The Issue The issue is whether the application of Thomas J. White Development Company for the establishment of a uniform community development district under Chapter 190, Florida Statutes, and Rule Chapter 42-1, Florida Administrative Code, should be granted.
Findings Of Fact The facilities and services that will be provided by the St. Lucie West Services District are the financing, constriction, ownership, operation, and maintenance of the surface water management and control system for the area, and necessary bridges and culverts. The land encompassed by the proposed development district is a development of regional impact. The final revised development order for the area was issued on February 27, 1989, by the City of Port St. Lucie. Exhibit 4. The land within the proposed district is composed of approximately 4,600 contiguous acres located in the city. The proposed district is bounded on the north and south by the city. The western and eastern boundaries are Interstate 95 and the Florida Turnpike, respectively. A map showing the location of the area to be serviced by the proposed district is found in Exhibit 2; a metes and bounds legal description of the proposed district is attached to the petition as Exhibit 1. The overall development to be serviced by the district will include a variety of single family and multifamily housing units, as well as commercial, industrial, and educational uses. A portion of the future land use map for the City of Port St. Lucie was received in evidence as Exhibit 3, and shows approved land uses for the St. Lucie West area. In the proceedings leading to the issuance of the development order, the city determined that the St. Lucie West development would be consistent with all applicable state, regional, and local comprehensive plans and policies. The proposed development of the district is consistent with the City of Port St. Lucie Comprehensive Plan: 1985, as amended. Exhibit 12. Ernest R. Dike, Jr. is the director of development of Thomas J. White Development Company. He is an expert engineer experienced in the planning, construction and management of large scale communities. Mr. Dike has substantial experience as a civil engineer, and holds an advanced academic degree in planning. He served as director of public works and as city engineer for the City of Port St. Lucie for the three years preceding his employment by White. As White's director of development over the last three and a half years, Mr. Dike assisted in the preparation of the petition; he also identified and explained the exhibits which were admitted into evidence. He assisted in crafting the development order for St. Lucie West which was adopted by the City of Port St. Lucie in February, 1987 and amended on February 27, 1989. Dike has been personally involved with the sales of land from White to other developers of property within the proposed district. All the owners of the real property to be included in the district have given their written consent to the establishment of the proposed district. Since the Thomas J. White Development Company purchased the approximately 4,600 acres which became St. Lucie West, Dike has directed the permitting and approval for all aspects of the project. In the design, White Development Company has accommodated the desires of St. Lucie County to obtain a spring training facility for a professional baseball team. White Development Company agreed to give the county 100 acres of land to build a training facility for the New York Mets. A predevelopment order for the stadium was obtained, which permitted the development of certain roads, a bridge over the Florida Turnpike, and an interchange with Interstate 95 which will all provide access to St. Lucie West These transportation facilities were completed without the use of any state or federal funds. None of these expenses will be born by the proposed district. The establishment of the district would not be inconsistent with any of the elements or provisions of the state comprehensive plan, the regional plan, or the local comprehensive plan. Creation of the district would be the best alternative available for providing water management and control facilities for the land encompassed by the proposed district. The South Florida Water Management District (SFWMD) and the City of Port St. Lucie have concluded that when fully developed, the land would discharge no additional water into the city's stormwater system as compared to the contribution of stormwater by the land made before it was developed by White. Mr. Dike also testified about the debt service required to amortize the debt on any benefit bonds issued by the proposed district, and the cost of operation and maintenance of the surface water control facilities to be constructed by the proposed district. Mr. Dike prepared a spread sheet entitled "Projected Statement of Cash Flow for the Years 1990-2000". (Exhibit 18). The estimated construction costs for water management facilities in the projection are reasonable. Based on White's plans for the district, and utilizing the assumptions for absorption of the residential and commercial space to be constructed, the benefit and maintenance taxes are projected to begin at $114 per taxable unit per year. These benefit and maintenance taxes will rise to no more than $170 per taxable unit per year in 1996. These projections are consistent with the testimony of Mr. Dike and of Dr. Henry Fishkind, an economist. All assumptions made in projecting future benefit taxes are reasonable. While these projections do not bind the district, which is not yet formed, and the district's electors could ultimately decide to assume additional responsibilities, the evidence shows that the benefit and maintenance taxes projected are adequate to pay the debt to be incurred by the proposed construction of surface water management facilities. Lester L. Solin, Jr., testified as an expert in land use planning. He was a planning consultant with the City of Port St. Lucie when the development of St. Lucie West by White Development Company was first under consideration, and worked with the city to formulate the overall development plan. St. Lucie West has been integrated into the future land use map for the City of Port St. Lucie Comprehensive Plan: 1985. Mr. Solin is also familiar with the state comprehensive plan. He has reviewed the application for development approval for the St. Lucie West development of regional impact. The proposed district would be consistent with the state comprehensive plan, Chapter 187 Florida Statutes. Mr. Solin is also familiar with the City of Port St. Lucie Comprehensive Plan: 1985 (Exhibit 12). The creation of the St. Lucie West Services District would not be inconsistent with any of the goals, objectives or policies in that plan. Peter L. Pimentel is the current executive director of the Northern Palm Beach County Water Control District (NPBWD). Mr. Pimentel testified as an expert in special district management, planning, staffing, reporting, and coordination with local governments. As the director of the Northern Palm Beach County Water Control District, he oversees a staff which works with other regulatory agencies on permitting, implementation, planning, construction and operation of water management systems. He coordinates construction with contractors, and engineers, and works with lawyers in carrying out the policies established by the district board of directors. The land encompassed by the NPBWD is approximately 200,000 acres. Mr. Pimentel has substantial experience, having worked as the executive director for two large independent special taxing districts, which are similar in structure and have similar powers as the community development district which White Development Company wishes to establish. Mr. Pimentel's testimony was especially persuasive due to his experience with water control entities. The proposed district is the best alternative available for financing, constructing, owning, operating and maintaining the surface water management and control facility for the area encompassed by the proposed district. It provides a more efficient use of resources, and provides the opportunity for new growth in the district to pay for its own surface water management, rather than imposing that cost on general government. The proposed district would not be incompatible with the capacity or uses of existing local and regional community services and facilities. The area to be served by the proposed district is amenable to separate special- district government. Henry H. Fishkind, Ph.D. testified as an expert economist about the economic consequences of establishing a community development district under Chapter 190, Florida Statutes, the economic consequences of financing the surface water management and control system through the use of tax exempt bonds, and the cost of operating and maintaining those structures by a community development district. Dr. Fishkind prepared the economic impact statement for the proposed district required by Section 120.54, Florida Statutes. The costs to the Florida Land and Water Adjudicatory Commission, and to state and local agencies in reviewing the petition are minimal. The costs to the City of Port St. Lucie and to St. Lucie County have been covered by the $15,000 filing fee which White paid to each of those governments. The cost to the City of Port St. Lucie once the district is operating would be negligible. The potential debt of the proposed district will not become general obligations or debts of the city or county governments. The cost of the surface water improvements will be paid by those who benefit from them. The economic impact statement is adequate, and meets the requirements of Section 124.54(2)(b), Florida Statutes. During the first six years, the proposed district would be controlled by Thomas J. White Development Company since White still would be the largest landowner. Tax exempt benefit bonds would be issued to construct the surface water management facilities. Both White and residents of the proposed district would share the burden of amortizing these bonds through benefit taxes. According to Dr. Fishkind, whose opinion is credited, from an economic perspective: The creation of the St. Lucie West District is not inconsistent with the state and local comprehensive plan; The land to be served by the proposed district is of sufficient size, is sufficiently compact and is sufficiently contiguous to be developed as a functional interrelated community; The proposed district is the best alternative for providing surface water management for the community, since other alternatives such as municiple service taking units or homeowners' associations are more expensive or more cumbersome; The area to be served by the proposed district is amenable to separate special-district government. All factors which are required to be considered in establishing a community development district under Section 190.005(1)(e), Florida Statutes, were analyzed by the witnesses presented by the Thomas White Development Company. Their testimony was persuasive, and the application meets all requirements of Chapter 190.
Conclusions Based on the record made, it is concluded: That all statements contained in the petition are true and correct; The creation of the proposed district is not inconsistent with any applicable element of the state comprehensive plan, or the City of Port St. Lucie Comprehensive Plan; The area in the proposed district is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developed as one functional, interrelated community; The district is the best alternative for delivering water management services to the area to be serviced by the district, and would be superior to the creation of a municipal service taxing unit, a homeowner's association, or to providing water management by the general county government of St. Lucie County; The community development services provided by the proposed district will not be incompatible with the capacity or uses of existing local and regional community development services and facilities; The area to be served by the proposed district is amenable to separate special district government. Accordingly it is recommended that the Florida Land and Water Adjudicatory Commission grant the petition of the Thomas J. White Development Company and adopt a rule pursuant to Section 190.005(f), Florida Statutes (1987), establishing the St. Lucie West Services District. DONE AND ENTERED this 5th day of September, 1989, in Tallahassee, Leon County, Florida. William R. Dorsey, 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 5th day of September, 1989 APPENDIX A Case No. 89-0072 Witnesses Earnest R. Dike, Jr., 590 NW Peacock Loop, Port St. Lucie, Florida. Lester L. Solin, Solin and Associates, 901 Douglas Avenue, Suite 207, Altamonte Springs, Florida. Peter Pimentel, 5725 Corporate Way, Suite 203, West Palm Beach Florida. Dr. Henry H. Fishkind, 201 North New York Avenue, Suite 300 Winter Park, Florida. APPENDIX B Case No. 89-0072 List of Documentary Evidence Exhibit 1. Petition for Rulemaking filed by Thomas J. White Development Company, Inc., including seven exhibits. Exhibit 2. Location Map for the proposed St. Lucie West Services District. Exhibit 3. Future Land Use Map for the area Exhibit 4. Resolution 89-R7 of the city council of Port St. Lucie, Florida, which is the development order for the St. Lucie West Development of Regional Impact. Exhibit 5. Transmittal letter for the Petition for the establishment of the Services District to the City of Port St. Lucie and filing fee, and transmittal letter for the St. Lucie West Development District to the St. Lucie County Board of County Commissioners, and filing fee. Exhibit 6. Transmittal letter for the Petition for the establishment of St. Lucie West Services District to the Florida Land and Water Adjudicatory Commission. Exhibit 7. Letter from the staff of the Florida Land and Water Adjudicatory Commission determining that the Petition appears to satisfy the requirements of Section 190.005, Florida Statutes, and Rule 42-1.009 Florida Administrative Code. Exhibit 8. Resolution 89-R6 from the City of Port St. Lucie, Florida supporting the petition of the Thomas J. White Development Company, Inc. for the establishment of the St. Lucie West Services District. Exhibit 9. Resolution 89-41 of the Board of County Commissioners of St. Lucie County supporting the petition of Thomas J. White Development Company, Inc. for the establishment of the St. Lucie West Services District. Exhibit 10. Proof of publication in the local newspapers and in the Florida Administrative Weekly of the Notice of the Hearing on the petition for the establishment of the community development district and notices to other interested persons. Exhibit 11. Copy of the State Comprehensive Plan Chapter 187, Florida Statutes (1987) Exhibit 12. Copy of the Comprehensive Plan: 1985 of the City of Port St. Lucie, Ordinance 85-102. Exhibit 13. Resume of Ernest R. Dike, Jr., P.E. APPENDIX B CONT. Case No. 89-0072 Exhibit 14. Permit granted to Thomas J. White Development Company, Inc. by the South Florida Water Management District for the construction and operation of a water management system. Exhibit 15. The prepared testimony Lester L. Solin, Jr. Exhibit 16. The resume of Peter L. Pimentel. Exhibit 17. The prepared testimony of Henry H. Fishkind, Ph.D. Exhibit 18. The additional prepared testimony of Mr. Dike including the computer generated spread sheet. COPIES FURNISHED: E. Lee Worsham, Esquire HONIGAMAN MILLER SCHWARTZ and COHN 1655 Palm Beach Lakes Boulevard Suite 600 West Palm Beach, Florida 33401 James C. Vaughn Florida Land and Water Adjudicatory Commission Office of the Governor The Capitol Tallahassee, Florida 32399-0001 William Buezett The Governor, Legal and Legislative Office The Capitol, Room 209 Tallahassee, Florida 32399-0001 Carla Stanford, Esquire Department of Community Affairs 2740 Centerville Drive Tallahassee, Florida 32399-2100 David McIntyre, Esquire County Attorney 2300 Virginia Avenue Fort Pierce, Florida 34982 Roger Orr, Esquire City Attorney 220 South Second Street Fort Pierce, Florida 33450 Patty Woodworth, Director Land and Water Adjudicatory Commission Planning & Budgeting Executive Office of the Governor The Capitol, PL-05 Tallahassee, Florida 32399-0001
The Issue Whether the proposed amendment to Rule 40E-7.653, Florida Administrative Code, is an invalid exercise of delegated legislative authority.
Findings Of Fact In July 1996, the Governing Board of the Respondent, South Florida Water Management District (District), adopted Chapter 40E-7, Part VI, Florida Administrative Code, which is called the Supplier Diversity & Outreach M/WBE Contracting Rule. Rule 40E-7.611(1), Florida Administrative Code sets forth the purpose of the rule as follows: The rules under this Part establish policies and procedures designed to remedy documented disparities in District contracting and the present effects of past marketplace discrimination. The rules under this Part implement specific recommendations of the District's Minority Business Availability and Utilization Study ('Study') as developed by MGT of America, Inc., dated August, 1995 and made a part of the District's Supplier Diversity & Outreach Program ('Program'). The rules under this Part shall apply to all competitive solicitations for commodities, construction, professional, and other contractual services, including change orders and amendments. The Supplier Diversity & Outreach M/WBE Contracting Rule became effective September 25, 1996. Prior to the effective date of the rule, the District had a minority and women business enterprise (M/WBE) program, but had no rules governing the program. Under the pre-rule policy governing the M/WBE program, the standards for determining eligibility for certification were less stringent than those adopted by rule in 1996. Beginning in October 1995, the District issued certification eligibility determinations for three-year periods. Prior to that time certifications were for a period of one year. The District maintains a database of firms which have been certified as M/WBE's and uses that database to generate lists of eligible firms for specific solicitations. The list for any particular solicitation is project-specific based on the opportunities for M/WBE participation afforded by the project. For example, if a contract calls for plumbing, but not electrical services, the list of eligible M/WBE firms would be limited to plumbing contractors. At the time that the Supplier Diversity & Outreach M/WBE Contracting Rule was adopted in July 1996, the District did not address in the rule how pre-rule certified M/WBE firms would be affected by the certification eligibility requirements in Rule 40E-7.653, Florida Administrative Code. Based on the District's database, there were approximately 370 to 380 firms which had been certified as M/WBE's prior to September 25, 1996, the effective date of Chapter 40E-7, Part VI, Florida Administrative Code. Some of the pre-rule certified firms are presently providing services to the District under existing contracts. On December 19, 1997, the District gave notice by publication in the Florida Administrative Weekly of proposed amendments to Rule 40E-7.653, Florida Administrative Code. A Notice of Change was published in the Florida Administrative Weekly on February 28, 1998. The proposed amendment to Rule 40E- 7.653, Florida Administrative Code, which is at issue states: For purposes of this rule, a firm shall be considered a District certified M/WBE only if the firm has applied for and been granted certification by the District after September 25, 1996. Firms certified prior to September 25, 1996, shall be counted toward the M/WBE goal attainment only if: the firm is either a prime contractor or subcontractor for a particular District contract executed prior to the effective date of this rule; or the firm is listed on the M/WBE vendor list for particular District solicitation issued prior to the effective date of this rule. In either case, the firm shall only be counted toward M/WBE goal attainment for that particular contract or solicitation. As part of the proposed rulemaking process, the District sent notice to all potentially affected firms recommending that the firms voluntarily apply for recertification prior to the effective date of the proposed rule. Carolyn Williams, the Director of the Office of Supplier Diversity and Outreach at the District, described the notification process as follows: We, when we initially entered into rule adoption, we sent a notice to all those interested and impacted firms and advised them that the District was undertaking this process and asked them to voluntarily submit their application for recertification, because at some point if the proposed rule was adopted, there would be an effective date and those firms then who had not come in to reapply for certification and did not fall within the exceptions under this proposed rule would no longer be considered certified by the District. The firms who fell within the two exceptions in the final rule language would be protected, and those firms who came back in to be recertified before the effective date of this rule would be protected, but anyone who did not would fall off the list. The rule initially had a May 1 effective date. We put a time, a series of dates in place to try to ensure that we notified all persons appropriately so they could get their certifications in, the application in. We had a March 30 deadline for all firms interested in recertifying prior to the effective date of the proposed rule, which was May 1. So again, if you didn't fall within the exceptions, the two exceptions, and you were certified prior to the rule, the original date of the rule, if you did not reapply by that May 1 date or we had not made a decision with regard to your status by that time, you would no longer be considered by the District. Gulf Construction, Inc. (Gulf), was sent notice but did not submit an application for recertification. During the final hearing, counsel for the District acknowledged that Gulf was a pre-rule certified M/WBE. (Transcript at 66 and 67).
Conclusions Having considered the entire record in this cause, it is concluded That all statements contained within the petition have been found to be true and correct. That the creation of the district is consistent with applicable elements or portions of the state comprehensive plan and the St. Lucie County Growth Management Plan, as amended. That the area of land within the proposed district is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community. That the district is the best alternative available for delivering community development services and facilities to the area that will be served by the district. That the community development services and facilities of the district will be compatible with the capacity and uses of existing local and regional community development services and facilities. That the area that will be served by the district is amenable to separate special-district government. DONE and ENTERED this 14th day of January, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 14th day of January, 1988. Appendix A (Names and Addresses of Witnesses) Joseph P. Strazzula, Post Office Box 3152, Fort Pierce, Florida 34948 Bruce Scott Benewitz, c/o Gee & Jenson, Post Office Drawer 4600, West Palm Beach, Florida 33402 Fred A. Greene, c/o Gee & Jenson, Post Office Drawer 4600, West Palm Beach, Florida 33402 Dr. Henry H. Fishkind, 201 North New York Avenue, Suite 300, Winter Park, Florida 32789 Exhibit 1 Appendix B (List of Documentary Evidence) St. Lucie County Context Nap Metes and Bounds Legal Description of District Warranty Deed of October 29, 1985 Conceptual Phasing Plan of District Conceptual Water and Wastewater Master Plan of District Estimated Infrastructure Construction Schedule and Cost 8A St. Lucie County Growth Management Policy Plan 8B St. Lucie County Ordinance No. 86-92 Economic Impact Statement Authorization of agent Exhibit 2 Letter of September 29, 1987 from Secretary Robertson to Sharyn Smith Exhibit 3A Copy of Notice published in Florida Administrative Weekly Exhibit 3B Notice of publication in The News Tribune Exhibit 3C1 Service of Notice of Hearing on Edgar A. Brown Exhibit 3C2 Service of Notice of Hearing on Joseph P. Strazzula Exhibit 3C3 Service of Notice of Hearing on Douglas S. Putnam Exhibit 3C4 Service of Notice of Hearing on Charles Stone, Jr. Exhibit 3C5 Service of Notice of Hearing on Dr. Kenneth Fulton Exhibit 3D1 Service of Notice of Hearing on St. Lucie County Attorney Exhibit 3D2 Service of Notice of Hearing on St. Lucie County Commission Chairman Exhibit 3E Service of Notice of Hearing on Secretary, Department of Community Affairs Exhibit 4A Notice of St. Lucie County meeting Exhibit 4B Copy of St. Lucie County Resolution No. 87-241 Exhibit 5 Copy of St. Lucie County Ordinance 86-92 Exhibit 6 County Context Map (enlargement) Exhibit 7 Existing and Abutting Land Use Map (enlargement) Exhibit 8 Conceptual Phasing Plan of District (enlargement) Exhibit 9 Corrected Table 3 of Economic Impact Statement Exhibit 10 Table 3 of Economic Impact Statement Exhibit 11 Table 1 of Economic Impact Statement COPIES FURNISHED: Richard S. Brightman, Esquire Post Office Box 6526 Tallahassee, Florida 32314 Glenn W. Robertson, Secretary Florida Land and Water Adjudicatory Commission The Capitol Tallahassee, Florida 32399-0001
Other Judicial Opinions A party who is adversely affected by this Summary Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a Notice of Appeal with the Agency Clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The Notice of Appeal must be filed within the 30 days of rendition of the order to be reviewed.
The Issue Whether Petitioner is eligible for certification as a Minority/Woman Business Enterprise pursuant to Chapter 40E-7, Part VI, Florida Administrative Code.
Findings Of Fact Petitioner, Mathews Consulting, Inc. (MCI), is a Florida corporation, incorporated on January 28, 1998, by Rene L. Mathews, a female, and David L. Mathews, a white male. Rene and David Mathews are and were married at the time MCI was incorporated. Ms. Mathews owns 55 percent of the stock of MCI, and Mr. Mathews owns the remaining 45 percent of the stock. Ms. Mathews is the President and Treasurer of MCI, and Mr. Mathews is the Vice President and Secretary. Ms. Mathews has a bachelor of science degree in civil engineering and has been a professional engineer licensed with the State of Florida since 1995. Her primary engineering practice areas are water and waste water treatment, industrial pretreatment, civil engineering, regulatory compliance, odor control/air quality assurance, and construction management. Prior to becoming employed full time with MCI, Ms. Mathews was employed for 8 years as a civil engineer with Hazen and Sawyer. Mr. Mathews is a professional engineer employed full time by Hazen and Sawyer. He specializes mainly in underground pipeline work and landfills. MCI has a board of directors consisting of two people: Rene and David Mathews. The ByLaws of MCI provide at Article Three, Section 3: Except as provided in the Articles of Incorporation and by law, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, its Board of Directors. MCI is in the business of providing engineering consulting services in the areas of water and waste water treatment, industrial pretreatment, civil engineering, regulatory compliance, odor control/air quality assurance, and construction management. MCI obtained a $30,000 loan and a $20,000 line of credit from Barnett Bank (collectively referred to hereafter as the Loan) to be used as start-up capital for MCI. The Loan was evidenced by a promissory note and guaranteed by a security agreement. The bank required both Rene Mathews and David Mathews to individually guarantee the Loan jointly and severally because they were the owners and officers of the corporation. David Mathews is an authorized signatory on MCI's bank account. Mr. Mathews is not authorized on the company credit card or ATM card and has not signed any checks for the company. MCI submitted an application dated June 4, 1998, to Respondent, South Florida Water Management District (District), for certification as a Minority/Woman Business Enterprise (M/WBE). By letter dated June 10, 1998, the District denied MCI's application, stating the following reasons: Documents do not support real and substantial ownership by the minority or woman applicant(s). Rule 40E-7.653(2) Documents do not support that the day-to- day operations are controlled by the minority/woman, nor is there evidence that the minority possess (sic) the authority to direct the management and policy of the business. Rule 40E-7.653.4(4)(a) The composition of the Board of Directors, regardless of percentage of ownership, is not made-up of a majority of minority/woman directors. If the applicant business is a corporation and the business and affairs of the corporation are managed under the direction of a board of directors as provided in the Articles of Incorporation or ByLaws of the corporation or Section 607.0824, Florida Statute, a majority of the directors must be minority/woman, not withstanding whether the directors are required to be elected by a majority vote of the outstanding shares of the corporation. Rule 40E-7.653.4(4)(b) The June 10, 1998, letter provided that if an applicant believes that it has been wrongly denied certification that the applicant may request an administrative hearing or do the following: Submit any information or documentation which clarifies the documentation submitted with the original application and/or request the opportunity to meet with the Office of Supplier Diversity & Outreach within fifteen (15) calendar days of receipt of this notice. The District will only consider information that clarifies the documentation in your original application. Changes occurring after the submission of your original application (i.e., any changes in corporate structure) will not be accepted as clarifying documentation. This office, after its review of any clarifying information will notify the applicant business by certified mail of its final decision to either uphold or overturn its decision to deny the application for certification. If the denial decision is upheld, you may petition for an administrative hearing in accordance with Rule 40E-1.521, Florida Administrative Code. The Petition must be received by the District's Office of Counsel within fifteen days of actual receipt of notice of decision to uphold the denial of certification. On June 15, 1998, after the District had denied MCI's application, Rene Mathews had a telephone conversation with Candice Boyer, a business operations analyst with the District. Ms. Boyer explained to Ms. Mathews the decision for denial was based on the composition of the board and David Mathews' guarantee of the Loan from Barnett Bank. After the telephone conversation with Ms. Boyer, Rene Mathews contacted her lawyer, who is also her sister. Her attorney drew up a Shareholders Agreement which reflected an effective date of January 28, 1998, and a Guarantee and Indemnification Agreement which reflected an effective date of March 6, 1998. The two documents were not in existence either at the time MCI submitted its application to the District or at the time the District initially denied MCI's application for certification. The minutes of the meeting to incorporate MCI on January 28, 1998, neither reflect nor reference the Shareholders Agreement or the Guarantee and Indemnification Agreement. The Shareholders Agreement stated: Rene and David desire to set forth in a written agreement the understanding and agreement they made at the time of incorporation of the Corporation as to the authority of Rene to exercise all corporate powers and direct the management of the business and affairs of the Corporations.... The agreement further provided: Rene, as one of the Directors of the Corporation, shall have the sole authority to exercise all corporate powers and direct the management of the business, policy and affairs of the Corporation. This authority includes, without limitation, the control of the day-to-day operations of the Corporation. Any authority given to David as one of the Directors of the Corporation to exercise corporate powers and direct the management of the business and affairs of the Corporation, including without limitation, his voting power as a Director of the Corporation, has been transferred to Rene. It is the intention of Rene and David that the Corporation be for all intents and purposes a Minority/Woman Business Enterprise, notwithstanding any authority, rights, or powers that may be given to David by virtue of the provisions of the ByLaws of the Corporation or the provisions of the Florida Business Organization Act F.S. Chapter 607. It is understood and agreed that because this Agreement limits the discretion and powers of David as a Director, David is relieved of all liability for acts or omissions imposed by law on directors and all such liability is imposed on Rene. This Agreement shall not restrict the ability of David to sign documents on behalf of the Corporation under the authority and direction of Rene, as she may so determine from time to time. . . . The Guaranty and Indemnification Agreement stated that the agreement was "entered into as of this 6th day of March, 1998, by and between" Rene and David Mathews. The agreement dealt with their liability for the Loan from Barnett Bank and provided: Rene and David agree that Rene shall be solely liable under the Guaranties for repayment for the Loan in the event of a default. To the extent that any action is taken by Barnett Bank against David under the Guaranties, Rene shall indemnify David in any threatened, pending, or completed action, suit, or proceeding against any expenses (including attorney's fees), judgments and amounts paid in settlement, actually or reasonably incurred by him in connection with such action, suit, or proceeding, including any appeal thereof. . . . On June 19, 1998, Ms. Mathews submitted the Shareholder's Agreement and the Guaranty and Indemnification Agreement to the District. On July 31, 1998, Ms. Mathews and MCI's counsel met with representatives from the District to discuss the initial denial of MCI's application. By letter dated August 4, 1998, the District advised MCI that the information submitted after the application did not support a reversal of the District's decision to deny the application. Although the District reviewed the additional information, the District deemed the Shareholders Agreement and the Guaranty and Indemnification Agreement to be new documentation rather than clarifying information originally submitted in the application. The changes which the documents reflect occurred after the application was submitted and the notice of intent to deny certification was issued. Carolyn Williams, the Director of the Office of Supplier Diversity and Outreach at the District, explained the rationale for not allowing changes after a denial has been issued and why firms which have been denied remain ineligible to reapply for certification for one year after denial pursuant to Rule 40E-7.655, Florida Administrative Code. According to Ms. Williams, to allow MCI to change its application and essentially restructure the firm would be inconsistent with the District's past practices and would violate the integrity of the program.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Mathews Consulting, Inc.'s application for certification as a M/WBE. DONE AND ENTERED this 25th day of February, 1999, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 25th day of February, 1999.
