Findings Of Fact Selwin Coleman is the record holder of land located near Maytown Road three miles west of Oak Hill, Florida, at latitude 28o51'25" North, longitude 80o54'26" West in Sections F and G, Township 19 South, Range 34 East in Volusia County (the proposed site). He has authorized his son-in-law, Ron Biritz, to seek DOT site approval and a license for a private airport as the proposed site. Petitioners and intervenors own land in the general vicinity, and Robert L. Hart owns extensive mineral rights, including rights to any minerals underlying the proposed site. Other land owners, including Warren J. Brull, who owns part of the land over which the existing air strip runs, C.R. "Dick" Powell, and Vaughn L. Grasso, who owns a crop duster he stores in a building he characterizes as agricultural, also made Mr. Biritz their agent for purposes of the pending application. Known as "Blue Ridge Flightpark," a 4,000-foot grass air strip at the proposed site had been used by light planes for some time, until recently. The air strip has been significantly improved within the last two years; at one time watermelons were grown on the property. Originally, scrub hickory and gopher tortoise holes made its use as an air field impractical. When John Bronson Monteith, the aviation specialist for DOT's District Five, learned the grass strip at the proposed site was "operational," he contacted the owners and instructed them to close down operations until site approval was granted; and told them how to apply for site approval. As one result, they caused a large "X" to be placed on the strip, indicating the field was closed to operation. When Mr. Monteith visited the proposed site on November 21, 1991, he saw rust on a brake disc on Mr. Biritz's airplane, suggesting disuse. After DOT received the application, Mr. Monteith determined that it was complete and seemed to meet all rule and statutory criteria, so he prepared a notice to grant the application for Nancy Houston's signature. He caused copies of the notice of intent to be sent by certified mail to all airports and municipalities within 15 miles and to all landowners within 1,000 feet of the proposed site. The notice of intent was published in the News Journal, and a public hearing was held on July 18, 1991. There is some question regarding the true nature of several largish buildings along the air strip. Treated as "agricultural" for purposes of construction without building permits, the buildings look to some more like hangars than barns. But, as to the air strip itself, Volusia County zoning officials have recognized a nonconforming use antedating adoption of County zoning ordinances, a use which the ordinances allow to continue, as long as it does not entail construction of any new structures. Respondent's Exhibit Nos. 4 and 7. As experience has demonstrated, the proposed site is "feasible" and "adequate." Despite military air traffic in the general vicinity, the Federal Aviation Authority concluded that, if limited to private use, the "airport will not adversely affect the safe and efficient use of airspace by aircraft." Respondent's Exhibit No. 3. Only a windsock and markings, including threshold markings, are needed to meet licensing requirements.
Recommendation It is, accordingly, RECOMMENDED: That DOT grant site approval on the conditions stated in Order No. 91-34; and, after the requirements of Section 330.30(2), Florida Statutes (1991) have been satisfied, issue a private airport license to Ron Biritz. DONE and ENTERED this 28 day of May, 1992, in Tallahassee, Florida. own. ROBERT T. BENTON, II 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 28 day of May, 1992. APPENDIX Both intervenors adopted petitioner's proposed findings of fact as their Petitioner's proposed findings of fact Nos. 1, 2 and 4 have been adopted in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 3, the legal status was not clear. With respect to petitioner's proposed finding of fact No. 5, a preponderance of the evidence established that flights had stopped recently. Respondent's proposed findings of fact Nos. 1 through 6 have been adopted, in substance, insofar as material. Respondent's proposed finding of fact No. 7 is properly a conclusion of law. COPIES FURNISHED: Ben G. Watts, Secretary Department of Transportation 605 Suwanee Street Tallahassee, FL 32399-0458 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building Tallahassee, FL 32399-0458 Dan R. Warren, Esquire 315 Silver Beach Avenue Daytona Beach, FL 32118 Bruce Best Post Office Box 2793 New Smyrna Beach, FL 32170 Cheryl M. Sanders Post Office Box 2793 New Smyrna Beach, FL 32170 James S. Morris, Esquire Storch, Hansen & Morris, P.A. 1620 South Clyde Morris Blvd., #300 Daytona Beach, FL 32219 Vernon L. Whittier, Esquire 605 Suwanee Street Tallahassee, FL 32399-0458
The Issue The issues are: whether proposed amendments to Florida Administrative Code1 Rules 9K-9.003(6) and 9K-9.006(2) are invalid exercises of delegated legislative authority under Section 120.52(8)(b), (c), and (e), Florida Statutes2; and, if so, whether costs and attorney's fees should be assessed against Respondent and paid to Petitioner under Section 120.595(2), Florida Statutes.
Findings Of Fact The FCT has the power "to undertake, coordinate, or fund activities and projects which will . . . serve to conserve natural resources and resolve land use conflicts, including . . . [w]orking waterfronts." § 380.507(2)(g), Fla. Stat. The FCT also is specifically authorized to "award grants and make loans to local governments and nonprofit organizations for" that purpose. Id. at ¶ (6). In 2008, the Florida Legislature enacted the Stan Mayfield Working Waterfront grant program. Codified as Section 380.5105, Florida Statutes, paragraph (2) of the statute authorizes the FCT to promulgate "rules specifically establishing an application process and a process for the evaluation, scoring and ranking of working waterfront acquisition projects. . . . Such rules shall establish a system of weighted criteria to give increased priority to projects: Within a municipality with a population less than 30,000; Within a municipality or area under intense growth and development pressures, as evidenced by a number of factors, including a determination that the municipality's growth rate exceeds the average growth rate for the state; Within the boundary of a community redevelopment agency established pursuant to s. 163.356; Adjacent to state-owned submerged lands designated as an aquatic preserve identified in s. 258.39; or That provide a demonstrable benefit to the local economy." The purpose of the grant program is to preserve working waterfronts, which have been under pressure to convert to other uses. Some driving forces behind the conversion of working waterfront to other uses include: high coastal property values; high and unpredictable property taxes; increased regulation of commercial fishing to protect reduced fishery stocks; confusing and time-consuming regulatory processes for expanding or creating new working waterfronts; increased cheaper imported seafood; and rising fuel costs. The Stan Mayfield Working Waterfront grant program is administered by the FCT. In 2008, the FCT adopted rules governing the program, including Rule Chapter 9K-9 on Grant Application Procedures. In the first cycle of grant applications, evaluations, and awards, Monroe County applied for a grant to purchase and preserve Intervenor's property on Stock Island in Key West. Monroe County's Stock Island application was not granted. The FCT announced its intention to amend the rules based on the experience of the first grant cycle under the existing rules and input from "stakeholders" (mostly local governments and private not-for-profit entities interested in applying for grants) throughout the State. Workshops were conducted, and stakeholders (including Monroe County) participated. Proposed amendments were drafted, and stakeholders were invited to comment on the draft proposed amendments. The draft proposed amendments and comments were considered by the governing board of the FCT at its meeting in May 2009. The Board made some revisions to the draft proposed amendments and initiated rulemaking. Petitioner and Intervenor challenge proposed amendments to Rules 9K-9.003(6) and 9K-9.006(2). The proposed amendment to Rule 9K-9.003(6) caps awards at five million dollars or the amount appropriated by the Legislature, if less than five million dollars (sometimes referred to as "the cap"). The proposed amendment to Rule 9K-9.006(2) adds paragraph (d) and awards evaluation points based on the amount of grant money requested in an application, as follows: 8 points for a request not exceeding $1.5 million; 4 points for a request not exceeding $2.5 million; and 2 points for a request not exceeding $3.5 million.3 This proposed rule amendment is sometimes referred to as "the sliding scale." It is common for grant programs to adopt a "cap" on awards. The FCT's proposed "cap" took into account recent and expected future legislative appropriations, as well as the grant amounts requested in the first grant application cycle and expected in the immediate future, with the understanding that the "cap" could be adjusted by rule amendment in the future if that became necessary. The purpose of the proposed "cap" was to ensure that at least two applicants would receive grant money in each grant cycle. The proposed "sliding scale" was suggested by a representative of Dixie County at a noticed public FCT meeting. It was designed promote the use of non-State matching funds and to help local governments with less resources to compete in the grant application process. The proposed "sliding scale" was thoroughly discussed in-house by FCT staff and was discussed by the FCT governing board before it was approved unanimously. The challenged proposed rules cite Sections 380.507 and 380.5105(2), Florida Statutes, as their statutory authority. They cite Sections 259.105 and 380.501-380.515, Florida Statutes, as the specific laws they implement. Section 259.105, Florida Statutes, is the Florida Forever Act. Some of the funds in the Florida Forever Trust Fund are designated for distribution "to the Department of Community Affairs for the acquisition of land and capital project expenditures necessary to implement the Stan Mayfield Working Waterfronts Program within the Florida communities trust pursuant to s. 380.5105." § 259.105(3)(j), Fla. Stat. Sections 380.501-380.515, Florida Statutes, are the Florida Communities Trust Act, which includes the Stan Mayfield Working Waterfronts grant program. Petitioner and Intervenor contend that the proposed rule amendments are not authorized by statute and enlarge, modify, or contravene the law implemented because they add to the evaluation criteria in Section 380.5105(2), Florida Statutes. But it is clear that, besides the two proposed rule amendments under challenge in this case, the "system of weighted criteria" adopted in Rule Chapter 9K-9 includes several unchallenged criteria, in addition to the ones required by the statute to be given "increased priority." In addition, the evidence was that evaluation criteria in addition to those to be given "increased priority" are essential for the "system of weighted criteria" to function properly to differentiate and rank the most worthy grant applications. Without additional criteria, it is likely that many if not all grant applications would get the same score in the evaluation process. Petitioner and Intervenor also contend that the proposed "cap" and "sliding scale" result in "increased priority" not being given to the criteria specified in Section 380.5105(2), Florida Statutes. Actually, "increased priority" still is given to the criteria listed in Section 380.5105(2), Florida Statutes. Rule 9K-9.006(1)(c) gives "increased priority" (ten points) for the criterion listed in Section 380.5105(2)(a), Florida Statutes. Rule 9K-9.006(2)(b) gives "increased priority" (ten points) for the criterion listed in Section 380.5105(2)(b), Florida Statutes. Rule 9K-9.006(1)(a) gives "increased priority" (ten points) for the criterion listed in Section 380.5105(2)(c), Florida Statutes. Rule 9K-9.006(1)(b) gives "increased priority" (ten points) for the criterion listed in Section 380.5105(2)(d), Florida Statutes. Rule 9K-9.006(2)(a) gives "increased priority" (ten points) for the criterion listed in Section 380.5105(2)(e), Florida Statutes. Petitioner and Intervenor also contend that the challenged proposed amendments discriminate against grants to higher-priced properties. They contend that higher prices indicate higher pressure to convert, larger size, and greater benefit to the local economy from preservation. They contend that all of these indicators exist in the case of Intervenor's Stock Island property--indeed, the Stock Island property is under relatively high pressure to convert, is relatively large in size, and would stand to continue to greatly benefit the local economy if preserved. They contend that discriminating against higher- priced properties like Intervenor's Stock Island property is not authorized by statute, contravenes the statutes, and is arbitrary and capricious. Actually, the challenged proposed rules do not necessarily discriminate against higher-priced properties. An applicant can use non-State matching funds to bring a more costly proposal under the "cap" of the proposed amendment to Rule 9K- 9.003(6), and unchallenged existing Rule 9K-9.006(4)(a) provides that grant proposals with non-State matching funds score significant points--far more than would be lost under the "sliding scale" of paragraph (d) of the proposed amendment to Rule 9K-9.006(2). In addition, higher-priced projects are favored by other criteria in parts of the rule and proposed rule amendments that are not under challenge. For example, points are awarded for docking facilities, seafood houses, storage areas for traps, nets, and other gear, and boat ramps. These are more likely to be attributes of a larger, more expensive property. A proposed amendment to Rule 6K-9.006(3) significantly increased the amount of points available for docking facilities, especially existing usable docking facilities, which are more likely to exist on larger properties. A grant proposal with these kinds of amenities and attributes will "blow away in point-scoring" an application for a smaller grant for a proposal without these features. In support of their contentions, Petitioner and Intervenor hypothesize two grant proposals for projects (whether in the same locale or in different parts of the state) with identical attributes except for property cost. However, the evidence was that such a scenario is unlikely. If that unlikely scenario were to occur, it is possible that the higher-cost proposal would exceed the "cap" of the proposed amendment to Rule 9K-9.003(6), and the lower-cost proposal would score more points as a result of the proposed addition of paragraph (d) to Rule 9K- 9.006(2). However, the former scenario would create the desired incentive to secure enough non-State matching funds to get under the "cap"; and under the latter scenario, it would make sense to favor the grant proposal requesting less State money. Petitioner and Intervenor also contend that the proposed amendments fail to include a provision suggested by Monroe County to adopt a "sliding scale" for the "benefit to the local economy" and add other quantifiable criteria on a "sliding scale" (e.g., a "sliding scale" to give credit for the capacity of docking facilities and storage areas) that would give a greater competitive advantage to a large project like Monroe County's Stock Island proposal. The evidence was that these kinds of criteria would be difficult to devise and implement to achieve the desire result. For example, a large project might appear to benefit the local economy greatly but actually just consolidate several different areas of economic activity into one location. As a result, it was logical for the FCT not to adopt rules attempting to quantify and score these criteria on a "sliding scale." The challenged proposed amendments are supported by logic and the necessary facts, and were adopted with thought and reason and are rational. The contention that the FCT thoughtlessly adopted a suggestion by a representative of Dixie County and ignored suggestions by Monroe County is rejected.
The Issue Whether Florida Power & Light Company (hereinafter referred to as "FPL") properly refused the request of Globe International Realty & Mortgage, Inc. (hereinafter referred to as "Globe") to supply electric service to the premises located at 808 Northeast Third Avenue, Fort Lauderdale, Florida?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Kenneth V. Hemmerle, Sr., is a real estate developer. Matthew Renda is a real estate and mortgage broker. Hemmerle and Renda have known each other since about 1986. At the suggestion of Hemmerle, in February of 1993, Renda, along with Hemmerle, formed Globe. At the time, Hemmerle was involved in a development project on the west coast of Florida and he wanted Renda, through Globe, to handle "the selling and so forth for the project." Globe was incorporated under the laws of Florida. The articles of incorporation filed with the Department of State, Division of Corporations (hereinafter referred to as the "Division of Corporations") reflected that: Renda was the president of the corporation; Hemmerle was its secretary; Renda and Hemmerle were the incorporators of the corporation, owning 250 shares of stock each; they also comprised the corporation's board of directors; and the corporation's place of business, as well as its principal office, were located at 808 Northeast Third Avenue in Fort Lauderdale, Florida (hereinafter referred to as the "808 Building"). Globe is now, and has been since its incorporation, an active Florida corporation. Annual reports were filed on behalf of Globe with the Division of Corporations in both 1994 (on April 19th of that year) and 1995 (on March 23rd of that year). The 1994 annual report reflected that Renda and Hemmerle remained the officers and directors of the corporation. The 1995 annual report reflected that Renda was still an officer and director of the corporation, but that Hemmerle had "resigned 9-2-93." Both the 1994 and 1995 annual reports reflected that the 808 Building remained the corporation's place of business and its corporate address. The 808 Building is a concrete block building with a stucco finish housing eight separate offices. The entire building is served by one electric meter. At all times material to the instant case, Southern Atlantic Construction Corporation of Florida (hereinafter referred to as "Southern") owned the 808 Building. Southern was incorporated under the laws of Florida in June of 1973, and administratively dissolved on October 9, 1992. Hemmerle owns a majority of the shares of the corporation's stock. The last annual report that Southern filed with the Division of Corporations (which was filed on June 10, 1991) reflected that: Hemmerle was the corporation's president and registered agent; he also served on the corporation's board of directors; Lynn Nadeau was the corporation's other officer and director; and the corporation's principal office was located in the 808 Building. From 1975 until September 6, 1994, FPL provided electric service to the 808 Building. Charges for such service were billed to an account (hereinafter referred to as the "808 account") that had been established by, and was in the name of, Hemmerle Development Corporation (hereinafter referred to as "HDC"). HDC was incorporated under the laws of Florida in 1975, and administratively dissolved on October 9, 1992. At the time of HDC's incorporation, Hemmerle owned 250 of the 500 shares of stock issued by the corporation. The last annual report that HDC filed with the Division of Corporations (which was filed on June 10, 1991) reflected that: Hemmerle was the corporation's president and registered agent; he also served on the corporation's board of directors; Lynn Nadeau was the corporation's other officer and director; and the corporation's principal office was located in the 808 Building. Following the administrative dissolution of the corporation, Hemmerle continued to transact business with FPL in the corporation's name, notwithstanding that he was aware that the corporation had been administratively dissolved. At no time has Renda owned any shares of HDC's stock or served on its board of directors. He and Hemmerle have served together as officers and directors of only two corporations: Globe and Hemmerle's Helpers, Inc. The latter was incorporated under the laws of Florida as a nonprofit corporation in March of 1992, and was administratively dissolved on August 13, 1993. Its articles of incorporation reflected that its place of operation, as well as its principal office, were located in the 808 Building. Pursuant to arrangements Renda and Hemmerle had made (which were not reduced to writing), Globe occupied office space in the 808 Building from March of 1993, through September 6, 1994 (hereinafter referred to as the "rental period"). Renda and Hemmerle had initially agreed that the rent Globe would pay for leasing the space would come from any profits Globe made as a result of its participation in Hemmerle's Florida west coast development project. Renda and Hemmerle subsequently decided, however, that Globe would instead pay a monthly rental fee of $300 for each office it occupied in the building. 1/ Globe (which occupied only one office in the building during the rental period) did not pay in full the monies it owed under this rental agreement. The office Globe occupied in the 808 Building was the first office to the right upon entering the building. It was across the lobby from the office from which Hemmerle conducted business on behalf of his various enterprises. Globe voluntarily and knowingly accepted, used and benefited from the electric service FPL provided to its office and the common areas in the building during the rental period. Under the agreement Renda and Hemmerle had reached, Globe was not responsible for making any payments (in addition to the $300 monthly rental fee) for such service. On July 26, 1994, the 808 account was in a collectible status and an FPL field collector was dispatched to the service address. There, he encountered Hemmerle, who gave him a check made out to FPL in the amount of $2,216.37. Hemmerle had noted the following on the back of the check: "Payment made under protest due to now [sic] owning [sic] of such billing amount to prevent discontinuance of power." The check was drawn on a Sunniland Bank checking account that was in the name of Florida Kenmar, Inc., (hereinafter referred to as "Kenmar"), a Florida corporation that had been incorporated in May of 1984, 2/ and administratively dissolved on November 9, 1990. (The last annual report that Kenmar filed with the Division of Corporations, which was filed on June 10, 1991, reflected that: Hemmerle was the corporation's president and registered agent; he also served on the corporation's board of directors; and the corporation's principal office was located in the 808 Building.) Hemmerle told the field collector, upon handing him the check, that there were no funds in the Kenmar checking account. Nonetheless, the field collector accepted the check. FPL deposited the check in its account at Barnett Bank of South Florida. The check was subsequently returned due to "insufficient funds." On the same day that he was visited by the FPL field collector, Hemmerle telephoned Sandra Lowery, an FPL customer service lead representative for recovery, complaining about, among other things, a debit that he claimed had been improperly charged to the 808 account. As a result of her conversation with Hemmerle, Lowery authorized the removal of the debit and all late payment charges associated with the debit from the 808 account. Following the July 26, 1994, removal of the debit and associated late payment charges, the balance due on the account was $1,953.91, an amount that Hemmerle still disputed. In an effort to demonstrate that a lesser amount was owed, Hemmerle sent Lowery copies of cancelled checks that, he claimed, had been remitted to FPL as payment for electric service billed to the 808 account. Some of these checks, however, had been used to pay for charges billed to other accounts that Hemmerle (or corporations with which he was associated) had with FPL. As of August 29, 1994, the 808 account had a balance due of $2,387.47. These unpaid charges were for service provided between March of 1993 and August 10, 1994. On August 29, 1994, Hemmerle showed Renda a notice that he had received from FPL advising that electric service to the 808 Building would be terminated if the balance owing on the 808 account was not paid within the time frame specified in the notice. Hemmerle suggested to Renda that, in light of FPL's announced intention to close the 808 account and terminate service, Renda should either apply for electric service to the 808 Building in Globe's name or relocate to another office building. Renda decided to initially pursue the former option. Later that same day, Renda telephoned FPL to request that an account for electric service to the 808 Building be opened in Globe's name. Gigi Marshall was the FPL representative to whom he spoke. She obtained from Renda the information FPL requires from an applicant for electric service. During his telephone conversation with Marshall, Renda mentioned, among other things, that Globe had been a tenant at the 808 Building since the previous year and that it was his understanding that FPL was going to discontinue electric service to the building because of the current customer's failure to timely pay its bills. Renda claimed that Globe was not in any way responsible for payment of these past-due bills. From an examination of FPL's computerized records (to which she had access from her work station), Marshall confirmed, while still on the telephone with Renda, that the 808 account was in arrears and that FPL had sent a disconnect notice to the current customer at the service address. Marshall believed that, under such circumstances, it would be imprudent to approve Globe's application for electric service without further investigation. She therefore ended her conversation with Renda by telling him that she would conduct such an investigation and then get back with him. After speaking with Renda, Marshall went to her supervisor, Carol Sue Ryan, for guidance and direction. Like Marshall, Ryan questioned whether Globe's application for service should be approved. She suggested that Marshall telephone Renda and advise him that FPL needed additional time to complete the investigation related to Globe's application. Some time after 12:30 p.m. on that same day (August 29, 1994), Marshall followed Ryan's suggestion and telephoned Renda. Ryan was on the line when Marshall spoke with Renda and she participated in the conversation. Among the things Ryan told Renda was that a meter reader would be dispatched to the 808 Building the following day to read the meter so that the information gleaned from such a reading would be available in the event that Globe's application for service was approved. At no time did either Marshall or Ryan indicate to Renda that Globe's application was, or would be, approved. Ryan referred Globe's application to Larry Johnson of FPL's Collection Department, who, in turn, brought the matter to the attention of Thomas Eichas, an FPL fraud investigator. After completing his investigation of the matter, which included an examination of the Broward County property tax rolls (which revealed that Southern owned the 808 Building), as well a search of the records relating to Globe, HDC and Southern maintained by the Division of Corporations, Eichas determined that Globe's application for service should be denied on the basis of the "prior indebtedness rule." Eichas informed Johnson of his decision and instructed him to act accordingly. Electric service to the 808 Building was terminated on September 6, 1994. As of that date, the 808 account had a past-due balance that was still in excess of $2,000.00. Although he conducted his business activities primarily from his home following the termination of electric service to the 808 Building, Hemmerle continued to have access to the building until March of 1995 (as did Renda). 3/ During this period, Hemmerle still had office equipment in the building and he went there on almost a daily basis to see if any mail had been delivered for him. It was his intention to again actively conduct business from his office in the building if electric service to the building was restored. Hemmerle (and the corporations on whose behalf he acted) therefore would have benefited had there been such a restoration of service. After discovering that electric service to the 808 Building had been terminated, Renda telephoned FPL to inquire about the application for service he had made on behalf of Globe. He was advised that, unless FPL was paid the more than $2,000.00 it was owed for electric service previously supplied to the building, service to the building would not be restored in Globe's name. Thereafter, Renda, on behalf of Globe, telephoned the PSC and complained about FPL's refusal to approve Globe's application for service. FPL responded to the complaint in writing. In its response, it explained why it had refused to approve the application. On or about November 15, 1994, the Chief of PSC's Bureau of Complaint Resolution sent Renda a letter which read as follows: The staff has completed its review of your complaint concerning Florida Power & Light's (FPL) refusal to establish service in the name of Globe Realty, Inc. at the above- referenced location. Our review indicates that FPL appears to have complied with all applicable Commission Rules in refusing to establish service. Our review of the customer billing history indicates that the past-due balance is for service at this location and not attributable to the judgment against Mr. Hemmerle for service at another location. The interlocking directorships of Globe International Realty & Mortgage, Inc. and Hemmerle Development, Inc. suggest that the request to establish service in the name of Globe Realty is an artifice to avoid payment of the outstanding balance and not a result of any change in the use or occupancy of the building. Thus, FPL's refusal to establish service is in compliance with Rule 25-6.105(8)(a), Florida Administrative Code. Please note that this determination is subject to further review by the Florida Public Service Commission. You have the right to request an informal conference pursuant to Rule 25-22.032(4), Florida Administrative Code. Should that conference fail to resolve the matter, the staff will make a recommenda- tion to the Commissioners for decision. If you are dissatisfied with the Commission decision, you may request a formal Administrative hearing pursuant to Section 120.57(1), Florida Statutes. After receiving this letter, Renda, on behalf of Globe, requested an informal conference. The informal conference was held on November 30, 1994. At the informal conference, the parties explained their respective positions on the matter in dispute. No resolution, however, was reached. Adopting the recommendation of its staff, the PSC, in an order issued January 31, 1995, preliminarily held that there was no merit to Globe's complaint that FPL acted improperly in refusing to provide electric service to the 808 Building pursuant to Globe's request. Thereafter, Renda, on behalf of Globe, requested a formal Section 120.57 hearing on the matter.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the PSC enter a final order dismissing Globe's complaint that FPL acted improperly in refusing to provide electric service to the 808 Building pursuant to Globe's request. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 4th day of December, 1995. STUART M. LERNER 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 4th day of December, 1995.
The Issue The issues presented for determination are whether Florida Housing Finance Corporation’s determination that the three applicant-parties were eligible for the allocation of low-income housing tax credits; and its intended decision to award such tax credits to Ocean Breeze East Apartments, LLC, are contrary to governing statutes, rules, or the solicitation specifications.1/
Findings Of Fact Parties and Process Florida Housing is a public corporation and, for the purposes of these proceedings, is an agency of the State of Florida. Pursuant to section 420.5099, Florida Statutes, Florida Housing is designated as the housing credit agency for Florida within the meaning of section 42(h)(7)(A) of the Internal Revenue Code and has the responsibility and authority to establish procedures for allocating and distributing low-income housing tax credits.3/ Florida Housing is authorized by law to allocate tax credits (and other funding) by means of requests for proposal or other forms of competitive solicitation. On October 6, 2017, Florida Housing published the RFA, starting the competitive application process being challenged in this proceeding. Completed applications were due December 28, 2017.4/ As explained below, all of the non-agency parties (HTG Heron, Channel Side, and Ocean Breeze) in this case applied for funding for a proposed development in Palm Beach County. According to the terms of the RFA, only one application for each county was to be funded. Moreover, the RFA’s stated goal was to fund one application wherein the applicant applied and qualified as a non-profit applicant. This non-profit goal did not apply within each of the six counties included in this RFA; one non-profit applicant in any of the six counties could satisfy the non-profit applicant goal for the entire RFA. No challenges were made to the terms or requirements of the RFA. HTG Heron is an applicant to the RFA, requesting an allocation of $1,541,751.00 in competitive tax credits. Its application, assigned number 2018-289C, was deemed eligible for consideration but was not selected for funding under the RFA. Channel Side is also an applicant to the RFA. It is requesting an allocation of $2,100,000.00 in competitive tax credits. Its application, assigned number 2018-278C, was deemed eligible for consideration but was not selected for funding under the RFA. Ocean Breeze is an applicant requesting an allocation of $2,070,000.00 in competitive tax credits. Its application, assigned number 2018-286C, was deemed eligible for consideration and was selected for funding under the RFA, subject to a credit underwriting review process. Florida Housing has adopted Florida Administrative Code Chapter 67-60 to govern the competitive solicitation process for several different programs, including the tax credit program. See § 420.507(48), Fla. Stat. The bid protest provisions of section 120.57(3) are adopted as part of the process for allocating tax credits, except that no bond is required. See Fla. Admin Code R. 67-60.009. A review committee was appointed to evaluate the applications and make recommendations to Florida Housing’s Board of Directors (the Board). Thirty-three applications for the RFA were received, processed, deemed eligible or ineligible, scored, and ranked, pursuant to the terms of the RFA; Florida Administrative Code Chapters 67-48 and 67-60; and applicable federal regulations. The review committee found 25 applications eligible and eight applications ineligible. Through the ranking and selection process outlined in the RFA, seven applications were recommended for funding, including Ocean Breeze. The review committee developed charts listing its eligibility and funding recommendations to be presented to the Board. On March 16, 2018, the Board met and considered the recommendations of the review committee for the RFA. The same day, the applicants to the RFA received notice of the Board’s determinations as to whether the applications were eligible or ineligible for consideration for funding, and which of the eligible applicants were selected for award of tax credits, subject to satisfactory completion of a credit underwriting process. Such notice was provided by the posting of two spreadsheets, one listing the “eligible” applications to the RFA and one identifying the applications which Florida Housing proposed to fund.5/ Relevant to this proceeding, Florida Housing announced its intention to award funding for Palm Beach County to Ocean Breeze, which received the maximum points available. Channel Side and HTG Heron were deemed eligible and scored the maximum number of points, but were not recommended for funding. Each applicant-party timely filed a Notice of Protest and Petition for Formal Administrative Proceedings. RFA The RFA contemplated a structure in which each applicant is scored on eligibility items and obtains points for other items. To determine if an application is eligible for funding, it must meet all of the requirements listed in section 5.A.1, of the RFA. The following eligibility terms and requirements are challenged in this proceeding: The evidence of control of the development site (site control) by Ocean Breeze and Channel Side; and The address of the development site provided by HTG Heron. For scoring the applications, the RFA allows up to a total of 20 points with the following point allocations: Submission of Principal Disclosure form stamped by Corporation as “Pre-Approved” (5 points); Development Experience Withdrawal Disincentive (5 points); and Local Government Contribution Points (5 points) or Local Government Area of Opportunity Points (10 points). As explained in pages 66-67 of the RFA, the first step in evaluating the applications is the sorting order. All eligible applications are ranked by first sorting all eligible applications from the highest score to the lowest score, with any scores that are tied separated in the following order: First, by the Application’s eligibility for the Proximity Funding Preference (which is outlined in Section Four A.5.e. of the RFA) with Applications that qualify for the preference listed above Applications that do not qualify for the preference; Next, by the Application’s eligibility for the Per Unit Construction Funding Preference which is outlined in Section Four A.11.e. of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); [sic] Next, by the Application’s eligibility for the Development Category Funding Preference which is outlined in Section Four A.4.b.(4) of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); [sic] Next, by the Application’s Leveraging Classification, applying the multipliers outlined in Item 3 of Exhibit C of the RFA (with Applications having the Classification of A listed above Applications having the Classification of B); [sic] Next, by the Application’s eligibility for the Florida Job Creation Funding Preference which is outlined in Item 4 of Exhibit C of the RFA (with Applications that qualify for the preference listed above Applications that do not qualify for the preference); and [sic] And finally, by lottery number, resulting in the lowest lottery number receiving preference. In other words, those competing for the RFA must first submit an application that meets all the eligibility criteria and does not have any significant omissions or errors before it is scored. After scoring, any tiebreakers are determined strictly by the luck of the draw. After applications are filed, but before they are scored, Florida Housing randomly assigned each a lottery number, and the highest scoring applicant with the lower number wins any ties, thus becoming the intended funding recipient. The notice of the intended award does not end the process, and the selection of an applicant for funding does not guarantee distribution of tax credits to that applicant. Florida Housing’s representative, Ms. Button, explained at the hearing: Q Okay. What happens once a preliminary agency action from Florida Housing becomes final agency action? A The awardees who are recommended or preliminarily approved for funding, once that becomes final, those applicants are then invited to credit underwriting by Florida Housing. * * * Q Can you provide some general information about credit underwriting? A Credit underwriting is essentially a de novo review of all the information that the applicant has provided in their application to proceed forward with the proposed development. Florida Housing retains their party underwriters who review that information and provide recommendations to Florida Housing. Similarly, the RFA provides that each selected awardee must complete a credit underwriting process before receiving funding or credits. The RFA states on page 68: Notwithstanding an award by the Board pursuant to his RFA, funding will be subject to a positive recommendation from the Credit Underwriter based on criteria outlined in the credit underwriting provisions in Rule Chapter 67-48, F.A.C. Rule 67-48.0072, in turn, provides in part: Credit underwriting is a de novo review of all information supplied, received or discovered during or after any competitive solicitation scoring and funding preference process, prior to the closing on funding, including the issuance of IRS Forms 8609 for Housing credits. The success of an Applicant in being selected for funding is not an indication that the Applicant will receive a positive recommendation from the Credit Underwriter or that the Development team’s experience, past performance or financial capacity is satisfactory. Thus, an application might fail in this de novo credit underwriting phase and never receive funding, even though it was “awarded” tax-credit funding as a result of a proceeding such as this one. In that event, page 67 of the RFA provides: 4. Returned Allocation Funding that becomes available after the Board takes action on the [Review] Committee’s recommendation(s), due to an Applicant withdrawing its Application, an Applicant declining its invitation to enter credit underwriting, or an Applicant’s inability to satisfy a requirement outlined in this RFA and/or Rule Chapter 67-48, F.A.C., will be distributed as approved by the Board. Therefore, if an intended applicant (such as Ocean Breeze), was nominally selected for funding at the end of the eligibility and scoring phase, but failed to garner a positive recommendation from the credit underwriting process, the next eligible applicants in the queue (such as HTG Heron and Channel Side) would be awarded the tax credits. As a result, in this consolidated proceeding, the objective of Petitioners is to displace any and all applicants in more favorable positions. Here, Petitioner Channel Side challenges the eligibility of both the Ocean Breeze and HTG Heron applications; and Petitioner HTG Heron challenges the eligibility of Ocean Breeze. Ocean Breeze, in turn, challenges both HTG Heron’s and Channel Side’s eligibility. The specific issues raised as to the three challenged applications will be discussed below. OCEAN BREEZE APPLICATION HTG Heron and Channel Side challenge Ocean Breeze’s eligibility based on the RFA requirements relating to site control. The parties have stipulated, and the undersigned finds, that site control must have been demonstrated as of the application deadline of December 28, 2017. The RFA provides three ways an applicant can demonstrate site control: (1) eligible contract, (2) deed or certificate of title, or (3) lease. Ocean Breeze utilized the first method to satisfy the site control requirement by submitting a document titled “Purchase and Development Agreement” (PDA) as Exhibit 8 to its Application. The PDA included two attachments: the “Legal Description” and a “Reverter Agreement.” Petitioners challenge the enforceability of the PDA on two apparent grounds: (1) it was not executed by the applicant6/; and (2) it was executed before the applicant was properly incorporated to do business within the State of Florida. The RFA, however, does not mention “enforceability” of a contract in its definition for “Eligible Contract.” The requirements for establishing site control though an eligible contract are found on page 30 through 31 of the RFA. Eligible Contract - For purposes of this RFA, an eligible contract is one that has a term that does not expire before June 30, 2018 or that contains extension options exercisable by the purchaser and conditioned solely upon payment of additional monies which, if exercised, would extend the term to a date that is not earlier than June 30, 2018; specifically states that the buyer’s remedy for default on the part of the seller includes or is specific performance; and the buyer MUST be the Applicant unless an assignment of the eligible contract which assigns all of the buyer’s rights, title and interests in the eligible contract to the Applicant, is provided. Any assignment must be signed by the assignor and the assignee. If the owner of the subject property is not a party to the eligible contract, all documents evidencing intermediate contracts, agreements, assignments, options, or conveyances of any kind between or among the owner, the Applicant, or other parties, must be provided, and, if a contract, must contain the following elements of an eligible contract: (a) have a term that does not expire before June 30, 2018 or contain extension options exercisable by the purchaser and conditioned solely upon payment of additional monies which, if exercised, would extend the term to a date that is not earlier than June 30, 2018, and (b) specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance. The initial paragraph of the PDA identifies the parties to the PDA as “Boyton Beach Community Redevelopment Agency,” as the “Seller,” and “Ocean Breeze East Apartments, LLC” as the “Purchaser.” Paragraph 14 of the PDA designates the following for purposes of notices: If to Purchaser: Ocean Breeze East Apartments, LLC Attn: Lewis Swezy 7735 NW 146 Street, Suite 306 Miami Lakes, FL 33016 Under the signature block, however, the PDA states it was executed on behalf of the “Purchaser” by “OCEAN BREEZE APARTMENTS LLC By Ocean Breeze East GP LLC” and signed by Lewis Swezy, “Title: Authorized Member” on December 8, 2017. “Ocean Breeze East, GP, LLC” does not exist and never has in Florida. The parties admit that this entity was not in existence on December 8, 2017, and was never subsequently formed. Ocean Breeze admits the identification of “Ocean Breeze East, GP, LLC” was in error. The PDA was executed on behalf of the “Seller” by BBCRA and signed by Steven B. Grant, “Title: Chair” on December 15, 2017. Paragraph 4 of the PDA indicates that its effective date is the date when the last party signed the PDA; in this case being the date the BBCRA executed the document--December 15, 2017. The Reverter Agreement is executed by the “Purchaser” “Ocean Breeze East Apartments, LLC” and signed by Lewis Swezy, “Title: Manager of Manager,” on December 12, 2017. The Reverter Agreement is executed by the “Seller,” BBCRA, and signed by Steven B. Grant, “Title: Chairman” on December 15, 2017. Mr. Swezy testified Ocean Breeze complied with all the terms of the PDA, including submitting an initial $25,000 deposit within two days of full execution of the PDA and a second deposit within 30 days. The Articles of Organization for Ocean Breeze East Apartments, LLC were filed on December 19, 2017, and effective December 14, 2017. Rachael Grice, Florida Housing Multifamily Programs Manager, scored the site control portion for this RFA based on the information in the application. Mrs. Grice found that Ocean Breeze met the RFA requirements for site control. It is unnecessary, and beyond the scope of the undersigned’s jurisdiction, to make a factual or legal determination as to the enforceability of the PDA. The RFA does not mention enforceability or validity as requirements for an “Eligible Contract” for site control purposes. There is no dispute that on its face, the PDA with the Reverter Agreement satisfied the RFA’s requirements for an “Eligible Contract” listed on page 30 and 31. In fact, as of the date of the application deadline the following was true: Ocean Breeze East Apartments, LLC, was listed as the applicant for the RFA. Ocean Breeze East Apartments, LLC, was listed as the “Purchaser” on the PDA. Mr. Swezy had signature authority to bind Ocean Breeze and was listed on the Ocean Breeze application as the “Authorized Representative.” Ocean Breeze East Apartments, LLC, and Mr. Swezy were identified in the notice provision in the PDA. The Reverter Agreement, which was signed after the PDA, correctly identified the applicant entity as Ocean Breeze East Apartments, LLC. Effective December 14, 2017, Ocean Breeze was incorporated. The PDA was fully executed on December 15, 2017. HTG Heron and Channel Side have not established that the PDA was fatally flawed or that Florida Housing erred in accepting the PDA as an “eligible contract” satisfying the RFA’s site control requirement. Even if the PDA contained errors by listing “Ocean Breeze East GP, LLC” in the signature block or was prematurely signed before Ocean Breeze was effectively incorporated, the evidence at the hearing established that it was a minor irregularity waivable by Florida Housing, and that Florida Housing would have waived any such errors. If the PDA is ultimately determined to be unenforceable and site control is not established at the credit underwriting stage, Petitioners would be next in line to be selected to receive the tax credits under the terms of the RFA. The preponderance of the evidence established that Ocean Breeze’s application is eligible for funding, it received the proper scoring, and should be the intended award for Palm Beach County. HTG HERON APPLICATION Channel Side and Ocean Breeze challenge the eligibility of the HTG Heron application because they claim it fails to satisfy the RFA eligibility requirement to provide a correct address of the proposed development site. Page 18 of the RFA requires in relevant part: Indicate (1) the address number, street name, and name of city, and/or (2) the street name, closest designated intersection, and either name of city or unincorporated area of county. Ms. Button testified the purpose of the address requirement in the RFA is to allow parties, including Florida Housing, to know where the proposed development will be built and to ensure the property has access to utility and other services. In that vein, the RFA does not require the street identified in an application to be a publicly maintained street. In its application, HTG Heron provided the address of the proposed development as “W 17th Ct., W 17th Ct. and North Congress Ave., Riviera Beach,” along with latitudinal and longitudinal coordinates of the development location. Ryan McKinless, Multifamily Programs Senior Analyst for Florida Housing, scored the development address section for this RFA. Mr. McKinless found that HTG Heron met the requirements in the RFA for providing an address of the proposed development. Here, Channel Side and Ocean Breeze argue Florida Housing erred in accepting the “W. 17th Ct.” address provided by HTG Heron because the address does not exist. They point to the site sketch submitted by HTG Heron in support of its application which references a “W. 17th Street” (not “W. 17th Ct.”) and has “W. 17th Street” intersecting with “Congress Avenue Extension,” (not “N. Congress Ave.”). In support of this position that “W. 17th Ct.” does not exist, Ocean Breeze and Channel Side also rely on a 1975 plat and a 1999 City of Rivera Beach Ordinance. The sketches attached to HTG Heron’s application each contain the disclaimer “NOT A SURVEY.” Although the sketches contain a reference to an abandonment relating to “W. 17th Ct.,” the 1999 Ordinance describing the abandonment relied on by Channel Side and Ocean Breeze was not submitted to Florida Housing. Regardless, this plat and ordinance information was not required by the RFA nor was it considered by Florida Housing in determining whether to accept the address submitted by HTG Heron for eligibility determination purposes. There was no evidence at the hearing that the “W. 17th Court” address misled Florida Housing (or anyone else) or caused confusion as to the location of HTG Heron’s proposed development. To the contrary, other information in the application supports accepting the provided address. The “Local Government Verification of Status of Site Plan Approval for Multifamily Developments” form executed by the City Manager of Riviera Beach affirms the “W. 17th Ct.” address. The “Local Government Verification that Development is Consistent with Zoning and Land Use Regulations” form executed by the City Manager of Riviera Beach affirms the “W. 17th Ct.” address. The “Verification of Availability of Infrastructure- Electricity” form executed by an Associate Engineer from Florida Power and Light affirms the “W. 17th Ct.” address. The “Verification of Availability of Infrastructure” form for water and sewer services executed by a Utilities Engineer from City of Riviera Beach affirms the “W. 17th Ct.” address. The “Verification of Availability of Infrastructure- Roads” form executed by a City Engineer from the City of Riviera Beach affirms the “W. 17th Ct.” address. The “Local Government Verification of Contribution- Grant” form executed by the Interim City Manager of Riviera Beach affirms the “W. 17th Ct.” address. The acting director of the City of Riviera Beach, Department of Community Development confirms by letter that the property at the “2003 W. 17th Court (adjacent to North Congress Avenue)” address is located with a “Qualified Census Tract for 2017 and 2018” and attaches a diagram of that tract. Documentation from the Palm Beach County Property Appraiser’s website lists the address location as “2003 W. 17th Ct.” Given that the purpose of providing an address was fulfilled and there was no ambiguity as to the actual location of the HTG Heron’s development site, Channel Side and Ocean Breeze failed to prove that Florida Housing erred in accepting HTG Heron’s address for the purposes of eligibility. At the hearing, HTG Heron also submitted a certified copy of a 2017 map from the Palm Beach County Property Appraiser’s Office for range 43, township 42, which includes the area of the proposed development in HTG Heron’s application, and indicates there is a “W. 17th Ct.” that intersects with “N. Congress Avenue.” There was a preponderance of evidence establishing HTG Heron’s designation in its application of “W 17th Ct., W 17th Ct. and North Congress Ave., Riviera Beach” was not an error, and that HTG Heron’s application is eligible for funding. CHANNEL SIDE APPLICATION7/ To satisfy the Site Control requirements Channel Side submitted a Purchase and Sale Agreement that lists among the sellers an entity named “MWCP, Inc., f/k/a Blueprint Properties, Inc., a Delaware corporation whose post office address is 248 Columbia Turnpike Florham Park, NJ (‘Blueprint’)” in the initial paragraph. MWCP, Inc. (MWCP) did not exist in Florida when the Purchase and Sale Agreement was executed. The parties stipulated that the reference in the Channel Side site control documents to MWCP was erroneous and that the owner of the property for the Channel Side’s proposed development as of the application deadline was a Delaware corporation known as Blueprint Properties, Inc., which has never operated as, or been corporately related to, MWCP. Rachel Grice, Florida Housing Multifamily Programs Manager, scored the Site control portion of this RFA based on the information in the Application. Mrs. Grice found that Channel Side met the RFA requirements for Site control. The RFA does not require the listing of related names of any corporations other than the applicant or developer. Thus, the error in the Purchase and Sale Agreement does not seem to affect Channel Side’s satisfaction of any requirement of the RFA. The error is insignificant and immaterial. There was no evidence presented at the hearing that Channel Side received a competitive advantage by identifying “MWCP, Inc. f/k/a Blueprint Properties, Inc.” instead of simply “Blueprint Properties” as the seller. The slight error conferred no competitive advantage on Channel Side; its application received no more points than it was entitled to by reason of the mistake. Ms. Button reasonably testified that had Florida Housing known about the mistaken listing of MWCP as the seller, it would have waived the error as a minor irregularity. The applicant-parties failed to prove that Channel Side’s application reflecting the “wrong corporate entity” as the seller was an error affecting eligibility of Channel Side’s application, or that Florida Housing erred in accepting the Purchase and Sale Agreement as proof of site control. The mistake was, at worst, a minor, inconsequential error that was waivable. Based on the preponderance of the evidence, Channel Side’s application is eligible for funding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Florida Housing Finance Corporation, enter a final order consistent with its initial decisions: (1) finding the applications of Ocean Breeze, HTG Heron, and Channel Side eligible for funding; (2) awarding the RFA Palm Beach County funding for the Ocean Breeze proposed development; and (3) dismissing the formal written protests of HTG Heron and Channel Side. DONE AND ENTERED this 29th day of June, 2018, in Tallahassee, Leon County, Florida. S HETAL DESAI Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 2018.
Findings Of Fact As the governing authority of the Canaveral Port District, Respondent is responsible for the operation of Port Canaveral. Respondent is headed by a Board of Commissioners, which consists of five elected officials. In descending order of authority, the next highest-ranking officials are the Executive Director (or Port Director), Deputy Executive Director (or Deputy Port Director), and six directors who are responsible for such things as operations and marketing. At all material times, Joe Lapolla served as the Deputy Executive Director and Director of Engineering. Respondent was organized pursuant to Chapter 28922, Laws of Florida, Special Acts of 1953. Article XVII of the Special Act provides: Section 1. No contract shall be let by the Port Authority for any construction, improvement, repair, or building . . . when the amount to be paid shall exceed $10,000 unless notice thereof shall be advertised at least three (3) times calling for bids upon the work to be done or the goods, supplies or materials toe be purchased by the Port Authority, and in each case the bid of the lowest responsible bidder shall be accepted, unless the Port Authority may, in its discretion, reject all bids. * * * On or about January 26, 1990, Respondent issued the "Contract Manual for Construction of Cruise Terminal #5 Building" ("ITB"). The ITB informs bidders: Sealed proposals will be received by the undersigned at the office of the Canaveral, Port Authority, 200 George King Blvd., P.O. Box 267, Cape Canaveral, Florida 32920 for construction of Cruise Terminal #5 Building and Site Work until 2:00 o'clock p.m., February 19, 1990 at which time and place they will be publicly opened and read aloud. * * * The Owner reserves the right to reject any or all proposals with or without cause, to waive technical errors and informalities, and to accept the proposal which in his judgement best serves the Owner. The Canaveral Port Authority By: Barbara Smith The ITB states: The award of the contract, if it is awarded, will be to the lowest sum of all base bid items by a responsible bidder whose qualifications indicate the award will be to the best interest of the Owner and chose proposal shall comply with the requirements of the Contract Documents and does cot exceed the funds available. . . . In no case will the award be made until all necessary investigations have been made into the responsibility of the low bidders and the Owner is satisfied that the bidders are qualified to do the work . ITB, P. IB-3. The above-quoted announcement was duly published in the Florida Today Newspaper on January 15, 22p and 26, 1990. The advertisement timely informed all bidders of the contents of an addendum to the ITB, changing the bid opening date to 2:00 p.m. on February 16, 1990, rather than February 19 Other addenda to the ITB were issued. One was issued as late as the morning of the bid opening. Seven contractors submitted bids on the Cruise Terminal project. In addition to Petitioner and Intervenor, the other bidders were Miorelli, Mark Arnold, Foley, Metric, and Butler. The persons delivering the bids for Petitioner, Intervenor, Miorelli, Mark Arnold, and Butler testified at the hearing. The Metric representative testified by deposition. Each bidder representative arrived at Respondent's office building at which the bids were to be opened well in advance of 2:00 p.m. Each representative entered the building through the front door, which leads to a lobby in which a receptionist sits. The receptionist informed five of the six bidder representatives that they should deliver their bids to her in the lobby and, at least four of the six representatives, that the lobby clock was the official clock. The same or another receptionist told the Mark Arnold representative that the clock in the Commission Room was the official clock. The Commission Room, which is where the bids were opened, is located elsewhere in the building. At the time in question, there was no significant discrepancy between the clocks in the lobby and Commission Room. Unlike the other bidder representatives, who synchronized their watches with the lobby clock, the Mark Arnold representative synchronized his watch with the Commission Room clock. The Mark Arnold and Miorelli representatives testified that they both delivered their bids at 1:59:50 p.m. As noted below, the two bids were submitted almost simultaneously, so there is no significant difference between the two clocks. After synchronizing their watches, the bidder representatives contacted their offices, by car phonies or other means, to get updated bid amounts and subcontractors. The last few minutes before submitting a bid is frenetic because subcontractors are calling in last-minute bids to the contractor, which must determine the best prices and relay the updated information to the bidder representative at the site of the bid opening. The representative must then complete the bid forms with the bid prices and names of subcontractors. At about 1:55 p.m., Mr. Lapolla and Barbara Smith, who is Assistant Secretary to the Board of Commissioners, were in the Commission Room preparing for the bid opening. Ms. Smith had brought with her bid proposals that had already been delivered to the receptionist in the lobby. Mr. Lapolla was in charge of the bid opening in his capacity as Director of Engineering, not Deputy Executive Director. By 1:56 or 1:57 p.m., Mr. Lapolla and Ms. Smith were joined by Bud McMann, who is Respondent's Director of Operations. They sat together at a table in the front of the Commission Room with the spectators' seats occupied by bidder representatives and other interested persons. At 1:57 p.m., the Butler representative delivered her bid proposal to the table in the Commission Room. Within a few seconds after receiving the Butler bid, Mr. Lapolla checked on the bid proposals that had already been delivered to the table. Each proposal consisted of a set of two envelopes, which, although sealed, bore the name of the bidder on the outside of the envelopes. He saw proposals from only three bidders Knowing that a large number of bidders had picked up copies of the ITB, Mr. Lapolla was disappointed by the low number of proposals that he had received. The three proposals were from bidders with which he was unfamiliar. In particular, he was expecting still to receive proposals from Miorelli and Metric. Metric was the contractor that had won a contract for construction of the waterside portion of the Cruise Terminal. In fact, the Metric bid proposal was one of the proposals already received. As set forth below, the proposals of Intervenor, Mark Arnold, Miorelli, and Petitioner were, in that order, the last proposals to be delivered to the table. Most likely, in the confusion of the final two to three minutes before the opening of the first bid, Mr. Lapolla hastily looked at the envelopes and failed to notice that one was marked "Metric." The realization at 1:57 p.m., or a few seconds thereafter, that he might not have received all of the bids on the Cruise Terminal project prompted Mr. Lapolla to decide to open first the bids of a different project. Respondent had advertised that, at the same time and place, bids would be opened for a much smaller project involving work on an office building. The office building project was entirely unrelated to the Cruise Terminal project. Respondent often set bid openings for more than one project at the same time and place. Mr. Lapolla decided to open the office building bids first in order to allow time for bids or bidders "hung up at the front desk." It was Mr. Lapolla's understanding that, given the language of the ITB and advertisement, a bid delivered to any full-time employee in the building prior to 2:00 p.m. would be timely. The decision to open first the office building bids did not necessarily signify a decision to accept late bids because Mr. Lapolla was correct in his understanding. Under the facts of this case, a bid could be timely submitted to the receptionist in the front lobby at 1:59:55 and not be delivered to Mr. Lapolla until after 2:00 p.m. In opening the office building bids first, Mr. Lapolla intended only to allow timely but "hung up" bids to get to the Commission Room, not to allow late bids to be submitted. Meanwhile, in the parking lot of the building, Intervenor's representative hung up on his office 1:57 p.m. After adding information to his proposal, he left his truck and proceeded to the lobby. The receptionist told him that Ms. Smith had already picked up the proposals and taken them to the Commission Room where they were going to be opened. Intervenor's representative immediately jogged from the lobby along the side of the building to the exterior entrance to the Commission Room. He entered the Commission Room and delivered his bid proposal to the table at 1:59:,15 p.m. As Intervenor's representative was running from the lobby to the Commission Room, the Miorelli representative approached the lobby, bringing his proposal to the receptionist. Although Intervenor's representative shouted to him to take his bid to the Commission Room, not the lobby, Miorelli's representative continued to the lobby, as the receptionist had instructed him earlier. The Miorelli representative reached the lobby at 1:59:30 p.m. This creates a discrepancy between his account of time and that of Intervenor's representative, who probably left the lobby by no later than 1:59 in order to reach the Commission Room at 1:59:15. However, the discrepancy is immaterial and suggests, at most, that Intervenor's bid was delivered to the Commission Room perhaps as late as 1:59:40, but in any event still well in advance of 2:00 p.m. The Mark Arnold representative arrived in the lobby just after Intervenor's representative and just before Miorelli's representative. When the Miorelli representative arrived on the heels of the Mark Arnold representative, the receptionist quickly ran both of them to the Commission Room. They delivered their proposals to the table at 1:59:50 with the Mark Arnold proposal delivered first. As the Commission Room clock approached 2:00 p.m., Mr. Lapolla announced, "It's two o'clock. Let's start opening bids." He added that he would first be opening the bids of the office building project. He did not state that the bidding was closed for either project. As Ms. Smith opened the first office building bid at 2:00 p.m., the only Cruise Terminal bid proposal not yet on the table was that of Petitioner. In fact, Petitioner's bid was not yet in the building at this time. Petitioner's representative hung up on his office at 1:59 p.m. He testified that he reached the lobby at 1:59:15, but this is impossible. The Miorelli and Mark Arnold representatives reached the Commission Room at least four minutes before Petitioner's representative. But they did not reach the lobby until 1:59:30, or, according to Petitioner's representative, fifteen seconds after he reached the lobby. In fact, Petitioner's representative did not enter the lobby until 2:03:30 p.m., at the earliest. Guided by the receptionist, Petitioner's representative did not enter the Commission Room until 2:04 p.m., at the earliest. He laid his bid proposal on the table while Mr. Lapolla was busy reading the office building bids. No one was recording the time at which bids were delivered to the table. A certain amount of confusion prevailed, as suggested by Mr. Lapolla's failure to realize that he already had received the Metric bid. Additionally, Ms. Smith was performing a task unfamiliar to her, and Mr. McMann, who was recording the bids, was performing the task normally done by Ms. Smith. Under the circumstances, it is clear that Mr. Lapolla was unaware, when Ms. Smith opened Petitioner's bid and Mr. Lapolla read it, that the bid was late. There was testimony that the Commission Room clock was determined, during the following week, to be two to three minutes faster than official time, as kept by the U.S. Naval Observatory. This testimony is irrelevant because the comparison is not timely and the time kept in the building was official, as it was reasonably accurate and not tampered with. Even if "official time" were relevant and three minutes slower, however, Intervenor's representative would have entered the lobby at no earlier than 2:00:30 p.m. and still would have been late. At no earlier that 2:10 p.m., Mr. Lapolla announced that he was ready to begin opening bids on the Cruise Terminal project. He did not announce that the time for submitting bids on the Cruise Terminal project was closed. Mr. Lapolla then opened and read all seven bids, including Petitioner's bid. He read the bids by reading the bidder's name and the amount bid, except in the case of Miorelli. Miorelli had failed to enclose a required bid bond. Reading the amount of the Miorelli bid, Mr. Lapolla noted that it lacked a bid bond, but took no further action to disqualify Miorelli or reject the bid. At the conclusion of the reading of the bids, Petitioner's bid was the lowest at $8,188,000. Intervenor's bid was the second lowest amount at $8,288,000. Mr. Lapolla announced that Petitioner was the "apparent low bidder." Respondent later determined that, but for the lateness of Petitioner's bid, its proposal was responsive and it was responsible. When Petitioner's representative identified himself in the audience, Intervenor's representative, recognized him as the man who had arrived at 2:04 p.m. After contacting his office, Intervenor's representative told Mr. Lapolla of this fact and protested any award to Petitioner. The architect's last estimate for the project, which was made in August, 1989, had been $6,200,000. The immediate concern among Respondent's employees was the cost of the project. The Assistant Director of Engineering Contacted the President of Petitioner's Florida Division later in she afternoon of February 16 and asked him to come over the following Monday, February 19, and discuss ideas to reduce the cost of the project. At the February 19 meeting, Mr. Lapolla stated that he would be recommending to the Board of Commissioners that they reject all bids and rebid the project due to the amount by which it was over budget. The lateness of Petitioner's bid was discussed as a secondary matter. The Board met on February 21 and considered, at the end of a long agenda, the Cruise Terminal project. The Board determined that Petitioner's bid was late and Intervenor's bid was timely. The Board concluded that they did want to rebid the project and did not want to accept a late bid. Respondent thus announced its intent to award the contract to Intervenor. Petitioner then timely filed a notice of protest and written formal protest. Respondent has no written rules or policies governing bidding procedures. Until about five yearns ago, the Board opened all bids. Mr. Lapolla has handled about five to ten bid openings annually for Respondent for a total of about $25 million. However, neither he nor Respondent has previously encountered a late-bid situation. The Cruise Terminal project is the most expensive single project that Respondent has undertaken. Industry custom is to reject late bids without opening them. The Board has delegated little authority to Mr. Lapolla in the bidding process. In particular, the Board has retained the authority to determine whether a bid is, responsive and a bidder responsible. The Board has also retained the authority to determine whether to award a contract based on a late bid. Mr. Lapolla's authority is limited to accepting the bids and presenting them to the Board, with his recommendation, for final action. Specifically, he was authorized to read the clock, start opening bids at the appointed time, read the bids, and announce the apparent low bidder. He is also responsible for developing whatever factual record the Board requires for deciding whether to award a contract to a particular bidder. There was no evidence that the decision of the Board to award the Cruise Terminal contract to Intervenor was based on illegality, fraud, oppression, or misconduct or that it was arbitrary or capricious. Undoubtedly, the fact-finding process was flawed. Most significantly, it resulted in the misidentification of the Metric and Miorelli bids as late. However, the process culminated in the correct findings that Petitioner's bid was late and Intervenor's bid was timely. Although not advised of their legal right to accept a late bid, the Commissioners clearly wanted to exercise their right to reject late bids in order to avoid establishing a poor reputation in the construction industry.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Canaveral Port Authority enter a final order dismissing the petition of Brice Building Company. ENTERED this 14th day of May, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk o the Division of Administrative Hearings this 14 day of May, 1990. COPIES FURNISHED: Emery H. Rosenbluth, Jr. Ralph C. Losey Subin, Shams, Rosenbluth & Moran, P.A. P.O. Box 285 Orlando, FL 32802 Leon Stromire Howard Bistline Stromire & Bistline 1970 Michigan Avenue Cocoa, FL 32922 John W. Foster William D. Sublette Baker & Hostetler P.O. Box 112 Orlando, FL 32802 APPENDIX Treatment Accorded Proposed Findings of Petitioner 1-11: adopted or adopted in substance. 12: rejected as irrelevant. 13-14: adopted. 15: rejected as unsupported by the greater weight of the evidence and recitation of testimony. 16: adopted in substance. 17-18: rejected as irrelevant. 19-23: adopted or adopted in substance. 24: rejected as unsupported by the greater weight of the evidence. Bids could be submitted anywhere in the building. No bidder for the Cruise Terminal project appeared before 2:00 p.m. with his bid in the lobby or anywhere else in the building, but did not deliver his bid before 2:00 p.m. at the table in the Commission Room. 25: adopted except as to the Mark Arnold representative. No evidence was presented as to the Foley and Metric representatives. 26: adopted in substance. The Butler bid, which was the third received, was apparently delivered by the Butler representative to the Commission Room table. 27-31: adopted or adopted in substance. 32: rejected as irrelevant and unsupported by the greater weight of the evidence. 33-34: rejected as unsupported by the greater weight of the evidence. 35: adopted. 36: first sentence rejected as unsupported by the greater weight of the evidence. Second sentence adopted. 37-40: adopted or adopted in substance. 41: first sentence adopted. Second sentence rejected as irrelevant. 42-45: adopted. 46: adopted except first clause of last sentence rejected as unsupported by the greater weight of the evidence and legal argument. 47: rejected as irrelevant. 48-50: adopted. 51-56 and 58: rejected as unsupported by the greater weight of the evidence, legal argument, and irrelevant. 57: first sentence adopted. Second sentence as unsupported by the greater weight of the evidence. In both cited portions of testimony, Mr. Lapolla testified to the effect that the Board, not himself personally, had the authority to waive a minor irregularity. 59-60: rejected as irrelevant. 61: adopted, although "official time" is irrelevant. 62-65 and 68-73: rejected as subordinate and irrelevant except that Respondent voted to award the contract to Intervenor. 66: rejected as unsupported by the greater weight or the evidence. 67: rejected as irrelevant and unsupported by the greater weight of the evidence. 74-76: rejected as irrelevant, unsupported by the greater weight of the evidence, and subordinate. Treatment Accorded Proposed Findings of Respondent 1-17: adopted or adopted in substance. 18-19: rejected as subordinate. 20-21: adopted. Treatment Accorded Proposed Findings of Intervenor 1-5: adopted or adopted in substance. 6: first sentence adopted as to the responsibility of Mr. Lapolla to make the initial factual findings concerning lateness. Second sentence rejected as unsupported by the greater weight of the evidence. Third sentence adopted. 7: rejected as irrelevant and unsupported by the greater weight of the evidence. 8: rejected to the extent that the finding implies a difference between the lobby and Commission Room clocks. 9: adopted. 10: first sentence adopted. Remainder rejected as irrelevant. 11: adopted. 12: rejected as unsupported by the greater weight of the evidence. The Butler bid was delivered by the Butler representative to the Commission Room at 1:57 p.m. 13: first sentence rejected to the extent that the finding implies that receipt in the lobby was ineffective. Remainder adopted in substance. 14-19: adopted or adopted in substance. 20: adopted in substance except that Mr. Witek is an employee of Intervenor. 21: rejected as irrelevant. 22-24: adopted. 25-26: adopted except that the "official time" is Irrelevant. 27: first sentence adopted as to the responsibility of Mr. Lapolla to make the initial factual findings concerning lateness. Remainder adopted. 28: adopted as to the purpose of the meeting and decisions reached by Respondent. Remainder rejected as irrelevant. 29: adopted. 30: rejected as subordinate.
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File and Relinquishing Jurisdiction by Jessica E. Varn, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Petitioner’s Notice Of Withdrawal of Proposed Dealer Agreement from Consideration by Respondents and Motion to Dismiss as Moot, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File and Relinquishing Jurisdiction as its Final Order in this matter. Accordingly, it is hereby ORDERED that this case is CLOSED. DONE AND ORDERED this AY day of May, 2013, in Tallahassee, Leon County, Florida. Bureau of Issuance Oversight Division of Motorist Services Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A338 Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motorist Services this 4 day of May, 2013. NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. JB/jdc Copies furnished: Dean Bunch, Esquire Nelson, Mullins, Riley and Scarborough, LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 dean.bunch@nelsonmullins.com John W. Forehand, Esquire South Motors Automotive Group 16165 South Dixie Highway Miami, Florida 33157 john.forehand@southmotors.net David Seymour Leibowitz, Esquire Braman Management Association 2060 Biscayne Boulevard, 2"! Floor Miami, Florida 33137 davidl|@bramanmanagement.com Richard N. Sox, Esquire Bass Sox Mercer, P.A. 2822 Remington Green Circle Tallahassee, Florida 32308 rsox@dealerlawyer.com Jessica E. Varn Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS BMW OF NORTH AMERICA, LLC, Petitioner, vs. SOUTH MOTOR COMPANY OF DADE COUNTY, d/b/a SOUTH MOTORS BMW, Respondent. BMW OF NORTH AMERICA, LLC, Petitioner, vs. POMPANO IMPORTS, INC., Respondent. BMW OF NORTH AMERICA, LLC, Petitioner, vs. POMPANO IMPORTS, INC., Respondent. a a aU OOOO ee Oe eee Case No. Case No. Case No. 12-3385 12-3386 12-3387 BMW OF NORTH AMERICA, LLC, Petitioner, vs. Case No. 12-3389 SARASOTA AUTOMOTIVE MANAGEMENT, LLC, d/b/a BMW OF SARASOTA BERT SMITH OLDSMOBILE, INC., d/b/a BERT SMITH INTERNATIONAL CAPITAL EUROCARS, INC., d/b/a CAPITAL BMW IMPORT CITY, INC., d/b/a QUALITY BMW REEVES IMPORT MOTORCARS, INC., Respondents. BMW OF NORTH AMERICA, LLC, _ Petitioner, vs. Case No. 12-3390 BRAMAN MOTORS, INC., d/b/a BRAMAN BMW PALM BEACH IMPORTS, INC., d/b/a BRAMAN MOTORCARS, Respondents. ORDER CLOSING FILES AND RELINQUISHING JURISDICTION This case came before the undersigned on the Petitioner's Notice of Withdrawal of Proposed Dealer Agreement from Consideration by Respondents and Motion to Dismiss as Moot, filed January 29, 2013, and the undersigned being fully advised, it is, therefore, ORDERED that: 1. The final hearing scheduled for May 13 through 17, 2013, is canceled. 2. The files of the Division of Administrative Hearings are closed. Jurisdiction is relinquished to the Department of Highway Safety and Motor Vehicles. DONE AND ORDERED this llth day of February, 2013, in Tallahassee, Leon County, Florida. aw JESSICA E. VARN 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 11th day of February, 2013. COPIES FURNISHED: Jennifer Clark, Agency Clerk Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-430 2900 Apalachee Parkway, Mail Stop 61 Tallahassee, Florida 32399 John W. Forehand, Esquire South Motors Automotive Group 16165 South Dixie Highway Miami, Florida 33157 john. forehand@southmotors.net Dean Bunch, Esquire Nelson, Mullins, Riley, and Scarborough LLP Suite 202 3600 Maclay Boulevard, South Tallahassee, Florida 32312 dean.bunch@nelsonmullins.com David Seymour Leibowitz, Esquire Braman Management Association 2nd Floor 2060 Biscayne Boulevard Miami, Florida 33137 davidl@bramanmanagement.com Richard N. Sox, Esquire Bass Sox Mercer, P.A. 2822 Remington Green Circle Tallahassee, Florida 32308 rsox@dealerlawyer.com STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS BMW OF NORTH AMERICA, LLC, Petitioner, v8. Case No. 12-3385 SOUTH MOTOR COMPANY OF DADE COUNTY, d/b/a SOUTH MOTORS BMW, Respondent. BMW OF NORTH AMERICA, LLC, Petitioner, vs. Case No. 12-3386 POMPANO IMPORTS, INC., d/b/a Vista BMW of Pompano Beach, Respondent. BMW OF NORTH AMERICA, LLC, Petitioner, vs. . Case No. 12-3387 POMPANO IMPORTS, INC., d/b/a Vista BMW of Coconut Creek, Respondent. Filed January 29, 2013 8:53 AM Division of Administrative Hearings BMW OF NORTH AMERICA, LLC, Petitioner, vs. SARASOTA AUTOMOTIVE MANAGEMENT, LLC, d/b/a BMW OF SARASOTA; BERT SMITH OLDSMOBILE, INC., d/b/a" BERT SMITH INTERNATIONAL; CAPITAL EUROCARS, INC., d/b/a CAPITAL BMW; IMPORT CITY, INC., d/b/a QUALITY BMW; and REEVES IMPORT MOTORCARS, INC., Respondents. BMW OF NORTH AMERICA, LLC, Petitioner, vs. BRAMAN MOTORS, INC., d/b/a BRAMAN BMV, and PALM BEACH IMPORTS, INC., d/b/a BRAMAN MOTORCARS, Respondents. Case No. 12-3389 Case No. 12-3390 NOTICE OF WITHDRAWAL OF PROPOSED DEALER AGREEMENT FROM CONSIDERATION BY RESPONDENTS AND MOTION TO DISMISS AS MOOT Comes now BMW of North America, LLC ("BMW NA") and notifies the Administrative Law Judge that it has withdrawn its notice to Respondents concerning the proposed dealer agreement which is the subject of this proceeding. withdrawal of notice, BMW NA moves to dismiss this matter as moot. motion, BMW NA states: As a result of this In support of its 1. On July 17, 2012, BMW NA notified Respondents of its intent to offer them the superseding/merged BMW Center Agreement for BMW passenger cars and BMW light trucks ("the Merged Agreement"), which was proposed to supersede, modify and replace the existing BMW Dealer Agreement for BMW passenger cars and the existing BMW SAV Center Agreement for BMW light trucks (collectively "the Existing Agreements"). 2. Respondents filed complaints with the Department of Highway Safety and Motor Vehicles ("DHSMV"), contesting the terms of the proposed Merged Agreement. These complaints were transferred by the DHSMV to the Division of Administrative Hearings. 3. On January 29, 2013, BMW NA, by letters attached hereto as Exhibit A, notified Respondents, as follows: BMW of North America, LLC ("BMW NA") hereby withdraws its notice, transmitted to you on July 17, 2012, with respect to the superseding/merged BMW Center Agreement (‘Agreement’) for BMW passenger cars and BMW light trucks. You and your successors may remain on your current forms of: dealer agreements: the BMW Dealer Agreement for BMW passenger cars (‘Old Agreement’) and the BMW SAV Center Agreement for BMW light trucks (‘SAV Center Agreement') or sign the Agreement which was offered to you, at any time in the future. 4. Inasmuch as BMW NA has withdrawn the July 17, 2012 notice that entitled Respondents to file their protests, and confirmed to Respondents that they and their successors', have the option to remain on the Existing Agreements unless, at any time in the future, they elect to sign the Merged Agreement, Respondents’ protests should now be dismissed as moot. ' Motor vehicle dealerships, and equity interests therein, are transferable to buyers as provided in Section 320.643, Florida Statutes. 3 Respectfully submitted, Lh. bL Dean Bunch dean.bunch@nelsonmullins.com C. Everett Boyd, Jr. everett. boyd@nelsonmullins.com Nelson Mullins Riley & Scarborough LLP 3600 Maclay Blvd., S., Suite 202 Tallahassee, FL 32312 Telephone: (850)907-2505 Attorneys for BMW of North America, LLC CERTIFICATE OF SERVICE I HEREBY CERTIFY that the forgoing was served by electronic transmission, this at day of January, 2013, upon the following: | Jennifer Clerk, Agency Clerk clark. jennifer@hsmv.state.fl.us Dept. of Highway Safety Neil Kirkman Bldg., Room A-430 2900 Apalachee Parkway, Mail Stop 61 Tallahassee, FL 32399 John W. Forehand, Esq. john. forehand@southmotors.net 16165 South Dixie Highway Miami, FL 33157 Richard N. Sox, Esq. rsox@dealerlawyer.com Nicholas A. Bader, Esq. nbader@dealerlawyer.com 2822 Remington Green Circle Tallahassee, FL 32308 David Leibowitz, Esq. davidl@bramanmanagement.com Timothy Grecsek, Esq. timothyg@bramanmanagement.com Braman Management Association 2060 Biscayne Bivd., Second Floor Miami, FL 33137 ~ Attorney
Findings Of Fact Background Respondent, Department of Health and Rehabilitative Services (Department), is the designated state agency responsible for the administration of Medicaid funds under Title XIX of the Social Security Act. Rule 10C- 7.048(2)(a), Florida Administrative Code. Petitioner, Richmond Healthcare, Inc., d/b/a Sunrise Health Center, owns and operates a 240-bed nursing home in Broward County, Florida, and is a participant in the Florida Medicaid Program. As a participant, petitioner is required to submit annual cost reports to the Department. Based on these cost reports, the Department establishes a participant's reimbursement rate. Rules 10C-7.048(4)(a)5 and 10C-7.048, Florida Administrative Code. The annual cost reports are subject to audit at the discretion of the Department. If audited, a direct examination of the participant's books, records and accounts that support the amounts reported in the annual cost report is made to determine the correctness and propriety of the amounts claimed in the cost report. Rule 10C-7.0481, Florida Administrative Code. Pertinent to this case, the Department elected to audit petitioner's cost reports for the period of October 5, 1983, through December 31, 1984. Based on such audit, the Department issued an audit report that disallowed certain costs claimed by petitioner, and proposed to recoup the excess Medicaid payments made to petitioner as a consequence of such disallowance. Petitioner filed a timely protest to contest the Department's decision. The parties' joint stipulation At hearing, the parties stipulated as follows: The parties have recalculated the usual and customary charges at $65.72 per day. The Department of Health and Rehabilitative Services will reclassify costs of $8,282.00 from the capitalized minor equipment to the operating and patient care component. The Department of Health and Rehabilitative Services will reclassify construction period interest to start-up costs from the date of certificate of occupancy to the date of the admission of the first resident to the nursing home. Amortization of this amount for the 15 months ended December 31, 1984, cost reporting period totaled $27,677.00. The adjustment to indirect home office costs will remain as in the audit report. The parties agree that the property ceiling issue will be remanded to the Department of Health and Rehabilitative Services for an informal hearing. All arguments will be presented in writing to the informal hearing officer. Oral argument will be permitted at the request of either party. The parties further agree that the written arguments will be due on the same date that the Proposed Recommended Order is due in the companion rule challenge case. If the rule challenge is dismissed, the parties will file briefs and hold oral argument, if requested, within fifteen (15) days of its dismissal. The parties agree that the only remaining disputed issue in the Petition filed in this matter is the allowable expense for private airplane usage. The expenses for private airplane usage. In rendering its annual cost report, a participant, such as petitioner, is bound by the following provisions of law or contract: Rule 10C-7.48(4), Florida Administrative Code, which provides: (4) Provider Eligibility. (a) Nursing home providers participating in the Medicaid Nursing Home Program shall: * * * Have a Medicaid reimbursement rate established. The provider shall submit a cost report in compliance with the provisions of the Florida Title XIX Long Term Care Reimbursement Plan, as revised April 1, 1983, and subsequently amended January 1, 1984, adopted by reference. The cost report shall be analyzed and a reimbursement rate established in accordance with the Florida Title XIX Long Term Care Reimbursement Plan, as revised April 1, 1983, and subsequently amended effective January 1, 1984. The Florida Title XIX Long Term Care Reimbursement Plan, which provides: * * * Cost Finding and Cost Reporting All providers are required to detail all of their costs for their entire reporting period, making appropriate adjustments as required by this plan for determination of allowable costs. . . . The cost report must be prepared by the facility's independent Certified Public Account, on the forms prescribed by the Department, and on the accrual basis of accounting in accordance with generally accepted accounting principles as established by the American Institute of Certified Public Accountants (AICPA), the methods of reimbursement in accordance with Medicare (Title XVIII) Principles of Reimbursement, the Provider Reimbursement Manual (HIM-IS) except as modified by the Florida Title XIX Long Term Care Reimbursement Plan, and State of Florida Administrative Rules. * * * G. All providers are required to maintain financial and statistical records in accordance with 42 CFR 405.453(a), (b, (c), (e). The cost report is to be based on financial and statistical records maintained by the facility. Cost information must be current, accurate, and in sufficient detail to support costs set forth in the report. This includes all ledgers, books, records, original evidence of cost and other records in accordance with HIM-IS which pertain to the determination of reasonable costs, and must be capable of and available for auditing by State and Federal authorities. . . . (Emphasis added) * * * III. Allowable Costs * * * C. Implicit in any definition of allowable costs is that those costs should not exceed what a prudent and cost-conscious buyer pays for a given service or item. . . . HIM-IS, which provides: 2100. PRINCIPLE All payments to providers of services must be based on the "reasonable cost" of services covered . . . and related to the care of beneficiaries. . . . * * * 2102.1 Reasonable Costs... It is the intent of the program that providers will be reimbursed the actual cost of providing high quality care. Implicit in the intention that actual costs be paid to the extent they are reasonable is the expectation that the buyer seeks to minimize its costs and that its actual costs do not exceed what a prudent and cost-conscious buyer pays for a given item or service. . . . 2102.2 Costs Related to Patient Care.-- These include all necessary and proper costs which are appropriate and helpful in developing and maintaining the operation of patient care facilities and activities. Necessary and proper costs related to patient care are usually costs which are common and accepted occurrences in the field of the provider's activity. . . . * * * 2103. PRUDENT BUYER General.--The prudent and cost-conscious buyer not only refuses to pay more than the going price for an item or service, he also seeks to economize by minimizing cost. . . . * * * 2304. ADEQUACY OF COST INFORMATION Cost information as developed by the provider must be current, accurate, and in sufficient detail to support payments made for services rendered to beneficiaries. This includes all ledgers, books, records and original evidences of cost (purchase requisitions, purchase orders, vouchers, requisitions for materials, inventories, labor time cards, payrolls, bases for apportioning costs, etc.), which pertain to the determination of reasonable cost, capable of being audited. (Emphasis added) On audit, petitioner provided no books, records or accounts to support the amounts reported in its annual cost report for expenses associated with private airplane usage. Under the circumstances, the Department properly disallowed such costs since their propriety and correctness was not substantiated by petitioner. At hearing, petitioner offered no proof regarding the correctness or propriety of the subject costs, but relied upon the proof offered on behalf of intervenor, Thelma R. Allgood. Ms. Allgood was, at all times material hereto, an owner of 50% of petitioner's stock, and was, after its sale to third parties, contractually obligated to assist and cooperate with petitioner to document the subject claim. At hearing, the proof offered on behalf of intervenor demonstrated that during the period of October 5, 1983, through December 31, 1984, petitioner had contracted with Allgood Healthcare, Inc., which was located in Augusta, Georgia, to provide all of the customary and necessary management services for petitioner. During this period, Ms. Allgood, in addition to owning 50% of petitioner's stock, was, along with her husband, Thomas Allgood, the sole owner of Allgood Healthcare. In view of this community of interest, Allgood Healthcare was considered a home office of petitioner for cost reporting purposes. Between October 5, 1983, and December 31, 1984, Allgood Healthcare used its private plane on 42 occasions to fly Mr. and Mrs. Allgood, as well as other personnel of Allgood Healthcare, to or from petitioner's facility in Broward County, Florida, and the home office in Augusta, Georgia, as well as the cities of Savannah and Atlanta, Georgia. The expenses for these trips totaled $41,228.26, and included aircraft operation costs, pilot charges, pilot's expenses, and fuel. On average, the cost of each trip was approximately $940. 1/ During the same time-frame, the cost for a round trip economy fare ticket between Augusta and Fort Lauderdale by commercial airline was approximately $430. To demonstrate its entitlement to claim the expenses for private airplane usage on its costs report, it was incumbent upon petitioner to demonstrate that such costs were reasonable and related to patient care. Petitioner has failed to demonstrate either prerequisite. The only proof offered to demonstrate that the subject costs were related to patient care was through the testimony of Mr. Allgood. Mr. Allgood, admittedly a person with no knowledge of patient care or cost reporting, accompanied his wife on approximately one-half of the subject trips and opined that the purpose of those trips, as well as those on which he had no personal involvement, were related to patient care. Mr. Allgood was, however, unable to recall any specific trips he made; any dates he, his wife, or any other specific person were on the premises; or what precisely was done at any particular time that would demonstrate that the trip was related to patient care. Under the circumstances, Mr. Allgood's testimony is not persuasive, and his conclusion that the subject costs for private airplane usage were related to patient care is not credited. 2/ Regarding the reasonableness of the expenses incurred, the proof demonstrated that the cost per trip for use of the private plane was $940, while the cost for a round trip ticket by commercial airline was $430. To support the reasonableness of this expense, intervenor again offered the testimony of Mr. Allgood, who opined that where two passengers were on a trip, the cost was comparable to commercial travel. Mr. Allgood's testimony was, however, unpersuasive to demonstrate the reasonableness of the cost to patient care. Notably, Mr. Allgood, who admitted performing no services related to patient care, accompanied his wife on approximately one-half of the trips. Under such circumstances, his presence was unnecessary, and the costs for transporting Ms. Allgood by private plane, even assuming she performed services related to patient care, were unreasonable. With respect to the remaining trips, Mr. Allgood was shown to have no personal knowledge regarding those trips, and his testimony that at least two passengers were present on each of those trips is not credited. In fact, to the extent proof is available, it indicates that a number of trips were made with only one passenger, and that on several occasions the expense of a trip, ostensibly a round trip (Augusta-Fort Lauderdale- Augusta), were incurred to transport one or two passengers in one direction only.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that: Petitioner's protest of the Department's disallowance of the expenses associated with private airplane usage as Medicaid resident costs be dismissed, and Upon review of the property ceiling issue which is hereby remanded to the Department, that it enter a final order consistent with its findings on that issue, the parties' stipulation, and the recommendation contained in this order. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 19th day of January, 1989. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of January, 1989.
The Issue The issue presented is whether Petitioner's application for site approval and licensure of a private seaplane base near Manatee Springs on the Suwannee River should be approved.
Findings Of Fact By application dated July 18, 1990, Petitioner applied to the Department of Transportation for site approval and licensure for a private seaplane base to be known as Manatee Springs Seabase on the Suwannee River in Dixie County, Florida, seven miles south of Old Town. On the application, Petitioner agreed that the private seaplane base would be for his personal use, that it would not be used for commercial operations, that flight activities from the proposed site would be conducted only during the day, and that operations would only occur in VFR weather conditions. Petitioner owns 362 acres of land with approximately 2,400 feet of that land being riverfront property. Petitioner's property is on the west shore of the Suwannee River. Approximately across from the southern boundary of Petitioner's property is the Spring Run in Manatee Springs State Park. The Park extends a considerable distance to both the north and the south, far beyond the boundaries of Petitioner's property. Approximately 100 feet south of the entrance to Spring Run is the dock of Manatee Springs State Park. Numerous manatee have been sighted around the Park's dock, at the entrance to the Spring Run, in the Spring Run, and in the middle of the River across from the dock. The Suwannee River between Petitioner's property on the west bank and the Park's property on the east bank is between 600 and 700 feet wide. In that area, the Suwannee River is open to all kinds of boat traffic, some of which travels as fast or faster than a seaplane taking off and landing. That area of the River is used by fishing boats, ski boats, airboats, jet skis, houseboats, and canoes. There is a tour boat which travels through the area in question, and canoes can be rented at the Park from a concessionaire. Personnel at the commercial canoe rental business advise renters to stay within 50 to 100 feet from the east shore line, along the Park. However, some renters ignore the instructions and cross the River. Due to the heavier manatee and boat activity at the Spring Run and Park docking area across from the southern portion of Petitioner's property, Petitioner proposes that his landing and take-off area be located just to the north of the northern boundary of his property, away from the entrance to Manatee Springs State Park, in the middle of the River, and in a section of the River which is straighter, which would increase his visibility of boat traffic in the area. Petitioner will place no structures of any kind in the River. Under Petitioner's proposal, he will store his seaplane in an area in the northern portion of his property. No structures will be constructed in this storage area. Petitioner would taxi out from the seaplane's storage area to his take-off and landing area which starts approximately 300 feet north of his storage site. The take-off and landing area would extend approximately 2,600 feet up the River and would be 100 feet wide. Petitioner proposes to use either a two-passenger or four-passenger seaplane. Such seaplanes utilize 100 h.p. and 150 h.p. engines, respectively. Such seaplanes taxi at 3-5 knots per hour, which speed would create the same wake as a canoe. When a seaplane is idling, it creates no wake. When a seaplane takes off, it rotates onto the pontoon step within 15 to 20 seconds and completes take-off within an additional 10 to 15 seconds. The total take-off time is approximately 30-35 seconds, and the seaplane during take-off will achieve a speed of 40-45 m.p.h., less the head wind. The total take-off distance is approximately 1,000 feet. Accordingly, Petitioner would be on the River for approximately 5 minutes of taxiing and 30 seconds of take-off, at which point the seaplane is off the River. The amount of wake created during take-off is 2-3 inches. The distance betwen the entrance to the Spring Run into Manatee Springs State Park and the southern end of Petitioner's proposed landing and take-off area is 3,000 feet. Thus, Petitioner's proposed landing and take-off area is located a safe distance from where boaters and manatee congregate around the Springs. Further, although some of Petitioner's neighbors on the west shore of the Suwannee River tie their boats to trees along the shore, there are no docks extending into the River in or near the area proposed for the landing and take- off strip. There are a public boat ramp at Clay Landing approximately 2 miles above the proposed seaplane landing area, a public boat ramp somewhere south of the Park, and a third public boat ramp somewhere in the Park. The boat ramps are not close enough to Petitioner's proposed landing and take-off strip to pose any threat to their users from Petitioner's proposed use of his seaplane. Petitioner is a licensed pilot, who possesses all appropriate ratings and has passed the required physical examinations. He learned to fly in 1940 and operated a seaplane base in Fort Walton during the 1940s and 1950s. He was then employed as a pilot for Eastern Airlines for 33 years. He has 18,000 hours of flying time, which includes 1,000 hours of flying seaplanes. He will carry liability insurance on his seaplane of at least $100,000. Petitioner understands that when his seaplane is on the water, it is subject to the rules and regulations governing boats and other watercraft. Accordingly, when "no wake" restrictions are in effect on the Suwannee River when the River is high, Petitioner cannot use his seaplane base. The Department's aviation specialist assigned to process Petitioner's application for site approval visited Petitioner's property on five separate occasions, observing boat traffic on the River during his visits. On one occasion, he spent the day counting the boat traffic and estimating intervals of traffic relative to landing and take-off times. Although the River was high on that occasion, it was during a weekend when boat traffic would be heavier than during the week. He determined that the proposed location of Petitioner's seaplane base was a safe location and that Petitioner's activity would not constitute a hazard to boating traffic. The Department issued its Notice of Intent to approve Petitioner's seaplane base, subject to several conditions: All operations are conducted during daylight hours and during VFR weather conditions only. Operations are prohibited on long holiday weekends that generate a high volume of river traffic (Memorial Day, 4th of July, Labor Day). A non standard traffic pattern be used, all traffic patterns will be to the west of the extended runway center line to prevent over flight of Manatee Springs State Park. Pursuant to the Department's regulations, Petitioner was required to provide notice of his application to all property owners within 1,000 feet from any boundary of the airport operational area, and the Department's Notice of Intent was published notifying interested persons that a public meeting would be conducted, if requested, on Petitioner's application. A number of persons attended the public meeting, some of whom supported Petitioner's application, but the majority of whom opposed Petitioner's application. After the public meeting, the Department issued a letter denying Petitioner's application, citing the concerns voiced at the public meeting. Additionally, the denial letter advised Petitioner that the Trustees of the Internal Improvement Fund have state sovereignty jurisdiction of the River area where the proposed seaplane base would be located and that Petitioner would, therefore, need appropriate authorization from the Trustees through the Department of Natural Resources to use the sovereign submerged land. That letter further advised Petitioner that the Trustees' jurisdiction is subject to the navigation servitude of the federal government and that Petitioner, therefore, would need a permit from the Army Corps of Engineers to use the proposed site on the Suwannee River as a seaplane base. Although the statutes and rules regulating the Department's site approval and licensure of airports and seaplane bases do not contain a requirement for authorization from the Trustees or the requirement of a permit from the Army Corps of Engineers, Petitioner contacted those agencies. By letter dated June 28, 1991, the Florida Department of Natural Resources advised Petitioner as follows: Please be advised that you do not need authorization for the use of state-owned submerged lands if you are not storing your sea plane waterward of the Ordinary High Water Line of the Suwannee River, constructing structures waterward of the Ordinary High Water Line, or impacting state-owned submerged lands and resources when removing your seaplane from the Suwannee River. Petitioner's proposal does not contain any of those characteristics. By letter dated September 6, 1991, the Department of the Army, Jacksonville District Corps of Engineers, advised Petitioner that no authorization or permit was required for his proposed seaplane base. Petitioner can safely take-off and land in his proposed strip without presenting a danger to boaters and swimmers any greater than the risk presented by other fast moving vessels currently permitted to utilize the Suwannee River in the area under question. The height of a seaplane propeller poses no danger to swimmers or manatee. One must be fully licensed and trained to operate a seaplane, while one needs no training or licensure to operate a speed boat. The height of a seaplane presents a better view of obstacles in the River than the view of someone in a boat or in the River. A seaplane offers the ability to stop quickly or "pull up" in a split second to avoid something coming quickly into the path of the seaplane. Although the Florida Department of Natural Resources advised Petitioner that he did not need authorization to use the state-owned submerged lands of the Suwannee River, employees of the Division of Recreation and Parks of the Department of Natural Resources testified at the final hearing in opposition to Petitioner's application. Those employees believe that Petitioner's proposed landing and take-off area is within the jurisdiction of the Division of Recreation and Parks pursuant to a Management Agreement entered into between the Division and the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida. That Management Agreement entered into on November 24, 1986, and amended on January 19, 1988, does grant management responsibilities to the Division over: All those sovereign submerged lands lying within 400 feet of the Mean High Water or Ordinary High Water Line, or in the case where the shoreline is vegetated with. . .wetland vegetation, within 400 feet of the emergent edge of the vegetation, and within the riparian area of any state park. . .administered by the Division of Recreation and Parks . . . . Petitioner's proposed landing and take-off strip is within 400 feet of the emergent edge of the vegetation of Manatee Springs State Park. That Management Agreement, however, also provides that the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida retained the right to also engage in management activities over those sovereign submerged lands and further provides that the Management Agreement is not to be construed in any way to interfere with the traditional riparian rights of private landowners. Lastly, that Management Agreement required the Division of Recreation and Parks to submit to the Board for its approval a management plan for those submerged lands and prohibited the Division from engaging in activities not provided for in the required plan without the advance written approval of the Board. There was no evidence indicating that the Division had adopted any management plan for the area under consideration in this cause. Further, no explanation was offered as to how the Division of Recreation and Parks could impose requirements not imposed by the Department of Natural Resources.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered granting Petitioner's airport site approval and license application, with the conditions set forth in paragraph numbered 13 of this Recommended Order. DONE and ENTERED this 26th day of November, 1991, at Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of November, 1991. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 91-4391 Respondent's proposed findings of fact numbered 1-4 have been adopted in substance in this Recommended Order. Respondent's proposed finding of fact numbered 5 has been rejected as not constituting a finding of fact. Respondent's proposed finding of fact numbered 6 has been rejected as being subordinate to the issues involved herein. Copies furnished: Ben G. Watts, Secretary Department of Transportation Haydon Burns Building Attn: Eleanor F. Turner 605 Suwannee Street Tallahassee, Florida 32399-0458 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0458 Henry C. Fucik, 8290 S.W. 58th Street Miami, Florida 33143
