis. In this case, Respondent dropped out of school for a period of time in 1987. On or about June 25, 1987, the school returned $632.52 of the Respondent's loan to the lender. This sum represented the unused portion of Respondent's loan. Respondent's account was credited accordingly. The last day that Respondent attended the school was May 27, 1988. By letter dated September 1, 1988, SLS notified Respondent of the repayment schedule for her loan. Her first payment was due on December 27, 1988. Respondent made no payments on the loan to Glendale or SLS. Accordingly, SLS declared Respondent's loan in default and filed a claim dated August 14, 1989, with Petitioner. On February 20, 1992, Petitioner, as guarantor of the loan, paid SLS for Respondent's defaulted student loan. On that date, the claim principal was $1,864.48 ($2,500 less the $635.52 credit) and the outstanding interest due was $469.95. After Petitioner acquired the loan, the outstanding interest was capitalized resulting in a balance of $2,334.43. This sum accrues interest at the rate of eight percent (8%) per year. Respondent made no payment on her loan after Petitioner acquired it until a portion of her lottery winnings was applied to her account. By letter dated August 31, 1998, Petitioner notified the Department of Lottery about Respondent's outstanding defaulted loan in the amount of $3,561.89, including principal and interest. Petitioner requested the Department of the Lottery to transmit a portion of Respondent's prize money to be credited toward Respondent's debt. Thereafter, the Department of the Lottery transmitted $3,561.89 of Respondent's prize money to Petitioner. By letter dated September 14, 1998, Petitioner notified Respondent that it was in receipt of $3,561.89 of her $5,000 lottery prize. Petitioner applied Petitioner's winnings to her outstanding balance. Respondent has applied for and received at least one other loan which is held by the United States Department of Education (USDE) in the Federal Direct Consolidation Loan Program. The loan which is the subject of this proceeding is not the same loan which is held by USDE.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner was authorized to apply $3,561.89 of Respondent's lottery prize toward her outstanding debt for a student loan. DONE AND ENTERED this 12th day of May, 1999, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 12th day of May, 1999. COPIES FURNISHED: Ronald E. Stowers, Esquire Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400 Dollie M. Tunsil 5813 Pompano Drive Jacksonville, Florida 32211 Tom Gallagher Commissioner of Education Department of Education The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400 Michael H. Olenick, General Counsel Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400
