Findings Of Fact Bartow Memorial Hospital (BMH or Petitioner) is a 56 bed, short-term, acute-care hospital chartered as a not-for profit corporation. It qualifies as a "charitable organization" under IRC Section 501(c)(3), and its services are not limited primarily to members or subscribers, but are provided to the public regardless of religion, race, sex, age, or national origin. Providing medical care to those unable to pay is not its primary function. Prior to May 1984 BMH did not participate in the Medicaid Program, had no charity write-off policy, and required all patients, other than those specified below, to pay the full charges for services rendered. In 1976 BMH entered into an agreement with the Office of Vocational Rehabilitation of the Florida Department of Health and Rehabilitative Services to admit, on a bed availability basis, rehabilitative patients on a per diem basis of $117 per day (Exhibit 2). During 1984 two write-offs under this program occurred, one for $507 and the other for $1,187. In 1973 BMH Board of Directors accepted the recommendations of the Professional Committee to treat patients from Florida Sheriffs Girls Villa on an individual basis as far as qualifying them as charity care patients (Exhibit 4). The net result is to waive payment of hospital charges for these patients who are not covered by insurance. In 1984 total services donated under this program was $347.86 (Exhibit 5). At a special meeting of the BMH Executive Committee on August 31, 1984, the Board adopted a policy for "consideration of charity care" which provides: "In those cases where patients are making a sincere, honorable effort to discharge their debts but do not have the financial resources to fully compensate the Hospital for their care, Hospital personnel and management shall recommend to the Board after careful consideration, individual accounts for forgiveness of unpaid balances." (Exhibit 1). In the first four months of BMH's current fiscal year (starting October 1, 1984) $10,964 of such unpaid balances were written off to such "charity." During fiscal year 1984 BMH wrote off $218,456 as uncollectible bad debts. If an account goes beyond 90 days without being paid, it is then turned over to a collection agency which seeks to recover from the debtor. On average half of the bad debts are generated from emergency room patients who cannot be screened as well as can non-emergency patients. Petitioner contends that it operates the emergency room as a public service and in fiscal 1984 its cost to the hospital exceeded emergency room revenues by $36,285. However, in order to qualify to receive payments for treating Medicare patients, which account for nearly half of BMH's admissions, an emergency room is required. Petitioner contends that its treatment of Medicare patients should be counted as "charitable" because when the hospital charges exceed what Medicare is willing to pay, the hospital is not permitted to collect the difference from the patient and must absorb these "losses." In fiscal year 1984 the hospital's Medicare Contractual Adjustment totaled $152,057. In 1983 that figure was $588,185. In 1983 Medicare paid all of the costs incurred by the hospital in treating Medicare patients. While some expenses, such as advertising, may not be included in calculating the hospitals cost of providing care, the guaranteed payment by the United States for the costs of treating these patients has been the primary impetus to the large increase in hospital beds in this state during the past decade. Petitioner suffered no "loss" in 1983 or 1984 in treating Medicare patients. On the other hand, Petitioner refused to take Medicaid patients until February 15, 1985, when the Board authorized the administrator to enroll the hospital in the Medicaid Program (Exhibit 8). Medicaid covers indigent patients and the United States government approved Medicaid payment is a fixed amount generally recognized to be less than the hospital's actual cost. The difference in the amount received by and the actual cost to the hospital is a recognized charitable contribution from the hospital. At the time of this hearing BMH had yet to admit its first Medicaid patient. On February 26, 1985, BMH entered into a contract with Good Shepherd Hospice of Polk County, Inc. (Hospice) to provide two beds in Room 211, South Wing, where terminally ill patients may be provided holistic care. For those patients covered by Medicare, Hospice will be responsible for payment of $175 per day to Petitioner. Patients not covered by Medicare will be billed as agreed to between patient and hospital; however, BMH agrees that no resident of Polk County shall be denied Hospice service by Hospital because of inability of that patient to pay, except for "county-eligible" patients who are referred to Polk General Hospital (Exhibit 3). As of the date of the hearing, no Hospice participants had requested admission under this program. The average room charge at BMH is in excess of $300 per day. The difference between BMH costs and the payment to be received from Hospice was not shown. Petitioner recently has agreed to provide services to residents of Green Tree, a home for the physically and mentally handicapped in Bartow, at no charge when there is no other source of compensation for the services. As of the date of hearing BMH has taken one case for which it contributed services charged at $2,684. Central Florida Speech and Hearing Center is a United Way agency which operates in Polk County. For the past two years BMH has provided space for services rendered by this center and estimates the value of this space at $500 per year. BMH prepares meals for Bartow Multicare Center, which is operated by Polk County, who provides these meals free to senior citizens. Multicare Center pays BMH for preparing these meals, which payment at least covers the cost of food prepared. Adding in overhead and labor costs (which are not increased by preparing these meals), BMH calculated the uncompensated costs of this service in 1984, obtained by taking the total costs of providing all meals prepared in the hospital, dividing by the number of-meals prepared, and multiplying this cost per meal by the number of meals prepared for Multicare Center, at $16,764. Each year BMH provides at no charge the facilities, technicians, testing, and supplies used by local doctors to give physical examinations to students going out for junior and senior high school football teams in Bartow. Petitioner estimates the cost to the hospital for these facilities for 100 physicals per year is $3,000. In January 1985 BMH entered into an agreement with Knights Templar Eye Foundation, Inc., a charitable organization, to provide operating room and intra-ocular lenses to Knights Templar's clients for extraction and insertion of intra-ocular lenses for $1,200 to be paid by Knights Templar. This is some $500 less than BMH charges private-pay patients for its services. No evidence was submitted showing the amount that was paid by Medicare prior to the advent of diagnostic related groupings (DRG) or the amount Medicare will pay for this service under the DRG pay plan. Petitioner estimates a total of 20 procedures will be performed annually pursuant to this agreement. BMH provides space during evening hours for Lamaze classes and prenatal instruction for expectant parents. Petitioner estimates the value of this space to be $1,000 per year. No evidence was presented that any additional direct cost to the hospital resulted from making such space available to expectant parents whose children will be delivered at BMH. For fiscal year 1984 BMH revenues were $4,982,456 and, had sales tax been levied on equipment bought by BMH, the sales tax would be approximately $41,000. In 1983 on total revenues of $5,289,849 BMH showed a net income of $342,302 (audit included with Request for Admission). Net income for 1984 was not presented. Polk General Hospital is located some two miles from Petitioner and is a publicly owned hospital dedicated in large part to providing care for indigents. This has allowed and encouraged BMH to refuse to participate in the Medicaid Program and to refer all patients, except those admitted to emergency, who are unable to pay for care provided, to Polk General. Of the $218,456 written off by BMH in 1984 as uncollectible bad debts, some 50 percent originated at the emergency room. The audit report included with Petitioner's Request for Admissions shows provision for uncollectible accounts of $68,843 in 1982 and $114,952 in 1983. These represent 1.9 percent and 2.5 percent of gross revenues for those years. In 1984, if none of the delinquent accounts are collected, this represents 4.3 percent of gross revenues.
The Issue The issue for determination is whether Petitioner should be granted a consumer’s certificate of exemption pursuant to Subsection 212.08(7)(o), Florida Statutes.
Findings Of Fact The Department of Revenue (Respondent) is the state agency charged with enforcement of Chapter 212, Florida Statues, and the issuance of certificates of exemption. Unto Others, Inc. (Petitioner) is an organization incorporated in the State of Florida as a non-profit corporation. Petitioner’s Articles of Incorporation, Article II, states Petitioner’s purpose as follows: The purposes for which the Corporation [Petitioner] is organized are exclusively religious, charitable, scientific, literary, and educational within the meaning of section 501(c)(3) of the Internal Revenue Code of 1986 or the corresponding provision of any future United States Internal Revenue law. Petitioner made application to the Respondent for a certificate of exemption as a charitable institution pursuant to Subsection 212.08(7)(o)2.b, Florida Statutes. Petitioner did not make application for an exemption as a scientific, religious, or educational institution, but it may in the future apply under these criteria. By Notice of Intent to Deny (Notice) dated January 30, 1998, the Respondent notified Petitioner that its application was being denied. The grounds stated in the Notice for the denial were the following: (1) "Your organization does not provide, nor does it raise funds for charitable institutions which provide one or more of the charitable services listed in the statute [Subsection 212.08(7)(o)2.b, Florida Statutes]."; and (2) "Your organization fails to meet the qualification for exemption from sales and use taxation, as set forth in Section 212.08(7), Florida Statutes." Currently, Petitioner’s sole function is the raising of funds to enable Petitioner to rehabilitate people and dwellings. All of Petitioner’s activities are conducted by non-paid volunteers. No evidence was presented to show that Petitioner rehabilitates any person or dwelling, or holds religious services. No evidence was presented to show that Petitioner governs or administers any office within any hierarchy of a larger organization. No evidence was presented to show that Petitioner participates with or controls another organization. No evidence was presented to show that Petitioner expends more than 50 percent of its expenditures toward any charitable service. No evidence was presented to show that Petitioner disburses more than 50 percent of its expenditures directly for a charitable service or to any entity that directly provides or performs any charitable service. No evidence was presented to show that Petitioner directly provides or performs any charitable service for any entity or person; or that Petitioner provides any goods or services as a charitable service. No evidence was presented to show that Petitioner directly provides a reasonable percentage of any charitable service free or at a substantially reduced cost to persons, animals, or organizations that are unable to pay for such services. No evidence was presented to show that any charitable service was provided free or at a substantially reduced cost. No evidence was presented to show that persons, animals, or organizations actually received any charitable service and that those persons, animals, or organizations were unable to pay for such service(s). Petitioner does not currently provide any of the services listed in Subsection 212.08(7)(o).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying a consumer's certificate of exemption to Unto Others, Inc. DONE AND ENTERED this 31st day of August, 1998, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of August, 1998.
The Issue The issue for determination is whether Petitioner is eligible for a consumer certificate of exemption pursuant to Subsection 212.08(7)(o), Florida Statutes.
Findings Of Fact On January 31, 1994, the National Council of La Raza (Petitioner) filed an application with the Department of Revenue (Respondent) for a consumer certificate of exemption as a charitable organization. Petitioner indicated, among other things, on its application that it was a social welfare organization. Petitioner filed the application in anticipation of bringing its annual conference to Miami Beach, Florida in July 1994. 1/ Petitioner is a private, nonprofit organization which was incorporated in 1968 in Arizona. Petitioner's national headquarters is in Washington, D.C. and it has offices in Arizona, California, Illinois, and Texas. Article III of Petitioner's second amended articles of incorporation provides in pertinent part that one of its purposes is to "operate exclusively for charitable and educational purposes, including, but not limited to improvement of the condition of the Mexican American poor, and the under privileged." Article III of the amended articles of incorporation further provides in pertinent part that in carrying-out its purpose it would "conduct research and inquiry of the problems and issues that confront, with local variations and particular effects, the Chicano communities"; "promote meetings, conferences, seminars, discussions and other forms of group communication and analysis of the same among those engaged in organizational activity"; "provide technical assistance to affiliated barrio/community development organizations and to encourage, promote and facilitate mutual aid and assistance among them in order to strengthen each of them through the moral, technical and material resources of all"; "encourage and assist the development of the moral, technical and material resources of the barrios and colonias"; and "organize, exist and function as a charitable, non-profit, non-political 501(c)(3) tax-exempt organization." Also, Article III of the amended articles of incorporation provides in pertinent part that its priorities are to "serve as the national advocate and mobilizer of resources and support for barrio/community development programs"; and "deliver program support and technical assistance services to barrio/community development programs in [named] priority areas." Consistent with the purposes in Petitioner's amended articles of incorporation, Petitioner provides in its publicly disseminated literature that it provides its services through four major types of initiatives: (a) "capacity-building assistance to support and strengthen Hispanic community-based organizations"; (b) "applied research, public policy analysis, and advocacy on behalf of the entire Hispanic community, designed to influence public policies and programs"; (c) "public information efforts to provide accurate information and positive images of Hispanics in the mainstream and Hispanic media"; and (d) "special catalytic efforts which use the [Petitioner] structure and reputation to create other entities or projects important to the Hispanic community". On or about May 1, 1968, Petitioner received a federal income tax exemption from the Internal Revenue Service as an organization described in Section 501(c)(3) of the Internal Revenue Code. Petitioner's organizational classifications under Section 501(c)(3) were charitable, educational and scientific. Petitioner's Section 501(c)(3) federal income tax exemption was effective at the time of its application with Respondent for a consumer certificate of exemption. Petitioner has been granted sales tax exemption by Washington, D.C., Michigan, Texas, and the city of Los Angeles, California. Petitioner's organizational structure consists of a Board of Directors, Office of the President, Office of Finance, Office of Administration, Office of Research Advocacy and Legislation, Office of Technical Assistance and Constituency Support, Office of Institutional Development, and Office of Development and Special Events. As to the Office of Research Advocacy and Legislation (ORAL), it is responsible for conducting research and analysis of issues which have been identified by Petitioner's Board of Directors and affiliates as having a primary importance to the Hispanic community. ORAL, through its Policy Analysis Center, conducts studies and research on immigration, education, housing, poverty, welfare, census, and national farm workers issues. Also, ORAL engages in a limited amount of lobbying on behalf of the Hispanic community. ORAL's services are mainly educational. The services include providing information and pamphlets on immigration and civil rights and producing a national radio program on immigration issues. The services are delivered primarily through brochures and pamphlets which are distributed without charge to Petitioner's affiliates and certain groups and organizations. Other groups and organizations are charged a fee depending upon what the group or organization is. ORAL's services are provided to a disadvantaged Hispanic population. As to the Office of Technical Assistance and Constituency Support (TACS), it is responsible for interfacing with both Petitioner's affiliates and its branch offices to directly provide services to the disadvantaged Hispanic community. Most of TACS' assistance focuses on resource development, program operations, and management or governance needs, in addition to addressing critical community needs through national emphasis programs operated in cooperation with Petitioner's affiliates. Also, TACS provides capacity-building assistance to the staff and board members of Hispanic community-based organizations through staff and board training and on-site assistance. As to the Office of Institutional Development (OID), it is responsible for conducting research on issues new to Petitioner and directing Petitioner's services to the Hispanic community. OID coordinates, on the national level, Petitioner's new programs (program models) in education, health education, the elderly and leadership development, as well as projects involving Europe. OID implements the new programs through Petitioner's affiliates. For example, in the 1980's AIDS became a new concern for the Hispanic community and was assigned to OID. A national toll-free AIDS hot line was established by OID and maintained in its office. The hot line is advertised through various media communications, Petitioner's affiliates, and community- based organizations. Additionally, funding has been provided through OID to two (2) Florida affiliates, Centro Campesino Farmworkers Center, Inc., and the Hispanic Alliance. The funding was provided through OID's leadership initiatives to a coordinating council for the purpose of distributing post-hurricane relief to farmworkers in Florida. The offices of ORAL, TACS, and OID have under their responsibility mission activities and core activities. Core activities involve issues which are identified by Petitioner's board and its affiliate organizations as being at the core of Petitioner's existence, such as civil rights enforcement and immigration issues. These activities are not necessarily funded by a particular government contract or grant from a private foundation or corporation. Mission activities consist of activities which are important in supporting the mission of Petitioner, but are not currently funded by a particular government contract or grant from a private foundation or corporation. These activities relate to administrative functions engaged in by ORAL, TACS, and OID to support Petitioner's operations and are funded with internal funds. The offices of ORAL, TACS and OID work interdependently. A problem is identified in the Hispanic community by Petitioner and/or its affiliates and assigned to ORAL or OID; ORAL or OID conducts research and develops programs to address the problem; and TACS delivers the program services to the disadvantaged Hispanic community, working with affiliates and community-based organizations to implement the programs. A program called Project EXCEL (Excellence in Community Educational Leadership) is an educational program developed by Petitioner. The problem of illiteracy and low graduation rates was identified. Research was conducted on the problem and the program, Project EXCEL, was developed. Petitioner implemented the program through its on-site staff who had oversight responsibility and who evaluated the program and actually worked with the clients to assist in the program's evaluation; whereas, the actual direct educational services were delivered to the clients by persons working for the organizations. Project EXCEL was implemented at public schools, day care centers, and churches. Petitioner secured and provided the funding for the community-based organizations to run demonstration sites for Project EXCEL. Two Florida organizations received assistance from Petitioner regarding Project EXCEL. Centro Campesino Farmworkers Center, Inc., which holds a sales tax exemption from Respondent, utilized the Project EXCEL curriculum developed by Petitioner in providing after-school services to children of migrant farmworkers. Also, the Coalition of Florida Farmworkers Organizations, Inc., which holds a sales tax exemption from Respondent, received a grant to implement Project EXCEL and Petitioner provided a curriculum and some of its staff to assist the Coalition of Florida Farmworkers in working with the children. Both the Centro Campesino Farmworkers and the Coalition of Florida Farmworkers pay annual dues to Petitioner as affiliates. They have received from Petitioner pass-through funds as subgrants. Petitioner does not engage in direct fund raising to support the organizations. Pass-through funding is funding distributed through Petitioner to its affiliates or other outside organizations through subgrants. The funds are received by Petitioner from grants for which Petitioner applies. For both the Centro Campesino Farmworkers and the Coalition of Florida Farmworkers, Petitioner has not provided volunteers to run any of the organizations' programs or provide the organizations' services at the local level. Furthermore, Petitioner does not control, govern, or administer any of the Centro Compesino Farmworkers' or the Coalition of Florida Farmworkers' services or activities at the local level. In another instance, Petitioner identified housing problems for the Hispanic community regarding ownership, quality and availability. Research showed that, for Hispanics, there existed a low rate of home ownership, substandard housing, and discrimination. Petitioner secured funding to build low income housing and commercial developments in low income neighborhoods; at times, providing pre-development costs or professional services such as engineers and architects. As with Centro Campensino Farmworkers and the Coalition of Florida Farmworkers, Petitioner does not provide volunteers to work for its affiliate organizations at the local level (Petitioner's staff are paid employees), Petitioner does not engage in direct fund raising to support its affiliate organizations, and Petitioner does not control, govern, or administer any of the services at the local level. Also, ORAL, TACS, and OID have worked interdependently in developing programs in the health field. AIDS public service announcements have been produced by Petitioner. An AIDS national toll-free hot line is operated by Petitioner, with professional staff manning the phones to provide information to AIDS patients and others and with the costs being borne by Petitioner. As to the Office of Development and Special Effects (ODSE), it is responsible for fund raising, proposal writing, receipt of grants, Petitioner's future endowment or capital campaign. ODSE's primary responsibility is the operation of Petitioner's annual conference and Congressional awards dinner. The annual conference is held in different locations and the awards dinner is held in Washington, D.C. The annual conference is attended by thousands of participants from across the United States to discuss topics and issues relevant to the Hispanic community. Affiliates which attend pay a registration fee. Usually offered at the conference are workshops, seminars, an art show, job fair, silent auction, and an exhibit hall where corporations and governmental agencies can promote themselves. Except for the meal events, all the other activities are open to the public at no charge. As part of the conference, Petitioner sponsors a Youth Leadership Program in which the expenses are paid for 25 to 30 youths (tenth to twelfth graders), who are disadvantaged and at-risk and from various parts of the country, to attend the conference. A similar program is sponsored by Petitioner for college students. Additionally, Petitioner sponsors a one day event for area disadvantaged district school students. Petitioner's 1994 annual conference was held at Miami Beach, Florida on July 17 - 20, 1994. Petitioner provided or sponsored all of its usual activities or programs, except for a job fair. In addition, Petitioner sponsored a senior citizens day for the disadvantaged elderly. The registration fee for affiliates was $150. Petitioner's Office of Finance is responsible for the fiscal management of all internal matters and the financial practices of Petitioner. Petitioner reflects its fiscal financial picture on two documents. As a Section 501(c)(3) organization, Petitioner files federal tax returns, known as Forms 990, on a yearly basis. Additionally, Petitioner has audited financial statements prepared annually. Among other things, Form 990 reflects Petitioner's expenses found on its audited financial statements, but in greater detail. Petitioner's fiscal year is from October 1st to September 30th of each year. Expenditures associated with Petitioner's Board of Directors, Office of the President, Office of Finance, and Office of Administration are general administrative expenses. These expenditures fall within the category of supporting activities on Petitioner's audited financial statements. For the fiscal year October 1, 1992 to September 30, 1993, Petitioner's total expenditures were $5,581,316. Of this total of expenditures, $4,407,194 represented expenses for program services, per the category on Form 990, of which $126,250 represented pass-through funds to subgrantees; of which over $2.6 million represented compensation of officers and directors, etc., other salaries and wages, pension plan contributions, other employee benefits, payroll taxes, and conferences, conventions and meetings 2/ ; and of which $57,421 represented legislative advocacy. Also, of the total expenditures, $1,174,122 represented expenses for supporting activities, of which $976,044 represented general administration; and of which $198,078 represented fund raising which is money expended in writing proposals to fund Petitioner's programs. For the fiscal year October 1, 1991, through September 30, 1992, Petitioner's total expenditures were $5,150,084.00. Of this total of expenditures, $3,982,552 represented expenses for program services, including $172,620 for pass-through funds to subgrantees, over $2.3 million for compensation of officers and directors, other salaries and wages, pension plan contributions, other employee benefits, payroll taxes, and conferences, conventions and meetings, and $54,410 for legislative advocacy. Also, of the total expenditures, $1,167,532 represented expenses for supporting services, including $978,557 for general administration, and $188,975 for fund raising. Even though Petitioner claims to have 182 affiliates, only 162 affiliates were identified. Petitioner actively works with 120 of the 162 identified affiliates. Nine of the affiliates hold certificates of exemption issued by Respondent. Because of the minimal descriptions provided by Petitioner of the affiliates, only a small minority could be determined to provide services for free or at a substantially reduced cost.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order DENYING the National Council of La Raza a consumer certificate of exemption. DONE AND ENTERED this 8th day of February, 1996, in Tallahassee, Leon County, Florida. ERROL H. POWELL, 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 8th day of February, 1996.
The Issue Whether Petitioner, Children's Charity Fund, Inc., qualifies under Section 212.08(7)(o)2.b., Florida Statutes, for a consumer certificate of exemption as a charitable institution.
Findings Of Fact Petitioner, Children's Charity Fund, is a not-for-profit corporation and qualifies as a tax-exempt organization pursuant to Section 501(c)(3) of the United States Internal Revenue Code. Petitioner maintains an office in Sarasota, Florida. The articles of incorporation specify that the nature of the business to be transacted and the purpose to be promoted by Children's Charity Fund "shall be exclusively charitable, including raising funds in any lawful manner" for the following purposes: (1) to educate and inform the public about the needs of handicapped and disabled children; (2) to provide referral services and maintain a hot-line for handicapped children; (3) to provide services "in whatever form possible that the Board may deem necessary" for handicapped children and their parents; and (4) to buy medical equipment for handicapped and disabled children. The Children's Charity Fund claims entitlement to a consumer certificate of exemption based primarily on the fourth purpose listed in paragraph 2 above. In carrying out this purpose, the Children's Charity Fund purchases various types of medical equipment for handicapped and disabled children who reside in Florida as well as in other states. The medical equipment is provided to children who need the equipment, but whose parents have no insurance or their requests for the equipment have been turned down by Medicare, Medicaid, or their insurance companies. In determining which applications for medical equipment it will approve, the Children's Charity Fund has not established income limits for the applicant family. The circumstances of each family are considered on a case-by-case basis and factors other than income are also considered. To date, Children's Charity Fund has never denied an application for medical equipment for a handicapped or disabled child, regardless of family income, if such equipment was needed by the child. In addition to purchasing medical equipment for handicapped and disabled children, the Children's Charity Fund provides Christmas gifts and tickets to events organized and promoted by the Children's Charity Fund such as charity softball games. The Children's Charity Fund claims that these gifts and tickets are charitable services. During its most recent fiscal year, the Children's Charity Fund spent less than 50% of its operational expenditures on qualified charitable services. The evidence at hearing established that during the relevant time period, Children's Charity Fund spent less than 35% of its total operating expenditures on qualified charitable services. This percentage does not meet the requirements of Rule 12A-1.001(3)(g)3.e., Florida Administrative Code, which mandates that the organization seeking tax exempt status as a charitable institution spend "in excess of 50.0 percent of [its] operational expenditures toward qualified charitable services." During its most recent fiscal year, Children's Charity Fund spent approximately 50% of its operating expenditures to pay for fundraising activities.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order denying a consumer certificate of exemption to Petitioner, the Children's Charity Fund, Inc. DONE AND ENTERED this 18th day of May, 1998, in Tallahassee, Leon County, Florida. Carolyn S. Holifield Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 18th day of May, 1998. COPIES FURNISHED: Ken Bowron, Sr. Executive Director Children's Charity Fund, Inc. 2011 Bispham Road Sarasota, Florida 34236 Kevin J. O'Donnell Assistant General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue Whether Petitioners, as members of the Florida Patient's Compensation Fund, are liable for additional assessments for Fund Years 1980-81 and 1981-82, as set forth in the Notice of Assessment filed on April 22, 1985. This proceeding arose as a result of petitions filed by two groups of hospitals contesting a Notice of Assessment issued by the Department of Insurance on April 22, 1985, based upon the certification by the Board of Governors of the Florida Patient's Compensation Fund to the Insurance Commissioner of a deficiency in the amount of money available to pay claims for the 1980-81 and 1981-82 fiscal Fund years. The proposed assessment seeks payment of the alleged deficiency in the total amount of $40,480,556.00 from health care providers who were members of the Fund during the Fund years in question, pursuant to Section 768.54, Florida Statutes. By Order, dated June 11, 1985, the two cases were consolidated into one proceeding, and the Florida Patient's Compensation Fund was granted intervention. Petitioners originally consisted of Southeast Volusia Hospital District and 58 other hospitals (Case No. 85-1650), and Tallahassee Memorial Regional Medical Center and 39 other hospitals (Case No. 85-1664). However, prior to final hearing, a majority of the hospitals from both groups voluntarily dismissed or otherwise withdrew their claims for relief in the proceeding. By Notice of Joinder, dated July 30, 1985, American Hospital, Northridge General Hospital and Pan American Hospital abandoned their claims in Case No. 85- 1650 and adopted the Amended Petition in Case No. 85-1664. As a result, the only remaining party of record in Case No. 85-1650 was St. Petersburg Osteopathic Hospital, Inc. which by Order, dated August 13, 1985, was ordered to show cause why it should not be dismissed as a party for failing to advise the Hearing Officer as to its status pursuant to Order dated July 12, 1985. No response to the Order to Show Cause having been received, it will be recommended herein that St. Petersburg osteopathic Hospital Inc. be dismissed as a party in Case No. 85-1650. Further, inasmuch as there are no longer any parties to that case, it will also be recommended for dismissal herein. By Prehearing Conference Order, dated July 11, 1985, Case No. 85-1664 was restyled to reflect Petitioners as Duval County Hospital Authority, et al. The parties remaining in Case No. 85-1664 at time of hearing were American Hospital of Miami, Inc., Duval County Hospital Authority, Gateway Community Hospital, Hialeah Hospital, Northshore Medical Center, Inc., Northridge General Hospital, Inc., Pan American Hospital, and St. Joseph's Hospital. By Prehearing Orders, dated July 11 and July 29, 1985, it was determined that questions concerning the setting or adequacy of base fees or additional fees, the statutory "cap" on physician assessments! the statutory cumulative "cap" on maintenance of the Fund per fiscal year, and the effect of payment limitations placed on the Fund by statute, were not properly at issue in this proceeding. However, one issue presented in the Amended Petition in Case No. 85-1664 as to whether the Fund has statutory authority to estimate reserves as a basis for an assessment was deemed to be an issue within the scope of this proceeding. The parties entered into a Prehearing Stipulation (Joint Exhibit 1), which included certain factual matters, subject to relevance, and the unresolved question of law as to whether the Fund and Department may include reserves on known claims other than those resolved by settlement or verdict in calculating the amount needed for assessments. At the final hearing, the parties stipulated that the Fund certification includes full credit for all previously noticed assessments, whether collected or not. They further stipulated as to the expertise of Charles Portero in claims handling and reserving practices. The parties also stipulated that there was no issue of fact as to the reasonableness of any individual claim reserve existing as of January 31, 1985, or included in the certification, except as to the Von Stetina claim. Testimony of Charles Portero concerning the Von Stetina claim was made confidential and the transcript of such testimony was extracted and submitted under seal pursuant to order of* *NOTE: Page 4 of the Recommended Order is omitted from the document on file with DOAH and, therefore, is not included in this research database. amount of the projected excess or insufficiency to the Insurance Commissioner with a request that he levy an assessment against Fund participants for that fiscal year. Petitioner hospitals were members of the Fund during one or more of Fund years 1980-81 and 1981-82 Each month, the Administrative Manager of the Fund follows a prescribed procedure to determine if an assessment is required for a particular Fund year, utilizing what is termed a "retrospective rating plan." The plan provides that assessments will not be levied in any year until the cash available for paying claims in that membership year is down to 50 percent of the loss and expense reserves for all known losses. It further provides that the amount should be sufficient to create enough cash flow to pay known reserved claims for the year showing such deficit. In reviewing the Fund's monthly financial report of January 1, 1985, it was determined that a sufficient deficit existed to warrant the levy of an assessment. Thereafter, an outside audit of the Fund accounts was conducted and presented to the Fund Board for Certification. On March 25, 1985, the Florida Patient's Compensation Fund certified a deficiency to the Department in the following amounts: 1980-81 Membership Year $14,866,718.00 1981-82 Membership Year 25,613,838.00 TOTAL $40,480,556.00 This certification was authorized by the Board of Governors of the Florida Compensation Fund on March 19, 1985. An audit substantiating the need for the assessment was performed by Catledge, Sanders and Sanders, certified public accountants. On April 22, 1985, the Department of Insurance issued a Notice of Assessment for Fund years 1980-81 and 1981-82. Notice was published in Volume II, No. 8 at page 1907 of the Florida Administrative Weekly on May 3, 1985. The Notice of Assessment announced the Department's intent to levy and authorize the Fund to collect an assessment in the amount certified by the Fund ($40,480,556.00). The Notice of Assessment further provided that the assessment be divided among the various classes of health care providers for each year as follows: (i) Physicians and Surgeons 1980-81 1981-8 Class 1 0 0 Class 2 0 0 Class 3 0 0 (ii) Hospitals $14,754,672 $25,388,773 (iii) HMO 35,621 161,102 Ambulatory Surgical Centers 76,425 63,963 Professional Associations 0 0 The Department computed the portion of the assessments to be paid by the different classes of health care providers for all years in question based upon the "indicated rate method," modified to all5w for the statutory proscription against assessing certain health care providers more than "an amount equal to the fees originally paid by such health care provider." This is the same method utilized in five previous assessment proceedings and specifically approved by the Florida Supreme Court in Department of Insurance v. Southeast Volusia Hospital District, 438 So. 2d 815, 821 (Fla. 1983). The appropriateness of the procedure has not been placed at issue in this proceeding. The amounts of the assessments sought by the Fund, and described in the Notice of Assessment, were calculated by the Fund by using the following formula: Total fees paid for the Fund year + Investment Income attributable to the Fund year + Amounts previously noticed as assessments Expenses allocated to that Fund year Amount paid on claims for that Fund year Amount reserved for all known claims for that Fund year The Fund used the same procedure calculating the amount of this assessment as it used in the first five assessments. The Department used the same procedure and methodology (indicated rate method) in allocating the assessment among the various classes as it used in the first five assessments. The amount of the assessment is based on the amount needed to pay known claims. This amount needed to pay known claims includes the amount reserved as the estimated loss and expense payments. The Fund follows standard industry reserving practices, as modified in several respects by its particular needs and procedures. Each claim is assigned to a claims supervisor who obtains information concerning the claims incident from the primary insurance carrier. The initial reserve on a claim is based on a variety of factors, including the type of injury, potential damages, liability considerations, geographic location, and the particular attorney for the claimant. After a determination that a reserve is needed on the file, the claims supervisor makes an initial determination of the amount which is referred to the claims manager for approval. Final approval of the posted reserve lies in the hands of the Claims Committee of the Fund. The figure is usually fixed at a sum for which it is believed that the claim could be settled and the potential liability arising from a jury verdict. The necessity of obtaining approval of the Claims Committee for the initial reserve and any subsequent changes creates a certain amount of delay in obtaining such decisions. Changes may be effected in the reserve when injuries are found to be greater than anticipated, or because of the discovery of additional facts affecting potential liability. It is not unusual for a particular claim to be submitted three or four times to the Claims Committee before it is settled.
Findings Of Fact The following Findings of Fact are based on the evidence presented at the hearing: The parties stipulated to the reasonableness of all established claim reserves reflected in the current assessment sought by the Fund. However, Petitioners questioned the reasonableness of the Fund reserve on the Von Stetina claim which had been included in a previous assessment. Although it is questionable as to whether the adequacy of such a prior reserve should be addressed in a proceeding contesting a subsequent assessment, it is clear that the determination of a deficit necessarily involves deductions or credits for prior reserves in determining a current deficit. In any event, the Von Stetina reserve was established according to the standards practices of the Fund, and no evidence was presented by Petitioners to show that it was unreasonable or otherwise incorrect either on January 31, 1985, when it was determined that a sufficient deficit existed to warrant the levy of an assessment, or at the present time. The Von Stetina case is presently pending in the judicial process and, accordingly, there is no basis at the present time to reduce the previously established reserve. (Stipulation, Testimony of Portero) As heretofore found, the Fund includes a "claim" as a basis for an assessment as soon as a reserve for the claim is established. Petitioners presented the testimony of an accountant who expressed the opinion that the term "claim" as used in pertinent statutes should be restricted to final judgments or settlements against a health care provider in excess of the provider's primary coverage. This "cash basis" methodology would require the entry of a final judgment or settlement before the claim could be considered in determining whether a deficit exists for any particular Fund year. On the other hand, expert testimony from the Fund's Claims Manager shows that the definition of "claim" as used by the Fund is basically in accordance with the generally accepted meaning and usage of that term by the insurance industry. The reserving practices of the Fund are found to constitute a reasonable basis for arriving at the projected amounts required to meet the claims made against the Fund account for a particular fiscal year. (Testimony of Cherry,Portero) It is further found that the present assessment was prepared in accordance with standard procedures, that the amounts proposed to be levied as an assessment for each Fund year in question represent a deficiency in the Fund account for such years, and that the proposed allocations of such amounts among the specified health care providers are appropriate. (Respondent's Exhibits 1-7, Joint Exhibit 1- Stipulation, Testimony of Portero)
Recommendation In view of the foregoing, it is RECOMMENDED that a final order be issued by the Department of Insurance dismissing Case No. 85-1650, and levying assessments in accordance with the Notice of Assessment, dated April 22, 1985, for the Fund years specified therein. DONE and ENTERED this 15th day of October, 1985, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1985. APPENDIX PETITIONERS' PROPOSED FINDINGS OF FACT Paragraphs 1-7: Adopted by Stipulation (Joint Exhibit 1) in Findings of Fact 1-3, 5, 8. Paragraphs 8-10: These are conclusions of law and are therefore rejected as not being Proposed Findings of Fact. See Conclusions of Law in Recommended Order. Paragraph 11: Rejected as unsupported by the evidence. See Finding of Fact 10. Paragraph 12: Adopted in Finding of Fact 8. Paragraph 13: First sentence rejected as unsupported by evidence. Remainder adopted in Finding of Fact 10. Paragraph 14: Rejected as unsupported by the Evidence. (Confidential Portion) Paragraphs 1-6: Irrelevant and unnecessary except as set forth in Findings of Fact 9. RESPONDENT'S PROPOSED FINDINGS OF FACT Paragraphs 1, 3-10: Adopted in Findings of Fact 1-8. Paragraph 2: Rejected as Conclusion of Law rather than Finding of Fact. Paragraphs 11 & 12: Substantially adopted in Findings of Fact 9 Copies furnished: Honorable William Gunter Insurance Commissioner The Capitol Tallahassee, Florida 32301 William C. Owen and W. Douglas Hall, Esquires Carlton, Fields, Ward, Emmanuel, Smith, and Cutler Post Office Drawer 190 Tallahassee, Florida 32301 David A. Yon, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 Clay McGonagill 241 East Virginia Street Tallahassee, Florida 32301 St. Petersburg Osteopathic Hospital, Inc. 401 15th Street, North St. Petersburg, Florida Information Copy to Neil H. Butler, Cathi C. O'Halloran and Ben Wilkinson, Esquires, Pennington, Wilkinson, Dunlap, Butler & Gautier Post Office Box 13527 Tallahassee, Florida 32317-3527
Findings Of Fact Peace River Center for Personal Development (herein Petitioner) is a community service center that offer services to clients who are victims of crimes. Petitioner has been awarded VOCA funds in the past by Respondent. Pursuant to the contract with Respondent, Petitioner was advised that VOCA funds were awarded specifically and that renewal was not automatic but would be considered each funding year. The contract and the VOCA guidelines grant Respondent the discretion to renew or not renew funding requests By letter dated March 23, 1994, Respondent advised Petitioner that its VOCA contract was expiring on June 30, 1994. Petitioner was also advised that its contract may or may not be renewed for an additional year depending on the outcome of a program evaluation and the availability of VOCA funds. In the March 23, 1994 letter to Petitioner, Respondent advised Petitioner that federal VOCA funding to Florida for the 1994/95 fiscal year had been reduced and the reduction would be passed on to applicants. The issuance of renewal funds for the 1994/95 VOCA contracts were based on three criteria, (1) the grant renewal requests, goals and objectives, and budget; (2) an evaluation of the VOCA program's effectiveness in serving victims of crime; and (3) the availability of funds. For fiscal year 1993/94, Petitioner received $55,000 in VOCA funds. Those funds were to assist with the provision of services to adult sexual abuse and domestic violence victims. Petitioner submitted documentation in support of its initial VOCA funding request and indicated that part of its funding would be used to hire a coordinator therapist and a child care advocate. However, during the course of the 1993/94 fiscal year, Petitioner did not fill those positions until the second half of the year based on delays that it experienced in building a new facility. As a result, a portion of the VOCA funds lapsed. Because of those delays, a contract amendment was executed by the parties allowing the lapsed money, which would have been spent for those professional positions, to be used for furniture and supplies. Based on the modification, revised goals were established. Thus, Petitioner set out to serve only 20 children in the child care unit instead of the 60 as noted in the funding request and to provide only 300 hours of child care to children of domestic violence victims instead of the 1000 hours as requested. The modification was an effort to maximize funding in the interest of the community for the 1993/94 fiscal year. Respondent established a procedure for evaluating all applicants for VOCA funding grants in 1994/95. This procedure included forwarding a packet of information which was sent to all applicants. The packet included a cover letter, instructions, a check list and various forms to be completed. As noted, the federal VOCA grant to Respondent was reduced by 5 percent for fiscal year 1994/95. Although Respondent's staff initially recommended to the Attorney General that all VOCA grants be reduced by 5 percent, Respondent reconsidered and decided that it would be more appropriate to evaluate each program to determine which programs were more efficient and were providing the most needed services to the communities. Respondent also reviewed those programs which provided services that were offered by VOCA monies and were achieving the goals and objectives that were originally stated in the funding request. The Respondent implemented this procedure and in doing so, set up a competitive process to rate each of the 48 existing VOCA grantees. To be awarded VOCA funds, the applicants were initially requested to submit renewal applications. Secondly, Respondent solicited comments from community representatives concerning the performance of the grantee over the preceding fiscal year and evaluated those comments. Next, Respondent reviewed and analyzed the funding by the internal monitoring system that was in place at the time. Utilizing this procedure, the grant managers within Respondent's office reviewed their internal reviews, evaluated the monitoring report of the agency that they had prepared including monthly reimbursement requests and any communication or correspondence that had been entered into between the agencies. Respondent's input from the community centered around the performance of the grantees. In measuring their performance, Respondent attempted to get at least three certifiers from persons in the community who worked with, or were familiar with, the grantees. Respondent selected three of the certifiers that had originally certified the grantee program prior to the award of the first VOCA grant and sent forms to those entities. In addition, Respondent attempted to get two additional certifiers, the state attorney's office or local law enforcement, to participate in the certification process. This second group of certifiers was contacted by telephone. In Petitioner's case, only three certifications were submitted. Respondent reviewed those written certifications and rated Petitioner. One certifier observed that Petitioner had insufficient staffing, that waiting periods were too long for victims to get in and that rape crisis volunteers needed to be matched in age with rape victims. That certifier did not intend for her review to impact adversely upon Petitioner's VOCA grant request although she stood by the representations made in the certification. The next certifier related that Petitioner displayed a program weakness in that victims of domestic violence were required to attend the same domestic violence treatment program class as the abuser or pay an additional $200 to attend a different treatment program. She also noted that certain child care victims were not assisted during court appearances, which was an area that Petitioner specifically noted that it would provide services under the VOCA grant. The next certifier related that Petitioner had a number of weaknesses in its program, albeit unspecific, and that she was familiar with the quality of services that Petitioner rendered with VOCA funds since February of 1994. Upon receiving all of the certification information, Respondent compiled a report and ranked each applicant by assigning a numerical value to each applicant. The ranking was based on the totality of the responses received by Respondent. All of the applicants were rated and based on those ratings, their VOCA grant applications were either renewed or not renewed. Of the 48 applicants evaluated, 45 were funded in whole or in part based on their numerical ranking and 3 requests were not funded, including Petitioner's request. Of all the applicants, Petitioner was ranked 48th or last. Specifically, Petitioner was advised of the non-renewal by Respondent in a June 10, 1994 letter that: This decision was based on an internal performance evaluation and upon performance evaluations of your program by agencies and organizations within your community. A major factor in the non-renewal determination was the administration of the VOCA funds, resul- ting in hiring delays, causing a de-obligation of funds and unnecessary waiting lists for crime victims. The effectiveness of services to your community was also a major factor in not offering your agency a renewal contract. Finally, Respondent's chief of advocacy and grants management of the Attorney General's office, Marcie Davis, was formerly employed in a position where she answered a toll-free information line to assist victims of crimes. Ms. Davis recalled an attempt, by her, to get counselling for a child who was a victim of domestic violence in Petitioner's service area (his mother was murdered by her boyfriend) during the 1993/94 fiscal year. Ms. Davis was unable to get services from Petitioner for that child due to its waiting list - a period of eight to thirteen weeks. Respondent's denial of Petitioner's application for VOCA funds was a non-renewal and was not a termination for cause. Respondent utilized sound discretion in awarding the VOCA funding to the various grantees. There was no evidence that the ranking of any grantee, including Petitioner, was either arbitrary or capricious.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Respondent enter a final order denying Petitioner's request to reverse the discretionary decision made to deny Petitioner's request for VOCA funding for the 1994/95 fiscal year. DONE AND ENTERED this 26th day of January, 1995, in Tallahassee, Florida. JAMES E. BRADWELL 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 January, 1995. APPENDIX TO RECOMMENDED ORDER Rulings on Petitioner's proposed findings of fact: Paragraph 4, rejected, not probative, paragraph 5 rejected, contrary to the greater weight of evidence, paragraphs 11-13, Recommended Order. Paragraph 7, rejected, speculative and not probative. Paragraph 9, rejected, contrary to the greater weight of evidence, Paragraphs 9 and 10, rejected contrary to the greater weight of evidence, paragraphs 12 and 17, Recommended Order. Rulings on Respondent's proposed findings of fact Paragraph 11, rejected, irrelevant and not probative. COPIES FURNISHED: Dennis Eshman, Esquire 1745 Highway 17 South Bartow, Florida 33830 M. Catherine Lannon, Esquire Gregory A. Chaires, Esquire Office of the Attorney General PL-01, The Capitol Tallahassee, Florida 32399-1050 Honorable Robert Butterworth Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32399-1050
The Issue The issues are as follows: (a) whether Respondent took "agency action" when it certified the Okaloosa-Walton College Foundation, Inc. as its direct support organization and endorsed the Foundation's decision to sell the Mattie Kelly property; and whether Petitioners have standing to request an administrative hearing on those issues.
Findings Of Fact The Foundation was incorporated and first certified as a direct support organization in 1988. The Mattie Kelly property is approximately 13 acres of waterfront property on Choctawhatchee Bay in Destin, Okaloosa County, Florida. It includes the former residence of Mattie Kelly and the real property surrounding the residence. Destin, Okaloosa County, Florida, is a municipality, bounded on the north and west by Choctawhatchee Bay, on the south by the Gulf of Mexico, and on the east by Walton County, Florida. On August 17, 1992, Mattie Kelly executed her Last Will and Testament (will). Article VIII of the will states as follows: I give, devise and bequeath my personal residence located a 1200 Indian Trail Road, Destin, Florida 32541, including all real property surrounding the residence and the sum of Five Hundred Thousand Dollars ($500,000,000) to Okaloosa-Walton Community College for the establishment of the "Mattie Kelly Cultural and Environmental Institute of Okaloosa-Walton Community College." The purpose of the "Mattie M. Kelly Cultural and Environmental Institute of Okaloosa-Walton Community College" shall be: To provide a meeting place for literary societies, fine arts groups, and small performing groups. To provide a location for conferences and seminars offered through Okaloosa-Walton Community College. To provide a location for biology studies and marine science studies associated with Choctawhatchee Bay and the Gulf of Mexico. To provide a location for displaying the coastal heritage of Northwest Florida. The Five Hundred Thousand Dollars ($500,000,000) endowment which forms part of this gift shall be used only for maintenance and operating costs in furtherance of the above purposes, including the perpetual care, maintenance and upkeep of my mausoleum. A Personal Representative's Warranty Deed dated March 6, 1997, conveyed the property to the Foundation. At some point in time, the Foundation decided to sell the property to a real estate developer and entered into a contract to do so. On March 15, 2004, Petitioner Hammet filed a Petition for Administrative Hearing with the Board. The petition questioned whether the Board should support, endorse, and/or not oppose the sale of the property for private real estate development purposes, accept the college president's recommendation about the sale, and certify the Foundation to be operating in the best interest of the state. The Board's March 16, 2004, minutes state as follows in relevant part: ACTION AGENDA DSO Certification/IRS 990 The District Board of Trustees certified that requirements of Direct Support Organization under FS 1004.70 have been met and that the OWCC Foundation is in compliance with the procedures as herein described and accepts Form IRS 990 as submitted. Further, the District Board of Trustees supports and endorses the Foundation Board of Directors in its endeavor to sell the Mattie Kelly Property (Motion: Henderson; Second Rainer. Vote: 6 yes; 2 no (Smith, Wells). Motion carried. On April 22, 2004, the Board referred Petitioner Hammet's petition to DOAH, together with the Board's Motion to Dismiss. DOAH assigned this case DOAH Case No. 04-2049. On June 15, 2004, the Board referred the following to DOAH: (a) Petitioner Coastkeepers' Petition for Administrative Hearing; (b) Petitioner's Motion and Suggestion for Disqualification of Joseph Henderson and James R. Richburg; and the Board's Motion to Dismiss Petition for Administrative Hearing. DOAH assigned the case DOAH Case No. 04-2141. On July 8, 2004, some of Ms. Kelly's relatives filed a suit against the Foundation in Circuit Court. In Count I of the complaint, the relatives sought a declaratory judgment that the Foundation's proposed sale violates Ms. Kelly's will and that the relatives had reversionary rights to the property. In Count II of the complaint, the relatives sought injunctive relief to restrain the Foundation from selling the property to a third party in accordance with a written contract of sale. On April 20, 2005, the Florida Attorney General issued an Advisory Legal Opinion, stating that the Foundation is subject to Florida's Sunshine Law. On May 5, 2005, the Foundation voted to ratify the contract to sell the property and to confirm the prior decision to sell the property. On June 3, 2005, the First Circuit Court entered a "Final Judgment for Defendant" in L. Bernarr Kelly, Carol Kelly and Lowell B. Kelly v. The Okaloosa-Walton Community College Foundation, Inc., No. 2004-CA-405 (Fla. 1st Cir. Ct. June 3, 2005), which states as follows in pertinent part: . . . The Court is convinced by the nature of the Will, and the testimony and evidence that Mattie Kelly had legal advice in her estate planning, that if Mattie Kelly intended for the subject property to be placed in a trust, and if she desired to put restrictions on the subject property to prevent Defendant Foundation from selling it, that she knew how to accomplish this, and that she chose not to do so. The Court finds . . . that Mattie Kelly did not intend to limit or restrict the sale of the subject property in the future to fulfill her desires for the creation of a cultural and environmental institute. . . . The Court finds that the deed dated March 6, 1997, . . . does not contain a reverter clause or language creating any right of reversion. . . . The Court finds that the deed conveyed a fee simple title to the OWCC Foundation with no right of reversion. The Court further finds that this deed was in accordance with the intent of Mattie Kelly at the time she executed her will. The Court finds that Article VIII of the Will which devised the subject property contains no language of trust and no language of reverter, and did not create a charitable trust . . . . The Court further finds that Defendant's proposed sale of the subject property does not include the "mausoleum property." . . . Since the mausoleum property is not being conveyed, the Court finds that the Plaintiffs no longer have standing as to the remaining property, and would deny Plaintiffs relief on this basis, in addition to the foregoing reasons. Therefore, the Court finds for the Defendant, The Okaloosa-Walton Community College Foundation, Inc. and against the Plaintiffs, and ORDERS and ADJUDGES as follows: Defendant Foundation's proposed sale of the subject property is not in derogation of Article VIII of the Last Will and Testament of Mattie Kelly, or the deed which conveyed the subject property to Defendant Foundation. Therefore, Defendant Foundation is not prohibited from selling the subject property, excluding the mausoleum property as described in Addendum #4 to the Contract for Sale and Purchase, in order to fulfill the intent of Mattie Kelly in creating the "Mattie M. Kelly Cultural and Environmental Institute;" however, all monies received from the sale of the subject property, including any matching funds, are to be used in the establishment and operation of the Mattie M. Kelly Cultural and Environmental Institute. [Emphasis added.] On June 8, 2005, Petitioners filed a Joint First Amended Petition for Administrative Hearing, stating as follows regarding standing: Petitioner Hammet's substantial interests will be affected by Respondent's determination because she and her family live within close proximity to the Mattie Kelly property and have often used and enjoyed the property for viewing the coastal heritage of Northwest Florida, and she wishes to continue to use and enjoy the property in the future. The Mattie Kelly property is a special place for Hammet and her family, where they have many pleasant memories and regularly have benefited from this public property being in their neighborhood. Hammet and her family will no longer be able to use and enjoy this accessible public resource if it is sold for private development. Petitioner Coastkeepers' substantial interest will be affected by Respondent's determination because it is a Florida non-profit corporation dedicated to protection of the environment in an area of the Gulf of Mexico Coast that includes Okaloosa and Walton Counties and Choctawhatchee Bay. Preservation of environmentally sensitive lands such as the Mattie Kelly property, and having the Mattie Kelly property as a location for biological studies, marine science studies, and studies of the coastal heritage of Northwest Florida, are vitally important to protecting Choctawhatchee Bay and the interest of Petitioner and its members, who include a substantial number of members who reside in Okaloosa and Walton Counties and have the present intention to use, visit, enjoy, and study biological, marine science and cultural heritage issues associated with Choctawhatchee Bay, the Gulf of Mexico, and the Mattie Kelly property at the Mattie Kelly property. The Mattie Kelly property is ideally suited to provide waterfront environmental education in an otherwise highly urbanized environment, including education of local residents, which is vital to controlling urban runoff, and for highlighting, encouraging, and educating the public of the need to protect Choctawhatchee Bay and the Gulf of Mexico. The Mattie Kelly property would no longer be available for such intended pursuits were the proposed sale of the Mattie Kelly property to private development interest go forward. Moreover, the proposed development of the very property set aside by Mattie Kelly would itself directly contribute to the urban runoff known to be causing problems in Choctawhatchee Bay. Choctawhatchee Bay has many examples of waterfront subdivision development and very little opportunity for environmental protection education in a local setting near where waterfront residential owners already live. These purposes will not be as well-served by educational efforts at OWC's main campus in Niceville, which is not waterfront and miles away from Choctawhatchee Bay. If properly managed, the Mattie Kelly property should be the field trip every school-age child in Okaloosa and Walton County takes, which would be a lasting legacy to Mattie Kelly that would truly be consistent with her express purposes. This opportunity will be forever destroyed if the property is developed as proposed. On June 24, 2005, Respondent filed a Motion to Dismiss Joint First Amended Petition for Administrative Hearing. On July 5, 2005, Petitioners filed a Response to Respondent's Motion to Dismiss Joint First Amended Petition for Administrative Hearing. Neither of the Petitioners holds any title interest in the property.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Board enter a final order dismissing the Petitions for Administrative Hearing. DONE AND ENTERED this 22nd day of August, 2005, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 2005. COPIES FURNISHED: James R. Richburg, President Okaloosa-Walton Community College 100 College Boulevard Niceville, Florida 32578-1295 Joseph D. Lorenz, Esquire 1270 North Elgin Parkway, Suite C-12 Shalimar, Florida 32579 Steven A. Medina, Esquire Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor, P.A. 316 South Baylen Street Post Office Box 12308 Pensacola, Florida 32581
Findings Of Fact 1 In either April or May, 1983, HRS District III, Respondents in this case, advertised a request for proposals to operate a spouse abuse shelter in a subdistrict of HRS District III in accordance with the following schedule: The request for proposal (RFP) package was to be picked up by 5 p.m., May 20, 1983; the applicant was to notify HRS of its intent to submit a proposal by 5 p.m., May 20, 1983; and the proposal was to be filed with HRS no later than 5 p.m., June 3, 1983. The contract in question was for the period July 1, 1983 through June 30, 1984. Linda Tucker, President of the Petitioner's Board of Directors, found out about the solicitation from her Vice President, Alice Mulrooney, who had received word of it through an administrative letter sent to her in her capacity of an officer on the County Rape Council. Ms. Tucker and Ms. Mulrooney both telephonically spoke with Carol Laxton, the HRS official in Gainesville who was stewarding this solicitation. It was not clear which of the two spoke with her first. Ms. Tucker spoke with Ms. Laxton on May 20, 1983, and requested to be furnished with a copy of the RFP. Both Tucker and Mulrooney indicated they told Ms. Laxton that Petitioner was not yet incorporated. Both agree Ms. Laxton advised them the requirement for incorporation could be waived and that the proposal should be submitted anyway, including a letter from Petitioner's lawyer to the effect that the incorporation papers had been forwarded to the office of the Secretary of State. On May 25, 1983, Petitioner contacted representatives of the Hernando County Commission relative to county funding of at least a portion of that local source of matching funds required to make up at least 25 percent or the overall proposed operating budget as required by Florida Statutes and as set out in the proposal. At that time, Petitioner was advised that while the Commission supported the Petitioner's proposal in concept and fully hoped to lend its financial support, it could not officially do so until after the county's budget hearings were completed and it was determined that the requested funds were in fact available. A letter to this effect was submitted to Ms. Laxton by the Chairman of the Commission on June 7, 1983. In the interim, before the proposal was submitted, both Ms. Tucker and Ms. Mulrooney discussed this possible defect, as well, with Ms. Laxton. Again, both ladies contend Ms. Laxton advised them this criterion could be waived, as well. Petitioner submitted its proposal on time. However, at the time of submittal, the Petitioner was not in fact incorporated. The proposed corporate charter was forwarded to the Secretary of State on June 2, 1983 (a letter to this effect was sent the same day to Ms. Laxton by Petitioner's attorney), and approved on June 13, 1983. Also, at the time of submission, the proposal listed as budgeted resources donated land and two homes having a rental value of $4,800 per year as an in-kind resource, $182 as cash client contributions and $3,750 as a cash contribution by the Hernando County Commission. It is this last funding source that was committed in theory only and was not firm. Taken together, the three sources totaled $8,732, which would be slightly over 28 percent of the total yearly budget of $31,052. However, since the commitment from the County Commission was not firm and was contingent on funds being available, it could not be considered; and the remaining sum of $4,982 is only 16 percent of the budget. Ms. Laxton admits talking with both Tucker and Mulrooney on several occasions about the proposal and the difficulties they were having. They indicated to her they were having problems getting incorporated, but that their attorney was working on it. She admits telling them to send whatever they had, which included a status letter from their attorney. She also admits stating to them that some requirements of the RFP could be waived, but does not think incorporation was one and is sure she did not tell them the matching funds requirement could be waived. After hearing the evidence presented and considering it along with its relative probabilities and improbabilities, it is found that the Petitioner's representatives may have reasonably inferred the incorporation requirement could be waived. However, it is unlikely that Ms. Laxton would have even inferred anything as significant and sensitive as a matching fund requirement could be waived. If Ms. Tucker and Ms. Mulrooney inferred that from Ms. Laxton's comments, it was unfortunate, but in error. In fact, the County Commission did ultimately approve a commitment to Petitioner in the amount of $3,750. They have also received additional cash contributions of $2,300 and additional in-kind contributions of $5,000. None of these latter resources were in hand or firmly committed by the June 3, 1983 proposal submission deadline, however. At the present time, Petitioner is operating a shelter without Respondent's funds. They have requested assistance from the successful bidder, but have been turned down. There is, however, substantial but non-financial community support for Petitioner's operation.
Recommendation Based on the foregoing, it is RECOMMENDED: That Petitioner's protest be rejected. RECOMMENDED this 4th day of January, 1984, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of January, 1984. COPIES FURNISHED: LINDA TREIMAN, ESQUIRE 11 NORTH MAIN STREET BROOKSVILLE, FLORIDA 33512 JAMES A. SAWYER, JR., ESQUIRE DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1000 N.E. 16TH AVENUE BUILDING H GAINESVILLE, FLORIDA 32601 MR. DAVID PINGREE SECRETARY DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BOULEVARD TALLAHASSEE, FLORIDA 32301
