The Issue Whether Respondent engaged in an unlawful employment practice.
Findings Of Fact Mr. McMillian, at the time of the hearing, was a 30-year-old resident of Marianna, Florida. He is an African- American. CBO is an employer as that term is defined in Subsection 760.02(7), Florida Statutes, and thus subject to the Florida Civil Rights Act of 1992. CBO provides in-home support to clients who need help in addressing their daily needs. The program under which they operate is run by the Agency for Persons with Disabilities (Agency). Mr. McMillian worked for CBO from January 25, 2006, until August 28, 2006. He worked as a caretaker in a private home. He took care of two men with mental disabilities. Both of the men, clients of CBO, were of the Caucasian race. Mr. McMillian was required to keep a "journal of living" that, when kept up-to-date, recorded the activities in the home and provided an account of client funds. CBO did not have enough homes in the Marianna area to warrant a supervisor, so Donald Bradley Graham, Executive Vice-President of CBO, was assigned to supervise the single-home maintained in Marianna, which was the home in which Mr. McMillian worked. Mr. Graham is of the Caucasian race. Mr. McMillian had conflicts with one of the clients. Mr. Graham gave Mr. McMillian a cleaning checklist to aid him in maintaining the cleanliness of the home, because there were issues involving sanitation, or more specifically, issues involving deficiencies in sanitation. Mr. Graham also found that Mr. McMillian was not keeping track of spending and was not maintaining receipts. Barbara Williams, a "life coach," also interacted with Mr. McMillian. Ms. Williams is of the Caucasian race. A "life coach" pays the bills for a client's house, makes medical appointments, and addresses the administrative needs of clients. Ms. Williams did not supervise Mr. McMillian. Mr. McMillian and Ms. Williams had a dispute involving the grocery supply for the house. Allegations were made by Ms. Williams and a client that Mr. McMillian had purloined raw chicken from the house. Mr. McMillian was informed on August 28, 2006, that CBO had suspended him and that he was the subject of an abuse investigation by the Department of Children and Family Services (DCFS). The allegations of theft were not proven. An abuse investigation conducted by DCFS Investigator Culbreath determined that no abuse had occurred. However, in the interim, the CBO clients in the home informed CBO that they did not want Mr. McMillian to return. If a client served by CBO does not want a particular person to work in his or her home, then that person, by Agency rules, may not work there. The client does not have to offer a reason for not wanting a person working in his or her home. Mr. McMillian was offered other work with CBO in homes in the Panama City area but made no effort to take advantage of the offer. The evidence is clear that he was not terminated and was not the subject of discipline.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 9th day of August, 2007, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of August, 2007. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Rodney McMillian 4052 Old Cottondale Road, Apartment 805 Marianna, Florida 32448 R. W. Tres Long Chief Financial Officer Community-Based Options, Inc. Post Office Box 438 Panama City, Florida 32402-0438 Glen Lord Community-Based Options, Inc. Post Office Box 438 Panama City, Florida 32402 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue The primary issue in this proceeding is whether Irene Murray is an employee of the City of Carrabelle and covered by Social Security and the Florida State Retirement System. A secondary issue is when did Murray become an employee.
Findings Of Fact Exception 4: The Petitioners' contention that the contract between Ms. Murray and the City is contingent upon the revenues generated and that the City never contributed funds to the operation of the program is without merit and hereby rejected. The Hearing Officer's findings of fact, which are supported by competent, substantial evidence in the record, concludes the contract is contingent upon the availability of funds appropriated for that purpose. Petitioners' exception is rejected. Exception 5: The Hearing Officer's finding of fact is supported by competent, substantial evidence. The City Commission is the authority responsible for the approval of the budget for the Center. Petitioners' exception is rejected. Exception 6: The Petitioners' contention that repairs to the Community Center do not have to be approved by the City Commission is without merit. The Hearing Officer found that prior approval of repairs must be granted by the City Commission and the expenditures for the Community Center are paid out of the City's general revenue fund. The Hearing Officer's findings are supported by competent, substantial evidence in the record. Exception 6 is rejected. Exception 7: The Petitioners' exception is without merit. The Hearing Officer's findings are supported by competent, substantial evidence in the record. The exception is rejected. Exception 9: The Petitioners' exception is without merit. The Hearing Officer's findings are supported by competent, substantial evidence in the record. The exception is rejected. Exception 10: The Petitioners' exception is without merit. The Hearing Officer's findings are supported by competent, substantial evidence in the record. The exception is rejected. Exception 12: The Petitioners' exception is without merit. The Hearing Officer's findings are supported by competent, substantial evidence in the record. The exception is rejected. Exception 13: The Petitioners' exception is without merit. The Hearing Officer's findings are supported by competent, substantial evidence in the record. The exception is rejected. Exception 14: The Petitiners' exception is without merit. The Hearing Officer's findings are supported by competent, substantial evidence in the record. The exception is rejected.
Recommendation It is RECOMMENDED that Petitioner, Irene Murray, be enrolled as a member of the FRS effective September, 1986 and Petitioner, City of Carrabelle, pay the retroactive retirement contributions. DONE AND ENTERED this 5th day of April, 1991, in Tallahassee, Leon County, Florida. Stephen F. Dean Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of April, 1991. APPENDIX TO RECOMMENDED ORDER The Petitioner's proposed findings were adopted or rejected for the following reasons: Paragraph 6 Rejected second unnumbered paragraph as contrary to more credible evidence. Paragraph 8 Rejected first sentence as contrary to more credible evidence. Rejected third sentence as to Ms. Murray's paying her taxes because it is irrelevant. Paragraph 9 Rejected as to entitlement to unemployment compensation because the contract is silent on this. Paragraph 10 Rejected all because it's contrary to more credible evidence. Paragraph 14 The city participates in a job and job skills program funded by a federal grant. The janitor at the center is a participant in this program. The City's proposal, while not strictly untrue, is an overstatement of the matter. Paragraph 16 Rejected that FRS is illegally interfering with the contract between the city and Ms. Murray, and what Ms. Murray wants is irrelevant. Paragraph 17 Rejected as a legal conclusion beyond the competence of the witnesses. Paragraphs 18 Rejected as contrary to fact. and 20 The Respondent's proposed findings were adopted or rejected for the reason stated: Paragraph 5 Rewritten to more completely explain the budget relationship. Paragraph 19 Rejected as conclusion of law. COPIES FURNISHED: William H. Webster, Esquire Post Office Box 478 Crawfordville, FL 32327 Larry D. Scott, Esquire Division of Retirement Cedars Executive Center Building C 2639 North Monroe Street Tallahassee, FL 32399-1560 A. J. McMullian III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, FL 32399-1560 John A. Pieno, Secretary Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550
The Issue Does Petitioner qualify for a consumer's certificate of exemption as a "church" as defined in Rule 12A-1.001(3)(c), Florida Administrative Code, or as a "religious institution" as defined in Section 212.08(7)(o) 2.a., Florida Statutes?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Friends Housing and Care, Inc. (Petitioner), is a non-profit corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. Petitioner has filed under the fictitious name statute and is doing business under the name Woodmere at Jacarande. Petitioner's Amended Articles of Incorporation dated October 25, 1996, state Petitioner's purposes as follows: To provide elderly families, elderly persons, and handicapped persons housing and related facilities and services specially designed to meet the physical, social, psychological, economic and spiritual needs of the aged and contribute to their health, financial security, happiness and usefulness in longer living. To plan, construct, operate, maintain, and improve housing and related facilities and services for elderly families and elderly persons. To acquire by gift or purchase, hold, sell, convey, assign, mortgage, or lease any property, real or personal, necessary or incident to the provisions of housing and related facilities and services for elderly families and elderly persons. To borrow money and issue evidence of indebtedness in furtherance of any or all of the objects of its business; and to secure loans by mortgage, pledge, deed or trust, or other lien. To engage in any kind of activity, and enter into, perform and carry out contracts of any kind, necessary or in connection with, or incidental to the accomplishment of any one or more of the nonprofit purposes of the corporation. To conduct educational or scientific research on a non-profit basis and to cooperate with foundations, educational institutions, and research centers in promoting same, with the aim of increasing knowledge and enhancing life in our society. To foster and encourage spiritual life and bring the human spirit into intimate relation with the Divine Spirit, to provide definite, organized opportunity for the development of spiritual values and for the renewal of our strength in accordance with generally accepted faith and practice of the Religious Society of Friends. Note 1 of Petitioner's audited financial statements containing the independent auditor's report dated January 8, 1997, states that Petitioner ". . .was created by Friends (Quakers) to plan and develop a Not-for-Profit Condominium Retirement Community in Florida to meet the needs of Friends and others who wish to retire or live in a Quaker-sponsored retirement community in Florida. " Note 3 to the same financial statements indicates that Petitioner's operations have been devoted to raising capital, obtaining financing, purchasing land and beginning construction on the planned retirement community. As reflected in the unaudited financial statement dated April 30, 1997, of the total reflected year-to-date expenses of $820,681: $299,548 went to architectural fees; $71,985 was spent for engineering fees; $84,265 was spent for pre-construction management fees; and $40,331 went to advertising. Only $200 was directed to worship expenses. Neither the audited financial statements nor any of the notes thereto indicate that Petitioner is engaged in any religious activities or worship services. Petitioner's retirement community will comprise 32.7 acres, with a 3.7 acre easement. There will be about 700 condominiums constructed on this acreage. Currently, it is anticipated that the first condominiums will be available for occupancy sometime in 1999. Thus, currently there are no residents residing at the Petitioner's retirement community. Petitioner will be constructing an 80,000 square foot commons building which will contain an "auditorium chapel" consisting of approximately 5,500 square feet. This building has not been constructed. The "auditorium chapel" will be used for "religious purposes and multiple-purposes." It is anticipated that both silent and program services of the Friends (Quaker) faith will be held in the chapel. Other religious faiths would also be included. There will also be located within the commons building a 6,000 square foot dining facility, 4,000 square foot library, a gift shop, beauty and barber shops, post office, banking facility, game rooms, and lounge area. Petitioner sells its condominiums to members of the general public of retirement age, regardless of their religious affiliation or even if they have no religious affiliation. Purchasers do not have to be members of the Friends (Quaker) faith. In fact, the retirement community will be a "non- denominational community." The price of the condominiums ranges from about $82,000 for a one-bedroom (676 square foot) unit, to well over $200,000 for a large (2100 square foot) unit. In addition to the sales price, Petitioner will charge its residents a monthly condominium fee to cover maintenance. An activity or club fee will also be charged by Petitioner to cover residents' social activities and transportation costs. If a resident needs medical attention, Petitioner will provide the care and bill the resident's insurance company for the cost of the care. Several witnesses testified that the meetings held at Petitioner's location were held under the name "Woodmere Friends Fellowship," while other witnesses testified that the meetings held at Petitioner's location were held under the name "Woodmere Fellowship." The newspaper advertisements or other published advertisements advertising meetings at Petitioner's location did not refer to "Woodmere Friends Fellowship" or "Woodmere Fellowship." An advertisement appearing in "Quaker Life" in June 1997, indicated that "All Friends Fellowship" was located at Woodmere at Jacaranda. A newsletter from Petitioner dated January 1997, stated that "Friends Inter-Faith Fellowship" was begun at Woodmere Information Center and that several prospective residents from the Venice/Englewood area had "voiced interest in having a meeting in this area. Presently, these meetings are being held every Sunday evening at 6:30 p.m." Additionally, this newsletter stated that these meetings were consistent with Petitioner's federally-recognized religious affiliation. However, Petitioner is never identified as a church or religious institution in this newsletter. By letter dated February 17, 1997, William R. Martin, Petitioner's Chairman, advised the Department that "[o]ur Worship group is being identified as the Woodmere All Friends Fellowship." In an advertisement dated February 1, 1997, Woodmere at Jacaranda, a Quaker-sponsored, resident-owned retirement community, invites interested people to attend a fellowship hour at 6:00 p.m. the first and third Sunday of each month. This advertisement does not refer to Petitioner as a church or religious institution. The bulletins, advertisements, newsletters, and other evidence submitted by the Petitioner do not refer to Petitioner as a church or religious institution. The hours of operation posted on the doors to Petitioner's premises indicate that Petitioner is open Monday through Friday from 9:00 a.m. to 5:30 p.m., and Saturday from 9:00 a.m. to 1:00 p.m. There were no hours listed for Sunday. Additionally, there was nothing to indicate that worship service or religious activities were being conducted by Petitioner on its premises. Although there are meetings being held at Petitioner's location where religious services or activities are being conducted on a somewhat regular basis, there is insufficient evidence to show that Petitioner is responsible for, and conducting, those religious services or activities. Petitioner's sole purpose is not to provide free transportation services to church members, their families, and other church attendees. Petitioner is not a state, district, or other governing or administrative offices the function of which is to assist or regulate the customary activities of religious organizations or members. Petitioner does not own or operate a Florida television station whose programs are of a religious nature. Petitioner does not provide regular religious services to Florida state prisoners. Friends Housing and Care, Inc., d/b/a Woodmere at Jacaranda is a Quaker-sponsored, resident-owned, retirement community whose primary function is the development and marketing of a retirement community to members of the general public, regardless of religious affiliation. Petitioner intends to use its sales tax exemption primarily to purchase building materials, including those building materials for the condominiums which it produces for sale to the general public, regardless of their religious affiliation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order denying Petitioner's application for sales tax exemption. DONE AND ENTERED this 25th day of February, 1998, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1998. COPIES FURNISHED: Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lattera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Nick Roknich, Esquire Dunlap, Moran, Roknich, and Gibson, P.A. 1819 Main Street, Suite 700 Sarasota, Florida 34236 Ruth Ann Smith, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
The Issue Whether Petitioner Lewis Velken failed to meet the Deferred Retirement Option Program ("DROP") termination requirements set forth in chapter 121, Florida Statutes; and, if so, whether he is liable for repayment of the distribution from DROP in the amount of $691,307.41.
Findings Of Fact The Division is, and was, at all times material to this case, the state agency charged with the responsibility of administering the Florida Retirement System ("FRS"). Petitioner Velken was employed by Miami-Dade County Sheriff's Office ("Sheriff's Office") from June 27, 1988, through January 31, 2018. For the last 12 years of his employment with the Sheriff's Office, Petitioner served in the position of lieutenant. On June 5, 2013, Velken filled out and signed the DP-ELE Form, entitled Florida Retirement System Pension Plan Notice of Election to Participate in the Deferred Retirement Option Program (DROP) and Resignation of Employment, indicating that he wanted to enter DROP. The form reads, in pertinent part: I elect to participate in the DROP in accordance with s. 121.091(13), Florida Statutes (F.S.), as indicated below, and resign my employment on the date I terminate from the DROP. I understand that the earliest date my participation in DROP can begin is the first date I reach normal retirement date as determined by law and that my DROP participation cannot exceed a maximum of 60 months from the date I reach my normal retirement date, although I may elect to participate for less than 60 months. Participation in DROP does not guarantee my employment for the DROP period. I understand that I must terminate all employment with FRS employers to receive a monthly retirement benefit and my DROP benefit under Chapter 121, F.S. Termination requirements for elected officers are different as specified in s. 121.091(13)(b)[4.], F.S. I cannot add service change options, change my type of retirement or elect the Investment Plan after my DROP begin date. I have read and understand the DROP Accrual and Distribution information provided with this form. Also, on June 5, 2013, Velken filled out and signed a DP-11 Form, entitled Florida Retirement System Pension Plan Application for Service Retirement and the Deferred Retirement Option Program (DROP). That form states, in pertinent part: I understand that I must terminate all employment with FRS employers to receive a monthly retirement benefit and my DROP benefit under Chapter 121, F.S. If I fail to terminate employment in accordance with s. 121.021(39)(b), F.S., on my DROP termination date, my retirement will be null and void and my FRS membership shall be established retroactively to the date I began DROP. Effective July 1, 2013, Velken entered DROP, and, for the last approximately four and one-half years of his employment with the Sheriff's Office, he participated in DROP. During the latter part of Velken's employment with the Sheriff's Office, he took a position with the Los Angeles County Public Defender's Office as an investigator while also being employed with the Sheriff's Office. In December 2017, Velken left the Public Defender's Office and, eventually, reunited with the Sheriff's Office. Prior to ending his DROP participation, Velken completed a DP_TERM Form, entitled Drop Termination Notification Form, on January 16, 2018, confirming he would terminate his employment early on January 31, 2018. The form included the following statement above his notarized signature: Termination Requirement: In order to satisfy your employment termination requirement, you must terminate all employment relationships with all participating FRS employers for the first 6 calendar months after your DROP termination date. Termination requirement means you cannot remain employed or become employed with any FRS covered employer in a position covered or non- covered by retirement for the first 6 calendar months following your DROP termination date. This includes but is not limited to: part-time work, temporary work, other personal services (OPS), substitute teaching, adjunct professor or non- Division approved contractual services. Velken's brother was married to Stephanie Leon's ("Leon") sister, and they have known each other since Leon was approximately 11 years old. After leaving the FRS, on or about February 5, 2018, Velken started working for Leon's property management and maintenance company, Stephanie Leon P.A., as an independent contractor. Stephanie Leon P.A. does not have any other employees. While working for Stephanie Leon P.A., Velken's law enforcement expertise was utilized to make properties safer and to help the agents remain safe. Velken also performed administrative duties such as reviewing contracts and proofreading, as well as generating business for Stephanie Leon P.A. Leon also has another company named Realty Empire, Incorporated ("Realty Empire"), which is a brokerage company. Velken, at the time of the hearing, had not been affiliated with Realty Empire. Leon has a broker's license and real estate license in Florida. While working for Leon, Velken looked into getting a real estate license. He also was still considering law enforcement opportunities. He was actively attempting to get an investigator position with the California Department of Insurance. Leon and Velken neither had a contract nor finalized Velken's salary amount, because they did not know how much business Velken would be able to generate for the company. However, Velken was living off his FRS pension, and he understood he was going to be compensated when Leon was compensated. On April 16, 2018, Velken's friend called him to let him know that North Bay Village ("Village") was looking for a police chief and that he had recommended Velken for the position. Velken told his friend he was not interested in the position but was convinced by his friend to meet with Marlen Martell ("Martell"), the Village manager, because she was under pressure to hire a police chief expeditiously, since the individual who was going to serve in the position decided not to accept the position at the last minute. Velken met with Martell that same afternoon. When the two met, Martell summarized the challenges the Village police department had and asked Velken about ideas to resolve the issues. The meeting ended with Martell letting Velken know that she had several others to meet with regarding the position and that she would get back with him. Later that same day, Martell called Velken and offered him the chief of police position. As the Village manager, Martell had the authority to contract for services on behalf of the Village. She also had the sole authority to hire the police chief. They agreed to meet the next day to discuss the position further. The following day, Velken discovered that the Village was an FRS employer. So, Velken let Martell know that he would not be able to take the position because he had just recently retired and exited DROP from an FRS agency. Martell responded by suggesting that Velken meet with the new human resources coordinator, Ana DeLeon ("DeLeon"), about the retirement issue. On April 17, 2018, Velken met with DeLeon who called the FRS hotline. DeLeon briefed the representative on Velken's retirement status and explained that he ended his DROP in January 2018 and that the Village was offering him a position. DeLeon inquired how the Village could bring Velken on board to work and him continue to receive his benefits. The FRS representative instructed Velken that he could not be placed on the payroll of an FRS agency, unless he had been unemployed for six months, because, once in DROP, a participant cannot receive an FRS salary and pension check at the same time. Additionally, the representative advised that there is no option around the six-month or one-year reemployment restrictions. Velken was told he could not go back to work without violating the termination requirement. After the teleconference meeting with the FRS representative, Velken informed Martell again that he could not come to work for the Village according to FRS requirements. Martell then suggested that Velken become a "contracted employee" to accept the police chief position, which would not interfere with his retirement because he would not be a Village employee in the FRS system. Martell then took Velken upstairs to the Village attorney, Norman Powell ("Powell"), to discuss a possible contracted employee arrangement. Powell informed them that he did not see any problems with a contracted employee arrangement for police chief. Powell indicated he would research and get back with them to inform them if he found anything contrary. Soon thereafter, Martell let Velken know that Powell had approved the contractual employee arrangement to move forward with Velken becoming a contracted police chief for the Village. Velken then approached Leon about the opportunity of expanding her business to include a temporary staffing service and making the service available to the Village to help increase her bottom line. Leon researched temporary staffing service businesses and what was legally required to become one. She checked to see what insurance was needed and checked with the Department of Business and Professional Regulation, where she found out she did not need a license for a temporary staffing agency. When Leon did not find anything that prevented her from having a temporary staffing service, she expanded Stephanie Leon P.A. to include temporary staffing services. Leon never contacted the Division while she was expanding her business or about Velken serving as an independent contractor for Stephanie Leon P.A. On April 25, 2018, Leon modified the purpose of Stephanie Leon P.A., so that the new venture, temporary staffing services, would be included under executive services. She amended her Articles of Incorporation with the Division of Corporations for her property management company, Stephanie Leon P.A., and modified the purpose to say "engage in real estate sales, management, executive services, and/or any and all lawful business." Leon decided to place Velken at the Village as her first attempt at temporary staffing. Since Leon did not know anything about police work, she authorized Velken to negotiate the terms and conditions of the agreement with the Village. However, Leon had the final approval on each portion of the negotiated agreement. Stephanie Leon P.A. through Velken and the Village through Martell reached a verbal agreement for Velken to perform temporary police chief services. Martell hired Stephanie Leon P.A. for approximately $130,000.00 annually. The verbal agreement provided that termination of the agreement could be by Stephanie Leon P.A., or Leon could authorize Velken to do so, or Martell could terminate the agreement for the Village, without any financial penalty. There was not a set term for the verbal agreement between Stephanie Leon P.A. and the Village. The agreement began in April and was not reduced to writing. In her capacity, Martell had the authority to make verbal agreements for the Village for services with Stephanie Leon P.A. Velken did not contact FRS again to review the agreement between Stephanie Leon P.A. and the Village, because the Village attorney, Powell, had approved the legality of his employment relationship as an independent contractor. Velken followed his advice. Martell retained Velken as the chief of police by "going through an agency, as we did with other employees in the Village, to be able to hire him at that time, without jeopardizing any of his existing benefits." Velken was not the first contracted non-FRS employee hired by the Village. The Village had hired numerous other contracted employees outside the FRS system to provide services. Some of the high-ranking Village positions, such as public works director, director of the Planning Department, and Village engineer, had been contracted non-FRS employees. The Village had also typically provided offices and assistants to the contracted employees, even though the Village used staffing agencies to fill many of the contracted employee positions. Martell notified the Village's finance department and DeLeon that Velken would be providing services through an agency. On or about April 17, 2018, Velken was drug tested by Quest Diagnostics Incorporated as part of pre-employment for his services to the Village. The results of his tests were negative. DeLeon had Velken fill out some paperwork when he started. However, Velken did not fill out the standard Village employee FRS paperwork because he was not an employee of the Village. Since Velken was not an employee of the Village, he was not on the Village's payroll, and the Village did not provide Velken any benefits such as workers' compensation insurance, health insurance, deferred compensation, retirement contributions, and vacation or sick leave. Also, the Village did not provide Velken a W-2 or W-4 tax form. On or about April 20, 2018, as the new Village police chief, Velken signed above the employee signature line on the Oath of Office for Elected and Appointed Village Officials ("Oath") template form, affirming to "support and obey the Constitution of the United States and of the State of Florida, and that I will, in all respects, observe the provisions of the Charter and Ordinances of the Village." The Oath also stated Velken was "a legal resident of the State of Florida and being employed [with the Village]." The Village had joined the FRS to cover their police officers in 2004. By doing so, the Village signed a federal-state agreement to cover their police officers and, also, had an agreement with the Social Security Administration to cover services. Village Resolution 2018-023 formally affirmed and documented the appointment of Velken as the police chief and was used to introduce Velken to the Village commission. Velken began services as Village chief of police while still working at Stephanie Leon P.A. as an independent contractor. The Village provided Velken an executive assistant, Ana Gonzalez ("Gonzalez"), who assigned him equipment. Velken was given a cell phone, handcuffs, holster, whistle, badge, uniform, shoulder mike, laptop, building fob, office keys, building keys, gym card, vehicle, rifle, shotgun, and taser. The majority of Velken's work as police chief was at an administrative level. He did not carry a gun and never patrolled or conducted enforcement activities; so, he did not use most of the equipment provided. Additionally, he supplied some of his own equipment. Velken typically wore his own purchased street clothes or a shirt and tie as police chief, and only wore the issued uniform about twice. Velken did use the Village cell phone for city-related calls to avoid public records issues if he used his own cell phone. Velken's work hours were determined by him. Velken was never instructed when to be at work, how to perform the job, what job to do, or where to perform services. He worked independently. Additionally, neither Stephanie Leon P.A. nor Velken were provided any training for the position. Velken once received a Village parking reimbursement check for $12.00, which he never cashed. Martell briefed Velken as to issues she had with the police department, such as overtime budget, accreditation, and preparation of a hurricane plan. Martell informed Velken that those were challenges she hoped could be resolved. However, she did not tell him how to resolve those issues. While working at the Village, Velken maintained his office at Stephanie Leon P.A. and another at his home. He continued to provide services to Stephanie Leon P.A. and, also, continued seeking employment with the California Insurance Commissioner. Velken even flew to California and participated in an in-person panel interview while assigned to the Village to work. Velken did not get the Village's approval to be absent while in California. He just told them he would be gone for a few days. Neither Stephanie Leon P.A. nor Velken ever submitted regular reports to Martell regarding his services performed for the Village. On July 10, 2018, Martell resigned as Village manager. That same month, Velken was appointed and sworn in as interim Village manager. Velken's services for the Village changed to interim Village manager, and he started the services of his new position. However, the original temporary staffing verbal agreement with Stephanie Leon P.A. continued unchanged with the Village for Velken's management services. Also, Velken continued to provide services to Stephanie Leon P.A. while working with the Village. Village Resolution 2018-47 formally documented the appointment of Velken as interim Village manager and is how Powell introduced Velken to the Village commission in his new capacity. Neither Velken nor the Village controlled Velken's pay while he was chief of police or interim manager. Leon generally prepared monthly invoices for services to the Village and submitted them to the Village for payment. The invoices listed "labor wages for Lewis Velken." The Village paid Stephanie Leon P.A. for Velken's services based on the invoices. After Stephanie Leon P.A. received payment from the Village, Leon determined Velken's salary and paid him. The Village never paid Velken any compensation. The Village benefited from not providing benefits for the agreement with Stephanie Leon P.A., because it did not have to pay the costs for the benefits. By utilizing a temporary staffing service, the Village saved money. Leon solely determined how much Velken was paid after receiving the Village payments. Velken never received the total amount of money the Village paid Stephanie Leon P.A. When Velken served as both police chief and Village manager, the verbal agreement between Stephanie Leon P.A. and the Village for Velken's temporary contracted services remained the same. As when Velken provided services as police chief, Velken still did not have structured or required hours as interim manager. In fact, Velken independently decided what services to perform and how to perform the services; he received a Village office, maintained an office at Stephanie Leon P.A., and was not trained. However, Village Resolution 2018-47 did provide that Velken was supposed to follow the charter. Stephanie Leon P.A. paid Velken $48,579.00 in 2018. Leon kept the remaining approximate $89,000.00 of the Village payments from the invoices. Stephanie Leon P.A. did not withhold any taxes or Social Security from the checks it paid Velken. Additionally, the company did not provide Velken any benefits. Velken's pay was reported to the Internal Revenue Service by Stephanie Leon P.A. by a 1099 tax form. On June 29, 2018, Velken signed a State of Florida Statement of Financial Interests for the fiscal year ending December 31, 2017, reporting his previous primary source of income from "Miami-Dade Police Department" (Sheriff's Office) and the Public Defender's Office in California. The name of the agency listed on the financial statement was "North Bay Village Police Department," and the name of office blank was filled out as "Police Chief." On January 9, 2019, Village Commissioner Julianna Strout ("Commissioner Strout") questioned Elbert Wrains ("Wrains"), Village finance director, by email as to who Leon was and requested that Wrains please clarify the labor wages related to Leon. That same day, Wrains responded: "Mr. Velken was hired through the firm of Stephanie Leon P.A. Staffing Services by Marlen Martell. This is for contract wages vs a paid salary. Mr Velken does not receive any wages directly from North Bay Village. He is paid by Stephanie Leon P.A." On January 30, 2019, Wrains further explained by email to Commissioner Strout about the multiple Leon invoices. The email stated, in pertinent part: I am resending the invoices, I do not believe that we have a contract with Stephanie Leon P.A. The Interim Village Manager is a contract employee and there is no contact with FRS for his cost to the Village. He works for a firm and we contract for his services. We have several contract employees including our building official, all our building inspectors, The Village attorney, one of my accountants, Johnny our computer tech, several public works employees, Amy in the Village Clerks office, Jim Larue, Gary Ratay of Kimley Horn, Marie Bennett in public works. We do not report any of their costs to FRS because they are not employees. If you have any questions please feel free to call me and ask. I would rather try and get you the right answer than speculation. Leon authorized Velken to end the Stephanie Leon P.A. agreement with the Village because of bad publicity. On or about February 11, 2019, the verbal agreement ended the same day Velken informed Powell. On February 22, 2019, Gonzalez followed the Acting Chief of Police Brian Collins's instructions and removed Velken from the Florida Department of Law Enforcement ("FDLE") Automated Training Management System. Gonzalez checked the box "[v]oluntary separation not involving misconduct" when filling out the form. The Village submitted an Affidavit of Separation to FDLE on behalf of Velken. The FDLE Profile Sheet was improperly checked, indicating Velken was an employee of the Village, before being forwarded to FDLE. After Stephanie Leon P.A. ended the agreement with the Village, Leon continued the temporary employee staffing part of the company by attempting to place Velken in loss prevention positions with other businesses. Velken stopped working for Stephanie Leon P.A. in May 2019. DIVISION INVESTIGATION Two anonymous complaints were reported to the Division regarding Stephanie Leon P.A. and Velken's services at the Village. On or about January 14, 2019, William McArthur ("McArthur"), retirement analyst I for the Division, received one of the anonymous complaints regarding the employment relationship of Velken and the Village. Afterwards, McArthur was assigned to look into the matter and to get any documentation from the Village regarding Velken's employment to determine what was going on. The Village provided McArthur documentation, including payment ledgers and some copies of resolutions. McArthur reviewed the Village ledgers and found enteries to Stephanie Leon P.A., listing "labor wages for Lewis Velken." The ledgers also showed where the city reimbursed Stephanie Leon P.A. for wages. McArthur then searched the Division of Corporations and discovered Leon's Realty Empire company. Neither McArthur nor his supervisors looked into Stephanie Leon P.A. McArthur believed that Realty Empire and Stephanie Leon P.A. were one in the same business. McArthur concluded his review without contacting Leon or Velken. He was never provided the terms of the work arrangement. Also, he failed to follow up with the Village and find out why the Village was paying Stephanie Leon P.A. when the payment ledgers indicate the payments were for Velken's services. Dr. Joyce Morgan ("Dr. Morgan"), bureau chief for the Bureau of Enrollment and Contributions for the Division, was also provided the Velken issue to evaluate. However, Dr. Morgan was not provided many details regarding the nature of the employment relationship between the Village, Velken, and Stephanie Leon P.A. Usually, when determining a DROP participant's status, Dr. Morgan is provided an employment relationship questionnaire to fully evaluate the circumstances of the DROP participant and to decide the employment relationship. However, Dr. Morgan was not provided the questionnaire while evaluating Velken. Dr. Morgan was informed of little else than that Velken was serving as Village police chief. Dr. Morgan utilized the documents provided for review and concluded that Velken was a compulsory employee in an established position under the IRC § 3401 and, therefore, an FRS employee. After Velken was designated an employee, the Division concluded that Velken committed a reemployment violation by working at the Village. As a result of the violation, the Division rendered Velken's retirement null and void, added the time he had been working for the Village to his years of service, and determined he had to repay retirement received because it was like he never retired. McArthur was instructed to call Velken and tell him of the Division's decision. McArthur called Velken to explain that the Division was suspending his pension because Velken had violated terms of the DROP agreement. On March 6, 2019, the Division issued an agency action letter voiding Velken's FRS DROP retirement and retroactively establishing service credit to July 1, 2013. The letter also requested the repayment of $691,307.41. HEARING At hearing, Dr. Morgan credibly explained that when she was assigned to review Velken to determine the employment relationship with the Village, "there was very little to review. There was nothing that showed that he was not an employee. Everything supported being an employee." Dr. Morgan testified that she reviewed all documents provided, including his Oath, global profile sheet that indicated his employer was the Village, resolutions affirming appointment, and payment registry. She also testified that her review of Velken's employment relationship did not include any information about benefits, payroll, the agreement between Stephanie Leon P.A. and the Village, or an ERQ-1 employment questionnaire form. Dr. Morgan also admitted, at hearing, that she did not do an independent contractor review because no one asked for one or submitted any staffing documents. Dr. Morgan summarized the process of her review and explained that she was looking to see what position Velken was filling. Once she determined he was a police chief, then she knew he was in an employee position under federal law. She further explained that IRC § 3401(c) classifies public officials, and Velken fell into that category because of his regularly established position as police chief, which allowed him to administer or enforce the public laws. Dr. Morgan testified that her determination was made because Velken was a compulsory employee in a regularly established position and, as such, also a mandatory FRS employee because he was a public official.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, enter a final order dismissing its request for reimbursement of past FRS benefits, reinstating Petitioner's monthly retirement benefits, and paying any and all past due amounts to Petitioner, with interest. DONE AND ENTERED this 28th day of February, 2020, in Tallahassee, Leon County, Florida. S JUNE C. MCKINNEY 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 28th day of February, 2020. COPIES FURNISHED: H. B. Stivers, Esquire Levine & Stivers, LLC 245 East Virginia Street Tallahassee, Florida 32301 (eServed) William R. Tunkey, Esquire William Tunkey, P.A. Fourth Floor 2250 Southwest Third Avenue Miami, Florida 33129 (eServed) Thomas E. Wright, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) Nikita S. Parker, Esquire Office of the General Counsel Department of Mangement Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399 (eServed) Mark S. Levine, Esquire Levine & Stivers, LLC 245 East Virginia Street Tallahassee, Florida 32301 (eServed) Ronald G. Stowers, Esquire Levine & Stivers, LLC 245 East Virginia Street Tallahassee, Florida 32301 (eServed) David DiSalvo, Director Division of Retirement Department of Mangement Services Post Office Box 9000 Tallahassee, Florida 32315-9000 (eServed) Sean Gellis, General Counsel Office of the General Counsel Department of Mangement Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed)
The Issue This case was initiated by a letter dated October 22, 1984, from the Department of Revenue ("Department") to National Christian Network, Inc. ("NCN") informing the organization that its Consumer Certificate of Exemption Number 05- 00852-00-15 would be revoked effective November 22, 1984, in accordance with Section 212.084(3) Florida Statutes. John Fox, Executive Vice president, responded with a timely request for an administrative hearing. The Department contends that NCN, as a radio and television network, does not qualify for a religious exemption under Subsection 212.08(7)(a) Florida Statutes and regulations interpreting that law. NCN argues that it is entitled to the certificate as a religious, charitable or educational organization. The only witness produced by either party was Raymond Kassis, and the facts elicited through his testimony are uncontroverted. One exhibit, the Articles of Incorporation, was placed into evidence by stipulation. The Department submitted its Proposed Finding of Fact, Conclusions of Law and Recommended Order; these have been considered and the proposed findings of fact have been incorporated below.
Findings Of Fact National Christian Network, Inc. was incorporated as a Florida nonprofit corporation on October 11, 1978. Its purposes, as stated in Article II, Articles of Incorporation include the following: * * * To establish, operate and maintain television and/or radio networks and/or stations. To produce and broadcast to the general public religious, charitable and/or educational programs either by television or radio, or both, for the purpose of educating and instructing the general public in religious, charitable or educational matters; to promote, extend and improve religion, charity and education and to participate in religious, charitable and/or educational programs in the united states, [sic] including but not limited to the State of Florida; to promote programs designed to increase public awareness and understanding of the needs and activities of religion, charity and/or education in the several states, including the State of Florida, and to encourage the public to give support, financial and otherwise, to such purposes. To acquire, take, receive, purchase, own, hold, use, manage, lease, mortgage, pledge, encumber, sell and convey, or otherwise dispose of any property, including but not limited to real, personal and mixed, tangible and intangible; to issue bonds, notes, evidences of indebtedness, receipts and obligation; to receive donations, subscriptions and contributions; to make donations to organizations created for similar or like purposes, and to have and exercise all other corporate rights and powers, to do all lawful acts necessary or desirable to carry out its purposes consistent with the laws of the State of Florida (as they now exist or from time to time may be amended), and Sec. 501(c)(3) of the Internal Revenue Code (as it now exists or from time to time may be amended) and not inconsistent with these Articles of Incorporation. * * * The primary purpose of NCN, in the words of its President, is to operate a national television network. Transcript, p. 10. NCN maintains status as an organization under Section 501(c)(3) of the Internal Revenue Code and holds non-commercial, educational, F.C.C. licenses for radio and television. The network activities are conducted at NCN's facility in Cocoa, Florida, twenty-four hours a day, and consist primarily of religious services by its seventy-eight multi-denominational member churches. Members include Protestant, Catholic and Jewish organizations. Some, but not all, of the church services are produced directly in the studio. The facility does not include a chapel. NCN maintains a cost share plan which pays for the broadcasts. Member organizations who can afford to pay, contribute their share; the others are given free air time. Funds for the network are solicited over the air. Funds are also solicited for charitable, educational and religious projects of the member churches. Free air time is provided to a wide variety of charitable organizations for fund raising activities. Some educational programs are aired; however, the network is not part of the system established by the Florida Department of Education pursuant to Sections 229.805 or 229.8051 Florida Statutes. The essence of NCN is that of a conduit, a medium for other organizations to transmit religious worship services into the homes of its viewers and listeners. It also, to a lesser degree, provides the medium for organizations to conduct charitable and educational activities.
Recommendation On the basis of the foregoing, I recommend that the intended agency action be upheld and that Consumer Certificate of Exemption No. 05-00852-00-25 be revoked in accordance with Section 212.084(3) Florida Statutes. DONE and ORDERED this 21st day of October, 1985, in Tallahassee, Florida. MARY CLARK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of October, 1985.
The Issue The issue for determination is whether Petitioner should be granted a consumer’s certificate of exemption pursuant to Subsection 212.08(7)(o), Florida Statutes.
Findings Of Fact The Department of Revenue (Respondent) is the state agency charged with enforcement of Chapter 212, Florida Statues, and the issuance of certificates of exemption. Unto Others, Inc. (Petitioner) is an organization incorporated in the State of Florida as a non-profit corporation. Petitioner’s Articles of Incorporation, Article II, states Petitioner’s purpose as follows: The purposes for which the Corporation [Petitioner] is organized are exclusively religious, charitable, scientific, literary, and educational within the meaning of section 501(c)(3) of the Internal Revenue Code of 1986 or the corresponding provision of any future United States Internal Revenue law. Petitioner made application to the Respondent for a certificate of exemption as a charitable institution pursuant to Subsection 212.08(7)(o)2.b, Florida Statutes. Petitioner did not make application for an exemption as a scientific, religious, or educational institution, but it may in the future apply under these criteria. By Notice of Intent to Deny (Notice) dated January 30, 1998, the Respondent notified Petitioner that its application was being denied. The grounds stated in the Notice for the denial were the following: (1) "Your organization does not provide, nor does it raise funds for charitable institutions which provide one or more of the charitable services listed in the statute [Subsection 212.08(7)(o)2.b, Florida Statutes]."; and (2) "Your organization fails to meet the qualification for exemption from sales and use taxation, as set forth in Section 212.08(7), Florida Statutes." Currently, Petitioner’s sole function is the raising of funds to enable Petitioner to rehabilitate people and dwellings. All of Petitioner’s activities are conducted by non-paid volunteers. No evidence was presented to show that Petitioner rehabilitates any person or dwelling, or holds religious services. No evidence was presented to show that Petitioner governs or administers any office within any hierarchy of a larger organization. No evidence was presented to show that Petitioner participates with or controls another organization. No evidence was presented to show that Petitioner expends more than 50 percent of its expenditures toward any charitable service. No evidence was presented to show that Petitioner disburses more than 50 percent of its expenditures directly for a charitable service or to any entity that directly provides or performs any charitable service. No evidence was presented to show that Petitioner directly provides or performs any charitable service for any entity or person; or that Petitioner provides any goods or services as a charitable service. No evidence was presented to show that Petitioner directly provides a reasonable percentage of any charitable service free or at a substantially reduced cost to persons, animals, or organizations that are unable to pay for such services. No evidence was presented to show that any charitable service was provided free or at a substantially reduced cost. No evidence was presented to show that persons, animals, or organizations actually received any charitable service and that those persons, animals, or organizations were unable to pay for such service(s). Petitioner does not currently provide any of the services listed in Subsection 212.08(7)(o).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying a consumer's certificate of exemption to Unto Others, Inc. DONE AND ENTERED this 31st day of August, 1998, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of August, 1998.
The Issue The issue in this case is whether Respondent, the Department of Revenue, should grant Petitioner's application for a consumer's certificate of exemption from sales and use tax.
Findings Of Fact Petitioner is a nonprofit organization incorporated under the laws of the State of Florida on or about August 27, 1997. Petitioner applied to Respondent for a consumer's certificate of exemption from sales and use tax. While the application indicates that it is based on exemption status as an "enterprise zone," Petitioner clarified at final hearing that it actually was basing its application on exemption status as a "charitable institution." ("Enterprise zone" is not an exemption category under the applicable statutes. See Conclusions of Law, infra.) The IRS has determined that Petitioner is exempt from federal income tax under IRC Section 501(a) as an organization described in IRC Section 501(c)(3). A letter dated February 2, 1999, stated that Petitioner: was formed in 1997 to plan and implement redevelopment efforts in the Greater Newtown Community which lead to overall improvement in the quality of life of its residents. In the short time since our inception, we have responded to community needs by implementing a broad range of programs that will have a positive impact on our community. But from the evidence presented (which included no testimony from either party), it is difficult to ascertain factual detail about Petitioner, its activities, or its finances. In addition to grant application and fund-raising activities, it appears that Petitioner has been involved in informational and participation-recruitment meetings and information-gathering surveys for planning purposes (called the Business Retention and Expansion Survey). Petitioner also appears to have been involved in a Storefront Renovation Program and several community celebrations. Petitioner has plans for other economic and community redevelopment activities. But it cannot be ascertained from the evidence which of the other economic development activities have taken place and which are still in grant application or planning stages. For example, documentation regarding Petitioner's involvement in one activity refers to the activity as the "proposed WAGES Employment Challenge." Petitioner obtained $128,000 of funding from the City of Sarasota for seed money for its economic redevelopment and other activities. Petitioner budgeted to spend the $128,000 in 1998. The entire budget consists of salaries, fringe benefits, and overhead expenses. According to a "Profit and Loss" statement for January through October 1998, Petitioner spent $30,581.49 during that time period. All of those expenditures were in the category of payroll and overhead expenses. One activity referenced in Petitioner's documentation is Petitioner's "partnering" with financial institutions and mortgage brokers to process mortgage loans for affordable housing. In that case, the expenditures would be by the other institutions, not by Petitioner. There is no information as to any other expenditures made by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying Petitioner's application for a consumer's certificate of exemption from sales and use tax. DONE AND ENTERED this 5th day of November, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 5th day of November, 1999. COPIES FURNISHED: Bill Nickell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Cynthia E. Porter, Executive Director Greater Newtown Community Redevelopment Corporation 1751 Dr. Martin Luther King, Jr., Way Sarasota, Florida 34234 Joseph C. Mellichamp, III, Esquire Office of Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue Whether Petitioner is entitled to a consumer's certificate of exemption from sales tax as a "charitable institution" as that term is defined by Section 212.08(7)(o)2b., Florida Statutes.
Findings Of Fact Petitioner is a nonprofit organization incorporated under the laws of the State of Florida as a corporation. Petitioner has applied to Respondent for a certificate of exemption from sales and use tax based on its claim that it is a "charitable institution" within the meaning of, and pursuant to the provisions of, Section 212.08(7)(o)2.b., Florida Statutes. 2/ The Internal Revenue Service has determined that Petitioner is exempt from federal income tax under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3). Edy Sanon, Petitioner's executive director, testified in general terms as to the services performed by Petitioner to persons of Haitian descent. Based on that general testimony, it cannot be determined with any degree of certainty the precise services performed by Petitioner. Mr. Sanon testified that his organization provides translation services and referral services that assist Haitian immigrants in adjusting to life in the United States, becoming employable, and obtaining services from various government agencies. Petitioner engages in fund raising and searches for governmental grants for a center where people can come for help. The extent of its resources expended on fund raising was not established. Mr. Sanon testified that Petitioner provides its services free of charge and that it served approximately 800 clients last year. Chapter 212, Florida Statutes, imposes a tax on sales, use and other transactions. Respondent is the agency of the State of Florida charged with administering Chapter 212, Florida Statutes, and its duties include the issuance of certificates of exemption from tax pursuant to Section 212.08(7)(o), Florida Statutes. Pursuant to its rule-making authority, Respondent has adopted Rule 12A-1.001, Florida Administrative Code, to implement the provisions of Section 212.08(7)(o), Florida Statutes. Although Petitioner has been recognized as a nonprofit organization by the Internal Revenue Service, Petitioner must receive a certificate of exemption from Respondent to be exempt from Florida's tax on sales, use, and other transactions imposed by Chapter 212, Florida Statutes. The provisions of Section 212.08(7)(o), Florida Statutes, and Rule 12A-1.001, Florida Administrative Code, provide the criteria for the exemption sought by Petitioner. Section 212.08(7)(o), Florida Statutes, provides, in pertinent part, an exemption from sales tax as follows: (o) Religious, charitable, scientific, educational, and veterans' institutions and organizations. There are exempt from the tax imposed by this chapter transactions involving: * * * b. Sales or leases to nonprofit religious, nonprofit charitable, nonprofit scientific, or nonprofit educational institutions when used in carrying on their customary nonprofit religious, nonprofit charitable, nonprofit scientific, or nonprofit educational activities . . . * * * The provisions of this section authorizing exemptions from tax shall be strictly defined, limited, and applied in each category as follows: * * * b. "Charitable institutions" means only nonprofit corporations qualified as nonprofit pursuant to s. 501(c)(3), Internal Revenue Code of 1954, as amended, and other nonprofit entities, the sole or primary function of which is to provide, or to raise funds for organizations which provide, one or more of the following services if a reasonable percentage of such service is provided free of charge, or at a substantially reduced cost, to persons, animals, or organizations that are unable to pay for such service: * * * (IV) Social welfare services including adoption placement, child care, community care for the elderly, and other social welfare services which clearly and substantially benefit a client population which is disadvantaged or suffers a hardship . . . 3/ Rule 12A-1.001(3)(g), Florida Administrative Code, implements the provisions of Section 212.08(7)(o), Florida Statutes, and provides, in pertinent part, as follows: (g)1. "Charitable institutions" means only nonprofit corporations qualified as nonprofit pursuant to s. 501(c)(3), United States Internal Revenue Code, 1954, as amended, and other nonprofit entities that meet the following requirements: the sole or primary function is providing a "qualified charitable service" as defined in this subsection; and a reasonable percentage of such service is provided free of charge, or at a substantially reduced cost, to persons, animals, or organizations that are unable to pay for such service. * * * 3.a. For the purpose of this subsection the following terms and phrases shall have the meaning ascribed to them except when the context clearly indicates a different meaning: I. "Persons unable to pay" means persons whose annual income is 150 percent or less of the current Federal Poverty Guidelines . . . * * * "Substantially reduced cost" means the normal charge, market price, or fair market value to a purchaser or recipient, diminished in an amount of considerable quantity. "Sole or primary function" means that a charitable institution, excluding hospitals, must establish and support its function as providing or raising funds for services as outlined in subparagraphs 1. and 2. above, by expending in excess of 50.0 percent of the charitable institution's operational expenditures towards "qualified charitable services", as defined in subparagraph 2.a. - g. within the charitable institution's most recent fiscal year. Petitioner established that it is a nonprofit organization. Petitioner did not present any financial data at the formal hearing. In the absence of that financial information, it cannot be found that Petitioner disburses more than fifty percent of its expenditures to provide or raise funds for a provider of a statutorily listed service. The absence of that information is fatal to Petitioner's application. 4/ The unchallenged testimony of Mr. Sanon was sufficient to establish for the purposes of this proceeding that Petitioner does not charge for its services. Petitioner did not establish at the formal hearing the ability of any of its client to pay a reasonable fee for the services provided by Petitioner. The general testimony of Mr. Sanon failed to establish that the translation, referral, and other services provided by Petitioner are "social welfare services" within the meaning of Section 212.08(7)(o)2.b., Florida Statutes. 5/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order that denies Petitioner's application for a certificate of exemption. DONE AND ENTERED this 1st day of December, 1998, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 1st day of December, 1998.
Findings Of Fact Jennifer Morales-Allison is Hispanic-American and qualifies as a minority as defined in Section 278.012(9), Florida Statutes (1989) (Ex. 6). TSI was incorporated with the intent to obtain certification as a Disadvantaged Business Enterprise (DBE). In carrying out this intent Ms. Allison owns 510 shares of the 1000 shares issued in TSI which constitutes 51% of the stock of TSI. Richard Alberts, the non-minority shareholder of TSI, owns 490 shares or 49% of the stock of TSI. Alberts is president of TSI. TSI is primarily an environmental planning consultant and contracts generally with governments to provide environmental consulting involving road and airport construction. Accordingly, the work performed is technical in nature. Richard Alberts has some 22 years experience in environmental consulting primarily under contracts with the Federal Aviation Administration involving environmental effects of airport construction and state road departments involving environmental effects of highway construction. Prior to the incorporation of TSI Alberts worked at Greiner, an engineering firm doing extensive environmental consulting work, for some eight years. Ms. Allison also worked at Greiner during the time Alberts was employed there. She started out as a word processor-typist, moved up through secretary to office manager. During her eight years at Greiner she worked as secretary for Alberts and later as his administrative assistant. Her working experience was predominantly administrative such as in the preparation of contracts as opposed to technical. She has never served as a project manager or been involved with carrying out environmental contracts other than seeing that the proper personnel were assigned to the project and the agency was properly billed for the services. Although the evidence indicates Ms. Allison contributed $19,876 (51%) and Alberts contributed $19,092.32 (49%) as start up capital for TSI, Ms. Allison's contribution was obtained as a loan from Alberts for which promissory notes were signed. These notes were intended to be repaid from profits of the corporation, although the promissory notes are not so conditioned. Alberts' salary is set at $60,000 per year and Ms. Allison's salary at $40,000. Prior to leaving Greiner Alberts' salary was $80,000 and Ms. Allison's salary was $28,000. The bylaws of TSI (Ex. 5) provide that the president of the corporation shall be the principal executive officer of the corporation and, subject to the control of the board of directors, shall in general supervise and control as manager of technology all of the business and affairs of the corporation. Both Alberts and Allison testified that it was their intent that Alberts supervise the technical aspects of the corporation and Allison would supervise the business aspects of the corporation, and, if necessary, the bylaws of the corporation would be redrawn to express that intent. Both incorporators, Allison and Alberts, testified that Allison made final decisions for the corporation and as 51% owner controlled the vote of the board of directors comprised of Allison and Alberts. As such she had the authority to hire and fire employees, including Alberts. Without Alberts' expertise the corporation could not have successfully commenced operations. He is the incorporator with the knowledge and experience to bid on projects and carry out environmental consulting contracts once obtained. He is also the person who provided all necessary working capital for TSI to commence operations. Finally, he holds the necessary licenses and is qualifying officer for the company's projects. Evidence was submitted that Allison signs checks and contracts on behalf of TSI, that she hires and fires employees, and that she has the final say in all corporate decisions. This evidence is not credible with respect to her having final say in all corporate decisions. If Allison attempted to fire Alberts he could move out with the remaining capital he provided and forthwith start another company similar to TSI; and, if he did so, TSI would undoubtedly fail.
Recommendation It is, RECOMMENDED: That the application of Transportation Solutions, Inc. for certification as a Disadvantaged Business Enterprise be disapproved. DONE and ENTERED this 9th day of September, 1991, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of September, 1991. APPENDIX Proposed findings submitted by Petitioner are generally accepted as testimony of the witnesses but, insofar as this testimony is that Ms. Allison controls the operation of TSI, those findings are rejected. Petitioner filed no findings of fact separate from conclusions of law; accordingly, without assigning a number to each paragraph, a ruling on Petitioner's proposed findings cannot be made. Nevertheless, the ultimate paragraph, starting at the bottom of page 6 of the proposed Order, is rejected insofar as it concludes that Ms. Allison has the requisite control to qualify TSI as a minority business enterprise. Proposed findings submitted by Respondent are accepted and are generally included in the Hearing Officer's findings of fact. COPIES FURNISHED: Mark M. Schabacker, Esquire P.O. Box 3391 Tampa, FL 33601-3391 Harry R. Bishop, Esquire 605 Suwanee Street Tallahassee, FL 32399-0458 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwanee Street Tallahassee, FL 32399-0458 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building Tallahassee, FL 32399-0458
